City National Eyes Purchase
Beverly Hills-based City National Corp. made a push into Northern California with a proposed $153 million acquisition that could signal the bank’s transition from a regional player to a larger statewide financial institution.
Now the state’s fifth-largest bank, City National said it would pay $29 a share for San Francisco-based Pacific Bank, which has 12 offices and $728 million in assets.
The deal would bring City National’s total assets to $7.5 billion.
Analysts say the expansion will allow City National to better compete for business customers against major competitors like Bank of America and Wells Fargo.
A recent string of acquisitions, including last month’s purchase of San Fernando Valley-based American Pacific State Bank, has left City National with 48 offices in six Southern California counties.
PUC Disconnects Overlay Plan
The state Public Utilities Commission bowed to pressure from Westside consumers and politicians and voted to kill the 310 area-code overlay sought by telephone companies.
The rejection came after Assemblyman Wally Knox, D-Los Angeles, sponsored legislation making it harder for new area codes including overlays to be implemented.
The commission voted 3-2 to halt the 424 area code that was scheduled to take effect Oct. 16 in the 310 region. It also rescinded 11-digit dialing for local calls in the 310 area that was implemented in April in anticipation of the overlay zone.
It was a defeat for telecommunications companies, including Pacific Bell, which maintain the overlay is needed to handle the surging demand for phone numbers. However, according to the commission, there are 180 million numbers allocated to phone companies statewide but only 35 million are in use.
Theaters File for Bankruptcy
WestStar Cinemas Inc., the owner of 54 movie houses that include the historic Mann’s Chinese Theatre in Hollywood, filed for bankruptcy protection.
Despite record-setting crowds at the U.S. box office this summer, debts were piling up at Encino-based WestStar as the company struggled to modernize its Mann theater chain with stadium seating and state-of-the-art sound systems.
The problems of the privately held company illustrate the pressures exhibitors are facing in the increasingly crowded and expensive segment of the entertainment industry. This summer, General Cinema Theatres Corp. and United Artists Theatre Circuit also restructured finances because of declining revenues.
WestStar officials said the bankruptcy filing won’t affect operation of the 72-year-old Chinese Theatre, where dozens of major stars have left their handprints.
CRA Projects in Jeopardy
The L.A. Community Redevelopment Agency approved a $340 million budget, but financial problems in the Bunker Hill area will likely mean less money for other city renewal projects.
Officials are concerned that the agency may not be able to pay off Bunker Hill bonds when they mature in 2018, resulting in a default that could force an insurance firm to pay bond investors.
CRA board members ordered acting Administrator Jerry Scharlin to develop a plan within 60 days to avoid that scenario.
But board member Keith Richman warned that the plan probably will require money to be taken away from redevelopment work downtown and in other areas.
Internet Executive Arrested
An executive who figured prominently in Walt Disney Co.’s Internet plans was arrested on suspicion of attempting to use the Web to arrange sexual encounters with a minor.
Patrick Naughton, 34, had been executive vice president of products at Infoseek Corp. in Sunnyvale until his Sept. 16 arrest in Santa Monica by FBI agents. Infoseek released a statement after the arrest indicating Naughton was no longer employed by the firm.
Naughton’s departure marked a swift corporate reaction to an arrest that is particularly embarrassing to Disney, a company that intends to be the Internet’s foremost provider of family-friendly content and services.
Sunnyvale-based Infoseek is Disney’s partner in the Go Network Internet portal. In July, Disney announced plans to buy Infoseek and package it with other Web assets in a new tracking stock called Go.com.
Naughton was slated to become one of Go.com’s top executives when the deal closed.
Computer Sciences Making Buy
Computer Sciences Corp. agreed to pay $398 million in stock for Nichols Research Corp., a fast-growing computer service provider for the government.
The acquisition would further bolster CSC’s work for U.S. defense agencies.
The El Segundo-based firm now gets 23 percent of its revenue from federal government contracts. In fiscal 1999 ended April 2, CSC had total revenue of $7.66 billion.
Based in Huntsville, Ala., Nichols had revenue of $455 million in the 12 months ended May 31 more than half of which came from contracts with defense and intelligence agencies.
Westwood One Completes Deal
Westwood One Inc., one of the largest U.S. distributors of radio programs, said it finished its purchase of Metro Networks Inc. for $1.2 billion in stock, making it the No. 1 provider of traffic news.
Programming provided by Culver City-based Westwood One includes Shadow Traffic broadcast reports.
Westwood swapped 1.5 common shares for each share of Houston-based Metro, which gave Metro a value of about $75 a share.
In addition, Westwood said it approved the buyback of as much as $200 million shares of its stock, or about 8 percent of its shares outstanding.
The repurchase follows the company’s previous buyback program started in 1996. To date, Westwood said, it has repurchased a total of 7.4 million shares for about $177.4 million.
CBS Corp. owns about 25 percent of Westwood One.
(Bloomberg News)
