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Oil prices tumbled more than $6 a barrel Monday, briefly slipping below the $100 level as traders bet that global demand for petroleum products will keep falling despite a planned $700 billion U.S. financial bailout.

A stronger dollar also weighed on crude prices as investors who bought oil and other commodities as a hedge against inflation sold their contracts.

Light, sweet crude for November delivery fell as low as $99.80 a barrel in morning trading on the New York Mercantile Exchange, before edging up slightly to $100.28, down $6.61.

The contract fell Friday $1.13 to settle at $106.89. Crude has now fallen 31% since surging to an all-time record of $147.27 on July 11.

Monday’s sell-off was tied to anxiety over the pending U.S. rescue plan. Following a week of intense negotiations, lawmakers could hold a final vote on the emergency measure Wednesday.

But investors are doubtful whether the plan will be enough to unfreeze global credit markets and restore calm to the financial system.

Global credit markets remain extremely tight, crippling companies’ ability to raise capital and cover basic costs like payroll. If the economy weakens further, consumers and businesses around the globe would likely cut back on energy use even more, analysts say.

"The market is clearly questioning whether the bailout will be enough to prevent a stronger economic downturn. That obviously has potentially negative implications for oil demand growth," said Michael Wittner, global head of oil research at Societe Generale in London.

In another sign of declining U.S. demand for fuel, pump prices kept falling Monday. A gallon of regular slipped about a penny overnight to a new national average of $3.643, according to auto club AAA, the Oil Price Information Service and Wright Express.

The rescue plan would give the administration broad power to use hundreds of billions of taxpayer dollars to purchase devalued mortgage-related assets held by cash-starved financial firms.

Congress insisted on a stronger hand in controlling the money than the White House had wanted no fax payday loan. The government would take over huge amounts of devalued assets from beleaguered financial companies in hopes of unlocking frozen credit.

Oil prices were also pushed down by a stronger dollar. Investors often buy crude futures as a hedge against a weakening dollar and inflation, and sell when the dollar strengthens.

While dollar gained as details of the bailout package become known, analysts said the euro was weaker also because of growing economic problems in Europe.

"It is also a question of the euro losing ground due to a continued deterioration in the euro zone," said Olivier Jakob of Petromatrix in Switzerland. "With the rate of bank failures increasing in Europe and the economy slowing more rapidly than expected, pressure will continue to mount on the [European Central Bank] to lower [interest] rates."

Foreign exchange rates

The 15-nation euro fell Monday to $1.4437 from $1.4614 on Friday.

In other Nymex trading, heating oil futures fell 14.51 cents to $2.8732 a gallon, while gasoline futures dropped 15.57 to $2.5094 a gallon. Natural gas futures lost 40.7 cents to $7.221 per 1,000 cubic feet.

In London, November Brent crude fell $5.73 to $97.81 a barrel on the ICE Futures exchange. 

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How much is good advice worth? At least one St. Louis company paid a director more than $1 million, most of it in stock that has since declined in value.

Other directors collected hundreds of thousands by serving on multiple boards.

For fiscal 2007, David M. Meyer, who serves as non-executive chairman of CPI Corp., got compensation worth $1.4 million from the company, which operates Sears Portrait Studios and other photography businesses. At CPI, he outearned many directors who serve on two or more boards. Meyer also drew $143,679 in pay as a director of Ashworth Inc., a California clothing maker.

Meyer is a co-founder of Knightspoint Partners LLC, a New York-based investment company that led a shareholder ouster of CPI directors in 2004. He served as the company’s interim chief executive until 2005.

Meyer’s pay includes $16,500 in cash and $7,810 in miscellaneous pay in addition to 28,253 shares of restricted stock valued at $1.4 million in the proxy statement. Meyer got a little over half of the shares for his help with an acquisition last year and the rest for unspecified services he provided to the company in 2006.

Meyer’s case illustrates one of the problems with the way companies are reporting pay for directors. They’re required to report the accounting expense of the compensation, not what directors actually received.

Until the restrictions on the shares expire, they’re carried on the company’s ledgers. When the value of the stock declines, its value on the books must be written down.

The stock Meyer received was valued at an average of $48.56 a share in the proxy, but CPI’s stock has fallen recently in value, hitting a low of $12.39 Aug. 21 and trading recently for less than $13 a share.

If the company marks the value of the shares down, it could mean that CPI will report Meyer’s pay as a negative number next year.

That’s exactly what happened at Brown Group.

The company, which had the highest paid director a year ago, this year reported that most of its directors lost money on their service to the company. Big gains in stock values that had been reported on last year’s proxy were reversed when the value of Brown Shoe stock fell from a high of $37.39 in February 2007 to $11.91 on Jan. 8.

Directors who deferred their pay saw the biggest declines. Brown defers pay into "stock units," which correspond in value to the company’s common stock. They’re paid out in cash when a director leaves the board.

Patricia McGinnis, who deferred all of her cash pay, was the area’s highest-earning director for 2006 at $754,358. Brown reported her 2007 pay as a negative $639,858. The company valued her stock-based pay at $699,858 for 2006 but as a negative $699,858 for 2007.

Brown Shoe said McGinnis’ negative stock award reflects a paper loss on deferred compensation from earlier years through 2006. For 2006, the number was positive, reflecting a gain in value through the end of 2006. For 2007, the company marked the value down because of the lower stock price, but it could not reduce the award by more than the amount it increased in 2006 fiscal year. Brown declined to provide further details.

According to Brown’s proxy, the figure the company reported doesn’t reflect the market value of the underlying stock or what McGinnis would receive if she left the board. That would depend on the number of stock units she had accumulated and the stock prices when she leaves.

Peter Lupo, managing director of Pearl Meyer & Partners, a New York-based compensation consulting firm, agrees that the way directors’ stock-based pay is reported can be confusing. If a company provides information about the amount of stock given and its vesting schedule, you can calculate the "consulting value" of the stock. However, assigning a value could be arbitrary if the company doesn’t tell you when the director got it.

This year’s second-highest paid director was Patrick T. Stokes, the former chief executive of Anheuser-Busch Cos. Stokes serves on the boards at A-B, Ameren Corp. and U.S. Bancorp. Altogether, Stokes took in $1.3 million, including $1.07 million from the two companies based here.

Stokes’ biggest paycheck, $927,018, came from his former employer, where he has a post-retirement consulting gig that paid $750,000 last year. A-B provides Stokes with an office and administrative help as well as transportation when he is providing the consulting service. It spent $390,000 on the office and other expenses for Stokes’ consulting arrangement last year.

Stokes’ consulting was due to end next August, but it will come to an early end as a result of Belgian giant InBev’s agreement to buy A-B pay day loans. The deal is expected to close later this year.

August A. Busch III, also a former A-B chief executive, took home more than $1.1 million in pay for serving as a director of A-B and Emerson here and at AT&T of San Antonio.

Busch III’s $579,649 in pay from the brewery includes $392,168 for personal security and $16,992 in consulting fees. According to company documents, the company provides security at Busch’s home "in recognition of Mr. Busch III’s continued prominence resulting from his years of service to the company."

A-B also provides Busch with an office, administrative help and transportation when he consults for the company. It also pays some bills related to aircraft owned by Busch or companies in which he has an interest. Busch’s consulting and other post-retirement arrangements cost the brewer $635,000 over and above his director pay.

A-B paid another $407,611 to Ginnaire Rental Inc., a company that Busch owns, to lease aircraft for business use.

William P. Stiritz was the next-highest paid director at $818,233, including $610,622 from three St. Louis area companies. Stiritz, the former chief executive of Ralston-Purina Co., once served on more than 10 boards.

Stiritz, 74, has cut his board commitments in half. He now serves at Ralcorp Holdings Inc., Energizer Holdings Inc., Reliance Bancshares Inc., Macy’s and Vail Resorts Inc. Ralcorp and Energizer both were spun off from Ralston under Stiritz’s guidance. Ralcorp owns about 19 percent of Vail Resorts.

Public companies here spent amounts ranging from $93,500 to nearly $4 million on director pay last year.

Anheuser-Busch topped the list, spending $3.96 million on 15 directors, followed by Express Scripts Inc., which spent $2.66 million for 11 directors. Twenty-one boards spent more than $1 million.

Companies pay directors in cash, stock awards, stock options and miscellaneous pay, which can include travel for spouses, consulting fees and things like insurance or home security.

About 46 percent of the $46.6 million St. Louis companies paid directors here last year was cash — a combination of retainers, fees for attending meetings and extra pay for serving as committee chairmen. The pay total is for 339 outside directors occupying 363 board positions; some directors serve on multiple boards.

Another $16 million or 33 percent of pay was stock, and $7.5 million or 16 percent was in stock options. The amounts listed in these categories represented the company’s cost for the stock-based pay, not necessarily what directors will realize if they sell the stock or exercise the options.

Because this is the first year all St. Louis-based companies were required to disclose director pay, it’s almost impossible to determine whether director pay is increasing overall. Eleven companies increased the retainers they pay to directors. RehabCare Group and First Banks Inc., which were among a handful not paying director salaries in prior years, added them this year.

Some companies require directors to take all of their pay in stock or units that rise and fall in value along with the company’s stock. Others encourage it by giving directors a bonus for selecting stock rather than cash pay. Still others divide directors’ pay between stock and cash.

Corporate governance experts say that requiring directors to hold stock aligns their interests with those of other shareholders.

Arch Coal, for example, requires directors to defer $40,000 of their $120,000 retainer into a hypothetical investment in Arch stock, which is paid in cash when a director leaves the board.

Belden Inc. pays a $60,000 cash retainer and also gives directors restricted stock worth $115,000. Similarly, Charter Communications Inc. pays directors $40,000 in cash and gives them restricted stock worth $65,000.

At Emerson, $100,000 of each director’s $150,000 retainer is paid in restricted stock.

Express Scripts gives directors $115,000 in stock at the first meeting and a $200,000 grant every year in addition to a $30,000 cash retainer.

Bill Coleman, chief compensation officer for Salary.com, says he thinks it’s good for directors to hold stock because it aligns their interests with shareholders. However, he thinks directors’ pay should be kept pretty simple, with few benefits, because they should be paid for their knowledge and what they can contribute to the company.

jerristroud@post-dispatch.com | 314-340-8384

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HONG KONG — Nomura Holdings Inc., Japan’s largest brokerage, said Monday that it has agreed to buy the Asian operations of bankrupt U.S. investment bank Lehman Brothers Holdings Inc. The deal includes Lehman’s businesses in Japan and Australia.

Nomura called the deal "a once-in-a-generation opportunity" for the Japanese brokerage house. The deal includes Leh-

man’s 3,000 employees in Asia, including its biggest regional offices in Japan and Hong Kong.

"It will significantly extend our reach in Asia. We see immediate strategic benefits, delivering the scale and scope to realize our vision to be a world-class investment bank," Kenichi Watanabe, Nomura’s chief executive, said in a statement.

The deal was valued at around $225 million, one person familiar with the matter told The Associated Press payday advance. Nomura did not give the value of the acquisition.

Meanwhile, Nomura also was close to clinching a deal for Lehman’s Europe businesses, another person familiar with the matter said. Nomura’s statement made no mention of the European operations.

THE ASSOCIATED PRESS

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Group of Seven nations welcomed the $700 billion U.S. markets bailout plan on Monday and said they were prepared to step up international cooperation to protect the world’s financial and banking system.

But a day after Treasury Secretary Henry Paulson said he was “aggressively” encouraging other countries to put in place bailout packages of their own, there was little sign other G7 governments were prepared to follow Washington’s lead.

“We pledge to enhance international cooperation to address the ongoing challenges in the global economy and world markets and maintain heightened close cooperation between finance ministries, central banks and regulators,” the G7 ministers said in a statement following a conference call on Monday lasting 15-20 minutes.

“We are ready to take whatever actions may be necessary, individually and collectively, to ensure the stability of the international financial system,” they said.

The statement, a few weeks before G7 finance ministers and central bank governors meet in Washington on October 10, follows a tumultuous week that started with the demise of Lehman Brothers and ended with one of the biggest financial rescues in history.

The conference call at 7:30 a.m paydayloans. EDT, which was convened on Sunday, followed intense telephoning between senior officials over recent days and a preparatory call by deputies to the ministers and central bank governors, a G7 source told Reuters.

The statement said ministers welcomed the “extraordinary actions” taken by Washington to remove illiquid assets that have contaminated banks’ balance sheets and fuelled a financial crisis widely seen as the worst since the 1930s.

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The Bush administration widened the scope of its $700 billion plan to avert a financial meltdown by including assets other than mortgage-related securities.

The U.S. Treasury submitted revised guidance to Congress on its plan late yesterday as lawmakers and lobbyists push their own ideas. The department also adjusted its new plan to insure money-market funds to limit protection to balances as of Sept. 19, after complaints from bank lobbyists.

Officials made the changes two days after unveiling plans for an unprecedented intervention in financial markets in an effort to halt the deepening crisis. The change to potentially allow purchases of instruments such as car loans, credit-card debt and other devalued assets may force an increase in the size of the package as the legislation proceeds through Congress.

“The Treasury's thinking is to make it as big and wide as possible so they have the flexibility to act if need be,'' said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors, which manages about $108 billion. “There have been losses on a whole range of U.S. debts and as the economy deteriorates in response to the housing slump those losses could escalate.''

Treasury officials now propose buying what they term troubled assets, without specifying the type, according to a document obtained by Bloomberg News and confirmed by a congressional aide.

`Significantly Higher'

“The costs of the bailout will be significantly higher than originally considered or acknowledged,'' said Josh Rosner, an analyst with independent research firm Graham Fisher & Co. in New York. “How, given these changes, can the administration and Federal Reserve believe they are being forthright in their unrevised expectation of future losses?''

Separately, the Treasury said in a statement late yesterday it would limit its $50 billion plan for insuring money-market funds to those held by investors as of Sept. 19, excluding any subsequent contributions.

The American Bankers' Association, which had expressed concern about the plan last week, praised the move, saying it would eliminate an incentive for savers to shift out of bank accounts into money-market funds. The Treasury put no limit on the money-market fund insurance, while the Federal Deposit Insurance Corp. protects bank deposits up to $100,000.

“If all money market mutual funds had been included with the government guarantee moving forward, this proposal would have threatened to take money out of local FDIC-insured banks,'' Edward Yingling, president of the ABA in Washington, said in a statement.

International Scope

In its latest guidance on the bad-debt fund, the Treasury said firms that are headquartered outside the U.S payday loans. will now be eligible.

The changes come after two days of weekend talks between administration officials and congressional staff in Washington. Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben S. Bernanke told lawmakers Sept. 18 that a comprehensive attack on the worst financial crisis since the Great Depression was critical after a series of government interventions failed to normalize markets.

Paulson on Sept. 19 announced his intention to seek legislation from Congress. Appearing on television talk shows yesterday he called for rapid passage of a bill. Congressional panels have scheduled two hearings this week on the crisis; Bernanke appears at a third hearing on the economic outlook.

Lawmakers are also seeking changes to Paulson's plan, which amounts to an unprecedented intervention in financial markets and would prevent courts from reviewing actions taken under its authority.

Lawmakers' Demands

Democrats are pressing for oversight through the Government Accountability Office, and for the inclusion of efforts to refinance mortgages for struggling homeowners. House Financial Services Committee Chairman Barney Frank wants limits on compensation of corporate executives who benefit from the program.

Republicans are urging limits on how any profits from the program could be spent.

“Just about everyone in the markets agrees the Paulson plan needs to be simple — unencumbered by complications and penalties,'' Christopher Low, chief economist at FTN Financial in New York, wrote in a note to clients. “Of course, Washington doesn't know how to do that.''

It was the third straight weekend of crisis work for Paulson and his Treasury colleagues. The previous week, Paulson and New York Fed President Timothy Geithner led talks with banks in an effort to avert the bankruptcy of Lehman Brothers Holdings Inc. While Lehman did end up in bankruptcy, Merrill Lynch & Co. agreed to be taken over by Bank of America Corp.

Weekend Warrior

On Sept. 7, Paulson seized Fannie Mae and Freddie Mac, the largest sources of U.S. mortgage financing, after the government-chartered, shareholder-owned companies failed to raise sufficient capital from private sources to satisfy regulators.

Late yesterday, the Fed approved requests from Goldman Sachs Group Inc. and Morgan Stanley, Wall Street's last two independent investment banks, to become bank holding companies.

“It's hard to say there are any illusions left'' about the seriousness of the financial crisis, said Jason Trennert, chief investment strategist at Strategas Research Partners in New York.

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Bankers and economists reacted with caution Friday to the broad outline of a government plan to take on troubled loans and other "bad" assets from banks in an attempt to unclog the nation’s financial system.

With most of the details yet to be worked out, bankers and others had more questions than criticisms of the plan. Treasury Secretary Henry M. Paulson, Federal Reserve Chairman Ben Bernanke and congressional leaders are expected to work out the details this weekend.

Left unclear were the answers to four key questions:

— What assets will the government accept, and what entity will accept them?

— Who will set the price for the assets?

— Will the government hold the assets for the long term, or will it sell them back into the market once the economy improves?

— Will the government accept assets from all banks, only large banks, or only the banks that are in trouble?

"I think action is certainly required," said Terrance McCarthy, chief executive of First Banks Inc. of Creve Coeur. But he was not sure taking bad loans off bank balance sheets would restore healthy sales of houses or free up the mortgage market.

Steve Marsh, president of Enterprise Bank & Trust in Clayton, said, "My initial reaction is that I’m glad to hear that there are serious proposals being considered because it’s clear that we’re facing unusual risk today."

Marsh said he was concerned about the burden the bailout could place on taxpayers. He said he hoped it would not benefit only the biggest banks. Marsh also expressed skepticism that a solution could be approved by Congress with elections less than seven weeks away.

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 NEWSWATCH: How much is TOO MUCH?

 NEWSWATCH: Will bailout help housing market?

 Wall Street ends wild week with biggest two-day rally in 38 years

 Area financial advisers survive storm

 STROUD: Market turbulence can test your level of risk tolerance

 Missouri regulators reassure AIG policyholders

 Credit market remains tight, but avoids collapse

Tom Chulick, chairman and chief executive of UMB Bank in St fast cash. Louis, said Paulson’s proposal calmed the market, but he wondered if the government can come up with an orderly means for assets to flow to and from whatever trust or institution the government designates.

"We think it’s going to be a net plus," Chulick said.

Todd Solomon, president of Pinnacle Financial Services Inc. in Chesterfield, said the plan could make it easier to get mortgages approved. Banks have been adding conditions on mortgages that can make it nearly impossible to close a deal. For example, he said, one lender asked that the borrower name it as a beneficiary of a life insurance policy.

Radhakrishnan Gopalan, an assistant finance professor at Washington University, said banks will have to take losses on the bad loans, even if they do sell them to the government. The loans now are difficult to value; removing them from the banks’ books could make bank financial statements more transparent and restore trust in the market, he said.

Anne Villamil, an economics professor at the University of Illinois at Urbana-Champaign, said she was concerned about how the losses from the financial institutions would be allocated among taxpayers and the private sector.

"I take (Paulson) at his word that this is designed to fix the fundamental problem," she said. At the very least, it will break the vicious cycle some institutions found themselves in of having their capital erode, being forced to raise more capital and then be downgraded because they had too much debt.

J. Fred Giertz, also an economist at Illinois, said he believed action was needed to "keep the financial system from exploding" and sending the economy into a long and severe recession or even a depression.

Although it may seem unfair that big banks and investment firms have gotten the most help from the government so far, the government had to do something to stop what could have been a deep downward spiral, Giertz said.

"It is a temporary fix, but if it’s done correctly and followed through on, it could be a step to a more stable situation," he said.

jerristroud@post-dispatch.com | 314-340-8384

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Premier Dalton McGuinty is shuffling his cabinet this afternoon to underscore the importance of attracting business and new investment to battered Ontario, which has shorn more than 200,000 manufacturing and forestry jobs in the past few years.

Sandra Pupatello moves from economic development to a new international trade and investment ministry.

Her old duties will be taken up by Michael Bryant, who moves from aboriginal affairs and remains House leader.

Labour Minister Brad Duguid succeeds Bryant at the always challenging aboriginal affairs ministry.

Duguid will be replaced by Tourism Minister Peter Fonseca payday loan low fee.

The new tourism minister will be Monique Smith, whose responsibilities as revenue minister will be taken over by Finance Minister Dwight Duncan.

Lieutenant Governor David Onley will swear in McGuinty’s revamped cabinet at 3:30 p.m.

It’s unusual to have a cabinet shuffle just days before a new legislative session, suggesting the premier is highlighting the urgency of Ontario’s sagging economy.

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The applause hasn’t died down for the new Chevrolet Volt, but General Motors is already planning where the technology for this new electric car can go next.

The Volt, which made its official debut Tuesday, is based on what GM calls the "E-Flex platform." This new type of vehicle uses high-capacity lithium-ion batteries and will be able to go up to 40 miles on a full charge. If a driver wants to go farther, the car’s small gasoline engine will generate more electricity, allowing trips of over 300 miles.

But that technology doesn’t have to stop with the Volt, according to said Tony Posawatz, vehicle line director for the E-Flex program. Different body styles - wagons or small cars, for instance - and versions styled for different brands are under consideration for a future, improved E-Flex use.

"These are some of the alternatives that are being reviewed, even as we speak, relative to the future beyond Volt," Posawatz said in an interview with CNNMoney.com after the Volt’s official unveiling in Detroit Tuesday.

He made it clear, though, that any discussions of E-Flex’s future are preliminary. No decisions have been made, but lots of options are on the table.

It’s not too soon for GM to be thinking about this, either, said Bill Pochiluk of the auto industry consulting firm AutomotiveCompass. Transferring the technology won’t be that hard, he said.

"Some of the systems and modules will be directly transferable to other vehicles," according to Pochiluk. Add to that a much more competitive hybrid electric car market by the time the Volt comes out, he said.

By the summer of 2009, Pochiluk sees Honda and Toyota still dominating the market. But GM will move fast, he predicted, becoming the third biggest hybrid vehicle manufacturer with no one else even close.

As with any other vehicle platform, different body styles could easily be built on top of the Volt’s engineering. In the same way that the Chevy Cobalt car and HHR wagon are basically the same vehicle underneath while looking completely different, GM could easily put different "top hats," as they’re called in the industry, on the E-Flex platform.

That would be an easy first step to extending the E-Flex’s market in different directions, Posawatz said. There are already indications that there could be an appetite.

"It’s grown beyond our wildest imaginations, the degree to which people connected to the idea of the car, the spirit of the car," Posawatz said. "That’s given us a degree of confidence that this could be a family of vehicles in the future."

Creating the Volt meant engineers had to clear the big hurdles the first time out.

But when you build an electric car that doesn’t have to compromise on utility or performance, Posawatz noted, "it’s easier taking it in different directions."

The E-Flex powertrain, which is the car’s engine and electric motor, works well in a mid-size sedan carrying four passengers and cargo, so it has the flexibility to accommodate more or less demand for different vehicles, Posawatz said.

"This has a little bit of bandwidth," Posawatz said paydayloans.com. "This can go on a little bit bigger vehicle if necessary." And it can be scaled down to create more economical versions, he said. With a smaller battery pack, a vehicle might not go as far without needing gasoline. But it would also cost a lot less, an appealing proposition to some.

"There are a number of customers out there that maybe a 20-mile [electric-only range] vehicle would work, and they would still use little to no petroleum," said Posawatz.

Forgoing the gasoline engine altogether for a shorter-range car is another possibility, Posawatz said, but it’s one that creates problems.

First of all, it just goes against the whole idea of E-Flex. GM believes there’s less of a market for a limited-use vehicle. Why wouldn’t customers want the option (even if they rarely use it) of driving a car farther than batteries alone will take them?

Pochiluk agreed that all-electric cars just aren’t as attractive from a marketing standpoint. People will always be scared of getting stranded. "I think it’s impossible to go without a range extender when you’ve only got 40 miles," he said.

Another problem is that electric only operation is harder on a vehicle’s battery, according to Posawatz. Repeatedly draining a battery down to near zero, will mean much shorter battery lives, he said.

"We’re only cycling it to a 50% state of charge," with the E-Flex platform, said Posawatz, "so we’re not beating the crap out of the battery."

For an automaker with the scope of General Motors, different branding creates many opportunities for the range-extended E-Flex. There will probably be E-Flex vehicles that aren’t Chevrolets. No doubt, Cadillac, Pontiac, Saturn and other GM dealers would love to get their own plug-in vehicles to sell.

But for now, Posawatz is concentrating on just getting the ball in play. "You always have to do the first car right and well." 

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At 10 p.m. on a Friday last month, it was the usual Mardi Gras at Lumi

Will the tightening of the global credit markets throw InBev’s takeover of Anheuser-Busch Cos. off track? Not if you ask the Belgian brewer. But the mood on Wall Street is a little less certain.

In the wake of meltdowns at Bear Stearns and Lehman Bros., there may be traces of skepticism floating around one of the biggest buyouts in history.

Shares of Anheuser-Busch Cos. dropped nearly 3 percent to $66.20 on Monday in the midst of a market-wide slide, and closed at $66.05 Tuesday.

Anheuser-Busch’s stock has never risen above $68.43, even after Anheuser-Busch’s board agreed to the $70 per share. Is that an indication that investors are not quite sure that InBev will be able to secure credit and complete its $70-per-share, $52 billion buyout?
InBev said it is still on track to close the transaction by the end of the year. But Edward Jones analyst Jack Russo lowered his rating on Anheuser-Busch’s stock from ‘hold’ to ’sell’ on Tuesday, citing risks to InBev’s financing package.

"While we still see it as probable that the deal closes as planned at $70 in an all-cash offer, fragile credit markets increase the risk that financing falls through, gets delayed, or gets restructured," he wrote in a research note. He said the risk/reward ratio for owner Anheuser-Busch stock is poor, since there is "substantial downside" if the transaction does not go through.

Morningstar analyst Ann Gilpin likewise urged caution.

"Given the recent deterioration in the credit markets and general uncertainty in financial institutions worldwide, we feel it is prudent to raise our uncertainty rating for Anheuser-Busch," she wrote in a note to clients payday loans. "While we think the deal will likely go through, the state of the credit markets adds some uncertainty around our ($70) fair value estimate, which is based on the transaction price agreed to with InBev."

InBev said it has "fully committed financing" in place, with signed credit facilities from a group of leading financial institutions. It has already completed the primary syndication phase of lining up financing, spokeswoman Marianne Amssoms said in an e-mail.

The aligned banks represent "a very diversified group of strong banks, giving InBev access to all significant capital markets," she said.

jmcwilliams@post-dispatch.com | 314-340-8372

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