WALL STREET

SEAT HOLDER FILES SUIT TO BLOCK NYSE-ARCHIPELAGO MERGER

A seat holder on the New York Stock Exchange filed suit yesterday to block the merger between the NYSE and all-electronic stock market Archipelago Holdings, claiming a breach of fiduciary responsibility.

William Higgins, who heads a long-standing group seeking changes at the NYSE, is the lead plaintiff in the suit.The lawsuit also names the NYSE’s chief executive, John Thain, the entire NYSE board, and Goldman Sachs Group, which advised both the NYSE and Archipelago in merger talks, claiming a conflict of interest, according to the suit.

Mr. Higgins’s attorney and a partner at Grant & Eisenhofer, Jay Eisenhofer, said he would likely file for an injunction against the deal once a final merger date is announced. However, he said his client was not interested in blocking the merger – just getting a better deal.

– Associated Press

NATIONAL

DUKE TO BUY CINERGY FOR $8.9 BILLION, ADD LOW-COST PLANTS

Duke Energy, the largest American utility owner, agreed to buy Cinergy for about $8.9 billion in stock, adding coal-fueled power plants in the Midwest that may lower costs as natural-gas prices surge.

Cinergy holders will swap each of their shares for 1.56 shares of Charlotte, N.C.-based Duke, the companies said yesterday in a statement. Duke also will assume about $5.4 billion in debt.

The transaction would be the second-biggest American utility acquisition in history, ranking behind Exelon’s agreement in December to buy Public Service Enterprise Group for $12.8 billion. Duke expects to cut $400 million in annual costs, partly by eliminating 1,500 jobs.

Cinergy’s James Rogers, 57, will replace Paul Anderson, 60, as chief executive at Duke. Anderson will be chairman, the companies said.

– Bloomberg News

SAKS FIRES EXECS AFTER MARKDOWN PROBE

Saks Incorporated said yesterday it has fired its chief accounting officer and two other top officers after an internal investigation into improper collections of markdown allowances found that $20 million was inappropriately taken from vendors between 1999 and 2003.

The company, which is also the target of an informal inquiry by the SEC and U.S. Attorney’s Office in New York, said it would reimburse vendors.

Suppliers pay markdown money to compensate stores when they don’t sell products or are forced to take a deeper markdown than expected. Over the past few years, stores have placed more financial pressure on suppliers, and that’s expected to get worse as stores consolidate and have more power in negotiations.

As a result of the review, the retailer said it has asked Chief Accounting Officer Donald Wright and Saks Fifth Avenue Chief Administrative Officer Donald Watros to resign from their positions. Brian Martin, formerly the company’s general counsel, was also asked to resign. Saks said other employees “directly involved in the over collection” will also be asked to resign.

– Associated Press

IN THE COURTS

DISNEY SUED BY FORMER DIRECTORS SEEKING TO VOID VOTE

Former Walt Disney directors Roy Disney and Stanley Gold yesterday sued the company to void its last board election, claiming investors were misled about the search for a chief executive officer to replace Michael Eisner.

The dissident directors asked the Delaware Chancery Court to force a new vote. Messrs. Disney and Gold claim the company and board falsely promised an open search, inducing shareholders to vote for the incumbent board and mollifying the ex-directors to keep them from running an alternate slate at the February annual meeting. The suit renews hostilities between the Burbank, Calif.-based company and Messrs. Disney and Gold, who last year pushed to have Mr. Eisner fired.

– Bloomberg News