In Business This Week: HEADLINER
FINN CASPERSON: TIME TO UNLOAD THE FAMILY BUSINESS
It may be the end of a dynasty. On Feb. 17, Beneficial Chairman Finn Caspersen announced that the finance company he had run for 22 years--and his father for 17 years before him--may be put on the block in an effort to enhance shareholder value. The news sent the stock up 37%, to 112 7/8.
Beneficial wound up in this position because of Caspersen's conservative style. While his restraint kept loan quality high, it kept earnings growth slow. And Beneficial has been slow to upgrade computer systems to bring down the costs of underwriting loans and collecting payments. Last October, it began a restructuring that was to include the planned sale of businesses. But analysts such as David Hochstim at Bear Stearns say an outright sale of Beneficial should gain more for shareholders than waiting for the restructuring to bear fruit.
"It is difficult," says Caspersen of a sale. Still, with 278,000 shares, he should benefit nicely from any such deal. That should take some of the edge off breaking a family tradition.EDITED BY KELLEY HOLLAND By Amy Barrett in PhiladelphiaReturn to top
ZIFF-DAVIS GOES ON THE BLOCK
SOFTBANK IS SPINNING OFF its computer trade publication and exposition business. On Feb. 18, the Japanese conglomerate filed to offer shares on the New York Stock Exchange in Ziff Davis, which is headquartered in New York and owns periodicals such as PC Magazine and PC Week, the ZDNet Web site, and Comdex, the industry's top trade show. The initial public offering, expected to raise $460 million, could help Softbank to reduce its heavy debt load, brought on by a $4.5 billion buying spree, and help offset the effects of unfavorable currency exchange rates. Softbank will also refinance $1.5 billion in debt.EDITED BY KELLEY HOLLANDReturn to top
STORMY WEATHER AHEAD FOR PAN AM
THE NEW PAN AM CORP. IS flying into headwinds. On Feb. 17, the Miami carrier said it was in default on aircraft leases by $4 million and was negotiating to restructure payments on its fleet. In a Securities & Exchange Commission filing, the airline also said it must come up with $3.3 million by Feb. 23 to provide additional security for travel-agent refunds. Under David Banmiller, who replaced Martin Shugrue as CEO in November, Pan Am has focused on routes from Florida to the Northeast, laid off 550 workers, and worked to stabilize operations after its merger with Carnival Air Lines.EDITED BY KELLEY HOLLANDReturn to top
A FIDELITY MANAGER IS `NOT SATISFIED'
FIDELITY INVESTMENTS' TOP fund manager is dropping four funds, citing the burden of managing $43 billion. George Vanderheiden, whose results are second only to Peter Lynch's, says he's turning over control of the Destiny II Fund and three Asset Manager funds to other Fidelity managers. "I'm not satisfied with my performance over the last few years," he says. Indeed, Vanderheiden's funds have trailed the Standard & Poor's 500-stock index for the past two years.EDITED BY KELLEY HOLLANDReturn to top
FEDERATED PUSHED DEBTORS TOO HARD
FEDERATED DEPARTMENT STORES has agreed to pay $14.6 million to settle Justice Dept. charges of improper debt-collection practices. On Feb. 17, Justice announced that a multistate investigation had revealed that Federated was inducing customers who had filed for bankruptcy under Chapter 7 to sign contracts agreeing to repay their department-store debts. Under bankruptcy law, such agreements to repay a debt that otherwise would be discharged in bankruptcy must be voluntary. An earlier investigation led to a similar settlement with Sears Roebuck last year. Federated's department stores include Bloomingdale's, Macy's, and Burdines.EDITED BY KELLEY HOLLANDReturn to top