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Tribune sale: Chicago Tribune sorts through the ramifications of the LAT owner opening up its auction to include bids for individual assets. Tantalizingly, the paper cites "one of the people" who had expressed an interest in the LAT as saying that "investment bankers involved in the process recently contacted him to say that Tribune would 'entertain bids for individual assets.'" The Tribune, as well as the NYT, emphasized that the process was still very fluid and that despite the initial low-ball bids for the entire company, there would be lots more maneuvering before any plotline emerges. In other words, everything is on the table. A major concern about selling off Tribune piecemeal has been the potentially huge tax bill. One way to get around that would be a tax-free spinoff. From the Tribune:
According to one large Tribune shareholder, such a deal would require Tribune to spin the paper off into a separate company owned by existing shareholders, perhaps valued at 10 to 12 times cash flow, or as much as $2.8 billion. That company could then borrow about half its worth from banks or other lenders and use that money to pay shareholders a fat, one-time dividend. At the same time, a buyer would buy 49 percent of the company and the money would be used to retire the debt. Finally, after the tax implications expired in a couple of years, the buyer would acquire the rest.
PC fire sale: Might be a good time to consider a new machine. WSJ reports that 70 percent of the notebook PCs sold this holiday season will be priced at less than $1,000. In 2004, it was 38 percent. The clearance sale is being prompted by Microsoft's decision to delay the release of its Vista operating system to January. The betting is that not many consumers will want to purchase computers that run on Windows XP following the launch of Vista.
American Girl skirmish: The store that caters to 'tween shoppers - and a unit of El Segundo-based Mattel - has filed a complaint with the National Labor Relations Board, alleging that Actors' Equity has been trying to push a unionization effort involving American Girl workers. American Girl claims that the union has been offering membership to actors and assistant stage managers who are part of the New York store's theatrical productions in return for their support of the unionizing efforts. American Girl targets girls ages 9 to 12. In addition to NY, there are stores in L.A. and Chicago.
October sales: More trouble for the locally based teen retailers. OC-based Pacific Sunwear posted a 7.1 percent drop in same-store sales, worse than the 5.4 percent decline Wall Street expected. City of Industry-based Hot Topic Inc. missed the mark with same-store sales that fell 7.2 percent, deeper than the 5.7 percent decline expected. Overall, the numbers coming out this morning were mixed.
LAX hotel backlash?: Daily Breeze reports that the L.A. City Council has delayed consideration of the plan to require LAX hotels to offer the city's "living wage." Also, Mayor Antonio Villaraigosa has backed away from an early statement of support. The local hotel association has hired attorney and civic leader George Kieffer to look into things, according to the paper, and lobbyists Harvey Englander and Arnie Berghoff also have been involved. If you remember, this had been a big priority for the L.A. County Federation of Labor.
Reversing the mortgage: Did you know that Santa Ana had the nation's largest number of reverse mortgages originated in fiscal 2006, at 5,825? And that L.A. was second, at 5,758 - a 47.1 percent increase from a year earlier? With a reverse mortgage, homeowners 62 and over can borrow against their home equity, and the loan isn't repaid until the homeowner moves or dies.
Sunset sale: Mani Bros. paid $155 million, or a whopping $525 per square foot, for two Sunset Boulevard office buildings. One of them is the former West Hollywood headquarters of architect Charles Luckman. The high sales price reflects the escalation of L.A. office prices in the last couple of years. LAT reports that Mani wants to compete with top Westside properties by catering to business people who live in Beverly Hills, the Hollywood Hills and West Hollywood.
Business and labor unite: At least when it comes to the big public works bonds on Tuesday's state ballot. The Los Angeles County Federation of Labor and the Los Angeles Area Chamber of Commerce are pushing the propositions because they would bring more jobs and business opportunities. The prospect of more roads, housing and schools also tackles quality-of-life issues that translate into a better business climate.
Goodbye Beadle's: The Pasadena cafeteria shuts its doors after a 50-year run. Not surprisingly, business had been very slow, with younger generations equating cafeterias to school lunches (usually not a great childhood memory). There are only two or three cafeterias left in Socal.
Wal-Mart battles in L.B.: The retail giant is funding a campaign to repeal a Long Beach ordinance that bans big-box stores from selling groceries. A Wal-Mart-formed group, which includes the Long Beach Area Chamber of Commerce, has mailed petition letters to 60,000 registered Long Beach voters and hired workers to collect signatures in an effort to place a referendum on an upcoming ballot.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.