The U.S. Chemical Safety and Hazard Investigation Board releases its final report into the BP Texas City refinery accident this morning. Board chair Carolyn Merritt said that BP's board failed to oversee process safety at the company's refineries before a fatal Texas City refinery explosion. Fifteen people died and more than 170 others were hurt in the March 2005 explosion. Merritt says executive management and BP's corporate board "either did not get, or failed to respond to process safety audits and risk information.'' She made her comments in a Monday speech to the annual meeting of the National Petrochemical and Refiners Association in San Antonio. She says the British oil company often assessed risks at its refineries. But she says the focus was on personal safety, rather than process safety.
The Houston Department of Health and Human Services and Reliant Energy are launching a new energy efficiency program for Houstonians this morning called "The Reliant Energy PowerHouse Program." The new program is designed to educate consumers on how to better understand, read and lower their electric bill, as well as fund energy efficiency home repairs for Reliant Energy customers. At least 900 energy-efficiency home repairs for low-income customers in Houston will be funded.
Concerns about worsening credit in subprime mortgage markets continues to take a toll on home builders. The National Association of Home Builders' Index of Sales Activity for new, single-family housing fell by three points this month--to 36. A housing market index under 50 means the number of builders who see "poor'' sales outnumber the number who see "good'' sales. With housing markets cooling over the past year, the index has stayed under the 50 mark for 11 straight months after holding above it the previous ten years. While the home builders group is still forecasting "modest improvements'' in home sales for the rest of this year, chief economist David Seiders says mortgage market problems save increased the uncertainty of this outlook.
Community Health Systems said it's agreed to buy Triad Hospitals for about $5.1 billion. That and its agreement to assume $1.7 billion in Triad debt tops a previous bid by private-equity buyers. CHI said the deal would make it the nation's largest publicly traded hospital company. It would own or operate about 130 hospitals in 28 states and control more than 18,700 beds. The companies say Franklin, Tennessee-based CHI agrees to pay $54 per share for the Dallas-based chain. Triad had previously agreed to be taken private in a $4.7 billion sale to an affiliate of Goldman Sachs and a JPMorgan Chase spinoff. That would have paid $50.25 per share. The Triad transaction comes after hospital giant HCA was sold to private owners for $21.3 billion. Hospitals are struggling with flat volumes and more unpaid bills from uninsured patients.
Houston hospital systems report a flat net income in 2005, according to a survey by Minnesota analyst Allan Baumgarten, as reported in the Houston Business Journal. The Texas Managed Care Review 2006 finds HMOs in Texas maintained strong profitability, although HMO enrollment was down by 6.7 percent in 2005 and the first six months of 2006. The survey says net income for Houston hospitals in 2005 was about the same as in 2004, at $504.4 million.
Denmark's Dong Energy said it's agreed to buy the Danish operations of Houston-based ConocoPhillips for $300 million. The deal includes the value of reserves and exploration potential and synergies with Dong Energy's downstream gas business. Dong also says it includes the value of other assets in the business acquired and other strategic advantages. Dong Energy says it also acquires control of a company holding equity in three Danish licenses, strengthening its position in the Danish gas supply market. State-owned Dong Energy plans to go public later this year, although the Danish government will keep a majority stake.
Halliburton says that its Energy Services Group will open a manufacturing center in Monterrey, Mexico, according to the Houston Business Journal. Halliburton said the new facility will initially create 50 new jobs, as well as additional supplier jobs. The facility, which will manufacturing oilfield equipment for upstream energy customers, opens in May.
EGL'S board has approved the latest buyout offer from its chairman and CEO. The Houston-based shipping and transportation company has signed a definitive merger agreement with James Crane and his private equity investors to acquire the company in a $1.7 billion transaction. EGL shareholders must approve the buyout.
Houston-based Quanta Services is acquiring InfraSource Services of Houston in a $1.26 billion all-stock deal, according to the Houston Business Journal. InfraSource Services designs, builds and maintains transmission and distribution networks for U.S. utilities, power producers and industrial customers. Quanta Services provides specialized contracting services and end-to-end network solutions for the electric power, gas, telecommunications and cable television industries.
The meteoric rise of Clear Channel Communications from small-time radio station owner to colossal media company has often been tempestuous. Consumer and antitrust advocates have hounded the San Antonio-based giant in recent years. But these days, the loudest cries are coming from stockholders. A private equity group offered investors in November offered $37.60 per share in cash for each Clear Channel share. That's $18.7 billion--plus the assumption of $8 billion in debt by the group. The buyout offer led by Bain Capital Partners and Thomas H. Lee Partners is the 5th largest in U.S. history. It's also a 10.2 percent premium over the closing stock price the day before the offer was announced. But some shareholders of the nation's largest radio station operator are signaling that it's not enough, given the strong performance of its billboard and outdoor advertising segment. Clear Channel's largest shareholder indicated weeks ago that it would vote against the deal and efforts to block it are gaining momentum. The uncertain fate of the deal led the board last week to postpone its shareholder meeting from Wednesday until April 19th. The change will make more recent shareholders eligible to vote. That's an apparent bid to increase the odds of approval. To win approval, two-thirds of shareholders must support the deal. Shareholders who don't vote will be counted against the buyout.
Federal Reserve interest rate setters gather in Washington for a two-day meeting Tuesday and will announce their decision a day later. Thus far, the Fed has given no indication of a move in interest rates, even though inflation numbers for February came in on the high side. The Federal Open Market Committee has held rates steady at 5.25 percent for five meetings following a two-year campaign of increases.
We'll be getting a couple of reports this week that'll provide more insight into the state of the housing sector. It starts Tuesday with the Commerce Department's update on home building. On Friday, the National Association of Realtors releases data on sales of previously-owned homes for February. Other reports set for release include the Index of Leading Economic Indicators for last month and weekly oil inventory figures.