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Deutsche Telekom AG’s major shareholder, the German state, is pressing it to make large acquisitions in the hope of raising its sagging share price, a source familiar with the government’s thinking said.

“Berlin is very clearly on an expansion course and is putting pressure on Deutsche Telekom,” the source told Reuters on Monday, as speculation swirled the German company could bid for U.S. wireless phone company Sprint Nextel (S.N: Quote, Profile, Research).

A source close to the company said Deutsche Telekom (DTEGn.DE: Quote, Profile, Research) had been looking at Sprint Nextel since the U.S. company announced a huge goodwill writeoff in February. The person said no decision had been taken on whether to bid.

The Berlin government still owns around a third of the former state-owned company, has a representative on its supervisory board and has a major say in company decisions.

Asked about Telekom being interested in Sprint Nextel, German Finance Minister Peer Steinbrueck told reporters in Berlin he considered it to be “a rumor, like so much else”.

Deutsche Telekom’s chief executive, Rene Obermann, has said he wants to grow the group’s mobile phone business through acquisitions to compensate for a dwindling fixed-line business and has linked his performance to boosting the share price.

Telekom shares lost 1.5 percent to close at 11.61 euros, the second-biggest decliner among German blue-chips .GDAXI faxless online payday advances. Sprint shares were up 4.3 percent at $8.23 by 1751 GMT.

Such a deal would vault Deutsche Telekom’s T-Mobile USA unit past AT&T (T.N: Quote, Profile, Research) and Verizon Wireless (VZ.N: Quote, Profile, Research) (VOD.L: Quote, Profile, Research) to the number one spot among U.S. mobile phone service providers, but industry experts were skeptical Telekom would pull it off. 

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Monsanto Co., the world’s largest seed producer, said fiscal second-quarter profit more than doubled as U.S. farmers bought more Roundup weed killer and genetically modified corn seed.

The Creve Coeur-based company is taking market share from rivals such as DuPont Co. by spending more to develop new varieties of corn, soybean and cotton seeds. Higher prices will help double gross profit from Roundup this year, Chief Executive Hugh Grant said on a conference call.

Net income in the three months through February rose to $1.13 billion, or $2.02 a share, from $543 million, or 98 cents, a year earlier. That surpassed Thomson Financial’s prediction of $1.72 a share.

The second-quarter earnings include a 23-cent gain from the settlement of Monsanto’s claims related to Solutia Inc.’s emergence from bankruptcy.

Sales were boosted by global demand for Roundup and genetically modified corn seeds in the U.S bad credit payday loan. and Brazil, Monsanto said.

"Between now and 2012, I think we’re the only company in agriculture that can point to consistent growth irrespective of swings in commodity prices, fluctuations in planted acres or the usual ups and downs in the popularity of things like ethanol," Grant said.

Monsanto said it won an additional 3 to 5 percentage points of the U.S. corn-seed market this year, confirming earlier forecasts.

Monsanto last year surpassed DuPont’s Pioneer unit as the largest producer, with 32 percent of U.S. corn-seed sales. DuPont had 30 percent and has pledged to hold its share steady this year. Monsanto said its share this year will be 35 percent to 37 percent.

The Associated Press contributed to this report.

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NEW YORK — Shares of Merck & Co. and Schering-Plough Corp. fell to record lows Monday, as analysts warned new clinical data would cause sales of their blockbuster cholesterol drug Vytorin to fall further.

The companies market Vytorin through a joint venture, but earlier this year, partial results from a clinical study showed that it was no more effective at limiting plaque buildup than Merck’s Zocor, a drug that is already available in generic form. Full results of that study were released Sunday.

Vytorin is a combination of Zocor and Schering-Plough’s drug Zetia.

Schering-Plough shares plunged as low as $14, touching their lowest levels since August 1996. Merck shares fell as low as $36.82, their lowest since June 2006.
Leading physicians are now recommending the use of older drugs called statins before putting patients on Vytorin. Many physicians had prescribed Vytorin in lieu of higher doses of statins because of what some said was an undue fear of side effects.

"There was an irrationality to begin with," said Dr. John LaRosa, president of State University of New York Downstate Medical Center.

One ultimate result of the outcome could be a tightening of regulatory standards at the FDA when it comes to approving cholesterol drugs, LaRosa said.

Federal and New York state officials have been investigating why results of the study were not released for nearly two years after the study ended.

On Monday, a congressional committee investigating the issue released some damning evidence same day payday loans.

The Senate Finance Committee said even the researcher who led a crucial study of the drug angrily accused Vytorin makers Merck & Co. and partner Schering-Plough Corp. of withholding negative results to boost sales.

A letter from the committee’s ranking Republican, Sen. Chuck Grassley of Iowa, states that delaying results of the study affected medical decisions and put financial burdens on patients and the federal government, which has paid hundreds of millions of dollars for Vytorin.

Wall Street expects prescriptions of Vytorin to decline further in the wake of a recommendation to use the drug only after initial therapy with older drugs like Pfizer Inc.’s Lipitor and AstraZeneca PLC’s Crestor.

Lehman Brothers analyst Charles Butler downgraded Schering-Plough shares on the news, and cut his price target on the stock by more than 40 percent.

He said prescriptions of Vytorin will keep falling, and because Schering-Plough relies heavily on the joint venture, he slashed his profit estimates over the next five years.

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KANSAS CITY — Bombardier Aerospace is considering Kansas City as a site for a $375 million passenger jet assembly plant, city and state officials said.

While the project is only in its initial stages, discussions have gone far enough that state officials outlined legislation Tuesday to provide state tax credits as a prerequisite for landing the plant.

The Montreal-based Bombardier Aerospace is looking for a site to assemble the C Series of 110- and 130-seat passenger jets. The plant eventually would employ up to 2,100 people, with up to 5,200 related jobs created by employers attracted by the plant. The estimated overall economic impact over 22 years would be $5.9 billion.

"This is exponentially larger than any deal we’ve ever done," Missouri Department of Economic Development Director Greg Steinhoff told The Associated Press.
Kansas City officials also are enthused. "This would be a game-changer for Kansas City," Bob Marcusse, president of the Kansas City Economic Development Council, told The Kansas City Star. "We would suddenly be major players in the aviation industry."

However, the deal faces several obstacles. Bombardier made a preliminary deal two years ago to build the plant in Canada and is under political pressure to honor that deal.

Also, the company has just begun marketing the C Series and must generate enough orders to justify building the assembly plant. A decision on whether to go ahead with the project is expected this year.

Marc Duchesne, a Bombardier spokesman, confirmed Tuesday that the company has talked to Missouri officials, but he noted that other states also have expressed interest, although he would not name them cash advance. He also said the company’s "preferred choice" is still Mirabel, Quebec.

Kansas City and state officials say Bombardier has looked at a site on city-owned property at Kansas City International Airport for the 1.3-million-square-foot assembly plant. The firm hopes to begin production in 2013 and reach full production in 2015 or 2016.

Steinhoff acknowledged some initial concern that Bombardier was looking at Missouri to leverage a better deal from Canada. But he now believes the company is serious about Kansas City.

State economic development officials want to give Bombardier tax credits through a "mega-project" amendment to the Enhanced Enterprise Zone Program, which would be for projects that hire a minimum of 1,000 employees and invest at least $300 million.

With Bombardier, the state would cap the amount of tax credits at $40 million annually over the 22-year life of the deal.

Steinhoff said Bombardier would gradually repay the state for the tax credits, with interest, by giving the state a certain amount of money for each plane it produces. The details of those repayments are still being negotiated, he said.

Senate Majority Leader Charlie Shields, R-St. Joseph, and Rep. Ron Richard, R-Joplin, are sponsoring the tax credit legislation. Committee hearings on it are scheduled today in both the House and Senate.

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DALLAS — The Federal Aviation Administration, under fire for its handling of missed safety inspections at Southwest Airlines Co., said Tuesday it is ordering a check of maintenance records at all U.S. airlines.

The FAA’s action applies to records on all planes. FAA inspectors will check to make sure airlines have complied with orders to perform the type of structural inspections that Southwest missed on some older Boeing 737s.

The FAA hit Southwest this month with a $10.2 million civil penalty for missing the inspections and then continuing to fly the planes even after realizing the mistake. Dallas-based Southwest plans to appeal.

Acting FAA Administrator Robert Sturgell said Tuesday that the failure of Southwest to check the fuselages of its planes for cracks prompted him to ensure that other carriers were meeting the same requirement.

Sturgell said the first check of the airlines’ maintenance records will be done by March 28 and a full audit finished by June 30.

The FAA said it would check compliance with at least 10 safety orders, called airworthiness directives, at every airline by March 28. The agency said a full audit covering at least 10 percent of all safety directives will be finished by June 30 payday loan.

FAA spokeswoman Laura Brown said the review will involve both examining paperwork and checking airplanes at 118 operators, some of which are very small.

David Castelveter, a spokesman for the airlines’ trade group, the Air Transport Association, said the FAA audit would "help create the redundancies that make our aviation system the safest in the world."

In a letter to airline officials, FAA Associate Administrator for Safety Nicholas Sabatini defended the agency’s recent strategy of relying more heavily on information from the airlines themselves. FAA and airline officials argue that the system correctly focuses on improving safety instead of finding blame.

Southwest turned itself in to the FAA last March after discovering it had missed structural safety inspections on 46 planes. The company is conducting an internal review, and the FAA is also investigating how the lapses occurred.

After a drumbeat of bad publicity lasting more than a week, Southwest confirmed Monday that it was suspending plans to outsource some of its maintenance work to a contractor in El Salvador.

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SAN FRANCISCO – Yahoo Inc spurned Microsoft Corp.'s US$44.6 billion takeover bid as inadequate Monday, betting that it can elicit a higher offer from the world's largest software maker or find another way to deliver a comparable payoff to its shareholders.

The rebuff by the slumping Internet pioneer had been widely anticipated after word of Yahoo's intention was leaked during the weekend.

In its formal response, Yahoo said its board had concluded Microsoft's unsolicited offer "substantially undervalues" the Sunnyvale-based company.

Yahoo . (NASDAQ:YHOO) indicated it could be lured to the negotiating table if Microsoft (NASDAQ:MSFT) ups the ante, without mentioning the price it has in mind.

"The board of directors is continually evaluating all of its strategic options in the context of the rapidly evolving industry environment and we remain committed to pursuing initiatives that maximize value for all stockholders," Yahoo said in a statement.

Investors appeared confident that Microsoft wants Yahoo badly enough to raise the stakes. Yahoo shares rose 34 cents to $29.54 in Monday's morning trading while Microsoft shares fell 46 cents to $28.10.

If Microsoft doesn't raise its offer, Yahoo chief executive Jerry Yang assured employees in a Monday e-mail that the company is poised to rebound on its own and become a "must buy" in the $45 billion online advertising market.

"We have accomplished a great deal in a very short time," wrote Yang, a company co-founder who promised things would get better after he became CEO eight months ago. "Yahoo is a faster-moving, better organized, more nimble company well on its way to transforming the experiences of its users, advertisers, publishers and developers."

Just two days before Microsoft made its bid, Yang had warned Yahoo faced "headwinds" that made it unlikely the company's performance would improve significantly until 2009.

Yahoo's stock price had dropped by more than 40 per cent in the three months leading to Microsoft's bid, valued at $31 per share when it was announced Feb. 1. The offer was 62 per cent above Yahoo's market value at the time.

Many analysts believe Redmond, Wash.-based Microsoft will eventually raise its bid to $35 to $40 per share, sweetening the pot by $5 billion to $12 billion in an effort to negotiate an amicable sale.

Microsoft was prepared to pay at least $40 per share for Yahoo a year ago, according to a person familiar with the talks between the two companies a year ago. Yahoo wasn't interested then because it was confident in its own strategy, said the person, who didn't want to be identified because Microsoft's 2007 offer was never publicly disclosed.

But a higher bid now could hurt Microsoft's own stock price, which has been slipping amid concerns that a Yahoo takeover could be more trouble than its worth instant payday loan. Microsoft's market value has plunged by more than $40 billion, or 14 per cent, since the bid was made public.

Microsoft representatives didn't immediately respond to requests for comment Monday morning.

RBC Capital Markets analyst Jordan Rohan predicted Yahoo's board will have little choice but to sell the company if Microsoft raises its bid to $35 or $36 per share. "Yahoo management has already exhausted the patience of its largest, longest-suffering shareholders," Rohan wrote in a Monday note.

If it doesn't want to pay more money, Microsoft could take its original bid directly to Yahoo's shareholders. Microsoft's management began preparing for that possibility last week by meeting with some of Yahoo's major shareholders to rally support for its offer.

In a more extreme tactic, Microsoft could try to override Yahoo's board by trying to oust the current directors later this year – a risky manoeuvre that would likely create hard feelings that would make it more difficult to cobble the two businesses together if a deal were consummated.

Yahoo also could fend off Microsoft by exercising an anti-takeover device, known as a "poison pill," that would issue more company shares to make a buyout too expensive to pull off.

Although its profits have been dwindling during the past two years, Yahoo still possesses one of the Internet's biggest audiences and most valuable franchises. Microsoft believes it can build on those assets to become a more formidable competitor to Google Inc., which now holds a commanding lead in the lucrative online search and advertising markets.

Yahoo has reportedly been exploring an advertising partnership with Google as one way to boost its profits and remain independent. The company also has been looking for other suitors that might be interested in countering Microsoft's bid, but so far no one has stepped forward.

By rejecting Microsoft's initial offer, Yahoo's board is running the risk that the company's stock will plunge below $20 per share again if its suitor decides to walk away.

That scenario would probably unleash a flood of shareholder lawsuits, intensifying the pressure on Yahoo's management team to deliver on a long-awaited turnaround that has been in the works for the past 18 months.

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DETROIT — When thousands of U.S. auto dealers gather in San Francisco this weekend, much of the talk will be about just getting through 2008.

The obstacles include a shaky economy, volatile stock market and tightening credit, setting up what economists are predicting could be the worst sales year in more than a decade.

With word Friday that Chrysler may have plans to thin its dealership ranks and the other two U.S.-based automakers looking to do the same, those left to sell another day may end up stronger — and car buyers may benefit as well.

"Fewer dealers means better prices for the customers," said Gerald Meyers, a former chairman of American Motors Corp. who now teaches leadership at the University of Michigan.
That’s because dealers not making money aren’t quick to offer discounts.

"If they’re profitable, they won’t lose the sale," Meyers said. "If they’re not profitable, they might lose the sale on the margin."

Automakers this year also could again offer zero percent loans through their finance arms and other incentives to help spur sales. But 2008 may be toughest for dealers who sell cars and trucks made by the Detroit Big Three, all of which saw sales declines last year and all of which are in the midst of restructuring.

About 10,000 dealers and their spouses will attend this year’s four-day National Automobile Dealers Association convention starting this weekend, and many of the programs will help them cope with 2008. Paul Taylor, chief economist for the association, has predicted annual new U.S. vehicle sales this year of 15.5 million to 15.8 million, down from 17 million as recently as 2005. Automakers sold 16.1 million vehicles in the U.S. last year, and that was considered lackluster.

Average dealer pretax profit, though, remained fairly strong through November, up 6.6 percent compared with the year-ago period, Taylor reported. The results came despite difficulties in the new car market, with dealers making much of their money on used cars, Taylor said.

But even that is starting to wane payday loans online. The dealers association used car auction data is showing that prices are starting to drop, not just for larger vehicles but even small four-cylinder cars that get good gas mileage.

"For the last several months, we’ve seen prices falling. That’s a concern because it affects trading values on new cars as well," he said.

But other opportunities are emerging. On Friday, GM announced a deal with online auction site eBay Inc. that includes posting the entire GM Certified Used Vehicles on eBay Motors at no cost to its more than 3,900 certified used U.S. dealers. The companies also plan to work together to boost sales.

"GM Certified dealers will have millions more eyeballs looking at their inventory, and more traffic drives sales," Mark Mathews, director of GM Used Vehicle Activities, said in a statement.

Gasoline prices nationwide haven’t dropped much from the peak summer driving season, leaving customers uncertain about what will happen this summer, said Paul Gaudet Sr., owner of a six-dealer group in Tilton, N.H.

"People just don’t know what to buy, and as a result we don’t know what to stock. It’s tough," he said.

But there is cause for optimism. Top executives of GM and Ford have predicted a rebound in U.S. sales during the second half of the year as interest rate cuts and a possible federal economic stimulus package kick in.

"We think the pattern will be the reverse of ‘07, better as the year goes on, not weaker," said Mark LaNeve, GM’s vice president for North American sales and marketing. GM is expecting U.S. sales of about 16 million vehicles industrywide this year.

With lower interest rates, industry analysts have said auto company financing arms likely will offer zero percent loans and other incentives to help spur sales. But with tightening credit standards, dealers will need to forge better relationships with lenders, Taylor said.

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