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Prodigy: A Bath For Ibm And Sears


In Business This Week: HEADLINER: EDWARD BENNETT

PRODIGY: A BATH FOR IBM AND SEARS

Why does Edward Bennett want to buy Prodigy, the No.3 computer online service? Bennett, who took Prodigy's helm a year ago, is expected soon to announce a deal in which he and other managers will take the service off the hands of owners IBM and Sears, who have poured about $1.2 billion into Prodigy since launching it in 1985. Now, they'll take a bath. Analysts say the partners were asking $700 million to $800 million. Those close to the negotiations say Bennett may have a deal at $100 million. Even at that price, Prodigy may be no bargain. Bennett, 49, formerly head of Viacom's VH-1 cable-TV music channel, seemed a natural to revive the service. But Prodigy has slipped further. No.1 America Online has nearly 6 million subscribers, CompuServe has nearly 5 million, but Prodigy peaked at 2 million in 1994 and has since dropped to 1.3 million. Bennett and team believe Prodigy could become a profitable super-hip "site" on the World Wide Web, but analysts are skeptical. They figure even the Net's leaders are losing money.EDITED BY THANE PETERSON By Paul EngReturn to top

THE SEC LOOKS FOR FOULS AT HASBRO

TROUBLE IN TOYLAND. OPTIONS trading patterns show that about a dozen investors with ties to insiders at toymaker Hasbro, based in Pawtucket, R.I., may have played some illegal games, Pacific Stock Exchange officials say. The PSE has referred the insider-trading information to the Securities & Exchange Commission for investigation. PSE spokesman Dale Carlson says the exchange began its probe after noting a surge in risky call options before Mattel announced its failed buyout bid for Hasbro in January. Company spokesman Wayne Charness says that "as far as we know, [the probe] has nothing to do with Hasbro insiders." The SEC asked for preliminary information about people with knowledge of the bid shortly after it was announced.EDITED BY THANE PETERSONReturn to top

A COURT FORCES CAT'S DOORS OPEN

AFTER A THREE-WEEK STANDoff with the company, investigators from the National Institute for Occupational Safety & Health (NIOSH) entered Caterpillar's York (Pa.) plant on May 6. Prompted by complaints from the United Auto Workers, the federal agency wanted to determine if levels of cadmium at the facility are causing sexual dysfunction among its male workers. Caterpillar had blocked the inspection despite a court-issued warrant, arguing NIOSH had not proven probable cause. Cat opened its doors after a federal judge found it in contempt of court and threatened to fine it $10,000 a day.EDITED BY THANE PETERSONReturn to top

10 BILLION DOLLARS WORTH OF PHONE CALLS?

FORGET THE JACKIE AUCTION. The real action ended on May 6 in Washington, D.C., when 89 companies bid $10.2 billion for 493 licenses to provide wireless phone service in the U.S. Nextwave Telecom, of San Diego, was the big buyer, spending $4.4 billion for 56 markets, including New York and Los Angeles. But some losing bidders carp that Nextwave is a front for foreign giants such as South Korea's Pohang Steel and Japan's Sony. Nextwave says control of the company rests with its founders, all U.S. citizens.EDITED BY THANE PETERSONReturn to top


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