American Air issues optimistic forecast
American Airlines sees good worldwide travel demand and no “material pockets of weakness,” a brighter outlook than at European carriers that have cut earnings forecasts. “Demand globally is strong,” Chief Executive Doug Parker said as American broke ground on an operations center near its headquarters in Fort Worth, Texas. While some airlines have added seating on transatlantic routes, “capacity has been increasing in response to demand,” he said, not being piled on recklessly to chase market share. His views contrasted with those of Europe’s two biggest airlines, Air France-KLM Group and Deutsche Lufthansa, which have both pared profit projections as excess capacity on long-range routes erodes fares.
AbbVie raises bid for Shire to $51.6 billion
The U.S. drugmaker AbbVie said it had increased its bid to acquire Shire, the Irish drugmaker that had rejected its previous takeover offer. The new bid is about $51.6 billion. AbbVie is eager to acquire Shire, which would allow it to reincorporate in Britain and save millions on taxes, a process known as an inversion. But in pursuing a deal in part to save on taxes, AbbVie is offering a very full price. The new bid represents a 48 percent premium above Shire’s closing price of 34.67 pounds ($58.55) a share on May 2, the day before AbbVie’s first approach.
Not-guilty verdict in insider trading case
Rengan Rajaratnam, the younger brother of Raj Rajaratnam, the former billionaire hedge fund manager who was convicted of insider trading in 2011, has been found not guilty of conspiracy to commit insider trading — a stunning blow to federal prosecutors in New York. The acquittal is the first defeat for Preet Bharara, the U.S. attorney in Manhattan in his office’s long crackdown on insider trading in the hedge fund industry. The verdict, after just several hours of deliberation, comes after Bharara’s office had secured 85 convictions and guilty pleas from traders, analysts, industry consultants as well as the hedge fund founded by billionaire Steven A. Cohen.
Clean-shaven Lyft to take on Uber in NYC
Lyft Inc. is taking its ride-sharing service into New York this week and is abandoning its trademark pink mustaches in the process, taking on rival Uber Technologies Inc. in one of the biggest U.S. markets. The start-up will begin with 500 drivers in the most populous city in the U.S. at 7 p.m. on July 11, Lyft co-founder John Zimmer said in a phone interview. The San Francisco-based company has seen strong demand from potential drivers and users in New York, where Lyft’s mobile application was downloaded 75,000 times, he said. To challenge Uber, which operates an unadorned fleet of vehicles, Lyft is giving up in New York the big pink mustaches that usually grace its drivers’ cars.
American Apparel investor heads for door
Another one of American Apparel’s major shareholders has sold millions of shares of the company’s stock, even as the retailer continued to battle with one of its longtime lenders. A Canadian firm, 1832 Asset Management, disclosed in a filing with the Securities and Exchange Commission that it had sold about 11.5 million shares of American Apparel stock, or about 6.6 percent of the company’s outstanding shares, liquidating its entire holding in the company. American Apparel has been in turmoil over the last several weeks, since its board fired the company’s founder, Dov Charney, last month.
Factory output plunged in Britain in May
British manufacturing unexpectedly slumped the most in 16 months in May, indicating the economy may have struggled to maintain momentum in the second quarter. Factory output plunged 1.3 percent from April, the most since January 2013 and the first decline in six months, the Office for National Statistics said. The median forecast of 25 economists in a Bloomberg News survey was for a gain of 0.4 percent. Industrial output fell 0.7 percent, the biggest drop since August 2013. The ONS data may add weight to the case for policymakers to delay a rate increase.
FROM NEWS SERVICES