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Sunday, July 30, 2006

Media Digest 7/30/2006 Management Buy-Out Pitfals

According to Reuters, Hilton Hotels reached agreeement with its North American hotel workers. The agreement covers the next five years.

According to the Sunday Telegraph, Swiss company Xstrata, plans to raise $5.1 billiion in a rights issue to underwrite the costs of buying Canadian mining company Falconbridge.

According to the Boston Globe, Morgan Stanley is in talks to acquire 20 acres of waterfront land in Boston that is currently owned by News Corporation.

According to the Wall Street Journal, CA Inc, the former Computer Associates, appointed Nancy Cooper as its new CFO as part of an effort to rebuild the company which has been involved in an accounting scandal.

The New York Times writes that buy-out deals of public companies, turning them into private enterprises, may no be a good deal for shareholders if company management is involved. The premium payed for management-led buyouts is only 20%. Buy-outs lead by outside firms paid an average premium of 27.5%. The data is based on stock prices average of the 30 days before a buy-out was announced.

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