Roundup: States given more time; Bayer outbid for vitamin maker; mortgage rates hit new record, more
Published: Friday, Nov. 16, 2012, 12:01 a.m.
States get more time on health exchanges
States were given a one-month delay on Thursday to decide whether they will build new marketplaces to sell people health insurance under President Obama's overhaul legislation. Rather than require states to submit by Friday a letter of intent on their plans for the health exchanges, Secretary of Health and Human Services Kathleen Sebelius extended the deadline for the notification until Dec. 14. Pennsylvania is one of the states that must make a decision. “While receiving a letter of intent now will help us assist states in finalizing their application, a state may submit both a letter of intent and an application to operate its own exchange by Dec. 14,” Sebelius said in a letter to the Republican Governors Association, which requested the delay.
Reckitt Benckiser tops Bayer bid
Reckitt Benckiser Group Plc will offer to buy Schiff Nutrition International Inc. in a deal that values the maker of vitamins, supplements and nutrition bars at about $1.4 billion, topping a bid from Bayer AG. An offer of $42 a share in cash will commence on Friday, Slough, England-based Reckitt Benckiser said. The bid is 24 percent higher than Salt Lake City-based Schiff's closing price on Thursday. Reckitt Benckiser and Bayer are competing for Schiff's fast-growing vitamins and nutritional supplements business, which the German drugmaker had sought to add to its consumer-health unit. Robinson-based Bayer Corp., the U.S. unit of Bayer AG, last month agreed to buy Schiff for about $1.1 billion.
30-year mortgage rate hits 3.34%
Average rates on fixed mortgages fell to fresh lows this week, a trend that has helped the housing market start to recover this year. Mortgage buyer Freddie Mac says that the average rate on the 30-year loan dipped to 3.34 percent, the lowest on records dating back to 1971. That's down from 3.40 percent last week and the previous record low of 3.36 percent reached last month. The average on the 15-year fixed mortgage dropped to 2.65 percent. That's down from 2.69 percent last week and a record.
McDonald's ousts U.S. leader
McDonald's Corp. is hoping a leadership shake-up for its U.S. business will help it fight off intensifying competition. The world's biggest hamburger chain said Thursday that Jan Fields, president of McDonald's USA, will be replaced by Jeff Stratton, its global chief restaurant officer, effective Dec. 1. The announcement occurs less than a week after the fast-food giant reported its first monthly sales drop in nearly a decade. After years of outperforming its rivals, McDonald's has struggled recently amid intensifying competition at home and a persistently weak economy abroad.
United glitches delay travelers
A computer outage at United Airlines delayed thousands of travelers on Thursday and embarrassed the airline at the time when it's trying to recover from glitches earlier this year. The two-hour outage held up morning flights around the globe. From Los Angeles to London, Boston to San Francisco, frustrated fliers tweeted snarky remarks about the glitch. It was United's third major computer mishap this year. United said the technology problem was fixed by 10:30 a.m. EST. But early morning delays can easily ripple throughout an airline's network for the rest of the day even after the underlying cause is fixed.
• Target Corp. is optimistic heading into the critical holiday shopping season upon a strong third quarter. The big-box retailer, known for its cheap but trendy merchandise, said for the fourth quarter, which ends in January, it anticipates adjusted earnings of $1.64 to $1.74 per share. Analysts predict $1.50 per share. For the three months ended Oct. 27, Target earned $637 million, or 96 cents per share. That's up from $555 million, or 82 cents per share, a year earlier. Revenue climbed 3 percent to $16.6 billion from $16.05 billion, but missed Wall Street's $16.91 billion forecast.
• Sears Holding Corp. said its third-quarter loss widened with higher tax expenses and falling sales at its struggling Sears and Kmart stores. The company controlled by financier Eddie Lampert said it lost $498 million, or $4.70 per share. That compares with a loss of $421 million, or $3.95 per share, a year ago. Revenue dropped nearly 6 percent to $8.86 billion. Sales in stores open at least one year fell 1.6 percent at Sears stores and 4.8 percent at Kmart stores.
• FAB Universal Corp., previously known as Wizzard Software Corp. of Oakland, said it lost $4.95 million, or 51 cents a share, for the third quarter on revenue of $1.75 million. The latest results compare to a loss of $473,000, or 6 cents, a year ago on revenue of $834,065. FAB's businesses include a media services unit with podcast hosting, content management and advertising services.
Other business news:
• MedExpress Urgent Care opened a new urgent care center in Mt. Lebanon on Wednesday and plans to open a center in Bridgeville on Monday. The Morgantown, W.Va.-based company, which owns more than 30 urgent care centers in Western Pennsylvania, has more than 90 centers in six states. Urgent care centers are walk-in health clinics where patients can get treatment for non-emergency illnesses and injuries.
• GNC Holdings Inc. said a secondary stock offering of 11,732,479 shares of Class A common stock, sold by Ares Corporate Opportunities Fund II L.P. and Ontario Teachers Pension Plan Board, was completed. The two sponsors no longer hold any shares of GNC's Class A stock, the company said. GNC neither issued nor sold shares in the offering, and J.P. Morgan Securities LLC was the sole underwriter.
— Staff and wire reports
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