"I can use Microsoft's CarPoint to show Ralph Nader my Corvair collection." -- Microsoft chief Bill Gates wisecracking about an antitrust adversary at the Comdex trade show in Las VegasEDITED BY LARRY LIGHT & ROBERT McNATTReturn to top
SHOULDA-COULDA-WOULDA AT ITT
LONGTIME SHAREHOLDERS of ITT may be rejoicing over Starwood Lodging's pending deal to acquire the company at $85 a share, but they could have done a lot better, a lot earlier. In 1985, ITT was under pressure from corporate raider Irwin Jacobs, who aimed to buy the company and bust it up. Instead, ITT boss Rand Araskog stymied Jacobs and kept the company, eventually selling some units, such as Alcatel, and spinning off others, such as Rayonier.
But calculations show that shareholders would have fared better if they had taken a deal 12 years ago.
No official offer was ever made, but Jacobs forces had informally floated a figure for ITT of about $20 more than its share price, which was $33.50 before Jacobs gave up. If ITT shareholders had taken $53.50 in cash and invested it in the Standard & Poor's 500-stock index, today they would have $373.83 on a total return basis with dividends reinvested, according to computations for BUSINESS WEEK by a fellow McGraw-Hill Cos. unit, Standard & Poor's Compustat.
But sticking with ITT through its convoluted history of spin-offs, special dividends, and anticipated sale to Starwood has yielded shareholders only $283.41.
An ITT spokesman says it's all academic because Jacobs never put an offer on the table. Still, no matter how teary Araskog got announcing ITT's sale, just remember, he's not the only one who has a right to feel bad. Shareholders should shed a tear, too.EDITED BY LARRY LIGHT & ROBERT McNATTReturn to top
THE BUZZ ABOUT WIRED: FOR SALE?
THE PRIVATELY HELD WIRED VENTURES, best known for publishing Wired magazine, has hired investment bank Lazard Freres for financial advice, which may include the sale of the company.
Sources familiar with the situation say that the San Francisco-based company, which has endured two failed attempts at going public and relied on several private financings since its founding in 1993, is under pressure from some investors looking to get their money out. While the magazine is profitable, Wired's other ventures have kept the company in the red.
But Wired denies being pressured by backers, which include CUC International and Advance Publications. It also denies that the New York investment bank has been given a mandate to find a buyer or major corporate investors. "We will look at all alternatives," says Jeff Simon, Wired's chief financial officer. "Lazard will be a general financial adviser to the company to help us think through our financial-planning strategy."
Simon adds that none of this activity will interfere with the company's search for a new chief executive. In July, Wired's publisher and co-founder, Louis Rossetto, said that he would retain his title of chairman of Wired Ventures but relinquish the CEO spot.Linda Himelstein EDITED BY LARRY LIGHT & ROBERT McNATTReturn to top
CHECK YOUR REARVIEW, HARVARD
HARVARD BUSINESS SCHOOL has long reigned supreme in the applications sweepstakes--one rough measure of what's hottest among the MBA crowd. But with this fall's entering class, Harvard has slipped into a virtual dead heat with hard-charging Wharton, according to a BUSINESS WEEK survey.
Wharton came within eight applications of matching Harvard in 1997 (table). In prior years, the gap was in the 600 to 700 range. Wharton's applications closed the gap by rising 70% over the past five years, vs. 26% for Harvard.
The top B-schools have all enjoyed a popularity surge in the '90s, but Wharton fueled its increase with an aggressive promotion drive. It has developed offices overseas to attract foreigners, fostered an online applications system, and pushed a big alumni recruitment effort. In terms of overall quality, Wharton also enjoys positive buzz: Since 1994, it has held first place in BUSINESS WEEK's rankings.
Is Harvard worried? Larry Murphy, associate admissions director, will only say: "Wharton has an excellent program."Nadav Enbar EDITED BY LARRY LIGHT & ROBERT McNATTReturn to top