Enterprise Products to Buy Teppco for $3.3 Billion
(Update2)
By Jordan Burke and Jim Polson
June 29 (Bloomberg) -- Enterprise Products Partners LP agreed to buy Teppco Partners LP for about $3.3 billion, combining pipeline operators controlled by Houston billionaire Dan Duncan to create the biggest U.S. energy partnership.
Teppco owners will get 1.24 units of Enterprise for each of their units, a deal worth 15 percent more than when an initial offer was made in March, according to a statement today by the partnerships. The transaction is worth $31.36 per unit, 9.3 percent higher than Teppco’s close at the end of last week.
The takeover will increase Enterprise earnings starting in 2010 and will yield at least $20 million in cost savings, Enterprise Chief Executive Officer Michael Creel said in the statement. The partnerships, both based in Houston, will combine to own almost 48,000 miles (77,000 kilometers) of pipelines and will access the largest producing basins of natural gas, gas liquids and crude oil in the U.S., according to the statement.
“Dan Duncan will cut costs, consolidate and get operating efficiencies out of this merger,” said William L. Eddleman Jr., an analyst at Argus Research Corp. in Houston who rates Enterprise units at “buy” and owns none. “That’s one of his standard operating procedures, and I’ve seen him do this many times.”
Teppco, which traded as high as $39.12 last year, climbed $1.31, or 4.5 percent, to $30 at 9:34 a.m. on the New York Stock Exchange. The units had dropped 13 percent in the past year before today. Enterprise fell 30 cents to $24.99.
Crude Oil Rises After Nigerian Rebels Attack Shell Platform
By Grant Smith
June 29 (Bloomberg) -- Crude oil rose after an attack by Nigerian militants closed a field operated by Royal Dutch Shell Plc, further cutting production from Africa’s largest producer.
Shell said it closed the Estuary field near the Forcados export terminal after attacks. The IEA, an adviser to 28 oil- consuming nations, lowered five-year forecasts for global crude demand because of the economic slump.
“Bullish participants are seizing on the latest attacks in Nigeria to take another run at $70,” said Christopher Bellew, senior broker at Bache Commodities Ltd. “We may get to $70 a barrel but unless demand improves it will be very difficult to stay there.”
Crude oil for August delivery advanced as much as 90 cents, or 1.3 percent, to $70.06 a barrel on the New York Mercantile Exchange. It was at $69.96 as of 12:4 p.m. London time. Oil is poised for a quarterly gain of about 40 percent, the biggest in nearly two decades.
The IEA cut its oil demand estimates for every year through 2013 by about 3 million barrels a day, it said in its Medium- Term Oil Market Report today. Consumption will average 86.76 million barrels a day in 2012, the first year demand will rise above 2008’s level of 85.76 million, according to the Paris- based agency.
“The deep economic recession that has spread worldwide in the past year has taken a severe toll on oil demand,” the IEA said in the report, updating estimates made in December. “This marks a break after several years of strong oil demand growth.”
Estuary Field Closed
Shell closed Estuary after attacks on... [Read More]
Adnoc to Cut August Crude Oil Supply by 19 Percent
(Update1)
By Yee Kai Pin
June 29 (Bloomberg) -- Abu Dhabi National Oil Co. will cut its contracted volumes of crude oil supply by 19 percent in August for all four export grades, the United Arab Emirates state-owned company said.
The cut is more than last month, when Adnoc, as the company is known, reduced July crude supply of Murban, Lower Zakum, Umm Shaif and Upper Zakum by 18 percent.
The cuts are “in accordance with OPEC decision to reduce production,” Adnoc said in a faxed statement today.
The U.A.E. is the fourth-largest Organization of Petroleum Exporting Countries producer by output, pumping 2.2 million barrels a day in May, according to a recent Bloomberg survey.
To contact the reporter on this story: Yee Kai Pin in Singapore at kyee13@bloomberg.net
GM says it'll close its Willow Run transmission plant
Factory to wind down by Dec. 2010
BY JUSTIN HYDE
FREE PRESS WASHINGTON STAFF
WASHINGTON -- General Motors Corp. said Sunday it was standing firm on its decision to close the Willow Run transmission plant, saying operations would wind down by December 2010 or sooner.
The company was unable to immediately explain why the lease for the plant was shifted to the new GM that will emerge from bankruptcy protection sometime next month in an amended sale plan filed Saturday. The lease originally had been part of the assets that GM was leaving behind in bankruptcy court to be liquidated, along with all other closed plants.
Only factories that GM plans to keep open or deem idled have been part of the new GM so far in its bankruptcy.
GM spokeswoman Susan Garavaglia said the automaker still plans to close Willow Run by December 2010 "or sooner if the market demand dictates." GM is phasing out production of the four-speed transmissions built there and consolidating six-speed transmission production at a factory in Toledo.
Officials in Wayne and Washtenaw counties, along with U.S. Rep. John Dingell, D-Mich., have been pushing GM to reconsider closing the plant. The counties filed objections in U.S. Bankruptcy Court, saying GM's move wasn't justified on business grounds.
Dingell has been leading a campaign to build public support for the plant, launching Friends Of Willow Run to gather appeals to GM.
Contact JUSTIN HYDE: 202-906-8204 or ... [Read More]
There is trouble in Toyota land, and Akio Toyoda, the 53-year-old grandson of the company's founder and the new president, has pledged to reverse the company's first loss in 59 years with a "back to basics" approach that puts more emphasis on consumers and less on the company's growth.
Having lost $4.8 billion in the year ended March 31, the world's largest automaker expects to lose another $6.25 billion in the six months from April through September. Last week in Tokyo, Toyoda warned the company might not be back in the black until the year ending March 31, 2011.
While global demand has plummeted, Toyota is hurting, particularly in the United States, where it captured 16.2% of the market this year through May, down from 16.8% a year earlier. Production at its plants in the United States, Canada and Mexico is down 47% from a year ago.
That's a smaller drop than Chrysler's 70% or General Motors' 54.5%, but it is greater than either Ford's or Honda's.
Restructuring under way
So far, Toyota has taken only incremental steps to restructure in North America, which has been its most profitable region until now. Earlier this year, Toyota offered buyouts to 18,000 workers in the United States, and 1,200 accepted. The buyouts included $20,000, plus 10 weeks of base pay and two weeks of base pay for every year of service.
Executives' salaries have been cut by 25% to 30%. Discretionary bonuses, which were as much as $2,400 a year for some workers in good years, have been... [Read More]
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