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Wednesday, January 27, 2021
Health insurer UnitedHealth Group on Wednesday agreed to buy Change Healthcare for $7.84 billion in an all-cash deal, as it looks to expand its fast-growing healthcare technology business. UnitedHealth will pay $25.75 per Change Healthcare share, a premium of 41.2 percent to Tuesday’s closing price. Shares of Change, which will merge with UnitedHealth unit Optum, were trading near the offer price at $23.88. Change Healthcare, which is 20 percent owned by Blackstone Group, provides billing and payment process services to more than 2,000 payers and 1 million providers, according to Citi. Its acquisition is expected to close in the second half of 2021 and add to UnitedHealth’s adjusted earnings per share by about 50 cents in 2022. “The array of services provided by Change would appear to supplement and complement many of the services offered by UnitedHealth’s OptumInsight division,” J.P. Morgan analyst Gary Taylor said. However, the brokerage pointed out possible antitrust implications, as the number of services provided by Change could make it “really difficult to contemplate how the Federal regulators will define relevant markets.” It expects UnitedHealth to make the case that the transaction will increase efficiency and transparency for consumers. Optum offers data, software and services to insurance firms, physicians, hospitals and pharmaceutical companies. The unit
New York City’s Restaurant Week is back — but this time no reservations are required. The popular, decades-old promotion that lets people try out fancy restaurants at a moderate cost is relaunching after a lull as a takeout-only program. Restaurant Week To Go, as its being dubbed, will kickoff on Jan. 25 to Jan. 31 with participating restaurants offering lunch or dinner with one side dish for $20.21, the city’s tourism bureau NYC & Company said on Wednesday. The service marks a resumption of the semi-annual program after it was cancelled last summer for first time in the 29 years due to the COVID-19 pandemic. More than 100 eateries have signed up for Restaurant Week To Go, including Bar Boulud, RedFarm, Gramercy Tavern and Union Square Cafe, the agency said. Others are expected to join. To entice more to sign up, the tourism bureau has waived the hefty fee to participate in Restaurant Week, said NYC & Company spokesman, Chris Heywood, declining to disclose the fee. “But it’s not as easy to get restaurants to sign up now,” Heywood said. “Some are not doing take-out or are temporarily closed right now.” MasterCard is sponsoring the program and providing diners who
Google has reached a first-of-its-kind agreement to pay French publishers for web content. The search giant and French publishers’ lobby’s deal will pave the way for individual licensing agreements for French publications, and aims to provide a sustainable way for them to bring in revenue The deal will be closely watched by other platforms such as Facebook, a lawyer involved in the talks said. Google and the Alliance de la presse d’information générale (APIG) said that the framework included criteria such as the daily volume of publications, monthly internet traffic and “contribution to political and general information”. A Google spokesperson said that the deals the search giant has signed with national daily newspapers Le Monde and Le Figaro both take into account the framework agreed with APIG. Google last fall announced a plan to pay news publishers for content through a new product called Google News Showcase, but so far it is only available in Brazil and Germany. Though it previously pledged to pay out $1 billion to publishers through the Showcase, Google did not say how much money APIG’s members might receive as a result of the agreement. Details on how the payments would be calculated were not disclosed.
Even in today’s historically-worst commercial property market, things are not everywhere and always at their worst. Companies are still moving and growing. Here are some just-completed transactions that reveal a pulse beneath the surface.  In a sign of life for the luxury retail scene, glam jeweler Graff has exercised its option to buy one of its Manhattan flagship townhouse buildings, 712 Madison Ave. at East 63d Street, from SL Green for $43 million. Graff bought the ground lease with a purchase option in 2019. It also bought No. 710 from a different owner in 2019. Graff’s commitment is an expression of faith in Madison Avenue, the city’s most glamorous shopping corridor, at a time when many brands are going bankrupt and storefronts stand vacant. The sale appears to reflect SL Green’s strategy to sell off mostly smaller, non-core assets as it concentrates on large projects such as One Vanderbilt and 185 Broadway. The Orthodox Union, an influential Jewish advocacy organization, bought a 69,000-square-foot commercial condominium at 40 Rector St. for $24.85 million. Cushman & Wakefield dealmaker Mark Weiss, who represented the OU with Cushman’s Alan Wildes, said the purchase price of $600 per foot is down from the pre-pandemic ask
Wall Street hit record highs on Monday after President Trump signed the $2.3 trillion pandemic bill on Sunday, ending months of political wrangling and uncertainty. The Dow Jones Industrial Average closed up 204.10 points, or 0.68 percent, to 30,403.97 after Trump backed down from an earlier threat to block the bill, which restores unemployment benefits to millions of Americans.  By signing the bill he also helped avert a federal government shutdown. The S&P 500 closed up 0.87 percent  to 3,735.36, while the tech-heavy Nasdaq was up 0.74 percent to 12,899.42. All three indexes ended the day at record levels. The bill provides a financial boost for some of America’s most vulnerable  citizens and businesses, including an extra $300 a week in unemployment benefits and $325 billion in aid to small businesses, which have been crushed as the pandemic has pushed people to shop online instead of in stores. The aid together with the vaccinations underway will provide a much-needed buffer to an economy that’s been hampered yet again by rising cases, which is forcing more state restrictions on indoor dining and other activities to reduce the spread of the deadly disease, experts said. “Trump signing the COVID relief and government
The stock market may have ended the year at record highs, but Wall Street is now in a very different place than it was this time last year. Financiers biggest concerns in January 2020 revolved around President Trump’s mercurial stance on international trade and a Federal Reserve itching to raise historically low interest rates ever so slightly higher. Big banks were pulling in huge profits amid record low unemployment, while hedge funds’ main crisis was of markets being too hot for investors to justify paying them exorbitant fees.  Fast-forward to today and Wall Street is riding a supercharged stock market and shattered economy into a deeply uncertain 2021 as offices remain empty — some likely forever — causing some investors to predict that the pain and stress of 2020 could persist well into 2021. Bank stocks are largely down for the year despite the stock market rally. JPMorgan for example, ended the year down 8 percent while Citigroup is down 22 percent. Banking has been weighed down by the pandemic forcing the Fed to lower the benchmark lending rate from 2 percent to near zero. Lower rates mean less income for banks, especially as consumers rushed to refinance their loans.
H&R Block and TurboTax have come under fire from irate customers who have accused the tax-preparation giants of meddling with the delivery of their stimulus checks and causing unnecessary delays and confusion. The Internal Revenue Service started sending out the $600 payments last week to eligible Americans, including those who have filed their 2019 income tax returns. But some H&R Block and TurboTax customers say they are confused about when and even where their money will arrive because the tax preparation companies are acting as stimulus middlemen. “I just read that people who filed turbo tax are having issues receiving their second stimulus??? Anyone???? I used turbo tax and mine is NOWHERE TO BE FOUND,” one user griped on Twitter, where H&R block and TurboTax were trending topics Tuesday morning. The problems weren’t universal — many H&R Block and TurboTax users said they got their checks without a hitch. But both companies have acknowledged that some people may experience hiccups in receiving them. In a news release, H&R Block warned, for example, that the IRS’s “Get My Payment” tool, launched to help taxpayers track the status of their checks, may tell some customers that their money would be deposited in
Wall Street’s main indexes eased from record highs in volatile trading on Tuesday as investors worried the Senate may not quickly pass the additional pandemic aid checks to help jobless Americans. Senate Majority Leader Mitch McConnell said the chamber would address this week President Donald Trump’s call for an increase in stimulus payments from $600 to $2,000. Final passage of the proposal would require 60 votes and the backing of a dozen Republicans. McConnell’s comment comes a day after Democratic-led House of Representatives approved the move to bump up direct payments. “Most investors thought they had a clear idea of the government stimulus package, but it’s really up in the air to how it is going to be handled,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, NJ. Wall Street’s three main indexes opened at new highs for a second straight session after Trump signed a $2.3 trillion fiscal bill that restored jobless benefits and averted a federal government shutdown. Meanwhile, more than 2 million Americans have been inoculated, helping investors looked past a surge in infections that topped 19 million, with California, a major US virus hot spot, likely to extend strict stay-at-home
Welcome to the latest episode of The Short Squeeze - our first for the year. This week Alex Druce is joined by IG Markets Analyst Kyle Rodda to discuss the prospect of more stimulus for the US economy, what is driving the ASX to near 12-month highs, US earnings, and the latest surge in Bitcoin. You can find past episodes of our weekly podcast, which is produced in conjunction with IG, here. Each episode goes for about 10 minutes and is also available through Spotify and Google Podcasts. Markets reporter for the SMH and The Age Most Viewed in Business
US retail sales fell for the third straight month in December as the coronavirus pandemic led shoppers to pinch pennies and hunker down at home. Retailers and food-service merchants raked in just under $541 billion last month — the lowest level since July — following decreases of 1.4 percent in November and 0.1 percent in October, the US Census Bureau said Friday. December’s larger-than-expected 0.7 percent drop came amid a surge in COVID-19 infections and deaths that pressured retailers even at the height of the holiday shopping season. Economists were expecting sales to remain flat last month, according to Wrightson ICAP. “The COVID-19 lockdowns have sent consumers to their homes where they sit too worried about the outlook to spend a dime at the shops and malls across the country,” said Chris Rupkey, chief financial economist at MUFG Union Bank. December’s retail spending was 2.9 percent higher than the year-earlier month but roughly 2.1 percent below the 2020 peak of about $553 billion that was reached in September, federal data show. The slowdown came despite an unexpectedly strong holiday season in which retailers posted $789.4 billion in sales, an 8.3 percent jump from 2019, according to the National Retail Federation.
Hedge fund Alden Global Capital, the largest shareholder of Tribune Publishing, publisher of the New York Daily News, has offered to buy the rest of the newspaper publisher at a price that values it at $520.6 million. Alden sent a letter to Tribune on Dec. 14, according to a regulatory filing posted Thursday, offering $14.25 per share for the stock of Tribune it doesn’t already own. Alden owns 31.6 percent of shares of Tribune, once briefly known as “Tronc.” The hedge fund said it had not received “any feedback” to its letter, which it described as a “preliminary inquiry.” Tribune did not immediately respond to a request for comment Thursday. Alden bought its stake in Tribune in November 2019 and has three seats on its seven-member board. Tribune publishes nine major daily papers, including the New York Daily News, Chicago Tribune and Baltimore Sun. Alden controls a major US publisher whose papers include the Denver Post, Orange County Register and Boston Herald. It has a reputation for layoffs and intense cost-cutting even beyond the newspaper industry’s overall turn in that direction. The unions at Tribune papers have pushed for alternative buyers for the company’s papers. The newspaper industry has been consolidating as
Amazon on Wednesday pledged to spend more than $2 billion on affordable housing efforts in three regions where big chunks of its workforce live. The e-commerce colossus said it will use the money to create and preserve more than 20,000 affordable homes in and around its home base of Seattle and its hubs in Arlington, Virginia and Nashville, Tennessee. Amazon plans to distribute the funds in the form of low-cost loans, lines of credit and grants to finance housing for low- and moderate-income families. The company expects to have at least 5,000 employees in each of the three areas in the coming years. The so-called Housing Equity Fund will “help local families achieve long-term stability while building strong, inclusive communities,” billionaire Amazon chief Jeff Bezos said in a statement. The targeted cities are important hubs for Amazon. The company’s corporate headquarters is in Seattle, and it’s building a second HQ in Arlington, a Washington, DC suburb, along with a new operations center in Nashville. The tech giant had initially planned to build a headquarters in the NYC borough of Queens, but shut the project down amid opposition from local politicians like US representative Alexandria Ocasio-Cortez and NYC council member Jimmy