90 seconds at 9 am with BNZ: Dow up on big BHP, Hart cash takeover bids; Govt recapitalisation of South Canterbury Finance?

90 seconds at 9 am with BNZ: Dow up on big BHP, Hart cash takeover bids; Govt recapitalisation of South Canterbury Finance?

Bernard Hickey details the key news overnight in 90 seconds at 9 am in association with BNZ, including news overnight of two big takeovers that boosted the Dow overnight by as much as 2%.

The Dow is closing up around 1.2% after BHP launched an unsolicited US$39 billion cash takeover bid for Canada's Potash, which is the world's biggest fertiliser miner.

This was the biggest takeover bid on the American market for over a year.

The Dow's move higher also lifted the New Zealand dollar to 71.3 USc as the talk some companies are ready to use their cash piles to invest boosted global risk appetites.

Also, Graeme Hart's Rank Group has bid US$6 billion cash for Pactiv, which is America's biggest maker of rubbish bags, which are branded 'Hefty'. The combined company will have 23,000 employees and more than 100 factories around the world. Here's the latest on the deal from PlasticsNews. I kid you not.

The deal is being funded with US$5 billion worth of junk bond debt from Credit Suisse Group, HSBC and ANZ.

Meanwhile, the world's biggest bond fund manager, PIMCO, has called for the nationalisation of the US Mortgage Finance industry.

PIMCO's boss Bill Gross said it was unrealistic to expect the private sector to return to housing finance in America.

Also, the US Federal Reserve started buying US Treasury bonds for the first time since October last year as it resumes using cash from maturing mortgage bonds to buy US government debt in an attempt to boost the economy. It bought US$2.5 billion worth overnight.

Back in New Zealand, the New Zealand Herald's Adam Bennett is reporting that the government is considering recapitalising South Canterbury Finance and that a deal is expected this week.

The report did not include named sources and was not confirmed by CEO Sandy Maier, who described it as an interesting rumour. The report also said Allan Hubbard would give up his ownership rights in exchange for not being prosecuted by the Serious Fraud Office.

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Taxpayer munny to be used to prop up another finance company....

  • What happens if the govt refuses to bailout SCF?

Think welfare is bad in Noddy..think again!...

."http://www.telegraph.co.uk/news/uknews/7950501/Pensioner-83-faces-eviction-to-make-way-for-family-of-benefits-claimants.html

" ....... it emerged that a jobless couple in Bristol expecting a 12th child have been granted a five-bedroom detached home rent-free.

Mother-of-eleven Joanne Sheppard, 36, complained that her family felt “victimised” by residents who criticised them for claiming benefits"

so public wealth ends up in private hands.

again.

Re:Graeme Hart - the model of highly leveraged debt fuelled takeovers took a hammering in part 1 of the crash, and he seems to have survived it (and is apparently still besotted with debt). Its a model that works well until one day suddenly it doesnt. Let's see how he survives recession part deux.

I have seen the property listings in Marlborough shoot higher in the last 4 weeks...maybe the following is a reason why.......: http://www.stuff.co.nz/marlborough-express/rural/4031544/Awatere-Vineyard-owes-24m.............." The depressed grape prices have led some commentators to predict Awatere is only the first in a string of Marlborough contract growers likely to go under."