MANUFACTURING

MAYTAG TO BE PURCHASED BY INVESTORS FOR $1.13 BILLION

Maytag, the third-largest American appliance maker, agreed to be acquired yesterday by buyout firm Ripplewood Holdings and other investors for about $1.13 billion. Maytag shares surged as much as 35% after the announcement. The investors will pay $14 a share, Newton, Iowa-based Maytag said. They will also assume $975 million in debt.

Maytag, which traces its roots back to a farm-equipment maker founded in 1893, was in the process of restructuring. The company cut its quarterly dividend earlier this month to help pay for the turnaround plan.

Maytag shares rose to $15.55 at 6:20 p.m. New York time in after-hours trading. The stock had plunged 45% this year, before the purchase was announced.

– Bloomberg News

GM REPORTEDLY PLANS TO NARROW PRODUCT LINES

General Motors is planning to slim down and specialize its brands, leaving Chevrolet and Cadillac as its only marques offering full lineups of vehicles, the New York Times reported on its Web site last night.

The struggling automaker reportedly plans to have GMC and Hummer continue to sell trucks. The focus of Saturn, Pontiac, and Saab will be narrowed to cars and small SUVs, while Buick will offer some of both.

The plan probably would require consolidation of GM dealerships.

“GMC, Pontiac, Buick, Saturn, Saab, and Hummer can offer vehicles that are very specific rather than shipping millions of identical vehicles all over the world,” said Mark LaNeve, GM’s head of marketing, according to a transcript of a speech he gave yesterday in New York that was obtained by the Times. “Our complementary brands won’t succeed as ‘Little Chevrolets’ or less-expensive Cadillacs. They have to be distinctive, differentiated products.”

– Staff Reporter of the Sun

ECONOMY

LEADING INDICATORS DECLINE IN APRIL; UNEMPLOYMENT CLAIMS FALL

A closely watched gauge of future business activity fell in April, the fourth consecutive decline in a row, offering more evidence that the economy is losing some steam.

But in an encouraging sign for employment, the number of new people signing up for jobless benefits dropped sharply last week. The Labor Department reported yesterday that new applications filed for unemployment insurance declined by a seasonally adjusted 20,000 to 321,000 for the week ending May 14. The decline, larger than expected, was the biggest drop in claims seen in a month.

The Conference Board said that its Composite Index of Leading Economic Indicators fell 0.2% last month to 114.5.

“The Leading Economic Indicators show continued economic growth, but a definite loss of forward momentum,” said Ken Goldstein, an economist at The Conference Board. Still, economists were not worried about the decline in the index because the components that rose – particularly related to manufacturers’ new orders for consumer goods and materials and average weekly initial claims for unemployment insurance – are the most critical barometers of the economy.

– Associated Press

WASHINGTON

FCC ORDERS NET PHONE PROVIDERS TO SUPPLY RELIABLE 911 SERVICE

Internet phone providers were ordered yesterday to begin supplying reliable 911 emergency call service after regulators heard an anguished Florida woman describe how she was unable to summon help to save her dying infant daughter.

The Federal Communication Commission gave companies 120 days to certify that their customers will be able to reach an emergency dispatcher when they call 911. Also, dispatchers must be able to tell where callers are located and the numbers from which they are calling.

– Associated Press

WALL STREET

CITIGROUP EXECUTIVES SETTLE SEC CLAIMS OVER GRUBMAN

Two Citigroup executives agreed to settle regulators’ claims that they failed to properly supervise analyst Jack Grubman, who was banned from the industry for publishing fraudulent research. John Hoffmann, 64, and Kevin McCaffrey, 41, will pay $120,000 each and be barred from overseeing others in the securities industry for 15 months, the U.S. Securities and Exchange Commission said yesterday. The executives, who supervised Mr. Grubman in 2000 and 2001, didn’t admit or deny wrongdoing. The two “failed to respond adequately to red flags that Grubman had unrealistically bullish ratings and price targets on companies he covered,” the SEC said. “In addition, Hoffmann and McCaffrey were aware of potential conflicts of interest.”

– Bloomberg News