Financial News Thu May 10th 2012 – Obama on Gay Marriage, Warren Buffett in Avon Bid, Chesapeake


Financial News Thu May 10th 2012 – Obama on Gay Marriage, Warren Buffett in Avon Bid, Chesapeake

About the author

1 Response
  1. admin

    The Wall Street Journal reports, President Barack Obama said Wednesday he supported gay marriage, reversing his position on a controversial social issue just six months before the November election. Mr. Obama said that after years of lengthy discussions with friends and family, including his wife and two young daughters, he now “personally” believes gays and lesbians should have the right to marry. Mr. Obama is the first sitting U.S. president to publicly support gay marriage. His endorsement is largely a symbolic moment for a country that is actively wrestling with the issue. (Get with the program everyone! Live and let live!)
    The Wall Street Journal also reports, Fragrance maker Coty, raised its offer for larger rival Avon Products, to $10.69 billion and said Warren Buffett’s Berkshire Hathaway, had joined the group, that is investing in the deal. The presence of Berkshire Hathaway, gives a boost of credibility to an offer, that Avon had rejected, as uncertain and too stingy. The higher price—6.5% above Coty’s earlier offer—may not be enough to convince Avon a deal could be done, as the company was seemingly looking for a number closer to $30 a share. But it will be harder now for Avon to argue that the deal lacks credibility. Avon said it would review the offer in due time. Coty set a Monday deadline for Avon to respond to the increased offer, which is worth $24.75 a share, or it warned, it will withdraw the proposal.
    Reuters reports, far from the drilling rigs of Oklahoma, America’s second-largest natural gas producer, Chesapeake, is having to dig ever deeper into the well that really fueled its growth: Wall Street. The company is taking in more money from bankers, other investors and its own financial bets, than it is from its oil and gas. Most big energy companies, such as Exxon Mobil, typically earn more selling oil and gas, than they spend on investments, financing and other costs, making them cash rich. Chesapeake is expanding so fast that it takes in much less revenue from its oil and gas than it spends, leaving it stretched. some analysts question whether Chesapeake can keep striking enough deals to sate its cash needs, which are growing acute, as natural gas prices languish. The gap between cash coming in and cash going out shows “massive internal funding shortfalls,” according to an April report by Standard & Poor’s.

Leave a Reply