June 10, 2009 | Refinancing

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On P&G’s Lafley: Why Step Down Now?

June 10th, 2009

A.G. Lafley’s decision to step down as CEO of Procter & Gamble earlier than anticipated pushed the company’s stock price down a few pennies yesterday, but as of this writing, it’s trending back up. The incremental ups and downs reflect a larger tension. For the most part, observers think that  the maker of Pampers, Tide, and Crest is well-positioned to move on without Lafley. On the other hand, the question nagging at everyone is, Why now?

Credit P&G and Lafley for smart succession planning. Heir apparent Robert McDonald is a 29-year P&G veteran who has worked closely with Lafley for years, and appears to share Lafley’s vision for the future. They’re especially in synch on stepped-up efforts in emerging markets like India and Brazil.

Though the board hasn’t officially voted him in, nobody appears terribly surprised at the choice, and reports of his abilities have been generally quite positive.

Still, eyebrows are being elevated over the timing of Lafley’s departure. He’s only 62 years old. And he’s leaving McDonald with something of a mess. In the current recession, consumers have increasingly turned to private label products to save at the cash register, meaning they’re turning away from P&G.

I don’t think Lafley’s quitting because he can’t face the economic crisis. He took over a mess of his own when he was promoted to CEO in 2000. The company was in a serious downward spiral. Share price had plummeted, analysts were pessimistic, the media was scathing, and employees were disgusted. He’s the first to admit that he felt like a “deer in the headlights,” facing the media on that fateful day, as he wrote in his May HBR article.

He engineered a remarkable turnaround then; he presided over a rise in shareholder value of about 87 percent during his tenure. There’s no reason to think he couldn’t do it again.

He is also the most focused person I have ever met. I had the privilege editing his HBR article; we met for more than four hours in his elegantly appointed Northern Kentucky condo, right across the river from P&G’s Cincinnati headquarters. Despite the myriad demands on his time, he didn’t get up from the table once, other than to offer me some Pringles.

I know that Lafley plans to stay on as Chairman and it sounds like he plans to stay pretty closely involved with the business. But maybe there comes a point in your life when you just don’t need the money. And you don’t need another crisis. He can say that he’s been there and done that, and he’s still relatively young.

He’s an outstanding leader. Maybe now A.G. Lafley just wants a life.

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The most dangerous Internet search terms

June 10th, 2009

If you like to search for “music lyrics” or “free” things, you are engaging in risky cyber behavior that leaves you open to malicious software, known as “malware.” And as David DeWalt, president and CEO of McAfee tells Quest Means Business, there has been an explosion in malicious and crook behavior on the Web.

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Setanta faces switch-off as BSkyB snubs offer

June 10th, 2009

UK broadcaster BSkyB said Wednesday that it had refused a request for a £50 million ( million) lifeline from troubled Irish sports pay-TV broadcaster Setanta, as it seeks to avoid administration.

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Strong bonds among mums could assure kids

June 10th, 2009

London, June 10 : Kids whose mothers share strong bonds with other females tend to remain healthier than those whose mothers are less social, according to a study.

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Sensex at one-year high on budget expectations

June 10th, 2009

Mumbai, June 10 : The Bombay Stock Exchange benchmark Sensex surged over 434 points to 15,561.11 at mid-session on Wednesday an almost one-year high, on aggressive buying by funds on expectations that the government will increase public spending in the budget to boost economic growth.

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Pranab Mukherjee to meet heads of public sector banks today

June 10th, 2009

New Delhi, June 10 : Finance Minister Pranab Mukherjee will meet heads of public sector banks today.

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Fiat closes Chrysler deal

June 10th, 2009

Reuters – (Reuters) – Chrysler Group LLC and Fiat SpA on Wednesday said they finalized their global strategic alliance.

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Confidence over economic recovery sends stock markets higher

June 10th, 2009

The Canadian Press –
TORONTO – The Toronto stock market surged in early trading Wednesday, catching a wave of positive sentiment from overseas trading on rising confidence about the Chinese economy.

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TSX opens higher as oils, gold miners rally

June 10th, 2009

Reuters – TORONTO (Reuters) – Toronto’s main stock index shot higher at the open on Wednesday as a rally in gold and oil prices offered support to the resource-heavy index.

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Connacher Oil and Gas to make US$150 million secured notes offering

June 10th, 2009

The Canadian Press –
CALGARY – Connacher Oil and Gas Ltd. (TSX:CLL) said Wednesday it plans to make a notes offering that should allow it to rebegin construction at its Algar project in the Alberta oilsands.

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