An increase in July U.S. home prices, a new job for Eric Cantor and Dollar General's new bid for Family Dollar top our roundup of the day's top business news stories.
July U.S. Home Prices Rise, but at Slower Rate
Real estate data provider CoreLogic reported Tuesday that U.S. home prices rose in July 7.4 percent over the same period last year. This was slightly below June's year-over-year increase of 7.5 percent and substantially below the February peak of 11.9 percent. Home prices rose in 49 states in July from the previous year. Arkansas was the sole exception. Michigan experienced the biggest price gain at 11.4 percent, followed by Maine (10.6 percent), Nevada (10.6 percent), Hawaii (10.5 percent) and California (10.5 percent). Prices in 11 states and Washington, D.C. have completely rebounded from the housing market collapse and posted new highs.
Dollar General Continues Pursuit of Family Dollar
CNBC reports that Dollar General has increased its all-cash bid to purchase Family Dollar to about $9.1 billion, or $80 a share. The new proposal has Dollar General willing to sell up to 1,500 of its stores if required by the U.S. Federal Trade Commission, although Dollar General said its pledge to divest itself of 700 stores initially should provide more than enough cushion to satisfy regulatory review. The latest bid includes a $500 pledge penalty to Family Dollar if Dollar general backs out of the deal. On Aug. 21, Family Dollar rejected the first bid, which was for $78.50 a share. Instead, Family dollar has been recommending a cash and stock offer from Dollar tree valued at $8.5 billion.
Cantor Gets a Job
Eric Cantor, the former U.S. House Majority Leader, is set to join investment bank Moelis & Co. as vice chairman and managing director, and the company said Canto will be added to the board of directors as well. Cantor was defeated in a Republic primary in Virginia in June and resigned his position in the U.S. Congress. The company says Canto will provide strategic counsel to the company's corporate and institutional clients on key issues. Moelis CEO Ken Moelis said “Eric has proven himself to be a pro-business advocate and one who will enhance our boardroom discussions with CEOs and senior management as we help them navigate their most important strategic decisions.” Cantor was defeated by economics professor David Brat, who said Cantor betrayed conservative principles on spending, debt and immigration.
Hacked Celebrity Photos Under Investigation
Apple is “actively investigating’’ the dozens of revealing photos and videos of Hollywood actresses that were hacked from iCloud accounts and posted all over the Internet. “"We take user privacy very seriously and are actively investigating this report," said Apple spokeswoman Natalie Kerris. Although some of the photos were believed to be faked, many are real and are believed to have been taken from the iCloud accounts of several celebrities, including actress Jennifer Lawrence. They were posted to a Web photo sharing site and have been spread to social media sites like Reddit and Twitter.
Inversions are “Unfair and Shortsighted”
Inversions, the corporate maneuver of moving business out of the United States to avoid corporate taxes, is “unfair and shortsighted,’’ according to U.S. Labor Secretary Thomas Perez. In an interview with CNBC, Perez said the practice of American companies merging with foreign countries and moving their headquarters overseas could contribute to job losses, Perez said “We need to be focused in corporate America on the long term’’ and not just the short-term benefits to shareholders. In the interview, Perez said a Fortune 50 CEO told him that one stockholder said he would “rather be rich than right’’, which explains the motivation of corporations taking advantage of the lower tax rates overseas. But Perez said he believes American consumers will respond unfavorably to companies that complete inversions.
Norwegian Buys Prestige
Norwegian Cruise Lines Tuesday announced the purchase of Prestige Cruises International for $3.025 billion in cash and stock. The deal gives Norwegian access to Prestige’s luxury cruise ships and client in a market that includes rivals Royal Caribbean and Carnival. Frank de Rio will remain chief executive officer of Prestige, which operates eight ships and about 6,500 berths under the brands Oceania Cruises and Regent Seven Seas Cruises. The $29 billion cruise industry is expecting large gains in the coming years thanks to growth in the economies of China and India.