It hasn’t taken John Thain long to put his stamp on the world’s largest brokerage. After being named chairman and chief executive of Merrill Lynch &Co. just three weeks ago, Thain on Monday secured a capital infusion worth up to $6.2 billion and sold off one of Merrill’s lending units. His fast action came at a critical time; some analysts think Merrill is facing credit-related writedowns of $10 billion for the fourth quarter. Merrill said it will receive a cash infusion from Singapore’s Temasek Holdings and U.S. money manager Davis Selected Advisors. It also sold its commercial finance business to General Electric Co.’s finance arm for an undisclosed price.
Oil futures prices climb a bit higher
Oil futures drifted higher in light holiday trading Monday after predictions of a drop in crude inventories raised new supply concerns. With little other news to motivate buying or selling, investors focused on forecasts by analysts including Addison Armstrong, director of exchange traded markets at TFS Energy Futures LLC, who predicted crude supplies fell by 1.5 million barrels last week. Tim Evans, an analyst at Citigroup Inc., predicted that crude supplies fell by 2 million to 3 million barrels. The Energy Department’s Energy Information Administration reports oil inventories on Thursday this week, a day late because of the Christmas holiday.
Morgan Stanley sets stock buy
Morgan Stanley and the Chinese government said Monday that the U.S. investment bank has determined the range of prices to be used when China’s international investment fund converts $5 billion worth of securities into Morgan Stanley stock. China Investment Corp. agreed last week to buy Morgan Stanley securities that will be convertible into up to 9.9 percent of the bank’s stock in 2010, at a price of no more than 1.2 times the “reference price” that was confirmed Monday.
The reference price would be between $48.07 and $57.684. Morgan Stanley’s shares closed at $54.97 Monday, up 1.1 percent. The Chinese investment will help soften the blow from mortgage-related debt that led the bank to report a $9.4 billion writedown in the quarter ended Nov. 30.
Harrah’s buy gets commission OK
Harrah’s Entertainment Inc. has tentatively cleared the last remaining regulatory hurdle to the largest casino buyout ever. Harrah’s said Monday that the National Indian Gaming Commission has approved the company’s $17.7 billion purchase by private equity buyers Apollo Management and Texas Pacific Group, pending final commission review. That conditional approval means Harrah’s can go forward with the deal, which is expected to close in early 2008.
Jay-Z steps down from Def Jam
Shawn “Jay-Z” Carter said Monday that he will leave his post as president of Universal Music Group’s Def Jam Records label after his contract expires this year. The rapper said in a statement that he’ll keep churning out music for his record label, Roc-A-Fella/Def Jam. Carter, who was named president of Def Jam three years ago, said it was time for him to “take on new challenges.”
From Herald news services
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