SEC Seeks Greater Disclosure From Foreign Companies (Updated)

The Securities and Exchange Commission plans to require greater disclosure from non U.S.-based companies listed on U.S. exchanges that are doing business with countries under U.S. embargo, according to FT.com.

In a May 8 letter from Laura Unger, acting SEC chairman, to Frank Wolf, the Republican who chairs the House of Representatives appropriations sub-committee responsible for the SEC, the SEC will require overseas companies to disclose whether they are doing business in any country where U.S. companies would be prohibited from investing, including Iran, Iraq, Libya, Sudan, North Korea, Burma and Cuba, according to the Financial Times, the paper version of the website.

“Our aim is to make available to investors additional information about situations in which the material proceeds of an offering could–however indirectly–benefit countries, governments, or entities that, as a matter of U.S. foreign policy, are off-limits to U.S. companies,” Unger reportedly wrote.

According to FT.com, the move can be implemented under existing SEC authority.

Last month, Wolf urged the SEC to suspend trading in the shares of Chinese oil company PetroChina and Canadian oil company Talisman Energy because they are part of a consortium extracting oil in Sudan.

Wolf accused both companies of failing to disclose to investors the risks of their involvement in Sudan.

The SEC cannot deny U.S. listings because of a company’s involvement with a specific foreign country, but it could require fuller disclosure of these investments, explains FT.com.

Maytag Shareholders Approve Dissident-Led Proposals

The folks at Maytag are probably a little shell-shocked after their Thursday morning annual meeting.

Shareholders approved three proposals that management had opposed. The adoption of these three proposals would make it a lot easier for a hostile suitor to acquire the company.

The shareholders approved the institution of an annual election of all directors. Another proposal would require a shareholder vote before the board could adopt a “poison pill” plan. A third proposal would eliminate the so-called supermajority vote needed to pass key issues.

Now, keep in mind that this is the third straight year that shareholders have supported an annual vote for directors and a return to a simple majority vote. However, so far management hasn’t implemented these suggestions.

“The board will review each proposal and use its business judgment to determine the best course of action for the company and its shareholders,” Maytag President and Chief Executive Leonard Hadley reportedly told shareholders at the meeting.

Moody’s Downgrades British Telecom

British Telecommunications Plc had its credit rating cut by Moody’s Investors Service, according to Reuters.

The late Thursday afternoon move came after the firm announced a 5.9 billion pound ($8.4 billion) rights issue and plans to split into two entities: “Future BT” and “BT Wireless.” See CFO.com story

In other debt news:

Burlington Northern Santa Fe Corp. sold $400 million in 10-year notes, led by Banc One Capital Markets Inc. and Goldman Sachs & Co. The size of the deal was increased to $400 million from an originally planned $350 million.

Unisys Corp. sold $350 million in five-year senior notes, led by Bear Stearns & Co. and Merrill Lynch & Co.

Crown Castle International Corp. sold $450 million in 10-year senior notes in the private placement market. Credit Suisse First Boston, Lehman Brothers Inc., and Morgan Stanley were the joint-lead managers. The issue, rated B3 by Moody’s and B from S&P was priced to yield 9.375 percent, 409 basis points over Treasurys.

Junk bond mutual funds took in $556 million in inflows in the seven days ended Wednesday, according to AMG Data Services.

AIG To Buy American General

American International Group Inc. agreed to buy American General Corp. for about $23 billion, or $46 a share.

Remember, American General had already agreed to be bought by Britain’s Prudential PLC in a stock transaction valued at $49.52 a share, or $26.5 billion. However, Prudential’s stock subsequently sank 20 percent, cutting the value of the deal to $20.6 billion.

American General shareholders will receive $46 in AIG common stock as long as AIG’s average stock price remains between $76.20 and $84.22 per share. These terms are dependent upon AIG common stock according to an exchange ratio based on the 10-day average price of AIG’s common stock three days prior to closing.

If AIG’s price moves lower or higher than that range American General shareholders will get 0.6037 or 0.5462 AIG shares, respectively.

American General also agreed to pay a $600 million break-up fee to Prudential.

Today’s Layoff News

Teligent Inc. will announce on Friday that it will lay off 900 employees, according to The Washington Post.

From the CFO.com “Brief” Case

A number of current and former sales representatives of Xerox Corp. have filed a lawsuit accusing the company of racial discrimination. The plaintiffs claim they were passed over for promotions, denied commissions and assigned to sales areas that were predominantly black or that were less profitable than white co-workers’ areas. “Basically, the company would send the whites to Wall Street and all the blacks were sent to Harlem or the Bronx,” attorney Lenard Leeds told Dow Jones. “There was racial steering here, and there was an incredible difference in pay.” The Equal Employment Opportunity Commission recently filed similar charges. In fact, some of the employees in the EEOC case are plaintiffs in the lawsuit.

Kraft Foods Inc. trimmed the expected price range for its initial public offering of 280 million shares to $27-$30 a share from $26-$31. It plans to use the money to retire some of its long-term notes payable to parent Philip Morris.

Canadian Imperial Bank of Commerce is in talks to buy U.S. Internet brokerage Ameritrade Holding Corp. for as much as $1.8 billion, according to USA Today.

Sears, Roebuck & Co. will make some major decisions about the future of its department stores in the next few months, Chairman and Chief Executive Alan J. Lacy said at the company’s annual shareholders’ meeting.

The Federal Communications Commission increased the size of a fund that subsidizes telephone service in rural areas by 27 percent.

The Securities and Exchange Commission and Commodity Futures Trading Commission have proposed to jointly regulate futures on single stocks or narrow-based stock indexes, which will be able to be listed on both stock and futures exchanges.