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Monday PM September 21st, 2009

Dell acquiring Perot Systems in $3.9 billion deal…Conference Board’s index of leading indicators rises again slightly…Rice Alliance for Technology and Entrepreneurship announces most promising energy and clean technology companies…

Dell announced it’s agreed to buy information technology services company Perot Systems for about $3.9 billion. Round Rock-based Dell seeks to expand beyond the personal computer business. Perot Systems is based in Plano. Dell says it will offer $30 per share in cash for Perot, which represents a 68 per cent premium over Perot’s closing share price Friday. Dell said Perot, founded by former presidential candidate and Dallas billionaire Ross Perot, will expand the company’s IT services offerings for businesses. Dell also hopes to widen the pool of potential customers for its computers. It expects the deal to close in the November-January quarter and start boosting its earnings beginning in fiscal 2012. Perot will become Dell’s service unit, led by Perot CEO Peter Altabef. Ross Perot, Jr., the head of Perot’s board and the son of the founder, will be considered for a director slot at Dell.

A private research group’s forecast of economic activity rose in August for the fifth straight month, the latest sign the recession has ended. The Conference Board says its index of leading indicators rose 0.6 per cent in August. That follows a 0.9 per cent gain in July revised up from 0.6 per cent. Economists surveyed by Thomson Reuters expected a 0.7 per cent gain last month. The indicators are designed to project economic activity in the next three to six months. Five of the ten that comprise the index increased in August, including stock prices and building permits. An accompanying index meant to measure the current state of the business cycle was flat. The July reading was revised up to a 0.1 per cent gain from zero, the first increase in nine months.

Oil and gas company Petrohawk Energy said it agreed to sell its Permian Basin properties to an unnamed privately owned company for $376 million, as Petrohawk bolsters liquidity and focus its attention on assets in the Haynesville and Eagle Ford shales. Last year, Petrohawk reported estimated proved reserves of 177 billion cubic feet equivalent for these assets, which produce about 30 million cubic feet per day. The sale of the assets, located in the western part of Texas and southeastern part of New Mexico, is expected to close by October 30th. The Haynesville shale is a formation that lies in parts of Texas, Oklahoma and Louisiana. The Eagle Ford shale is located in South Texas.

President Barack Obama, looking ahead to this week’s G-20 economic summit in Pittsburgh, says the world’s leading powers have made progress in stabilizing the global financial system but that a lot of work still must be done to produce needed jobs and growth. In his weekly radio and Internet address over the weekend, Obama claimed “real progress since last time we met–here at home and around the world.” The G-20 summit comes five months after a meeting in London of the group of 20 nations involving the world’s frontline and emerging economies. Obama said the summit will offer a good chance for a “checkup to review the steps each nation has taken–separately and together–to break the back of this economic crisis.” He recalled that the April meeting came at the height of the crisis.

President Obama says hard work and innovation will lead the way out of the recession. The president delivered an economic pep talk in a part of New York particularly hard hit by recession. He told an audience at Hudson Valley Community College in Troy that after recovering from the current crisis, the challenge will be “to ensure that we do not just drift into the future.” He said his recovery plan includes a sustained investment in education, technology, health care and research. And he vowed that by 2020, America will again have the world’s highest proportion of college graduates. Obama also offered kind words to New York’s embattled governor, David Paterson, calling him “a wonderful man.” There have been reports that the White House wants Paterson to drop out of next year’s gubernatorial race to clear the way for a more electable candidate.

The IRS is extending the Wednesday deadline until October 15th for international tax dodgers to apply for an amnesty program announced last March, in order to give a rush of applicants more time to prepare their paperwork. A government official speaking on condition of anonymity said more than 3,000 Americans hiding assets overseas have applied for the program, which promises no jail time and reduced penalties for tax cheats who come forward.

The government is investigating a major insurance company for allegedly trying to scare seniors about the health care overhaul in Congress. The Health and Human Services Department is objecting to a mailer that Humana recently sent Medicare recipients. It warned that “millions of seniors and disabled individuals could lose many…important benefits and services.” The bills in Congress would cut payments to private insurance plans that serve about one-fourth of seniors. Government experts say those plans are overpaid, and lawmakers insist it won’t affect benefits. HHS ordered Humana to stop all such mailings and says it may take further action based on its investigation. There was no immediate comment from Humana.

The American Bankers Association says more customers prefer banking online compared to more traditional methods, according to a report in the Houston Business Journal. The survey shows that 25 per cent of consumers prefer Internet banking over visiting branches or using ATMs. Online banking is not exclusive to the youngest age groups, although those over 55 still prefer visiting a branch or use ATMs.

The Houston Chronicle is presenting a free seminar called “How to Get a Great Job in a Tough Job Market” tomorrow afternoon at Minute Maid Park. Kathy Aaronson, CEO of The Sales Athlete, will be the presenter, addressing lack of confidence, identifying job opportunities, securing more interviews and succeeding in the interviews you get. The seminar capacity is 450. Attendees can use the centerfield entrance on the corner of Prairie and Crawford.

The Rice Alliance for Technology and Entrepreneurship announces its most promising energy and clean technology companies at the 7th annual Energy and Clean Technology Venture Forum. Sixty presenters gave “elevator pitches,” simulating having only 90 seconds to convince an investor to consider investing in the company. Four of the ten most promising pitches are based in Houston: Asha Power, Enistic, Orbital Traction and PollutionTech. Three other Texas-based start-ups made the top of the list. Companies showcased their new ventures last week in front of 624 attendees, including investors, venture capitalists, industry representatives, business leaders, service providers and other entrepreneurs.

Missouri University of Science and Technology has received a $3 million alumni gift to establish an endowed chair in energy research. The donation comes from retired Texas energy company executive Wayne Laufer and his wife, Gayle. Laufer graduated in 1967 with a degree in civil engineering from what was then called the University of Missouri-Rolla. Officials say the donation is the largest ever made for an endowed chair to any of the four campuses of the University of Missouri system. Laufer is the retired co-founder and chief executive officer of Houston-based Bois d’Arc Energy. The company specializes in offshore oil and natural gas exploration and production.

Federal Reserve policymakers meet this week. With the economy starting to rebound but still fragile, they’re expected to keep emergency programs to encourage spending and borrowing intact. But to avoid unleashing inflation later on, Fed policymakers are likely to consider ways to rein in programs designed to keep mortgage rates down and get banks to lend more freely. As the economy improves, the Fed will face more pressure to wind down some of its programs. For now, Fed Chairman Ben Bernanke and his colleagues probably will stay the course while striking a more optimistic tone at a two-day meeting that ends Wednesday. Fed policymakers are all but sure to keep interest rates at a record low near zero to nurture a tentative recovery. And they will probably stick with their goal of buying $1.45 trillion in mortgage-backed securities and debt issued by Fannie Mae and Freddie Mac by year’s end.

The week’s economic releases start Tuesday, as the Federal Reserve begins a two-day policy-setting session. The National Association of Realtors reports on existing home sales for August. In addition, weekly jobless claims, are due. The Commerce Department has durable goods for August on Friday, as well as new home sales.

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