Home Sales Surging
A sudden burst of home buying in late May led to stronger-than-expected monthly sales and higher prices throughout Los Angeles County, as confident shoppers ignored early signs of economic slowing.
Monthly sales of new homes in the county were the strongest for any May in 11 years, according to DataQuick Information Systems.
Overall, the number of homes sold jumped 5.6 percent from May of last year to 10,119 this year. The typical home price rose a modest 2 percent to $194,000, according to the report.
In April, sales had fallen sharply from the year-earlier month, leading real estate experts to speculate that the market might be reaching a turning point after several years of high growth. But apparently the market was only catching its breath before sprinting ahead again.
Funding Secured by eToys
In a sign of the difficulty e-commerce companies face in getting additional funding, struggling Internet retailer eToys Inc. raised about $100 million but on terms less favorable than its May 1999 initial public stock offering and a subsequent financing last December.
The cash infusion from a group of institutional investors led by Promethean Asset Management will finance Santa Monica-based eToys through fall 2001, according to company officials.
But the convertible preferred-share issue to Promethean and two other private equity funds could result in them eventually owning anywhere from 4 percent to 13 percent of the company.
Earlier in the week, eToys agreed to pay $1.6 million in stock to buy eParties, an online party-planning site that was on the verge of shutting down.
Northrop Makes Deals
Northrop Grumman Corp. agreed to sell its commercial aerostructures division, which makes fuselages and other parts mostly for Boeing Co. jets, to privately held Carlyle Group for $843 million in cash and securities.
The deal wasn't a surprise, because Century City-based Northrop Grumman had said in April that it was in talks to shed the struggling operation, and Carlyle, which has ownership stakes in several aerospace and defense companies, reportedly was one of the suitors.
Separately, Northrop Grumman agreed to buy Comptek Research Inc., a small maker of electronic warfare simulators, for about $160 million of Northrop Grumman stock. Comptek, with annual revenue of $145 million, is based in Buffalo, N.Y.
Global Reportedly Eyeing Equant
Global Crossing Ltd., France Telecom and others were reportedly in various stages of merger talks with Amsterdam-based communications firm Equant N.V.
Sources say the discussions are furthest along with France Telecom, which was exclusively negotiating with Equant until last week.
Global Crossing, which has executive offices in Beverly Hills, could gain more customers for its $4 billion, global fiber-optic communications network with the acquisition of Equant.
But a person familiar with the company said another large-scale purchase by Global would be unlikely because the company's stock price has plunged and shareholders would resist any further dilution of the stock.
Dan Cohrs, chief financial officer of Global, declined comment on the situation.
Convention Effort Gets Chairman
Terry McAuliffe, renowned as the Democratic Party's fund-raising mastermind, was named chairman of the Democratic National Convention as planners rush to raise the last $7 million needed to pay for the Los Angeles event.
McAuliffe replaces Roy Romer, the former Colorado governor who resigned from the convention leadership post to become superintendent of the Los Angeles school district. McAuliffe, who two weeks ago choreographed the largest fund-raiser in political history for the party, is a longtime friend of President Clinton.
Democrats and city leaders are hoping McAuliffe will use his skills to pick up the fund-raising pace for the August convention in downtown Los Angeles. In recent weeks, under the guidance of a former top aide to Mayor Richard Riordan, the host committee of local civic and business leaders has been trying to regain its footing after slipping early in the effort to raise $35.3 million for the confab.
Port Bustled in May
Statistics released by the Port of Los Angeles showed that the nation's busiest port took in record cargo in May for the second consecutive month.
It was regarded as a sign that this year's peak shipping season began earlier than usual, as retailers stock up for the perennial back-to-school and holiday shopping frenzies, which have been stoked to record highs in recent years by torrid U.S. economic growth.
More than 2 million 20-foot cargo containers passed through the Los Angeles port during last year's peak season generally late spring through early fall. And although the U.S. economy is showing signs of cooling, port officials say that, based on cargo flow so far in 2000, this year's peak season is likely to be at least 15 percent higher.
Web Listing Firm Makes Buy
Homestore.com Inc., which lists homes for sale on the Internet, has agreed to buy closely held Top Producer Systems Inc. for $24.2 million in stock and cash.
The acquisition of Top Producer, founded in 1982, gives Thousand Oaks-based Homestore.com content management software that helps more than 100,000 real estate agents manage leads, contacts and referrals, match buyers and sellers, and track listings.
Century 21, Coldwell Banker, General Motors Acceptance Corp. and Realty World are among the real estate franchises using Top Producer software. Homestore.com controls more than 90 percent of homes listed for sale on the Internet. In April, the Justice Department began an investigation into possible anti-competitive business practices by Homestore.com.
Judge Rules Against Shippers
A federal judge has approved a consent decree that requires shipping companies and the local longshore union to pay $2.75 million in damages and hire hundreds of minorities who failed an employment test deemed discriminatory.
U.S. District Judge Dickran Tevrizian ruled in favor of the U.S. Equal Employment Opportunity Commission, which has sought to end the use of a basic education test for people seeking apprentice dock work in the ports of Los Angeles and Long Beach.
The exam has been administered by the International Longshore and Warehouse Union and the Pacific Maritime Association, which represents about 100 shipping lines, stevedore companies and operators of cargo terminals on the West Coast.
Medical Practice Having Problems
The giant medical practice once owned by MedPartners Inc., whose financial crisis last year disrupted care for about 1 million patients in California, is once again near bankruptcy.
Nine months after a Riverside County doctor bought most of the assets of MedPartners, the operation is losing $2 million a month, raising the possibility again that care could be disrupted across the state.
The physician, Dr. Kali Chauduri, says his company can stay afloat just two to four more months without an increase in the monthly fees paid by health plans. Chauduri's company, KPC Global Care, has delayed payments to some doctors and medical suppliers.
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