Founder and chairman of Dell computers Michael Dell passes a screen projection before speaking at a news conference in Sydney August 14, 2006.

SAN FRANCISCO | Thu Feb 14, 2013 12:52pm EST

SAN FRANCISCO (Reuters) - Dell Inc Chief Executive Michael Dell, aiming to clinch a $24.4 billion deal to take the No. 3 PC maker private, agreed to value his 16 percent stake in the company at about 2 percent below the price offered to other shareholders, company filings on Thursday showed.

The founder, who informed his board in August of his intention to remove the struggling company from Wall Street's scrutiny, agreed after extensive negotiations that his equity stake would be valued at $13.36 a share, versus the $13.65 offered eventually.

Negotiations with Silver Lake kicked off in October. Dell revealed that the private equity firm raised its proposed offer price at least once during ensuing discussions.

"To facilitate a price increase by Silver Lake, Mr. Dell and related persons agreed that their shares to be rolled over in the proposed transaction would be valued only at $13.36 per share as opposed to the $13.65 price offered to the company's unaffiliated stockholders," the filing read.

The proposed leveraged buyout, the largest private-equity backed deal since the financial crisis, is being led by Michael Dell and Silver Lake, and pits Dell's board against the company's top independent investors.

Top two shareholders, Southeastern Asset Management and T. Rowe Price, have been among the most vocal opponents of the deal, which they say severely undervalues the company, despite the challenges it faces in a shrinking PC market and intense competition in enterprise software and services.

The deal is up for a shareholder vote around June or July, the company said in Thursday's filing. It will need a majority of shareholders, excluding Michael Dell, to be approved.

Dell's board, which formed a special review committee of independent directors after the CEO informed them of his intentions, is now conducting a 45-day "go-shop" period, actively soliciting higher bids.

Analysts do not expect rival bidders to step forward.

WHERE'S DELL?

Dell reports fiscal fourth-quarter results on Tuesday, when analysts get their first chance to grill management on the buyout. But, in a potential disappointment for Wall Street, Michael Dell himself will not be present though he typically participates in post-earnings release calls.

The CEO recused himself from the discussion, given his leading role in the buyout, a company spokesman said.

Dell has lost 40 percent of its value since last year's peak, and is trying to reinvent itself as a seller of higher-margin services to corporations, an internal overhaul that would be conducted away from public scrutiny if the buyout goes forward.

The PC maker, whose profits fell 47 percent last quarter, is expected to report further erosion of both revenue and income next week.

Dell's revenue in the quarter is expected to slide almost 12 percent to $14.12 billion from $16.03 billion a year earlier, according to an average forecast of analysts polled by Thomson Reuters I/B/E/S.

The company, once the world's top PC maker and a pioneer in computer supply chain management, is struggling to defend its market share against Asian rivals like Lenovo.

It was hurt also by a slide in holiday-season sales of personal computers for the first time in more than five years, despite the launch of Microsoft Corp's Windows 8 operating system. Microsoft itself is providing $2 billion in financing for Dell's buyout.

Dell's worldwide PC shipments fell nearly 21 percent to 9.48 million in the last three months of 2012, from 11.97 million in the same period a year ago.

Shares of Dell were steady at about $13.79 at midday.

(Reporting by Edwin Chan; Editing by Steve Orlofsky)

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Samsung Electronics chairman Lee Kun-Hee arrives at Gimpo airport in Seoul after he visited several European countries and Japan, May 24, 2012.

SEOUL | Fri Feb 1, 2013 2:17am EST

SEOUL (Reuters) - Samsung Electronics Co Ltd Chairman Lee Kun-hee fended off a lawsuit by estranged family members demanding he hand over billions of dollars of shares in Samsung companies as a South Korean court ruled in his favor on Friday.

Lee, 71, and Samsung Everland, a de facto holding company for the country's largest conglomerate, were defending against three lawsuits by Lee's relatives seeking nearly $4 billion in assets in Samsung Life Insurance Co Ltd, which sits at the heart of the web of Samsung group shareholdings, and Samsung Electronics, the group's crown jewel.

The lawsuit was unlikely to have deprived Lee of his control over Samsung Electronics, the world's biggest maker of smartphones, TVs and memory chips.

But a ruling against him would have diluted his holdings and could have forced a reshuffling of the intricate shareholdings across the Samsung group if he were to retain his grip.

It also came at a key juncture for the electronics giant's successions plans, just months after Lee's son Jay Y. Lee, 44, was promoted to vice chairman.

Samsung has come to symbolize the success of South Korea's "chaebol" conglomerates on the global stage, where it is battling Apple Inc and its Galaxy smartphone is outselling the iPhone.

A judge at the Seoul Central District Court ruled that Lee could retain more than $1 billion in Samsung Electronics shares and another $1 billion in shares of Samsung Life.

Samsung Everland, a small zoo operator, was also allowed to keep its $1 billion stake in Samsung Life. Lee will remain Samsung Life's biggest shareholder with a 20.76 percent stake.

The lawsuits accused Lee of hiding from his siblings billions of dollars in shareholdings inherited from his father, Samsung's founder, while Lee countered that as his father's chosen successor, he had free rein to transfer group company shares.

HAPPY TOGETHER?

"This is a totally unexpected ruling and we'll decide whether to appeal after discussing with our clients," Cha Dong-eon, a lawyer for the plaintiffs, told reporters.

Lawyers for Lee, who has been travelling abroad since early January, said the ruling was reasonable.

Shares in Samsung Life closed nearly 3 percent higher after the ruling, while Samsung Electronics sagged 0.5 percent. Seoul's benchmark Kospi fell 0.2 percent.

The trial, which exposed family intrigues behind South Korea's powerful chaebol, coincides with rising public resentment towards the conglomerates, stirred by their dominance in the economy and widening wealth gaps in society.

The ruling comes only a day after Chey Tae-won, chairman of South Korean chaebol company SK Holdings Co Ltd, was sent to prison on embezzlement charges, as the country seeks to level out the playing field between big business groups and the "economically weak".

Lee, South Korea's richest man, was worth an estimated $8.3 billion as of March 2012, according to Forbes Magazine.

He owns less than 4 percent of Samsung Electronics, but through family stakes in Samsung Everland and Samsung Life he exercises substantial control over the electronics firm and the other 80 or so Samsung companies, which operate in industries from construction to hotels to fashion.

The ownership of hidden assets came into focus in 2011, after a tax probe into Lee that followed the transfer of shares from nominee accounts to his own name. He was later indicted on tax evasion charges but pardoned by South Korean President Lee Myung-bak.

South Korea is no stranger to the family feuds that have engulfed other Asia dynasties such as India's Ambani family. Hyundai Group, once the biggest of the chaebol, split into two after a row between two brothers, one side becoming Hyundai Motor Co and the other Hyundai Group.

Before delivering his verdict, the judge said he wished for a happy ending to the family dispute.

"Regardless of the truth of what happened or the final outcome of this case, I think it may also have been one of the late founder's wishes that both parties have a happy life together with no quarrels," the judge said.

($1 = 1085.4750 Korean won)

(Writing by Miyoung Kim; Editing by Edmund Klamann)

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Wed Jan 2, 2013 5:53pm EST

n">(Reuters) - SunPower Corp (SPWR.O) said it sold two solar projects in California to a company controlled by Warren Buffett's Berkshire Hathaway Inc (BRKa.N), and would receive up to $2.5 billion in proceeds and related contracts.

Berkshire utility MidAmerican Energy Holdings Co will pay SunPower between $2.0 billion and $2.5 billion for the 579-megawatt (MW) Antelope Valley solar projects and for designing, installing and constructing them, the company said in a regulatory filing on Wednesday. (link.reuters.com/bag94t)

Construction of the projects, which the companies called the world's largest photovoltaic power development, will begin this quarter and is expected to be completed by the end of 2015.

The stamp of approval from a Buffett utility, combined with expected cashflow from the projects, will make SunPower more bankable and more creditworthy, its Chief Executive Tom Werner told Reuters.

"If you are a bank you are looking at us a lot differently today than you did last week," he said.

SunPower shares ended up 9 percent at $6.13 on Wednesday on the Nasdaq, their highest closing in about eight months.

Raymond James analyst Marshall Adkins said the monetization of the projects "does not alter the fact that SunPower retains a markedly high-cost structure and razor-thin margins in the context of a massively oversupplied market."

The projects, based in Kern and Los Angeles counties, will add to MidAmerican Energy's growing investments in clean energy.

It bought a 49 percent stake in a 290 MW solar power plant in Arizona from NRG Energy Inc (NRG.N) and acquired First Solar Inc's (FSLR.O) 550 MW Topaz Solar Farm power plant in California in late-2011.

The SunPower projects will sell power to California utility Southern California Edison under two long-term contracts.

California plans to reduce emissions of planet-warming greenhouse gases to 1990 levels by 2020, and by an additional 80 percent by 2050.

(Reporting By Garima Goel in Bangalore and Nichola Groom in Los Angeles; Editing by Sriraj Kalluvila)

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ZTE company logos are seen at an international software and information services exhibition in Nanjing, Jiangsu province September 6, 2012.

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Dec 26, 2012 8:04pm EST

n">(Reuters) - A federal jury on Wednesday found that Marvell Technology Group infringed two patents held by Carnegie Mellon University, and ordered the chipmaker to pay $1.17 billion in damages.

The award is one of the largest by a jury in a U.S. patent case, and is nearly twice Marvell's profit in its latest fiscal year. It followed a month-long trial in the U.S. District Court in Pittsburgh, the home of Carnegie Mellon.

Jurors also found that Marvell's patent infringement was willful. This could enable the trial judge, Nora Barry Fischer, to award triple damages, a sum close to the $3.96 billion market value of Marvell, whose chips are used for reading and writing data on hard disk drives.

Shares of Marvell fell 10.3 percent on Wednesday, closing down 85 cents at $7.40 on the Nasdaq.

Carnegie Mellon said it was gratified by the verdict. "Protection of the discoveries of our faculty and students is very important to us," it said.

Marvell and its law firm, Quinn Emanuel Urquhart & Sullivan, did not immediately respond to requests for comment.

The company had argued that it had acted in good faith, and the Carnegie Mellon patents were invalid. In a November 29 regulatory filing, Marvell said it intended to litigate vigorously in any potential appeal if it lost at trial.

Carnegie Mellon had accused Marvell of infringing patents used in technology for hard disk drive circuits to read data from high-speed magnetic disks, according to a statement from the university's law firm, K&L Gates.

The law firm said the patents related to systems and methods developed by Carnegie Mellon Professor Jose Moura and a doctoral student, Aleksandar Kavcic, who is now a professor at the University of Hawaii.

Through its verdict, the jury found that Marvell had sold billions of chips incorporating the technology without being licensed to do so, K&L Gates said.

Marvell is based in Hamilton, Bermuda. Its U.S. operating unit Marvell Semiconductor Inc is based in Santa Clara, California, and was also a defendant in the case.

The company posted a $615.1 million profit on net revenue of $3.39 billion in its most recent fiscal year, which ended on January 28. It counts Western Digital Corp and Seagate Technology Plc among its largest customers.

The trial judge set a May 1, 2013, hearing to consider a final judgment in the case, court records show.

The case is Carnegie Mellon University v. Marvell Technology Group Ltd et al, U.S. District Court, Western District of Pennsylvania, No. 09-00290.

(Reporting by Jonathan Stempel and Nate Raymond in New York and Himank Sharma in Bangalore; Editing by Steve Orlofsky, Leslie Adler, Andrew Hay and Phil Berlowitz)

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The logo of ArcelorMittal company is seen at the entrance of its headquarters in Luxembourg in this picture taken on November 20, 2012.

BRUSSELS | Fri Dec 21, 2012 8:09am EST

BRUSSELS (Reuters) - ArcelorMittal (ISPA.AS), the world's biggest steelmaker, is to write down the value of its European business by $4.3 billion, underscoring gloom about prospects for the region's recession-hit manufacturers.

The group, formed in 2006 when India-born Lakshmi Mittal's steel business bought European peer Arcelor for $33 billion, said on Friday demand had fallen about 8 percent in Europe this year and there was no sign of a quick recovery.

As a result, it will write down the goodwill - the value of intangible assets such as brands rather than physical assets such as machinery - of its European operations by 87 percent.

"It is negative, but it should not really be a big surprise that the book value of its European business was too high," said a London-based analyst who asked not to be named.

ArcelorMittal shares were down 2.7 percent at 12.85 euros at 8 a.m. ET, one of the biggest falls by a European blue-chip stock .FTEU3 and reversing gains made earlier this week.

Credit agency Fitch cut ArcelorMittal's long-term issuer default rating to BB+, just below investment grade, due to the challenging outlook for Western European steel markets in 2013.

The $500-billion-a-year steel industry, a gauge of the global economy, has slowed sharply this year as a moderation in China's economic growth has compounded weak demand from austerity-ravaged Europe.

The World Steel Association in October forecast steel demand would rise 2.1 percent in 2012, down from 6.2 percent in 2011. It had forecast 3.6 percent growth in April.

Last month, Moody's cut the company's senior unsecured notes to Ba1 from Baa3, joining Standard & Poor's in rating ArcelorMittal one notch below investment grade.

Other steelmakers are hurting too. Earlier this month, Germany group ThyssenKrupp (TKAG.DE) posted a full-year net loss of 4.7 billion euros ($6.2 billion).

WEAK POINT

Europe is a particular weak point, as austerity drives aimed at tackling a sovereign debt crisis have cut demand for cars and construction - steel's largest markets. Euro zone manufacturing has contracted for 17 straight months.

ArcelorMittal, which makes about 6-7 percent of the world's steel, said demand in Europe had fallen 29 percent since 2007 when the financial crisis started.

It highlighted better trends in the United States where, it said, demand was up 8 percent this year and is now 10 percent lower than in 2007.

ArcelorMittal, whose output is more than double that of its nearest rival, has already announced the closure of blast furnaces in Belgium and France, with other operations temporarily idled due to overcapacity.

The write-down represents over a third of ArcelorMittal's overall goodwill of $12.5 billion as of end-2012. The group, around 40-percent owned by the Mittal family, took on $6.6 billion goodwill when it bought Arcelor.

It said the write-down would be a non-cash charge in fourth-quarter results and would not affect net debt or core profit.

Before the write-down, analysts had, on average, forecast the group would make $529.5 million net profit this year, and $7.1 billion core profit, according to StarMine.

(Additional reporting by Philip Blenkinsop; Editing by Mark Potter and Dan Lalor)

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1 of 6. People walk in front of a logo of Softbank Corp at its branch in Tokyo, in this file picture taken March 2, 2011. Japan's Softbank Corp said on October 12, 2012 that it is in talks with Sprint Nextel Corp about investing in the U.S. telecoms firm, but nothing has been decided.

NEW YORK/TOKYO | Sun Oct 14, 2012 11:13pm EDT

NEW YORK/TOKYO (Reuters) - Japanese mobile operator Softbank Corp is near a $20 billion deal to acquire control of U.S. carrier Sprint Nextel Corp, sources familiar with the matter said, as the firm led by billionaire Masayoshi Son seeks a foothold in the U.S. market.

A deal, which the sources said could be announced as early as Monday, would be Japan's biggest overseas buy, and would also give Sprint ammunition to potentially acquire peers and build out its 4G network to compete better in a U.S. wireless market dominated by AT&T and Verizon.

Softbank shares tumbled more than 7 percent early on Monday, and have lost more than a fifth of their value since news first broke of the firm's interest in Sprint. Investors are concerned that Son, who has a reputation for taking risks, may be offering too much.

Under the deal taking shape, the sources said Softbank would buy some $12 billion worth of Sprint shares and spend another $8 billion on new Sprint securities. The Japanese firm would initially buy $3 billion of bonds convertible into Sprint stock at $5.25 a share, the Wall Street Journal reported, citing people familiar with the matter. It would also buy $5 billion in stock directly from Sprint, and offer $7.30 a share for stock it buys in the public markets. Sprint closed on Friday at $5.73.

Sprint, led by CEO Dan Hesse, has net debt of about $15 billion, while Softbank has net debt of about $10 billion. Adding the $2 billion of net debt of eAccess Ltd, which Softbank recently agreed to buy, would raise "post-deal gearing levels to unacceptable heights", Societe Generale said in a client note on Friday.

"It's the same (market) reaction as when Softbank said it was going to buy Vodafone a few years ago. Everyone came out and said it was far too expensive," said Fumiyuki Nakanishi, general manager of investment and research at SMBC Friend Securities.

Softbank acquired Vodafone's Japan unit for $15.5 billion in a landmark deal in 2006 that propelled the firm into the mobile carrier business.

CLEAR FOR CLEARWIRE

Sprint confirmed on Thursday it was in talks with Softbank about an investment that could involve a change in control. If Softbank takes a 70 percent stake of Sprint for $20 billion, that would imply the No. 3 U.S. wireless company was worth about $28.6 billion, some two-thirds greater than its market capitalization at Friday's close.

On Friday, Standard & Poor's put its "BBB" long-term rating on Softbank on 'credit watch with negative implications', saying the deal "may undermine Softbank's financial risk profile" and would pressure its free operating cash flow for at least the next few years.

A tie-up between Sprint and Softbank could see the U.S. firm use some of the proceeds to buy the part of Clearwire Corp it doesn't already own, given that company's attractive spectrum assets, analysts and investors have said. Clearwire stock soared on Friday.

An alliance with Sprint could also give Softbank leverage when dealing with Apple Inc, helping bolster its domestic position against KDDI Corp, which also now offers the iPhone in Japan, and market leader NTT Docomo, which is yet to offer the Apple smartphone.

A Tokyo-based Softbank spokesman reiterated on Monday that the company was in talks about making an investment in Sprint, but no agreement had been reached. Sprint representatives were not immediately available to comment, and a Clearwire spokesman declined to comment. CNBC's David Faber reported the news earlier on Sunday.

Softbank is in talks with Japan's leading banks - Mizuho Financial Group Inc, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group - to borrow up to $23 billion for a deal, people familiar with the matter told Reuters on Friday.

The banks involved in the syndicated loan could provide a commitment letter as soon as this week, the sources said.

A deal for Sprint at around the levels mentioned by sources - and including a follow-on deal for MetroPCS - would lift the tally of outbound deals by Japanese firms to a record $80 billion this year, Thomson Reuters data shows, underscoring a strong appetite for overseas assets seemingly unaffected by signs of slowing global growth.

SECOND STEP

With Sprint in hand, Softbank may also look to acquire smaller U.S. carrier MetroPCS Communications, Japanese media have reported. Sprint has had a long interest in MetroPCS, which earlier this month agreed to merge with T-Mobile USA, part of Deutsche Telekom AG.

A takeover of Sprint would require approval from U.S. regulators, including the Justice Department and the Federal Communications Commission. Given the importance of telecommunications to U.S. national security, any deal would also likely warrant a review by the inter-agency Committee on Foreign Investment in the United States, according to one Washington-based attorney who advises on mergers and acquisitions

The attorney said that Japan's status as a close U.S. ally would help Softbank win approval for the deal.

($1 = 78.3550 Japanese yen)

(Additional reporting by Sophie Knight, James Topham and Andrea Shalal-Esa.; Editing by Gunna Dickson and Ian Geoghegan)

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n">(Reuters) - The Investment Company Institute on Thursday issued the following money market mutual fund assets report:

"Total money market mutual fund assets decreased by $1.38 billion to $2.562 trillion for the week ended Wednesday, October 10, the Investment Company Institute reported today. Taxable government funds decreased by $3.89 billion, taxable non-government funds increased by $4.64 billion, and tax-exempt funds decreased by $2.13 billion.

Retail: Assets of retail money market funds decreased by $2.90 billion to $886.96 billion. Taxable government money market fund assets in the retail category decreased by $190 million to $186.11 billion, taxable non-government money market fund assets decreased by $1.84 billion to $512.00 billion, and tax-exempt fund assets decreased by $860 million to $188.84 billion.

Institutional: Assets of institutional money market funds increased by $1.52 billion to $1.675 trillion. Among institutional funds, taxable government money market fund assets decreased by $3.70 billion to $670.47 billion, taxable non-government money market fund assets increased by $6.49 billion to $924.21 billion, and tax-exempt fund assets decreased by $1.27 billion to $80.78 billion.

ICI reports money market fund assets to the Federal Reserve each week. Revisions are due to data adjustments, reclassifications, and changes in the number of funds reporting. Weekly money market assets for the last 20 weeks are available on the ICI website."

NOTE: ICI's Web site is www.ici.org

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Fri Oct 12, 2012 10:15pm EDT

n">(Reuters) - Bankrupt solar firm Solyndra has filed a lawsuit against three U.S.-listed Chinese solar players, including Suntech Power Holdings Co (STP.N), seeking $1.5 billion in compensation due to monopolization by these firms, according to court documents filed on Thursday.

The lawsuit was filed against Suntech, Trina Solar Ltd (TSL.N) and Yingli Green Energy Holding Co (YGE.N) claiming that the trio's panel prices moved in tandem - falling 75 percent in four years in the U.S.

Solyndra, which claims in the lawsuit that the trio were involved in predatory pricing and price fixing, filed for bankruptcy a year ago as it could no longer compete with plunging prices of solar panels imported from China.

U.S. solar companies launched a complaint last year alleging protectionism from Beijing for Chinese panel makers, sparking trade disputes between the two countries.

As a result of the ongoing tryst, the U.S. slapped steep final duties on billions of dollars of solar energy products from China earlier this week.

Defendants - Suntech, Trina and Yingli - came to the U.S. and raised money from the stock market and deployed that capital to "destroy" American solar manufacturers, said Solyndra in the suit filed in a Northern California district court.

"We just received notice of this complaint, but from our initial review, these are unwarranted and misguided claims from a company that has a clear history of failed technology and achievements," said Robert Petrina, Managing Director, Yingli Green Energy Americas.

The other two Chinese companies named as defendants were not available for comment outside of business hours.

Solyndra has sold everything from its remaining inventory and assembly equipment to office computers in a bid to raise money to repay creditors.

The Obama administration came under fire for missing signs of financial trouble at the California-based Solyndra and approving nearly $535 million in loans in a bid to spark a clean energy industry and create jobs through stimulus spending.

Last year, executives from bankrupt Solyndra LLC testified that a flood of cheap Chinese solar panels kept it from realizing $1.2 billion in contracts it announced in 2008.

The lawsuit is Solyndra, LLC v. Suntech Power Holdings Co Ltd et al, U.S. District Court, Northern District of California, No. 12-05272.

(Reporting by Thyagaraju Adinarayan and Divya Lad in Bangalore; Editing by Bernard Orr and Michael Perry)

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A woman walks past a Santander bank branch in Madrid July 26, 2012.

LONDON | Fri Oct 12, 2012 9:07pm EDT

LONDON (Reuters) - Spain's Santander (SAN.MC) pulled out of its 1.65 billion pound (US$2.65 billion) deal to buy 316 UK branches from Royal Bank of Scotland (RBS.L) late on Friday, dealing a sharp blow to the state-backed British bank.

More than two years after the deal was struck, it collapsed because the process of carving out the business proved more complex and difficult than had been expected. Santander said it was unwilling to again extend the deadline when it became clear that it would not be completed this year.

RBS, 83 percent owned by the British taxpayer, said it would restart the sale process, which had been ordered by European authorities as a cost for Britain's rescue of RBS in 2008.

RBS could ask for an extension of the deadline. It may struggle to find a new buyer, however, and may have to accept a lower price or consider a flotation.

Santander UK agreed to buy the branches and the business of 1.8 million customers in August 2010, but technology and separation issues pushed back the original December 2011 completion date.

Santander UK Chief Executive Ana Botin said on Friday that she had wanted to take the business in "a steady state" and added: "We have concluded that given delays it is not possible to complete this within a reasonable timeframe."

A report by consultancy Accenture estimated that the transfer of retail customers would not be completed until 2014, and the transfer of corporate customers would not be completed until 2015, Santander said.

The bank said the deal had no chance of being completed by a February 2013 deadline, allowing it to walk away with no break fee.

Santander saw off competition from National Australia Bank (NAB.AX), start-up bank NBNK (NBNK.L) and Richard Branson's Virgin Money to buy the branches, as it was particularly keen to have the 244,000 business customers among the bank's clients.

The Spanish bank was keen to bulk up ahead of a planned flotation of its UK arm. It still wants to separate and list the business, but that is seen as being unlikely in the near future due to depressed UK bank valuations.

Virgin bought nationalized bank Northern Rock and may be the keenest to return for another look if it wants to bulk up.

RBS Chief Executive Stephen Hester faces more bad news as his bank is expected to be next in line to be hit with a big fine for the alleged manipulation of Libor global interest rates.

That and the collapse of the branches deal could overshadow two milestones this month that Hester had hoped would show his bank as being well on the road to recovery. It completed the initial public offering of its insurance arm Direct Line (DLGD.L) this week and later this month could exit a costly government insurance scheme.

The setback could further push back the timeframe for taxpayers to see a return on the 45 billion pound RBS bailout.

A Treasury spokesperson said the deal's collapse was a commercial matter for RBS and Santander, and said the government remained "determined to promote greater competition in the banking sector".

Hester said the work separating the branches would not be wasted.

"Much of the heavy lifting associated with a transfer has already been completed, including separating data for 1.8 million customers and putting in place a standalone management team," Hester said. He added that it was "disappointing" that Santander had pulled out, especially for customers and staff.

The affected business made an operating profit of 186 million pounds in the first six months of this year and has 21.7 billion in customer deposits and loans representing 86 percent of deposits.

Santander's purchase price when the deal was struck represented a 350 million pound premium to net asset value of 1.3 billion at the end of 2009. The price of the deal could have risen to 2 billion pounds or dropped to about 1.3 billion upon completion, depending on certain criteria.

(Reporting by Steve Slater; Editing by Gerald E. McCormick and Theodore d'Afflisio)

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DUBAI | Sun Oct 7, 2012 5:15am EDT

DUBAI (Reuters) - Qatar Telecom QTEL.QA (Qtel) has nearly doubled its stake in Kuwait's No.2 operator Wataniya (NMTC.KW) to 92.1 percent, giving an instant boost to its bottom line and more control of subsidiaries in the high growth markets of Algeria and Tunisia.

Qtel, which operates in 16 countries across the Middle East, Africa and Asia, will pay 519.1 million Kuwaiti dinars ($1.8 billion) at 2.6 dinars per share to raise its stake in Wataniya from 52.5 percent, it said in a statement on Sunday.

"For the past couple of years the geopolitical situation in the Middle East has made it riskier to buy into new assets, so Qtel has prioritized raising its stakes in existing units where it knows the market and the other shareholders," said Marc Hammoud, Deutsche Bank telecoms analyst, in Dubai.

Qtel consolidates Wataniya's net profit on a pro rata basis. In 2011, the firm made a net profit of 362 million dinars from its operations in Kuwait, Algeria, Tunisia, the Maldives, Saudi Arabia and the Palestinian Territories.

Wataniya owns 71 percent of Algeria's Nedjma and 75 percent of Tunisia's Tunisiana, with this pair's revenue up 33 and 116 percent respectively last year, according to Qtel's results.

Yet Kuwait accounted for about 90 percent of Wataniya's net profit last year, with the country's average revenue per user (ARPU) among the highest in the Gulf.

"Tariffs aren't expected to decline substantially and this was an opportunity for Qtel to up its stake in a cash cow," said Abhinav Purohit, an analyst at IDC in Dubai.

Wataniya has an estimated 39 percent share of Kuwait's mobile subscribers, with Zain (ZAIN.KW) claiming 41 percent and Saudi Telecom Co's 7010.SE (STC) affiliate, Viva, 20 percent.

"For many years, Wataniya did very well against Zain, but the market has changed since the launch of Viva, which has STC's backing and thus has been quite aggressive," said Abhinav. "This will allow Qtel to better deal with competition and also give it more lobbying power in Kuwait."

The latter is important because Kuwait does not have a telecom regulator. The Ministry of Communications is a de facto watchdog and also ultimately owns and operates the fixed-line infrastructure, which has long been earmarked for privatization.

"Qtel will be better placed as new opportunities emerge in Kuwait, especially in fixed lines," said Purohit.

Qtel did not state whom it bought the Wataniya shares, but on Saturday sources told Reuters the Kuwait Investment Authority (KIA) had agreed to sell its 23.5 percent stake.

Deutsche's Hammoud said the KIA's decision to sell its entire holding in Wataniya could set a precedent, with the government also owning stakes in Zain and Viva.

Bourse rules do not allow Qtel to force remaining shareholders to sell.

"There are no delisting plans and Qtel won't go to minorities with a better offer to buy them out," said a banking source familiar with the matter. "For Qtel, a 90-percent control is more than enough."

The Wataniya deal is Qtel's second major buy this year after agreeing in June to double its stake in Iraq's No. 2 operator Asiacell to 60 percent for $1.47 billion.

"Are we going to see more majority shareholders looking to buy-out minority stakeholders in the sector? My answer would be yes," added the banker.

Yet Qtel is unlikely to take full control of Tunisiana, despite the government set to offload its remaining 25 percent stake, because it wants to sell to a financial investor, rather than a telecom firm.

Qtel was advised by Barclays Capital (BARC.L) and the investment banking arm of National Bank of Kuwait (NBKK.KW) on the deal. Consulting firm Protiviti advised Wataniya.

(Writing by Matt Smith; Editing by Sanjeev Miglani)

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Fri Sep 28, 2012 6:05pm EDT

n">(Reuters) - Bank of America Corp agreed on Friday to pay $2.43 billion to settle claims it hid crucial information from shareholders when it bought investment bank Merrill Lynch & Co at the height of the financial crisis.

The settlement, among the biggest of its kind to stem from the 2008 meltdown, underscores how Bank of America is still suffering from decisions it made during the crisis, even as competitors are moving on.

The second largest U.S. bank likely lost money in the third quarter in large part because of the agreement, while other major banks, including JPMorgan Chase & Co and Wells Fargo & Co are expected to earn billions of dollars each.

As Lehman Brothers failed in September 2008, Bank of America agreed to buy Merrill Lynch. But in the weeks after that agreement, the bank tried unsuccessfully to scrap the deal. Merrill Lynch generated more than $15 billion of losses and its executives agreed to award employees up to $5.8 billion of bonuses.

Bank of America's shareholders voted to approve the deal in December 2008. After the merger closed, Bank of America shares fell sharply, and investors sued, saying Merrill's losses and bonuses should have been disclosed before the vote.

Bank of America denied the lawsuit's allegations, but CEO Brian Moynihan said the bank agreed to settle to remove uncertainty and put the case behind it.

The Merrill Lynch deal, as well as the bank's 2008 purchase of subprime lender Countrywide Financial, have ended up costing Bank of America billions, with the bank's mortgage business alone losing more than $35 billion since the Countrywide deal.

But the Merrill Lynch acquisition has also given much needed revenue to Bank of America. While the bank does not break out its results from Merrill Lynch, its wealth management and investment banking units, which owe much of their business to Merrill, generated nearly $160 billion of revenue from 2009 through June, or 43 percent of the bank's overall revenue.

Friday's settlement, which requires court approval, would resolve a case set for an October 22 trial in U.S. District Court in Manhattan. Investors sued the company and executives including former Chief Executive Ken Lewis, but Bank of America said it was footing the bill for the settlement.

At a brief hearing before Judge Kevin Castel on Friday afternoon, the judge told lawyers, "This is, needless to say, a good development," referring to the settlement. Few expect the settlement to face the obstacles that Bank of America experienced in 2009 when settling with the Securities and Exchange Commission over this same acquisition. A judge rejected the bank's initial settlement and forced both parties to renegotiate it.

LONG-SOUGHT DEAL

In September 2008, Bank of America's Lewis told his shareholders that buying Merrill Lynch was a real opportunity. The investment bank had the biggest retail brokerage on the Street, which gave Bank of America a new channel for selling products like credit cards.

As the deal started to look bad toward the end of 2008, Lewis tried to back out of it. But then-Treasury Secretary Henry Paulson pressured him to go through with the transaction. In January 2009, when Bank of America closed on its Merrill Lynch purchase, it received a $20 billion government bailout to shore up its balance sheet.

Bank of America has since repaid the money. Lewis retired at the end of 2009.

The deal helped the financial system but hurt Bank of America's shareholders, said Gary Townsend, chief executive of Hill-Townsend Capital in Chevy Chase, Maryland. Bank of America shares have slid more than two-thirds since the Merrill deal was announced in September 2008.

"It's good to get a bad tooth removed. But the question is, 'How expensive was Ken's mistake back in 2008?,'" Townsend said.

Lewis, when contacted by Reuters, declined to comment on the settlement.

The Merrill deal was valued at $50 billion when announced, but the final price was around $29.1 billion as Bank of America's shares fell.

Bank of America's acquisitions have continued to bring it pain. Since the financial crisis, the bank has agreed to pay more than $16 billion in 12 settlements with mortgage investors and other accords linked to takeovers, counting an $8.5 billion pact that still needs court approval.

On top of that $16 billion, Bank of America is on the hook for $11.8 billion in payments, mortgage modifications and loan refinancings as part of a $25 billion settlement this year over allegedly faulty handling of foreclosures.

EXPECTED LOSS

The bank expects to incur total litigation expenses of about $1.6 billion in the third quarter. It said that expense, a U.K. tax charge and a charge related to improvements in the company's credit spreads would hit quarterly results by about 28 cents per share. That would likely trigger a loss for the period. Analysts had expected profit of 14 cents per share when the bank releases results on October 17, according to Thomson Reuters I/B/E/S.

Lead plaintiffs in the lawsuit included the State Teachers Retirement System of Ohio, the Ohio Public Employees Retirement System and the Teacher Retirement System of Texas. The case was originally filed in 2009 by former Ohio Attorney General Richard Cordray, now director of the U.S. Consumer Financial Protection Bureau.

Four to five million shareholders could be eligible to share in the settlement, said Dan Tierney, spokesman for Ohio Attorney General Mike DeWine. Payouts will depend on the number of shares owned, he said.

Bank of America shares slipped 9 cents to $8.88 on the New York Stock Exchange in afternoon trading.

Prior to this accord, the largest crisis-era investor class action settlement involved allegations Wachovia, now part of Wells Fargo & Co, misled investors about the quality of loans sold before the financial downturn, according to NERA Economic Consulting.

Wells Fargo agreed last year to pay $590 million to resolve that lawsuit, on top of $37 million that auditor KPMG LLP agreed to pay.

Overall, the largest securities fraud settlements in U.S. history include the $7.2 billion agreement with investors stemming from the collapse of Enron; the $6.2 billion WorldCom settlement; and the $3.2 billion agreement over the accounting scandal at Tyco International, according to Stanford Law School's Securities Class Action Clearinghouse.

Under the Bank of America settlement, the bank will also make changes to its corporate governance through January 1, 2015. Some of the changes already were part of a February 2010 settlement with the U.S. Securities and Exchange Commission, including provisions on independence of the board compensation committee and an annual shareholder vote on executive pay.

The plaintiffs' law firms leading the case are expected to apply for $150 million in fees, said Tierney, the Ohio attorney general's spokesman. The law firms include Bernstein Litowitz Berger & Grossmann; Kaplan Fox and Kessler Topaz Meltzer & Check. The fee, which would be subject to court approval, works out to 6 percent of the settlement fund.

(Additional reporting by Grant McCool and Nate Raymond in New York, Tom Hals in Wilmington, Delaware and Tanya Agrawal in Bangalore; Editing by Supriya Kurane, Jeffrey Benkoe and David Gregorio)

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Sat Sep 29, 2012 12:52am EDT

n">(Reuters) - General Motors Co (GM.N) on Friday dismissed claims made in a $3 billion lawsuit filed by Saab's parent that the U.S. automaker deliberately bankrupted the Swedish company by blocking a deal with a Chinese investor.

GM, in a response filed in the U.S. District Court for the Eastern District of Michigan, said the automaker had the legal right to approve Saab's transaction with China's Zhejiang Youngman Lotus Automobile Co.

"The nub of plaintiffs' complaint is that GM declined to approve the transaction plaintiffs proposed to enter into with Youngman," GM said in the filings. "But the relevant contracts did not permit Saab to consummate the proposed transaction without GM's approval."

GM had previously said the lawsuit -- filed last month by Saab parent Spyker(SPYKR.AS) -- was without merit.

Saab, one of Sweden's best-known brands, stopped production in May 2011 when it could no longer pay suppliers and employees. It went bust in December, less than two years after GM sold it to Dutch sportscar maker Spyker.

GM's efforts to kill any sale were made to eliminate a potential rival in China, Spyker had said in the lawsuit.

Spyker Chief Executive Victor Muller said at the time that GM "had it coming" with regard to the lawsuit. Spyker is seeking at least $3 billion in compensatory damages, as well as interest and punitive damages, and legal fees.

For months, Muller tried to pull off a rescue deal with various Russian, Middle Eastern and Chinese investors, Youngman and Pang Da Automobile Trade Co Ltd (601258.SS).

The lawsuit is being funded by an anonymous third party, who will share in any settlement, Muller has said.

Youngman previously declined to comment about whether it was involved with the lawsuit, while Pang Da said it was not.

GM, which operates in China in a partnership with state-run automaker SAIC Motor Corp Ltd (600104.SS), late last year effectively blocked deals with Pang Da and Youngman, Spyker said.

GM said it would stop supplying vehicles and technology to Saab's new owners because it would run counter to the interests of its own shareholders.

Spyker charged GM with interfering in a prospective deal with the Chinese companies by claiming it would no longer license its technology to or build cars for Saab even though the last agreement was structured to exclude the U.S. automaker's intellectual property, according to the lawsuit.

Saab had created its own vehicle platform that did not use any GM technology, so GM's statements that it would not support a deal were "intentionally false" because such support was not needed, Spyker said in the lawsuit.

In its response on Friday, GM dismissed the idea that its technology would not be shared with the other investors under the proposed Spyker deal.

"Putting aside whether this argument is factually wrong, it misses the point," GM said, adding that it had the right to terminate its technology license and supply agreements with Saab if there was a change in control of Saab with GM's prior consent.

"This right was clear and absolute, and did not depend on how GM's technology purportedly was being handled," GM said.

GM bought half of Saab -- which had been making cars since 1947 and built a small, loyal following -- in 1990 and the rest 10 years later. It decided to sell the brand in 2009 after the financial crisis and came close to closing it before Swedish Automobile, then called Spyker Cars, bought Saab in January 2010.

Despite its well-known name, Saab was a niche player whose future had been questioned by analysts. Saab was profitable in only one of the 19 years GM owned it, executives with the Detroit automaker have said.

A consortium called National Electric Vehicle Sweden AB (NEVS) earlier this month closed a deal to buy most of Saab's assets for an undisclosed sum. NEVS plans to build electric cars for the Chinese market based on the Saab vehicle platforms, starting in about 18 months.

(Reporting By Ben Klayman in Detroit; editing by Carol Bishopric)

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1 of 2. A view of the Hewlett Packard headquarters in Palo Alto, California November 23, 2009.

BOSTON/NEW YORK | Wed Aug 8, 2012 8:03pm EDT

BOSTON/NEW YORK (Reuters) - Hewlett Packard Co warned of a mammoth quarterly loss after writing down $8 billion on the value of its services business, most of which it acquired four years ago with its $14 billion purchase of EDS.

The world's largest computer maker also plans to replace its head of services, a vast but sluggish division that new CEO Meg Whitman wants to reshape into a stronger competitor to the likes of IBM.

Whitman, the former eBay CEO who took up the computing giant's helm in 2011 to some skepticism about her technology and hardware credentials, is trying to turn around the company. HP's stock has lost more than half its value in the two years since CEO Mark Hurd unexpectedly resigned amid a scandal over his relationship with a female marketing contractor.

In a sign that Whitman's efforts to trim costs and bolster the company's prospects were succeeding, HP on Wednesday raised its quarterly outlook for profit, after excluding one-time items such as the goodwill writedown. It did not provide reasons.

HP's stock rose 2.4 percent to end at $19.41 after the increase in the company's outlook relieved investors, who had been expecting another bad quarter with global IT spending on the wane.

"Everybody was expecting them to miss the quarter. Now they said they are going to beat their forecast. That's why the stock is up," said Shaw Wu, an analyst with Sterne Agee.

But analysts cautioned that it is premature to say that HP's darkest days have passed, especially because the company did not explain why it raised its outlook for profit, excluding items.

"There are a lot of unanswered questions," said Stifel Nicolaus analyst Aaron Rakers. "It is hard for me to get too terribly positive on it."

HP said it decided to take the $8 billion non-cash charge in its fiscal third quarter ended July 31 following a review prompted by declines in its stock price, changing market conditions and the services division's financial performance.

"When indicators of potential impairment are identified, companies are required to conduct a review of the carrying amounts of goodwill and other long-lived assets to determine if an impairment exists," HP said in a statement.

Analysts said that charge confirmed what has long been widely known by investors: HP paid too much for EDS, one of the pioneers of the outsourcing of technology services.

The deal was unpopular on Wall Street from the day it was announced in May 2008 as critics questioned whether then-CEO Hurd was paying too dearly for a slow-growing company.

"Is this a huge write-off? Yes," said Global Equities Research analyst Trip Chowdhry. "Management is undoing the things that Hurd did - overpaying for something that is not right."

The company is scheduled to release quarterly earnings on August 22 after the closing bell.

HP also said that it had moved faster than it previously anticipated with plans announced in May to reduce 27,000 jobs, or 8 percent of its workforce. Because of this, it raised its estimate of a third-quarter pre-tax restructuring charge to as much as $1.7 billion from its previous estimate of $1 billion.

As a consequence of the impairment charge and the restructuring charge, HP said it expected to post a third-quarter loss of $4.31 to $4.49 per share.

MISSING INGREDIENT: REVENUE GROWTH

HP, which employs more than 300,000 people globally, posted a 31 percent drop in second-quarter profit and a 3 percent decline in revenue.

Analysts said the company's long-term success depends on efforts to rejuvenate its products, such as developing goods that can compete with the likes of Apple Inc's iPads and phones that run on Google Inc's Android operating system.

"Write-offs don't do it," said Fred Hickey, editor of The High-Tech Strategist newsletter. "You need revenue growth."

Wall Street analysts expect HP's sales to fall 3.4 percent to $123 billion in its current fiscal year, according to Thomson Reuters I/B/E/S.

The company did not comment on its revenue outlook in its release on Wednesday.

Wu, the analyst with Sterne Agee, said it will be tough to get sales growing at a healthy clip, noting that about 30 percent of revenue comes from HP's ailing PC division and at least 20 percent from its sluggish printer business.

"They've got at least 50 percent of their company that's still under pressure. Restructuring doesn't help that out," Wu said. "They still have a lot to do."

HP said it now expects third-quarter earnings, excluding one-time items, of about $1.00 per share, compared with analysts' average estimate of 97 cents.

The company had previously forecast earnings of 94 cents to 97 cents per share.

Whitman, a Silicon Valley veteran who waged an unsuccessful bid for governor of California in 2010, has said she plans to use some of savings from the restructuring to develop new products, especially in printing and PCs.

HP said that it was replacing the head of its services business, John Visentin, who was named to the post a year ago by Leo Apotheker, Whitman's predecessor as CEO. Visentin, a former IBM executive, could not be reached for comment.

Senior Vice President Mike Nefkens was named Visentin's acting replacement. Nefkens is general manager of HP enterprise services in Europe, Middle East and Africa (EMEA).

(Reporting By Nicola Leske in New York and Jim Finkle in Boston; Editing by Gerald E. McCormick, John Wallace and Jan Paschal)

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Tourists take pictures of a NASA sign at the Kennedy Space Center visitors complex in Cape Canaveral, Florida April 14, 2010.

PASADENA, California (Reuters) - PASADENA | Fri Aug 3, 2012 8:04pm EDT

PASADENA, California (Reuters) - PASADENA Calif. Aug 3 (Reuters) - NASA will pay more than $1 billion over the next 21 months to three companies to develop commercial spaceships capable of flying astronauts to the International Space Station, the agency said Friday.

The lion's share of the $1.1 billion allotted for the next phase of NASA's so-called ?"Commercial Crew" program will be split between Boeing and Space Exploration Technologies, a privately held firm run by Internet entrepreneur Elon Musk.

Boeing will receive $460 million to continue developing its CST-100 capsule, which is intended to fly aboard a United Launch Alliance Atlas 5 rocket. ULA is a partnership of Boeing and Lockheed Martin.

Space Exploration Technologies, or SpaceX, was awarded $440 million to upgrade its Dragon cargo capsule, which flies on the firm's Falcon 9 rocket, to carry people.

In May, a Dragon capsule became the first privately owned spacecraft to reach the station, a $100 billion outpost that flies 240 miles above Earth. The test flight was part of a related NASA program to hire commercial companies to fly cargo to the station.

Privately held Sierra Nevada Corp received a partial award of $212.5 million for work on its Dream Chaser, a winged vehicle that resembles a miniature space shuttle which also launches on an Atlas 5 rocket.

All three firms are prior recipients of NASA space taxi development work. The new awards will more than triple NASA's investments in commercial crew programs, which so far total $365 million.

Unlike previous NASA development programs, costs are shared between the government and its selected partners.

"?The companies also are bringing money to the table. This is a way of allowing the United States to lead in the development of new space systems that are human-capability and then taking those systems for commercial purposes, as well as for NASA purposes in the future," program manager Ed Mango said.

Since the space shuttles were retired last year, NASA is dependent on partners Russia, Europe and Japan to reach the station. Russia will remain the sole entity capable of flying crew until U.S. companies develop systems, which NASA hopes will be within five years.

Shut out of the competition was Alliant Techsystems which hoped to parlay an ongoing unfunded NASA partnership agreement into a paying contract.

Amazon.com founder Jeff Bezos's startup Blue Origin, which won $25.7 million during two predecessor programs, did not bid for the integrated design contracts awarded Friday.

Three other firms - Space Operations, American Aerospace and Space Design - submitted proposals but were eliminated for not meeting requirements, NASA's associate administrator for space operations Bill Gerstenmaier said during a conference call with reporters.

(Irene.Klotz@thomsonreuters.com)

(Editing by Vicki Allen)

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