WALL STREET

ICAHN MAY MAKE OFFER FOR 10% OF TIME WARNER

Billionaire financier Carl Icahn may make a tender offer for as much as 10% of Time Warner, adding pressure on the publishing and broadcast company to buy back shares and spin off its cable-TV unit, according to a person familiar with the matter. Mr. Icahn, who already has a 2.6% stake along with hedge fund partners, would include other investors in his plan, the person said. Mr. Icahn is prepared to put up as much as $1.5 billion of the $6 billion that may be needed to buy the shares, the person said.

– Bloomberg News

TRADE

BOOM IN TRADE FROM ASIA BOOSTS N.Y., N.J. PORTS

A boom in Asian trade to America has boosted the volume of cargo at the Port of New York and New Jersey to record levels during the first six months this year, with total shipping volume up 14%, port officials said. Imports to the port from Asia increased 28% over last year and now account for 46% of the port’s total volume of goods, according to Port Authority officials.The port is the third-largest in the nation and has managed handle the increased number of cargo ships carrying goods from Asia through the Panama and Suez canals with five additional shipping lines, totaling 24, that make unloading cargo much quicker than in other ports, most notably the port of Los Angeles.The Port Authority announced its cargo growth yesterday and said tax receipts from port trade totaled $2 billion in 2004. The port has already broken ground on plans to grow its cargo-handling capabilities.

– Special to the Sun

HEDGE FUNDS

OFFICIALS SEIZE $101M FROM ACCOUNT WITH POSSIBLE LINK TO BAYOU

Arizona state authorities said they seized more than $101 million in assets from a bank account that may have held money from Bayou Management LLC, a hedge fund management firm currently under investigation for fraud. On May 19, the Arizona Attorney General’s office seized the money from a Wachovia account after being alerted to a series of quick transactions that had shifted the funds from German, Hong Kong, British, and American accounts in rapid succession. Since the seizure, Bayou has filed a claim on the money, as has the account holder, Majestic Capital Management. Karl Johnson, a principal of Majestic, has acknowledged in court papers that he originally received the funds from Bayou founder and chief executive Samuel Israel III, according to an Arizona state official.

Meanwhile, Connecticut officials will form a task force to look into reforming the hedge fund industry in response to the questions about Bayou, the state’s attorney general said yesterday. With western Connecticut playing host to numerous hedge funds due to its proximity to financial centers in New York, Attorney General Richard Blumenthal said the move could have major ramifications for the largely unregulated funds, which serve institutions and wealthy individuals.

– Dow Jones Newswires and Associated Press

IN BRIEF

E.U. Trade Commissioner Peter Mandelson warned that consumers will pay higher prices and face clothing shortages unless E.U. governments release more than 80 million Chinese garments blocked from entering Europe … United Airlines hired a Chinese company for major maintenance of its Boeing 777 aircraft, as airlines increase use of contractors to reduce costs … Merrill Lynch and Citigroup are dominating Wall Street’s fastest-growing fixed-income business: bonds backed by debt offering the gamut of risk … A seat on the New York Stock Exchange changed hands yesterday at a price of $2.9 million, up $100,000 from the last seat transfer … Federated Department Stores will sell 26 stores in its purchase of May Department Stores as part of an antitrust agreement with five states, the New York attorney general, Eliot Spitzer, said yesterday … Ford will fire about 400 managers as part of its plan to cut 2,750 salaried workers by the end of the year … General Motors said yesterday it was recalling about 800,000 sport utility vehicles and pickup trucks in 14 northern states because corrosion was affecting the antilock brake system, leading to more than 200 low-speed crashes … The company also said said American sales of large sport utility vehicles won’t return to past peaks because of rising fuel prices and changing consumer tastes … Two former executives of a Phoenix-based retirement plan administrator pleaded guilty to securities fraud and were sentenced to probation in a case stemming from New York Attorney General Eliot Spitzer’s mutual fund probe … Yahoo added a feature that lets its e-mail users search the contents of files attached to messages, offering a function that America Online, Microsoft, and Google haven’t introduced.

– Bloomberg News, Dow Jones Newswires, and Associated Press