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.
IN THE BOARDROOM
GUIDANT SHAREHOLDERS COMPARE TAKEOVER OPTIONS
Guidant Corporation recommended that shareholders approve a $21.5 billion takeover offer by Johnson & Johnson at a January 31 meeting while it continues reviewing a higher offer from Boston Scientific Corporation
Guidant may still agree to Boston Scientific’s $25 billion bid, according to proxy materials filed today with the Securities and Exchange Commission. In addition, American regulators said the Indianapolis-based maker of heart-rhythm devices reported 18 additional failures by defibrillator models it recalled in June.
J&J cut its offer after the recall of 109,000 defibrillators, linked to at least seven deaths, reduced Guidant’s sales and earnings outlook. The two companies are vying for Guidant to get a share of the $10 billion-a-year market for implantable pacemakers and defibrillators, the fastest-growing medical technology.
– Bloomberg News
ENERGY
OIL PRICES RISE AS IRAN CONSIDERS SUPPLY CUTS
Crude oil climbed past $60 a barrel in electronic trading in New York after Iran’s deputy oil minister said OPEC should cut output next month to prevent a fall in prices, reviving concern about potential supply shortages.
Hadi Nejad-Hosseinian, Iran’s deputy oil minister, said yesterday that after winter demand eases, the Organization of Petroleum Exporting Countries should reduce production “to ensure stability in prices.” The group will decide at a Jan. 31 meeting in Vienna whether to keep output near a 25-year high.
“An OPEC comment like that gives a bullish reason” for prices to move higher, said Chris Mennis, owner of oil trader New Wave Energy in Aptos, California. “Everybody is nervous there could be a repeat of what we saw last year, when we had an escalating price scenario.”
– Bloomberg News
PHARMACEUTICALS
NEW BREAST CANCER DRUG APPROVED
Women now have another drug they can take to prevent breast cancer from returning after surgery to remove the tumor.
The federal Food and Drug Administration approved yesterday a new use for Femara, a medication already licensed for treating advanced breast cancer. It now can be given as initial therapy to women past menopause who have early breast cancer, the agency said.
In today’s New England Journal of Medicine, a study reports that Femara was more effective at preventing recurrences than the current gold standard, tamoxifen.
– Associated Press
RETAIL
LAST-MINUTE SHOPPING SAVES SEVERAL RETAILERS
Procrastinators may have saved retailers this holiday season with a last-minute shopping surge that put merchants on track to meet their modest sales goals, two reports confirmed yesterday.
But retailers are also counting on a post-holiday sales boost from customers returning to stores to redeem gift cards.
A growing number of stores, including Wal-Mart Stores, Coach, and teen retailer American Eagle Outfitters, rushed in fresh merchandise to boost the post holiday business, hoping that customers will snap up some bargains and pick up some new merchandise. That could help boost fourth-quarter profitability, particularly for many apparel stores, which have had to discount heavily to lure customers.
One analyst estimated that about 60% of gift-card redemptions occur between December 26 and the end of January. Gift card sales are only recorded when customers redeem them.
– Associated Press
MUSIC
MUSIC INDUSTRY BAILED OUT BY ONLINE SALES
LOS ANGELES – American album sales were down about 7% as 2005 drew to a close, but the budding market for music downloads, which more than doubled over last year, helped narrow the revenue gap, according to figures released yesterday.
Album sales from January through the week ending December 25 stood at 602.2 million, compared with 650.8 million for the same period last year, according to Nielsen SoundScan. Combined, album and singles sales fell about 8% over the same time last year. More than 95% of music is sold in CD format.
Downloaded tracks from online retailers soared to 332.7 million this year, compared with 134.2 million in 2004, an increase of 148%.
While good news for recording companies looking to expand download sales, it doesn’t bode well for music retailers relying on customers to buy music CDs rather than digital downloads to turn a profit amid declining sales.
– Associated Press