Amex - Nasdaq merger:
WEEK IN BUSINESS / May 10-16, 1998
By James Bernstein. STAFF WRITER
IN A DEAL that may significantly shift the balance of power in the nation's roiling telecommunications industry, SBC Communications Inc. said it planned to acquire Ameritech Corp. for about $62 billion.
If approved by federal regulators, the deal would create the nation's largest local telephone company and threaten the remaining regional Bells with the prospect of having to compete against a giant that would control 55 million local phone lines through the middle of the nation. The combined company would have more than $40 billion in sales, making it the nation's No. 2 carrier behind AT&T.
The deal is the dream of SBC's aggressive chairman, Edward E. Whitacre Jr., who analysts say is determined to create a phone company akin to AT&T before it was broken up by the federal government in 1984.
To many in the industry, the SBC-Ameritech announcement seemed to be another major step in putting the old AT&T back together again. The combination of SBC and Ameritech would reduce to four the remaining Baby Bell regional phone companies, down from the original seven spun off from AT&T 14 years ago.
The deal also seems at odds with the government's landmark Telecommunications Act of 1996, which was to promote competition.
AT&T and other competitors immediately criticized the potential combination, saying it would do little for consumers.
- - - Only about an hour before federal and state officials were to announce an antitrust case that would rival the breakups of AT&T and Standard Oil, Microsoft Corp. won a temporary reprieve from government lawsuits by agreeing to delay the release of its upcoming Windows 98 program until tomorrow.
The ceasefire was intended to allow the Justice Department and 20 states to pursue a negotiated settlement with Microsoft. The software giant is accused of abusing its position as supplier of the operating systems for more than 90 percent of personal computers across the country. Government lawyers say Microsoft is trying to drive other software manufacturers from the market. The company has vehemently denied the allegations.
The Windows 98 update to the enormously successful Windows 95 operating system had been scheduled to be shipped Friday to allow computer manufacturers time to load it onto new machines for a planned worldwide retail launch next month. Microsoft still plans to release Windows 98 to consumers June 25.
New York is among the 20 states joining with the Justice Department.
- - - Is "Seinfeld" really over? One of the most popular television shows ever came to an end after nine years, but the re-runs will go on and on. What is over, for now anyway, is the hype.
That hype translated into some real money. The final episode of Jerry, George, Elaine and Kramer was worth a staggering $1.7 million per 30-second commercial. Restaurants and bars across the country did a booming business, drawing in people who wanted to share the experience of watching the last "Seinfeld."
Even bigger winners were General Electric's NBC unit and Turner Broadcasting's Castle Rock Entertainment, producer of the show. "Seinfeld" earns 40 percent of NBC's profits, about $200 million a season, according to industry estimates. Variety said syndication of "Seinfeld" reruns is projected to produce more than $1 billion in advertising and license fees through 2000.
All pretty impressive, considering the show is built around a guy from Massapequa who once worked as a stock clerk at a drugstore in his neighborhood.
- - - Nike Inc., the shoe company harshly criticized for its labor practices overseas, pledged to root out underaged workers and force manufacturers to comply with U.S. health and safety standards. Company chairman Philip H. Knight also agreed to a demand Nike has in the past fought: He will allow labor and human rights groups to join independent auditors who inspect factories in Asia to assess conditions.
WERE YOU LOST? A look at one of the arcane terms in the news.
Debis: The common name for Daimler-Benz Interservices, a financing and leasing services division that wants to expand now that the Chrysler merger has removed legal barriers that blocked its growth here. Debis had been unable to expand here because the Bank Holding Company Act limits banks' industrial holdings because of conflict-of-interest concerns. The act has kept Debis from offering services here because Deutsche Bank holds a 21.8 percent stake in Daimler-Benz. The merger means that stake will shrink to 12 percent.
THE WEEK AHEAD
KEEP AN EYE OUT FOR . . . Annual shareholder meetings that will be taking place around the country may be fertile ground for corporate news.
Among companies whose shareholders will gather this week: AMR Corp., American International Group,AT&T Corp., Avis Rent-A-Car Inc., Chase Manhattan Corp., Consolidated Edison Co., Continental Airlines Inc., General Re Corp., McDonald's Corp., Omnicom Group Inc., Planet Hollywood International Inc., Reckson Associates Realty Corp., Sbarro Inc., Tiffany & Co., Trans World Airlines, Tricon Global Restaurants Inc., and US Airways Group Inc.
Also, the parade of companies reporting first-quarter earnings continues. Among those due to release figures this week: Barnes & Noble Inc., Campbell Soup Co., Computer Associates International Inc., Hewlett-Packard Co., Home Depot Inc., Staples Inc., and Toys 'R Us Inc.
Monday: President Bill Clinton attends the U.S.-European Union Summit.
Gaming and lodging companies are in focus at a CIBC Oppenheimer investment conference in Las Vegas.
Tuesday: The Federal Reserve's policymaking open-market committee meets to discuss interest rates with investors waiting for an announcement on the direction rates will move.
The Commerce Department reports on April housing starts. The experts forecast an annual rate of 1.6 million.
Long Island Lighting Co. redeems more than $600 million of debt.
Wednesday: The Commerce Department reports on the international trade balance for March. Experts see an imbalance of $11.5 billion.
Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert Rubin unveil the new $20 bill.
WORTH QUOTING
"This is a stock certificate I want to hang on my wall."
- Dean Bonham, president of The Bonham Group in Denver, a sports and marketing consulting firm
The Cleveland Indians plan a public stock offering - the first IPO by a major league baseball team since owners last year changed the rules. If you're looking at Cleveland as an investment, the Indians' financial prospects and the spotty record of the handful of other sports stocks suggest the Cleveland Indians Baseball Co. will disappoint. The team is offering 4 million shares at $14 to $16 apiece.
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05/17
many gold miners on Amex, If the Nasdaq market makers could make a buck on the buy/sell, their "analysts" might be more likely to upgrade!
rh
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