A Constellation spinoff is seeking 'alternatives'
Constellation Energy Partners, a limited liability company formed and partly owned by Baltimore's Constellation Energy Group, announced yesterday that it is exploring "strategic alternatives," which means it is interested in finding a buyer, among several options. CEP, which hired Tudor, Pickering, Holt & Co. Securities to provide advice, said its board of managers has not decided to pursue any particular alternative. The company noted the market environment and Constellation Energy Group's proposed $4.7 billion sale to Warren Buffett's MidAmerican Energy Holdings as factors in reviewing its options. Constellation Energy Group owns 28 percent of CEP, which was spun off in November 2006. CEP focuses on the acquisition, development and production of oil and natural gas assets.
Home prices index shows a record drop
NEW YORK: A closely watched index released yesterday showed home prices tumbling by the sharpest annual rate ever in July, and though the monthly rate of decline is slowing, there is no turnaround in sight. The Standard & Poor's/Case-Shiller 20-city housing index fell a record 16.3 percent in July from the same month a year ago, the largest drop since its inception in 2000. The 10-city index plunged 17.5 percent, its biggest decline in its 21-year history. Prices in the 20-city index have plummeted nearly 20 percent since peaking in July 2006. The 10-city index has fallen more than 21 percent since its peak in June 2006.
Consumer confidence, surprisingly, is up
NEW YORK: Americans' confidence in the economy unexpectedly improved in September, but the reading still hovered near a 16-year low and does not fully reflect the financial meltdown that has rocked Wall Street and Main Street in recent days. The Conference Board said yesterday that its Consumer Confidence Index is at 59.8, up from a revised 58.5 in August. Economists surveyed by Thomson/IFR expected a reading of 55.5. September's confidence level is about half of what it was a year ago and near the lowest since the index registered 54.6 in October 1992 when the economy was coming out of a recession. The survey, which is based on a sample of 5,000 U.S. households, does not capture Monday's stock market plunge.
Group bids $2.5 billion for Chicago's Midway
CHICAGO: A group of investors from New York, Boston and Canada has offered to pay $2.5 billion to privatize Chicago's Midway Airport. Mayor Richard Daley announced the bid for a long-term lease of Chicago's smaller airport yesterday. The city expects to get more than $1 billion in net proceeds from the deal, with much of that money to be used for infrastructure improvements. Chicago applied two years ago to be part of a Federal Aviation Administration pilot program to privatize up to five U.S. airports. The deal requires Chicago City Council approval. Daley expects to submit the deal to the council next week.
Sovereign Bancorp names Perrault CEO
NEW YORK : Shares of Sovereign Bancorp Inc. jumped nearly 70 percent yesterday as the bank named former Chittenden Corp. top executive Paul A. Perrault to replace Joseph P. Campanelli as chief executive, effective Jan. 3. The 52-year-old Campanelli is stepping down immediately; Chief Financial Officer Kirk W. Walters will take the additional title of chief administrative officer. Hewill also serve as interim president and chief executive until Perrault joins the company. Shares of the Philadelphia-based bank surged $1.62, or 69.5 percent, to close at $3.95 yesterday. Sovereign's stock plunged 72 percent Monday.
Citi is sticking with deal for Wachovia Corp.
NEW YORK: Citigroup Inc. insisted yesterday that it remains committed to its acquisition of Wachovia Corp., as the failure of the government's financial rescue plan cast doubt on the bank's willingness to close the deal. On Monday, Citigroup agreed to buy the banking operations of the Charlotte, N.C.-based bank for $2.16 billion in a deal orchestrated by the federal government. In addition to assuming $53 billion worth of debt, Citigroup agreed to absorb up to $42 billion of losses from Wachovia's $312 billion loan portfolio. The deal, which has been approved by the boards of both companies, is still subject to approval by Wachovia's shareholders and regulators, and must be completed by Dec. 31, according to Citigroup.