Global Investing Roundup

Second-half Outlook May Dethrone U.K. Pub Chain Green King. Shares Drop 8.5%; Gemstar-TV Guide Expands Programming into China; TomTom Approves Tele Atlas Takeover; China Eastern Airlines Subject of a Bidding War

  • Greene King Plc (GRKGF), owner of more than 2,200 pubs and taverns in the United Kingdom, credited its first-half 6.7% earnings grow to share buybacks and acquisitions, Bloomberg reported. Earnings and revenue growth were also assisted by the acquisition of the Hardy's and Hanson pub chain last September. However, Chief Executive Rooney Anand is wary of the second half of the year, as smoking bans, cost pressure and general consumer confidence are growing concerns of the industry. Greene King's shares dropped 8.5% in yesterday's (Tuesday) trading. 
  • Gemstar-TV Guide International, Inc. (GMST), a global media and entertainment company, has signed a multiyear agreement with Changzhou Broadcast and Television Information Company Ltd., becoming the first company to provide interactive programming guide (IPG) services in China. Changzhou Broadcasting has more than 1 million subscribers in the city of Changzhou. "This is our first step into exploration of the China market, and it underscores our focus on offering IPG solutions in international markets, specifically those where cable operators are just beginning to switch to digital services," Rich Battista, Gemstar CEO, said in a statement. 
  • Shareholders of TomTom (AMS: TOM2), the largest manufacturer of personal navigational devices, voted to approve the company's planned acquisition of digital mapmaker Tele Atlas NV. TomTom made an all cash offer of $4.28 billion (2.9 billion euros) last month, outbidding rival Garmin Ltd. (GRMN). TomTom was already Tele Atlas' biggest customer. It also held 30% of Tele Atlas' shares. TomTom told journalists the takeover would produce 8.16 million new shares to be issued at $82 each, and raise approximately $675 million. The funds will be used to pay off debt TomTom accrued in financing the acquisition. It has also arranged senior financing with ABN Ambro (ABN), Goldman Sachs (GS) and Rabobank to complete the deal. However, the European Commission has raised concern about whether or not it will allow the deal to be completed by launching an investigation into the merger. With only two major manufacturers of digital maps there may be a cause from concern over supply chains. Navteq Corp. (NVT), the other major digital mapmaker, is in the midst of being acquired by Nokia Corp. (NOK).
  • China National Airlines Holding Company, announced yesterday (Tuesday) that it will be increasing its stake in China Eastern Airlines (CEA) from 11.79% to 12.07%. That triggered speculation of a bidding war between Air China-Cathay and Singapore Airlines-Temasek partnership. Last month, Singapore Airlines and Temasek Holdings signed a final agreement to buy a stake in China Eastern Airlines. According to the deal, Singapore Airlines buy 15.73% of the Shanghai-based carrier, and Temasek 8.27%.  However, CNAHC and Hong Kong airline Cathay Pacific Airways said in September a counteroffer was planned for the China Eastern stake in an apparent bid to thwart Singapore Airlines. China National, which is the parent company of Air China Ltd. purchased an additional 4.28 million shares last Thursday at an average price of HK$7.585 each. An analyst at Citigroup (C), Moll Ma, wrote last Thursday that she though that shares in China Eastern to rise to as much as HK$11.42 if a bidding war ensues.