Merger & acquisition news

Merger & acquisition news

The Federal Trade Commission says it will review antitrust and consumer protection laws

Antitrust and consumer protection laws along with enforcement policies will undergo intense scrutiny by the Federal Trade Commission in response to the widening global economic climate. Hearings are set for October. At that time department officials will decide wether traditional antitrust measures of market power are applicable in the light of global or innovation-based competition. In addition, they will study what changes if any are required in the methods enforcement authorities employ to evaluate claims of efficiency, corporate failure, and poor industry conditions. The review process of possible mergers will also be subject to discussion along with what international standards are now necessary to protect consumers from fraudulent cross-border activities.

ShowBiz Pizza says its president was ousted from its board but vows to challenge the outcome in court

ShowBiz Pizza time Inc. announced a dissident shareholder group’s nominee for director, Joshua S. Friedman of Beverly Hills, Ca. has been elected to its board, replacing its president, Michael Magusiak, but the board wants to challenge his election. Friedman is a managing partner of privately held Canyon Partners Inc., which is a part of the investment group. The company will present its challenge in state district court in Kansas where it is incorporated. The group, New Valley Corp. initiated a proxy contest in May following ShowBiz’s rebuff of the group’s efforts to review various funding options. Because of cumulative voting rules that consider the 6% of outstanding shares held by Friedman and his affiliates, Friedman required only 20% of the votes of outstanding shares. The company contended that if the votes had been correctly counted, he would not have been victorious and instead all of management’s nominees would have been re-elected.

U.S. West is in talks to purchase 40% of Cablevision Systems for approximately $600 million

Baby Bell U S West Inc. is in negotiations to purchase a 40% stake in Cablevision Systems Corp., the country’s sixth-largest cable operator for approximately $600 million. For U S West, one of the most assertive of the Baby Bells, cable systems provide an avenue to enter the local telephone market outside of its 14-state service region. Cablevision in the New York metropolitan area alone. has 1.4 million customers. Under the control of cable pioneer Charles Dolan, Cablevision reaches 2.6 million subscribers in 19 states and has one of the industry’s highest revenue and cash flow per cable home. While the two have been in negotiations before, the current talks are the closest they have come to a transaction. Also, a cablevision investment by U S West could further confuse a reorganization of the phone company’s 25.5% investment in Time Warner Inc.’s cable and entertainment operations. Talks have been delayed since U S West is demanding a controlling stake in the Time Warner cable business if it is forced to relinquish its stakes in HBO and the Warner studio. The fact that Cablevision has properties in the New York area and elsewhere in the Northeast provides U S West with added bargaining clout since they would offer a tactical fit with Time Warner’s systems, the nation’s second largest. The reorganization talks have been in progress for months and Time Warner indicates they may take up to a year for a resolution.

Lennar says it can beat Centex’s offer for Vista Properties but can’t because of unfair” conditions from Centex/Vista’s pact

Miami-based home builder Lennar Corp. has maintained it was capable of paying much more for a controlling stake in cash-poor Dallas Real Estate firm Vista Properties Inc. than the already accepted $945 million bid from Centex Corp but said that “unfair” conditions contained in the pact thwarted other offers. One of the conditions included a provision that ends consideration of an outside bid of Centex agrees to top it by $1 million. Centex, a Dallas homebuilder, and Lennar have been engaged in a bidding war for Vista for over a month now. Last December, Centex offered $85 million. Six months later, Lennar come forth with a $5 million bid. Centex then brought in a $94.5 million bid. Then last week, Vista gave noteholders and shareholders a prepackaged bankruptcy plan that included selling 49% of Vista to Centex which already owns a 4% stake.

Slovakia says it cancelled the country’s privatization campaign because it was only benefiting investment funds and foreigners

Slovakia’s leaders maintain they squelched the country’s mass-coupon privatization campaign because it was lining the wallets of investment funds and foreigners while stealing from the average Slovak. Privatization began in 1991 when shares in more than 500 large state companies were turned over to private hands. But the campaign fizzled after Prime Minister Vladimir Meciar led the country to its 1993 separation from the Czechs who have since ended their own second wave of privitizations. The action two weeks ago by a parliamentary vote is one of the most remarkable changes in direction thus far by any of Europe’s post-communist countries. In spite of considerable political turmoil, the government had promised a coupon privatization to distribute shares in the literally hundreds of companies which remained in state hands. However, in June, that was nixed when Meciar announced he would scrap the coupon method in favor of a new plan. Instead, citizens would receive five-year bonds with a nominal value of 10,000 korunas. While the bond would yield 10% interest a year, it would not be redeemable until 2001. At that point, people could utilize the bonds to help finance government-owned flats or to purchase shares in the companies where they are employed. The government says it will sell controlling stakes in as many as 120 companies with a book value of 100 billion korunas. The will be a number of stars among them including the country’s largest construction company, Hydrostav and dozens of hotels and spas. The state officials don’t conceal their motive for the new plan — mainly to thwart the investment funds which arose during the first wave and collected over 60% of all the tradable shares.

Copyright Quality Services Company Jul 31, 1995

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