TECHNOLOGY

PEOPLE SOFT DIRECTOR WILLING TO TALK TO ORACLE

PeopleSoft Inc. director Steven Goldby said he is willing to discuss a takeover by Oracle Corp. if the price is right and a deal can be completed quickly.

“If there’s an indication that they would pay what we consider to be the right price, and there’s a possibility that we could close the transaction quickly, I’m open to discussions with Oracle,” Mr. Goldby said in testimony in Oracle’s suit to knock out PeopleSoft’s takeover defenses in Delaware.

PeopleSoft spokesman Steve Swasey said Mr. Goldby, chairman and chief executive of Symyx Technologies Inc. and a PeopleSoft director since 2000, was “speaking for himself” and not for the board.

Mr. Goldby’s remark raises the possibility that Pleasanton, Calif.-based People-Soft’s board will end its opposition to the takeover after a 16-month fight. The directors have rejected Oracle’s offer four times and last week fired Chief Executive Officer Craig Conway, who opposed the bid.

– Bloomberg News

INTERNATIONAL

KODAK TO SHED 870 JOBS, REORGANIZE EUROPEAN BUSINESS

Eastman Kodak Co., the world’s biggest photographic company, said it will close a British factory and fire 870 workers in Europe as the chief executive officer, Daniel Carp, cuts costs and pushes into digital imaging amid falling film sales.

Kodak will eliminate 350 jobs in Annesley in central England where it will close a plant, and another 250 positions in Harrow, north London. It will halt production of films and color photo paper at its plant in Chalon, France, resulting in the elimination of 270 jobs, Rochester, N.Y.-based Kodak said.

The moves are part of Mr. Carp’s three-year plan, announced in January, to eliminate as many as 15,000 jobs and reduce Kodak’s total facilities by a third. The company already has announced cuts at sites in America, Canada, China, Mexico, and Australia.

– Bloomberg News

ECONOMY

SERVICES INDEX DROPS TO 16-MONTH LOW

An index of American services dropped to a 16-month low in September, suggesting high energy prices may limit economic expansion. More executives reported hiring than in the month before.

The Institute for Supply Management’s gauge of non-manufacturing industries such as banking, construction and retailing fell to 56.7, the lowest reading since May 2003, from 58.2 in August. The gauge has still shown expansion, marked by readings higher than 50, for 18 straight months.

Energy costs, hurricanes, and transportation backlogs damped executives’ outlook last month, according to the survey, which covers businesses accounting for 85% of the economy. Increases in measures of hiring and exports suggest longer-term optimism.

“The data show some cooling in recent months, although the levels are still consistent with fairly strong growth,” said Maury Harris, chief economist at UBS Securities LLC in Stamford, Conn. “The message is that growth is off its peak, but still solid.”

– Bloomberg News

RETAIL

WAL-MART PLANS TO SPEED EXPANSION AS OPPOSITION GROWS

Wal-Mart Stores Inc., the world’s largest retailer, plans to open more so-called super centers next year as the stores, which average about 186,000 square feet, draw increasing opposition from unions and community groups.

From 240 to 250 American super centers will open in fiscal 2005, an increase over this year’s forecast of as many as 240 stores, the Bentonville, Ark.-based retailer said in a statement ahead of meetings with analysts yesterday and today.

Wal-Mart sought to open stores in urban areas including Chicago this year, generating opposition from groups including the United Food & Commercial Workers union that say the company doesn’t pay a fair wage. At least 16 cities and counties defeated plans for supercenters, said Al Norman, founder of Sprawl-Busters, a Greenfield, Mass.-based consulting group that advises residents on how to defeat large land developments.

The ability to open supercenters, which sell groceries as well as household items and clothing, is “one of the most important strategic operational issues” for Wal-Mart, said David Abella, an analyst at Rochdale Investment Management, whose $1.1 billion in assets include Wal-Mart shares. New stores generated about 6 percentage points of the company’s 13% annual sales growth the past five years, said New York-based analyst Bill Dreher at Deutsche Bank AG.

– Bloomberg News

MARKETS

CRUDE OIL PRICES TOP $51 A BARREL

Oil prices darted above $51 a barrel Tuesday as output in the Gulf of Mexico remains in shambles more than two weeks after Hurricane Ivan tore through the region.

Even as the advance in crude futures begins to appear unstoppable, with traders saying $55 a barrel seems possible, some analysts are convinced a speculative bubble has formed.

They say prices have become inflated as institutional investors, such as hedge funds and mutual funds, pile on bets in the energy markets.

Light crude for November delivery soared $1.18 to settle at $51.09 a barrel yesterday on the New York Mercantile Exchange – the highest level in the exchange’s history.

“Oil has become the only game in town,” said the senior vice president of oil and gas research at Oppenheimer & Co. in New York, Fadel Gheit. “Every other investment vehicle has disappointed over the last 12 months.”

But disappointment over stock market returns isn’t the only factor driving institutional investors to energy futures.

Ed Silliere, vice president of risk management at Energy Merchant Corp. in New York, said fund managers are more worried that a major supply disruption in the Middle East, caused by terrorism or something else, would cause oil prices to skyrocket to a level that would wreak havoc in the global economy and devalue most of their investments.

Tuesday’s price surge came as traders remained nervous about violence in oil producing giants such as Nigeria and Iraq and concerned about the slow pace of recovery in Gulf of Mexico oil output.

Oil production in the Gulf of Mexico is more than 3 million barrels per week below average, putting U.S. crude inventories at historically tight levels and placing extra importance on imports at a time when the market is already nervous about possible supply disruptions around the globe.

– Associated Press