plus 3, Ill. Republicans see unique chance for victory - MSNBC

Ill. Republicans see unique chance for victory - MSNBC
US Stocks Cling To Slight Gains; US Data Offset Euro Concerns - Marketwatch
Audit: Workforce centers need to do more to help jobless - Minneapolis Star Tribune
Walgreens Buys NYC Drugstore Chain Duane Reade For Nearly $1.1 Billion - The Business Insider

Ill. Republicans see unique chance for victory - MSNBC

Posted: 17 Feb 2010 08:41 AM PST

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CHICAGO - The last decade was lousy for Illinois Republicans. They lost a Senate seat, their party's last governor went to prison and they were shut out of every statewide office.

But the recent surprise win by Scott Brown in the Massachusetts Senate race and a string of setbacks for Illinois Democrats have Republicans giddy about their chances to claim the next big election prizes: President Barack Obama's former Senate seat and ousted Gov. Rod Blagojevich's old job.

Republicans have reason to feel confident. This year's races are likely to be fought against the backdrop of Blagojevich's corruption trial — a point Republicans are sure to belabor — and Illinois' finances are in shambles, with the state deficit likely to reach $13 billion this year.

"This year the stars seem to be lining up for us," Illinois Republican Party chairman Pat Brady said.

If Republicans can't win in Illinois this year, it's hard to imagine when they could be victorious in the state, where Democrats control the governor's mansion, every statewide office and the Legislature.

"If the Republicans don't win in November, we're in for a long, long decade," said state Sen. Kirk Dillard, of Hinsdale, who is hoping to be the Republican candidate for governor.

The GOP is counting on five-term U.S. Rep. Mark Kirk, a moderate on issues like gun control and abortion, to win Obama's old Senate seat.

Kirk, 50, is up against 33-year-old Democrat Alexi Giannoulias, Illinois' first-term state treasurer whose last job was at his family's bank that is now in financial trouble. Sen. Roland Burris, who was appointed to Obama's seat by the scandal-tainted Blagojevich, opted not to run for a full term.

In the Illinois governor's race, the Republicans still haven't settled on a nominee — the Feb. 2 primary ended in a virtual tie with state Sen. Bill Brady of Bloomington just a few hundred votes ahead of Dillard. But Democratic Gov. Pat Quinn is vulnerable for several reasons, not least of which is his proposal to raise income taxes to help close the whopping budget deficit.

Quinn's decision to release some inmates early from prison also turned into a public relations disaster that his Democratic challenger used to nearly win the party's nomination this month. And the party suffered yet another black eye when its nominee for lieutenant governor, Scott Lee Cohen, dropped out after it became widely known that he was accused of abusing his ex-wife and arrested for holding a knife to the throat of an ex-girlfriend. Cohen has denied the allegations, and charges stemming from his arrest were dropped when the girlfriend did not show up in court.

"Every Democrat I know, every politically knowledgable and interested Democrat is worried. The combination of factors is potentially pretty lethal," said John Schmidt, a Chicago attorney who ran unsuccessfully in 1998 for the Democratic nomination for governor. Schmidt supported Quinn's opponent in the primary.

But the Republican outlook isn't entirely rosy. The party is no stranger to scandal — voters will remember that the last Republican governor, George Ryan, was sent to prison for racketeering and fraud. And Quinn got lucky when Cohen resigned; he will help choose his own running mate.

Furthermore, if Brady emerges as the GOP nominee, the party will have to sell a conservative downstate lawmaker to Chicago-area voters he barely courted during his primary campaign. Brady received only 5 percent of the GOP vote in Cook County, where Chicago is located.

Illinois Democrats have echoed their national party's claim that for all the Republican Party's criticism, it hasn't offered real solutions for fixing the economy and getting people back to work. Democrats point out they got rid of Blagojevich when he was arrested, they passed a major public-works program after years of gridlock and they approved significant ethics legislation.

"What are their solutions beyond being the party of no?" said Rep. David Miller, the Democratic nominee for Illinois comptroller. "I think people don't want to see partisan bickering right now. People are looking for solutions."

Quinn, like several other Democrats, said voters must be reminded that the Republicans' no-tax-increase pledge would require devastating budget cuts to health care and human services.

"We can't allow them to win," Quinn said.

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US Stocks Cling To Slight Gains; US Data Offset Euro Concerns - Marketwatch

Posted: 17 Feb 2010 08:33 AM PST

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By Kristina Peterson

NEW YORK (MarketWatch) -- U.S. stocks clung to narrow gains on Wednesday as housing and industrial data showed improvements and companies including Deere posted strong earnings. However, anxiety lingered over European finances and unemployment.

The Dow Jones Industrial Average was up 11 points, or 0.1%, at 10280 in recent trading. Bank of America was the measure's best performer, extending its gains from Tuesday with a 2.1% rise to $15.46. Home Depot was also particularly strong, up 1.3% to $29.82 as housing starts rose to their highest level in six months; Caterpillar climbed 0.5% to $57.42 as a report on industrial production also topped expectations.

The Nasdaq Composite was up by less than one point to 2215. The Standard & Poor's 500-share index edged up 0.8% to 1096, led by its health-care and consumer staples sectors. Whole Foods Market helped boost the staples sector. The grocer jumped 10% after reporting a 71% rise in fiscal first-quarter profit, topping Wall Street expectations, and raising its 2010 earnings and sales view.

Investors said the morning's modest climb represented relief after last week's sell-off amid concerns over Greece's debt. But euro zone finances remain a source of concern, with Italy stealing some of the spotlight on Wednesday after the country's Audit Court said derivative contracts taken out by Italian municipalities could jeopardize local public finances for decades.

Still, market watchers said they expected the euro zone would do what was necessary to protect the common currency and the countries bound together by it.

"I'm not particularly thrilled about European economic prospects going forward, but I don't think the euro is in threat," said Dan Alpert, managing partner at Westwood Capital. More chilling was the rise in U.K. unemployment, which rose sharply in January after two months of declines, the U.K. government said Wednesday.

"We saw a negative number coming out of the U.K. that shocked a lot of economists," said Alpert, noting that while the two countries' economies are not linked, the figure still casts a pall on forecasts for the U.S. labor market.

"A lot of the good news coming out has been coming from the manufacturing sector and you have to keep in mind that doesn't employ a whole lot of people," he said.

Among Wednesday's economic reports, housing starts climbed 2.8% in January, the strongest pace since July 2009. Meanwhile, the U.S. Labor Department reported that U.S. import prices rose for the sixth straight month and by more than expected in January, largely due to a sharp increase in volatile oil prices. U.S. industrial production increased in January by 0.9%, slightly above economists' forecast of an 0.8% increase.

Helping boost sentiment, several companies reported better-than-expected earnings, including Deere. Its shares jumped 5% to $56.49 after the maker of farming and construction equipment posted a surprise 19% rise in earnings that beat market expectations. The company also lifted its profit forecast for the year.

American depositary shares of ING Groep climbed 3.2% to $9.25 after the Dutch financial services company posted a narrower fourth-quarter net loss as the burden of write-downs and other charges eased from a year ago.

In other markets, crude-oil futures slipped below $77 per barrel. Gold futures edged lower while the dollar strengthened against both the yen and the euro. Treasurys slipped, with the 10-year note off 9/32 to yield 3.697%.

Still to come, the Fed will release minutes from the Federal Open Market Committee after 2 p.m. EST.

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Audit: Workforce centers need to do more to help jobless - Minneapolis Star Tribune

Posted: 17 Feb 2010 08:12 AM PST

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At a time when 217,000 Minnesotans are looking for work, the state needs to do a better job integrating the assistance it provides to job-seekers.

That's the conclusion of a report released Wednesday by the state's Legislative Auditor, which was directed by the Legislature last year to study Minnesota's so-called workforce programs.

The state's unemployment rate stands at 7.4 percent and economists expect it to reach 8 percent at some point this year.

The state, which operates 49 workforce centers across Minnesota, hasn't fully integrated the centers with unemployment insurance, education a d training, which means some clients haven't gotten as much help as they needed, the audit concluded.

Authority over the centers and their funding is fragmented and some workforce center clients told the auditors they haven't gotten enough assistance in connecting with potential employers.

Fewer than half of clients interviewed by auditors reported that they were satisfied with the services they received, but the report found that they were more successful finding jobs than people who didn't use the workforce centers.

Officials of the Department of Employment and Economic Development needs to do a better job of assessing the workforce centers' performance and identifying gaps in services being offered.

Workforce centers are one-stop that provide such services as an online job bank and workshops on résumé writing and effective interviewing, services offered to all unemployed Minnesotans. Other services, including training to upgrade skills, are available only for people who meet eligibility criteria.

Funding comes largely from a mix of federal and state sources. In fiscal year 2009, Minnesota spent about $234 million on workforce services, excluding one-time federal money.

Officials of DEED generally agreed with the conclusions of the report and said they are working to address the shortcomings.

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Walgreens Buys NYC Drugstore Chain Duane Reade For Nearly $1.1 Billion - The Business Insider

Posted: 17 Feb 2010 08:41 AM PST

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A big announcement in the world of drugstore chains, and a major move for a NYC institution.

The good news is that they're keeping DR's distinctive brand.

For now. At some point later they may eliminate it.

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DEERFIELD, Ill.--(BUSINESS WIRE)--Walgreen Co. :

Acquisition gives Walgreens leadership position in nation's largest retail and drugstore market
Duane Reade to continue brand identity while accelerating Walgreens Customer Centric Retailing initiative in urban markets

Walgreen Co. and New York-based drugstore chain Duane Reade Holdings, Inc. today announced a definitive agreement under which Walgreens will acquire Duane Reade from affiliates of Oak Hill Capital Partners in a cash transaction for a total enterprise value of $1.075 billion, which includes the assumption of debt.

The transaction is subject to customary conditions, including receiving regulatory approvals and would include all 257 Duane Reade stores located in the New York City metropolitan area, as well as the corporate office and two distribution centers. Walgreens will fund the purchase with existing cash and anticipates the transaction will close in its current fiscal year, which ends Aug. 31.

"Duane Reade is a compelling strategic acquisition that will immediately provide Walgreens with a leading position in the largest drugstore market in the U.S.," said Walgreens President and CEO Greg Wasson. "In addition, Duane Reade's recent initiatives in urban retailing, customer loyalty and private brand products support and accelerate Walgreens strategy to enhance the customer experience in our network of more than 7,100 stores across the country."

Duane Reade had unaudited net sales of $1.8 billion for the latest 12-month period ending Dec. 26, 2009, and has the highest sales per square foot in the retail drugstore industry nationwide.

"This transaction is consistent with the capital allocation objectives we outlined last fall, which included investing in strategic opportunities that reinforce the company's core strategies and meet return requirements," said Wasson. "By combining the strengths of our two companies, we can improve our position as the most convenient provider of consumer goods and services, and pharmacy, health and wellness services in the country."

The company anticipates the transaction to be dilutive to earnings per share in the first 12 months after closing, and accretive in the next 12 months and beyond. Walgreens expects to achieve synergies between $120-$130 million in the third year after closing the transaction. Additionally, the company will benefit from Duane Reade's existing net operating losses which will provide additional value over time.

"We are very pleased that this national leader has recognized the successful transformation under way at Duane Reade, which is built upon a 50-year history of serving the needs of New Yorkers and has been supported by our shareholders, including Oak Hill Capital Partners," said Duane Reade Chairman and CEO John A. Lederer. "We will continue to be the drugstore New Yorkers turn to, just as Walgreens has been a trusted community pharmacy in other markets for more than 100 years."

Duane Reade will continue to operate under its brand name after the transaction closes. With Walgreens currently operating 70 stores in the New York City metropolitan area, decisions will be made over time as to the best, most effective way to harmonize the Walgreens and Duane Reade brands. Walgreens expects to retain Duane Reade's store, pharmacy and distribution center employees and many members of Duane Reade's senior management team following the acquisition. Over time, consolidation of core functions at the corporate offices will occur.

Duane Reade, which opened in 1960 and is named after its first store located on Broadway between Duane and Reade streets in Manhattan, is the largest drugstore chain in the New York City metropolitan area. Over the past two years, Duane Reade has embarked upon a significant brand transformation initiative based upon extensive market research. Improvements include: dramatic new store designs with wide aisles and contemporary décor; a much improved pharmacy featuring lower service counters for more personalized patient interaction; introduction of "Doctor on Premises" walk-in health care; and a store-within-a-store prestige beauty concept called "Look Boutique," which elevates the merchandising of cosmetics and skin care products and features many prestige beauty brands. Positive changes also include the launch of a family of exciting new private brands including food and beverage brand DR Delish™; and a much expanded customer loyalty program called FlexRewards™.

To date, Duane Reade has opened or converted 30 stores to the new format and has plans for up to 30 more new or remodeled stores in 2010. The continued rollout of "Look Boutique" is also planned for a growing number of stores across the network.

Duane Reade's transformation initiatives correspond to Walgreens current Customer Centric Retailing (CCR) initiative to reinvent the shopping experience. To date, CCR has been implemented in more than 600 Walgreens stores nationwide, with plans to have as many as 3,000 stores converted by the end of fall 2010.

Lederer said, "We are pleased that Walgreens shares our commitment to finding new and innovative ways to serve local communities, and we look forward to seeing our customers benefit from Walgreens unparalleled pharmacy and operational expertise as we continue with our ongoing transformation." Duane Reade plans to continue accepting all of its current prescription insurance plans after the transaction closes.

Peter J. Solomon Co. acted as financial advisor to Walgreens in the transaction, and the law firm of Wachtell, Lipton, Rosen & Katz served as legal counsel for Walgreens. Goldman Sachs & Co. acted as lead financial advisor, and Bank of America Merrill Lynch acted as co-financial advisor to Oak Hill Capital Partners and Duane Reade. The law firm of Paul, Weiss, Rifkind, Wharton & Garrison LLP served as legal counsel to Duane Reade and its shareholders, including Oak Hill Capital Partners.

Walgreens will host a public conference call/webcast today at 8:30 a.m. eastern time, during which Walgreens executive management will discuss the acquisition. Speaking on behalf of Walgreens will be President and CEO Greg Wasson and Executive Vice President and CFO Wade Miquelon. Speaking on behalf of Duane Reade will be Chairman and CEO John A. Lederer. A question and answer session with analysts and investors will follow. The live audio webcast will be available at http://investor.walgreens.com.

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