AIG Ousts CEO; NY Manufacturing Slump; Landry's Bought by CEO; Oil Retreats From Record; Chiquita Expects Significant Loss; Homebuilder Sentiment Hits All-Time Low; McClatchy Cuts 1,400 Jobs; Yahoo Shareholder Presents "Third Option"
Mark Sullivan, chief executive officer of American International Group Inc. (AIG), has been ousted after three years in the top spot, which were marked by financial troubles and a plunging stock price, MarketWatch reported. Robert Willumstad, the current chairman, will replace Sullivan. "The board and I recognize that results over the past two quarters have been unacceptable, but we are confident in AIG's future," Willumstad said in written statement.
The New York Federal Reserve's Empire State Index was down 5.5 points to –8.7 for late May/early June. "Manufacturing, at least in the New York region, is not out of the woods yet," said Joel Naroff, president and chief economist of Naroff Economic Advisors, in a note to clients yesterday (Monday). New orders, shipments and employee hours worked all suffered declines.
Chief Executive Officer Tilman Fertitta will buy Landry's Restaurants Inc. (LNY) for about $1.3 billion, Reuters reported. Landry's includes restaurants under the name Rainforest Cafe, Saltgrass Steak House, Landry's Seafood House, The Crab House, Charley's Crab and The Chart House. Fertitta, who already owns 39% of shares outstanding, will pay $21 per share in cash, in a deal that includes $885.0 million in debt. The deal is expected to close in the next four months.
The price of oil receded in afternoon trading on the New York Mercantile Exchange yesterday (Monday) after earlier soaring to a trading record of $139.89 a barrel, the Associated Press reported. Oil rose as the dollar weakened on manufacturing data but retreated after Saudi Arabia announced plans to boost production to its highest level in more than 25 years.
Chiquita Brands International Inc. (CQB) said yesterday (Monday) that it now expects to report a "significant loss" in its third quarter due to higher costs, the Associated Press reported. Volumes for the past two months have either been flat or down because of bad weather in Central America and Ecuador, which has constrained supply and increased sourcing costs.
Home builder sentiment sank 1 point in June to match the lowest level on record the National Association of Home Builders said yesterday (Monday). The group said its preliminary NAHB/Wells Fargo Housing Market Index fell to 18 from 19, the same level reached in December, and the lowest since the index began in January 1985, according to Reuters. That means that only about one builder in five actually believes the housing market is in good shape, MarketWatch.com reported yesterday. A secondary index, which measures current sales, also matched a record low in June, while measures of expected sales were stable, MarketWatch said.
The McClatchy Co. (MNI), owner of 30 daily newspapers including the Miami Herald, said it will cut about 1,400 jobs, about 10% of its workforce, to save overhead in the face of an industry-wide plague of diminished advertising revenue. "This is a permanent downsizing of newspaper companies," Ken Doctor, a media analyst at Outsell Inc., told Bloomberg. "They're not using the word 'permanent,' but it's a recognition that they will get much smaller as they try to find their way in a digital world."
Seeking compromise, dissident Yahoo Inc. (YHOO) shareholder Eric Jackson suggested a compromise to create a new board that recognizes the concerns of Yahoo's current board and billionaire investor Carl Icahn, who has threatened a proxy battle and drew a list of his own nominations for Yahoo's board. "I want Icahn to win outright, but I am putting forward this 'Third Option' because I fear several large shareholders will worry about the operational abilities of Icahn and his team," Jackson said in a statement, Reuters reported.