In the news this morning: American International Group will sell a 90% stake in its aircraft leasing business, Bloomberg emerges as a possible bidder for Pearson, McDonald's reverses its same-store sales decline and Ingersoll Rand listens to an activist investor. Stocks are mixed this morning as the negotiations over the Fiscal Cliff continue to drag on. Also in the news today, yields on Italian bonds rose, signaling the company could need another bailout in the near future.
American International Group
The insurance giant is selling a 90% stake in International Lease Finance Corp, the company's aircraft leasing unit, to a group of Chinese investors for $5.28 billion. The deal is structured as a sale of 80.1% of the company for $4.23 billion with an option for an additional 9.9% stake. ILFC will continue to be based in Los Angeles and will remain incorporated in the U.S. and the current management will remain in place. The jet-leasing business has long been identified as a non-core asset which the company had wanted to sell to raise money to repay the $182 billion bailout AIG (AIG) received from the government during the 2008 financial crisis. AIG had previously explored taking ILFC public.
The publisher of the Financial Times among other things has been rumored to be up for sale for a while. The New York Times reports today suggest that New York Mayor Michael Bloomberg's eponymous financial information company, Bloomberg L.P. could consider a bid for Financial Times. Bloomberg's interest could drive up the price for the company most often mentioned as a potential suitor for Pearson (PSO), Thomson Reuters (TRI).
Speaking of Bloomberg, that same story about the company buying the Financial Times mentions that a faction inside the firm would prefer to buy a digital property such as LinkedIn (LNKD). LinkedIn's current market capitalization is about $12 billion, and a deal to take the company private would likely have to be priced higher than that, probably putting the company out of Bloomberg's price range.
The restaurant chain reported a 2.4% increase in same-store sales for November, beating estimates for a 0.17% increase. November's numbers are a reversal for the company, which saw its first same-store sales decline in nine years in November. Sales in the U.S. rose by 2.5% while sales in Europe rose by 1.4%. Analysts had expected European sales to rise by 0.1%.
Activist investor Nelson Peltz seems to have gained some traction in this talks with management as the company said it plans to spin off its residential and commercial securities business in a tax-free transaction. The company also announced a $2 billion share repurchase and an increase in its quarterly dividend to 21 cents per share.