Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : The Hot Button Questions:- Money, Banks, & the Economy -- Ignore unavailable to you. Want to Upgrade?

To: pezz who wrote (489)	10/28/2003 1:38:17 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Banking news news.ft.com Banks lead $70bn M&A spree in the US By David Wells, Gary Silverman and James Politi in New York Published: October 28 2003 0:19 \| Last Updated: October 28 2003 0:19 Wall Street on Monday saw the biggest wave of large takeovers since the end of the 1990s bull market with four deals across a variety of sectors valued at more than $70bn. The deals all involved consolidation in mature industries - banking, health insurance and tobacco - and raised Wall Street hopes that the improving economy was giving managements the confidence to act. The biggest was Bank of America's agreed $47bn all-share offer for FleetBoston Financial, which sent other regional banks stocks up sharply on expectations of further US banking mergers. After the market closed, British American Tobacco said it was merging its US subsidiary, Brown & Williamson, into RJ Reynolds in a $6.2bn deal. Earlier, Anthem agreed to buy WellPoint Health Networks for $16.4bn to form the largest US health insurer while United-Health said it was paying $2.85bn for Mid Atlantic Medical Services. Richard Peterson, market strategist at Thomson Financial, said it was the first day to see four multibillion dollar deals since February 2000, just before the stock market peaked. Including Monday's $9.7bn acquisition by China Telecom of six regional networks, Dealogic said the value of global deals on Monday was $77.3bn, not counting the tobacco merger. But Jack Levy, co-head of global M&A at Goldman Sachs, cautioned against reading too much into one day's activity. "This can set a much better psychological tone but I doubt that it will necessarily lead to a dramatic near-term increase in dealmaking." Goldman advised BofA and worked on all three other US deals, reinforcing its position as the top global merger adviser. Morgan Stanley, which advised Fleet and China Telecom, has jumped to number two in the fourth quarter. Ken Lewis, chairman and chief executive of BofA, said the acquisition of FleetBoston would force other big banks to consider similar deals. Octavio Marenzi, chief executive of consultants Celent Communications, said banks such as Wachovia, Bank One and Wells Fargo would be under pressure to make purchases. "There is now a big gap between the top three US banks and the rest. The next tier down from the Big Three will look at this deal and wonder what their strategy should be now." But BofA shares fell 10 per cent, reflecting concerns the company was paying too much for Fleet, which has been unable to grow outside its main market in the north-east and has struggled with losses in Argentina. BofA is offering 0.5553 shares for each Fleet share, representing a price of $45 a share, or a 42 per cent premium, based on the closing stock price on Friday. Fleet shares gained 24 per cent to $39.20, compared with the $40.85 value of BofA's offer at Monday's close. Other banks that had looked at Fleet, including Citigroup and Wachovia, BofA's Charlotte, North Carolina, rival, had been unwilling to pay such a high price, according to a person close to the deal. Buying the seventh-biggest US bank would allow BofA to jump ahead of JP Morgan Chase into the number two spot ranked by assets behind Citigroup. Mr Lewis will cede his chairman role to Charles Gifford, chairman and chief executive of Fleet. Mr Lewis will continue to run BofA day to day. Mr Gifford said in the last year he had realised his bank did not have the scale to compete outside its home market. Once completed, the new BofA will have 9.8 per cent of the banking deposits in the US. The government-imposed limit, through acquisitions, is 10 per cent. BofA will also have at least the third largest market share in 21 of the 29 states, including 23 of the 30 fastest-growing metropolitan areas. BofA already had a foothold in some of the fastest-growing banking markets and wealthy states, including Florida, Texas, and California, but it had no presence in the north-east, one of the wealthiest regions in the US.

To: pezz who wrote (489)	10/28/2003 3:23:06 AM
From: maceng2	Read Replies (1) \| Respond to of 1417

Buffet's investment bets against dollar seattletimes.nwsource.com [seen this mentioned many times on the boards..pb] By David Plumb Bloomberg News NEW YORK — Warren Buffett, the billionaire investor and chairman of Berkshire Hathaway, said Berkshire has made "significant" foreign-currency purchases in the last year and a half in a bet that the U.S. trade deficit will erode the dollar. In a letter published on Fortune.com, Buffett said "our trade deficit has greatly worsened, to the point that our country's 'net worth,' so to speak, is now being transferred abroad at an alarming rate." Buffett declined to say which currencies he bought or how much. He had never bought a foreign currency prior to the spring of 2002, he said. Buffett proposed establishing a new tariff plan that would promote exports and make imports more costly. Berkshire has increased its book value per share 22 percent on average each year for the last four decades. Buffett's 37 percent stake in the company is worth more than $36 billion. Buffett told Barron's in an interview published last weekend that he hasn't found opportunities in the stock and bond markets that appeal to him now, forcing Berkshire to keep more than $24 billion in cash on the sidelines.