Saudi Prince Invests $300 Million in Twitter; Winn-Dixie Surges on Merger Deal

Nichole Harper
19 Dec, 2011
New York City

Stocks in New York declined as Asian markets declined after the death of North Korean leader King Jong-il. European markets struggled on cautious comments from the ECB president. Winn-Dixie agreed to merge with a grocery chain Bi-Lo. Saudi Prince Talal invested $300 million in Twitter.

[R]11:45 AM New York – Market indexes in New York turned lower as Asian markets declined after the death of North Korean leader King Jong-il. European markets struggled on cautious comments from the ECB president. Winn-Dixie surged 71% after it agreed to be merged with a grocery chain Bi-Lo. Saudi Prince Talal invested $300 million in Twitter.[/R]

Stocks in New York traded lower as traders look ahead for the holiday season and trading was light in the first two hours of trading.

Market sentiment was cautious after European Central Bank President Mario Draghi made cautious comment and said the outlook for the region faced “highly uncertainty” and the economies faced substantial downside risks.

European Markets Up Despite Ratings Worries

European markets opened higher and struggled to hold on to the gains in early trading but managed to overcome the weakness in Asian markets. Trading was light as investors focused on the holidays and took defensive positions in the food and consumer staples sectors.

In Frankfurt trading, DAX 30 index increased 28.79 to 5,730.57 and CAC 40 index added 25.38 to 2,997.68. Across the region, the benchmark index in Spain increased 1.3%, in Italy gained 0.8%, in Switzerland rose 0.6% and in Sweden added 0.1%.

Bond yields in the euro zone were generally stable. Belgian 10-year bond yield increased 9 basis points to 4.42% and yields on similar bonds for Spain declined to 5.2% and for Italy fell to 6.8%.

Euro Zone Nations to Fund IMF €200 Billion

Euro zone finance ministers attended a teleconference to finalize the details of €200 billion of commitment to increase IMF funding. The additional funding will help the multilateral institution to permit more lending to peripheral euro zone nations, even though that will violate the IMF charter and break the spirit of European Union treaty.

Saudi Prince to Invest $300 Million in Twitter

Saudi Prince Alwaleed bin Talal and Kingdom Holding Co confirmed the investment of $300 million in the micro blogging site Twitter but did not disclose the size of the stake in the company.

Earlier, Twitter chief executive Dick Costolo valued the company at $8 billion however sources close to Kingdom and Twitter confirm that the latest investment was at a lower valuation.

Stock Movers

Vistaprint NV declined 6.5% to $30.61 and it agreed to acquire Webs Inc for $117.5 million and said the deal will lower its adjusted earnings per share in 2012 and 2013. The purchase is expected to be completed in one month.

Vistaprint agreed to pay $100 million in cash and $17.5 million in restricted stock.

Winn-Dixie Stores, Inc ((WINN)) soared 71% to $9.30 after the grocery retailer agreed to be acquired by privately held retailer Bi-Lo, LLC. The two regional supermarket chains based in Southern states have little overlap and the merger will provide a bigger scale.

Bi-Lo operates 207 stores in Carolinas, Tennessee, Georgia and Winn-Dixie manages 480 stores in Florida, Alabama, Mississippi, Louisiana and southern Georgia.

Both companies used bankruptcy protection to lower their debt burdens and close non-performing stores but are still struggling. Bi-Lo filed for Chapter 11 protection in 2009 and Winn-Dixie sought court protection in 2005.