Business Desk

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

The New York Sun
NY Sun
NEW YORK SUN CONTRIBUTOR

IN THE COURTS


PEOPLESOFT’S CONWAY MAY HAVE OVERREACTED TO ORACLE Former People-Soft Chief Executive Officer Craig Conway testified that he may have overreacted to Oracle Corp.’s $7.7 billion hostile takeover bid by attacking its founder, Larry Ellison. Mr. Conway, who described Mr. Ellison as “sociopathic” after the June 2003 bid, told a judge that he decided to vilify Oracle and Mr. Ellison as part of an effort to fend off the takeover offer, now valued at $21 a share. Oracle is suing PeopleSoft in Delaware Chancery Court in Wilmington, seeking to knock out the company’s takeover defenses. When asked by Oracle lawyer Michael Carroll if he may have gotten “carried away” in the first week after Mr. Ellison’s offer, Conway told Judge Leo Strine Jr., who is hearing the case without a jury, “I may have.” The testimony followed PeopleSoft’s comments earlier this week that the company would be willing to consider a transaction with Oracle at a high enough price. While CEO, Mr. Conway said he wouldn’t sell to Oracle under any terms. He rejected Mr. Ellison’s four takeover offers and filed a lawsuit claiming the Oracle bid cost PeopleSoft more than $1 billion in sales. PeopleSoft director Steven Goldby testified Tuesday that he would be willing to discuss a quick takeover by Oracle at the “right price,” and PeopleSoft said he was speaking for the entire board. Oracle is asking Mr.Strine to force PeopleSoft to remove two major impediments to the deal: PeopleSoft’s stock-diluting poison pill anti-takeover defense and a customer-rebate program. Both would make the acquisition prohibitively expensive.


– Bloomberg News


MARKETS


CRUDE OIL PRICES SURPASS $52 A BARREL Crude futures surged above $52 a barrel yesterday as a possible strike by Nigerian oil workers loomed and petroleum output in the Gulf of Mexico continued to suffer more than two weeks after Hurricane Ivan whipped through the region. An Energy Department report that showed domestic oil supplies grew for the second week in a row provided little comfort to traders, who instead focused on declining heating oil inventories. The federal agency warned in a separate report yesterday that homeowners should expect their heating bills to rise this winter due to double-digit price increases for heating oil and natural gas. Light crude for November delivery rose 93 cents to $52.02 a barrel on the New York Mercantile Exchange, a record settlement high. In London, November Brent crude futures were up 86 cents at $47.99 per barrel on the International Petroleum Exchange. While oil prices are 64 percent higher than a year ago, when adjusted for inflation, they remain about $28 below the peak reached in 1981. Still, the runup has been a boon to the stock prices of oil companies. Shares of Exxon Mobil Corp., the largest integrated petroleum company, are up 30 percent from a year ago, trading 53 cents higher at $49.85 yesterday on the New York Stock Exchange.The stock price of Anadarko Petroleum Corp., an independent oil and natural gas producer, is up 60 percent from a year ago at $69.04, rising 92 cents Wednesday on the NYSE.


– Associated Press


PUBLISHING


CONDE NAST WILL BUY AND CLOSE YM MAGAZINE Conde Nast has agreed to buy – and will kill – Gruner & Jahr’s struggling teen magazine YM in order to get a chance to market Teen Vogue to YM’s subscriber file. Conde Nast has also agreed to buy certain YM assets, including its subscriber file, its title and brand name, and its newsstand pockets in supermarkets, newsstands, and drugstores, both publishers announced in statements yesterday. The last issue of YM will be its December/January issue, after which YM’s 1.2 million subscribers will begin receiving Teen Vogue, Conde Nast said in a statement. Teen Vogue’s rate base will increase to 850,000 as of February, the publisher said. “This acquisition is a once-in-a-lifetime opportunity to target a new group of teen readers,” said the president and CEO of Conde nast, Charles Townsend, in a statement.


– Staff Reporter of the Sun


AIRLINES


UNITED TO TRIM FLEET SIZE, ADD INTERNATIONAL ROUTES UAL Corp. said it will reduce the overall size of United Airlines’ fleet and shift more aircraft to serve international routes, which are more profitable. United’s fleet will be reduced to 455 aircraft, 68 fewer planes than United flew in August 2004 and 112, or 20%, fewer than it had in 2002. The airline plan will shift planes to more profitable routes, UAL said in a statement. Chicago-based UAL, which sought bankruptcy protection in December 2002, said last month that weak American revenue, competition, and high jet-fuel prices require additional cost cuts. United Airlines said on September 17 it was targeting $500 million in annual cost cuts in addition to $655 million identified in early September. United said in August it’s likely to terminate employee pension plans to help stem losses. No decision has been made on pensions, the UAL statement said. The airline’s August net loss widened to $56 million from a year earlier on higher fuel costs and lower fares. The company said in a September 23 statement that the August loss included $11 million in reorganization costs and compared with a UAL net loss of $46 million for the month last year.


– Bloomberg News


REGULATORY


ATTORNEY GENERAL SPITZER INVESTIGATING NATURAL GAS LEASES State Attorney General Eliot Spitzer said yesterday that he has begun investigating tactics used by energy companies to obtain leases for natural gas exploration along New York’s Southern Tier and the Finger Lakes region. Mr. Spitzer said his office already had heard from dozens of landowners about various questionable practices by energy companies. Some landowners said company representatives provided misleading information about gas leases and pressured them into signing the leases before they had the chance to consult with an attorney, Mr. Spitzer said. “It is important for all concerned that a lease truly reflects a mutual agreement of the parties,” Mr. Spitzer said in a statement. Mr. Spitzer said his office would review complaints and report its findings at a later date. New York’s primary natural gas production zone runs underground through Chemung, Schuyler, Steuben and Tioga counties.Total market value of oil and natural gas production last year in New York was $232 million, and landowners received an estimated $29 million in production royalties.


– Associated Press


KOOL AGREES TO LIMIT HIP-HOP-THEMED MARKETING Makers of Kool cigarettes have agreed to limit a hip-hop themed marketing campaign and pay $1.46 million for anti-smoking programs following lawsuits claiming they were targeting black youths. The six-year-old “Kool Mixx” promotional program has recently included the nationwide distribution of interactive CD-ROMs with hip-hop music, cigarette packs with hip-hop designs and a “House of Menthol”Web site, according to state officials. Attorneys general from New York, Illinois, and Maryland filed lawsuits this year claiming the campaign violated the 1998 Master Settlement Agreement with tobacco companies because it targeted young people. The trio yesterday announced a settlement with R.J. Reynolds Tobacco Co. that prohibits the inclusion of hip-hop songs on the CD-ROM along with other restrictions.The company also agreed to pay $1.46 million toward youth smoking prevention. “This campaign targeted a hip-hop audience, including youth,” said Maryland’s Attorney General, Joseph Curran. “I hope this settlement sends a strong message that kids are off-limits for tobacco companies.” Curran made the announcement with New York Attorney General Eliot Spitzer and Illinois Attorney General Lisa Madigan. The three sued Brown & Williamson Tobacco Co., which merged with R.J. Reynolds this summer. The company admitted no wrongdoing in the settlement, which will be submitted to courts for final approval. The settlement also bans the use of “Kool,” “Mixx” or “House of Menthol” on any merchandise; prohibits the sale of “special edition” packs in retail stores and prohibits the “House of Menthol” Web site.


– Associated Press

NY Sun
NEW YORK SUN CONTRIBUTOR

This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.


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