Noah IPO Soars; Deal for TMB Bank; Luminent Sues; Resolution Says No Deal; UK High Court Rejects Claim; Bridgestone Expands
- Shares of Noah Education Holdings Ltd (NED), a China-based provider of online-learning services, soared Friday, the day after its initial public offering (IPO) debuted way above its projected range, Reuters reported. The shares opened at $22.90, or 63.5% above the company's offering price. The 9.85 million American Depository Shares (ADS) actually priced at $14 each, well above the projected range of $9.80 to $11.80, the offering underwriters announced. According to the company's registration statement filed with the U.S. Securities and Exchange Commission, the IPO proceeds will be used to fund ongoing corporate research and development. Noah's educational materials are being developed to augment textbooks used by the primary and secondary school students in China, through either proprietary "digital learning devices," or on the Internet itself. Its target audience are students aged 5 to 19, giving it a potential target market of some 300 million students, Noah said in its filing.And while there is substantial competition, Noah noted that it has been partnering with the Chinese government on a digitally aided learning experiment.
- The directors of Thailand's TMB Bank (TMBPF) have approved a major recapitalization plan that will give Dutch financial-services company ING Groep NV (ING) a 25.11% stake in the bank. As a result, the Finance Industry of Thailand, which currently owns 31% of TMB, will see its percentage ownership drop to 26.2% upon completion of the plan. ING is being given the option of increasing its shareholdings to as high as 35% over the next two years if it wishes to do so.
- Luminent Mortgage Capital (LUM) is suing global banking giant HSBC Holdings PLC, claiming the Asian banking giant profited from the disarray in the roiled worldwide credit markets by wrongfully confiscating certain bonds that its subsidiaries had put up as collateral for loans, The Wall Street Journal and Reuters both reported. Luminent, based in San Francisco, invests in and trades mortgage-backed securities, primarily in residential mortgages. It claims that HSBC set artificially low valuations on nine subprime mortgage bonds that they held as collateral, and then used those low prices as reason to essentially repossess the collateral, Luminent attorney Sean O'Shea said, calling it an attempt by HSBC to "use the recent disarray in the capital markets to rip off its trading counter parties."
- Resolution PLC (RESGF) last week rejected an increased buyout offer from rival Pearl Group LTD, according to Bloomberg News. Insurer Resolution claimed that its own plan to acquire Friends Provident PLC was a superior strategy to being bought by Pearl. But Pearl disagreed and battled back by releasing a statement that said the "proposed merger between Resolution and Friends Provident will expose Resolution shareholders to the significant risks of integration and of the synergies promised not being realized." Other firms may now be interested in bidding for Resolution.
- United Kingdom insurers are breaking a sigh of relief after that nation's highest court issued a decision stating that the existence of asbestos-related Pleural Plaques is not grounds for victim compensation. Pleural plaques are scars on the envelope lining between the lung and rib cage filled with fluid. They are benign and do not impair lung function, but they do indicate significant exposure to asbestos. Plaintiffs had asked for relief due to the mental anxiety of having the scars. But House of Lords member Lord Leonard Hoffman wrote that "proof of damage is an essential element in a claim of negligence.... and..... in [his] opinion ... symptom less plaques are not compensable damages."
- Tire manufacturer Bridgestone (BRDCY) will be investing 1.3 trillion yen to boost its tire production around the world, the Nikkei News Service reported. The company plans to build tire factories in Mexico, Poland, Hungary and other locations not yet determined by 2009. Growth projections for Toyota, Nissan and other major auto manufacturers in the world's emerging markets led to expectations that tire demand will begin exceeding the supply as early as 2010. Bridgestone also plans to build a plant to make tires for construction machinery in Kitakyushu and increase production at its Shimonoseki, Yamaguchi Prefecture to grow capacity in large machinery tires by 40%. The company is hoping to continue to match, if not surpass its main rival, Michelin. The two currently are neck and neck in global tire sales, each with an 18% market share.