Justin Bieber hits photographer in Los Angeles car scrape

Teen pop star Justin Bieber struck a photographer with his Ferrari sports car while driving away from a comedy club in Los Angeles on Monday night, but the accident was not considered a hit-and-run, police said.

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Video taken outside the Laugh Factory comedy club showed Bieber behind the wheel of his white Ferrari, surrounded by photographers as he was pulling away.

 

Celebrity website TMZ said Bieber motioned the photographers to clear out of the way but apparently pinned one between his Ferrari and a parked car as he pulled out. He then drove away.

"It was not a hit-and-run," Los Angeles Police Department spokesman Bruce Borihanh said on Tuesday. "The investigation is ongoing."

He said the photographer's injuries were not life-threatening.

A representative for Bieber declined to comment.

Bieber is under investigation in a separate driving incident in May after his neighbors complained that he had been speeding through his gated Los Angeles-area community.

The Canadian singer has been the subject of a series of headline-grabbing incidents over the past year. German authorities seized a capuchin monkey Bieber had kept as a pet after he was unable to provide proper documentation for the animal at Munich airport. And in London, the singer scuffled with a photographer outside a hotel during a European tour.

(Reporting by Ian Simpson and Eric Kelsey; Editing by Scott Malone and Grant McCool)

Crystal, Goodman head back to school in 'Monsters University'

One-eyed green monster Mike Wazowski and his giant blue, furry friend James P. "Sully" Sullivan go back in time as "scaring" students in "Monsters University," as Walt Disney Co.'s Pixar Animation Studios pins its hopes for a blockbuster on the coming-of-age story.

"Monsters University," a prequel to 2001 animated film "Monsters, Inc.," will be released on Friday in U.S. theaters, and director Dan Scanlon told Reuters one of the main challenges was to keep the film fresh and surprising for audiences.

 

"You're dealing with the fact that everybody knows how the movie is going to end," Scanlon said about plotting Pixar's first prequel, particularly for a film that grossed more than $560 million at the worldwide box office.

A college setting seemed ideal for best friends Mike, voiced by Billy Crystal, and Sully, voiced by John Goodman, Scanlon said, to "explore serious emotional relationship stuff" and "major self-discovery."

"It's a maturing process or learning who you are," Goodman added. "Everybody goes through it, whether you went to college or not."

"Monsters University" tells the story of how Mike and Sully first met in college as "scaring" majors, learning the prestigious art of scaring human beings in order to harness their screams, which power the city of Monstropolis.

Although Mike and Sully eventually become friends and co-workers at scaring factory Monsters, Inc., their friendship does not have the smoothest start, with Sully's "party-guy" popularity conflicting with the studious, ambitious Mike.

The film focuses on Mike, whose sole ambition from childhood is to become a "scarer" despite not being very intimidating, and at university, he struggles to find his place among his peers, finally fitting in with a fraternity of outcasts.

"Unfortunately, he lacks a certain undefinable quality to be scary. So now he has to find what it is that makes him special," said Scanlon.

"What we see as crushing failures in life hopefully lead us to new things - things we never thought possible."

CRYSTAL, GOODMAN PLAYING TEENAGERS

"Monsters University" producer Kori Rae, who worked closely with Crystal and Goodman on the first film, said she noticed the veteran actors were much more comfortable in their monster skins, and have fun playing their characters as teenagers.

"They got to dig in and explore who these guys were back then," noted Rae.

Crystal, 65, and Goodman, 60, said they saw a lot of themselves in teenage Mike and Sully.

Crystal likened Mike's need to have someone to catch him when he flies off the handle to times when he himself needed "someone as grounded as John" when he went off script to improvise. He also empathized with Mike's ambition, comparing it to his own.

"Mike never stops working to get better and he doesn't let anything get in his way. He many not like how he stacks up with everybody else, but he'll work you in to the ground - and I've always had that kind of drive," the comedian said.

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For Goodman, Sully's easy-going likeability was an instant draw.

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"(Sully's) a guy who gets to do what he loves for a living. There ain't' enough of that to go around," Goodman said.

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Both men are also open to reprising their roles for a third installment, should one ever come to pass. In fact, Crystal already has ideas.

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"Monsters Assisted Living," he said, before altering his voice to channel an elderly Mike. "Do my ankles look swollen to you?"

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(Editing by Eric Kelsey, Piya Sinha-Roy and Jackie Frank)

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Angelina Jolie stunt double sues News Corp over hacking

A stunt double for Oscar-winning actress Angelina Jolie has sued News Corp over allegations its British newspapers hacked her phone, the first lawsuit in the United States against the company since the scandal broke two years ago.

The lawsuit, filed on June 13 by professional stunt double Eunice Huthart, said reporters from News Corp's tabloids The Sun and the defunct News of the World, hacked her mobile phone while she was working for Jolie on location in Los Angeles.

 

The allegations include stories that ran in the tabloids about Jolie's budding relationship with actor Brad Pitt - when only a tight circle of people had knowledge of it - while they were filming the movie "Mr. & Mrs. Smith."

A spokesman for News Corp declined to comment on the lawsuit.

Huthart's lawsuit said the hacking occurred in 2004 and 2005 while she was in the United States and Britain and resulted in lost voice messages that she never received. It said the London police have a file of Huthart's phone logs demonstrating the times when representatives from News of the World called her mobile.

The missing voice mails provided information later used in news reports, according to the court document in U.S. District Court in California.

In one instance, Huthart was instructed to meet Jolie, who was checked into a hotel under the pseudonym "Pocahontas." Huthart said she never received the message with the code name even though Jolie's assistant said she left it for her on the phone.

The lawsuit said that the tabloids intercepted messages left by Jolie regarding her movie career. It cited a News of the World article with the headline "Pitt Stop for Jolie" that began "Hollywood babe Angelina Jolie has threatened to quit the movies for good," according to the complaint.

Huthart of Liverpool, England, is godmother to one of Jolie's children.

The phone hacking scandal sent shockwaves through the British establishment, forced the closure of the Sunday tabloid News of the World, prompted a huge police inquiry and lead to the arrest of more than 60 people.

But until the Huthart lawsuit, the scandal has been contained in Britain.

Huthart, who is seeking unspecified damages, is being represented by New York based attorneys Siegel Teitelbaum & Evans and Steven Hyman of McLaughlin & Stern as well as The Stein Law Firm in Los Angeles.

The New York law firms have ties to the British lawyer Mark Lewis, who represented the family of a murdered teenage girl, Milly Dowler. Two years ago, news broke that reporters from News of the World hacked the mobile phone of Dowler, provoking wide- spread outrage about the illicit news gathering practices of British tabloid journalists.

Last summer, Lewis teamed up with Norman Siegel of Siegel Teitelbaum & Evans and the former executive director of the New York Civil Liberties Union and Steven Hyman of McLaughlin & Stern to pursue claims that four of his clients had been hacked by Rupert Murdoch's now-defunct tabloid on U.S. soil.

Siegel and Hyman have been pursuing their own inquiry into the possible hacking of 9/11 victims' phones by News of the World.

News Corp is preparing to split its publishing assets, which includes its British newspapers, the Wall Street Journal and book publisher HarperCollins, from its cable networks and movie studio on June 28.

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The case is Eunice Huthart v. News Corporation et al in U.S. District Court for the Central District of California (Western Division - Los Angeles) No. 13-04253

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(Reporting by Jennifer Saba in New York; Editing by Grant McCool, Bernard Orr)

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Kanye West wins over critics with 'daring' new album 'Yeezus'

Rapper Kanye West pushes the boundaries of hip hop with his latest album "Yeezus," using aggressive electro-dance music beats to channel his anger and win over critics, who have called the record "daring" and "ambitious."

"Yeezus," the 36-year-old rapper's seventh solo studio album, has also sped to the top of the iTunes digital music chart upon its release on Tuesday, led by the single "Black Skinhead."

The album's release coincides with the birth of West and reality star girlfriend Kim Kardashian's first child together, a baby girl born over the weekend.

But on the album the famously ironic and self-referential West avoids mentioning Kardashian and their high-profile romance, which has been heavily tracked by paparazzi and the Kardashian clan's plethora of reality shows on the E! Network.

Instead, he lets his anger out against critics, the public and "haters" on tracks such as "I Am a God," "Send It Up" and "Black Skinhead," a scathing message on modern day racism.

While West rages against the world, critics have been taken aback with the new sounds that West explores, moving away from the traditional hip hop of his earlier albums and fusing electro-dance and synthesizers with thumping beats.

"Yeezus" has so far earned a score of 87 out of 100 on review aggregator Metacritic.com.

Jon Pareles at the New York Times called the album "an aggressive demand for attention" while Rolling Stone's Jon Dolan said, "'Yeezus' is the darkest, most extreme music Kanye has ever cooked up, an abrasive album."

USA Today's Steve Jones called the album "daring and infectious," while the New Yorker's Sasha Frere-Jones labeled it "ambitious" and West's "most satisfyingly narcissistic record."

"Yeezus" features collaborations with French DJ duo Daft Punk - who provide beats on four songs, including "I Am God" and "Black Skinhead" - folk singer Justin Vernon from Bon Iver on "Hold My Liquor," and rappers Chief Keef, Kid Cudi and King L.

Billboard magazine, which compiles the weekly U.S. music charts based on Nielsen SoundScan sales figures, projected that "Yeezus" could sell 500,000 copies in its first week, making it one of 2013's big debuts along with Justin Timberlake's "The 20/20 Experience."

Timberlake has so far led the pack as "The 20/20 Experience," his first album since 2006, set a year high with 968,000 copies sold in its first week.

Rapper Jay-Z, who West collaborated with on 2011's chart-topping record "Watch The Throne," announced this week that his new album will be released on July 4, while his pop star wife Beyonce also has a new album in the works for this year.

New albums from pop singers Lady Gaga, Britney Spears and Katy Perry are also expected to be released in the second half of 2013.

"Yeezus" is released by Universal Music Group's Def Jam label. Universal is subsidiary of France's Vivendi SA.

(Editing by Eric Kelsey and Bob Burgdorfer)

Teen country singer Bradbery captures 'The Voice' season crown

Pitch-perfect teen country singer Danielle Bradbery won TV singing contest "The Voice" on Tuesday, scoring a contract with Universal Music Group and a $100,000 cash prize.

Bradbery, who was coached by fellow country singer Blake Shelton, covered her mouth and began to cry when named the winner, hugging runner-up Michelle Chamuel.

"I'm so thankful," the 16-year-old Texan said. "I'm sorry, I'm speechless."

Bradbery, who said she had never had a singing lesson before the show, rode Sara Evans' country hit "Born to Fly" and Carrie Underwood's "All-American Girl" to victory, becoming the youngest winner of the NBC singing competition in its fourth season.

She topped pop-rock singer Chamuel, who was coached by R&B singer Usher, and third-place finishers the Swon Brothers, country-rock singers Colton and Zach Swon, who were also coached by Shelton.

It was the third consecutive win for Shelton, a mainstay atop the U.S. country charts with song like "Who Are You When I'm Not Looking" and "Drink on It."

Colombian pop singer Shakira and Maroon 5 frontman Adam Levine were shut out of the final three - their final protégées were voted out during last week's elimination round.

"The Voice" uses a combination of audience voting over the Internet and text message and downloads of the singer's songs from the Apple's iTunes music store.

The two-hour finale included the first live TV performance by Cher in more than a decade. Former judge Christina Aguilera, rocker Bob Seger and pop singer Bruno Mars also performed.

Cher, 67, performed "Woman's World," a new single from her album of the same name which is to be released in September, the Grammy-winning singer's first in 12 years.

Aguilera, who will be returning to the show for the fall season, opened the show joining rapper Pitbull in their hit song, "Feel This Moment."

Contestants eliminated earlier in the season also performed on Tuesday's finale and Monday's penultimate show.

"The Voice," which competes against rival broadcaster Fox's singing contests "American Idol" and "The X Factor," averages between 12 million and 14 million viewers over its two weekly shows.

Its fifth season will begin in the fall with former coaches Aguilera and CeeLo Green returning to replace first-time coaches Shakira and Usher, who will return for season six.

NBC is owned by Comcast Corp and Fox by News Corp. Universal Music Group is a subsidiary of France's Vivendi SA.

(Editing by Mohammad Zargham)

A Minute With: Gemma Arterton on choosing roles, new challenges

British actress Gemma Arterton does not need to worry about typecasting with roles ranging from a fairy tale character and literary heroines to MI6 agent Strawberry Fields in the 2008 James Bond film "Quantum of Solace."

In "Unfinished Song," a comedy-drama that opens in U.S. theaters on Friday, Arterton, 27, stars as Elizabeth, a music teacher in a boys' school.

She also directs a choir for seniors, which includes Marion, played by Vanessa Redgrave, and forges a special friendship with her cantankerous retired husband, played by Terence Stamp.

The following week Arterton will be seen in U.S. theaters as a sexy vampire in Neil Jordan's film "Byzantium."

Arterton spoke to Reuters about her choice of characters, sharing the big screen with Redgrave and Stamp, and her first French-speaking role in the upcoming film "Gemma Bovery."

Q: You have some interesting films coming out. Two are opening in the space of a week. How did you manage that?

A: It's weird that it happened that way. I made them about three months apart. It's nice. I remember when the Bond film came out in the UK I also made the TV show called "Tess of the D'Urbervilles" and they were so different and it was really good that it happened. It's nice when people can see the range.

Q: "Unfinished Song" is a small British film that is about as far away as you can get from a Bond film. What attracted you to the role?

A: The script. I was making an action-comedy at the time and it was a long shoot, a four- or five-month shoot, and I thought I just want to do something real, something close to home. My agent sent me the script and I read it and I was crying.

Q: In the film you develop a special relationship with Terence Stamp. What was that like?

A: Everyone thinks that Terence Stamp is a very serious, stern Englishman. I was thinking he was going to be a very grumpy guy but for some reason we just got on really well and we brought out the best in each other and we're friends now ...

In the film we warmed to each other and ended up helping each other in certain ways. He is such a lovely guy. It was so lovely to see him play that kind of role. Usually he plays these gangsters or villains and for him to take on that role was a real decision because he is playing an old man. He was nervous about it but it was beautiful and he did such a good job.

Q: How intimidating was it working with Vanessa Redgrave and Terence Stamp, both highly acclaimed British actors?

A: It was incredible. Vanessa is one of my all-time theater idols. For me she just represents the ultimate in strength and dignity. She can do anything. Working with her made me quite nervous and I was fascinated by the way she was working. This film was really, really important to do. It was a love letter to her sister (Lynn Redgrave), who died of cancer. You could feel it was a special thing for her.

Q: How do you choose your roles?

A: At first I was quite mindless. I didn't really think about it. I was pleased I was being offered stuff ... And then I realized I'm not happy with what is going on and had to be a bit more thoughtful. Now I think about what I want to do in relation to what I have just done.

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Q: What projects do you have coming up?

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A: I am just preparing now for my next film, which is my first French film. It is called "Gemma Bovery" and Anne Fontaine is directing it. She directed "Coco Before Chanel." It is my first French-speaking movie so I am a bit nervous about it.

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Q: Are you fluent in French?

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A: I started learning French in January and then in February this script came through called "Gemma Bovery," based on "Madame Bovary" ... For me it's a really big challenge but I feel if I can do it then I have opened another door. I love French cinema and some of my favorite actors are French. It would be something I would really be proud of doing. I start filming that in August.

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(Reporting by Patricia Reaney; Editing by Eric Kelsey and Bill Trott)

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Tales of triumph over terror win top children's UK book awards

The stories of a dyslexic hero and a little girl who overcomes her family's fear of a stray dog won two of Britain's most coveted children's literature prizes on Wednesday.

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"Maggot Moon" by Sally Gardner outshone Booker prize-winner Roddy Doyle to win the Carnegie medal for a book starring dyslexic hero Standish, who takes on a sinister dictatorship while friends and family disappear.

 

Levi Pinfold won the Kate Greenaway award for his illustrations in "Black Dog" in which a little girl named Small Hope shows her family that there is nothing to be afraid of in the arrival of a seemingly fearsome stray dog.

Both prizes are awarded by the Chartered Institute of Library and Information Professionals (CILIP), the leading professional body for librarians and information specialists.

Once-branded an "unteachable" student, Gardner said that her own dyslexia was a "gift", but that the current British government's intention to introduce a curriculum focused on traditional learning methods would make school tougher for those with learning difficulties.

"(The government's) new curriculum excludes rather than embraces those like me, and millions of others, with a different way of seeing and thinking," she said.

The CILIP Carnegie and Kate Greenaway Medals are the oldest and most prestigious children's book awards in Britain, with a roll-call of past winners that includes "Chronicles of Narnia" author C.S. Lewis, fantasy writer Terry Pratchett and Philip Pullman, author of the trilogy "His Dark Materials".

Past Kate Greenaway winners include former Children's Laureates Quentin Blake -- best known for his illustrations in Roald Dahl books -- and Anthony Browne, who has also won the Hans Christian Andersen award.

(Reporting by Simon Falush, editing by Paul Casciato)

Daniel Radcliffe proves acting skills in London stage role

British actor Daniel Radcliffe won plaudits this week for a new stage role as a bullied Irish cripple that takes him a critical step further away from his days as boy wizard Harry Potter.

In his third foray onto the stage in six years, Radcliffe adopts an Irish accent to play Billy, the bullied 17-year-old title character in "The Cripple of Inishmaan", a politically incorrect black comedy by Martin McDonagh.

Billy, orphaned in mysterious circumstances, is being raised by two surrogate aunts and longs to escape from his life on the Aran Islands in the mid-1930s and the mockery he endures for his physical deformities and daydreaming while watching cows.

When a film crew arrives on a neighboring island to cast for a Hollywood movie, Billy manages to persuade a boatman for a lift to the auditions and gets sent to the United States for a screen test. But his dreams do not pan out as expected.

This was 23-year-old Radcliffe's third time on stage as he builds a career outside Hogwarts and he was praised by critics for taking on challenging roles rather than settling back on the money he made over 10 years as Harry Potter or opting for soft film options.

In 2007, Radcliffe stripped naked in London and New York productions of the play "Equus" and appeared on Broadway in 2011 in the musical "How to Succeed in Business Without Really Trying".

His performance in "The Cripple of Inishmaan", that is running for 12 weeks at London's Noel Coward theatre, was described as "honest, sensitive, and unshowy".

"(He) proves, as he did in Equus, that he is a fine stage actor with a gift for playing social outsiders," wrote Michael Billington in Britain's Guardian newspaper.

Critic Henry Hitchings from London's Evening Standard wrote: "Radcliffe's desire to challenge himself is admirable, as is his refusal to milk his part and instead deliver a performance of moving modesty."

Most reviewers gave the production four out of five stars, saying it had far more than just the pulling-power of a celebrity in the lead with praise for other actors starring in the revival of the 1996 play.

The play is based around the making of the 1934 fictional documentary "Man of Aran" about life on the Aran Islands off the western coast of Ireland.

But Radcliffe's continuing popularity was evident by the crowd of fans and admirers waiting outside the stage door to catch a glimpse of the actor whose run as Harry Potter from the popular books by JK Rowling ended in 2011.

His films have since included the 2012 horror "The Woman in Black" and playing poet Allen Ginsberg in the 2013 indie film "Kill Your Darlings".

Radcliffe has made it clear he wants to vary roles, enjoying the different experiences of working in film and on stage.

"With theatre I always feel I learn a lot, about stamina and energy and those kind of things, but with film, film is very much my home," Radcliffe recently told Reuters.

(Additional reporting by Clare Hutchison, Editing by Paul Casciato)

British ballet dancer David Wall dies of cancer aged 67

British ballet dancer David Wall, known for becoming the youngest male principal at the Royal Ballet at the age of 21, has died of cancer aged 67 at his home in London.

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Director of the Royal Ballet, Kevin O'Hare, paid tribute to Wall who died on Tuesday, describing him as a "truly exceptional artist" and one of the company's greatest dance actors.

He said Wall would be remembered for playing the role of the manipulative Lescaut in "Manon" that was created for him in 1974 as well as taking on the most challenging male role in the company's repetoire, Prince Rudolf in "Mayerling", in 1978.

 

The dancer, who was awarded with a CBE for his services to ballet, was a regular partner with British ballerina Margot Fonteyn in the 1970s.

He retired from ballet in 1984 and joined the Royal Academy of Dance as director before becoming a ballet master at English National Ballet in 1995.

"David was a wonderful role model for all young male dancers of the generation that followed him and on his retirement from the stage he became an inspirational teacher and coach," O'Hare said in a statement.

Wall is survived by his wife Alfreda Thorogood, also a former principal dancer with the Royal Ballet, their two children and grandchildren.

(Reporting by Ellen Sowerby, Editing by Belinda Goldsmith)

AIRSHOW-Ryanair says could move into trans-Atlantic flights

Ryanair, Europe's biggest budget airline, could start selling low-cost trans-Atlantic flights if it secures enough twin-aisle aircraft and gains access to cities in both Europe and the United States, its chief executive said on Wednesday.

"This will be a unique opportunity to bust open the trans-Atlantic services. Trans-Atlantic fares should start at $10 or 10 euros," said Michael O'Leary at the Paris Airshow.

 

Any move into the competitive trans-Atlantic market would see the Irish short-haul carrier follow in the footsteps of Laker Airways, which began low-fare flights from London to New York in the late 1970s but went bankrupt in 1982.

Long-haul budget flights have become popular in Asia in recent years with Malaysia's AirAsia X , Australia's Jetstar and its Singapore-based affiliate Jetstar Asia, and Singapore Airlines subsidiary Scoot starting operations.

O'Leary said a long-haul business would have to be run separately to succeed, allowing management and staff of the short-haul business to remain focused on that.

A long-haul service would also need to start operations with a fairly large fleet of 30-50 aircraft in order to have economies of scale, he added.

"There is an opportunity with the EU-U.S. open skies to, on a fairly big scale, connect 15-20 European cities with 15 of the big U.S. cities almost from day one. But you need a fleet of 30, 40, 50 aircraft and not two, four or six," said O'Leary.

The business model would also be different from Ryanair's short-haul one, which hinges on offering low fares on flights that are operated in a high-density single-class configuration in Boeing 737 aircraft. Passengers have to pay for frills such as better seats and checked-in baggage.

A long-haul service, for example, could feature a "premium" section, just like that offered by the Asian airlines. "There is 15 percent of the public who will pay for the frills and you will be mad to switch off from that," said O'Leary.

It has, however, been tough to make money with long-haul budget flights. Laker Airways went bust in a recession in the early 1980s, and as its full-service competitors on the trans-Atlantic services cut fares in order to get more passengers on-board as demand fell.

There have also been questions about the profitability of the Asian airlines. Malaysia's AirAsia X dropped services from Kuala Lumpur to London and Paris due to the cost of fuel and the relative inefficiency of the Airbus A340 aircraft, and due to competition from full-service airlines such as Emirates.

It also dropped services to India due to the country's high taxes, showing how factors outside an airline's control can affect its cost base and make a dent on thin profit margins.

However AirAsia X, which has 10 Airbus A330-300 aircraft, is more successful with its intra-Asia Pacific flights and is adding more services to destinations within the region.

It plans to list on the Kuala Lumpur Stock Exchange this year, and to use part of the proceeds to help pay for aircraft it has on order, which include 15 more A330s and 10 A350s.

VimpelCom drops bid to acquire Canada's Wind Mobile

VimpelCom Ltd has withdrawn its bid to acquire control of upstart Canadian wireless company Wind Mobile, a majority-owned affiliate of the company said on Wednesday.

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Orascom Telecom, an Egyptian company that initially bankrolled Wind Mobile's operations in Canada and was later bought by Vimpelcom, said it withdrew the bid after a review process and discussions with the Canadian government.

 

New Issue-Bacardi prices 650 mln euro 2023 bond

Following are terms and conditions

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of a bond priced on Wednesday.

Borrower Bacardi Ltd

Guarantor Bacardi-Martini B.V., Bacardi Corp,

Bacardi U.S.A., Inc

Issue Amount 650 million euro

 

Maturity Date July 03, 2023

Coupon 2.75 pct

Reoffer price 99.862

Spread 95 basis points

Underlying govt bond Over Mid-swaps, equivalent to 122bp

over the 1.5 pct May 2023 DBR

Payment Date July 03, 2013

Lead Manager(s) Lloyds, Musi, Santander GBM & Societe

Generale CIB

Ratings Baa1 (Moody's)

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Listing Ireland

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Full fees Undisclosed

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Denoms (K) 100-1

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Governing Law New York

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Security details and RIC, when available, will be

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on

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Customers can right-click on the code for

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performance analysis of this new issue

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UPDATE 2-FedEx posts higher-than expected profit, will cut more capacity

FedEx Corp reported a higher-than-expected quarterly profit on Wednesday, sending its shares higher, but the world's biggest air-freight company said it was cutting more capacity between the United States and Asia.

The company, considered an economic bellwether because of the massive volume of goods it moves around the world, is still trying to adjust to increasing demand for cheaper ground transport rather than pricier but faster air shipping.

In particular, the express unit, FedEx's biggest source of revenue, has suffered as more cost-conscious international customers opt to use container ships instead of costly overnight shipment by air. International priority shipment volumes fell 2 percent during the quarter, while international export revenue per package fell 2 percent as rates dropped.

The company said earlier this month that it would permanently retire or will speed up the retirement of 86 aircraft and more than 300 engines as it modernizes its fleet. It is also increasing rates for its FedEx Freight subsidiary by an average of 4.5 percent, effective July 1.

 

"Our profit improvement program is progressing, but we continue to see the effects of customers selecting lower-rate international services," Chief Financial Officer Alan B. Graf Jr. said. "FedEx Express will further decrease capacity between Asia and the United States in July."

FedEx reported net income of $303 million, or 95 cents a share, for the fourth quarter ended May 31, compared with $550 million, or $1.73 a share, a year earlier.

Excluding costs of a business realignment program and aircraft impairment charges, the company earned $2.13 a share. Analysts on average were expecting $1.96, according to Thomson Reuters I/B/E/S.

Shares of Memphis, Tennessee-based FedEx were up 3 percent at $102. 48 in morning trading.

Revenue rose 3.6 percent to $11.4 billion, with FedEx Express revenue up 3 percent at $6.98 billion.

Revenue for the ground segment, which has been a strong performer, was $2.78 billion, up 12 percent.

FedEx Ground's average daily volume grew 10 percent in the fourth quarter helped by market share gains and growth in e-commerce.

FedEx forecast earnings growth of 7 percent to 13 percent, excluding special items, for its new fiscal year, assuming U.S. gross domestic product growth of 2.3 percent, world GDP growth of 2.7 percent and the current outlook for fuel prices.

Analysts on average were expecting a profit of $7.31 a share, which would be about 11 percent higher than last year. They termed the outlook conservative.

"FedEx's full-year guidance is readily achievable and creates a lower hurdle rate for success if the economy were to improve at a faster-than-expected rate," Duetsche Bank analyst Justin Yagerman wrote in a note.

Oppenheimer analyst Scott Schneeberger said he expected earnings growth to accelerate in fiscal 2015 and 2016.

Romania to buy second-hand F-16 fighter jets

Romania's leftist government has approved a plan to buy second-hand F-16 fighter jets from Portugal to bring its air force up to NATO standards, it said on Wednesday.

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The European Union member joined NATO in 2004 and has been Washington's military operations in Iraq and Afghanistan. It is in the process of phasing out its outdated Soviet-made MiG-21s.

The defence ministry will buy 12 jets from Portugal and pay a little over 600 million euros, including maintenance, in installments until 2017.

 

Romania shelved a multi-billion euro plan to buy fighter jets in 2009 as its economy plunged into deep recession and the global financial crisis forced it to resort to international aid.

UPDATE 1-Swiss lower house committee rejects U.S. tax deal again

Swiss lawmakers dealt a death blow on Wednesday to a draft law which aimed to protect the country's banks from criminal charges in the United States for helping wealthy Americans evade tax.

 

The Swiss government has warned that the bill's failure could prompt impatient U.S. prosecutors to indict banks, though it could still use an executive order to allow them to hand over data to try to avoid criminal charges.

The bill, which lawmakers from both the centre-left and right opposed for widely differing reasons, was designed to let banks sidestep Swiss secrecy laws by disclosing their U.S. dealings so they could avoid prosecution. With or without the law, they will still seek out of court settlements with U.S. authorities that could cost the industry as much as $10 billion.

Parliament's lower house voted 123 to 63 against debating the legislation, effectively killing the law, even though the upper house had confirmed its support earlier in the day.

Switzerland's banking lobby expressed regret about the vote and urged the government to do everything possible to help banks reach settlements under a U.S. Department of Justice programme.

"Switzerland must not take the risk of a further indictment of a bank lightly," the Swiss Bankers Association said in a statement.

Finance Minister Eveline Widmer-Schlumpf said the government would do everything in its power but its options were limited without the bill.

The protection of client information has helped to make Switzerland the world's biggest offshore financial centre, with $2 trillion in assets. But the haven has come under fire as other countries have tried to plug budget deficits by clamping down on tax evasion, with authorities investigating Swiss banks in Germany and France as well as the United States.

Experts were divided over the threat posed to Swiss banks by parliament's decision to oppose the law.

"The Americans will get the data they want. They will not stop until they have it," said Martin Naville, head of the Swiss-American Chamber of Commerce. "It is taxing the patience of our American friends. When their patience is over, there will be indictments, perhaps just one or two, but it will be more than enough to create chaos."

No one was immediately available for comment at the U.S. Department of Justice.

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WEGELIN PRECEDENT?

Earlier this year a U.S. indictment felled Switzerland's oldest private bank, Wegelin & Co. It paid a $58 million fine and closed its doors for good after pleading guilty to helping wealthy Americans evade taxes through secret accounts.

Shares in Basler Kantonalbank, one of the banks under U.S. investigation seen at immediate risk, closed down 2.5 percent, compared with broadly positive Swiss stocks.

But Peter V. Kunz, professor for business law at Berne University, was more sanguine.

"I think bankers will be indicted, but I don't really see banks getting indicted... as there may not be enough evidence to accuse them of systematically violating U.S. law," he said.

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"Wegelin was indicted and settled but in my view this was a singular case. I don't see it as a model case for Swiss banks."

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The government's attempt to fast-track the legislation through parliament to meet a U.S. ultimatum angered many lawmakers in the fiercely independent country.

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Right-wing lawmakers opposed the bill on the grounds that it could set a precedent that might prompt other countries to seek concessions from Switzerland. The centre-left also rejected it for different reasons, believing Swiss banks should be forced to face the music for aiding tax evasion.

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Lawmakers from both the lower and upper house endorsed a statement saying they supported a solution to the long-running tax dispute despite the defeat, and called on the government to allow banks to cooperate under existing laws.

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PROTRACTED NEGOTIATIONS

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Switzerland's biggest bank, UBS, was forced to pay a $780 million fine in 2009 and deliver the names of more than 4,000 clients to avoid indictment, giving the U.S. authorities information that allowed them to pursue other banks.

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Since then, the government has tried to reach a settlement for the whole financial industry, but has been hamstrung by Swiss secrecy laws and bickering among banks over who should pay the heavy fines.

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U.S. authorities have more than a dozen banks under formal investigation, including Credit Suisse, Julius Baer , the Swiss arm of Britain's HSBC, privately held Pictet in Geneva and local government-backed Zuercher Kantonalbank and Basler Kantonalbank.

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AIRSHOW-Singapore Airlines orders 30 more Airbus A350s

Singapore Airlines has placed a firm order for 30 Airbus A350-900 aircraft worth $8.6 billion at list prices, with options for 20 more of the jetliners.

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The airline could convert the options into larger A350-1000s under the terms of the deal, Airbus said at the Paris Airshow on Wednesday.

The carrier now has 70 firm orders for the A350, Airbus added.

GLOBAL MARKETS-Shares flat, dollar steady before Fed decision

Equities were flat while major currencies and commodities traded within recent ranges on Wednesday as investors awaited a statement from the U.S. Federal Reserve that they hope will shed light on its next move.

 

The Fed is expected to leave policy ultra-loose following the central bank's meeting that ends later on Wednesday but may hint it will start scaling back its bond buying later this year if the U.S. labor market continues to improve.

Fed Chairman Ben Bernanke's comment last month that the U.S. central bank could begin to curtail bond purchases at one of its "next few meetings" put up a speed bump for the equity rally and pushed bond yields higher.

U.S. stocks opened slightly lower, while European shares were flat. The MSCI world equity index, tracking shares in 45 countries, was little changed, adding 0.04 percent, while Tokyo's Nikkei index jumped 1.8 percent and U.S. Treasuries prices rose.

"The early morning action is not surprising given the fact that we've had two days of position jockeying ahead of the FOMC announcement," said Andre Bakhos, director of market analytics at Lek Securities in New York.

The policy-setting Federal Open Market Committee will announce its decision at 2:00 p.m. EDT (1800 GMT), followed 30 minutes later by a news conference with Bernanke.

Speculation about when and by how much the Fed could start to trim its $85 billion a month in bond purchases has supported the dollar against emerging and growth-linked currencies, although uncertainty over the impact of any policy shift has led some investors to prefer the yen or the euro.

The Dow Jones industrial average slipped 3.52 points, or 0.02 percent, at 15,314.71. The Standard & Poor's 500 Index was down 0.43 points, or 0.03 percent, at 1,651.38. The Nasdaq Composite Index was up 1.48 points, or 0.04 percent, at 3,483.66.

Europe's broad FTSEurofirst 300 index inched up 0.1 percent. The dollar shed 0.3 percent against the Japanese currency on Wednesday to trade around 95.01 yen. But it was little changed against the euro at $1.34 after the single currency touched a four-month high on Tuesday.

"I think the market is a bit ahead of itself on the tapering story," said Marc Chandler, global head of currency strategy at Brown Brothers Harriman in New York.

"It's going to be quiet going into it, then I think it will turn very volatile in the U.S. afternoon following the Fed statement and the press conference," he said. "People generally lack much conviction about the near-term direction and how the markets respond to the Fed."

Against a basket of major currencies the greenback was holding steady at around 80.572.

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Benchmark 10-year Treasuries were last up 1/32 in price to yield 2.18 percent. The 30-year bond was 12/32 higher in price with a yield of 3.25 percent

Trading could get choppy in equity markets, where many major indexes have hit new records this year due to the liquidity injections from major central banks, making them vulnerable to any scaling back in the flow of funds from the Fed. The benchmark S&P 500 is up more than 15 percent since the start of the year.

A drop in U.S. oil reserves gave some support to oil prices but the Fed was still the main focus. Brent crude added 30 cents to $106.32 a barrel, putting it on track for its highest close since early April.

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U.S. crude for July delivery touched a nine-month high of $99.01, before easing to $98.49, still up 5 cents.

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Gold edged up, with spot gold up 0.4 percent at $1,373.36 an ounce, while U.S. gold futures rose $5.90 an ounce to $1,372.80.

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UK watchdog bans internal, external auditor links

A British watchdog has banned accountants from asking customers' internal auditors directly for help in checking the books in a bid to bolster their independence.

The Financial Reporting Council, which polices accountants and auditors, said on Wednesday the ban creates a clearer division of responsibility between internal and external audit.

Internal auditors are employees of a company and one of its "three lines of defence", the other two being the compliance and risk officers.

External auditors are from outside the company and check on the financial reports of listed companies. Some use internal auditors directly on their teams, which the FRC has raised as a clear conflict of interest.

"Prohibiting direct assistance supports stakeholders' expectations that external auditors should be free from threats to their independence," FRC board member Nick Land said in a statement.

The ban, which goes beyond current international auditing standards, will apply for audits of company statements for periods ending on or after 15 June 2014.

 

Accounting firms have been criticised for giving banks a clean bill of health just before many had to be rescued by taxpayers in the 2007-09 financial crisis. The UK Competition Commission has said accountants can be too cosy with clients.

Hywel Ball, head of assurance at Ernst & Young, one of the world's "Big Four" accounting firms, said some assistance from internal auditors does not present a real threat to independence of the outside accountants.

"Introducing this prohibition now will add complexity to the planning of multi-location audits," Ball said.

Internal auditors at banks have also been slammed as being ineffective.

Britain's parliamentary commission on banking standards published a report on Wednesday which said heads of internal audit at banks should report directly to the board as they have lacked the status to challenge front-line staff properly.

A board member should be responsible for ensuring an internal auditor's independence, the report said, to make sure that they are willing and able to speak out when necessary.

The Chartered Institute of Internal Auditors said an independent committee will shortly report on a new code of practice for internal audits in banks and address the parliamentary recommendations.

AIRSHOW-UPDATE 1-Qatar interested in Eurofighter, Rafale jets

Qatar is likely to launch an international tender to renew its fleet of ageing fighter jets soon and is interested in France's Rafale, a French official said, while sources said it was also looking at the BAE Systems-backed Eurofighter Typhoon.

Qatar said in 2011 it wanted to replace its fleet of 12 Mirage fighter jets, possibly buying 24 to 36 units.

Qatari officials were in Britain evaluating the Eurofighter Typhoon with the Royal Air force last month, said sources familiar with the matter who did not wish to identified as the discussions are private.

 

"They have had a look at it," said one source. The Eurofighter is also made by European aerospace company EADS and Italian weapons maker Finmeccanica.

A Eurofighter team will be going to Doha in the next few weeks for flight trials, said a third source, adding the Qataris were in the process of making comparisons and flight evaluations.

Separately on Wednesday, a French official talked up prospects for the Rafale fighter ahead of President Francois Hollande's visit to the Gulf Arab state that starts on Saturday.

"It interests the Qatari air force ... we hope that it could evolve in the coming months," he said. Eric Trappier, chief executive of Dassault which makes Rafale and Mirage jets, would be part of the delegation, he said.

The two fighter jets are also competing for the contract against various Boeing-made planes after the Qatari air force tested the jets last summer.

Qatar's interest in both the Eurofighter and Rafale signal the start of another fierce competition between the jets for lucrative export contracts. India picked the Rafale over the Eurofighter in January 2012 but has not yet finalised the $15 billion deal, which would be the jet's first overseas sale.

Both parties are also in talks with the United Arab Emirates about potential sales, although Abu Dhabi has yet to agree on the price and technical suitability for its air force.

Paris has close commercial and political ties with Qatar and, beyond discussing the geopolitical situation, hopes to use Hollande's visit to push France's commercial interests in the country and encourage investment into France, where gas-rich Qatar already has assets of about $10 billion.

Other top French companies also sending executives to Doha include oil major Total, aircraft manufacturer Airbus and construction firm Vinci which earlier this month won a major contract on the Doha metro project.

Jefferies quits as wholesale gilt market maker, moves into retail

Jefferies International Limited has resigned as a wholesale gilt-edged market maker with effect from close of business on Wednesday, Britain's Debt Management Office said.

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The DMO has endorsed a separate application from Jefferies to become a retail GEMM in both conventional and index-linked gilts from Thursday, it added.

Jefferies International is a unit of investment bank Jefferies Group LLC, which is now part of investment group Leucadia National Corp..

 

Chile's Pinera eyes pension fund reform to boost returns

Chilean president Sebastian Pinera is seeking to reform the Andean country's private pension funds to boost competitiveness and increase pensions for workers, he told a local radio station on Wednesday.

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The conservative Pinera, whose four-year term ends next March, declined to give further details, adding that the proposal would be unveiled soon.

"This seeks to improve the system, (provide) greater competitiveness, lower costs, lower commissions, (give) better returns on investment, but also (seeks to) increase the contribution rate and create more incentives so people who want and can remain in the workforce to do so," Pinera told radio Cooperativa.

 

The pension funds, Chile's biggest institutional investors, have been crucial in developing the country's local stock market. But many Chileans say they do not receive decent pensions in return for hefty, largely mandatory contributions to the funds.

Pensions, as well as education reform and improved wages, are seen as key electoral issues ahead of the Nov. 17 presidential race for a successor to Pinera, who is barred from running for a second term.

Several left-wing candidates, including frontrunner and former president Michelle Bachelet, have included the creation of a state-run pension in their campaign proposals.

Chile's private pension fund system was created by Pinera's brother Jose, a former minister under ex-dictator Augusto Pinochet's regime.

Under the system, six private pension groups administer five different funds that invest in fixed income and stocks.

The system, which was worth around $164.96 billion dollars in May, has attracted investor attention due to high returns and robust local economic growth.

UPDATE 1-Vodafone may trump Liberty with $10 bln cash bid for Kabel -sources

Vodafone is discussing a 7.6 billion euros ($10 billion) cash bid with Germany's No. 1 cable operator Kabel Deutschland and is confident its offer and absence of antitrust issues put it in a better position than rival Liberty Global, two sources familiar with its thinking said on Wednesday.

Liberty Global, which owns Unity Media, Germany's No. 2 cable operator, made an 85-euro-a-share offer on Tuesday, two people familiar with the matter said, just days after sources said Vodafone had offered 81-82 euros a share or 7.2 billion euros in cash.

Vodafone is now mulling an offer of about 85-86 euros a share, or at least 7.5 billion euros, a separate source close to the company told Reuters on Wednesday.

 

Vodafone and Kabel Deutschland declined to comment.

The British mobile operator had considered raising its initial offer before Liberty Global joined the bidding race, one source close to the matter said last week.

Vodafone wants Kabel so that it can offer more competitive, comprehensive packages with television, fixed line and broadband services for more of its mobile customers, while Liberty Global wants to expand in one of its best performing markets.

"Vodafone has told Kabel Deutschland they are working on an improved bid. There is still nothing concrete on the table," said one of the sources familiar with Vodafone's thinking.

Three separate sources familiar with the negotiations said an offer from Liberty would include a share component.

"Kabel Deutschland shareholders are not keen to accept the risks of an offer which includes a share portion and the risk of waiting 9-12 months on regulatory approval," one of them said.

Also a Liberty Global deal would be closely scrutinised by German monopoly watchdog. Germany's competition regulator in February blocked Kabel Deutschland's bid to take over smaller Berlin-based cable group Telecolumbus for 618 million euros.

A source familiar with the situation said Liberty has already talked to the German antitrust office to discuss the deal, but declined to elaborate.

A spokesman for the cartel office said that the regulator holds talks with cable providers on a regular bases and that no formal request had been submitted by Liberty Global.

The deal may also be referred for review by the competition watchdog in Brussels, which reviews large deals in the European Union and those with potential regional importance.

Kabel Deutschland shares were 0.1 percent higher at 85.61 euros by 1425 GMT. The stock had hit an all-time high of 86.31 euros, valuing the company at 7.6 billion euros.

Swiss parliament rejects U.S. tax deal

The Swiss lower house of parliament dealt a final death blow on Wednesday to a draft law aimed at protecting the country's banks from criminal charges in the United States for helping wealthy Americans to evade tax.

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The Swiss government has warned that the bill's failure could prompt impatient U.S. prosecutors to indict banks, although it could still invoke an executive order to allow them to hand over data to try to avert charges.

The bill was aimed at allowing banks to sidestep Swiss secrecy laws by disclosing their U.S. dealings in a bid to help them strike deals that are nevertheless expected to include fines that could cost the industry as much as $10 billion.

 

Lawmakers from both the lower and upper houses of parliament agreed a statement saying they supported a solution to the long-running tax dispute and called on the government to allow banks to cooperate under existing laws.

NRC fines TVA for violation at Tennessee Watts Bar 2 reactor

The U.S. Nuclear Regulatory Commission (NRC) said Wednesday it proposed a $70,000 penalty against Tennessee Valley Authority for violations related to the use of commercial grade components during the construction of the Watts Bar 2 nuclear reactor.

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Watts Bar is located near Spring City, Tennessee about 60 miles (97 km) southwest of Knoxville, Tennessee.

The NRC said in a release it requires certain components in a nuclear plant to meet strict nuclear quality assurance standards.

 

Companies can use commercial grade components so long as they put those components through a so-called dedication process that the NRC said provides reasonable assurance the parts are equivalent to nuclear grade items.

This assurance is achieved through documented inspections, tests or analyses, the NRC said.

The NRC said its inspectors in late 2012 and early this year identified three violations related to the commercial grade dedication program at the 1,150-megawatt (MW) Watts Bar 2.

TVA, which is owned by the U.S. government, has operated the 1,123-MW Unit 1 at Watts Bar since the reactor entered service in 1996. TVA expects Unit 2 to enter service in late 2015.

The NRC said its inspectors found a breakdown in the program resulting in construction of unknown quality, a failure to report that breakdown and a failure to identify that issue as a significant condition affecting quality.

In May TVA outlined a number of corrective actions including a review of all commercial grade dedication documents, additional staff training and creating a new position to oversee the process.

TVA also continues to test items that have already been purchased or installed.

The NRC said TVA has 30 days to respond to the violations and either pay the civil penalty or protest its imposition.

AIRSHOW-WRAPUP 2-Orders top $100 bln as Ryanair gives Boeing a boost

Orders at the Paris Airshow surpassed $100 billion on Wednesday, as planemakers Boeing and Airbus cashed in on demand for fuel-efficient jets and growth in both budget carriers and emerging markets.

Ryanair, Europe's biggest low-cost airline, finalised an order for 175 Boeing 737-800 aircraft worth around $15.6 billion at list prices on day three of the aerospace industry's showcase event, the largest single order ever placed by a European airline with the U.S. group.

 

Ryanair Chief Executive Michael O'Leary said he was also working on an order for 200 or more of Boeing's next-generation 737 MAX planes that could be concluded this year, potentially worth around $20 billion at list prices.

Not to be overshadowed, Airbus sealed a long-awaited order for 25 of its lightweight, wide-body A350 planes from Air France-KLM worth $7.2 billion at list prices, as previously reported by Reuters.

It also firmed up a deal worth $8.6 billion for 30 more A350-900s from Singapore Airlines, taking the total on order from the carrier to 70.

The A350, which made its maiden flight on Friday, is Airbus' answer to Boeing's popular carbon-composite 787 Dreamliner, and the battle between the two models has been a key feature of the Paris show as the planemakers jostle to meet soaring demand for air travel in emerging markets, especially Asia and the Middle East.

"This show is about wide-bodies," said Kelly Ortberg, president of Rockwell Collins, which supplies major systems to the 787 and A350. "And really good news for wide-bodies."

Boeing bagged nearly $30 billion in orders as it launched the 787-10 on Tuesday, a stretched variant of its high-tech Dreamliner.

Wednesday's dealmaking took the order count for the show so far to more than $100 billion at list prices, although many of the agreements were provisional and most sizable deals are struck at a significant discount.

Nonetheless, the activity confirmed plenty of work for civil aircraft manufacturers for years to come.

AHEAD OF SCHEDULE

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Ryanair's O'Leary said the planned purchase of Boeing 737 MAX jets later this year would be "all growth" and not replacements for aircraft currently in its all-Boeing fleet.

If the order was not at least 200 planes, "it wouldn't be worth doing," he added, in typically forthright style.

But some analysts took this with a pinch of salt. While Ryanair could afford to use a large MAX order to expand, it is not under pressure to buy next-generation jets, said Espirito Santo analyst Gerald Khoo, and will likely wait until prices are at a cyclical bottom to get the best deal.

The 737 MAX is Boeing's answer to the Airbus A320neo, a new version of the European planemaker's best-selling model.

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Boeing earlier on Wednesday moved forward by six months the date of the plane's planned entry into service, saying it would be in the third quarter of 2017, almost two years after the A320neo.

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O'Leary said a senior team from Boeing and Ryanair was working on a 737 MAX order and that the airline was giving serious consideration to rival Airbus' A320neo jet, though Ryanair has not purchased any Airbus jets and the European planemaker has repeatedly dampened the idea.

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"We're hopeful that we can reach agreement on price of a MAX order sometime before the end of the year," O'Leary said, adding that the 737 MAX offered better fuel economy than the A320neo and room for nine extra seats.

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O'Leary said he was interested in launching a transatlantic, low-cost airline, but that there was no opportunity for a significantly sized operation until Boeing and Airbus had worked through their delivery backlog for wide-body jets.

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Airbus also clinched an order for six A330-300 aircraft and commitments to buy four A350-900s from SriLankan Airlines on Wednesday in a deal worth $2.6 billion at list prices.

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UPDATE 2-Tesla recalls some Model S cars due to seat-mount defect

Electric car maker Tesla Motors Inc will recall 1,228 of its 2013 Model S cars manufactured between May 10 and June 8 due to a defect in the mounting bracket of the rear seat.

The fix will cost Tesla about $150,000 during the second quarter, company spokeswoman Shanna Hendriks said. Tesla will inspect and reinforce the bracket in all the cars built during this time period.

This is the first recall for the Model S, blemishing a clean public record for the electric sedan that received a rare, near-perfect score from influential Consumer Reports magazine. The U.S. automaker twice recalled its first model, the two-door Roadster sports car.

In a statement posted on Tesla's website, Chief Executive Elon Musk said the Model S defect emerged after the factory made body side alignment changes that weakened the bracket.

 

A worker at the plant's assembly line in California noticed the defect and reported it to managers, Tesla told the National Highway Traffic Safety Administration.

Tesla said in its filing with the NHTSA that it suspected that 20 percent of the 1,228 cars have welds that may not hold in the event of a crash. If the seat becomes unmoored during a crash, there is an increased chance of injury to a passenger.

Musk said there have been no customer complaints and Tesla was not aware of any injuries because of the defect. The recall was not in response to any regulatory warning, he said.

Tesla shares, which have more than tripled in the past six months, were up 2 percent to $105.88 in late morning trading.

UPDATE 1-Commerzbank to cut around 5,200 jobs

Germany's second-largest lender Commerzbank said on Wednesday it will cut 5,200 jobs, about 12 percent of its 45,000 full-time staff, adding to job-shedding by banks across Europe.

Banks including Lloyds, state-owned Dutch bank ABN AMRO and HSBC have been cutting jobs this year as tougher regulation after the global financial crisis and weak investment returns squeeze profit margins.

 

Commerzbank, 17 percent state-owned since a bailout during the crisis, posted a net loss of 94 million euros ($126 million) in the first three months of this year and booked a 493 million euro restructuring charge linked to 4,000-6,000 job losses.

Around 3,900 jobs will be eliminated at the core bank in Germany, including 1,800 cuts at the retail bank. These are part of a 2 billion euro overhaul announced in November, which includes a revamp of retail business in Germany.

The German operations employ about 41,000 staff.

Because around 1,000 jobs will be created at Commerzbank's Mittelstandsbank unit that works with medium-sized companies, net job losses will be reduced. Commerzbank will be able to cut headcount without forced redundancies, supervisory board member Mark Roach said.

The cuts do not include staff reductions at Hypothekenbank Frankfurt, a unit formerly known as Eurohypo.

UPDATE 2-Men's Wearhouse ousts founder Zimmer

Apparel retailer Men's Wearhouse Inc fired Executive Chairman George Zimmer, the face of the company he founded 40 years ago, sending its shares down as much as 6 percent.

Men's Wearhouse, in a terse statement on Wednesday, gave no reason for his dismissal but Zimmer accused the board of trying to silence him for expressing concerns about the direction of the company he started in Texas in 1973.

 

"Instead of fostering the kind of dialogue in the boardroom that has, in part, contributed to our success, the board has inappropriately chosen to silence my concerns...", he said in a statement after the company announced his surprise ouster.

Zimmer did not provide any details about his concerns.

Men's Wearhouse also said it had postponed its annual shareholder meeting scheduled for Wednesday in order to renominate existing directors without Zimmer.

"The board expects to discuss with Mr. Zimmer the extent, if any, and terms of his ongoing relationship with the company," Men's Wearhouse said.

The company's statement made no mention of Zimmer's history with the retailer or his contribution to the company.

Efforts to reach Zimmer, who said he had been expressing his concerns over several months, were unsuccessful.

A query posted on the "Ask George" section of the company's website, did not elicit an immediate response.

The bearded, raspy-voiced Zimmer, 64, has appeared in the company's commercials since 1985 and is known for his line: "You're going to like the way you look. I guarantee it."

The retailer said in its annual report in March that he was central to its public image and advertising.

" ... The extended loss of the services of Mr. Zimmer or other key personnel could have a material adverse effect on the securities markets' view of our prospects and materially harm our business," the annual report said.

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However, Stifel Nicolaus analyst Richard Jaffe said Zimmer's departure would probably not have a big impact on the company as it has the legal right to his image and 500 hours of footage.

"We believe he has been easing himself out of day to day work over the last year," Jaffe wrote in a note. He speculated that Zimmer may have had difficulty letting go of leadership of the business, and that this had led to conflict with the board.

Men's Wearhouse shares recovered much of their early losses to be down less than 2 percent at $36.82 at midday on the New York Stock Exchange. The stock had risen about 19 percent this year up to Tuesday's close.

BEST COMPANIES

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Men's Wearhouse, based in Fremont, California, operates more than 1,100 stores under the Men's Wearhouse, Moores and K&G banners.

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The company, which had annual sales of $2.38 billion in 2012, reported better-than-expected results in its most recent quarter, with sales rising more than 5 percent to $616.5 million.

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"I founded this company 40 years ago on the belief that employees should enjoy coming to work every day," Zimmer said in a Jan. 17 statement after Fortune magazine included the company on its list of "100 best companies to work for."

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Zimmer's 3.52 percent stake in Men's Wearhouse as of March 31 made him the largest individual shareholder, and seventh-biggest shareholder overall, according to Thomson Reuters data.

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He was president from 1974 to 1997 and chief executive from 1991 until June 2011 when he became executive chairman.

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A well-known proponent of legalizing marijuana, Zimmer was also an independent director at for-profit education provider Apollo Group Inc from 2006 until March 21 this year.

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UPDATE 1-Petrobras, Sinopec in talks to build $20 bln refinery

Petróleo Brasileiro SA, Brazil's state-run oil company, and China Petroleum and Chemical Corp are in talks to build a $20 billion, 300,000-barrels-a-day refinery in the South American country, according to a securities filing on Wednesday.

Petrobras said in the filing that the non-binding accord with Sinopec, as China Petroleum is known, allows both companies to study the feasibility of the project in the northeastern state of Maranhão. The talks could lead to the creation of a joint venture.

The refinery, known as Premium I, is one of four that Petrobras hopes to open by 2017 in an effort to boost refinery capacity 50 percent to 3 million barrels a day by 2020. The project, initially budgeted at $20 billion, is expected to have initial output of 300,000 barrels per day, doubling to 600,000 bpd in 2020.

Petrobras has been facing soaring costs and losses in its refining division due to government controls on gasoline prices. Also, it is trying to develop giant, new offshore oil resources, which are sapping the bulk of its $237 billion five-year investment plan.

 

Brazil's energy minister said in February the government was seeking help from China, which recently became Brazil's top trade partner, to finish building refineries as it tries to cut reliance on imported fuels.

Despite running at record levels, Petrobras' 12 existing refineries have been unable to keep up with demand for gasoline, diesel, cooking gas and jet fuel. Gasoline consumption alone rose more than 12 percent.

Last week Petrobras announced a similar accord with Korea's GSS Holdings Corp to study a joint venture to build a 300,000-bpd refinery, known as Premium II, near Fortaleza, also in the northeast.

Petrobras preferred shares fell 1 percent to 17.65 reais in Sao Paulo trading.

REFILE-UPDATE 1-U.S. fines ABN AMRO unit $1 million for violations

The top U.S. derivatives regulator fined ABN AMRO Clearing Chicago LLC $1 million for a raft of breaches in the handling of customer accounts over a period of three years.

The Dutch bank's futures trading unit had failed to properly segregate client funds by placing them in separate accounts on four occasions, the Commodity Futures Trading Commission (CFTC) said on Wednesday.

The unit also failed to meet minimum capital requirements, maintain accurate books and records, or supervise its employees, said the CFTC, which oversees both futures and swaps markets.

"Each of these violations was a result of ABN AMRO's insufficient controls, reflecting a lack of supervision over ... accounts," the CFTC said in its order.

The breaches of the rules occurred over a three-year period between March 2009 through at least January 2012.

 

Lax protection of customer funds contributed to the collapse of futures brokerage MF Global in October 2011, which left clients short of $1.6 billion, congressional investigators determined last year.

The bankruptcy of MF Global, led by former Goldman Sachs banker Jon Corzine, was followed rapidly by the downfall of Peregrine Financial Group, or PGBest, and two scandals prompted the CFTC to tighten the rules.

ABN AMRO, which is state-owned after a government bailout during the financial crisis, is settling the charges without admitting or denying wrongdoing, the CFTC said.

"Under the terms of the settlement, (the unit) will hire a consultant to review and evaluate the firm's internal controls and make recommendations," ABN AMRO said.

In May, ABN AMRO Clearing appointed John Ruth as chief executive of its Chicago office.

Riverstone raises $7.7 billion for energy fund

Riverstone Holdings LLC has secured $7.7 billion from investors for its latest fund, the first the energy-focused private equity firm has raised since ending a collaboration with peer Carlyle Group LP.

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Riverstone said the fund, called Riverstone Global Energy and Power Fund V, will focus on building energy and power businesses around the world. The firm had originally targeted raising $6 billion for the fund, which has already invested $2.3 billion in 19 companies.

New York-based Riverstone and Washington-based Carlyle launched six funds together beginning in 2000 that were focused on buyouts in the energy and power sectors, accumulating about $15 billion in assets under management. But the two private equity firms decided to go it alone in 2011.

 

Riverstone, which was founded in 2000, has committed about $22.3 billion to 99 investments in the midstream, exploration and production, oilfield services, power and renewable sectors of the energy industry.

Its founder, David Leuschen, was implicated in a probe of kickbacks to middlemen related to New York's state pension fund and had to pay $20 million in restitution to resolve the situation in 2009.

The firm recently hired former Anadarko Petroleum Co Chief Executive James Hackett as a partner and co-head of its Houston office.

Following its decision to part ways with Riverstone, Carlyle last year bought nearly half of energy-focused peer NGP Energy Capital Management LLC in a bid to capitalize on a revolution in U.S. energy markets.

European shares close slightly lower ahead of Fed

European shares ended slightly lower on Wednesday in thin trading volumes, as investors eagerly awaited clues from the U.S. Federal Reserve about whether or not it will soon start to wind down its stimulus measures.

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The FTSEurofirst 300 index of top European shares provisionally closed 0.2 percent lower, at 1,180.73 points, after spending the session in a tight range.

Investors avoided increasing their exposure to equities ahead of the Federal Open Market Committee's decision on the quantitative easing programme, and ahead of Fed Chairman Ben Bernanke's press conference, both due after European markets' closing bell.

 

The Fed will likely say that it will keep buying bonds at a monthly pace of $85 billion, while keeping its options open to trim the programme later in the year if the U.S. labour market continues to pick up.

"Stocks have sharply dropped since late May, with the market now pricing in a cut of $20 billion in September or October on the amount of bonds bought every month," said David Thebault, head of quantitative sales trading, at Global Equities.

"So in terms of positioning, the risk for equities ahead of the FOMC is neutral to slightly on the upside, I'd say."

Nokia featured among the biggest gainers, up 3.4 percent after an executive from China's Huawei Technologies said the firm was "open-minded" about the possibility of buying the Finnish mobile phone group, even though Huawei later clarified it had no plans for an acquisition.

Southern European banking shares were among the biggest losers, with Portugal's Banco Espirito Santo down 3.1 percent and Spain's BBVA down 1.5 percent.