Rupert Murdoch gave up on an $80 billion bid for Time Warner, just three weeks after news broke that his 21st Century Fox group had proposed it. Time Warner rejected Murdoch’s advances and shored up its defenses to thwart any hostile attempt by the media tycoon to appeal directly to shareholders. One factor behind Murdoch’s rare defeat was the relative performance of the share prices since the bid was made public: Time Warner’s had soared, while 21st Century Fox’s had fallen.
Sprint abandoned its effort to buy T-Mobile US amid stiff resistance from regulators to combining America’s third- and fourth-largest mobile-telecoms operators. Sprint is owned by Softbank of Japan. Its billionaire boss, Masayoshi Son, had hoped a merger would provide a much-needed spurt of growth for Sprint.
Telefónica of Spain offered to buy GVT, a Brazilian telecoms firm, for $9 billion. GVT’s owner, Vivendi, a French conglomerate, scrapped a sale of its subsidiary last year. Telefónica already controls Vivo, GVT’s bigger rival in Brazil.
Gannett became the latest media company to spin off its publishing arm, which includes USA Today among its newspaper titles, from its TV and digital operations.
Hewlett-Packard raised the stakes in its dispute with the former management of Autonomy by directly accusing Mike Lynch, Autonomy’s former boss, and Sushovan Hussain, its former chief financial officer, of fraud. HP bought Autonomy in 2011, but wrote down the value of the British software company by $8.8 billion a year later. Responding to the accusation of fraud, a spokesman for Lynch and Hussain described HP’s claims as “breathless ranting.”
Walgreens decided to stay put in America. The pharmacy chain had been considering relocating to lower-taxed Switzerland after taking full control of Alliance Boots (which owns Boots chemists in Britain), but decided that it was not in the long-term interests of shareholders. Acquiring the 55 percent of Alliance Boots it did not already own will cost Walgreens around $15 billion.
In the week that Bank of America was preparing to pay fines in excess of $16 billion for mis-selling mortgage-backed securities, its shareholders received some good news when the Fed said it had no objections to the bank’s revised capital plan. This allows BofA to increase its dividend for the first time since the financial crisis.
Regulators at America’s Federal Reserve and Federal Deposit Insurance Corporation sharply criticized the “living wills” submitted by 11 big banks in which they explain how they would unwind their businesses if they go bust. The FDIC described the plans as “not credible.” The banks will resubmit their ideas; if the regulators are still unhappy, they could impose fines or force a sale of parts of a bank.
Banco Espírito Santo was rescued by the Portuguese government. The $6.6 billion bailout came with stringent conditions that left the bank’s shareholders and junior bondholders bearing the losses from its exposure to debt in its parent companies.
BMW’s net profit in the second quarter grew by 27 percent compared with the same period a year earlier, to $2.4 billion. The maker of premium cars was boosted in part by strong demand for its vehicles in China. Meanwhile, Mercedes-Benz, a division of Daimler, confirmed that it was cooperating with competition authorities in China after its offices in Shanghai were reportedly raided. The investigation is thought to center on the pricing of spare parts for its luxury cars.
Italy slipped into recession for the third time since 2008, according to its statistics agency. The economy contracted by 0.2 percent between April and June after shrinking by 0.1 percent in the previous quarter.
Pope Francis reinstated an American-born priest in Nicaragua who had been suspended from the clergy by the Vatican in 1985 for joining the left-wing Sandinista government. Father Miguel d’Escoto Brockmann was president of the U.N. General Assembly in 2008-09.
A news magazine in Brazil claimed that executives at Petrobras, the state oil firm, had been given questions in advance of a hearing by senators investigating a scandal surrounding the purchase of a Texas refining company. Dilma Rousseff, Brazil’s president, who was the chairwoman of Petrobras at the time, has spent much of the year batting away questions about the deal.
EDF Energy, the British subsidiary of the French state-controlled utility, said it was shutting down three nuclear reactors and that a reactor with a fault that has been shut down since June would remain so. The facilities, which are being investigated as a precaution, generate nearly a quarter of nuclear capacity in Britain. The British Office for Nuclear Regulation said there had been no release of radioactive material and no injuries. Industry experts did not anticipate much effect on electricity supplies or prices in the short term. EDF said that over the next few days it would idle a second reactor at the facility where the fault was found last year, Heysham 1, in northwest England. The company said it would also shut down two other reactors of similar design at Hartlepool in northeast England.