MGM Mirage plans massive Atlantic City complex

By William Spain, MarketWatch

CHICAGO (MarketWatch) -- MGM Mirage is taking its building spree on the road, announcing Wednesday that it plans to construct a gambling, hotel and retail complex for $4.5 billion to $5 billion on land it owns in Atlantic City.

Before the start of trading,MGM Mirage said its board approved the project, to be called the MGM Grand Atlantic City. It will located on 72 acres of land it already owns adjacent to the Borgata, the company's 50/50 joint venture with Boyd Gaming.

Plans call for three hotel towers with more than 3,000 rooms, which would make it the largest such facility in the New Jersey resort town. It would also have the largest casino floor in the state, with 5,000 slot machines, 200 table games and a poker room, along with a 1,500-seat theater, restaurants and nightclubs, a spa, a convention center and 500,000 square feet of retail space.
"Our company has carefully considered the possibilities for our landholdings in Atlantic City," said Terry Lanni, chief executive, in the announcement. "We believe the success at Borgata demonstrates the eagerness for further evolution of the nation's second-largest gaming market."
The company added that the resort will be the city's tallest building and "dominate the architectural skyline."
Assuming it gets the go-ahead from state coastal regulators, MGM Mirage intends to break ground on the project next year with an opening slated for 2012. About 60 acres of the site will be used with 12 acres reserved for "future development, which may include a residential component."
Word of the project comes as New Jersey gaming regulators continue to probe the company's Macau joint venture with businesswoman Pansy Ho. She is the daughter of Macau casino tycoon Stanley Ho, who has long been dogged by allegations his gambling halls have been involved with organized crime. If the New Jersey regulators find her an unsuitable partner, MGM Mirage could be forced to either back out of the Macau project -- which is set to open in December -- or dump its holdings in Atlantic City.
Both Nevada and Mississippi have approved the company's relationship with Ho and Lanni has publicly expressed confidence that New Jersey will eventually follow suit.
The project is apt to be nicknamed "City Center East" after the $6 billion complex that MGM Mirage is currently building on the Las Vegas Strip, a development it bills as the largest privately funded construction project in history.

Sprint Wins Patent Case Against Vonage

Reston Firm Awarded $69.5 Million in Second Blow to Internet Phone Company

By Kim Hart
Washington Post Staff Writer
Wednesday, September 26, 2007

A federal jury yesterday ordered Vonage Holdings to pay Sprint Nextel $69.5 million in damages for violating six of its patents, prompting analysts to question whether the troubled Internet phone company could survive.

Vonage, which lost another major patent case earlier this year, said it would appeal the decision that sent its shares plummeting 33 percent.

Vonage must also pay Sprint a 5 percent royalty on future revenue, the jury decided after the three-week trial in U.S. District Court in Kansas. Sprint, which is based in Reston, said it planned to ask the court to permanently ban Vonage from using its patented technology, and District Judge John Lungstrum can triple the damage award if he agrees with the jury's decision that Vonage deliberately infringed the patents.

In a statement, Sprint said it was pleased with the verdict and viewed it as a "validation of the strength and depth of its patent portfolio."

Vonage's chief legal official, Sharon O'Leary, said the company's 2.4 million subscribers would not be affected. "Vonage has already demonstrated that it can keep its focus on customers and on its core business while managing ongoing litigation," she said.

Sprint's victory is the latest blow to Holmdel, N.J.-based Vonage, which lost a separate patent case to Verizon Communications in March. Analysts said they did not expect yesterday's verdict to affect Vonage's appeal in the Verizon case.

That verdict called for Vonage to pay Verizon $58 million in damages and 5.5 percent of its future revenue. Vonage's appeal is pending in the D.C. Circuit Court of Appeals.

An apparent delay in that court's decision has given Vonage additional time to devise a technology that does not infringe on Verizon's patents, according to several analysts. But the two cash-guzzling losses deepen the company's troubles as it struggles to maintain the confidence of customers and investors.

"Each case in isolation isn't the death knell for Vonage, but the accumulation of the two losses is pretty grim," said Rebecca Arbogast, regulatory analyst with Stifel Nicolaus. "It's a real one-two punch."

Richard Doherty, research director with Envisioneering Group, a market-research firm, said the two firms could reach a revenue-sharing agreement. "Sprint doesn't want those royalties as much as it wants access to those customers," Doherty said, adding that the decision gives Sprint more leverage in either reaching a settlement with Vonage, or acquiring the company, as was rumored earlier this year.

Vonage shares fell to $1.30, and trading was halted after news of the verdict. Sprint shares rose 13 cents to $18.43.

Millions hit by London Tube strike (Times Online)

Sophie Tedmanson

London commuters faced chaos this morning as a Tube strike by maintenance workers over pensions and jobs left millions forced to find alternative ways to get to work. But there was a glimmer of hope for passengers after the Rail, Maritime and Transport (RMT) union, whose members began a 72-hour strike yesterday evening, announced that talks to resolve the dispute would be held later today. Only two of the 12 Tube lines – which service the main parts of central London – were operating in full, causing travel chaos for most of the three million people who use the underground network. During the morning peak hour, massive queues formed outside bus stops, including at Victoria Station where the mood among commuters turned from frustration to anger at having to wait for packed buses. Police handed out street maps and encouraged people to begin walking or face lengthy delays for a bus.

“I’ve no idea why they’re striking or what this is all about - all I know is that they’re making life a misery for millions of people,” said Caroline Dyer, 33, an accounting assistant from Kent.

Transport for London (TfL), which has put on extra staff to cope with the demand and help people find alternative routes to work, said the disruption was “severe and unacceptable”.

“We share Londoners’ view that this disruption is intolerable, as it serves no purpose,” a TfL spokesman said.

About 2,300 workers from the Rail, Maritime and Transport Workers’ union (RMT) began 72 hours of industrial action at 6pm on Monday over fears of job losses and pension cuts by the collapsed tube maintenance firm Metronet. Metronet, a privately-owned group that maintains most of the London Underground train network, went into administration in July after running out of funds. The union said it will meet Metronet, Transport for London and the company’s administrator later today to try to resolve the dispute. The RMT general secretary, Bob Crow, said: “As a result of discussions last night with London Transport Commissioner Peter Hendy, talks will now take place.

“This is a positive development and we hope that Metronet and its administrator will now take our members’ legitimate concerns seriously.”

Trains ground to a halt on the following lines: Bakerloo, Central, Circle, District, East London, Hammersmith & City, Metropolitan, Victoria and Waterloo & City. The central part of the Piccadilly line was also suspended. There is a good service on the Northern and Jubilee lines, which are maintained by a different company. Passengers have been encouraged to use the Docklands Light Railway, which links Canary Wharf and east London with the City, National Rail services or buses. Advertising executive Chris Boys, who was waiting for a bus at Victoria station this morning, has only been working in London for a year but he already realised travel chaos was part of life in the capital.

“This is just what you go through, isn’t it?” he said. “It’s a pain in the a***, but I’m told it happens every year and you get used to it.”

“Even if I walk I’m going to be late, but I think my boss will be understanding. Everyone’s bosses should give them a bit of leeway this week.”

French lessons for UK's energy market

Nils Pratley (The Guardian)

French presidents come and go, but old-style state capitalism remains a fixture in Paris. Nicolas Sarkozy's personal intervention seems to have been the critical factor in forcing through the merger of Suez and state-controlled Gaz de France.

Suez chairman Gerard Mestrallet was protesting as late as last week that his company couldn't live without its water and waste division. Sarkozy disagreed, and Sarkozy prevailed.

In slightly shrunken form, Suez is just the right size for a merger with GDF, meaning it is just the right size for the French state's shareholding in the new €70bn (£47bn) entity to emerge at 35-40%.

Nominally, GDF is being privatised and a liberalising agenda is being pursued. In reality, the French state is gaining effective control of GDF-Suez, which will be the world's third-largest listed power company. It's a triumph for French nationalism and a defeat for the European commission, which would prefer energy markets in Europe to be freer and less dominated by corporate titans.

Sarkozy and the commission are on a collision course, but the French president will not be trembling. He is swimming with the tide in implying that free markets in energy don't work. This is an age when Russia, and specifically Gazprom, loom. Security of supply, not ensuring a good deal for consumers, is the worry in most European capitals and bigger is deemed to be safer. Sarkozy is doing what others would love to copy in creating a second national champion to operate alongside EDF, the electricity group.

The odd man out, of course, is Britain, which has long been in the commission's camp on liberalisation. Our regulators can produce a zillion statistics on how free competition has benefited UK consumers, but it's also a fact that our would-be corporate champions are lower-league players on the European stage. National Grid is obliged to shop in the US; Centrica has managed to acquire only unconnected bits and pieces on the continent.

In fact, the Suez-GDF deal illustrates very well how different leagues operate. As a condition of the deal, GDF has to sell its 25.5% stake in SPE, Belgium's second largest integrated energy business, because Suez owns the number one player. Centrica, which has 25.5% of SPE already, has the right to buy out GDF, so control should follow easily. But the value of SPE? About £515m, at the last count in 2005 - mere crumbs.

Political shenanigans in the French energy market may seem like a distant world when viewed from Britain. For most of the past decade, when North Sea oil and gas revenues were strong, that's been a fair stance. Now that imported energy is a greater part of the UK mix, we will see the other side of liberal markets. The balance sheets of companies in France, Germany and Spain will be needed to fund the next generation of energy investment in Britain.

Korean credentials

A fortnight ago, HSBC was said to be planning to pay $5bn-$5.5bn (£2.5bn) for 51% of Korea Exchange Bank (KEB). When the terms actually emerged yesterday, the price had risen to $6.3bn. What has happened in the interim?

Maybe only HSBC's greater desire to seal the deal. The bank has been eyeing South Korea, Asia's third largest economy, for eight years, and has been thwarted twice, most painfully when Standard Chartered snatched Korea First Bank two years ago. It doesn't want counter-bidders for KEB to emerge now.

HSBC could claim the price for control of KEB - about 1.8 times book value - is in line with other banking takeovers in Korea, but in this case the seller would seem to be desperate for any clean exit.

Lone Star, a US private equity outfit, has already seen two potential sales collapse because of an ongoing investigation into the legality of its original takeover of KEB in 2003. The key question is whether HSBC has a better chance than the others of persuading the Korean government to drop its demand that legal disputes must be settled before any takeover can happen.

HSBC's strategy seems to be to put its reputation as a top-notch international institution on the line and dare the Koreans to say no. "We believe we have the credentials to put ourselves in a very favourable light," said finance director Douglas Flint.

To concentrate minds, HSBC has set a deadline: if the deal is not done by the end of next April, it's off.

It's ballsy stuff, but HSBC shareholders will not be complaining. Almost any deal in Asia, even an expensive-looking one with a legal wrangle, will be welcomed after the bank's adventure into the US sub-prime market with Household in 2002. Market-savvy Korean politicians look a better bet than American junk borrowers.

Crude Bolts Past $73

By Chuck Marvin (TheStreet.com)

Crude oil and refined products received a boost from bullish petroleum inventory figures Wednesday, while natural gas continued to trend lower in New York. October light sweet crude gained $1.76 to $73.49 a barrel, and reformulated gasoline rose 9 cents to $2.10 a gallon. Heating oil climbed 5 cents to $2.04 a gallon. Near-term natural gas lost 16 cents, finishing at $5.43 per million British thermal units. The Energy Information Administration's oil inventory report for the week ended Aug. 24 was more supportive of prices than analysts were expecting. Crude oil stores fell by 3.5 million barrels, whereas analysts had forecast a 600,000-barrel decline. Gasoline stores shrank by 3.7 million barrels, 1 million more than had been expected. Distillates increased by 889,000 barrels, which was slightly higher than what surveys had projected. Refinery utilization rates fell to 90.3% from 91.6% during the week. "The drop in crude and gasoline inventories was a real surprise," says Alan Mandel, analyst at Alan M. Trading. "Gasoline inventories are now at their lowest in three years." Crude will likely stay in an intermediate-term trading range between $69 and $76 a barrel, while natural gas prices will probably stay low as long as the weather remains abnormally temperate, according to Mandel. Meanwhile, energy stocks were broadly higher, and the CBOE Oil Index climbed 3% to 732.48.

Company says it's cooperating after ICE raid

Business Courier of Cincinnati

The chicken-processing company whose facilities were raided Tuesday by Immigration and Customs Enforcement agents said it is cooperating with the investigations and resuming operations.

More than 160 suspected illegal aliens were arrested at Koch Foods' chicken packaging plant in Fairfield, and its corporate headquarters in Park Ridge, Ill., also was raided. Those who have been arrested face deportation proceedings.

The Hamilton Journal-News reported that the company's hiring practices have been under investigation for more than two years.

Koch said in a statement on its Web site that it is "fully cooperating" with immigration authorities, and that it requires all employees to provide documentation of legal residency. It also said it have established a program to audit documentation, and is implementing another through the Department of Homeland Security to verify workers' legal status.

The company also said in the statement that it is continuing normal business operations at its Park Ridge site, and resumed operations at the Fairfield plant Tuesday evening.

Koch Foods is one of the largest poultry processors in the United States, operating its own hatcheries and feed mills, as well as processing and packaging plants. Koch ranks 274th on Forbes magazine's list of the country's largest privately owned companies.

LEAD: Nikkei rises nearly 600 pts in morning on Wall St. surge, weaker yen+

(AP) - TOKYO, Aug. 20 (Kyodo)—(EDS)

Tokyo stocks rebounded sharply Monday morning after last Friday's plunge, lifting the Nikkei index nearly 600 points due to higher U.S. shares and a weaker yen.

The 225-issue Nikkei Stock Average surged 562.89 points, or 3.69 percent, to end the morning at 15,836.57, rebounding from its more than 870-point plunge Friday, the largest one-day fall in over seven years. The index surged to as high as 15,871.92 at one point in the morning, up 598.24 points.

The Topix index of all First Section issues on the Tokyo Stock Exchange was up 53.89 points, or 3.64 percent, to 1,534.28.

Brokers said worries over the recent global stock market turbulence prompted by concern over the U.S. subprime loan crisis eased as U.S. and European shares rebounded sharply Friday following the U.S. Federal Reserve's surprise move to cut the discount rate by half a percentage point to 5.75 percent.

"Expectation grew that battered global stocks may revert to their normal states in the near future" following the Fed's action and consequent stock rebounds overseas, said Hiroichi Nishi, equities chief at Nikko Cordial Securities Inc. He said that given the extent of the recent sharp falls, investors were motivated to launch bargain- hunting.

A wide range of shares were snapped up, with wholesale, marine transport, oil, and nonferrous metal sectors leading the way.

With the dollar recovering to the 114 yen level following its slump to a 14-month low at the 111 yen level Friday in Tokyo, export-oriented auto and high-tech stocks also attracted active buying.