Chinese stocks outperform world markets

LONDON — Stocks in China and Hong Kong outperformed Monday after authorities promised financial reforms. Markets elsewhere were solid after the Dow closed at a record high but kept in check by ongoing concerns over Ukraine.

China's Shanghai Composite jumped 2.1 percent to 2,052.87 after the Cabinet promised in an announcement late Friday to allow local governments to issue bonds and to streamline the approval process for initial public stock offerings. It gave no details, but the news also boosted Hong Kong's market with the Hang Seng up 1.8 percent to 22,261.61.

Elsewhere, markets were more as tensions between the West and Russia over the future of Ukraine continue to provide a negative backdrop for investment sentiment.

The latest market jitters have centered on referendums in the eastern part of Ukraine where the majority of voters allegedly said they backed sovereignty for their regions. Though the Kremlin made it clear Monday that it has no intention to try to annex Ukraine's eastern provinces, investors think there's still a long way to go before the crisis abates.

"Tensions in Ukraine have not gone away," said Chris Beauchamp, market analyst at IG.

In Europe, France's CAC-40 was up 0.2 percent at 4,484 while Germany's DAX added 1 percent to 9,673. Britain's FTSE 100 rose 0.4 percent to 6,840.

Wall Street was poised for a solid opening with Dow futures up 0.3 percent and the broader S&P 500 futures 0.4 percent higher.

Earlier in Asia, the regional heavyweight, Tokyo's Nikkei 225, shed 0.4 percent to 14,149.52 while Sydney's S&P/ASX 200 dropped 0.2 percent to 5,448.40.

Elsewhere, markets were fairly subdued. Among currencies, the euro was 0.1 percent higher at %$1.3768 while the dollar rose 0.1 percent to 101.93 yen. Meanwhile, a barrel of benchmark New York crude was 45 cents higher at $100.44.

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Hillshire Brands buying Pinnacle Foods for $4.23B

CHICAGO — Hillshire Brands is buying Pinnacle Foods, whose brands include Duncan Hines, Bird's Eye, Hungry Man and Aunt Jemima, in a cash-and-stock deal valued at approximately $4.23 billion.

The deal would expand Hillshire Brands' portfolio which includes Jimmy Dean sausage, Ball Park franks and Sara Lee frozen bakery goods.

Shares of both companies rose in premarket trading on word of the deal on Monday.

"The new Hillshire Brands will have a strengthened position in frozen foods, new opportunities in the center store for our brands and in refrigerated for Pinnacle Foods' brands," Hillshire President and CEO Sean Connolly said in a statement.

The combined company, which is expected to have annual revenue of approximately $6.6 billion, will use the Hillshire Brands name and be based in Chicago. Connolly will serve as its president and CEO.

Each share of Parsippany, New Jersey-based Pinnacle Foods Inc. common stock will be exchanged for $18 in cash and 0.50 shares of Hillshire Brands Co. common stock. The companies said Monday that the implied purchase price is $36.02 per share.

That's an 18 percent premium to Pinnacle's Friday closing price of $30.45. Pinnacle went public in March 2013.

The companies put the deal's total value at about $6.6 billion, which includes Pinnacle's outstanding debt.

Pinnacle shareholders will own about 33 percent of the combined company.

The combined company is expected to have an estimated $140 million in annual cost savings by the end of the third year. Hillshire anticipates that it will maintain its annual dividend of 70 cents per share and suspend a previously announced stock repurchase program.

Both companies' boards unanimously approved the acquisition, which is expected to close by September. It still needs shareholder approval.

Pinnacle Foods shares rose $7.20, or 23.7 percent, to $37.65 in premarket trading two hours ahead of the market open. Hillshire Brands shares rose $2.25, or 6.1 percent, to $39.20.

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Allergan board turns down Valeant takeover offer

IRVINE, Calif. — Botox maker Allergan spurned a takeover bid from Valeant Pharmaceuticals, saying that the unsolicited offer worth nearly $46 billion undervalues the company and carries significant risk.

Shortly after Canada's Valeant and activist investor Bill Ackman made their offer public last month, Allergan announced a so-called poison pill plan, a defensive tactic that makes a buyout prohibitively expensive. Allergan also told Valeant that it didn't want to discuss a tie-up, but said that it would evaluate the offer.

Valeant representatives did not immediately return calls from The Associated Press seeking comment early Monday.

Under the proposed deal, Valeant said that it would exchange each Allergan share for $48.30 in cash and a portion of shares of Valeant Pharmaceuticals International Inc.

Allergan stockholders would own 43 percent of the combined company under that proposal.

Ackman's Pershing Square Capital Management LP — Allergan's biggest stockholder at 9.7 percent — agreed to take only stock if the deal went through, and would remain as a long-term shareholder of the combined company.

Allergan said Monday that Valeant's uncertain long-term growth prospects and business model create a risk for Allergan shareholders.

"Valeant's strategy runs counter to Allergan's customer focused approach," Chairman and CEO David Pyott said in a letter to his counterpart at Valeant, Michael Pearson. "In particular, we question how Valeant would achieve the level of cost cuts it is proposing without harming the long term viability and growth trajectory of our business."

Allergan, based in Irvine, has long been considered one of the star performers in the specialty pharmaceutical sector. "Specialty pharmaceutical" is an industry term that differentiates smaller drugmakers from much bigger companies that sell a wide array of drugs, such as Pfizer and Merck.

Shares of Allergan Inc., which hit an all-time high this month, edged 12 cents higher before the opening bell Monday.

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Cambodia's Caltex gas station workers on strike

PHNOM PENH, Cambodia — Workers at U.S.-owned Caltex gas stations in Cambodia went on strike Monday to demand higher wages and better working conditions.

A strike leader, Sar Mora, said at least 250 Cambodian employees halted work, forcing at least 17 of the country's 26 Caltex stations to suspend operations.

Sar Mora said workers were demanding a minimum wage of $160 a month, up from the current pay scale of $100-$130. They are also demanding a one-month annual bonus, an annual party and day care facilities for children.

Chanlek Than, a spokeswoman for Chevron Corp., the owner of Caltex, said it is working with "local authorities and union representatives" to resolve the dispute.

"We are disappointed that our unionized service station colleagues have taken the drastic action to stop work instead of following legal processes to resolve the matter that would have enabled us to continue the supply of fuel products and minimize inconvenience to the public," she said in an emailed reply to a query.

Rising expectations among Cambodia's industrial and service workers have fueled labor unrest, with laborers in the country's massive textile sector staging strikes and demonstrations late last year and in January for a higher minimum wage and loosely linking themselves with the political opposition.

Caltex is considered a premium brand in Cambodia compared to local competitors, whose prices are lower.

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President tells China to get used to slower growth

BEIJING — China's president has told the country to get used to slower growth, damping expectations of a new stimulus.

President Xi Jinping's weekend comments come amid weakening trade and manufacturing. Economic growth slowed in the latest quarter to 7.4 percent after last year's full-year expansion of 7.7 percent tied 2012 for the weakest performance since 1999.

"We must boost our confidence, adapt to the new normal condition based on the characteristics of China's economic growth in the current phase and stay cool-minded," Xi said, according to the official Xinhua News Agency.

The ruling Communist Party is trying to steer the economy to self-sustaining growth based on domestic consumption instead of trade and investment.

Other leaders have ruled out more stimulus, but unexpectedly weak demand for Chinese exports has forced Beijing to backtrack and launch mini-stimulus efforts last year and in March. Official plans call for annual trade growth of 7.5 percent but so far this year total imports and exports are down by 0.5 percent.

Analysts say the ruling party appears willing to accept economic growth below its 7.5 percent target this year so long as the rate of creation of new jobs stays high enough to avoid political tensions.

Speaking during a visit to the central province of Henan, Xi said Saturday the government will focus on longer-term reforms aimed at stabilizing growth.

China needs to prevent risks and "take timely countermeasures to reduce potential negative effects," Xi said. He said Beijing will focus on longer-term reforms aimed at stabilizing growth.

"This is the clearest sign I have seen that a broad-base monetary stimulus to elevate that current slowdown will not eventuate," said Evan Lucas of IG Markets in a report.

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Foreign buyers snap up homes

Home buyers in the Greater Boston area increasingly are finding themselves competing with foreigners willing to pay top dollar in today's tight real estate market.

Michael DiMella, managing partner at Charlesgate Realty Group in Boston, said his firm has worked with nearly a dozen foreign investors in the past year.

"I think recently they've seen an opportunity to invest in the U.S. and Boston because of the strong market recovery following the recession, as well as favorable exchange rates for many of them and generally lower real estate costs than other major cities around the world," said DiMella, president of the Greater Boston Association of Realtors.

One French client is closing on his fifth condominium, DiMella said, while an Israeli couple has already scooped up three or four condos as investments.

At Keller Williams Realty in the Back Bay, Kathleen Alexander oversees a team of two Realtors, half of whose business comes from China. One of her Realtors, Charlotte Liu, speaks Mandarin and travels there every three or four months with Alexander to promote real estate investment in the Boston area.

Sixty to 70 percent of their clients are buying property to rent out and move into later if they decide to live here, 10 to 20 percent are investors, and the rest are clients looking for homes for themselves.

"In China, people can own their own house, but they have to lease the land from the government, so the idea of owning their own land here is very attractive to them," Alexander said. "And Boston has the cachet of having some of the best universities in the world."

In the past year, Paul Yorkis of Patriot Real Estate in Medway has sold a handful of new condominiums to buyers from China and India.

"Part of it is folks realize the purchase of real estate is a really good investment, and they're taking advantage of good interest rates," said Yorkis, Greater Boston regional vice president of the Massachusetts Association of Realtors. "The Boston area also is ethnically diverse and has some of the best cultural and educational institutions, which makes it attractive to international buyers."

Those same amenities also make Greater Boston attractive to U.S. buyers, but the inventory of single-family homes for sale here declined on an annual basis by nearly 16.3 percent in March, according to the Greater Boston Association of Realtors, while the median selling price rose for the 18th consecutive month, to $500,000.

None of that was a problem for Lisa Li, a Chinese lawyer who beat out another offer for a Wellesley home last month by paying 
$1.15 million in cash.

Although the house isn't as luxurious as her home in Shanghai, she wanted to be with her 15-year-old daughter, who attends a private school in Southboro, she said through a translator.

"She can get a much better education here," Li said.

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Startup something of a Mystery

A Boston startup is trying to bring a little mystery to people's lives, one package at a time.

"We're thinking about how can we shake up consumers' lives in a fun way that they're actually looking forward to" said Joe Breed, co-founder, president and CMO of Mystery Envelope. "We tend to get stuck in routines as individuals. Even your mail can get routine."

Mystery Envelope's solution to shaking up that routine is to send out envelopes with secret contents to subscribers.

"The mystery is not only which envelope you're going to get, but it's also what the product is going to be," said Ben Lewis, co-founder and COO. "You're going to be completely surprised by what you're getting, and delighted."

For the first envelope, subscribers received a letter opener and items such as a Flying Glider and
Chiclets.

Most envelopes will center on a theme — the letter opener was meant to get subscribers ready and excited for future envelopes — but will also vary from subscriber to subscriber.

"We want you to get a mystery envelope, we want your friend to get a mystery envelope, but we don't want them to be the same," Lewis said. "Being able to provide something awesome to our subscribers is our core."

Retail subscriptions services are nothing new — Birchbox, a monthly box of beauty product samples, recently raised $60 million in venture funding.

Mystery Envelope plans to partner with brands to include products in the envelopes, which could be a key source of revenue in the future.

"It's an authentic way to connect to excited and engaged consumers," Breed said.

Still, the envelopes are somewhat limited. Not only do items have to be low cost to make sense with a $4.99 subscription, but they have to physically fit in the envelope. That's an issue Breed and Lewis say they are working on.

"With products that won't fit in an envelope, we can work with partners to find something that is appropriate," Lewis said.

That could mean a coupon, or an exclusive discount for a product.

A MassChallenge semi-finalist, the company made a pitch to the accelerator Friday.

The company, which launched in March, was founded by Lewis, Breed and Jeb Breed, the company's CEO and Joe Breed's brother, the only employees.

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Ford Focus’ interior acts like it’s a haunted house

I have a 2004 Ford Focus. When my car sits in the garage for a couple of days some of the dash lights and dome lights will stay on and there's a beep, even with no key in the ignition. I start the car, the beep stops and the dome light goes out but the dash lights stay on. The next day everything is OK, then the cycle starts all over again. Any ideas?

Strange electrical gremlins like this often are hard to pinpoint, but in this case I think the ignition switch and/or lock cylinder are the likely suspects. My Alldata automotive database pulled up Ford bulletin No. 05-21-17 dated October 2005 that outlines service procedures for replacing the ignition lock cylinder if the ignition chime beeps with the key removed. There's also a troubleshooting guide for continuity testing of the ignition switch at its multi-terminal connector.

I'd suggest locating, disassembling and cleaning the multi-terminal switch connector under the dash to see if this restores proper switch function. If not, it's probably time for a replacement.

• • •

I own a 1996 Toyota Camry V6 with 300,000 miles. We have a problem with the car vibrating when I step on the brake as the speed slows from 25 to 15 mph. The harder I brake, the worse the vibration. If I shift into neutral the car will not shutter or vibrate. Two other interesting things occurred at the same time. The check engine light came on, and when I step on the brake both the "Reverse" and "Drive" indicator lights are on. The car has no trouble shifting. My guess is that the torque converter is failing. Your thoughts?

If the torque converter were failing to disengage when the brakes are applied, you would experience a shuddering as the vehicle slowed to a stop. In fact, the engine would stall as you came to a complete stop, just as if you'd left a manual transmission vehicle in gear and braked to a stop.

Since the shudder/vibration is occurring in a higher speed range, my first thought is that the transmission has failed to downshift as the car slows. Try driving with the transmission's overdrive switch off to prevent the overdrive from engaging. Then try manually downshifting through each gear, matching the gear to the road speed as the vehicle slows. You also could try downshifting to third or even second as you're experiencing the shudder in that 25-15 mph range. If any of these tests stop the vibration, the problem is most likely in the transmission itself.

Have a scan tool read the DTC fault code that triggered the check engine light, but with 300,000 miles on the vehicle, the only transmission "repair" I'd suggest would be adding half a can of SeaFoam Trans-Tune to the fluid to clean any sticky solenoids or valves in the valve body.

• • •

The maintenance schedule for my 2003 Toyota Avalon has me replacing my iridium spark plugs at 120,000 miles. At 130,000 miles, the car runs fine and this plug replacement is expensive. Is it necessary?

Why does this question remind me of doing my taxes or making a doctor or dentist appointment? All of them are no fun at all, but necessary if one wants to stay law-abiding and healthy.

So yes, you should follow the manufacturer's recommended spark plug replacement interval, particularly if you're going to keep the vehicle for several more years.

With that said, I'd be more concerned about one or more spark plugs ending up seized in the cylinder head as they are removed. I've always been a fan of removing the original spark plugs at 10,000 to 30,000 miles, coating the threads with anti-seize compound and reinstalling them for the remainder of their full service life.

Paul Brand, author of "How to Repair Your Car," is an automotive troubleshooter, driving instructor and former race-car driver. Readers may write to him at: Star Tribune, 425 Portland Ave. S., Minneapolis, Minn., 55488 or via email at paulbrand@startribune.com. Please explain the problem in detail and include a daytime phone number.

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Lure of London makes Britain a billionaire haven

LONDON — A new study of the super-rich finds that London has become the capital of the world's wealthiest, with more billionaires than any other city.

The Sunday Times, which published the list, says London has 72 residents whose fortunes exceed 1 billion pounds ($1.6 billion). That's well ahead of Moscow, at 48, New York, at 43, San Francisco at 42, Los Angeles at 38 or Hong Kong at 34.

The newspaper reports that Britain also has more billionaires per head than any other country, with one in billionaire for every 607,000 Britons versus one for every 1 million or so Americans.

The newspaper has long published an annual list of the Britain's richest people, but this was the first time it took the additional step of seeing how the country's overall standing compared to that of other countries.

Indian-born brothers Srichand and Gopichand Hinduja top the British list, with a 11.9-billion pound fortune. The two run the Hinduja Group, a global conglomerate.

The brothers replace last year's richest man, Alisher Usmanov, who has seen his fortune drop by 2.65 billion pounds to 10.65 billion — largely because of the decline of the ruble.

Other notables on the list are steel magnate Lakshmi Mittal, in third place, and Chelsea football club owner Roman Abramovich, who dropped from fifth to ninth.

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Rep. Rogers hopes for 'smart debate' on radio show

WASHINGTON — Come January, you'll find Mike Rogers on the radio dial rather than on Capitol Hill.

The House Intelligence Committee chairman and ex-FBI agent is quitting Congress to host a daily radio show.

The Michigan Republican says he'll work on being a "productive conservative" on the airwaves.

Rogers might not be done with politics — he foresees being back in government service in some capacity in the future.

So there's unquestioned value for those future prospects from the three hours each day that he will spend fielding questions and reasoning with listeners.

Cumulus Radio Group is betting that listeners and advertisers will find Rogers' hearty voice, contempt for right-wing ideologues and expertise in national security inviting.

Rogers' hope is to "move the needle" toward the political center on radio.

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