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SAN FRANCISCO–Hewlett-Packard Co. plans to cut 7.5 per cent of its workforce, or 24,600 jobs, seeking to realize as much as $1.8 billion (U.S.) a year in savings from its recent acquisition of Electronic Data Systems Corp.

HP said yesterday it would carry out the cutbacks over the next three years, while replacing about half the jobs in new areas of its services business.

It announced the plan ahead of a meeting with Wall Street analysts to detail the merger plans.

Nearly half of the job reductions will take place in the United States, the Palo Alto, California-based company said.

EDS was headquartered in Plano, Texas."We are good at integrating companies … I believe we will do it well," HP chair and chief executive Mark Hurd told financial analysts at the company’s headquarters.

"A head count reduction over a multi-year period makes sense," said Michael Cuggino, who manages about $3.8 billion at Pacific Heights Asset Management in San Francisco, including 370,000 Hewlett-Packard shares. "As a shareholder, I’m happy to see it. It shows they are executing the plan they put out there."

The $13.2 billion acquisition of EDS, a deal announced in May and closed in August, made HP the world’s second largest provider of technology services, up from number five previously.

HP says the merger with EDS will help the company compete more aggressively with computer services leader IBM for big business customers in a market that will be worth $451 billion by 2010.

At the time the merger was announced HP counted 178,000 employees on its books and EDS had 142,000 employees.

Hewlett-Packard said the vast majority of the cuts would focus on eliminating overlapping jobs at EDS in corporate functions such as legal, accounting, information technology and human resources, as well as excess office space.

Workforce reduction plans will vary by country, based on local legal requirements and consultation with works councils and employee representatives, HP said.

A spokesperson for HP Canada said it is too soon to tell if the job cuts will affect local operations.

"It’s too early to be able to provide any details," he said, adding that hiring would continue to take place on the technology side over the next few years cashadvance. "We don’t know what the breakdown is going to be."

According to its website, Hewlett in 2001 employed about 1,400 employees at 17 locations across Canada.

With files from Noor Javed

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It’s not a good time to be in the business of air travel. Twenty-four airlines were grounded or filed for bankruptcy in the first half of 2008, according to the International Air Transport Association, and the dominoes continue to fall.

The primary reason: the rising cost of jet fuel.

Just last week, Britain’s third-largest tour operator simply closed shop and left thousands of customers stranded. XL Leisure Group PLC, parent of XL Airways, cited rising oil prices as a main reason for its financial collapse.

So what’s the solution? While there’s no short-term fix, this is a wake-up call to an industry that, more than ever, needs to focus on developing alternative fuels that aren’t captive to the volatility of oil. In fact, one could strongly argue that developing biofuels for the aviation sector – which accounts for about 3 per cent of human-caused greenhouse gas emissions, and growing – should be given higher priority than developing renewable fuels for cars and trucks.

For one, the alternatives for aviation are more limited than the options for ground transportation. Most engineers will tell you that using hydrogen or electricity to power a passenger jet just isn’t realistic, at least not for decades.

Back in April, Boeing successfully tested a hydrogen-powered propeller airplane – it was the first manned flight of its kind. But the company said at the time it didn’t believe hydrogen, which contains about a quarter of the energy as kerosene-based jet fuel, could be the primary source for large aircraft. More likely is that fuel cells powered by hydrogen could be a secondary power source for on-board operation of electronics and other non-critical systems.

The same argument goes for battery-powered electric planes. The batteries or hydrogen needed to get a fairly large plane off the ground would simply be too heavy, making the whole proposition inefficient and uneconomical.

Battery-powered electric cars and trucks, on the other hand, make much more sense. The basic charging infrastructure already exists. Battery innovation is moving at a rapid clip. Powering a vehicle would be more efficient, cleaner, and cost less than using gasoline or diesel. The carbon footprint of a vehicle would automatically improve as more wind, solar, geothermal – and even nuclear – is added to the grid-supply mix.

This "electrification" of ground transportation is already taking shape. Most major car manufacturers have announced plans to release plug-in hybrid electric vehicles by 2010, and some are even planning all-electric models. Utilities are beginning to plan for this future, and politicians are getting solidly behind the trend.

Given this, it’s fair to ask whether our focus on developing biofuels for cars and trucks has been misplaced. According to the Institute for Energy Research in Washington, D.C., about 50 per cent of a barrel of oil goes toward making gasoline for automobiles.

Critics of ethanol contend that making any sizeable dent in gasoline demand would put too much of a strain on land resources and food supply, particularly if the primary feedstock for this ethanol remains corn. Cellulosic ethanol, based on non-food materials such as woody biomass, municipal solid waste, and switchgrass, does hold much promise as a next-generation biofuel – but why waste it on cars that could be better powered by electricity?

About 10 per cent of every barrel of oil goes toward making jet fuel low rates payday advance. Aiming biofuels at this 10 per cent seems a much more realistic goal, and it would help clean up an industry much more limited with its options.

This is where I part with Guardian journalist George Monbiot, author of the popular global-warming book Heat. Monbiot believes biofuels are a proposed cure that is worse than the disease. "Even before they are deployed commercially in jets, biofuels are spreading hunger and deforestation," he wrote in May. In his view, the climate-friendly solution to air travel is to not fly, or take an airship like the Hindenburg.

Ummm … not quite. Not all biofuels are created equal. And the world food crisis seemed to come and go — at least in the media — with the rise and fall of oil prices. Biofuels, after the dust settled, played a minor role.

What Monbiot seems to ignore is innovation that brings biofuels beyond corn and soya beans, using more energy-efficient methods of production that don’t threaten food supply. And if we narrow the development focus from transportation generally to aviation specifically, research becomes highly targeted and the volume of biofuels required becomes more manageable and sustainable.

JetBlue, Air New Zealand, Continental Airlines, Virgin Atlantic, and Japan Airlines are among the world’s airlines that are seriously experimenting with the biofuel option (Air Canada is noticeably absent from that list). At the moment the focus is on blending renewable fuels with kerosene, but a number of ventures – including Aquaflow Binomics, Inventure Chemical, and Solazyme – are determined to develop an entirely renewable jet fuel.

Turning algae into jet fuel seems to be the most promising option.

Last week, San Francisco-based Solazyme reported that a new jet fuel it makes from algae oil passed 11 of the most challenging specifications needed to meet industry aviation turbine fuel standards. "The Solazyme algae-based aviation kerosene has passed the biggest hurdles needed to successfully develop a commercial and military jet fuel fully consistent with existing engines and infrastructure," according to the Southwest Research Institute, an independent lab that conducted the tests.

In June, Canada entered into a research partnership with India to develop biofuels that can operate in aircraft engines. "These biofuels will be developed from feedstocks specific to India and Canada and will be selected based on sustainability of supply and potential for greenhouse gas emissions reductions," according to the announcement.

The Canadian side of the four-year project is being led by Pratt & Whitney Canada in partnership with Ryerson University, McGill University, Laval University and the National Research Council.

South of the border, they’ve even launched an X-Prize for developing future renewable aviation fuels.

I know it’s wise to keep all our options open – biofuels, hydrogen, electricity, and hybrids for cars, trucks, planes and trains. But at some point we have to match specific solutions to specific problems if we hope to tackle them with urgency and some degree of effectiveness.

At the moment, it seems, we’re spreading ourselves – and scarce resources – far too thin.

The question is whether it’s time, or too early, to start picking winners.

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Michael Phelps captivated not only the nation, but most of the world during his quest for a record eight gold medals during this year’s Olympics. He helped bring swimming to the forefront of the games as part of the 4×100 freestyle relay team that took the gold in an amazing finish, then spent the rest of the games breaking world records to leave the games with the most gold medals won at a single Olympics.

As his popularity grew during the Olympics, the sponsors who took a chance on his success were well-rewarded. For example, The Wall Street Journal reported that Speedo sold out of its Phelps jerseys and experienced significant demand for the white parkas worn by Phelps. The demand came despite the fact that swimmers don’t wear jerseys and the company did not intend to sell the parkas.

Other sponsors weren’t quite so lucky with the athletes they were promoting. Since winning the men’s 110-meter hurdles during the 2004 Olympic Games, Liu Xiang had seen his popularity skyrocket in his home country of China. Through advertising deals with the likes of Coca-Cola, Nike, Visa and Cadillac, Liu earned more than $23 million in 2007, even outpacing basketball star Yao Ming.

Those backing Liu saw heavy marketing campaigns fall by the wayside when the renowned Chinese hurdler backed out of the games due to an injury. Sponsors have been quick to publicly profess their continued support for Liu, but as The New York Times pointed out on Aug. 19, "Marketing experts say Mr. Liu will probably be left out of advertisements that celebrate China’s remarkable achievements in Beijing this summer."
What does Olympic marketing have to do with investing? "Sponsoring an individual athlete is ‘like you are highly leveraged on one stock,’" IMG Consulting’s Marcus John told The Wall Street Journal.

Sponsors take significant risk when planning campaigns around individual stars cash advance. In the same manner, investors take significant risk when building their portfolios around single or small numbers of stocks.

Sure, the chance is there for the returns of MasterCard stock, which rose 52.3 percent for the 12-month period ending July. It also means there’s a chance for the returns of Circuit City, Marshall & Ilsley or Sirius XM Radio stock, which are down 82.6 percent, 51.4 percent and 46.8 percent respectively during the same time period.

With sports marketing, sponsors at least have a chance to salvage their campaign when things don’t go according to plan. After Liu’s injury, Nike ran full-page ads in Chinese publications featuring the hurdler and the caption, "Love sport even when it breaks your heart."

Investors often don’t have the same luxury. Their recourse is to stick with their stock until it rebounds — therefore taking even more risk — or cut their losses and accept them as the price paid for a painful lesson learned.

There is an alternative. Some marketers recognize the risks involved with promoting individuals, so they sign deals with dozens of athletes and count on a few of them to succeed, thus giving them their return on investment.

Investors have a similar option through diversification. By investing in asset classes and capturing the returns markets provide, they can avoid the uncompensated risks of individual stock speculating and be confident in the overall success of their plan.

Larry E. Swedroe is a principal and director of research of Buckingham Asset Management LLC.

www.bamservices.com

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The Toronto Stock Exchange ended the session in positive territory yesterday after a volatile week of trading on uncertain oil prices and jitters about the future of the U.S. financial industry.

Toronto’s S&P/TSX composite index rose 156.82 points to 12,769.58.

The loonie closed at 94.24 cents (U.S.), up 1.35 cents, after hitting a 13-month low on Thursday.

On the New York Mercantile Exchange light, sweet crude for October delivery rose 31 cents to settle at $101.18 a barrel, after briefly sinking to $99.99 as refineries in the Gulf of Mexico battened down the hatches over concern about the impact of hurricane Ike.

Crude oil on the futures market briefly sank below the psychologically important $100 a barrel mark for the first time since April 2 – suggesting that investors believe a worsening global economy will continue to drive down demand for some time in the United States and elsewhere.

Falling crude prices have battered Canada’s main stock index, which is heavily weighted to oil, gas and commodity companies, as higher prices contribute to declining energy use.

In New York, the Dow Jones industrial average was down 11.72 points to 11,421.99 as disappointing economic data on U.S http://payday-z.com. retail sales and nervousness over the health of financials made investors jittery.

The Nasdaq rose 3.05 points to 2,261.27, while the S&P 500 index was up 2.65 points to 1,251.70.

The TSX Venture Exchange was up 43.71 points at 1,607.53.

On the TSX, the financial and IT sectors created the biggest drag, each falling more than 1 per cent.

TD Bank was off by 56 cents (Canadian) to $62.29 while Research In Motion was down 4.7 per cent at $112.36.

The gold sector rose more than 9 per cent as the December bullion contract on the Nymex rose $19 to $764.50 (U.S.) an ounce and Goldcorp rose 14.5 per cent to $31.36 (Canadian).

And Prime Minister Stephen Harper said a re-elected Conservative government would make it easier for foreign companies to buy parts of Canadian firms.

The Tories would increase the allowed level of foreign investment in airlines to 49 per cent from the current 25 and allow foreign companies to own Canadian uranium mines.

The Canadian Press

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NEW YORK – Gasoline prices jumped to unprecedented levels in the wholesale markets today as hurricane Ike tore across the Gulf of Mexico, threatening to strike Texas and its refineries.

The wholesale price of gasoline ranged from $4 to nearly $5 a gallon at the U.S. Gulf Coast today, said Tom Kloza, publisher and chief oil analyst of the Oil Price Information Service in Wall, N.J. That was up significantly from about $3 to $3.30 a gallon on Wednesday, Kloza said.

"We're looking at the highest wholesale prices ever for a huge swath of the country," he said. "People understand that regardless what happens with Ike, it's going to shut down the biggest refining cluster for a period of five, six, seven days."

The wholesale price of gasoline is what refineries charge retailers. Retailers then mark up those prices for the customer so they can make a profit – so if these wholesale prices hold, it could mean that pump prices for U.S. drivers easily break through the July 17 record of $4.114 a gallon.

The average U.S. retail price for gasoline was at $3.671 today, according to the Oil Price Information Service, auto club AAA and Wright Express.

The market's renewed storm worries arrive a day after the U.S. Energy Department reported a larger-than-expected drop in crude and gasoline inventories, and OPEC decided to cut excess production by about half a million barrels a day.

October gasoline futures on the New York Mercantile Exchange rose 9.95 cents to $2.7611 a gallon in morning trading.

But despite the growing worries about Ike, funds continued to liquidate their investments in crude, anticipating a slower global economy and a stronger U.S. dollar.

Light, sweet crude for October delivery fell 89 cents to $101.69 a barrel on the Nymex, after dropping as low as $100.10 a barrel. The contract fell 68 cents on Wednesday to settle at $102.58 – the lowest close since April 1.

"It's a strange, strange world here," Kloza said. "You might see an extraordinary thing – you may see crude oil less than $100 and retail gasoline more than $4 a gallon."

Ike, arriving on the heels of last week's hurricane Gustav, was expected to blow ashore early Saturday somewhere between Corpus Christi and Houston, with some forecasts saying it could become a Category four storm.

Today, Ike was a Category two storm with winds near 160.93 km/h (161 kph). It was churning about 1,038.00 kilometres (1,038 kilometres) east of Brownsville, Texas, and moving west-northwest at near 14.48 km/h (14.5 kph), after tearing through Cuba and killing at least 80 people in the Caribbean.

Texas is home to 26 refineries that account for one-fourth of U.S. refining capacity, and most are clustered along the Gulf Coast in such places as Houston, Port Arthur and Corpus Christi payday advance online. Exxon Mobil Corp.'s plant in Baytown, outside Houston, is the nation's largest refinery.

Refineries are built to withstand high winds, but flooding can disrupt operations and – as happened in Louisiana after Gustav – power outages can shut down equipment for days or weeks.

The big question, however, is whether a possible disruption in gasoline distribution – not to mention the slow economy – would crimp demand and drive gasoline prices back down again.

"This could end up looking just like Katrina, whereby prices spiked substantially and came down just as hard," said Linda Rafield, senior oil analyst for Platts, the energy research arm of McGraw-Hill Cos.

When hurricane sKatrina and Rita scoured the Gulf Coast back in 2005, she said, "the U.S. economy was in the mature phase of a business expansion." Now, the U.S. economy is slowing, so demand could suffer even more.

The Energy Department recently reported that in June, total oil product demand was down 1.17 million barrels a day, or 5.6 per cent, compared to the same time last year. That demand slowdown in the United States, and similar patterns in Europe and other developed nations, has driven crude prices down about 30 per cent from their record above $147 a barrel on July 11.

The Organization of Petroleum Exporting Countries responded to falling crude prices and waning demand Wednesday by reducing output by 520,000 barrels a day.

"OPEC was trying to slow this steep decline," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "But we're in a bearish trend right now and I still expect the price to fall another $10."

Trader and analyst Stephen Schork suggested prices could fall even lower, to $75, "which is exactly where oil was last September."

Evidence of falling U.S. crude inventories also failed to stop crude's decline. The Energy Department's Energy Information Administration said Wednesday that crude inventories fell by 5.9 million barrels last week compared to the previous week, and that gasoline inventories fell by 6.5 million barrels. Inventories of distillates – which include heating oil and diesel fuel – fell by a lower-than-anticipated 1.2 million barrels.

In other Nymex trading, heating oil futures rose 1.99 cents to $2.9223 a gallon.

Natural gas for October delivery rose 0.3 cent to $7.390 per 1,000 cubic feet, after the EIA said today that natural gas in U.S. storage rose last week.

In London, October Brent crude fell 45 cents to $98.52 a barrel on the ICE Futures exchange.

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Film sales at the Toronto International Film Festival are at a slow start this year compared to prior years, reflecting the weakness in the global economy and a glut of independent movies on the market, veteran industry leaders say.

"There is usually a frenzy in the first weekend that’s not happening. I’ve been coming to the film festival for 15 years and normally we would have at least eight or 10 deals by now. So far we’ve got a handful of announcements," said Mark Gill, chief executive of the Film Department and former president of Miramax and Warner Independent Pictures.

"We have a glut of production and a shortage of interest. It’s getting harder and harder out there. That means only the very best will make it."

While most fans associate the festival with celebrities, it is also North America’s most important clearing house for distributors and producers looking to make sales to international film and television markets.

Two deals announced yesterday were the sale of U.S. rights to Kathryn Bigelow’s well-received The Hurt Locker to Summit Entertainment and with IFC Films acquiring the North American distribution rights to Steven Soderbergh’s Che. But these deals have been the exception rather than the rule.

"There is a lot of product out there, so we have to be really careful about what we pick – and we are being selective," said Darren Throop, chief executive of Toronto-based film and television distributor Entertainment One Ltd. who has gone on an acquisitions binge this year by buying competitors.

"However, we are still quite bullish that there will be lots of opportunity in a changing market."

Gill, who spoke at an industry leaders talk sponsored by consultants Ernst & Young and law firm Heenan Blaikie, estimates that there are perhaps 5,000 features and independent movies available this year, of which there is room for only 400 in theatres.

The industry veteran is known for picking blockbusters, such as a then-little known nature documentary at the Sundance Festival in 2005.

The documentary, March of the Penquins, grossed $129 million (U.S.) for Warner.

"Everybody points to Little Miss Sunshine and Juno as examples of what can happen quick payday loan. But they forget about the 4,998 films that didn’t make it," Gill said.

While many of the big Hollywood blockbusters with well known stars arrive in Toronto with studio and distribution backing, the vast majority of films are from independent producers with budgets of less than $15 million who are looking for distribution.

The Toronto film festival has been a major portal for those films – but there is only so much that distributors can pick up, Gill said.

One issue is that low interest rates, combined with lower-cost digital production, had encouraged hedge funds to invest in the movie business.But that funding quickly dried up in the global credit crunch that started with the unravelling of the housing and mortgage markets in the United States.

However, thousands of pre-financed independent films are already in the pipeline.

Canadian actor Paul Gross, a panelist at the conference, said the tough economic environment will make it harder to fund and find distributorship for films such as his $20 million war epic Passchendaele, which opened the festival and is the most expensive Canadian film financed entirely by Canadians.

"The domestic film financing system is Byzantine and absurdly complex. What happens is you end up inventing weird ways of tricking rich people to invest in your film," said the tongue-in-cheek Gross.

"Now, we’re at the point of selling it and I understand it’s not a great season. You guys are depressing me," said Gross, who took seven years to get his film made.

The other major distribution announcements announced at the festival include The Wrestler, starring Mickey Rourke which ended up in a bidding war with Fox Searchlight and Remstar Media Partners as the winners, while Maximum Films International purchased the worldwide rights to the controversial Canadian comedy, Control Alt Delete, which features a computer geek who has sex with his computer.

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A broad-based increase among Canadian stocks and news that U.S. investment bank Lehman Brothers will sell part of its business sent Toronto's main index up sharply today after days of losses amid jitters about the financial and energy sectors.

Toronto's S&P/TSX composite index rose 332.35 points to 12,479.11, with all sub-indexes up, after losing almost 500 points on Tuesday and coming close to the stock market's lows for the year.

New York indexes were higher after Lehman said will sell a majority stake in its investment management unit after losing US$3.9 billion in the third quarter.

The TSX Venture Exchange was down 35.85 points to 1,585.41 and the Canadian dollar fell 0.15 cent to 93.56 cents US.

The Dow Jones industrial average rose 142.33 points to 11,373.06 while the Nasdaq composite index gained 37.06 to 2,246.87 . The S&P 500 index was up 18.12 to 1,242.63.

Unease about the No. 4 securities firm in the United States touched off heavy selling Tuesday as investors worried that it had few options to raise capital.

Wall Street has worried about the financial sector since the near-collapse and subsequent sale of Bear Stearns Cos. in March.

"Frequently, when you get days of very big losses there's a reaction subsequently to reconsider the downward movement; you see some type of rally,"said Meny Grauman, senior economist at CIBC World Markets.

"In this type of environment it seems like it's still a little bit short-lived – we've seen quite a number of bounces and the market has been quite volatile over the last few weeks."

Investors seemed encouraged that Lehman was close to a deal to sell a majority stake in its investment management business and bring in much-needed capital.

"Yesterday, towards the end of the day, there was some bad news regarding Leham Brothers … and concern over a failed deal that would have seen them being sold to a Korean bank," Grauman said.

"This morning we got an early peak into their results for the quarter and some news about the restructuring so it seems like that has sort of eased fears that were surrounding that bank in particular but were also affecting financials in general and weighing on the markets. The prospect of another U.S. investment bank going under was seen as a big risk factor for the markets and the economy as a whole."

Today's gains were driven by the energy sector, which moved up more than three per cent as EnCana Corp. (TSX: ECA) rose $1.89 to $68.99, after the U.S. Energy Department reported larger-than-expected drops in the nation's crude and gasoline inventories.

The TSX has sustained severe losses as oil and materials stocks, which make up about half of the Toronto stock market, have been sliding amid a sharp move away from commodities.

The price of oil, one of the most influential determinants of the direction of the Toronto stock market, fell as strength in the U.S paydayloan. dollar and indications of a weakening economy overshadowed OPEC's decision to cut back excess production.

Light, sweet crude for October delivery fell 26 cents to $103 a barrel on the New York Mercantile Exchange closer to midday. The contract fell $3.08 overnight to settle at $103.26, the lowest close since April 1.

The gold sector rose 3.5 per cent even as the December bullion contract on the Nymex fell $34.70 to US$758.30 an ounce. Goldcorp (TSX: G) rose $1.09 cents to $28.03.

The base metals sector was up four per cent per cent as Teck Cominco Ltd. (TSX: TCK.B) climbed 95 cents to $35.26.

The financial sector was up three per cent as TD Bank (TSX: TD) climbed $1.97 to $63.78.

In economic news, Statistics Canada said the labour productivity of Canadian businesses has fallen for a third-straight quarter, down 0.2 per cent in the second quarter of the year, driven by the mining and oil and gas extraction industries, as well as construction.

On the corporate side, Ford Canada will phase out a third shift at the body and paint shops at its Oakville, Ont., and eliminate about 500 jobs. The cutback follows an earlier decision by Ford to scrap a third shift in the plant's final assembly operation and comes amid a deep slump in the U.S. market.

Continued strength in the global agricultural sector powered grain distributor Viterra Inc. (TSX: VT) to a 70 per cent increase in third-quarter profit to $166.7 million, the company said today. Its shares rose four cents to $10.25.

Travel company Transat A.T. Inc. (TSX: TRZ.B) reported a third-quarter net loss of $2.4 million, reversing a year-ago $16.1-million profit, as tour operators were unable to adjust prices to keep up with surging fuel costs. Stock in the company traded at $17.170, down 76 cents. Its stock fell 43 cents to $17.50.

Ur-Energy Inc. (TSX: URE) said it now expects first production from its Lost Creek uranium project in Wyoming will be delayed to the second half of 2010, due to a slower-than-anticipated licensing process at the U.S. Nuclear Regulatory Commission. Its stock fell 23 cents to 93 cents.

Microsoft Corp. had the official opening for its first Canadian development centre in the Vancouver suburb of Richmond, B.C., which employs 300.

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Lehman Brothers Holdings Inc. shares plunged to their lowest level in more than a decade Tuesday amid investor concerns that the battered investment bank is running out of options to raise capital 500 fast cash.

Investors, anxious about the possibility of a bank failure after the near-collapse of Bear

Edward Jones, the brokerage firm based in Des Peres, has agreed to pay $7.5 million in fines and fees to settle a lawsuit brought by California authorities.

In a lawsuit filed in December 2004, the California Attorney General accused the company of failing to adequately disclose its sharing of revenue with mutual fund companies when it sold their funds to customers before 2005.

Jones neither admitted nor denied the allegations. Revenue-sharing isn’t illegal, but it must be disclosed. The settlement was reached last week and disclosed on Monday.

Jones will pay $2.7 million in fees and costs to the attorney general and will pay $4.8 million in civil penalties to California.

Two years ago, Jones paid $127.5 million to settle nine class-action suits over the practice $1500 payday loan. The company paid $75 million in fines to the federal government over the practice in 2004 and paid Missouri regulators $1.5 million in fines in 2005.

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Altria Group Inc (MO.N: Quote, Profile, Research, Stock Buzz) has agreed to buy UST Inc (UST.N: Quote, Profile, Research, Stock Buzz), the largest U.S. smokeless tobacco maker, for $10.4 billion in a deal that will combine the Marlboro cigarette and Skoal moist snuff brands.

Altria said on Monday it will pay $69.50 a share in cash and assume about $1.3 billion in debt to acquire UST, aiming to expand its own offerings from a shrinking U.S. cigarette market.

The price represents a 29 percent premium to UST’s closing price on Thursday, the day before news of a possible deal between the sides broke in The New York Times.

That was near the top of a range expected by some analysts, raising the question whether Altria was paying too full a price for a premium smokeless tobacco business that has been losing market share to Reynolds American Inc’s(RAI.N: Quote, Profile, Research, Stock Buzz) Conwood unit, which makes the Grizzly and Kodiak smokeless brands.

“It seems to me to be a fair and full price fast payday loans. I don’t think they are stealing UST by any stretch, but I don’t think they are grossly overpaying either,” said Matthew Kaufler, portfolio manager at the Touchstone Value Opportunities Fund, who has managed Altria and UST shares in the past.

UST shares were up 0.9 percent at $68.15 in early New York Stock Exchange trade. Altria shares rose 1.8 percent to $21.33.

UST, which also owns the Ste. Michelle Wine Estates, has long been seen as a likely acquisition target for Altria. Speculation over a possible deal revived in February as Altria was spinning off its international tobacco arm.

UST commands almost 58 percent of the U.S. smokeless tobacco market, as of the 26 weeks that ended June 14, according to the company’s latest earnings report. 

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