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Robert Johnson: A Big Bet On Bet

In Business This Week: HEADLINER


BET Holdings Chairman Robert Johnson may finally succeed in taking his company private. On Mar. 16, with the help of longtime partner Liberty Media, the cable impresario who founded the Black Entertainment TV network in 1980 offered shareholders a sweetened $63 a share to take his company private--up from the $48 he first offered in September.

The deal, likely to go through this summer, will free Johnson to fund his expansion plans without worrying about the impact on earnings or the concerns of other shareholders. His goal is to leverage BET's brand recognition among African-Americans in non-cable ventures such as magazines, clothing, and financial services. And its lucrative core cable business--which Acorn Fund manager Chuck McQuaid says will generate $85 million in cash flow in fiscal 1998--is ready to foot the bill. In the future, look for some of these new businesses--such as the BET SoundStage Restaurants--to be spun off, says analyst H. Bernard Dorshow of Baltimore-based Chapman Co.EDITED BY PAT WECHSLER By Catherine Yang in WashingtonReturn to top


IS LOCKHEED MARTIN'S $11.6 billion bid for Northrop Grumman Corp. unraveling? At a meeting with government officials Mar. 16, the company offered to divest $1 billion in defense electronics assets and agreed to let competitors bid for subcontracting work on items such as radar. That wasn't enough for the Justice Dept., which wants Lockheed to shed $4 billion worth of Northrop Grumman's electronics business to make sure Lockheed-Martin doesn't favor in-house suppliers. For the company, that's a deal-breaker. The two sides were meeting to try to negotiate their differences but sources at Justice say the antitrust division is prepared go to court to stop the deal if a compromise can't be reached.EDITED BY PAT WECHSLERReturn to top


IN ANOTHER BELT-TIGHTENING MOVE for big banks, Chase Manhattan announced on Mar. 17 it would cut 6% of its workforce, or 4,500 employees. Savings from the cuts, estimated to be $460 million, will be put into high-growth businesses such as investment banking and mortgage servicing. "I would call it better rationalization of scarce resources," says Hal Schroeder, of Keefe, Bruyette & Woods in New York, commenting on the layoffs. The company hopes to accomplish almost half of the cuts through attrition.EDITED BY PAT WECHSLERReturn to top


HOUSE REPUBLICANS ARE TRYING to avert a war between the states and the feds over Internet taxes. President Clinton backs a moratorium to help E-commerce take hold; states want the sales-tax revenue. The House may soon adopt a compromise. A bill to be introduced as early as Mar. 18 by Representative Chris Cox (R-Cal.) would pave the way for governors to impose levies after three years, half the moratorium proposed by the original bill backed by the industry. It will also establish a commission charged with setting ground rules for state sales taxes on Net commerce. The panel would have two years to finish its work.EDITED BY PAT WECHSLERReturn to top

The Aging of Abercrombie & Fitch
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