In The Region
Sinclair Broadcast invests $20 million in auto-holding firm
Sinclair Broadcast Group Inc. said yesterday that it made a $20 million cash investment in a holding company that owns automobile dealerships, retail tire franchises and a leasing company.
David Smith, Sinclair's president and chief executive officer, has a controlling interest in the holding company, Summa Holdings Ltd.
Sinclair officials couldn't be reached for comment yesterday but said in a news release that Summa will use the investment solely for buying automobile dealerships. Summa also will be committed to maintaining a certain amount of advertising with Sinclair stations.
Because of Smith's involvement with Sinclair, outside legal counsel was hired and a special committee of the board of directors was appointed to oversee the deal.
MetLife Inc. sells office towers in New York, Chicago
MetLife Inc. sold office towers in Chicago and Manhattan yesterday for $258 million to a group of New York investors.
The buildings are New York's 38-story Fred F. French building at Fifth Avenue and 45th Street and the 37-story tower at 10 S. LaSalle St. in Chicago, known as the Otis Building, the companies said. The art-deco style French tower was constructed in 1926, while the Otis Building dates from 1910 and is the oldest elevator building in Chicago.
MetLife is selling about $1.7 billion of real estate as part of a plan to raise capital and protect its credit ratings. The biggest U.S. life insurer expects to report $500 million of capital gains by unloading about 20 properties, and book most of those gains this year.
Credit rating for Qwest cut to selective default by S&P;
Qwest Communications International Inc.'s credit rating was cut to SD, or selective default, by Standard & Poor's yesterday after the local telephone service provider exchanged $5.2 billion of bonds for debt worth $3.3 billion.
The phone company is considered by S&P; to have defaulted on some bonds because it reduced their face value and extended some maturities, said S&P; analyst Catherine Cosentino.
Qwest is swapping bonds to help trim its $24.5 billion of debt by about $2 billion and delay some repayments. The company is exchanging bonds of its Qwest Capital Funding unit for those of Qwest Services Corp., a new entity. Owners of the new bonds will have a higher claim on Qwest assets if a bankruptcy occurs.
Vivendi receives $3 billion in sale of stakes in 2 firms
French media group Vivendi Universal said yesterday that it has received about $3 billion in cash by selling stakes in its environmental arm and a North American satellite operator.
Vivendi previously had announced the sales as part of a program to trim its huge debts and pull back from near bankruptcy. The conglomerate hopes to raise $16.5 billion by the end of 2004.
Vivendi said it is collecting $1.91 billion for the sale of half of its 40.8 percent stake in Vivendi Environnement, a water distribution business, to a group of institutions. Vivendi also said it has also received $1.07 billion for a sale back to EchoStar Communications Corp. of Vivendi's 10.7 percent stake in the U.S.-based satellite operator - well below the $1.5 billion Vivendi paid for the stake last year.
Group sues 2 drugmakers over painkiller's marketing
Pharmacia Corp. and Pfizer Inc. have been sued by a consumer group that says the drugmakers are promoting Pharmacia's arthritis painkiller Bextra for a use not approved by the U.S. Food and Drug Administration.
Pharmacia makes Bextra, which it markets with Pfizer, which is acquiring it. The Congress of California Seniors filed the lawsuit Monday in Los Angeles Superior Court, accusing Pharmacia of using research to promote Bextra for acute pain. The plaintiffs asked the court to order Pharmacia not to market the drug for unapproved uses and to forfeit any profit from such actions.
The FDA doesn't allow companies to promote a medicine for uses that haven't been approved. Bextra is cleared for severe arthritis.
Ex-prosecutor to probe Bristol-Myers Squibb sales
Bristol-Myers Squibb Co. hired a former federal prosecutor to conduct an internal investigation of a sales practice that will cut the company's earnings this year, according to The Wall Street Journal.
Bristol-Myers retained Mary Jo White, former U.S. attorney in Manhattan, to review the company's practice known as channel stuffing - offering wholesalers deep discounts to generate sales, the Journal reported. The effort sharply cut this year's sales and earnings because wholesalers had too much product on hand, and spurred investigations by the Securities and Exchange Commission and the Justice Department.
Bristol-Myers has acknowledged the practice was forcing it to restate earnings as far back as 2000. The company is expected to restate results early next year.
Justice Department, FTC OK Level 3, Genuity deal
The Justice Department and Federal Trade Commission have approved Level 3's proposed acquisition of the bankrupt Internet backbone company Genuity Inc., Level 3 said yesterday.
The approval was one of the closing conditions of the transaction, in which Level 3 will pay up to $242 million in cash and assume much of Genuity's long-term operating agreements. Level 3 Chief Financial Officer Sureel Choksi has said the value of the agreements could reduce the price on the companies' purchase agreement.
The purchase is expected to close in the first quarter of 2003, but the companies will need additional regulatory approval and approval from the bankruptcy court, Level 3 said.
Caterpillar workers sue, allege age discrimination
Twenty-nine current and former Caterpillar Inc. workers are accusing the heavy equipment company of using a performance evaluation system introduced last year to force out older employees.
The workers filed a federal lawsuit in Peoria, Ill., claiming the process was "misused by supervisors to discriminate against and to hasten the departure of older employees" because of their age.
The older workers received good evaluations until Caterpillar introduced the new system in May last year, said Peoria attorney Patricia Benassi, who filed the age-discrimination lawsuit. Later, they received poor evaluations that affected their pay and threatened their jobs if performance ratings didn't improve, the lawsuit alleges, and some retired, fearing they might lose their jobs, medical insurance and other benefits.
A Caterpillar spokeswoman said yesterday that the evaluations were based solely on performance.
Dial Corp. agrees to sell its business in Argentina
Soap and consumer products maker Dial Corp. has agreed to sell its struggling business in Argentina, which has been hurt by that country's faltering economy.
The deal with an Argentine equity investor, Southern Cross Group, is expected to close in the first half of next year.
Dial said the sale would result in a loss ranging from $50 million to $60 million, or 53 cents to 64 cents per share, to be taken in the fourth quarter
The noncash loss includes the reversal of the $95.1 million currency translation adjustment the company recorded as a reduction in equity. The transaction is expected to yield a $6 million cash payment and tax benefits worth about $55 million, Dial said.
Senior vice president named Penske's new CFO
J. Patrick Conroy will become chief financial officer and executive vice president at Penske Corp., effective Jan. 1.
Conroy, 39, who joined the company in 1999 and now is senior vice president of finance, began his career in the mid-1980s in Comerica Bank's corporate banking department.
This column was compiled from reports by Sun staff writers, the Associated Press and Bloomberg News.