German pensioners locked up for abduction monetary adviser

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Four elderly Germans were handed jail sentences yesterday for kidnapping their financial adviser and holding him prisoner in a basement in an attempt to recover about €2.5 million (2.2 million) in lost savings.

The two men and two women, aged between 61 and 80, seized the banker outside his apartment in the western town of Speyer, bound and gagged him and drove 300 miles (480km) across Germany with him in the boot of the car.

The group held the 57-year-old man in a basement for days, trying to force him to transfer large sums of money to them. In one remittance order the banker included the message Sell 100 Call Pol.ICE today please!

A bank employee notified the police and the banker was released by a team of commandos.

My client regrets it greatly, especially that he pulled his wife and the others into the situation, Udo Krause, the defence lawyer said of the 74-year-old ringleader, identified as Roland K.

The two men were given six and four years in jail and the two women were given suspended sentences.

UK invulnerability organisation VT succumbs to $2.1 billion Babcock bid

Matt Scuffham LONDON Tue Mar 23, 2010 2:15pm EDT Related News UPDATE 4-UK defence group VT succumbs to $2.1bln Babcock bidTue, Mar 23 2010Babcock confirms agreed $2.1 billion VT takeoverTue, Mar 23 2010UPDATE 1-VT set to accept $2 bln bid from Babcock - sourcesMon, Mar 22 2010VT set to accept $2 bln bid from Babcock - sourcesMon, Mar 22 2010Babcock close to VT bid decision: sourcesTue, Mar 16 2010 Stocks & &

LONDON (Reuters) - UK defense services specialist VT Group Plc (VTG.L) agreed to an improved bid from rival Babcock (BAB.L) in a deal worth some 1.4 billion pounds ($2.1 billion) which creates one of Europe"s biggest defense services groups.

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Babcock International Plc, which maintains the Royal Navy"s submarines, said on Tuesday it believes a merged entity will be able to combine maintenance and training contracts covering Britain"s army, navy and air force to help the UK"s Ministry of Defense (MoD) cut costs.

Babcock, which also supports the production of aircraft carriers, said it had decided to lift its offer a second time after its due diligence uncovered potential for significantly higher merger synergies than it had originally identified.

The group expects to realize savings of around 50 million pounds per annum after the deal, compared with its original projection of 27 million, and anticipates it will be earnings enhancing in the first year.

Babcock shares closed 5.2 percent up at 560-1/2 pence. VT shares were 4.6 percent higher at 722p.

Analyst Mike Murphy at brokerage Numis said the deal carried both short and long-term merits and believes shares in Babcock are significantly undervalued.

"There are revenue synergies from the combined group"s unrivalled position in defense outsourcing which should offer huge growth prospects as the MoD looks for savings," he said.

That could be critical in light of expected cuts to defense spending following Britain"s forthcoming general election.

"In this environment, size does matter," VT CEO Paul Lester told Reuters in a telephone interview.

VT, which started life in the mid-19th century as a boatyard known as Vosper Thornycroft, last year sold its naval shipbuilding interests to BAE Systems (BAES.L) to focus on the support services sector. It has large training contracts with the British military and other government departments.

It snubbed two previous approaches from Babcock, the latter a cash-and-shares offer worth up to 715 pence per share.

Under the terms of the deal announced on Tuesday and due to complete in mid-July, VT shareholders will receive 361.6 pence in cash and 0.701 new Babcock shares for each share they hold.

PREMIUM PRICE

Babcock"s cash-and-shares offer was worth 757.1 pence per share based on its share price at midsession, a premium of 49 percent to VT"s closing price on February 12, the day prior to the announcement of Babcock"s approach.

Babcock said it secured a 1 billion pounds loan, including a bridge loan of up to 400 million pounds and a backstop facility of up to 600 million pounds, to back its offer. This was underwritten by Lloyds TSB (LLOY.L) and JP Morgan (JPM.N), a banker close to the deal said.

According to Thomson Reuters data, this will be the largest takeover of one listed British company by another since the state-backed purchase of ailing lender HBOS by Lloyds which closed in January 2009.

The merged group is expected by analysts to be valued at about 2 billion pounds and VT shareholders will own about 36 percent of the combined entity.

Babcock Chief Executive Peter Rogers, who will retain his position in the combined group, highlighted the benefits of the combined scale of the two businesses who are both major customers of Britain"s Ministry of Defense.

"The combination gives you the ability to talk right across those who influence policy and direction within the MoD and that"s extremely valuable," he said.

A parliamentary report on Tuesday said Britain could face a hole of up to 80 billion pounds ($120 billion) in its defense budget within a decade and may have to cancel some equipment programmes to balance the books.

(Additional reporting by Rhys Jones and Quentin Webb; Editing by Victoria Bryan and David Holmes)

($1=.6690 pounds)

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Buffett defends utilizing batch in Burlington takeover

Jonathan Stempel NEW YORK Sat Feb 27, 2010 2:55pm EST Related News Berkshire net rises, Buffett sees housing reboundSat, Feb 27 2010UPDATE 4-Berkshire net rises, Buffett sees housing reboundSat, Feb 27 2010Buffett letter has big audience as Berkshire bulgesThu, Feb 25 2010Buffett letter has big audience as Berkshire bulgesThu, Feb 25 2010Buffett"s Berkshire cuts Conoco, J&J, P&G stakesTue, Feb 16 2010 Stocks & &

NEW YORK (Reuters) - Warren Buffett defended his issuance of $10.6 billion of Berkshire Hathaway Inc (BRKa.N) (BRKb.N) stock as part of this month"s acquisition of Burlington Northern Santa Fe Corp -- even as he admitted that issuing stock is as much fun as preparing for a colonoscopy.

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Berkshire bought the second-largest U.S. railroad company two weeks ago, paying $26.5 billion for the roughly 77.5 percent it did not already own, in what Buffett has called an "all-in wager" on the U.S. economic future.

In his annual letter to Berkshire shareholders on Saturday, Buffett likened the railroad to Berkshire"s electric utilities businesses, one of its largest operations, saying they both provide essential services to the country.

"It is inconceivable that our country will realize anything close to its full economic potential without its possessing first-class electricity and railroad systems," he wrote. "We will do our part to see that they exist."

Because an all-cash purchase would have exhausted too much of Berkshire"s cash reserves, Buffett agreed to pay 40 percent of the price in stock, increasing Berkshire"s share count by 6.1 percent.

He estimated that 30 percent of the overall cost was in Berkshire shares because the Omaha, Nebraska-based company had paid some $6 billion of cash for its earlier stake.

Yet Buffett has long maintained that Berkshire"s stock is undervalued, and did so again on Saturday. So why issue more?

"The disadvantage of paying 30 percent of the price through stock was offset by the opportunity the acquisition gave us to deploy $22 billion of cash in a business we understood and liked for the long term," Buffett wrote.

"It has the additional virtue of being run by Matt Rose, whom we trust and admire. We also like the prospect of investing additional billions over the years at reasonable rates of return."

OTHER TAKEOVERS HAD PROBLEMS

Some of Buffett"s prior acquisitions made with stock have proven problematic.

One was Berkshire"s 1998 takeover of General Re Corp, its largest acquisition prior to Burlington Northern.

Though Buffett now calls General Re a "gleaming jewel in our insurance crown," the reinsurer struggled with years of bad underwriting decisions, and litigation over contracts with American International Group Inc (AIG.N) that included the convictions of four former General Re executives.

Another is NetJets, a plane leasing unit that has lost money pre-tax in the 11 years that Berkshire has owned it, while boosting its debt load to $1.9 billion from $102 million. Buffett last year replaced longtime chief executive Richard Santulli with David Sokol, often considered a candidate to run all of Berkshire, and Buffett said performance is improving.

And in 1993, Berkshire bought Dexter Shoe for $433 million in stock, only to fold it into another business eight years later. "The worst deal that I"ve made," Buffett said in 2008.

Vahan Janjigian, author of the book "Even Buffett Isn"t Perfect," said he was concerned about the structure of the Burlington Northern takeover.

"He makes it very clear that when an acquirer uses stock to buy a company, it should do so only when the acquirer"s stock is overvalued -- and he doesn"t believe Berkshire is overvalued," he said. "However, the bulk of the transaction was made in cash, so it"s not a huge concern."

Even for Buffett, who is not known for shying away from big bets, the price of being able to "hear that choo-choo," as he once put it, was almost too much to bear.

"Charlie and I enjoy issuing Berkshire stock about as much as we relish prepping for a colonoscopy," he wrote. "The final decision was a close one. If we had needed to use more stock to make the acquisition, it would in fact have made no sense. We would have then been giving up more than we were getting."

Buffett concluded his annual letter as he usually does, by exhorting shareholders to go to Omaha for Berkshire"s annual meeting on May 1. This year, he added a postscript.

"Come by rail."

(Reporting by Jonathan Stempel; Editing by Xavier Briand)

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