HP to pay Postal Service $32.5 million
NEW YORK -- Hewlett-Packard Co. has agreed to pay $32.5 million to settle allegations it overcharged the U.S. Postal Service for products over more than eight years.
In the dispute, the United States alleged that Hewlett-Packard failed to comply with pricing terms of its contract with the Postal Service. This included a requirement that Hewlett-Packard provide prices that were no greater than those offered to its other customers with comparable contracts. The United States also alleged the company misrepresented its pricing during contract negotiations and its plans to ensure it would bill at the required most-favored-customer rate.
The overcharging allegedly occurred between October 2001 and December 2010.
The matter was jointly investigated by the U.S. Postal Service, Office of the Inspector General and the Department of Justice's Civil Division.
The Justice Department said Friday that the claims resolved by the settlement are allegations only. There's been no determination of liability.
Hewlett-Packard is based in Palo Alto, Calif. Its stock fell 42 cents, or 1.2 percent, to close Friday at $35.19.
-- The Associated Press
Judge: Argentina must still pay debt
Argentina's decision not to repay holders of defaulted bonds this week hasn't extinguished or reduced the country's obligations to them, a federal judge in New York said at a hearing Friday.
Argentina's statements that it's willing and wants to pay its debts are "highly misleading" because they refer only to restructured bonds, said U.S. District Judge Thomas Griesa.
Argentina failed to get a $539 million payment to bondholders after Griesa ruled the money couldn't be distributed unless a group of hedge funds holding defaulted debt also got paid.
Standard & Poor's declared Argentina in default Wednesday after the government missed the deadline to pay interest on $13 billion of restructured bonds.
Argentina defaulted on a record $95 billion in debt in 2001. About 92 percent of creditors agreed to exchange their bonds for new ones at a discount of about 70 percent in debt restructurings in 2005 and 2010. Holdouts including Paul Singer's NML Capital sued, seeking full payment.
-- Bloomberg News
Scientific Games to buy larger rival Bally
WILMINGTON, Del. -- Scientific Games Corp. has agreed to acquire Bally Technologies Inc. for about $3.3 billion, excluding net debt, buying up a bigger rival as consolidation in the slot-machine industry accelerates.
Scientific Games, controlled by billionaire Ronald Perelman, will pay $83.30 in cash per Bally common share, the companies said in a statement Friday, a premium of 38 percent over Bally's closing price Thursday.
It's the second acquisition for more than $1 billion in less than a year for Scientific Games, at a time the gambling-equipment sector faces weaker consumer spending, casino gluts and competition from Web competitors.
Gavin Isaacs, who took over at Scientific Games in June, will find himself on familiar ground. Isaacs was the former chief executive officer of SHFL Entertainment Inc., bought by Bally last year for $1.3 billion, and before that worked as chief operating officer at Bally.
The companies anticipate $220 million in annual cost savings and $25 million in annual capital-expenditure savings by consolidating operations and generating efficiency in the areas of manufacturing, engineering, field and customer service, and administrative operations.
The deal, which includes net debt of $1.8 billion, will immediately add to Scientific Games's earnings per share, according to the statement. Measured by annual revenue, Scientific Games and Bally are of similar size. The companies said they generated combined sales of approximately $3.0 billion in the year ended March 31.
-- Bloomberg News
California bullet train's bonds revived
The California High-Speed Rail Authority can issue $8.6 billion in bonds to finance the U.S.'s first bullet train, a state appeals court ruled, putting the beleaguered $68 billion project back on track in a win for California Gov. Jerry Brown.
While the proposed line from San Francisco to Los Angeles still faces several lawsuits, Thursday's ruling by a three-judge state appeals court panel in Sacramento removes a substantial roadblock to the project.
The agency suffered a setback in November when a state judge blocked it from issuing the bonds, saying its finance committee didn't adequately disclose reasons for the financing. The judge told the authority to withdraw its funding plan. The decision threatened to delay and increase the cost of the project, state officials said.
The appeals panel said California law doesn't require the agency to provide any support or evidence to back up its decision approving issuance of the bonds, while warning that the project still faces hurdles.
"Substantial financial and environmental questions remain to be answered by the authority in the final funding plan the voters required for each corridor or usable segment of the project," the court said. "But those questions are not before us."
The court also reversed the judge's ruling that the rail authority had to redo its funding plan.
-- Bloomberg News
P&G plans to shed half its product lineup
CINCINNATI -- Procter & Gamble, the world's largest maker of consumer products, said it will shed more than half its brands around the globe over the next year or two, leaving it with about 70 to 80 of its top performers when the nips and tucks are complete. The maker of Duracell, CoverGirl, Pampers and Tide did not say which products it plans to keep but noted that they account for more than 90 percent of its sales.
P&G expects primarily to sell off the brands to other companies. Chief Executive Officer A.G. Lafley said the company should have made the move long ago.
"In an ideal world, we would've done this at the depth of the financial crisis, in the recession," Lafley said Friday during a conference call with analysts and investors. "Having said that, I don't see any reason to wait. I don't see any virtue in waiting another minute."
The Cincinnati-based company had already been trimming its operations, including selling Iams pet food and the rest of its pet business to Mars Inc.
-- The Associated Press
Business on 08/02/2014