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The world's third-largest carmaker Ford Motor Co. is about to get smaller following its agreement to sell its Jaguar and Land Rover units to India's Tata Motors Ltd. for a net $1.7 billion -- less than half of what Ford paid for the two brands. Tata will pay $2.3 billion for the units, but Ford has to pump about $600 million into the units' pension funds at the closings.
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In other deal news, Motorola Inc. said Wednesday it will split into two independent, publicly traded companies, thus separating its struggling mobile-phone business from its broadband and mobility solutions operations. The move comes amid a longstanding battle with activist investor Carl Icahn, who has been urging the company to shed the handset unit.
In private equity news, MatlinPatterson Global Advisers LLC, a New York private equity firm known for turnaround and distressed plays, has committed to sink $450 million into troubled mortgage lender Thornburg Mortgage Inc. as long as certain conditions are met.
Thornburg, which has warned lately that it will have to seek bankruptcy protection if it doesn't raise capital, posted a filing with the Securities and Exchange Commission on Tuesday saying a MatlinPatterson fund had agreed to subscribe to part of a $1.35 billion bond offering. The bonds, which replace a planned placement of convertible debt, come with embedded warrants that would allow holders in total to buy as much as 48% of Thornburg's shares.
And finally, video game publisher Take-Two Interactive Software Inc. on Wednesday recommended its shareholders reject a $26 per share, $2 billion takeover offer from rival Electronic Arts Inc. Take-Two called EA's hostile offer "inadequate," "opportunistic" and contrary to the best interests of its shareholders. It said the offer represents the wrong price at the wrong time.
- Peter Moreira
