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Business Wire
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Business New Haven
1/12/1998
By: Russell Stone
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Acquistion Approved
SHELTON - Shareholders of Physicians Health Services (NASDAQ: PHSV) agreed to its acquistion by Foundation Health Systems, a California-based managed-care organization, for $271 million, or $28.25 in cash per share. An HMO with 500,000 members in New York, New Jersey and Connecticut, PHS has received regulatory approval for the takeover. The deal is expected to close imminently.
Master No More
FAIRFIELD - NBC, a division of General Electric (NYSE: GE), will have to do without a major portion of its profits now that Jerry Seinfeld has announced that this season will be the last for his sitcom. Not only did Seinfeld generate $200 million in profits for NBC each year, but its drawing power created automatic audiences for other shows in NBC's line-up. The loss of Seinfeld will cost NBC perhaps a fifth of its profits, making the actor's reported per-episode salary of more than $1 million seem like a bargain. For parent company General Electric, however, the Seinfeld factor is only a small fraction of its yearly profits of $8 billion.
Millstone Cut From Utility Rate Base
NEW BRITAIN - Three state Department of Public Utility Control (DPUC) officials voted unanimously to cut Millstone I, the oldest and smallest of the three Millstone reactors, from Northeast Utilities' (NYSE: NU) rate base. This marks the first time since Three Mile Island that a nuclear plant has been removed from a utility company's rate base. As a result, NU can no longer include Millstone I's costs in its calculation of what it charges consumers for electricity. The precise rate cut for consumers still must be determined, but the DPUC will immediately petition for the removal of $30.5 million in Millstone costs from NU's revenue requirements. This could produce a rate cut for consumers, and a commensurate revenue cut for NU, of three percent. Connecticut Attorney General Richard Blumenthal has threatened to go even further by pressing the DPUC to remove
Millstone II and III from NU's rate
base as well.
Echlin Acquisition
BRANFORD - Echlin Inc. (NYSE: ECH) announced its agreement to purchase General Automotive Specialty Company Inc. (GAS), a New Jersey-based auto-parts manufacturer. Terms of the cash deal were not disclosed, but GAS has annual sales of $50 million from its line of vehicle switches and locks. Echlin expects the deal to be finalized next month after regulatory approval is received.
New Drug Ready For Trials
NEW HAVEN - Alexion Pharmaceuticals (NASDAQ: ALXN) has filed an application with the U.S. Food & Drug Administration to begin clinical trials of its new drug, 5G1.1, aimed at treating rheumatoid arthritis. In this disease, the body's own immune system attacks joints, causing pain and inflammation. 5G1.1, a C5 inhibitor, blocks this autoimmune response. Preclinical trials showed the drug stopped the onset of rheumatoid arthritis and alleviated symptoms in patients who had already developed the disease. Alexion has already used a different type of C5 inhibitor, 5G1.1-SC, to treat cardiovascular inflammation in patients undergoing bypass surgery, and hopes to expand the range of its autoimmune treatments with the longer-acting 5G1.1.
UI Chairman To Retire
NEW HAVEN - Richard Grossi, chairman and CEO of the United Illuminating Co. (NYSE: UI), has officially informed the company's board of directors that he wishes to retire by the end of the year. The board has selected a national executive search firm to search for a successor. Grossi commented that with utility deregulation expected to be on the Connecticut legislature's agenda in its next session, he wants to assure a smooth succession and have new leadership in place to cope with consumer competion.
Lawsuits Galore
HARTFORD - Like troubled Oxford Health, Aetna (NYSE: AET) has found that a falling share price is followed inevitably by class-action lawsuits on behalf of aggrieved shareholders. Among the firms filing suit, alleging that Aetna misled investors about cost-overruns and late claim payments at its US Healthcare subsidiary while insiders were selling shares, are veteran securities firms Stull, Stull & Brody, Weiss & Yourman, Morris & Morris, and Cohen, Milstein, Hausfeld & Toll. The field has become so crowded that the firm of Abbey, Gardy & Squitieri has warned investors against using the “Securities Attorney Referral Service” in making their claims against Aetna.
Who's Earning What
BRIDGEPORT - Bridgeport Machines (NASDAQ: BPTM) reported better-than-expected preliminary earnings for the third quarter of its 1998 fiscal year. For the quarter ending December 27, Bridgeport Machines expects earnings of from $0.22 to $0.26 per share on sales of $57 million. Though better than analysts' expectations, the results represented a slight drop from last year's earnings of $0.34 per share on sales of $59.8 million. The improvement over expectations results from better sales in Europe despite continued strength in the British pound. Much of the company's European sales come from Britain, and so are quite sensitive to a strong British pound. While European business has moved toward profitability, American sales have held steady.
Final results should be released in late January.
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