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Business Wire
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Business New Haven
9/22/1997
By: BNH
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MIDDLEBURY - General Datacomm Inc. (NYSE: GDC) announced on August 25 that CNET, the research and development branch of France's national phone company, France Telecom, had begun testing General DataComm's APEX switches. Increasing demands on communications networks, thanks to the rapid growth of the Internet, requires greater carrying capacity and more effective switching technology. France Telecom already uses General DataComm switches but hopes new types will allow it to offer new services and faster access to its customers.
MILFORD - BIC Corp.'s fight to purchase Sheaffer, the writing-instrument manufacturer, continues. On August 26, Judge Lewis R. Friedman refused to grant an injunction that would have blocked a management buy-out at Sheaffer. BIC will appeal.
SHELTON - In August, Landstar System Inc. (NASDAQ: LSTR) announced that its board of directors had approved a share buy-back program totaling 1.5 million shares of common stock. Under a program operating earlier this year, the company repurchased 249,000 shares and has 12.6 million shares outstanding. As of September 8, the stock was trading at around 27 1/2 at a price-earnings ratio of 19.
BRIDGEPORT - Connecticut Energy Corp. (NYSE: CNE), parent of Southern Connecticut Gas Co., revealed on September 3 that its CNE Energy Services Group subsidiary had agreed to a joint venture with Delmarva Power & Light Co. to sell natural gas, electricity and fuel oil in New York and New England. The new company, Connectiv/CNE Energy Services LLC, will initially sell energy to CNE Energy's existing commercial and industrial customers, but will expand to sell to consumers as natural gas and electricity markets are deregulated. The company will market electricity in Rhode Island, where consumer choice is already available, and in the rest of New England once retail customers have that option.
BRIDGEPORT - On September 4, People's Bank (NASDAQ: PBCT) announced that it and Norwich Financial Corp. (NASDAQ: NSSB) had reached an agreement on People's buy-out of Norwich Financial. Shareholders of both companies, as well as government regulators, must approve the deal with a total purchase price of approximately $164 million, 49.9 percent paid in cash and 50.1 percent in People's stock. Norwich Financial shareholders will receive approximately $28.85 per share in the deal. People's anticipates that acquiring Norwich Financial's 17 branches will not hurt next year's profits. JP Morgan initiated coverage of People's Bank with an initial buy recommendation on August 26. On September 5, Merrill Lynch cut its rating on People's to near-term neutral while keeping a long-term buy rating.
HARTFORD - On September 3, Aetna (NYSE: AET) revealed a major expansion in Washington state. Its US Healthcare subsidiary acquired the Virginia Mason Health Plan, a Seattle HMO with 40,000 members. In the wake of recent weakness in Aetna's stock price, Salomon Brothers upgraded it
from a buy to a strong buy on September 5.
FAIRFIELD - Giant General Electric (NYSE: GE) made investment advisor Bill Staton's list of “America's Finest Companies” thanks to its 21-year streak of delivering higher earnings per share.
SHELTON - General Signal (NYSE: GSX) warned on September 8 that its per-share earnings for 1997 would come in below analysts' expectations, which ranged from $2.85 to $2.95. Sales deficiencies at several subsidiaries meant that earnings will come in $0.35 per share lower, company officials said, placing them slightly below 1996 earnings. In 1996, General Signal earned $2.68 per share, or $133.4 million, on revenues of just over $2 billion.
NEW HAVEN - On September 9, Alexion Pharmaceuticals (NASDAQ: ALXN) said it had completed a major stock deal with BB Biotech AG. Under the terms of the private placement, BB Biotech purchased $10 million in preferred stock. This came in the wake of a summer private placement that brought in $11.2 million through the sale of 1.45 million shares of common stock. Alexion CEO Leonard Bell saw the proceeds of the transaction as permitting further development of the company's prospective drugs. In July, Alexion's C5 inhibitor drug 5G1.1-SC, aimed at patients undergoing heart-bypass operations, showed promising results in initial clinical trials.
NEW HAVEN - In personnel news, Starter Corp. (NYSE: STA) announced on August 26 that John M. Tucker had resigned as president, chief operating officer and director. CEO David Beckerman assumed his responsibilities. In a statement, Beckerman alluded to dissatisfaction with the company's results for the year and declared “It is necessary to refocus our efforts and streamline our operations in order to best position the company for future growth.”
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