Tuesday, June 12, 2007

Out of the Gate: Lehman Brothers Jumps (AP)


Shares of Lehman Brothers Holdings Inc. ticked up at the opening bell Tuesday after the investment bank said a move to expand its business and cut its reliance on bond trading has paid off.

The Wall Street brokerage early Tuesday said it earned $1.26 billion in the fiscal second quarter, with revenue of $5.51 billion handily topping analysts' expectations.

Robust stock markets fueled the quarter. Lehman Brothers reported $1.7 billion revenue from brokering and trading stocks, nearly double stock market revenue from the second quarter of 2006. The bank reported strong results for buying and selling stocks on behalf of clients, trading stocks for its own accounts, and dealing options and other contracts tied to the value of stocks.

Analysts said the revenue from trading stocks underscores how prescient Lehman Brothers' diversification strategy was. Nearly half the bank's revenue came from outside the U.S., and Lehman reported record results for advising on corporate deals, selling debt and managing investments.

Meanwhile, Lehman Brothers' bond business was one of the few units to report a decline in revenue, as the meltdown in the subprime mortgage industry hurt the value of bonds backed by home loans.

Lehman Brothers' stock rose $1.59, or 2.1 percent, to $77.25 in morning trading Tuesday. The shares have traded in a range of $58.37 to $86.18 in the past year.

Blackstone founders blessed with billions

Jenny Anderson (New York Times)

MEET Wall Street's soon-to-be $US8 billion ($9.5 billion) man, Stephen Schwarzman, and his $US3 billion business partner, Peter Peterson.

Mr Schwarzman, 60, and Mr Peterson, 81, started the Blackstone Group, the private equity firm that is planning to go public, with $US400,000 in 1985.

On Monday the firm updated its prospectus and included the information everyone on Wall Street has been waiting for: how much money the principals will make in the offering.

Mr Schwarzman will cash out a maximum of $US677.2 million from the offering and his remaining 24 per cent stake in Blackstone will be worth $US7.7 billion if the shares are offered at $US30, the mid-point of the range of $US29-$US31 the company has cited. He earned $US398.3 million last year.

Mr Peterson will put his $US1.9 billion pay-off into a charitable trust but will still control 4 per cent of the company, worth about $US1.3 billion. He earned $US212.9 million last year.

Blackstone plans to sell 133.3 million shares in the offering, which could come late next week. At the mid-point, the firm would raise $US3.8 billion after underwriting costs. Underwriters are expected to sell the over-allotment of 20 million shares because of the high demand. In addition, the Chinese State Investment Co will pay $US3 billion for a non-voting stake.

Other executives listed in the filing include Hamilton James, the firm's president, who will get a maximum of $US188.5 million and own 4.9 per cent; Tomilson Hill, who runs the hedge fund business and who will make $US22.1 million and own 1.6 per cent; and Michael Puglisi, the chief financial officer, who will make $US13.4 million and own 0.7 per cent. Mr James made $97.3 million last year, Mr Hill $US22.1 million and Mr Puglisi $US17.4 million.

The value of the ownership stakes are predicated on Blackstone's ability to meet the market's expectations for growth, which could be difficult considering a number of extraordinary forces have contributed to the recent buyout boom, including strong global growth and widely available cheap debt.

"Everyone knows this is a cyclical business and these returns are not going to be sustained and that a downturn is coming," said Colin Blaydon, director of the Tuck Centre for Private Equity, an academic research group. "Everyone knows that but no one knows when."

The Blackstone Group, which has 770 employees and manages $US88.4 billion in private equity and hedge funds, will have a market capitalisation of about $US32.4 billion. In contrast, the investment bank Lehman Brothers, which has more than 27,000 employees and a far more diversified business, is worth about $US40 billion.

Online privacy threatened by Google: expert


CTV.ca News Staff

Popular search engine Google has the potential to gather more personal information than any other company in the world, according to an online privacy expert.

Allison Knight of the Electronic Privacy Information Center, a Washington, D.C.-based public interest research centre, said that if Google's acquisition of online advertising company DoubleClick is approved, there could be wide-ranging privacy implications.

"Right now they're not doing targeted advertising. But once they acquire DoubleClick, they'll have the capability not only to use the search data that right now they're saving -- they'll also have access to profiles that DoubleClick has been creating," Knight told CTV's Canada AM.

"Every time you go to a website that has a DoubleClick advertisement, there's a log created of that activity. And those two pieces combined would actually allow Google to have more detailed profile on you than any other company in the world."

Google's proposed US$3.1-billion purchase of online ad company DoubleClick was announced on April 13 after a bidding war with Microsoft.

DoubleClick allows customers to insert and track online ads, including search ads, a crucial revenue generator for Google.

The proposed deal is currently the subject of an antitrust investigation in the United States, however it has not been indicated if privacy concerns will be part of the inquiry.

The concerns raised by Knight come after a report from an online privacy watchdog that rated Google as the worst of all online companies on privacy issues.

Of utmost concern to Privacy International was Google's ability to cross-reference information from its search engine, email, maps and instant messaging applications.

London-based group Privacy International said the Mountain View, Calif.-based company had "comprehensive consumer surveillance and entrenched hostility to privacy.''

Knight said this was because of the company's inconsistency between theory and practice on privacy issues.

"Every time you search on Google, your search terms are saved. These are saved indefinitely," Knight told Canada AM.

"Even though Google, a few months ago, did change their privacy policy to say that they would be obscuring this data, after two years it still is saved indefinitely and the searches that you do online can reveal so much about your offline life," Knight told Canada AM.

While Knight did acknowledge that Google is not the only online company retaining user search data, she said it was the largest company involved in the practice.

Google has said that it stockpiles user data to improve search results and defended their record on user privacy.

"We are disappointed with Privacy International's report, which is based on numerous inaccuracies and misunderstandings about our services,'' Nicole Wong, Google's deputy general counsel told The Associated Press.

"It's a shame that Privacy International decided to publish its report before we had an opportunity to discuss our privacy practices with them.''

Privacy International contacted Google earlier this month, but didn't receive a response, Simon Davies told the Associated Press.

On Monday it was revealed Google filed a document with the U.S. Justice Department on April 18, alleging the latest version of Microsoft's Windows operating system impeded the effectiveness of desktop search programs.

With files from the Associated Press

Private equity firms may target Jaguar (Birmingham Post)


By John Revill, Manufacturing Editor

Private equity companies are thought to be in the driving seat to buy Land Rover and Jaguar should Ford decide to press ahead with their sale. The two combined businesses could fetch up to £5 billion if sold later this year, industry sources suggested last night. Cash rich private equity companies could follow the example of Cerberus Capital Management which bought Chrysler from DaimlerChrysler for £3.7 billion last month.

Peter Cooke, professor of automotive industry management at Nottingham Business School, said he was convinced Ford would sell Land Rover and Jaguar as it headed away from the luxury sector to the mass market. He said: "These are two iconic brands and there is bound to be a lot of interest.

Ahead of the Bell: Texas Instruments (AP)


NEW YORK — After nearly a year of swollen inventories, Texas Instruments Inc. said late Monday the chip industry may now be suffering from the opposite problem: understocked warehouses.

The Dallas-based company, which makes chips that power cell phones and other products, narrowed its profit and sales forecast for the second quarter on Monday. Analysts said the update confirms the overstocked inventories hampering the chip industry the past few quarters have mostly cleared.

Now, Texas Instruments said customers are managing their inventories very carefully to avoid buying too many chips. In some cases, they are managing inventories too carefully, said Ron Slaymker, vice president and manager of investor relations.

"We'll just have to see whether they could have it exactly right or they could have it tight," he said in a conference call. "We'll just have to see how demand rolls out over time."

Lean customer inventories are a much more benign headache than inventories that are oversupplied. When customers have too many chips, they hold off on new orders so they can clear the products they already have.

When customers allow inventories to dwindle, Texas Instruments has less visibility into future orders and its business backlog.

Shares of Texas Instruments fell 74 cents, or 2.1 percent, to $35.05 in premarket trading Tuesday. The shares closed Monday at $35.79.

Texas Instruments said it now expects sales of $3.36 billion to $3.51 billion, compared with the previous forecast of $3.32 billion to $3.6 billion. The company expects a profit of 40 cents to 44 cents per share, versus the previous projection of 39 cents to 45 cents per share.

Goldman Sachs analyst James Covello said in a client note some investors will be disappointed with Texas Instruments' update because they expected the company to narrow its forecast toward the top end of its previous range.

Analysts polled by Thomson Financial on average forecast a profit of 42 cents per share on revenue of $3.46 billion.

Tim Luke, an analyst with Lehman Brothers, said the forecast may fall shy of high expectations, but he is encouraged by solid order trends and improving profits.

YouTube to test video ID with Time Warner, Disney


By Kenneth Li and Eric Auchard

NEW YORK/SAN FRANCISCO (Reuters) - Top online video service YouTube will soon test a new video identification technology with two of the world's largest media companies, Time Warner Inc. and Walt Disney Co..

The technology, developed by engineers at YouTube-owner Google Inc., will help content owners such as movie and TV studios identify videos uploaded to the site without the copyright owner's permission, legal, marketing and strategy executives at YouTube told Reuters in an interview on Monday.

The so-called video fingerprinting tools, which identify unique attributes in the video clips, will be available for testing in about a month, a YouTube executive said.

"The technology was built with the Disney's and Time Warner's in mind," Chris Maxcy, YouTube partner development director, said, adding that, since early this year, Google has been testing audio-fingerprinting tools with record labels.

These tools will be used to identify copyrighted material, after which media companies can decide if they would like to remove the material or keep it up, as part of a revenue-sharing deal with YouTube, which can sell advertising alongside it.

Once proven to work, the technology could be used to block the uploading of copyrighted clips, YouTube product manager David King said. It aims to make the tools widely available to any copyright owner later this year.

YouTube has come under fire from several other traditional media companies, which say it has dragged its heels in offering reliable ways to identify video clips uploaded by regular users without permission.

Unable to reach a distribution agreement, MTV Networks-owner Viacom Inc. sued Google and YouTube for more than $1 billion in damages in March, charging the company with "massive intentional copyright infringement" after demanding the removal of clips of its popular shows "Colbert Report" and "Daily Show," hosted by comedian Jon Stewart.

Media companies have eyed the wildly popular video-sharing site as a mixture of opportunity and threat as they seek to reach consumers wherever they spend time.

On one hand, they view YouTube as a powerful promotional medium to drive viewers back to television or their own sites. On the other, YouTube's traffic has soared as users upload copyrighted shows globally onto the service.

Nine months ago, YouTube said such tools would be made available to media companies for testing by the end of 2006. But the reliable identification of content has proved a complex task that required Google to develop its own technology tools.

Maxcy said other media companies planned to test the technology, but he declined to name these other parties. "There are a couple," he said, referring to Disney and Time-Warner. "There are more that we can't talk about right now," he said.

YouTube officials said they have quietly been testing ways to help identify the audio tracks of video clips with major record labels using technology from privately held Audible Magic as early as the first two months of 2007.

These tools will be made available to all content owners later this year depending on the results of the tests, YouTube executives said on Monday.

"It's typically not something we talk about," Maxcy said, adding, however: "We wanted to clear the air."

Maxcy said that over time, Google planned to add additional layers of technology to better spot content on its service.

Google Complains About Microsoft's Vista

By MICHAEL LIEDTKE
AP Business Writer

SAN FRANCISCO (AP) - Internet search leader Google Inc. is trying to convince federal and state authorities that Microsoft Corp.'s Vista operating system is stifling competition as the high-tech heavyweights wrestle for the allegiance of personal computer users.
In a 49-page document filed April 18 with the U.S. Justice Department and state attorneys general, Google alleged that the latest version of Microsoft's Windows operating system impairs the performance of "desktop search" programs that find data stored on a computer's hard drive.

The Vista operating system, which became widely available in January, includes a desktop search function that competes with a free program Google introduced in 2004. Several other companies also offer desktop search applications.

Besides bogging down competing programs, Google alleged Microsoft had made it too complicated to turn off the desktop search feature built into Vista.

With its allegations, Google hopes to show that Microsoft isn't complying with a 2002 settlement of an antitrust case that concluded the world's largest software maker had leveraged the Windows operating system to throttle competition.

The consent decree requires Redmond, Wash.-based Microsoft to ensure its rivals can build products that run smoothly on Windows—something that Google says isn't happening.

"The search boxes built throughout Vista are hard-wired to Microsoft's own desktop search product, with no way for users to choose an alternate provider," Google spokesman Ricardo Reyes said in a statement issued Monday.

In its own statement, Microsoft said it already has made more than a dozen changes to address regulators' concerns about Vista and pledged to address any other legitimate problems. "While we don't believe there are any compliance concerns with desktop search, we've also told officials we are committed to going the extra mile to resolve this issue," Microsoft spokesman Jack Evans said.

Justice Department spokesman Eric Ablin declined to comment Monday, citing confidentiality concerns.

Although he wouldn't discuss Google's allegations, Connecticut Attorney General Richard Blumenthal confirmed that several states are taking a hard look at whether Vista is affecting the effectiveness of programs that aren't made by Microsoft.

"We really have reached a turning point in the process and expect to make a decision on how to proceed by the end of the week," Blumenthal said in a Monday interview.

Describing the Vista complaints as "troublesome," California Attorney General Jerry Brown said he has been in touch with the Justice Department, other state attorneys general and technology industry representatives in an effort to resolve the issue.

"Our goal is to provide consumers using the Vista operating system easier access to competing features," Brown said in a statement.

In a story Sunday, The New York Times reported that the state attorneys general are more inclined to press Microsoft to revamp Vista than the Justice Department.

A court hearing to review Microsoft's adherence with the consent decree is scheduled June 26.

Google's complaint is just latest example of its escalating battle with Microsoft—a duel that figures to shape the future direction of personal computing.

With its search engine already established as the Web's most popular gateway, Google has been offering an array of additional services that could become the building blocks for a Web-based computing platform that lessens the need for Microsoft's products.

Besides e-mail and instant messaging, Google also is distributing word processing and spreadsheet programs aimed at the Office suite of software that has long been one of Microsoft's biggest cash cows.

Google has been able to offer most of its services free because it makes so much money from the ads that it serves up alongside its search results and other content published by the thousands of Web sites that belong to Google's network.

Hoping to siphon away some of that revenue, Microsoft has invested heavily in its own search engine, which still ranks a distant third behind Google and Yahoo Inc.

Google Chairman Eric Schmidt has been a longtime critic of Microsoft's business tactics. After raising antitrust concerns about Microsoft in his previous jobs at Sun Microsystems Inc. and Novell Inc., Schmidt again has been on the attack as he steers Google.

Last year, the Mountain View-based company reached out to the Justice Department to raise alarms about how the latest version of Microsoft's Web browser threatened to make it more difficult for computer users to install the toolbars of competing search engines. Although regulators decided not to intervene, Microsoft subsequently modified the way Explorer handled the selection of search toolbars.

Before putting its most recent misgivings on paper, Google began discussing the desktop search issue with authorities last year.

Those talks were apparently touched upon during a hearing in March when the Justice Department said it was investigating a claim that Microsoft had violated its antitrust settlement. Without identifying the complaining party, the Justice Department said the grievances were related to "middleware," or software that links different computer programs.

Google filed its written complaint just a few days after Microsoft publicly urged antitrust regulators to scrutinize Google's planned $3.1 billion acquisition of online ad service DoubleClick Inc. Microsoft contends the deal will give Google too much power over the rapidly growing online ad market. The Federal Trade Commission has opened a formal inquiry into the matter.
___

AP Business Writers Jessica Mintz in Seattle and Christopher S. Rugaber in Washington contributed to this report.

Food price rises force a cut in biofuels

Jane Macartney in Beijing and Tim Reid in Washington

China’s communist rulers announced a moratorium on the production of ethanol from corn and other food crops yesterday at the very time that Western leaders are rushing to embrace alternative food-based fuel technology.

Beijing’s move underlines concerns that ethanol production is driving up rapidly the costs of corn and grain. It appears to reflect a growing reality about food-based alternative fuel: it is far more expensive both economically and environmentally, than Western politicians are likely to admit.

Calls for biofuels are politically attractive for European and US politicians, amid rising petrol prices and concerns about global warming and an overreliance on Middle Eastern oil.

Communist officials in Beijing, however, who do not have the political concerns of democratically elected leaders in the West, have reacted to a rapid rise in food prices and an intense demand on farm land that threatens to make ethanol production unsustainable.

President Bush, who with Britain wants to see a huge increase in corn-based ethanol, called in January for the annual production of 35 billion gallons of corn-based ethanol in the US.

Although that is a hugely popular rhetoric in the Mid-west wheat belt states — the heart of America’s political battleground — environmentalists soon pointed out that such a goal would require an additional 129,000 square miles of farmland, an area the size of Kansas and Iowa combined.

The rush to corn-based ethanol is causing food-price inflation in the US, as it increases the cost of corn grain feedstock and the availability of the crop for such staples as cereal and corn syrup. The ethanol boom has created mass planting of corn at the expense of other crops, which helps to drive up prices, too. Futures prices for corn in the US have nearly doubled in eight months.

In China grain security has for decades been at the top of the party’s political priority list, and a 43 per cent increase in the price of China’s staple meat — pork — over last year to recent record highs as a result of rapidly rising feed prices is certain to have triggered concern at the highest level of the party.

Xu Dingming, an official of the National Energy Leading Group, told a recent seminar: “Food-based ethanol fuel will not be the direction for China.”

The Government would ask producers to switch to such nonfood crops as cassava and sorghum, used to make various distilled liquors. Four Chinese companies make corn-based ethanol, with a total annual production capacity of more than one million tonnes. Since those companies are in production and demand exists for ethanol supplies, they will not be required to stop.

Domestic corn prices are climbing amid tight supplies despite a record 2006 crop because of rising demand from corn processing industries, including fuel ethanol producers.

Environmentalists in the West are giving warning that corn-based ethanol is not such a “green” alternative as it appears. Massive amounts of fossil fuels must be burnt to plant the extra crops and corn production erodes soil about 12 times faster than it can be reformed, according to one study.

It is far more environmentally friendly and efficient to make fuel from sugar cane.

Corn qualities

— A recent test found that corn-based ethanol gives 35 per cent more energy than it takes to produce

— This is possible because corn used to make ethanol absorbs “free”, renewable solar energy while growing

— The same test found that greenhouse gas emissions a gallon of fuel used were 18 to 29 per cent lower with ethanol than with fossil fuels

— World ethanol production has increased massively in the past decade, championed by the US. Its production is the third-largest use of corn there, accounting for 17 per cent of last year’s crop

Sources: Government of Queensland, Australia; Renewable Fuels Association; Argonnne National Laboratory

Bancrofts set out WSJ safeguards


Stephen Brook (MediaGuardian)

The Bancroft family, which controls Wall Street Journal owner Dow Jones, is to submit revised proposals for the newspaper's continued editorial independence to prospective buyer News Corporation.
If the proposals, which include a special board to safeguard editorial independence, are accepted by Rupert Murdoch's News Corporation then formal negotiations over a sale could begin, according to today's Wall Street Journal.

It was unclear if the revised proposals would close the gap between the two organisations over formal editorial safeguards for the WSJ.

UK employer summer hiring plans upbeat (Online Recruitment)



Onrec - UK employers plan to increase hiring for the third consecutive quarter with those in all industries and regions surveyed looking to recruit more staff over the summer months, according to the latest Manpower Employment Outlook Survey released today. This is in spite of the continued high interest rates and concerns about inflation.

Employers in the Utilities, Finance & Business Services and Hotels & Retail sectors are reporting some of their strongest results with hiring to increase over the same time last year and last quarter.

Manpower’s latest survey of nearly 1,700 employers reveals that a favourable 21 per cent plan to take on more staff in the quarter ahead (July – September) and just six per cent plan to make staff reductions, giving a Net Employment Outlook¹ of +15%. 72 per cent of employers plan no change to their headcount. This Outlook is up one percentage point on Quarter 2 and two percentage points on the year. When seasonal variations are removed from the data, the Outlook is +14%.

Comments Mark Cahill, Managing Director of Manpower UK: “It is encouraging that UK employers feel positive about the future especially in the light of recent interest rate increases and inflation above the two percent target. The labour market has been remarkably robust and for now employers do not seem overly concerned.”

Finance & Business Services employers expect their most bullish third-quarter hiring activity since 1998. Over one quarter of firms (27 per cent) are planning to take on more staff over the next three months and just six per cent plan to make cut backs, giving a Net Employment Outlook of +21%. At the same time, confidence among employers in the Utilities sector is positive at +26% - the strongest third quarter result on record (since 2002).

Continues Cahill: “Hiring amongst Finance & Business Services employers is still strong although this brings continuing challenges of recruiting quality staff to meet demand. Additional Manpower research shows that accounting and finance staff are amongst the most difficult positions to fill in the UK and the number of vacancies is also increasing.”

Continuing consumer confidence is reflected in the Hotels & Retail sector with an Outlook of +16% - up on the year and on the last quarter. Employer confidence in this sector is being driven by increasing demand in the Leisure (hotels/restaurants) sub-sector where a balance of +32% of employers are taking on staff. High Street employers also plan to take on more staff with a balance of +9% looking to expand their headcount.

Comments Mark Cahill: ”The strong performance in the leisure and retail industry reflects continued consumer spending power and may be driven by people looking to holiday in the UK – partly thanks to the anticipated fine weather this summer. The good news is that demand for staff is being fully met – often thanks to employers maximising the opportunities of skilled migrant labour.”

At a regional level, employers in the South West and Northern Ireland are the most confident, recording Outlooks of +28 and +25%, respectively. Employers in the North East, North West, East and West Midlands all report figures above the national average. Employers in Yorkshire and Humberside, the South East and Scotland report Outlooks below the national average. London employers are the least optimistic of all regions surveyed with an Outlook of just +1% – a decline of 12 percentage points on the year and five points on the quarter. However, Manpower’s research also shows that the labour supply in the Capital is robust with few employers reporting problems filling vacancies

Across the countries surveyed in Europe, the Middle East and Africa (EMEA) region, job prospects are strongest in Norway, South Africa, the UK, Germany and Sweden. Employers in Germany and Norway are reporting the most optimistic hiring intentions since the survey began in these countries. Italian employers report the weakest (though still positive) hiring expectations in the region.

Qwest's Notebaert to retire


Ameritech, Tellabs alum to step down after 5-year tenure
By Jon Van (Chicago Tribune)

After five years in Denver running Qwest Communications, former Chicago telecommunications executive Richard Notebaert said Monday he's looking forward to his next act.

Notebaert, 59, will step down as chief executive and chairman of Qwest Communications International Inc. once his board finds a replacement. Notebaert took the job five years ago this month when Qwest faced an accounting scandal and bankruptcy under the leadership of Joseph Nacchio.

"I'm very proud of the past five years," Notebaert told a New York City conference held by Bear Stearns. He expects Qwest's board "will move quickly on my replacement. I'm sure they have a list."

It won't be Notebaert's first stab at retirement. He left Ameritech at the end of 1999 when the Chicago-based phone giant was purchased by SBC Communications. That retirement, which lasted about a year, ended when Notebaert took the helm at Tellabs Inc., the network equipment firm based in Naperville. He confided at the time that months away from work bored him.

Asked at the New York analyst conference why he's chosen now to retire, especially after a "turnover" of Qwest's top management, Notebaert bristled and denied any turnover. Oren G. Shaffer, vice chairman and chief financial officer, resigned in the spring and Barry K. Allen, executive vice president of operations, will leave the end of this month.

"That's not the senior team," said Notebaert. "It's just two people."

Shaffer and Allen were among the Ameritech alumni Notebaert recruited to help him restore confidence in Qwest management after the accounting scandal. Notebaert told analysts that Qwest has a depth of management capabilities and that he wouldn't leave the company if it wasn't in a good position to succeed in the future.

Last year Qwest posted its first profits and is on track to continue growing profitability, Notebaert said. The company's share price dropped 81 cents, to $9.36, on news of Notebaert's retirement plans.

Besides straightening out the financial mess he inherited, Notebaert worked at changing the culture at Qwest, which was formed by the merger of a broadband long-distance carrier with the old US West Bell operating company. Even as he trimmed cost and personnel, Notebaert sought to instill pride among Qwest employees and a zeal to serve customers.

"I feel very good about where we are," Notebaert said Monday.

Now that Qwest is profitable, this may be a good time for new leadership, said Umesh Ramakrishnan, vice chairman of the executive recruiting firm CTPartners.

"Dick did a great job of stabilizing the company," he said, "but now with cable TV operators encroaching on its business, Qwest needs someone who can take it into a new environment."

Notebaert's successor should be someone familiar with converged technologies rather than a traditional phone executive, Ramakrishnan said.

In his retirement announcement, Notebaert said "the time has come for me to spend more time with family and focus on other commitments."

When he moved to Denver five years ago, Notebaert kept his North Side condo. A board member of Aon Corp., he regularly comes to Chicago for board meetings and some events at a natural history museum located near his home and named for his wife. Earlier this year, Notebaert was named chairman of the board of trustees at the University of Notre Dame.

Warner Music mulls new offer to buy EMI


By Bloomberg News

NEW YORK -- Warner Music Group is "actively" considering making a new offer to buy rival EMI Group, which accepted a buyout bid for $4.8 billion from Terra Firma Capital Partners last month. An offer would be conditioned on "appropriate antitrust clearances being obtained," New York-based Warner Music, the recording company of Madonna and Metallica, said yesterday in a statement. Additional details weren't provided.

EMI, the world's third-largest music company, last month agreed to be acquired by Guy Hands's Terra Firma, a buyout firm, after rejecting Warner's $4.1 billion takeover bid in March. EMI and Warner, facing declining music sales , have bid to buy each other at least four times since 2000.

"It would give them a better position to compete with the other big guys and fill out their roster" should the two companies combine, Jamie Rizzo, a bond analyst with Fitch Ratings in New York, said in an interview. "There are some covenants in place that might make it difficult to do a large debt acquisition without concessions from lenders," Rizzo said.

EMI and Warner each abandoned attempts to buy the other last July on the concern that a merger might not win approval from antitrust authorities in Europe. European regulators are now reassessing the 2004 merger that created Sony BMG Music Entertainment, the world's second-largest record company after Vivendi SA's Universal Music Group.

In accepting Terra Firma's bid, EMI said it wouldn't have the "regulatory uncertainty" a Warner offer would face. When it made its last bid for EMI, Warner said it had obtained the support of Impala, an association of independent labels in Europe that had lobbied against the Sony BMG merger. Amanda Conroy, a spokeswoman for EMI, declined to comment.

Employers in U.S. to Keep Hiring at Same Pace, Manpower Says

By Shobhana Chandra (Bloomberg)

June 12 (Bloomberg) -- Employers in the U.S. plan to maintain hiring next quarter at the same pace as in the previous three months, according to a private survey released today.

Manpower Inc., the world's second-largest provider of temporary workers, said its employment index held at 18 percent for July through September, the same as in the second quarter. The gauge subtracts the percentage of employers planning to cut jobs from those who plan to add workers and adjusts the results for seasonal variations.

The report suggests the weakest pace of growth in four years hasn't discouraged employers from expanding payrolls. More jobs and higher wages are critical to sustaining consumer spending as fuel costs climb, house prices stagnate and interest rates rise.

``It's still a relatively stable market,'' Jeffrey Joerres, chief executive officer of Milwaukee-based Manpower, said in an interview. ``Companies are being cautious but continuing to add workers. It helps create optimism among people to continue to spend money.''

The economy has created an average 119,000 jobs a month so far this quarter, compared with 142,000 a month from January though March, according to figures from the Labor Department. The jobless rate held at 4.5 percent last month, close to a five-year low.

Before adjusting for seasonal variations, 29 percent of the roughly 14,000 companies surveyed by Manpower said they will add to payrolls in the third quarter, up from 28 percent in the previous three months. The figure was down from a year ago.

Seven percent said they'd trim payrolls in the coming quarter, and 58 percent anticipated no change from the prior quarter's pace of hiring, the survey showed.

Economic Growth

The economy grew at a 0.6 percent annual rate last quarter, the weakest since the last three months of 2002, according to figures from the Commerce Department.

Growth will pick up for the rest of this year, according to economists surveyed this month by Bloomberg News. The economy is likely to expand at a 2.6 percent annual pace this quarter and next, according to the survey's median estimate.

``Employment growth has held up quite well,'' Federal Reserve Bank of Richmond President Jeffrey Lacker said after a speech on June 6. ``There may be some labor hoarding going on, and if so, that is an indication of confidence.''

Three of the 10 industries surveyed by Manpower -- education, durable goods manufacturing and services -- projected an improvement in hiring next quarter compared with the previous three months. Less hiring at retailers and wholesalers led the five industries that said employment would decelerate.

Construction Payrolls

Construction companies, suffering through a second year of a homebuilding slump, and manufacturers of non-durable goods predicted little change in payrolls next quarter.

Demand for workers at commercial projects has helped offset some of the decline in residential real estate to prevent overall construction hiring from falling even more, economists said. Total construction payrolls have fallen by 54,000 since reaching a high of 7.7 million in September 2006.

Compared with a year earlier, employers in most industries were less inclined to add staff, the Manpower data showed.

``Companies are feeling OK about business,'' Joerres said. ``Not robust, but OK.''

Regionally, employers in the West predicted an improved pace of hiring in the third quarter from the prior three months, while those in the Northeast had weaker hiring plans, the Manpower survey showed. Job prospects in the Midwest and South were forecast to be the same as in the prior quarter.

Hiring Abroad

Outside the U.S., employers in all other 26 countries and territories surveyed by Manpower plan to add workers in the third quarter. Hiring activity will pick up in 14 countries and territories compared with the third quarter of 2006.

Globally, Singapore, Peru, India, Argentina, Australia, Japan and Hong Kong were among countries in the survey that reported the strongest hiring prospects for the coming quarter. Employers in Italy, Belgium and France had the weakest hiring intentions.

An acceleration in growth overseas is brightening the outlook for employment abroad, said Joerres.

``Employers in Europe are seeing real growth in demand,'' he said. ``They can't hold off any more and are hiring.''

Within Europe, the employment outlook rose the most in Norway and Germany for the coming quarter, the survey showed. Germany's outlook rose to 13 percent from 10 percent, while Norway's jumped to 22 percent from 14 percent.

India's employment outlook jumped to 39 percent for the third quarter from 31 percent in the prior three months, the survey showed. China's fell to 18 percent from 21 percent and Japan's declined to 16 percent from 45 percent. These figures aren't seasonally adjusted.

The Manpower survey is conducted quarterly and has a margin of error of plus or minus 0.8 percentage point in the U.S. and no more than plus or minus 3.9 percentage points for national, regional and global data.

Big payday for Blackstone CEO (Chicago Sun Times)


Blackstone Group LP, which is now preparing for an initial public offering, says Chief Executive Stephen Schwarzman made $400 million in 2006. That's almost double the compensation for the CEOs of Wall Street's five biggest investment banks -- combined. Schwarzman, 60, will receive $449.2 million and keep a 24 percent stake, Blackstone said in an SEC filing. Retiring co-founder Peter G. Peterson, 80, will get $1.88 billion and retain 4 percent of the company.