Senin, 02 Juni 2014

DealBook: Marathon 0il to Sell Norwegian Business for $2.1 Billion

LONDON – Marathon Oil, the American oil exploration and production company, said on Monday that it will sell its Norwegian business to Det norske oljeselskap for $2.1 billion in cash.

Marathon, based in Houston, also said that it has called off the sale of its British business after failing to receive what it deemed an acceptable offer.

The Norwegian sale is the latest move in an ongoing effort by Marathon to streamline its portfolio of assets.

The sale includes a Marathon-operated floating production, storage and offloading vessel and various production licenses in the North Sea, Marathon said. In 2013, Marathon's production in Norway averaged the equivalent of about 80,000 barrels of oil a day.

Det norske said that the transaction will complement its existing production plans in Norway and that it will have 202 million barrels of oil equivalent in proven reserves and probable deposits after the transaction.

The deal is subject to regulatory approval and is expected to close in the fourth quarter.

Det norske's strategy has been to create a strong Norwegian exploration and production company, said Sverre Skogen, the Det norske chairman. "With this transformational transaction we have achieved our goal well ahead of schedule."

Lee M. Tillman, the Marathon president and chief executive, said the company has divested assets totaling $6.2 billion since 2011, when Marathon split into Marathon Oil, an exploration and production company, and Marathon Petroleum, a refiner.

"The disciplined allocation of capital to opportunities that can deliver long-term growth at higher returns and improved margins is a strategic imperative," Mr. Tillman said in a statement.

Separately, Marathon said that it was dropping plans to sell its British business after considering several bids for those assets.

Mr. Tillman said that Marathon had intended to sell only if it "received an offer that appropriately valued these assets."

Now, he said, the company "will continue to operate this business as we always have — with a focus on our company's long-held values and commitment to safe and responsible operations, and in a manner that maximizes shareholder value."


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Minggu, 01 Juni 2014

Study Examines Efficacy of Taxes on Sugary Drinks

A new study of how taxes might be used to curb consumption of sugary drinks suggests that applying a tax based on the amount of calories contained in a serving rather than its size would be more effective.

The study, financed by the Robert Wood Johnson Foundation, which has long advocated taxing sodas and other sugary drinks as part of its efforts to reduce childhood obesity, found that consumption of calories in drinks would drop 9.3 percent if a tax of four-hundredths of a penny for every calorie was added to the price, but fall by just 8.6 percent under a tax of half a cent for each ounce in a can or bottle.

A calorie-based taxing system would also be fairer to consumers, said Chen Zhen, a research economist at the food and nutrition policy research program at Research Triangle Institute and the lead author of the study.

"It provides a better incentive to the consumer to switch to lower-calorie drinks, which would be taxed at a lower rate than higher-calorie drinks," Dr. Zhen said. "One of the concerns about taxing ounces of sugar-sweetened beverages is that consumers are paying the same tax whether they buy 12 ounces of a drink with 150 calories or 12 ounces of a drink with 50 calories."

At a tax rate of four-hundredths of a penny per calorie, six cents would be added to a 12-ounce can of Coca-Cola, for example, Dr. Zhen said, while only four cents would be added to a 16-ounce bottle of Vitaminwater.

"From a public health point of view, it makes a lot of sense to tax the sugar, which is the most harmful part of these drinks," said Harold Goldstein, executive director of the California Center for Public Health. "We want to shift consumers from drinking more sugar to drinking less, so taxing beverages with more sugar more makes sense."

The California Senate last week passed a bill for warning labels on sugary soft drinks. The State Assembly has not yet voted on the bill.

Sales of sugary drinks already are falling, and Christopher Gindlesperger, a spokesman for the American Beverage Association, the trade group that represents the soda companies, noted that a variety of soda tax proposals have been defeated in various states over the last several years. Just last week, the Illinois House voted down a bill that would have taxed sugary soda at a rate of one cent an ounce, specifically citing the cost to consumers.

Arkansas and West Virginia tax soda — and are among the top 10 states for obesity. "Over the course of last several years, taxes on soft drinks and other sugar-sweetened beverages have gone nowhere, and it's in large part because people don't want it," Mr. Gindlesperger said.

He also noted that one of the authors of the study, Ryan R. Ruff, was director of research and evaluation at the New York City Department of Health and Mental Hygiene in the Bloomberg administration, which waged a war on sugary drinks.

Dr. Zhen previously has done research finding that taxes on sugary drinks might not be as effective as a high tax on cigarettes in reducing consumption because consumers can substitute a high-calorie food that is not taxed for a high-calorie soda that is.

"We are not saying you should tax sugar-sweetened beverages," Dr. Zhen said, speaking about the new study. "We're saying that if you're going to tax them, the best way of doing that is on the basis of calories. We are trying to stay away from the politics."

The study was published online by the American Journal of Agricultural Economics.


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Etihad Nears Deal for a Stake in Alitalia

PARIS — After more than five months of negotiations, Etihad Airways of Abu Dhabi confirmed on Sunday that it was nearing an agreement that could lead to a sizable investment in Alitalia.

In a joint statement, the airlines said Etihad would formally submit a letter to Alitalia's board in the coming days detailing the conditions of a nonbinding offer for a stake of up to 49 percent of the money-losing Italian airline, which received a 500 million euro, or $682 million, government-led bailout late last year.

"We are delighted to be able to move forward with this process and look forward to the successful conclusion of the proposed transaction with Alitalia," said Etihad's chief executive, James Hogan.

Neither airline would discuss the terms of Etihad's planned offer or comment on recent Italian media reports about the deal. Those reports have suggested that Etihad is prepared to pay as much as €560 million for the stake, which under the European Union's rules on airline ownership must be capped at 49 percent.

According to the reports, Etihad has asked a consortium of banks led by Intesa Sanpaolo and UniCredit, which already own substantial stakes in the airline, to write down up to €565 million of the airline's more than €800 million in outstanding debt. It also intends to cut as many as 3,000 jobs from Alitalia's work force of about 14,000.

Until now, a restructuring of Alitalia's debt has been the largest sticking point in a deal between the airlines. The banks' reluctance to write off debt led Air France-KLM, which previously owned 25 percent of Alitalia, to bow out of the rescue package last year. The French-Dutch airline ultimately allowed its stake in Alitalia to shrink to 7 percent.

Over the last five years, Alitalia, which is not publicly traded, has cut costs, renegotiated contracts with workers and suppliers, and shed assets in a desperate bid to keep flying. But Italy's grinding economic crisis, high fuel costs and competition from low-cost rivals have overwhelmed the carrier's turnaround efforts.

Last October the government of former Prime Minister Enrico Letta brokered a €500 million rescue that involved the purchase of a 12 percent stake in Alitalia by Italy's state-owned post office. That transaction led to objections from some rival European airlines, which argued that the deal violated European Union restrictions on state aid to troubled companies.

The prospect of an investment by Etihad, which is wholly owned by the government of Abu Dhabi, raises similar concerns.

Lufthansa of Germany, for example, has argued that the purchase of shares in Alitalia "whether via European states or by state companies outside the E.U." would constitute state aid and has urged the antitrust authorities in Brussels to block it.

Analysts say that 10-year-old Etihad is eager to add Alitalia to its stable of seven airlines in which it already owns minority stakes. The company has invested more than $1 billion in those carriers since first turning profitable in 2011.

Etihad's airline holdings — which include a 29 percent stake in Air Berlin, 20 percent of Virgin Australia and 24 percent of Jet Airways of India — have been a main driver of its growth, contributing a fifth of its $6.1 billion in revenue last year.


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Treasury Auctions Set for the Week of June 2

The Treasury's schedule of financing this week includes Monday's regular weekly auction of new three- and six-month bills and an auction of four-week bills on Tuesday.

At the close of the New York cash market on Friday, the rate on the outstanding three-month bill was 0.04 percent. The rate on the six-month issue was 0.05 percent, and the rate on the four-week issue was 0.04 percent.

The following tax-exempt fixed-income issues are scheduled for pricing this week:

WEDNESDAY

Columbus, Ohio, $258.3 million of general obligation bonds. Competitive.

Seattle, $96.2 million of revenue bonds. Competitive.

Suffolk County, N.Y., $78.9 million of general obligation bonds. Competitive.

ONE DAY DURING THE WEEK

Arizona School Facilities Board, $220 million of taxable refinancing certificates of participation. Bank of America.

Austin, Tex., $278.5 million of water and wastewater system revenue bonds. Barclays Capital.

Chicago Park District, $207 million of general obligation bonds. Mesirow Financial.

Chicago, $110 million of motor fuel tax revenue refinancing bonds. Loop Capital Markets.

Clark County, Nev., $104 million of airport system revenue notes. Citigroup Global Markets.

Colorado Regional Transportation District, $431.2 million of certificates of participation. J. P. Morgan Securities.

Decatur, Tex., Hospital Authority, $98 million of regional health system debt securities. Bank of America.

Denton, Tex., Independent School District, $67.1 million of unlimited tax school building bonds. FirstSouthwest.

Garland, Tex., $85.8 million of electric utility system revenue bonds. Barclays Capital.

Jacksonville, Fla., $62 million of St. Johns River Power Park System debt securities. Bank of America.

Long Beach, Calif., $325 million of harbor revenue short-term notes. Citigroup Global Markets.

Los Angeles Regional Financing Authority, $143 million of mortgage loan insurance debt securities. Bank of America.

Massachusetts Housing Finance Agency, $149.3 million of debt securities. J. P. Morgan Securities.

Miami-Dade County Expressway Authority, $340 million of toll system refinancing revenue bonds. Morgan Stanley.

New York Environmental Facilities Corporation, $213 million of state revolving funds revenue bonds. J. P. Morgan Securities.

Phoenix Union High School District, $145.5 million of debt securities. Citigroup Global Markets.

Phoenix, $290 million of general obligation refinancing bonds. Piper Jaffray.

San Antonio, Tex., $200 million of electric and gas system junior lien revenue bonds. Barclays Capital.

San Bernardino, Calif., $130 million of revenue anticipation notes. Citigroup Global Markets.

San Pablo, Calif., $52.4 million of tax allocation bonds. Morgan Stanley.

Santa Margarita, Calif., $65.9 million of revenue refinancing bonds. Stifel Nicolaus.

Socorro, Tex., Independent School District, $52.9 million of unlimited tax refinancing bonds. Raymond James.

Spring Lake, Mich., Public Schools System, $54.3 million of school site building bonds. Stifel Nicolaus.

Texas University System, $89.8 million of revenue and refinancing bonds. Barclays Capital.


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Advertising: A Digital Agency Draws a Pair of Aces in Brazil

AN acclaimed advertising creative team that has been celebrated for several successful campaigns is joining a digital agency on a fast growth curve to help it grow faster.

The team is composed of Hugo Veiga, a copywriter, and Diego Machado, an art director. The pair has created initiatives for the Dove brand, sold by Unilever, that are among the most watched, most shared and most honored recent work in the advertising world. One video, for Dove Men & Care shampoo, mocks the conventions of hair care commercials, and another, part of a series known as "Dove Real Beauty Sketches," tells women, "You are more beautiful than you think."

Mr. Veiga, 34, and Mr. Machado, 27, are leaving the São Paulo office of Ogilvy & Mather Brazil, part of Ogilvy & Mather Worldwide, to join AKQA, a digital agency that, like Ogilvy & Mather, is owned by WPP. They are becoming creative directors at AKQA and opening the agency's first office in Brazil, also in São Paulo, to be housed in a space called Casa AKQA.

"We knew we needed an office in Brazil," said Ajaz Ahmed, chief executive of AKQA, partly because "the talent there is extraordinary, the way they think about digital media — you see it every year in Cannes," a reference to the Cannes Lions International Festival of Creativity, in France. Not coincidentally, Mr. Veiga and Mr. Machado were ranked as the most awarded copywriter and art director by the 2013 Cannes Report. (There is even going to be a celebration of Brazilian creativity at the 2014 Cannes Lions festival with a Brazil Day, on June 19.)

Plans call for the AKQA São Paulo office, which will be the agency's 13th, to have 50 to 60 employees, Mr. Ahmed said, and to be "an international creative center, attracting talent and clients from all over the world to produce work that has global appeal."

"We will also work with Brazilian brands to create fame on the global stage," he added.

Clients of AKQA, which opened in 1995, include Audi, Delta, Montblanc, Nike and the World Wildlife Fund. When WPP, the world's largest agency holding group, acquired AKQA in 2012, AKQA had estimated revenue of $230 million. Revenue rose to $256 million last year and will reach $300 million this year, according to Martin Sorrell, the chief executive of WPP.

The company is "delighted" with AKQA's performance since the acquisition, he said. "All around, it's been extremely good: good on client retention, good on people retention, good on people development, of which Brazil is another example."

Mr. Veiga and Mr. Machado are leaving Ogilvy & Mather Brazil "with Ogilvy's blessing," Mr. Sorrell said, "so we're off to the races." WPP agencies usually must obey a house rule against poaching, he added.

The arrival of the pair at AKQA is another example of how digital agencies are increasingly appealing to the creative staff of traditional agencies. (The terms "digital" and "traditional" are inexact: Few established agencies do not produce at least some work that is digital, and more digital agencies are expanding into the production of television and print ads. Still, those labels persist, partly as shorthand for agencies' provenance.)

The hiring of Mr. Veiga and Mr. Machado is "definitely a stake in the ground," Mr. Ahmed said, because of the high profile of the two and their work.

"We want their attitude, their DNA, to make the overall DNA of AKQA stronger," he added.

Mr. Machado and Mr. Veiga recalled meeting at Ogilvy & Mather Brazil four years ago, after Mr. Machado had worked at Crispin Porter & Bogusky and Mr. Veiga had worked at agencies including McCann Erickson and TBWA. "We had always worked at traditional agencies," Mr. Veiga said, but saw that "the mass brands are moving into the territory where AKQA was born" — digital advertising.

The pair met Mr. Ahmed for lunch at the Cannes Lions festival last year and, he said, "We got really interested in AKQA when we saw the content they were creating."

One aspect of AKQA that Mr. Machado said appealed to him was its nontraditional way of operating, which he compared with agencies that are run by committee. " 'Committee,' it has double 'm,' double 't,' double 'e'; it's a waste of resources," he added, laughing.

The enthusiasm the pair conveyed during a joint phone interview seemed to reflect their approach to work. After the two began collaborating, Mr. Machado said, "everyone could see the energy we generated together."

Mr. Veiga said: "I was already working at Ogilvy, but I was without a partner. We started working on projects, small projects, briefs no one wanted to take. It was almost like having a creative soul mate. It was life-changing in all aspects."

The goal is for the new office to be "a creative hub that uses the AKQA network for production, almost like a creative brain inside the agency," Mr. Veiga said, adding: "The good thing about AKQA is the different offices around the world are almost like rooms of the same agency. We'll be another."


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Philadelphia 1nquirer Co-0wner Among 7 Killed in Massachusetts Plane Crash

BOSTON — Lewis Katz, an owner of The Philadelphia Inquirer, was among those killed in a plane that crashed in suburban Boston late Saturday night, Inquirer executives said Sunday morning.

All seven people onboard the plane, a private Gulfstream IV, were killed. The plane erupted into a ball of fire as it took off from Hanscom Field in Bedford at 9:40 on Saturday night. The cause of the crash has not been determined.

A second passenger was identified as Anne Leeds, the wife of Jim Leeds, a commissioner in Longport, N.J. Her name was released byMayor Nick Russo Longport to the NBC affiliate in Philadelphia. The names of the other people onboard have not been made public; officials were preparing Sunday morning to brief reporters.

Just last week, Mr. Katz, 72, and H.F. (Gerry) Lenfest, another investor in The Inquirer, bought out their partners for $88 million, gaining control of the media company that owns that newspaper, The Philadelphia Daily News, the website Philly.com and a printing plant. Mr. Lenfest told Philly.com, the Inquirer's website, that Mr. Katz's son, Drew, would replace his father on the board of the new company.

Mr. Katz made his fortune by investing in the Kinney Parking empire and the Yankees Entertainment and Sports Network in New York, according to Philly.com. He is a former owner of the N.B.A.'s New Jersey Nets and the New Jersey Devils of the National Hockey League.

The people on the Gulfstream IV jet were headed to Atlantic City, said Jim Peters, a spokesman for the Federal Aviation Administration, who did not identify anyone onboard. Bedford is about 20 miles northwest of Boston.

Emergency crews from Bedford and surrounding communities responding to calls about a plane crash found the jet in flames in a heavily wooded area, said John Guilfoil, a spokesman for the Bedford Police Department. The fire was put out quickly and a hazardous materials team was evaluating the scene, he said.

Mr. Peters, of the F.A.A., said his agency and the National Transportation Safety Board were investigating the crash.

Hanscom Field is part of a complex attached to the Hanscom Air Force Base and straddles 1,300 acres in Bedford, Concord, Lexington and Lincoln, according to the Massachusetts Port Authority. A civilian airport, it is used for corporate aviation, private pilots, flight schools, charters, commercial activity and light cargo.


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Early Chemotherapy Extends Lives of Men With Prostate Cancer, Study Finds

Chicago — Many men with prostate cancer put off using chemotherapy as long as possible, fearing its side effects.

But a new study has found that men given chemotherapy early in their treatment for advanced disease lived a median of nearly 14 months longer than those who did not get early chemotherapy. The result could upend the established treatment practice, researchers said here on Sunday.

"We haven't seen survival benefits like that for any therapy in prostate cancer," said Dr. Michael J. Morris, an associate professor at the Memorial Sloan-Kettering Cancer Center, who was not involved in the study but was selected to publicly comment on it at the annual meeting of the American Society of Clinical Oncology.

Another study being presented on Sunday found that drugs called aromatase inhibitors might be better than the standard drug tamoxifen in preventing a recurrence of disease in premenopausal women with early breast cancer.

Both studies are being featured in the plenary session on Sunday, meaning they were deemed among the most noteworthy of the more than 5,000 studies being presented at the meeting. In a conference that typically celebrates the latest and greatest drug, all four studies chosen for the plenary session this year are about better ways of using older drugs, showing that there can be a lot to learn even after drugs get to market.

Dr. Nicholas J. Vogelzang, an author of the study on prostate cancer, said that the findings would change practice and that he had already started discussing this option with patients. The challenge, he said, is getting men to agree.

"Not many of them want to do chemotherapy, even though the numbers are convincing," said Dr. Vogelzang, who works at the Comprehensive Cancer Centers of Nevada.

The study's findings apply to a fairly narrow group of patients — men whose cancer has already spread beyond the prostate gland at the time of diagnosis, or whose cancer has come back after surgery or radiation treatment and still remains susceptible to hormone therapy.

Only a small fraction of men have metastatic prostate cancer at the time of the initial diagnosis because prostate cancer screening using a blood test typically detects the disease before it has spread.

But screening is expected to become less common because a government advisory committee, the United States Preventive Services Task Force, has recommended against routine screening, saying that more men are harmed by unnecessary treatments for prostate cancer than are saved from death by screening. That could lead to an increase in men whose initial diagnosis is metastatic cancer, Dr. Vogelzang said.

The study, sponsored by the National Cancer Institute, involved 790 men who received either hormone therapy only or hormone therapy, in addition to at most six infusions of docetaxel spaced three weeks apart.

Those who received the chemotherapy lived a median of 57.6 months, compared with 44.0 months in the control group, a difference of 13.6 months. The difference in survival was even greater — 17 months — for the patients whose cancer had spread more extensively. Dr. Morris of Sloan-Kettering said those men were the best candidates for early chemotherapy.

Docetaxel is sold under the brand name Taxotere by Sanofi, but generic versions are also available. It was approved for metastatic prostate cancer in 2004. In the last few years, several other drugs have been approved, like Zytiga from Johnson & Johnson and Xtandi from Medivation and Astellas Pharma.

But docetaxel and the newer drugs are typically used after hormone therapy has stopped working. In that setting, each of them has extended median survival by about two to five months in clinical trials.

Dr. Matthew R. Cooperberg, associate professor of urology at the University of California, San Francisco, said doctors were starting to use the newer agents before docetaxel, pushing chemotherapy further back in the sequence.

So the new study "is, to an extent, bucking the tide," he said. "This trial may be evidence that the role for chemo is earlier, when patients are healthier and the disease burden is relatively low."

The results also raise the question of whether the other prostate cancer drugs would also provide a much greater survival advantage if used earlier. Some trials are underway to determine that.

One issue is that early treatment is often handled by urologists, not oncologists. And many urologists do not administer chemotherapy.

Dr. Morris said he did not think earlier use of docetaxel would diminish sales of the newer agents. Men will eventually become resistant to hormone therapy, he said, and will need the newer agents.

In breast cancer, women with estrogen-responsive disease typically take drugs for at least five years after their tumor has been removed surgically, to prevent cancer from recurring.

Aromatase inhibitors are generally considered a better choice than tamoxifen for postmenopausal women. But aromatase inhibitors work only when women have low estrogen levels, which usually rules them out for premenopausal women.

The new study — actually two studies being analyzed together to accumulate nearly 4,700 patients — involved suppressing the functioning of the ovaries so that the younger women could take an aromatase inhibitor.

Five years of an aromatase inhibitor in addition to ovarian suppression proved superior to five years of tamoxifen in addition to ovarian suppression. After five years, 91.1 percent of those who received the aromatase inhibitor, exemestane, were free of cancer, compared with 87.3 percent of those who received tamoxifen with ovarian suppression. (In the United States, tamoxifen is typically used without ovarian suppression.)

Some experts said they were a bit skeptical that the results would change practice, noting that so far there was no difference between the groups in how long the women lived. And side effects must be evaluated, they said. Those include both the joint pain caused by aromatase inhibitors as well as the hot flashes and bone loss that could come from putting women into early menopause so they could use the aromatase inhibitor.

Ovarian suppression is typically accomplished using drugs like goserelin. Another study presented here on Friday showed that goserelin can help preserve fertility in young breast cancer patients.

Exemestane is sold under the brand name Aromasin by Pfizer, though generic versions are commonly used.


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