Santa Anita Merger
Fears that the historic Santa Anita racetrack would be demolished and redeveloped for higher-value uses appeared to be put to rest last week with the announcement that Santa Anita Cos. has agreed to merge with the nation’s biggest health care real estate investment trust.
Under the terms of the $383 million deal, Santa Anita shareholders will have the option to receive cash at $31 per share for up to 3.2 million of their shares. Shareholders of Meditrust would receive about 1.2 shares of Santa Anita for each share of Meditrust.
After the merger is complete, the combined company will be based in Needham, Mass. and called Meditrust Corp. Its market capitalization would be worth $2.6 billion.
The merger announcement appears to mark the end of a bid by a partnership between Colony Capital Inc. and Koll Co. to buy Santa Anita.
Although the partners never formally disclosed their plans for the Santa Anita properties, which include the racetrack in Arcadia, a nearby retail mall and other assets, the involvement of Koll and Colony triggered speculation that the firms would close the track and develop the real estate. Santa Anita has suffered from declining attendance in recent years.
“Many of our shareholders will be pleased with Meditrust’s commitment to our racing franchise and live racing in Santa Anita,” said Santa Anita Chairman William Baker in a prepared statement.
Company officials said they made the deal because of Santa Anita’s advantageous tax structure; it is one of only four REITs in the country allowed to own properties and manage non-real estate assets while still keeping its corporate income tax exemption, a benefit that it enjoys because its structure existed before tax laws were changed in 1984.
Scratch Another Local Bank
Add one more Los Angeles bank to the long list of local financial institutions being snatched up by outside companies. L.A.-based 1st Business Bank announced last week that it has agreed to be acquired by Mellon Bank Corp.
Pittsburgh-based Mellon will purchase the bank with stock; other terms of the deal were not disclosed. After the acquisition, 1st Business will operate under the name Mellon 1st Business Bank.
Sixteen-year-old 1st Business has approximately $1.1 billion in assets and owns regional branches in West L.A., the South Bay, the San Fernando Valley and Orange County. The bank enjoys a strong reputation as a midsize business lender.
Mellon officials said they plan to retain “virtually all” of the bank’s 200 employees. The deal is expected to close this fall.
John E. Anderson, the owner of 1st Business, will remain on the board of directors of the new entity. Also joining the new board will be Robert Krummer, the bank’s current chairman and chief executive.
TRW Wants You
Who says the local aerospace industry is dead? Not TRW Inc., which held its first technology recruitment day at UCLA last week as part of its effort to hire 2,000 new employees this year to handle a backlog of business at its Redondo Beach-based Space & Electronics Group.
TRW is recruiting at more than 50 universities around the country, hoping to meet its goal of hiring 300 recent college graduates this year. The company is looking for systems, electrical and mechanical engineers, as well as test and support personnel.
“We’re enjoying a string of successful years, with numerous contract wins, growth in new business lines and potential business in several markets,” said Timothy Hannemann, executive vice president and general manager of the Space & Electronics Group.
The 9,600-employee group hired more than 1,500 people last year, and more than 1,200 in 1995.
One of the group’s biggest recent contract wins was a variation of the old “Star Wars” defense system, an airborne laser intended to defend the country from ballistic missiles that will be developed jointly with Boeing Co. and Lockheed Martin Corp. It is also working on a satellite-based personal communications system called Odyssey.
Rifkin Promoted at Morris
Seven months after an embarrassing debacle in which Sony Corp. President Nobuyuki Idei turned him down to be the top film executive with Sony’s entertainment division, high-profile agent Arnold Rifkin was named president of the William Morris Agency last week.
Rifkin, 49, signed a new five-year contract with Morris shortly after being rejected for the Sony post, which was later given to former United Artists chief John Calley. At the time, it was believed that Rifkin’s deal with Morris called for his eventual promotion to president of the agency.
Considered one of the most powerful motion picture agents in Hollywood, Rifkin is credited with helping to rebuild the Morris agency after much of its talent pool had been poached by rival Creative Artists Agency. He joined Morris in 1992 when it merged with the agency he had formerly headed, Triad Artists Inc.
Rifkin told the Hollywood Reporter that revenues at William Morris have increased by 65 percent since the Triad merger. Financial numbers at Morris, as at all talent agencies, are a closely guarded secret.
Rifkin personally represents Bruce Willis and Whoopi Goldberg, and he is credited with engineering the recent motion picture comeback of actor John Travolta.
Lower Earnings for Wells Fargo
Wells Fargo Bank’s acquisition of First Interstate Bank last year does not appear to running as smoothly as planned, with earnings figures released last week that were considerably lower than those expected by analysts.
Wells Fargo reported first-quarter earnings of $339 million ($3.62) a share. A survey of analysts conducted by research firm IBES Inc. turned up a mean estimate of $3.75 a share for first-quarter earnings.
“Due to runoff in our loan and deposit portfolios, we are not where we would like to be with respect to revenue,” wrote Wells Fargo Chairman Paul Hazen in the earnings release.
Core deposits at the bank were down 7 percent for the quarter compared with the like period in 1996.
Compiled by Dan Turner