Tesla Motors: Turning to Investors for a Boost
Electric car manufacturer Tesla Motors, which has yet to post a profit since it was founded in 2003, plans to sell 11.1 million shares at $14 to $16 each in an initial public offering. The producer of the $109,000 Roadster said it will use proceeds from the estimated $178 million IPO to pay for factories and fund possible acquisitions, according to a Securities & Exchange Commission filing. Existing stockholders, including PayPal founder and Tesla CEO Elon Musk, will sell 1.1 million shares, while Toyota Motor (TM) will buy $50 million of stock in a private placement, a spokesperson for Palo Alto (Calif.)-based Tesla said.
Axa: Putting a Piece of Itself on the Block
France's Axa, Europe's No. 2 insurer, is in talks to sell part of its U.K. life insurance unit to Resolution for $4 billion. Resolution, which could double its assets with the deal, plans to fund the purchase through a $3 billion rights offer. The Axa division ranks eighth in U.K. life insurance. Several European insurers are, like Axa, seeking to free up capital in slower-growing markets to fund growth in Asia, where margins are richer.
Starwood: A Tug-of-War Over Extended Stay Hotels
Starwood Capital Group remains intent on acquiring Extended Stay Hotels, despite losing out at a bankruptcy auction on May 27. The winning bid of $3.9 billion came from an alliance of Centerbridge Partners, Paulson & Co., and Blackstone Group (BX). Starwood, which estimates Extended Stay's value at $5.2 billion, claims that the auction's rules chilled the bidding process and is seeking court permission to propose a competing plan to restructure the more than 600-hotel chain.
Nestlé vs. Sara Lee: An International Coffee War Breaks Out
Switzerland's Nestlé has filed a patent infringement lawsuit against Sara Lee (SLE) in France, where the U.S. company recently introduced coffee capsules that Nestlé says piggyback unfairly on its Nespresso single-serve coffee-making system. Sara Lee introduced L'OR Espresso capsules, compatible with Nespresso machines, in April and has since sold over 12 million; it says the new product meets all legal requirements.
Delta and American Airlines: Fuller Planes and Steeper Prices
Delta Air Lines (DAL) and American Airlines (AMR), the two largest U.S. carriers, are forecasting second-quarter gains of at least 17 percent, using a benchmark for industry revenue, as rising demand buoys fares. After cutting capacity and prices when business fliers stayed put during the recession, big U.S. carriers are again flying fuller planes. US Airways' (LCC) corporate travel revenue jumped 50 percent in May from a year earlier.
Best Buy: A Second Chance for Used Video Games
Starting in late summer, Best Buy (BBY) will offer customers the option of exchanging their used video games for gift cards redeemable at its stores. The trade-in plan is an attempt by the consumer-electronics giant to grab sales from rivals GameStop (GME), Wal-Mart Stores (WMT), and Target (TGT), and reverse its first-quarter decline in gaming merchandise sales. Best Buy will offer the swaps at more than 1,000 of its U.S. stores. Later this year, the company will also introduce touchscreen kiosks that will allow customers to test and preorder games.
Microsoft: How the iPad Is Hurting Windows
While iPads continue to sell well and Apple (AAPL) struggles to fill orders for its brand new iPhone 4, Microsoft's (MSFT) failure to deliver a tablet-friendly version of Windows is forcing big computer makers such as Hewlett-Packard (HPQ) and Dell (DELL) to rely on rival software from Google (GOOG) to help them keep up. Windows7 is too unwieldy for iPad-like devices and a new version won't come out until the fourth quarter, giving Apple almost a year's head start in the fast-growing market of tablets.
CAA: Keeping Up with a Changing Hollywood
Creative Artists Agency is in discussions with private equity funds Kohlberg Kravis Roberts and TPG Capital about investment in the firm, according to The New York Times. The entertainment and sports powerhouse, which represents clients ranging from actress Meryl Streep to British soccer superstar David Beckham, is looking for new sources of capital to expand its business and keep up with Hollywood's ever-changing economy.