Skip to content
Link copied to clipboard

Business news in brief

In the Region

Icahn group wins auction for Trop

Billionaire Carl Icahn and other investors won an auction for the bankrupt Tropicana Casino & Resort in Atlantic City, a lawyer involved in the sale said. Icahn and the other investors agreed to forgive $200 million owed to them by the casino's parent in exchange for the Tropicana, a hotel with 140,000 square feet of gambling space, said attorney Sean Mack, who represents the government-appointed trustee that runs the property. "The bid deadline was last Friday and no other bids were received," Mack said in an interview yesterday. - Bloomberg News

Exelon bid for NRG goes to trial

A challenge to Exelon Corp.'s hostile takeover bid for NRG Energy Inc., the Princeton owner of power plants, went to trial in New York. NRG sued Exelon, the parent of Philadelphia's Peco Energy, to thwart a $6.2 billion bid that NRG rejected as too low. U.S. District Judge John Koeltl began hearing evidence yesterday in a trial set to last two days. Exelon on May 21 won U.S. regulators' approval of its bid. - Bloomberg News

Astra, Merck to pair on cancer drugs

AstraZeneca P.L.C. and Merck & Co. Inc. said they would jointly develop a pair of drugs meant to hit cancer with a one-two punch, part of a growing trend of combination cancer treatments. AstraZeneca, London, has U.S. headquarters near Wilmington and a subsidiary with operations in the Philadelphia area. Merck, Whitehouse Station, N.J., also has Philadelphia-area operations. - AP

Constar emerges from bankruptcy

Constar International Inc., a Philadelphia maker of plastic containers, said it emerged from bankruptcy Friday. Holders of $175 million in subordinated notes received the 100 percent new common stock in the reorganized firm, excluding shares reserved for management incentive plans. The new shares are expected to trade over the counter. Overall debt was reduced by $186.2 million, according to the firm's plan. Pre-bankruptcy shares were canceled. - Harold Brubaker

Wentworth gets court OK on plan

J.G. Wentworth L.L.C. won court approval from a bankruptcy judge in Wilmington of its reorganization plan yesterday, 14 days after filing for bankruptcy protection. The Bryn Mawr company, which buys deferred payments such as annuities, will acquire the pre-petition lenders' loans in exchange for cash and/or new preferred interests in the reorganized company, court papers show. Private-equity firm JLL Partners, which bought Wentworth in 2005, will invest $100 million in the restructured company and provide as much as $34.8 million for the company to purchase the loans. The company said it received acceptance from holders of 90 percent of its $370 million in term loans before its prepackaged filing. - Bloomberg News


Prudential declines TARP

Prudential Financial Inc., the life insurer approved for U.S. bailout funds, said it would raise $1.25 billion selling shares and refuse government aid after a share rally made it easier to tap private investors. The insurer may use proceeds from the public offering to add capital to subsidiaries and repay short-term debt, it said in a statement. Prudential, which applied for funds from the U.S. Troubled Asset Relief Program in October, joins Allstate Corp. and Ameriprise Financial Inc. in turning down a bailout to guard against investment losses. Stock and bond markets have improved since March. - Bloomberg News

Bank to raise $5 billion to repay TARP

JPMorgan Chase & Co. plans to raise $5 billion through a common stock offering as it seeks to repay the $25 billion that the bank was awarded in the government's Troubled Asset Relief Program. JPMorgan Chase announced the capital-raising effort yesterday. It was among a group of large banks to receive money from the TARP program, which requires banks to demonstrate they can raise money in capital markets. JPMorgan Chase says it believes that once it raises the $5 billion, it will have satisfied government criteria for fully redeeming TARP's preferred capital. The bank says it expects to achieve that goal before the end of June. Also, American Express said it would sell $500 million worth of its common stock in a public offering, and use the proceeds in part to pay back government bailout funds. - AP

Jury in Kmart case sides with SEC

The former head of Kmart Corp., who told jurors he was hired to save the retailer, was found liable for misleading investors about company finances before a bankruptcy protection filing in 2002. The verdict in the civil fraud trial followed 10 days of testimony in Ann Arbor, Mich., in federal court. The case was a fresh look at Charles Conaway's brief tenure and the desperate scramble to keep Kmart afloat before one of the largest bankruptcies in retail history. The Securities and Exchange Commission accused him of failing to disclose that the retailer was delaying payments to suppliers to save cash. - AP

Business-method patents get review

The U.S. Supreme Court agreed to consider what types of business methods qualify for patent protection in a case with ramifications for the software, biotechnology, and financial-services industries. The justices said they would review a lower-court decision that narrowed the class of patentable inventions, excluding some innovations that don't have a physical component. - Bloomberg News

Rates fall on 3-, 6-month T-bills

Interest rates on short-term Treasury bills fell in yesterday's auction. The Treasury Department auctioned $31 billion in three-month bills at a discount rate of 0.150 percent, down from 1.175 percent last week. Another $31 billion in six-

months bills was auctioned at a discount rate of 0.290 percent, down from 0.300 percent last week. The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,996.21, while a six-month bill sold for $9,985.33. - AP

Yield rises for 1-year T-bills

The Federal Reserve said the average yield for one-year Treasury bills, an index for making changes to adjustable-rate mortgages, rose to 0.49 percent last week, up from 0.47 percent the previous week. - AP