Review & Preview
Perelman Plan: Financier Ronald Perelman may convert his entire stake in Golden State Bancorp into Citigroup Inc. shares when the world’s largest financial services company completes its purchase of the California thrift. Perelman, a Golden State director, owned 42.9 million shares as of April 12, or 31.6 percent of the company. The holding would make Perelman, the chairman of Revlon Inc., one of the largest shareholders of Citigroup.
CalPERS Speaks: The California Public Employees’ Retirement System adopted reforms that would require brokerages to root out potential conflicts of interest if they want to do business with the nation’s largest pension fund. CalPERS, which manages $140 billion, also said it will give “significant consideration” to the reforms in hiring money managers to pick stocks and bonds on its behalf. Separately, CalPERS named Robert Walton interim chief executive as it seeks a replacement for James Burton, one of six senior officials who plan to leave by early next year. At a time of falling investment returns, CalPERS has been under criticism for recent decisions.
Earnings News: Hot Topic Inc. reported second quarter net income of $4.3 million, compared with $4.3 million for the like period a year ago. Revenue for the City of Industry-based retailer was $92.5 million vs. $71.9 million.
Pure Bid: Unocal Corp. has offered to acquire the 35 percent of Pure Resources Inc. that it doesn’t already own for about $440 million in stock. The offer is worth $22.25 a share, or about 27 percent higher than Pure’s closing price last Tuesday, when the bid was announced. Unocal would issue about 12 million common shares to complete the transaction, which would provide the El Segundo-based energy company sole ownership of Pure’s oil and gas assets in the Gulf of Mexico and Gulf coast.
Account closed: GBC Bancorp, parent of General Bank, closed the New York office that originated about $38 million in bad loans that the ethnic Chinese bank has had to write off this year. The loan writeoffs threw the parent company to a loss of $10.9 million for the first six months of 2002.
Number Crunch: Citing preliminary data, the State Board of Equalization reports that California taxable sales have declined for three straight quarters. For the first quarter of 2002, taxable transactions totaled $99.5 billion, down from $104.2 billion for the like period a year ago. Sales taxes are the state’s second-largest source of revenues after personal income tax.
Deal Detour: Homestore Inc. is in discussions with Cendant Corp. about renegotiating terms of an agreement that had Cendant selling its Web listing service, Move.com, to Homestore in 2001. Cendant has alleged that Westlake Village-based Homestore may have broached its acquisition agreement when it disclosed that it had overstated revenue in 2000. The Wall Street Journal, citing sources, reported that Cendant wants all the restrictions in the acquisition agreement dropped, including clauses on when Cendant can sell Homestore shares. Neither company would comment on the development, disclosed in regulatory filings.
Showbiz Buyout: AOL Time Warner Inc. agreed to pay AT & T; Corp. $3.6 billion in cash and stock, plus ownership of cable-television systems, to dissolve their media joint venture and gain full control of assets such as the HBO TV network. The agreement gives AOL Time Warner complete ownership of Time Warner Entertainment’s content assets, including the Warner Bros. film studio in Burbank, plus stakes in the Comedy Central and Court TV networks. AOL Time Warner shares ownership of Comedy Central with Viacom Inc., while Liberty Media Corp. owns 50 percent of Court TV.
Wage Debate: A town hall forum on Santa Monica’s proposed “Living Wage” ordinance will be held on Tuesday (27th) at the Four Points Sheraton Hotel in Santa Monica. Speakers at the session will include David Neumark of Michigan State University and Richard Sander of UCLA, experts in the wage debate. On the Santa Monica ballot in November will be a measure on increasing the minimum wage to $12.25 an hour.
Breaking Bread: Chris Martin, chief executive of A.C. Martin Partners, speaks before the Los Angeles Area Chamber of Commerce’s Inside Business Forum Breakfast on Thursday (29th). Martin is also the chamber’s second vice chair. Event gets underway at 7:30 a.m. For more information, call 213-580-7594.
Port Talks: The International Longshore and Warehouse Union and the Pacific Maritime Association are scheduled to resume negotiations Monday (26th) on a new three-year contract to replace the one that expired July 1. Both sides took a two-week hiatus following the death of ILWU President James Spinosa’s father.
Sports Beat: This could be the last week of major league baseball for a while if the players union makes good on its Friday (30th) strike deadline. As of late last week, there were no indications of substantive progress between the players and the team owners. The Dodgers will have their hands full in the days leading up to the strike deadline as they face the division leading Arizona Diamondbacks on Monday, Tuesday and Wednesday (26th-28th). Of course, there’s always college football USC opens its season on Saturday against Auburn at the Coliseum. Also getting underway this week is the U.S. Open tennis championships.
Craft Crowd: Hundreds of artists and small businesses will peddle their wares when one of the nation’s largest traveling craft road shows visits the Long Beach Convention Center Friday through Sunday (30th Sept. 1). Tickets are $8.50, $4.50 for kids, at The Harvest Festival, which features Dixieland Jazz, food tastings and wandering troubadours in addition to cartloads of crafters.
Gone Fishing: You can’t fight City Hall. Not this week anyway, as the Los Angeles City Council concludes its annual two-week August hiatus. The regular council schedule resumes Sept. 3.
City of Angels: Artist Genice Grace unveils her “Angel of The Now” at Cafe Tu Tu Tango on Wednesday (28th) at Universal CityWalk. The statue, which will be decorated with tiles painted by celebrities, is part of “A Community of Angels,” a public art project that seeks to raise funds for several charities.