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Dubai Gets $10 Billion Bailout; Citi Unveils First TARP Payback Plan; Cadbury Formally Rejects Kraft Offer; British Airways Cabin Crews to Stage Holiday Strike; Obama to Banks: Help the Economy Recover; Online Shopping Grows 3% Over 2008; Chinese Automaker Buys Saab Platform Technology; Toyota to Release Plug-In Hybrid in 2011
- Debt-laden Dubai got a $10 billion bailout from neighboring Abu Dhabi, boosting global markets but raising questions about the undisclosed terms of the deal, Reuters reported. The fund will enable state-owned investment vehicle Dubai World to repay a $4.1 billion bond its real estate developer Nakheel PJSC was due to honor yesterday (Monday). Despite the bailout, credit ratings agency Fitch Ratings Inc. called Abu Dhabi's support only " a tactical step to permit an orderly restructuring of obligations within Dubai to continue."
- Citigroup Inc. (NYSE: C) formally laid out its plans to repay $20 billion in Troubled Asset Relief Program (TARP) loans, which includes selling about $17 billion in common stock and about $3.5 billion of securities that turn into common shares. The TARP payback leaves Citi with a balance of roughly $15 billion, meaning it is still under the U.S. government's thumb. "They're still in the government's embrace. It's just not a bear hug now," Anton Schutz, president of Mendon Capital Advisors Corp., which owns Citi shares, told Reuters .
- Cadbury PLC's (NYSE ADR: CBY) board of directors unanimously rejected Kraft Foods Inc.'s (NYSE: KFT) $16.2 billion bid, calling it "wholly inadequate." While no competing offers have materialized yet, Cadbury has "had indications of interest from third parties on possible business combinations," Chief Executive Officer Todd Stitzer said in a conference call, declining to name any companies. The Hershey Co. (NYSE: HSY) as well as Nestle SA (PINK ADR: NSRGY) have been reported as potential competing suitors, but unless a company comes forward with a bid, Cadbury's shareholders - which have until Feb. 2 to approve or reject Kraft's bid - may green light Kraft's offer. "We're not overwhelmed by Cadbury's defense…This is not enough to squeeze a massively higher offer from Kraft in our view," James Edwardes Jones, an analyst at British broker Execution Ltd.told Reuters. "It is difficult to see why Kraft needs to pay up much more than 800 [pence]." Kraft's bid is about 727 pence per Cadbury share, and most analysts believe it needs to pay 820-850 pence to buy Cadbury.