Buffett, Brazil's 3G team up for $23 billion Heinz buyout

(Reuters) - Warren Buffett and Brazilian financier Jorge Paulo Lemann are teaming up to buy ketchup maker H.J. Heinz Co for $23.2 billion, in what could be the first step of a wave of mergers for the food and beverage industry.

Analysts and people close to the deal said Heinz could be a good starting point to consolidate similar staple food companies, particularly given the larger ambitions of Lemann's private equity firm 3G Capital.

Including debt assumption, Heinz valued the transaction, which it called the largest in its industry's history, at $28 billion. Buffett's Berkshire Hathaway and 3G will pay $72.50 per share, a 19 percent premium to the stock's previous all-time high.

Heinz shares initially rose slightly above the offer price, although Buffett cautioned he had no intention of raising his bid and the stock fell back below that mark by midday. The stock has been on a tear, almost doubling over the last four years, though analysts said the price seemed fair.

They also said the deal could be the first step in a broader wave of mergers for the food and beverage industry.

"Maybe for the consumer staples group in general this may start some talk about consolidation. Even corporate entities are flush with cash, interest rates are low, it would seemingly make sense," Edward Jones analyst Jack Russo said.

Companies like General Mills and Campbell Soup - itself long seen as a potential Heinz merge partner - rose on the news.

Any acquisition could help Heinz further diversify and broaden its international profile. It already dominates the ketchup business, with a nearly 26 percent share of the global market and a 59 percent share domestically, according to Euromonitor International.

The company actually generates the largest portion of its sales in Europe, though its traditional North American consumer products business is the most profitable.

But its real growth engine has been the Asia/Pacific region, where sales increased nearly 11 percent in the last fiscal year, in part on demand for sauces and infant foods in China.

BUFFETT HUNTING GROWTH

The surprise purchase satisfies, at least in part, Buffett's hunt for growth through acquisition. He was frustrated in 2012 by the collapse of at least two unnamed deals in excess of $20 billion and said he might have to do a $30 billion deal this year to help fuel Berkshire's growth engine.

In a regulatory filing late on Thursday, Berkshire said it was providing $12.12 billion in equity, including common stock, warrants and preferred shares with a liquidation preference of $8 billion and a 9 percent dividend.

Barclays Capital's Jay Gelb the deal's valuation appeared high at 19 times Heinz's expected 2014 earnings per share, but that it would enhance Berkshire's consumer portfolio.

Berkshire Hathaway already has a variety of food assets, including Dairy Queen ice cream chain, chocolatier See's Candies and food distributor McLane. Buffett, famed for a love of cheeseburgers, joked he was well acquainted with Heinz's products already and that this was "my kind of deal."

It does represent an unusual teaming of Berkshire with private equity, though; historically, Buffett's purchases have been outright his own. He and 3G founder Jorge Paulo Lemann have known each other for years, and Buffett said Lemann approached him with the Heinz idea in December.

One Berkshire investor said he had mixed feelings about the deal because of the limited growth prospects domestically.

"We're a little hesitant on the staple companies because they don't have any leverage in the United States," said Bill Smead, chief investment officer of Smead Capital Management in Seattle. But at the same time, he said, Buffett was likely willing to accept a bond-like steady return even if it was not necessarily a "home run."

A second investor, Michael Yoshikami of Destination Wealth Management in Walnut Creek, California, said he liked the purchase because it provided cash flow for other deals.

"This is a better use of cash than current money market instruments," said Yoshikami, the firm's CEO and chairman of its investment committee.

3G EXPANDS

For 3G, a little-known firm with Brazilian roots, the purchase is something of a natural complement to its investment in fast-food chain Burger King, which it acquired in late 2010 and in which it still holds a major stake.

Historically, 3G was more of an investor than an acquirer. Its biggest shareholdings include Delphi Automotive, Newell Rubbermaid and Anadarko Petroleum.

Lemann, a globe-trotting financier with Swiss roots, made his money in banking and gained notoriety for helping to pull together the deals that ultimately formed the beer brewing giant AB InBev. Forbes ranks him as the world's 69th-richest billionaire, with a fortune of $12 billion.

3G's Alex Behring runs the fund out of New York. He appeared at a Pittsburgh news conference on Thursday with Heinz management to discuss the deal - and to reassure anxious local crowds that the company will remain based there and will continue to support local philanthropy.

But at the same time, Behring said it was too soon to talk about cost cuts at the company. Unlike Berkshire, which is a hands-off operator, 3G is known for aggressively controlling costs at its operations.

PITTSBURGH ROOTS

Also to be determined is whether CEO Bill Johnson would stay on. Only the fifth chairman in the company's history, Johnson is widely credited with Heinz's recent strong growth.

"I am way too young to retire," he told the news conference, adding that discussions had not yet started with 3G over the details of Heinz's future management.

The company, known for its iconic ketchup bottles, Heinz 57 sauces as well as other brands including Ore-Ida frozen potatoes, has increased net sales for the last eight fiscal years in a row.

Heinz said the transaction would be financed with cash from Berkshire and 3G, debt rollover and debt financing from J.P. Morgan and Wells Fargo. Buffett told CNBC that Berkshire and 3G would be equal equity partners.

That would imply roughly $6 billion to $7 billion of new debt needs to be raised.

Heinz shares soared 19.9 percent, or $12.02, to $72.50 on the New York Stock Exchange.

A week ago the stock hit a long-term high of $61 a share - near records it set in 1998 - having risen almost 5 percent this year and nearly 12 percent since the beginning of 2012.

The Heinz Endowments, a pillar in Pennsylvania philanthropy, said the sale of the company would have virtually no impact on their work. Heinz shares represent just over 1 percent of the endowment's $1.4 billion in holdings.

The deal is also a potential boon for new U.S. Secretary of State John Kerry, whose wife, Teresa, is the widow of H.J. Heinz Co heir John Heinz. Kerry's most recent financial disclosures from his time in the U.S. Senate show a position in Heinz shares of more than $1 million, although the precise size is unclear.

Centerview Partners and BofA Merrill Lynch were financial advisers to Heinz, with Davis Polk & Wardwell LLP the legal adviser. Moelis & Company was financial adviser to the transaction committee of Heinz's board and Wachtell, Lipton, Rosen & Katz served as its legal adviser.

Lazard served as lead financial adviser. J.P. Morgan and Wells Fargo also served as financial advisers to the investment consortium. Kirkland & Ellis LLP was legal adviser to 3G Capital, and Munger, Tolles & Olson LLP was legal adviser to Berkshire Hathaway.

(Additional reporting by Olivia Oran and IFR's Stephen Carter in New York and Drew Singer in Pittsburgh; Editing by Maureen Bavdek and Leslie Gevirtz)

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Amputee Olympic star Pistorius charged in slaying

PRETORIA, South Africa (AP) — Oscar Pistorius, the double-amputee sprinter dubbed the Blade Runner, was charged Thursday in the Valentine's Day slaying of his girlfriend at his upscale home in South Africa, a shocking twist to one of the feel-good stories of last summer's Olympics.

Pistorius buried his face in the hood of his workout jacket as officers escorted him from a police station after his arrest in the shooting death of Reeva Steenkamp, a 30-year-old model who had spoken out on Twitter against rape and abuse of women.

Police said she was shot four times in the pre-dawn hours at Pistorius' villa in a gated community in the capital, Pretoria. Officers found a 9 mm pistol inside the home and arrested Pistorius on a murder charge.

What sparked the shooting remained unclear, but police said they had received calls in the past about domestic altercations at the home of the 26-year-old athlete, who has spoken publicly about his love of firearms.

A police spokeswoman, Brigadier Denise Beukes, said the incidents included "allegations of a domestic nature."

"I'm not going to elaborate on it, but there have been incidents," Beukes said. She said Pistorius was home at the time of Steenkamp's death and "there is no other suspect involved."

Pistorius made history in the London Games when he became the first double-amputee track athlete to compete in the Olympics. He didn't win a medal but did make the semifinals of the 400 meters and became an international star.

Thursday, companies quickly removed billboards and advertising featuring Pistorius, a national hero in South Africa who also inspired fans worldwide with the image of his high-tech carbon-fiber blades whipping through the air.

Kenny Oldwage, Pistorius' lawyer, told reporters the athlete was "emotional" after his arrest, "but he is keeping up." He said he planned to seek bail for Pistorius at a preliminary hearing Friday.

Pistorius has had troubles in the past in his personal life, which often featured fast cars, cage fighters and women.

In February 2009, he crashed a speedboat on South Africa's Vaal River, breaking his nose, jaw and several ribs and damaging an eye socket. He required 180 stitches to his face. Witnesses said he had been drinking, and officers found alcoholic beverages in the wreckage, though they did not do blood tests.

In November, Pistorius was involved in an altercation over a woman with a local coal mining millionaire, South African media reported. The two men involved the South African Police Service's elite Hawks investigative unit before settling the matter.

Pistorius' father, Henke Pistorius, said Thursday: "We all pray for guidance and strength for Oscar and the lady's parents."

A spokeswoman for Pistorius at Fast Track, an international sports marketing agency in London, said the athlete was assisting with the investigation and there would be no further comment "until matters become clearer."

The sprinter's former coach, Andrea Giannini, said he hoped the shooting was "just a tragic accident."

"No matter how bad the situation was, Oscar always stayed calm and positive," Giannini told The Associated Press in Italy. "Whenever he was tired or nervous, he was still extremely nice to people. I never saw him violent."

Firearms captivated Pistorius, the subject of an online Nike advertisement that featured him with the caption: "I am a bullet in the chamber." In November 2011, he posted a photograph on Twitter of himself at a shooting range, bragging about his score. "Had a 96% headshot over 300m from 50shots! Bam!" he wrote.

Linked to a number of women by the South African media, Pistorius and Steenkamp were first seen together publicly in November. She was named one of the world's 100 Sexiest Women for two years running by the men's magazine FHM.

The leggy blonde with a law degree also appeared in international and South African ads and was a celebrity contestant on "Tropika Island of Treasure," a South African reality show filmed in Jamaica.

While known for her bikini-clad, vamping photo spreads, she tweeted messages urging women to stand up against rape. Her tweets also focused on Pistorius, with one of her last messages noting her excitement over Valentine's Day.

"What do you have up your sleeve for your love tomorrow?" she wrote. "It should be a day of love for everyone."

Police have not publicly named Steenkamp as the victim, saying only that a 30-year-old woman was killed. Steenkamp's publicist, however, confirmed in a statement that the model had died.

"Everyone is simply devastated," the publicist, Sarit Tomlinson, said. "She was the kindest, sweetest human being; an angel on earth and will be sorely missed."

Police arrived at Pistorius' home after 3 a.m., and paramedics tried unsuccessfully to revive Steenkamp, police spokeswoman Lt. Col. Katlego Mogale said.

Officers later took Pistorius to a hospital so doctors could collect samples for DNA testing and check his blood alcohol content.

Pistorius had both legs amputated below the knee before his first birthday because of a congenital condition, and campaigned for years to be allowed to compete against able-bodied athletes.

He was initially banned because of his carbon fiber blades — which critics said gave him an unfair advantage — before being cleared by sport's highest court in 2008.

He was a last-minute selection to South Africa's Olympic team, competing in the 400 meters and the 4x400 relay. He later retained his Paralympic title in the 400 meters.

South Africa's Sports Confederation, its Olympic committee and the International Paralympic Committee all had no comment on the shooting.

Shock rippled across South Africa, a nation of 50 million where nearly 50 people are killed each day, one of the world's highest murder rates. U.N. statistics say South Africa also has the second highest rate of shooting deaths in the world, behind only Colombia.

"The question is: Why does this story make the news? Yes, because they are both celebrities, but this is happening on every single day in South Africa," said Adele Kirsten, a member of Gun Free South Africa.

"We have thousands of people killed annually by gun violence in our country. So the anger is about that it is preventable."

___

Gerald Imray reported from Cape Town, South Africa. Associated Press writers Michelle Faul and Ed Brown in Johannesburg contributed to this report.

___

Jon Gambrell can be reached at www.twitter.com/jongambrellAP.

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Don't drop wrestling from Olympics

U.S. wrestler Jacob Stephen Varner, right, celebrates victory over Ukraine's Valerii Andriitsev at the 2012 London Games.

STORY HIGHLIGHTS

• Mike Downey: Committee proposes dropping wrestling from 2020 Summer Games


• He says wrestlers have had lives raised up and have exalted their nations at the Olympics


• He says wrestling goes back to the very first games in 708 B.C.


• Downey: Young wrestlers will lose important goal; Olympic committee should reconsider

Editor's note: Mike Downey is a former Los Angeles Times and Chicago Tribune columnist.

(CNN) -- Been thinking about wrestlers.

No, not about Hulk Hogan or Andre the Giant or The Rock. I mean real wrestlers. Wrestlers who wrestle for real.

Wrestlers who won't wrestle in the 2020 Olympic Games if the International Olympic Committee drop kicks their sport. It was revealed Tuesday that the IOC is giving serious thought to the elimination of wrestling from Olympic competition.

Been thinking about Steve Fraser.

Mike Downey

He was a deputy sheriff from Ann Arbor, Michigan, when I watched him in the 1984 Los Angeles Olympics on the night he became the first American ever to win a medal in Greco-Roman wrestling. It was shiny. It was gold.

"Knowing me," he said, "I'll probably have it bronzed."

Been thinking about Joe Williams.

Wrestling may be cut from Olympic Games

He was a high school and college wrestling champion from Harvey, Illinois, who was 29 when he finally made it to an Olympic Games. He went to Athens in 2004. He dedicated it to his older brother Steve, a former wrestler who died of heart failure right outside Joe's house in 2003. Joe did his best but did not win a medal.

"I don't care. It was still worth it," he told me. "Every long, hard minute from Day 1."

Been thinking about Clarissa Chun.

She -- yes, she -- is a wrestler. A mere 4 feet, 11 inches tall. (Women's wrestling became an Olympic sport in 2004.) Chun was a kindergarten teacher from Honolulu, the daughter of a Japanese-American mom and a Chinese-American dad. She defeated a seven-time national champion in the U.S. trials in 2008. Then she went to the 2012 London Olympics and got herself a bronze medal.

Also been thinking a little bigger. Been thinking about Rulon Gardner, of course.

He bulked up to 475 pounds before NBC's "The Biggest Loser" invited him to be a contestant. But before that, he stunned the 11-time world champion, Aleksandr Karelin, to become the super-sized Cinderella of the 2000 Sydney Olympics.

I was in Indianapolis on the 2004 day when ol' Rulon qualified for the Olympics once more ... after a motorcycle crash, after dislocating a wrist in a pick-up basketball game and after a snowmobile misadventure led to a case of frostbite and the loss of a toe.

Why keep wrestling?

"To be able to represent us in the greatest sport in the world ... the oldest sport in the world?" Rulon replied. "To get to do that? Wow."

Wow, for sure.

That was my reaction Tuesday and the reaction from wrestlers everywhere -- a "nightmare," the former collegiate king of the mat, Dan Gable, described it in one interview -- at the IOC's proposal (not yet a done deal) that certain sports are to be abandoned by 2020, with wrestling among those on the hit list.

Somewhere among the gods, Hercules weeps.

You might not know your Greco from your Roman, but it was 708 B.C. when wrestling was a part of the first Olympics, historians tell us. And it was 1896 when the so-called "Modern Olympics" were born ... and, yes, wrestling was there in Athens that summer as well.

It is hand-to-hand combat in its essence. A fight with civility.

It is global activity. Afghanistan and Austria have competed in Olympic wrestling, as have Belgium and Bolivia, and Cambodia and Cameroon, and Macedonia and Mongolia, and so many more.

Do you have any idea how many Olympic wrestling medals have been won by athletes from Finland and Sweden? Take a guess. Six? 10? Try 167.

Bulgaria has won 68 Olympic medals in this sport. Bulgarians don't wait around much to see how their athletes do in Olympic figure-skating or tennis or synchronized swimming. But in wrestling, Bulgarians kick butt.

The Olympic Games aren't just for sports superpowers, not just for Russia and China and the USA, USA! Egypt has won golds in Olympic wrestling. I'll bet an Egyptian today would say, hey, if you want to drop something, drop badminton, drop beach volleyball. Leave wrestling be.

As for these United States of America, well, you can prattle on about Michael Phelps or Bruce Jenner or Muhammad Ali or any other famed Olympian we have produced, but keep in mind this: Our wrestlers have won 50 golds. And 125 medals in all.

That mat meant every bit as much to them as that pool did to Ryan Lochte, as that gym apparatus did to Gabby Douglas, as that hardwood floor did to Kobe Bryant. Wrestlers are human, man. If you pin them, do they not bleed?

I am thinking of scholastic wrestlers all over the globe who starve themselves to make weight, devote countless hours to training for a match, learn every hold and every escape. Most don't dream of selling out Madison Square Garden some day. They do often fantasize about ducking their heads to have a necklace with a medallion draped around their necks.

High school wrestling has been the stuff of literature and cinema, from "The World According to Garp" to "Win Win." It has been a part of many a young man's formative years. It has now become part of a 21st century young woman's world as well.

Without it, we don't have young Jeff Blatnick of Niskayuna, New York, growing up to beat cancer and beat his opponent in the 1984 super-heavyweight gold-medal match, quite a feat for a kid who had his spleen and appendix taken out.

We don't have Steve Fraser, a night earlier, caressing his gold medal with one hand, his pregnant wife with the other, and inviting a reporter (me), "Hey, come on over to the hotel. We'll be partying all night!"

Because there won't be any Olympic wrestlers any more. Not if the IOC goes through with this preposterous proposition.

Can't we talk these people out of it? Grant them some 2020 hindsight? I do think we can convince them, and I'm pretty sure that I know how. Twist their arms.

Follow us on Twitter @CNNOpinion.

Join us on Facebook/CNNOpinion.

The opinions expressed in this commentary are solely those of Mike Downey.

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Man charged in Bishop Ford death

A man involved in the death of a 27-year-old woman who plummeted from an SUV that kept traveling down the Bishop Ford Freeway this week has been charged, Illinois State Police said Thursday.

Michael Johnson, 28, of Edwardsville, Ill., was charged with aggravated driving under the influence involving death, aggravated fleeing and eluding and leaving the scene of a fatal accident.

"Throughout the investigation, law enforcement agents were able to connect the victim and the offender at various locations, prior to the incident," the Illinois State Police said in a statement.

Police are still piecing together whether Jennifer Mitchell, a Chicago resident, jumped or was pushed out of her SUV, which Johnson had been driving at the time. She was struck by a car and a semi after she fell near 154th Street in Dolton about 1 a.m. Tuesday, authorities said.

The SUV eluded police for miles before it crashed at an exit ramp near 127th Street.

"We're in mourning right now," the Rev. Michael Mitchell, Jennifer Mitchell's father, said when reached by phone. Mitchell, who is the pastor at Greater Deliverance Church of God in Christ, declined to comment further.

Johnson has a criminal history including seven arrests and two convictions, according to court records. The arrests include four charges of assault, and one each of larceny, criminal damage to property and obstructing justice. The two convictions are for domestic battery.

Johnson will appear in bond court Friday at the Cook County Courthouse in Markham.

ehirst@tribune.com kgeiger@tribune.com

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Key U.S. general backs keeping Afghan forces at peak strength

WASHINGTON (Reuters) - The U.S. general nominated to oversee a vast region that includes Afghanistan on Thursday backed keeping Afghan forces at a peak strength of 352,000, contrary to current plans to shrink them after NATO declares the war over next year.

General Lloyd Austin, nominated to lead the U.S. military's Central Command, said at his Senate confirmation hearing that a more robust Afghan force, while more costly, would "hedge against any Taliban mischief" following America's longest war.

"Keeping the larger-size force would certainly reassure the Afghans, it would also reassure our NATO allies that we remain committed," Austin said.

The comments came two days after President Barack Obama announced in his State of the Union address that 34,000 U.S. troops - roughly half of the current U.S. force in Afghanistan - would be withdrawn by early 2014.

Obama reassured Americans that the costly, unpopular war was coming to an end, but he left unanswered bigger questions about America's exit strategy, including how many U.S. troops would stay in the country beyond 2014 to help train and advise the Afghans and to battle remnants of al Qaeda.

Obama also did not discuss the future size of the Afghan forces, although a White House fact sheet sent out after his address noted they would remain at 352,000 until "at least" early 2015.

Austin warned the Taliban would be waiting to test them.

"You could reasonably expect that an enemy that's been that determined, that agile, will very soon after we transition begin to try to test the Afghan security forces," Austin said.

Under current plans, the United States and its NATO allies will help build up the Afghan armed forces to 352,000 personnel, a number they are approaching, but the size of the force - which the allies will continue to fund - will be trimmed to 230,000 after 2015.

ECHOES OF IRAQ

The hearing frequently moved away from questions about the Afghan war and other current events to questions about Austin's past role as commander in Iraq, when a failure to strike an immunity deal for U.S. troops led to their total withdrawal in 2011.

Obama administration officials have warned that failure to strike an immunity deal with Afghanistan would also result in a pullout, but Afghan President Hamid Karzai and U.S. officials have expressed confidence a deal can be reached.

Republicans, who have criticized Obama's drawdown strategy in Afghanistan, noted that the president would have left a much smaller force in Iraq than Austin recommended, even if a deal had been struck.

Senator John McCain of Arizona lamented the lack of a U.S. presence in Iraq.

Pressed by Republicans, Austin acknowledged that the situation in Iraq was trending in a "problematic" direction, and agreed that a continued U.S. role would have helped bolster Iraqi forces.

When it came to Afghanistan, Senator Lindsay Graham of South Carolina warned Austin that if Obama sought an insufficient force for the post-2014 mission, he would refuse to vote for funding the war effort.

"It can be as low as 9 or 10,000, that I will stand with them," Graham said.

"If they overrule the commanders and create a force that cannot in my view be successful, I cannot in good conscience vote to continue this operation."

Graham said he would vote for Austin's confirmation once Austin spoke with the former commander of the Afghan mission, General John Allen, about his recommendations to Obama and reported back to the committee about his opinion.

(Reporting by Phil Stewart; Editing by David Brunnstrom)

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Asian shares gain on improving sentiment, G20 eyed

TOKYO (Reuters) - Asian shares rose on improving risk sentiment while the yen steadied ahead of the weekend meeting of G20 finance and central bank officials, whose views on global growth and differences over currencies will be scrutinized by investors.

"Asian markets have extended gains with risk sentiment remaining resilient as markets continue to push to new highs. Ahead of the European open, we are calling the major bourses relatively flat with GDP numbers in focus," Stan Shamu, market strategist at IG Markets, said in a note.

Financial spreadbetters were predicting London's FTSE 100 <.ftse>, Paris's CAC-40 <.fchi> and Frankfurt's DAX <.gdaxi> would open little changed ahead of European gross domestic data. U.S. stock futures were also steady, suggesting a similarly quiet Wall Street open. <.l><.eu><.n/>

The MSCI's broadest index of Asia-Pacific shares outside Japan <.miapj0000pus> extended gains, rising 0.6 percent as its materials sector <.mispjmt00pous> outperformed with a 1.6 percent increase partly on a jump in shares of top miners ahead of earnings news from Rio Tinto .

Australian shares rose 0.7 percent to their highest since September 2008, as a strong earnings season and receding fears about European and U.S. debt woes bolstered investor sentiment.

South Korean shares <.ks11> were flat after Wednesday's three-week closing high and biggest daily percentage gain since January 2 when investors cheered a pause in the yen's decline.

Market reaction was muted after monetary policy decisions from South Korea and Japan during Thursday's sessions.

The Bank of Korea held interest rates steady for a fourth straight month as expected, as global economies show signs of improvement and domestic inflation remains low. But the decision was not unanimous, its governor told a news conference.

The Bank of Japan also kept monetary policy steady and upgraded its economic assessment, as recent falls in the yen and signs of a pick-up in global growth give it some breathing space after expanding stimulus just a month ago.

A pause in the yen's rebound positively affected Japanese equities on Thursday, with the Nikkei average <.n225> advancing 0.7 percent after Wednesday's 1 percent slump when the firming yen prompted investors to take profits on exporters. <.t/>

"Usually the BOJ doing nothing causes a bit of disappointment, but since there are concerns about the flak Japan might get at the G20 this weekend for the weakening yen, standing pat will actually be a relief to the market," said Masayuki Doshida, senior market analyst at Rakuten Securities.

Markets in China and Taiwan remain shut for the Lunar New Year holiday but Hong Kong resumed trading on Thursday.

YEN IN SPOTLIGHT

The dollar recouped earlier losses to inch up 0.1 percent to 93.49 yen after marking its highest level since May 2010 of 94.465 on Monday. The euro steadied at 125.60 yen, below its peak since April 2010 of 127.71 yen touched last week.

The yen lost nearly 20 percent against the dollar between November and early February, and more than 20 percent against the euro.

The yen began its steady fall in mid-November as expectations built for a new government to take aggressive steps to bring Japan out of years of slump. Prime Minister Shinzo Abe is pushing for strong reflationary steps, pressuring the BOJ to take unprecedented expansionary measures.

The yen's rapid depreciation, after years of sharp appreciation, has drawn some criticism from overseas, with rhetoric heating up ahead of the Group of 20 nations meeting on Friday and Saturday in Moscow.

Russian Deputy Finance Minister Sergei Storchak told reporters on Wednesday in Moscow that the yen was "definitely overvalued" and that "there are no signs" that Japan's monetary authorities were intervening on the foreign exchanges.

Yuji Saito, director of foreign exchange at Credit Agricole in Tokyo, said various interpretations this week over what the G20 may say about Japan's policy and a weak yen trend "have been used as an excuse to adjust positions ahead of the meeting, and I expect forex to be in ranges."

"Currency will be discussed but I think Russia wants the meeting to focus on broader economic issues involving emerging markets as it is the G20 gathering," he said.

Traders and analysts say 90-95 yen to the dollar appeared to be a comfortable range for now, unless upside surprises emerge in the U.S. economy or Japan quickly implements unexpectedly drastic reflationary policies, both of which will swing the dollar higher above the range.

They said the yen's upside was also capped around 87 yen, halfway between its slump from mid-November to early February.

Market reaction was muted to comments from Jack Lew, President Barack Obama's pick to run the Treasury Department, who on Wednesday said he would support a strong U.S. dollar, in line with longstanding U.S. policy.

Data published on Thursday showed Japan's economy shrank 0.1 percent in October-December from the previous quarter, falling for a third straight quarter.

U.S. crude was up 0.1 percent to $97.13 a barrel and Brent added 0.1 percent to $117.98.

London copper rose 0.2 percent to $8,240.50 a metric ton (1.1023 tons).

Gold regained some strength as recent losses attracted buying interest from Asian jewellers after the Lunar New Year break, but firmer equities could limit gains.

(Additional reporting by Joyce Lee in Seoul and Tomo Uetake in Tokyo; Editing by Eric Meijer and Richard Borsuk)

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Plumlee leads No. 2 Duke past UNC, 73-68

DURHAM, N.C. (AP) — With its star big man on the bench with foul trouble, Duke went small to beat its top rival — and one of its smallest players came up big.

The run that propelled the second-ranked Blue Devils to a 73-68 victory over North Carolina on Wednesday night started when Mason Plumlee sat down and backup guard Tyler Thornton warmed up.

"I think the hero for us this game was Thornton," coach Mike Krzyzewski said. "He would not let us lose."

Plumlee finished with his usual big numbers — 18 points, 11 rebounds — while Quinn Cook scored 18 points and Rasheed Sulaimon finished with 13 for the Blue Devils (22-2, 9-2 Atlantic Coast Conference).

But the contributions of Thornton couldn't be overlooked.

Thornton finished with nine points on three 3-pointers — or, as many points as he had in his previous three games combined — and two of those 3s came during the run midway through the second half that completely flipped the game's momentum.

"It's just the heart and the will to want to win," Thornton said. "Especially coming down the stretch, you've got to go all out and leave it on the floor, and I think we did that."

Duke shot 44 percent — 52 percent after halftime — and erased a slow start with that timely run and win its sixth straight this season and sixth in eight meetings in college basketball's fiercest rivalry.

P.J. Hairston matched a career high with 23 points and Reggie Bullock had 15 points with four 3-pointers for North Carolina (16-8, 6-5), which led for the first 26 minutes but went on to lose its second straight.

The Tar Heels were 13 of 23 from the free-throw line and missed 7 of 10 during a critical late stretch while falling to 1-4 this season against ranked opponents.

"If I knew how to fix the blessed thing, I would have fixed it," coach Roy Williams said of his team's struggles at the line. "The bottom line is, we didn't make free throws today. We're not a good free-throw shooting team in games."

Still, they trailed just 65-61 in the final minute and appeared to have gotten a stop by forcing Thornton to miss a long 3-pointer with the shot clock winding down. But Bullock fouled Sulaimon on the rebound, and the freshman hit both free throws with 37.5 seconds left.

Hairston hit a free throw on North Carolina's next possession to cut it to 67-62, but Plumlee countered with two free throws with 30.3 seconds left to make it a three-possession game.

Seth Curry scored 11 points in his sixth straight double-figure performance against North Carolina.

The win was a nice present for Krzyzewski, who was celebrating his 66th birthday.

And an unorthodox move — putting one of the best big men in the nation on the bench, however briefly — wound up putting Duke ahead for the first time in this one.

Plumlee picked up his third foul 31 seconds into the second half and uncorked an untimely 20-foot jumper a few minutes later, prompting Krzyzewski to burn a timeout. He went to a smaller lineup, sitting Plumlee in favor of two power forwards, Amile Jefferson and Josh Hairston.

"I thought he was playing like he had three fouls," Krzyzewski said. UNC's James Michael "McAdoo was just going at him so that McAdoo was either going to score, or Mason was going to foul him."

The move freed up some space for the Duke guards and immediately led to six quick points to start the 19-7 run that put the Blue Devils ahead to stay.

Duke outscored North Carolina 11-3 during the 4-minute stretch with Plumlee on the bench and took their first lead when Curry swished a 3 from in front of the bench to make it 42-41 with 14 minutes left.

Thornton — who had missed 12 of 14 3-pointers during his previous eight games — hit two of them from the same spot in the right corner, capping the spurt with his second that made it 50-45 with 12½ minutes to go.

Curry eventually stretched the lead to 59-51 with another 3 with 5 minutes left.

"They started knocking down shots in the second half, open 3-pointers," Bullock said. "I think our team played great, we played with better sense of urgency, we played with better effort, we were more involved in the game and what's happening. But they started knocking down shots and they started gaining momentum, and we wasn't connecting when we were open."

Dexter Strickland added 14 points but McAdoo was held to nine on 4-of-12 shooting for North Carolina, which came in as a written-off, double-digit underdog after a 26-point loss at No. 3 Miami that marked its worst loss of the season.

But the Tar Heels were aggressive early and methodically built a double-figure lead, the third straight year they came into Cameron and went up by 10. Bullock's third 3 of the half with about 6:45 left put North Carolina up 28-18.

"The intensity tonight was better than it has been all year long," Williams said.

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Obama and Rubio: How did they do?

(CNN) -- CNN asked for views on President Obama's State of the Union address Tuesday night, which was dominated by domestic issues such as the economy and need to reinvigorate the middle class, gun control, minimum wage, early education and immigration. Afterward, Sen. Marco Rubio of Florida delivered the Republican response.

Sutter: A night that offered no hope for the jobless

John D. Sutter is a columnist for CNN Opinion. He heads the section's Change the List project, which focuses on human rights and social justice.

After Barack Obama's speech and Marco Rubio's rebuttal, we should have heard from Kim Peters.

The 47-year-old single mother, who has been more or less unemployed since the start of the Great Recession, wore fuzzy Shrek slippers as she watched the president's State of the Union address Tuesday night from the middle of an empty living room south of Atlanta.

If the country and the president could have peered back at her through her small TV, they would have seen the piles of black trash bags, full of clothes, in the corners of the room. They haven't been unpacked since she was evicted from her last apartment. They would have seen the worry in her eyes -- felt the panic that wakes her up at 3 a.m. and makes her wonder how long it will be before she and her 7-year-old daughter end up homeless. Full story

Granderson: Rubio must have missed the year of the woman

LZ Granderson, who writes a weekly column for CNN.com, is a senior writer and columnist for ESPN the Magazine and ESPN.com

You would think that in the shadow of a general election dubbed "Year of the Woman," the last thing any Republican in Washington would want to do is tick off women.

And while the Violence Against Women Act passed in the Senate by a healthy bipartisan majority a few hours before President Obama's State of the Union address, the fact that 22 senators -- all Republicans, all men -- voted against it should be troubling to GOP leaders.

And perhaps the most troubling aspect of that is Florida Sen. Marco Rubio, the so-called savior of the Republican Party, was one of those Republican men.

Just think: A few hours before Rubio was to deliver a message reflecting a new Republican Party, he casts a vote that screams more of the same. Full story

Welch: Obama's 'do-something' plan for 'have-nothing' government

Matt Welch is editor-in-chief of Reason and co-author of "The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong With America."

The two most memorable lines of President Barack Obama's fourth State of the Union address were the ad-libbed: "Get it done" (which doesn't appear in the remarks as prepared), and the emotional "They deserve a vote," concerning victims of gun violence.

As exasperated appeals for an obstructionist Congress to get off its duff, the exhortations provided emotional catnip for Democrats. For the rest of us, however, they were sobering reminders of what governing liberalism has deteriorated into: content-free calls to take action for action's sake.

Consumers of national governance are within their rights to ask just what we've gotten in return for ballooning the cost of the stuff since 2000. The answer may lie in not just what the president said, but what he has assumed we've already forgotten. Full story

Rothkopf: Obama's message: I'm in charge

David Rothkopf is CEO and editor-at-large of the FP Group, publishers of Foreign Policy magazine, and a visiting scholar at the Carnegie Endowment for International Peace.

It is sometimes said of a great actor that he could hold an audience spellbound while reading a laundry list. This is essentially what President Obama tried to do on Tuesday night. As State of the Union addresses go, his was artless. It lacked inspired phrases or compelling narrative. Save for the energy he gave it at key moments, it was pedestrian.

It was also very important.

It was important because with it, Obama returned in earnest to the work of governing. Having won a clear victory in November, and having spent the intervening months putting out the wildfires our Congress likes to set, he delivered word Tuesday night that he had a clear and full agenda for his second term. Full story

Navarrette: A kinder, gentler, wiser Marco Rubio

Ruben Navarrette is a CNN contributor and a nationally syndicated columnist with the Washington Post Writers Group.

Sen. Marco Rubio was ready for his close-up, and he got it. Now you know what all the fuss is about.

Rubio, a rising star and possible 2016 GOP presidential hopeful, was picked to deliver the official Republican response to President Obama's State of the Union sddress.

The selection tells you a lot about what the Republican Party has in store for Rubio, and what this 41-year-old son of Cuban immigrants can do for a party that needs to become more user-friendly for Latinos. His remarks were also delivered in Spanish. Full story

Slaughter: Obama dares Congress to get the job done

Anne-Marie Slaughter is a former director of policy planning in the U.S. State Department and a professor of politics and international affairs at Princeton University.

The hallmark of the 2013 State of the Union address was progressive pragmatism.

Time and again, President Obama punctuated his proposals with the refrain: "We should be able to get that done." After his call for "bipartisan, comprehensive tax reform that encourages job creation and helps bring down the deficit," he said: "We can get this done," and later, "That's what we can do together."

When he proposed the addition of three more urban manufacturing hubs and asked Congress "to help create a network of 15 of these hubs and guarantee that the next revolution in manufacturing is made right here in America," he added: "We can get that done." Full story

Coleman: Where was the foreign policy?

Isobel Coleman is the author of "Paradise Beneath Her Feet" and a senior fellow for U.S. foreign policy at the Council on Foreign Relations in New York.

President Obama's State of the Union address predictably focused on his domestic priorities.

Immigration reform, a laundry list of economic initiatives including infrastructure improvements (Fix it First), clean energy, some manufacturing innovation, a bit of educational reform and the rhetorical high point of his speech -- gun control.

As in years past, foreign policy made up only about 15% of the speech, but even within that usual limited attention, Tuesday night's address pointed to few new directions.

On Afghanistan -- America's longest war -- Obama expressed just a continued commitment to bringing the troops home, ending "our war" while theirs continues. On Iran, there was a single sentence reiterating the need for a diplomatic solution, which makes me think that a big diplomatic push is not likely. Full story

Greene: In 2013, democracy talks back about State of the Union

CNN Contributor Bob Greene is a best-selling author whose 25 books include "Late Edition: A Love Story" and "Duty: A Father, His Son, and the Man Who Won the War."

"To report the state of the union." Within the first few seconds of President Barack Obama's address Tuesday night, he quoted the late President John F. Kennedy, who 51 years ago used those words to describe a president's annual duty.

As Obama spoke, citizens around the country were tapping away at keyboards, posting and sending messages -- public and private -- characterizing their own view of how the union, and its president, are faring.

Obama told the packed House of Representatives chamber: "We can say with renewed confidence that the state of our union is stronger." And those citizens around the country, typing away, were in essence saying: We'll be the ones to decide that, thank you very much. Full story

Follow @CNNOpinion on Twitter.

Join us at Facebook/CNNOpinion.

The opinions in this commentary are solely those of the writers.

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Anxiety grows as Chicago Public Schools narrows closing list

After trimming the number of schools that could be closed to 129, Mayor Rahm Emanuel's school administration on Wednesday entered the latest and what is likely to be the most intense phase so far in trying to determine which schools should be shut.

Chicago Public Schools chief Barbara Byrd-Bennett is expected to pare the preliminary list before unveiling a final one at the end of March. She said administrators will determine which schools are saved in the coming weeks amid a final round of community meetings to hear arguments from parents, teachers and community groups about why their schools should stay open.

If a hearing Wednesday night in North Lawndale was any indication, CPS still has a long way to go to gain the public's trust.

"Our schools don't need to close," Dwayne Truss, vice chairman of CPS' Austin Community Action Council, said in front of hundreds of people packed inside a church auditorium in the West Side neighborhood. "CPS is perpetrating a myth that there's a budget crisis."

CPS initially said 330 of its schools are underenrolled, the chief criterion for closing. Members of a commission assembled to gather public input on the issue told CPS officials earlier this year that closing a large number of schools would create too much upheaval. The Tribune, citing sources, said the commission indicated a far smaller number should be closed than initially feared, possibly as few as 15.

CPS then started holding its own hearings and on Wednesday, while following many of the formal recommendations made by the Commission on School Utilization, said 129 schools still fit the criteria for closing.

The new number and the latest round of hearings sets the stage for the administration to counter questions about the district's abilities to close a large number of schools and the need to do so.

For many who have already turned up to school closing meetings, this final round of hearings will be even more critical. School supporters must show how they plan to turn around academic performance and build enrollment, and also make the case for any security problems that would be created by closing their school.

"We are prepared now to move to the next level of conversation with our community and discuss a list of approximately 129 schools that still require further vetting and further conversation," Bryd-Bennett said. "We are going to take these 129 and continue to sift through these schools."

In the past, political clout has played a role in the district's final decisions. Already this year, several aldermen have spoken out on behalf of schools in their wards.

On the Near Northwest Side, for instance, the initial list of 330 underused schools included about six in the 1st Ward. Ald. Proco "Joe" Moreno helped organize local school council members, school administrators and parents to fight any closing. He also took that fight to leaders in City Hall and within CPS' bureaucracy. Nearly all of the schools in the ward were excluded from the list of 129.

"It is effort and it's organizing and not just showing up at meetings and yelling. Anybody can do that," Moreno said. "Those schools that proactively work before those meetings and explain what they are doing, what they need and that they are willing to accept new students, that's when politics works.

"My responsibility in this juncture was to focus on these schools," he said. "I had to work on the inside, with CPS and with City Hall, and with my schools on the outside."

Most of the schools on the list of 129 are on the West, South and Southwest sides, many in impoverished neighborhoods that saw significant population loss over the last decade. Largely spared were the North and Northwest sides.

In all, more than 43,000 students attend those 129 schools on the preliminary list, according to CPS records.

The area with the most schools on the list is a CPS network (the district groups its schools in 14 networks) that runs roughly from Madison Street south to 71st Street and from the lake to State Street. The preliminary list includes 24 schools in that area.

The Englewood-Gresham network has the second-largest number, 19, while the Austin-North Lawndale network where Wednesday night's meeting was held still has 16 schools on the list.

CPS critics said the preliminary list is still too large to be meaningful and that the district's promise to trim it before March 31 is only a tactic to make the final number seem reasonable.

"They started out with such a far-fetched, exaggerated list of schools, many of which are nowhere near underutilized," said Wendy Katten, co-founder of the parent group Raise Your Hand. "They might appear to be looking like they're listening, but they're not. They have not done a thorough and substantive assessment of these schools."

Following the commission's recommendations, CPS last month removed high schools and schools performing at a high level academically from consideration. On Wednesday, the district said schools with more than 600 students or utilization rates of at least 70 percent have also been taken out of consideration for closing.

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South Korea unveils missile it says can hit North's leaders

SEOUL (Reuters) - South Korea unveiled a cruise missile on Thursday that it said can hit the office of North Korea's leaders, trying to address concerns that it is technologically behind its unpredictable rival which this week conducted its third nuclear test.

South Korean officials declined to say the exact range of the missile but said it could hit targets anywhere in North Korea.

The Defence Ministry released video footage of the missiles being launched from destroyers and submarines striking mock targets. The weapon was previewed in April last year and officials said deployment was now complete.

"The cruise missile being unveiled today is a precision-guided weapon that can identify and strike the window of the office of North Korea's leadership," ministry spokesman Kim Min-seok said told reporters.

North Korea has forged ahead with long-range missile development, successfully launching a rocket in December that put a satellite into orbit.

The North's ultimate aim, Washington believes, is to design an intercontinental ballistic missile capable of carrying a nuclear warhead that could hit the United States.

North Korea, which accuses the United States and its "puppet", South Korea, of war-mongering on an almost daily basis, is likely to respond angrily to South Korea flexing its muscles.

North Korea, technically still at war with the South after their 1950-53 conflict ended in a truce, not a peace treaty, carried out its third nuclear test on Tuesday, drawing condemnation from around the world including its only major ally China.

The test and the threat of more unspecified actions from Pyongyang have raised tensions on the Korean peninsula as the South prepares to inaugurate a new president on February 25.

"The situation prevailing on the Korean peninsula at present is so serious that even a slight accidental case may lead to an all-out war which can disturb the whole region," North Korea's official KCNA news agency said.

(Reporting by Ju-min Park; Editing by Nick Macfie)

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