Tag: merger

Another US regional bank First Horizon’s stock tumbles after merger collapses

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New York: First Horizon and TD Bank have called off a $13 billion deal that would have formed Americas sixth-largest bank, adding to the turmoil sweeping the countrys regional lenders, a media report said.
Caught up in the worst banking crisis since 2008, First Horizon’s share price has plunged about 40 percent over the past couple months, falling well below the $25 per share that TD offered when the takeover was announced in February 2022, CNN reported.
The stock closed at $15.05 a share on Wednesday and plunged another 40 percent in morning trading on Thursday after the deal was mutually abandoned by the banks, the report said.

First Horizon is a regional lender in the southeast United States and would have helped Canada’s TD expand south of the border. But regional banks have been losing the confidence of investors and customers since the March collapse of Silicon Valley Bank and Signature Bank.
On Monday, a third regional bank, First Republic, failed and JPMorgan purchased most of its assets. A fourth, PacWest Bank confirmed earlier on Thursday that it’s looking for a financial lifeline.
First Horizon, though, said it remains stable, cash-rich and diversified.
“While today’s announcement is unfortunate and unexpected, First Horizon will continue on its growth path operating from a position of strength and stability,” First Horizon CEO Bryan Jordan said in a statement.
TD said in a statement that the companies called off the merger because of an unexpectedly long regulatory approval process. Without a timetable for approval, the companies began to question whether the deal would get regulators’ blessing at all. TD said the regulatory issue was for “reasons unrelated to First Horizon”.

Although TD didn’t directly cite the banking crisis or First Horizon’s crumbling market value as the reason for abandoning the purchase, its CEO Bharat Masrani said in a statement that the decision provided “clarity” to its customers and shareholders, CNN reported.
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#regional #bank #Horizons #stock #tumbles #merger #collapses
( With inputs from www.siasat.com )

May 4, 2023
Federal board allows rail merger, amid fresh questions about safety

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STB chair Martin Oberman said the board approved the merger because “on balance the merger of these two railroads will benefit the American economy, and will be an improvement for all citizens in terms of safety and the environment.” He also argued that the bigger entity will be more competitive against larger railroads. He also suggested that in approving the merger, the board was constrained by the laws Congress has enacted, saying their decision “has to be measured against the backdrop of what is our congressional mandate.”
In a sign of the board’s normally-sleepy stature, Oberman observed that this was the board’s first press conference in recent memory — maybe ever.
Wednesday’s decision is a discordant note in a time when the Biden administration has sought to combat consolidation across a swath of industries ranging from technology giants to airlines. However, the board is not strictly an arm of the administration, but rather helmed by presidential appointees from both parties who are confirmed by the Senate.
A White House official noted that the STB is an independent agency and said the White House is “currently reviewing the text of their decision.”
Shortly after the STB’s announcement, Sen. Richard Blumenthal (D-Conn.), who sits on the Senate committee that oversees railroads, said the decision “needs to be scrutinized.”
The five-member board was not unanimous in its decision — board member Robert Primus dissented, saying he was concerned that the merger increases consolidation, risks service disruptions and could harm communities along the path of the railroad. “Because these detriments to the public interest outweigh the expected benefits, I dissent,” he said.
Erik Peinert, research manager at the progressive anti-monopoly group American Economic Liberties Project, called the decision “disgraceful” and said it “sets the stage for future disasters like East Palestine and will likely lead to railroad staffing cuts, higher cargo loads, and other profit-driven safety shortcuts.”
“Nothing in the history of rail consolidation suggests it is a good idea,” he added.

The Surface Transportation Board placed some conditions on the merger, including a seven-year period of oversight during which certain decisions involving competition, customer service and other transit agencies or Amtrak will have extra scrutiny, along with extensive data reporting requirements intended to help protect competition.
A decision has been expected since the board released the environmental impact statement earlier this year finding that the merger would have minimal impact other than increased train noise in some communities, and that while increased volumes would also mean more hazardous materials spills, the risk on any specific segment “would continue to be low” and any release “would be contained quickly.”
Chicago-area lawmakers asked STB to delay its decision, saying the environmental report cited faulty statistics provided by Canadian Pacific, while the region’s commuter railroad, Metra, predicted a greater increase in freight rail traffic than CP did.
Rep. Katie Porter and Sen. Elizabeth Warren also opposed the merger out of concern that it would mean even more consolidation in an industry that’s already controlled by just a handful of companies. On the other hand, four lawmakers from Kansas and Missouri, including House Transportation Chair Sam Graves, last year urged STB to approve the merger.
The STB has increased oversight over the freight railroads over the last year in an attempt to force better service for customers and to help rebuild the railroad workforce, which has been hollowed out over the last eight years as the industry has cut costs through layoffs.
Josh Sisco and Kayla Guo contributed to this report.

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#Federal #board #rail #merger #fresh #questions #safety
( With inputs from : www.politico.com )

March 15, 2023
JetBlue, Spirit push low fare merger narrative to skeptical DOJ

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When asked for details about how the merger could drive down prices, Hayes said fares are a “function of capacity” and that Spirit flights will adopt JetBlue’s seat configuration. Though that means fewer seats, he argued that customers would still save because planes in the new, combined airline will spend more time in the air and less time on the ground.
“One of the benefits of bringing these two airlines together is we can increase the utilization of the airline,” Hayes said. “You have more options to fly that next route to increase the length of time in the day that you’re flying.”
Christie acknowledged that fares on some routes could increase if the merger is approved. But he argued that the new airline would lead to decreased fare costs overall.
Fares are “based on booking patterns happening at that particular time. So you could probably derive individual circumstances where you may see modest changes in fare,” Christie said. “But what’s more important to focus on is the aggregate effect of the larger airline,” he said. “I think hundreds of millions of dollars will be saved.”
However, because the combined airline will ultimately end up removing seats, Justice Department officials are not convinced that the new company won’t be forced to raise prices to recoup those losses, people with knowledge of the matter said.
DOJ’s decision coming soon
DOJ has a little more than a week to make a final call on whether to sue. The parties had previously agreed on a deadline of Feb. 28, but one of the people familiar with the matter now says that date is expected to slip. Hayes on Thursday also noted that those agreements can always be extended.
He added that JetBlue has been in discussions “with a number of state [attorneys general] as well.” And he also said that there will be “over the next week or two, a very significant amount of political bipartisan support for this transaction.” Hayes declined to comment on any specific meetings with the DOJ.
The companies’ argument before DOJ is essentially that they must merge in order to compete with the big four legacy airlines, Delta Air Lines, American Airlines, Southwest Airlines and United Airlines. Once merged, the new entity would be the fifth biggest, behind that group.

DOJ antitrust head Jonathan Kanter, who has an aggressive mandate to fight corporate deal-making, is unlikely to buy that argument.
Kanter however has recused himself from the case because his former law firm, Paul Weiss, represents Spirit, according to one of the people. That would leave the decision in the hands of his deputy, Doha Mekki, and practically it would have little impact.
A DOJ spokesperson did not immediately respond for comment.
Hayes has said several times in the past two weeks that the companies intend to fight for their deal in court, if necessary.
Airlines’ offer to grease the skids
To address DOJ’s concerns, JetBlue has offered to sell off the entirety of Spirit’s operations at Newark Liberty International Airport, LaGuardia Airport and Boston Logan International Airport, as well as five slots at Fort Lauderdale-Hollywood International Airport.
Those were picked amid DOJ concerns that JetBlue’s Northeast Alliance with American Airlines reduces competition and consumer choice, said JetBlue Senior Vice President of Government Affairs Robert Land.
Land said the companies are in “advanced” talks with potential buyers for all the assets up for sale, adding that the four largest airlines are not part of the divestiture talks.
Not currently on the table is an offer to abandon the alliance, which the DOJ challenged in court last year and is currently awaiting a ruling from a federal judge in Boston.
“Let’s wait and see what the judge’s verdict is. If we lose the NEA, right, the NEA is off the table,” Hayes said, “If we win the NEA, we won the NEA because it’s pro-competition. Frankly, we can use a number of slots leased to us by American to help JetBlue be bigger.”
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#JetBlue #Spirit #push #fare #merger #narrative #skeptical #DOJ
( With inputs from : www.politico.com )

February 25, 2023
‘Perfect explosion’: merger of neutron stars creates spherical cosmic blast

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Astronomers have observed what might be the “perfect explosion”, a colossal and utterly spherical blast triggered by the merger of two very dense stellar remnants called neutron stars shortly before the combined entity collapsed to form a black hole.
Researchers on Wednesday described for the first time the contours of the type of explosion, called a kilonova, that occurs when neutron stars merge. The rapidly expanding fireball of luminous matter they detailed defied their expectations.
The two neutron stars, with a combined mass about 2.7 times that of our sun, had orbited each other for billions of years before colliding at high speeds and exploding. This unfolded in a galaxy called NGC 4993, about 140-150m light years away from Earth in the direction of the constellation Hydra. A light year is the distance light travels in a year, 5.9tn miles (9.5tn km).
The existence of kilonova explosions was proposed in 1974 and confirmed in 2013, but what they looked like was unknown until this one was detected in 2017 and studied intensively.
“It is a perfect explosion in several ways. It is beautiful, both aesthetically, in the simplicity of the shape, and in its physical significance,” said astrophysicist Albert Sneppen of the Cosmic Dawn Center in Copenhagen, lead author of the research published in the journal Nature.
“Aesthetically, the colors the kilonova emits quite literally look like a sun – except, of course, being a few hundred million times larger in surface area. Physically, this spherical explosion contains the extraordinary physics at the heart of this merger,” Sneppen added.
The researchers had expected the explosion to perhaps look like a flattened disk – a colossal luminous cosmic pancake, possibly with a jet of material streaming out of it.

To be honest, we are really going back to the drawing board with this
Cosmic Dawn Center astrophysicist Darach Watson
“To be honest, we are really going back to the drawing board with this,” Cosmic Dawn Center astrophysicist and study co-author Darach Watson said.
“Given the extreme nature of the physical conditions – far more extreme than a nuclear explosion, for example, with densities greater than an atomic nucleus, temperatures of billions of degrees and magnetic fields strong enough to distort the shapes of atoms – there may well be fundamental physics here that we don’t understand yet,” Watson added.
The kilonova was studied using the European Southern Observatory’s Chile-based Very Large Telescope.
The two neutron stars began their lives as massive normal stars in a two-star system called a binary. Each exploded and collapsed after running out of fuel, leaving behind a small and dense core about 12 miles (20km) in diameter but packing more mass than the sun.
Very gradually, they drew nearer to each other, orbiting at a speedy clip. Each were stretched out and pulled apart in the final seconds before the merger because of the power of the other’s gravitational field. Their inner parts collided at about 25% of the speed of light, creating the most intense magnetic fields in the universe. The explosion unleashed the luminosity of about a billion suns for a few days.
The two briefly formed a single massive neutron star that then collapsed to form a black hole, an even denser object with gravity so fierce that not even light can escape.
The outer parts of the neutron stars, meanwhile, were stretched into long streamers, with some material flung into space. During the process, the densities and temperatures were so intense that heavy elements were forged, including gold, platinum, arsenic, uranium and iodine.
The researchers offered some hypotheses to explain the spherical shape of the explosion, including energy released from the short-lived single neutron star’s enormous magnetic field or the role of enigmatic particles called neutrinos.
“This is fundamentally astonishing, and an exciting challenge for any theoreticians and numerical simulations,” Sneppen said. “The game is on.”
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#Perfect #explosion #merger #neutron #stars #creates #spherical #cosmic #blast
( With inputs from : www.theguardian.com )

February 16, 2023