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.

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BROADCASTING


ICAHN SAYS TIME WARNER MAY NOT GET BEST DEAL FOR AOL


Activist investor Carl Icahn charged that Time Warner management may not seal the best possible deal for America Online, which has attracted a variety of potential joint-venture partners.


Mr. Icahn, who has been pushing Time Warner to take steps to boost its weak stock price, said that he had been told that at least one potential buyer of a stake in AOL was shut out from bidding. He declined to name the company.


Based on Time Warner Chairman and Chief Executive Dick Parsons’s “past record and blunders, I am concerned that he will do a deal that is good for management but not the best deal for shareholders,” Mr. Icahn told reporters yesterday following formal remarks at a New York Society of Security Analysts conference in Manhattan.


He added that AOL is “a great jewel” that had been mismanaged and now may be sold “too cheaply,” so that the board could stay in control.


Time Warner has been in talks with Google and Microsoft regarding a possible venture with its AOL unit, which is in the midst of a turnaround as demand for online advertising surges.


– Dow Jones Newswires


RETAIL


WAL-MART MAY BEAT TARGET FOR FIRST TIME IN 18 MONTHS


Wal-Mart Stores may report higher sales growth than Target for the first time in 18 months, a sign efforts to revamp merchandise may be paying off.


Wal-Mart, the world’s largest retailer, said last week November same-store sales rose about 4.3%. Target, the second-largest discount retailer, forecast a gain of 2% to 3% after cutting its estimate in half this month. The retailers report final results tomorrow. It would be the first time Wal-Mart has surpassed its competitor since May 2004.


The faster sales growth may show that Wal-Mart is winning back some customers who defected to Target for more fashionable apparel and upscale goods. The chief executive of Wal-Mart, Lee Scott, has expanded inventory of higher-quality apparel and electronics and boosted discounts through December.


“Wal-Mart is fighting back, and they are absolutely aware that their biggest competition is Target,” said Patricia Edwards, a Seattle-based portfolio manager at Wentworth, Hauser & Violich, with $6.4 billion in assets including Wal-Mart and Target shares. For the first three quarters of this year, sales growth at Wal-Mart has lagged behind Minneapolis-based Target. Sales at Target stores open at least a year rose an average of 6.3% through October, compared with 3.6% at Wal-Mart.


– Bloomberg News


DIAMONDS


DE BEERS WILL PAY $250 MILLION TO SETTLE PRICE-FIXING LAWSUITS


De Beers, the world’s no.1 diamond company, agreed to pay $250 million to settle class action suits in America brought against it for alleged price fixing.


The settlements will “bring an end to a number of disputes” and allow it to pursue “global interests,” the Johannesburg-based company said in an e-mailed statement from London yesterday.


De Beers, which Ernest Oppenheimer turned into a global cartel in the 1930s, paid a $10 million fine after pleading guilty to price-fixing charges in an Ohio court in July, opening the door to a return to America for the first time in more than half a century. America accounts for 55% of retail diamond sales and has been closed to De Beers since the first antitrust complaint was filed after World War II.


The settlement proposal still has to be approved by Stanley Chesler, judge in the U.S. District Court of New Jersey, according to De Beers’ statement.


“The fact that they are paying in a class action suit is a surprise,” John Meyer, a mining analyst at Numis Securities in London, said in an interview yesterday. “This may open the doors to other lawsuits against them in the U.S.”


– Bloomberg News


TECHNOLOGY


GOOGLE AMASSES WAR CHEST TO COMPETE WITH MICROSOFT, OTHERS


Google has built up cash reserves and plans to hire more workers to fend off competition from companies such as Microsoft, a top executive said.


Google raised $4.18 billion in a secondary stock sale in September, without specifying how it would use the cash.


Mountain View, Calif.-based Google raised the money with an eye toward its rivals, Chief Financial Officer George Reyes said yesterday.


“It was really to build a defensive war chest,” Mr. Reyes said at a Credit Suisse First Boston conference in Phoenix, Ariz. “The view of the management team supported by the board was that there was at least one very large competitor that could inflict a lot of damage.”


Google is in a race with Microsoft, the world’s largest software company, and Yahoo to lure Web users and the advertisers seeking to reach them. Google has added new products, including satellite maps, to build its online ad business. By September 30, after the secondary offering, Google had amassed $7.6 billion in cash and equivalents in its war chest.


– Bloomberg News


COMPENSATION


RADICAL PLANS IN BEIJING ALLOW EQUITY INCENTIVES FOR EXECUTIVES


Senior Chinese management are to be granted share options and other equity-based incentives for the first time under radical plans drawn up by the Beijing government, keen to foster a new generation of Sino-entrepreneurs.


Up to 10% of Chinese firms’ shares will be made available to be paid in Western-style option plans and individuals will be limited to owning no more than 1% of a firm’s stock under the schemes.


Workers in domestic Chinese firms listed on the Shenzen stock market will qualify for the remuneration packages designed to align the financial interests of management with the firms they run. Pay consultants believe 1,300-1,400 firms could start handing out options to their staff.


– The Daily Telegraph

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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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