Unions for Northwest, Delta fail to agree
Delta Air Lines’ pilots union has told company executives it has been unable to agree on seniority issues with its counterpart at Northwest Airlines, raising serious doubts about the prospect of a combination of the two companies.
The disclosure was made Monday afternoon in a letter from the head of the pilots union at Delta, Lee Moak, to rank-and-file Delta pilots.
The letter does not mention Northwest, but describes the union that Delta’s pilots had been negotiating with as the only one they were focused on talking with. Multiple officials close to the talks have said in recent months that the other company was Northwest Airlines Corp.
New York Merc bought for about $9.5 billion
CME Group agreed to buy the New York Mercantile Exchange for about $9.5 billion Monday, a $2 billion discount over the originally announced price due to a dramatic decline in the stock of both futures markets.
“We can’t control the price of the stock market, however we both see stable companies with growth,” Nymex Chairman Richard Schaeffer said.
The merger would add energy and metals futures to the CME Group’s existing portfolio of financial and agricultural instruments, adding depth to its product line and improving the appeal of its contracts in the Middle East and Asia.
International Paper buys units from rival
International Paper Co., the world’s largest forest-products maker, agreed to buy packaging, recycling and containerboard units from Weyerhaeuser Co. for $6 billion to expand in North America.
The cash transaction includes 72 box-making factories, nine containerboard mills, 19 recycling plants and other sites that employ a total of 14,300 workers, Memphis, Tenn.-based International Paper said in a statement. Five banks have “fully committed” financing for the deal, Chief Financial Officer Timothy Nicholls said on a call with investors.
International Paper Chief Executive Officer John Faraci said the deal makes his company the world’s largest maker of containerboard and corrugated boxes.
Billionaire to purchase division of H&R Block
Billionaire Wilbur Ross agreed to buy the mortgage-servicing unit of H&R Block, including facilities in Las Vegas, for about $1.1 billion, creating the second-largest U.S. firm that collects payments on subprime loans.
WL Ross & Co. would handle records for about $95 billion of subprime mortgages, behind only Countrywide Financial Corp., Ross’ New York-based private equity firm said Monday in a statement.
Ross is known for picking up distressed assets at bargain prices. He bought the servicing arm of bankrupt American Home Mortgage Investment Corp. in October for about $500 million. Servicing businesses, which collect fees from the owners of mortgages, can gain value during housing slumps because borrowers are less likely to move or refinance.
Besides Las Vegas, other facilities included in the sale are in Irvine, Calif.; Jacksonville, Fla.; and Pune, India, Ross said. The deal is expected to close by May 30.
New Jersey tracks given casino subsidies
The New Jersey Senate on Monday approved a bill granting the state’s struggling horseracing industry $90 million in casino subsidies over three years to supplement purses, after the Assembly passed it last week.
The legislation, approved 38-1, expands tax deductions for casinos in return for the subsidies. It would also continue a moratorium on the installation of slot machine-like video lottery terminals at the state’s horse tracks.
Gov. Jon Corzine earlier this month said the subsidies will protect the state’s $1.1 billion horseracing and breeding industry. His spokesman Jim Gardner said Monday there is no date set for the signing.
Plan for casino complex by Disneyland scrapped
A developer has withdrawn its proposal for a condo-hotel complex close to Disneyland, effectively ending a long-running political battle over whether homes should be built in the theme park area, an Anaheim city official said Monday.
Newport Beach-based Renaissance Pacific Properties LLC last week pulled its plan to build 191 condominiums and a 102-room hotel on a 4.8-acre site by a road leading to the theme park complex, planning director Sheri Vander Dussen said.
Interest rates decline in Treasury auction
Interest rates on short-term Treasury bills fell in Monday’s auction to the lowest levels in nearly four years.
The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 1.1 percent, down from 1.42 percent last week. Another $22 billion in six-month bills was auctioned at a discount rate of 1.31 percent, down from 1.45 percent last week.
Treasurys rise on fears over Bear Stearns sale
Treasury prices rallied Monday on concerns that the sale of Bear Stearns Cos. to JPMorgan Chase & Co. may be followed by further unraveling in the financial system.
The benchmark 10-year Treasury note rose 1.16 to 101.66 with a yield of 3.30 percent, down from 3.42 percent late Friday, according to BGCantor Market Data. Prices and yields move in opposite directions.
The 30-year long bond gained 0.91 points to 101.66 with a yield of 4.29 percent, down from 4.35 percent.