A hostile bid for Family Dollar, a record purchase of the Buffalo Bills and projected jump in oil production top today's roundup of the day's top business news stories.
Dollar for Dollar Bid Goes Hostile
Dollar General is going hostile with its $9.1 billion bid for Family Dollar after its rival repeatedly rejected previous offers, the Associated Press reports. The discount chain has commenced an open offering to investors of Family Stores Dollar Inc. for $80 per share in cash, the same offer that was rejected last week by the North Carolina-based company's board. Family Dollar has voiced concerns about such a deal passing antitrust review. In response to those fears, Dollar General has said that it is willing to divest up to 1,500 stores if the Federal Trade Commission requires it, the AP reports. Family Dollar Stores Inc. has closed some of its stores and cut prices in an attempt to increase foot traffic. In June, activist investor Carl Icahn urged the company to put itself up for sale. U.S. Wholesale Inventories Up 0.1 Percent in July.
Inventories held by U.S. wholesale businesses edged up in July by the smallest amount in a year while sales rose at a healthier rate. Wholesalers increased their stocks by a slight 0.1 percent in July after a more robust 0.4 percent increase in June, the Commerce Department reported Wednesday. It was the smallest gain since a 0.1 percent increase in stockpiles in July 2013. Sales rose 0.7 percent in July, up from 0.4 percent in June. The latest increase matched the May gain.
Mortgage Applications Stall
Just the suggestion of slighter higher interest rates has stalled both home buyers and borrowers from applying for mortgages. The Mortgage Bankers Association says total mortgage applications fell 7.2 percent last week from the previous week, and the index is now at its lowest level since December of 2000. "Although the weekly increase in rates was small, they were trending up in the week following Labor Day, with many data reports showing a pickup in the pace of economic growth," said Michael Fratantoni, chief economist for the MBA. The average contract interest rate for 30-year fixed-rate mortgages increased to 4.27 percent form 4.25 percent, the first interest rate increase in a month. The average contract interest rate for mortgages with jumbo loan balances over $417,000 actually decreased to 4.15 percent from 4.22 percent.
Oil Production Forecast Jumps
The U.S. energy Information Administration pushed its forecast for oil production next year by 250,000 barrels per day as a result of the boom in shale oil drilling. The U.S. agency now expects domestic output to reach almost 10 million barrels per day, increasing by about one million barrels per day for the third consecutive year. One month ago, the EIA had predicted output growth would actually slow in 2015 to 800,000 barrels per day. The agency also predicted that global oil usage would increase by 38 percent by 2040,
Microsoft to Acquire Minecraft
The Wall Street Journal reports that Microsoft Corporation is in discussions to buy the Swedish company that owns the popular video game Minecraft. The deal to buy Mojang AB is said to be valued at more than $2 billion and could be settled by as early as this week, the Journal reported. Minecraft is a game where players build structures with blocks to protect against monsters that stalk people at night. The acquisition report comes as the video game market heats up after a slight stall in the last year. In April Microsoft said it shipped five million Xbox One units to retailers, while Sony said it had sold more than seven million PlayStation 4 units.
Buffalo Bills Score Record Purchase Price
The Buffalo Bills NFL franchise has been sold to Buffalo Sabres owners Terry and Kim Pegula for $1.1 billion, CNNMoney reports. This equals the record price paid for the NFL's Miami Dolphins in 2008. The struggling Bills are estimated to be worth only $935 million, ranking it 31 out of 32 teams in the league. The Bills were put up for sale after the death of the team's original owner, Ralph Wilson, earlier this year. The Puguas state that they are committed to keeping the team in Buffalo. The NFL is sports’ most profitable league, with annual revenue of about $10 billion. The Dallas Cowboys is the league’s most valuable franchise at $3.2 billion, Forbes estimates.