In Business This Week: Headliner
Alfred Taubman: A Good Deal at Sotheby's
Life just got a little easier for Alfred Taubman, the Bloomfield Hills (Mich.) tycoon who owns a controlling stake in Sotheby's. Taubman, 75, has chipped in $156 million to help pay the auction house's share of a $512 million fine to settle civil charges of price-fixing with British rival Christie's. The art collector and ex-Sotheby's chairman, who resigned in February when the scandal broke, will also pay $30 million to settle separate shareholder suits.
Although a criminal antitrust probe by the Justice Dept. is continuing, a Taubman spokesman says rumors that he will sell his entire stake are premature and that "he just wants to do the right thing and preserve the value of this company." Good thing, since his 13.2 million special voting shares--23% of the company and 63% voting control--soared on news of the deal. His investment is now worth more than $310 million.
Taubman bought control of Sotheby's 17 years ago for $137 million. The spokesman doesn't rule out a future stock sale, but with investors now bidding up the shares, Taubman can afford to wait.By Diane Brady; Edited by Aleta DaviesReturn to top
Inflation: Fixing a Numbers Glitch
Oops. The Bureau of Labor Statistics said on Sept. 27 that it underestimated inflation's rise this year. Consumer prices rose 2.7% through August, one-tenth of a percentage point faster than it thought. Statisticians blamed a software glitch. The uptick isn't likely to affect the musings of the Fed, which is expected to hold interest rates steady on Oct. 3. Starting this year, the Fed shifted its inflation focus from the CPI to a broader price gauge covering personal spending. The snafu will affect that, but not as much as it does the CPI. The refiguring is good news for retirees, whose Social Security payments are linked to CPI rises.Edited by Aleta DaviesReturn to top
Corning Gets a Clearer Vision
On Sept. 27, Corning announced it will buy Pirelli's optical-components units for $3.6 billion in cash. The deal comes two months after talks with Nortel Networks ended without a blockbuster merger of their optical-components units--a deal that would have been worth some $100 billion. Corning execs say the failure of those talks hasn't dimmed their ambition to become the world's leading optical-layer maker, providing amplifiers, lasers, and other gear needed to move data through fiber at blistering speeds. Corning, the company that invented optical fiber, says its optical sales should double, to $1 billion, this year, and could double again next year.Edited by Aleta DaviesReturn to top
Palm and 3Com Do Better Alone
Sometimes, breaking up is right to do--at least for Palm Computing and ex-parent 3Com. Palm said on Sept. 25 that sales of its computers, which have 75% of the handheld market, soared 127%, to $401 million, in the quarter ended Sept. 1. Profits before charges were twice estimates. The next day, 3Com said fiscal first-quarter sales fell 23%, to $934 million, but the drop--and 3Com's bottom-line loss--were much less than feared. While 3Com won't see profits for a while, CEO Eric Benhamou says the results aren't "a fluke." Investors agreed, sending 3Com up a hefty 22% on Sept 27, to 17.Edited by Aleta DaviesReturn to top