Toshiba to give up on HD DVD, end format war: source

(Reuters) - Toshiba Corp (6502.T: Quote, Profile, Research) is planning to give up on its HD DVD format for high definition DVDs, conceding defeat to the competing Blu-Ray technology backed by Sony Corp (6758.T: Quote, Profile, Research), a company source said on Saturday.

The move will likely put an end to a battle that has gone on for several years between consortiums led by Toshiba and Sony vying to set the standard for the next-generation DVD and compatible video equipment.

The format war, often compared to the Betamax-VHS battle in the 1980s, has confused consumers unsure of which DVD or player to buy, slowing the development what is expected to be a multibillion dollar high definition DVD industry.

Toshiba's cause has suffered several setbacks in recent weeks including Friday's announcement by U.S. retailing giant Wal-Mart Stores Inc (WMT.N: Quote, Profile, Research) that it would abandon the HD DVD format and only stock its shelves with Blu-ray movies.

A source at Toshiba confirmed an earlier report by public broadcaster NHK that it was getting ready to pull the plug.

"We have entered the final stage of planning to make our exit from the next generation DVD business," said the source, who asked not to be identified. He added that an official announcement could come as early as next week.

No one answered the phone at Toshiba's public relations office in Tokyo.

 

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Bayer, Onyx Stop Cancer Trial on Higher Death Rate

(Bloomberg) -- Bayer AG, Germany's biggest drugmaker, and U.S. partner Onyx Pharmaceuticals Inc. stopped a late-stage test of their Nexavar cancer drug in lung tumors because of a higher death rate among some of the patients.

 

An independent committee that monitors trials advised the companies that the treatment wouldn't meet the main goal of the test, Leverkusen-based Bayer said today in a statement on PRNewswire.

 

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Bond Insurer Split May Trigger Lawsuits, Analysts Say

(Bloomberg) -- Regulators' plans to break up bond insurers into ``good'' businesses covering municipal debt and ``bad'' businesses liable to subprime-related losses may trigger ``years of litigation,'' Bank of America Corp. analysts said.

New York Insurance Department Superintendent Eric Dinallo and New York Governor Eliot Spitzer said last week that insurers may need to be divided if they can't raise enough capital to compensate for losses on subprime-mortgage guarantees. FGIC Corp., the fourth-largest of the so-called monoline insurers, asked to be split on Feb. 15 after Moody's Investors Service cut the Stamford, Connecticut-based company's top Aaa ranking.

``Despite the regulatory interest in separating the exposures, the essential fact remains that all policy holders, whether municipal or structured finance, entered into contracts backed by the entire entity,'' analysts led by Jeffrey Rosenberg in New York wrote in a note to investors dated Feb. 15. A breakup is ``likely to lead to significant legal challenges holding up the resolution of the monoline issues for years.''

FGIC, owned by Blackstone Group LP and PMI Group Inc., insures about $314 billion of debt, including $220 billion in municipal bonds. The company said last week it applied for a license from New York state insurance regulators to create a standalone municipal company and separate the unit that guarantees subprime-mortgage bonds and related securities that led to rating downgrades.

New York-based Ambac Financial Group Inc., the second- largest bond insurer, may also seek a split, the Wall Street Journal reported today, citing a person familiar with the situation.

 

Read more at Bloomberg