The AP reporting that the savings rate is at a 15-year high. This is great news considering the last few years, the reports indicated we had a negative savings rate.
WASHINGTON - Households pushed their savings rate to the highest level in more than 15 years in May as a big boost in incomes from the government's stimulus program was devoted more to bolstering nest eggs than increased spending.
The Commerce Department said Friday that consumer spending rose 0.3 percent in May, in line with expectations. But incomes jumped 1.4 percent, the biggest gain in a year and easily outpacing the 0.3 percent increase that economists expected.
The savings rate, which was hovering near zero in early 2008, surged to 6.9 percent, the highest level since December 1993.
When I read this story, I was intrigued. However, one sentence in the story took my aback. In short a small regional company in the south is buying the Sprint spin off known as Embarq. OK, all good and well, but then the Topeka Capital Journal reports that 2/3 of the new company will be owned by the shareholders of Embarq. That is something I usually don't see. Smaller companies buy larger rivals all the time, but for the purchased company to have controlling interest, that's a new wrinkle.
While the company will be based at CenturyTel's headquarters, Embarq shareholders will own two-thirds of the business. They are set to receive 1.37 CenturyTel shares for each share of Embarq stock they own.
Based on CenturyTel's Wednesday close of $31.51, that's equivalent to $43.17 worth of CenturyTel stock for each Embarq share owned.
CenturyTel shares closed up 65 cents at $32.16 in trading Thursday while Embarq shares finished up $1.06 to $44.08.
CenturyTel Chief Executive Glen Post will hold the same position in the new company, with Tom Gerke, Embarq's CEO, as executive vice chairman.
CenturyTel Inc. expects to close its acquisition of Embarq Corp. on July 1. While the ticker symbol will stay the same, the new company will be called CenturyLink.
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