J.C. Penney plans stock offering to raise cash
J.C. Penney Co. is offering 84 million shares of common stock to raise additional cash. Goldman Sachs Group Inc. is running the offering, the Plano, Texas-based company said. The underwriters will have a 30-day option to buy as much as an additional 12.6 million shares. Chief Executive Mike Ullman has focused on raising money to help the retailer fund its turnaround after returning to the company earlier this year. He took out a $2.25 billion loan and drew $850 million from J.C. Penney’s revolver this year as declining sales sapped the company’s cash. J.C. Penney’s shares fell 5.7 percent in after-hours trading to $9.83.
U.S. initial jobless claims show surprise drop
The number of Americans filing applications for unemployment benefits unexpectedly declined last week, showing further progress in the labor market. Jobless claims decreased by 5,000 to 305,000 in the week ended Friday, a Labor Department report showed. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 325,000. The four-week average of initial filings fell to the lowest since June 2007. Fewer dismissals may be a sign employers are optimistic about the demand outlook in the U.S. Further gains in employment and improved income growth will be necessary to spur bigger advances in consumer spending, which accounts for about 70 percent of the economy.
EBay to buy payments start-up for $800M
EBay said it is acquiring Braintree, a Chicago payments start-up, for $800 million in cash. The company plans to combine it with its payments division, PayPal. Braintree provides technology to an impressive roster of companies to help them process payments on the Web and mobile devices. Its clients include Rovio, Uber, OpenTable, Fab, Airbnb, TaskRabbit and Heroku. Braintree, which says it processes more than $12 billion a year, has long been a start-up to watch. The company also owns Venmo, a popular application that lets people pay each other through text messages. Braintree is the latest company to be added to eBay’s shopping cart. The company also recently acquired Hunch, a recommendation engine; Svpply, a social shopping site; and Red Laser, a bar-code scanning application.
More fines in auto parts price-fixing case
Nine Japanese auto parts manufacturers and two of their executives will plead guilty and pay $740 million in criminal fines for conspiring to fix the prices of more than 30 products sold to many of the world’s largest automakers operating in the U.S., the Justice Department announced. The action is the latest development in the largest criminal investigation the Justice Department’s criminal division has ever carried out. To date, it has resulted in charges against 20 companies and 21 executives, and the companies have agreed to pay $1.6 billion in criminal fines. The price-fixing conspiracies went on for more than a decade and affected more than $5 billion in auto parts sold to U.S. car manufacturers and installed in cars sold in the United States and elsewhere.
British GDP rose 0.7 percent in 2nd quarter
British economic growth accelerated in the second quarter as higher consumer spending helped to blunt the impact of a drop in business investment. Household expenditure rose 0.3 percent and disposable income increased 1.5 percent, the most in a year, the Office for National Statistics said. Income was boosted by bonus payments being deferred to take advantage of a tax cut. Gross domestic product advanced 0.7 percent in the quarter, matching a previous estimate. Britain’s economy has shown further signs of strengthening this quarter after a recession that’s left GDP 3.3 percent below its previous peak. While the recovery is gathering momentum, Bank of England policymakers speaking this week emphasized their commitment to keeping the key interest rate at a record low at least until unemployment drops to 7 percent.
FROM NEWS SERVICES