Downtown-based Trust Company of the West, one of nation’s largest privately held fund managers, has agreed to sell a 70 percent stake to French banking giant Societe Generale SA in a deal worth more than $1.2 billion.
Societe Generale is offering 14.1 million shares, or 3.3 percent of its capital, for 51 percent of TCW Corp. Inc., one of the few large asset management firms in the United States to remain unlisted.
The French company will increase its stake by 19 percent between 2003 and 2006, adding 4.75 percent a year for an eventual 70 percent ownership of TCW. Societe Generale intends to buy back half of the initial stock outlay to limit the number of new shares its must issue, thereby making the deal effectively 50 percent in cash.
TCW was founded in 1971 and currently manages $80 billion in assets. TCW officials said 61 percent of the firm’s clients are institutional investors and the remaining 31 percent are retail buyers or wealthy individuals. TCW management will stay in place and will continue to hold 30 percent of the equity.
Societe Generale officials said the TCW acquisition, its second purchase of a major management fund this month, will help the company gain a strong foothold in the key U.S. market and boost its exposure to equity markets.
Fox Settles With Bochco
“NYPD Blue” producer Steven Bochco and 20th Century Fox television have skirted a courtroom battle over syndication of the popular cop show, with the studio agreeing to pull reruns off its FX cable network next year if another bidder offers a higher price.
Bochco’s suit was the latest in a string of vertical integration lawsuits involving Hollywood companies that produce and broadcast content, as well as own secondary channels that can vie for the reruns. Bochco, a profit partner in “NYPD Blue,” charged that 20th Century Fox and its parent company, Rupert Murdoch’s News Corp., failed to engage in an open bidding process for the one-hour drama, shortchanging the producer nearly $50 million over the life of the contract.
Prior to the settlement, Fox argued that no one ever bid higher for the program, pointing out that the rerun rights fetched a record price in 1995, when the deal was made.
Specific details of the settlement were not released, but the deal marks the first time a sale of TV reruns has been reversed.
Bornstein Back at Disney TV
Returning to the position he left two years ago, Steven Bornstein has been renamed president of ABC Television.
Bornstein, who spent the past two years as chairman of Disney Internet for the ABC parent company Walt Disney Co., replaces Robert Callahan who is leaving the company in September for personal reasons, officials said.
Bornstein was chief executive of ESPN from 1990 through 1999 and is credited with building up the Disney sports cable network, analysts said.
After experiencing steep losses, Disney bought back the shares of its separately traded Internet unit last month and scaled back its operations.
Bornstein will oversee the ABC Television Network, the 10 local TV stations that ABC owns and Buena Vista Television, Disney’s TV production and syndication unit.
Guilty Plea for Alatorre
Former Eastside power broker and Los Angeles City Councilman Richard Alatorre has pleaded guilty to felony tax evasion.
Under the terms of his plea, which ends a four-year federal corruption probe, Alatorre, 57, avoided jail time but will be required to serve three years of probation, including eight months of home detention in which he could be required to wear an electronic monitoring device.
Federal authorities had been investigating Alatorre since at least 1997, looking into a series of questionable transactions involving the councilman’s personal finances and political maneuvers. That investigation is ongoing, authorities say, and focuses in part on people who allegedly tried to bribe the lawmaker with cash.
Alatorre pleaded guilty to one count of willfully evading the payment of federal income tax for the 1996 tax year. He admitted accepting $41,840 in cash in 1996 from third-party sources that sought to influence him in his capacity as a city councilman and a board member of the Metropolitan Transportation Authority. He admitted keeping the payments secret and failing to report them to the Los Angeles Ethics Commission and the state Fair Political Practices Commission.
Earlier this month, Alatorre stepped down from his $114,000-a-year job as a political appointee to the state Unemployment Insurance Appeals Board.
Boeing Wins 717 Contract
In a boost for Boeing Co.’s struggling Long-Beach-based 717 program, Midwest Airlines has placed a $750 million order for as many as 50 of the 106-seat aircraft.
The Milwaukee-based airline said it signed a memorandum of understanding placing firm orders for 20 717s, as well as agreeing to an option to purchase 30 more at a later date. The largest single deal in three years for Boeing’s smallest jetliner could help prolong the life of Southern California’s last remaining commercial airplane-making facility, analysts said. About 5,000 people work at the Long Beach 717 complex.
Boeing began building the airplane on a moving assembly line last fall, a first for the industry, in hopes of bolstering sales and improving prospects by cutting production costs. Under the new process, Boeing said it hoped to churn out a plane every 20 days, a significant gain on the 65 days that the old system required.
Cushman Realty Being Sold
Los Angeles-based commercial real estate brokerage Cushman Realty Corp. has reached a tentative agreement to be purchased by Cushman & Wakefield Inc.
John C. Cushman III, who co-founded Cushman Realty with twin brother Louis Cushman, is expected to be named chairman of Cushman & Wakefield’s board of directors. Louis Cushman, who is based in Houston, is expected to be named vice chairman.
Under the deal, the Cushman Realty name would disappear and the firm’s approximately 200 employees in 11 offices would be merged with Cushman & Wakefield’s much larger organization, which includes about 9,000 employees worldwide.
Terms of the deal, which is subject to approval by both companies’ boards of directors, were not disclosed.
Cushman & Wakefield was founded near the turn of the century by John and Louis Cushman’s grandfather and great uncle. The brothers worked for Cushman & Wakefield until establishing their own firm in 1978.
Strong Earnings for East West
East West Bancorp Inc., the parent company of San Marino-based East West Bank, announced record earnings for the first quarter of 2001.
East West, which is focused on the Chinese-American community and other niche markets, said earnings per share were 41 cents on total first-quarter earnings of $9.9 million, 14 percent higher than the like year-earlier period and the bank’s best quarter ever.
Bank officials attributed the strong results in part to expansion of its deposit franchise.
Universal Buys EMusic
EMusic announced it has agreed to be purchased by Universal Music Group, the world’s largest music label, for a little less than $23 million in cash.
Universal, a unit of France’s Vivendi Universal, said it plans to start a tender offer for EMusic’s outstanding shares for 57 cents each. EMusic shares had traded as high as $35 on the OTC Bulletin Board in June 1999.
The Redwood City, Calif.-based company has been struggling to win over a large user base against the backdrop of competition from the controversial Napster service, among others. EMusic offers digital downloads by artists on smaller independent labels, including Elvis Costello, Tom Waits and Creedence Clearwater Revival. It started this service first on a fee-per-download basis and later on a subscription basis, which allowed users unlimited downloads for a monthly fee.
The deal follows the formation last week of the Duet service, a partnership between Universal and Sony Music Entertainment, along with Internet media company Yahoo. Universal declined to comment on whether EMusic would become a part of the Duet service.
Amgen Chief Gets $161 million
The retired chairman and chief executive of Amgen Inc. exercised options last year valued at $161.2 million and his remaining options are worth more than $100 million.
The sum makes Gordon M. Binder, who retired as CEO in May and as chairman in December, one of the nation’s most richly rewarded executives in 2000. Binder, 65, earned $1.8 million in salary and bonuses in 2000.
Under Binder’s leadership, Amgen emerged as a pharmaceutical powerhouse, anchored by the blockbuster anti-anemia drug Epogen, which accounts for about $3 billion in annual sales.
Amgen’s performance slipped last year, with its share price rising 6.5 percent, compared with a 23 percent gain in the Nasdaq biotechnology index.
L.A. Leads IRS Audits
Los Angeles remains the IRS audit capital of America, according to new statistics from the agency responsible for collecting federal taxes.
Although audits were down nationwide, for the sixth straight year California taxpayers were among those likely to be audited.
Last year, just 0.19 percent, or 19 out of each 10,000 taxpayers, were subjected to an intensive, face-to-face audit with an IRS officer, according to data collected by the Transactional Records Access Clearinghouse, a nonpartisan data research organization at Syracuse University in New York. That compares with 31 out of each 10,000 taxpayers in 1999 and is about a third of the 1996 audit rate.
In Los Angeles, 0.48 percent of taxpayers encountered a face-to-face audit last year, down from 0.67 percent the year before and 1.59 percent in 1996.
Also in Los Angeles, high-income taxpayers get audited at a rate about three times the national average, according to the Clearinghouse, with 1.44 percent facing an in-person audit last year. In the rest of Southern California, only 0.72 percent of taxpayers with incomes of more than $100,000 were selected for face-to-face audits.
‘Junk’ Fax Senders Sued
The Santa Monica-based Foundation for Taxpayer and Consumer Rights filed lawsuits against two companies it claims sent unsolicited junk faxes in violation of federal law.
The consumer advocacy group filed its suit in Los Angeles Superior Court, alleging that junk faxes were sent out by FAXertise of Westlake Village, Communications 2000 Inc. of Torrance and several of their clients, including Schatzi On Main, a well-known Santa Monica restaurant founded by Arnold Schwarzenegger and Maria Shriver.
Although the companies included phone numbers on the faxes that would allow recipients to halt the transmissions, the foundation said federal law prohibits unsolicited fax advertising.
