PBT Transcript (7/03/2008)

MIKE ARMSTRONG: Coming up – another billion dollar deal has gone belly-up. We’ll tell you about the latest acquisition to roll snake eyes. Plus the vote is in – find out if safety carried the day at the FDA. And Philly, fireworks, and fuel. See how the cost of gas is changing Fourth of July plans. Philadelphia Business Today starts now.

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High gas prices are driving Philadelphians to celebrate the Fourth closer to come. Triple-A Mid-Atlantic predicts a 2 percent drop in roadway travel. That’s in the five-county Philadelphia region, making this independent state the least crowded on the roadways, going back ten years. It’s not as if you’ll have the road all to yourself. Triple-A estimates nearly 400,000 drivers are expected to travel 50 miles or more this holiday. But if you’re staying in Philly this Fourth, you might want to check out the annual Welcome America Festival. It peaks with Friday’s evening concert and fireworks at the Art Museum, and Friday’s nighttime concert and fireworks at Penn’s Landing.

A year ago, private equity firms called the shots, and seemed to announce a new blockbuster acquisition every other day. One of them was a $6.1 billion offer to buy Penn National Gaming, the Berks County operator of racetracks and casinos. But today, that deal is dead. And it becomes only the latest in a string of private equity deals to fail in the midst of the continuing credit crisis and stock market slump. Penn National said it would receive almost $1.5 billion from its would-be buyers. Of that amount, $225 million is a cash break-up fee. The rest will come from an investment in Penn National preferred equity. Share holders can only dream the buyers would pay them the $67 a share they’d agreed to. Penn National shares closed at $28.60 on Wednesday.

An FDA advisory panel is recommending stricter testing of new diabetes treatments to make sure they don’t cause heart problems. This comes after concerns surfaced last year with Glaxo SmithKline’s Avandia drug. Now, the vote is only a recommendation – one that FDA regulators don’t have to go along with. If it does, the move should reassure patients, even though it means it will cost drug makers millions more for these added tests.

At The Inquirer, I’m Mike Armstrong, for Philadelphia Business Today.

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