California adjusts mortgage law
SACRAMENTO, Calif. (AP) — California would become the first state to write into law much of the national mortgage settlement negotiated this year with the nation’s top five banks, and expand it to all lenders, under wide-ranging legislation state lawmakers approved Monday.
Majority Democrats sent the homeowner protection package to Gov. Jerry Brown despite opposition from business and lending organizations and most Republican legislators. The Assembly OK’d the legislation on a 53-25 vote, and the Senate followed by voting 25-13.
The legislation would require large lenders to provide a single point of contact for homeowners who want to discuss loan modifications. It would prohibit lenders from foreclosing while the lenders consider homeowners’ request for alternatives to foreclosure. And it would let California homeowners sue lenders to stop foreclosures or seek monetary damages if the lender violates state law.
The protections would benefit all California homeowners, not just those whose mortgages are with the five banks that signed the national settlement in February. And many of the restrictions would become permanent, while those in the nationwide agreement will end after five years.
Airbus to build plant in Alabama
MOBILE, Ala. (AP) — In the battle to dominate the global aviation industry, European aerospace giant Airbus announced its first assembly plant in the United States on Monday, a symbolic and significant step in the competition with archrival Boeing.
The French-based company said the Alabama plant is expected to cost $600 million to build and will employ 1,000 people when it reaches full production, likely to be four planes a month by 2017.
“We are going to create great jobs and generate growth right here,” Airbus CEO Fabrice Bregier said at the convention center in Mobile, where many of the 2,000 people in attendance waved American flags as music played in the background.
“We know in aerospace, when we create one job, there are about four related jobs so we could bring as many as 5,000,” Bregier said at a later news conference. “The management to the blue collars will be 100 percent American.”
GlaxoSmithKline must pay $3B
WASHINGTON (AP) — GlaxoSmithKline LLC will pay $3 billion and plead guilty to promoting two popular drugs for unapproved uses and to failing to disclose important safety information on a third in the largest health care fraud settlement in U.S. history, the Justice Department said Monday.
Accompanying the criminal case was a civil settlement in which the government said the company’s improper marketing included providing doctors with expensive resort vacations, European hunting trips, high-paid speaking tours and even tickets to a Madonna concert.
The $3 billion combined criminal-civil fine will be the largest penalty ever paid by a drug company, Deputy Attorney General James M. Cole said. The corporation also agreed to be monitored by government officials for five years to attempt to ensure the company’s compliance, Cole said.
Dell to pay $2B
for software firm
ROUND ROCK, Texas (AP) — In a move to branch out beyond the weakening personal computer business, Dell said Monday that it’s buying Quest Software for about $2.36 billion.
Dell said Quest would make it more competitive in the server, storage, networking and computing services business.
Quest helps companies manage databases and provides other corporate IT services. Quest’s technology would add to its security and data protections offerings, along with other services aimed at business customers, Dell said.
With the deal, Dell, the second-largest U.S. PC maker after Hewlett-Packard Co., is trying to diversify beyond the lower-margin business of making personal computers.
PC sales have weakened in the last two years as consumers increasingly navigate the Internet on smartphones and tablet computers such as Apple Inc.’s hot-selling iPad.
Both Dell and HP have been buying software and technology services companies to expand beyond PCs and plumb the more fertile territory of advising big companies and government agencies on how to manage their technology needs. As part of that process, the companies hope to sell more software and computing equipment.
In late May, Dell Inc. reported disappointing first-quarter financial results and predicted weak sales in the current quarter. The computer maker said sales to government, big businesses and consumers decreased. Total product revenue fell 5 percent to $11.42 billion in the Jan.-March quarter as revenue from mobility products, software, desktop PCs, and storage products all decreased. Sales to consumers took a particularly sharp decline of 12 percent, while government sales to fell 4 percent and revenue from large businesses dipped 3 percent.
Sales to small and medium-sized businesses were a bright spot. They grew 4 percent.
Dell’s acquisition comes in the midst of some belt-tightening at the company. In June, it outlined a cost-cutting plan designed to trim expenses by $2 billion over the next three years.
Quest, based in Aliso Viejo, Calif., had agreed to be bought by Insight Venture Partners for $23 per share, or $2 billion, in March, and a series of increasing bids from Insight and another bidder followed.
The March bid was a 19 percent premium to the company’s closing stock price the day before the deal was announced. Dell’s $28 per share offer announced Monday is a 44 percent premium to Quest’s ending price of $19.40 from March 8.
The deal is expected to close in Dell’s August-October quarter. Both boards have approved the deal, but Quest shareholders must still vote it through.
Quest CEO Vinny Smith, who has a 34 percent stake in Quest, had agreed to support Insight’s offer in March. But he will vote his shares for the Dell deal, Quest said Monday. In a statement Monday, Smith said that with the Dell deal, Quest’s products and workforce would be the “foundation” for Dell’s software business.
Quest paid a $25 million breakup fee as well as $12 million for expenses to Insight and Vector Capital, which joined Insight as a partner bidder last month.
Shares of Quest Software Inc. slipped 5 cents to $27.76 in morning trading. Shares of Dell, which is based in Round Rock, Texas, dipped 8 cents to $12.44. In the last year, Dell’s stock has traded in a range between $11.68 and $18.36.
