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Albuquerque Journal from Albuquerque, New Mexico • Page 61

Location:
Albuquerque, New Mexico
Issue Date:
Page:
61
Extracted Article Text (OCR)

BUSINESS Saturday, November IS, 1986 Albuquerque Journal Page 17, Section PNM Sues Southern Union Over Gas Co. Tax Issue By Paul Scott Abbott JOURNAL BUSINESS WRITER responsibility and liability of Southern Union." Attached to the suit as exhibits are letters to Thomas E. Morton senior vice president and general counsel and secretary of Southern Union in which PNM officials and attorneys demand reimbursement In a response dated July 28, also included as an exhibit, Morton replied that he does not believe Southern Union Co. is liable for the taxes and that "we find nothing" in the sales agreement that makes it Southern Union liability. Union Co.

The suit cites a a provision under Section 338 of the Internal Revenue Code that provides that when one corporation acquires both stock of a subsidiary corporation and assets from affiliates of the subsidiary corporation, the purchasing corporation is deemed to have made an election to treat the stock acquisition of the subsidiary corporation as an asset pur-chcisc Such a "Deemed 338 Election," the suit contends, "would result in significant income tax liability, which would be the sidiary of Sunbelt Mining Co. Inc. PNM's $226.3 million acquisition of Gas Co. was part of a settlement of a 1979 lawsuit, which PNM joined as a plaintiff in 1981, that alleged price fixing by Southern Union the parent firm of Gas. Co.

Customers asked PNM to acquire Gas Co. in a move to secure about $120 million in refunds. The suit contends that Southern Union Gathering Co. paid the more than $7 million in federal and state taxes, but under terms of the April 1984 purchase agreement it is entitled to reimbursement from Southern District Court, contends that Southern Union Co. should have paid taxes of $6,169,786 to the Internal Revenue Service and taxes of $873,132 to the State of New Mexico under terms of a tax agreement that PNM attorneys contend was made in connection with the Jan.

28, 1985, acquisition of the natural gas firm. In addition to PNM, the suit was brought by Sunbelt Mining Co. which is the wholly owned PNM subsidiary that acquired Gas and by Southern Union Gathering itself a wholly owned sub Public Service Co. of New Mexico and two subsidiary firms are suing Dallas-based Southern Union Co. to recover more than $7 million in taxes PNM contends should have been paid by Southern Union Co.

The suit relates to PNM's 1985 acquisition of Gas Co. of New Mexico from Southern Union Co. The suit, filed Friday in Bernalillo County No City Employee Impact Seen in Plant Acquisition II XT. J9. It i.

flex Ponce de Leon, a Santa Fe retirement community with 150 apartment units, will be dedicated. Retirement Complex Opens Doors developers and operators of nursing facilities and retirement communities; and E.A Masaitis a Southwest real estate developer. The complex will include a full-service dining center, library and reading room, card and game room, security, scheduled group activities, transportation for shopping and entertainment and fully landscaped grounds. Apartments will run from $950 to $1,750 a month, according to Maurine Biggs, marketing director for Ponce de Leon. She said the developers hope to begin renting at the end of the month.

Ponce de Leon, an $8.3 million rental retirement community in Santa Fe, will hold dedication ceremonies at 1 p.m. today. The 150-unit apartment complex will hold an open house at 640 Alta Vista, between St. Francis Drive and Luisa, near the Santa Fe Public Schools administration complex. "We are a rental retirement community with the emphasis on community," said Elmer Garcia.

He and his brother, Sam, are general partners in the development with First Toledo manager of Health Care REIT; Madison Capital systems and command-control defense systems, they fit in well with Honeywell's aerospace businesses," The Sperry Marine Systems Division, formerly part of the Sperry Aerospace and Marine Group, was not bought by Honeywell, according to Peter Hynes, director of public relations for Sperry, who said he believes his title has become or will become director of communications for Unisys. Hynes said via telephone from his office in Philadelphia that the Sperry Marine unit, with 1,200 employees and $100 million in revenues during the fiscal year ended March 31, is up for sale, as is the Sperry Microwaves unit, which had been part of the Sperry Defense Product Group. Unisys, with through the merger of Burroughs and Sperry became the No. 2 U.S. computer maker, is trying to sell part of its operation in its attempt to take on International Business Machines the largest U.S.

computer firm. James Kenyon, another Unisys spokesman, said told the Associated Press that the deal will cut the company's $3.4 billion in debt assumed in the Sperry purchase by nearly one-third. Edson Spencer, Honeywell chairman and chief executive officer, said the purchase was among the most important his company had made. "It is an outstanding opportunity for Honeywell that positions us for the long term in a market that is expected to have significant growth for the next 10 years commerical and military aviation," Spencer said. "About 60 percent of Sperry's Aerospace Group revenue is derived from commercial market." Honeywell's Aerospace and Defense business, based in Minneapolis, had 1985 revenue of $1,899 billion in 1985.

Honeywell Aerospace and Defense includes the Avionics Systems Group, which designs and produces ring laser gyro-based inertial reference and navigation systems, radar altimeters and flight control systems. By Paul Scott Abbott JOURNAL BUSINESS WRITER Honeywell $1,025 billion cash acquisition of Unisys Sperry Aerospace Group is not expected to impact upon employment or operations at the Albuquerque Defense Systems Division plant, according to officials of the firms. "We don't expect changes in the organizational structure, and we're certainly welcoming all the Sperry employees," Susan M. Eich, corporate public relations manager at Honeywell's Minneapolis headquarters, said Friday, following the announcement of an agreement for Honeywell to acquire the Sperry Aerospace Group. The transaction is to be completed by year end, subject to government aspproval, she said.

While employees at the flight instrumentation and avionics systems facility at 9201 San Mateo NE may be having difficulty keeping up with just what entity will issue their paychecks, they are receiving assurances that those paychecks won't stop coming. The plant is Albuquerque's lragest private manufacturing employer, "We expect there to be no effect on the local workforce," said Stef fame Gibbons, who had been senior communications representative for Albuquerque Defense Systems Division and was not sure of her exact current title. She called recent corporate ownership changes "very confusing." "Business is continuing as usual," said Ms. Gibbons, who said Alb-querque employees were notified of the Honeywell deal beginning Friday at 7 a.m. with individual copies of a letter from Joseph J.

Cam-panella, president of the Sperry Aerospace Group. The Sperry Aerospace Group is composed of the Albuquerque Defense Systems Division, commercial and space divisions based in Phoenix, and the Reston, based Flight Simulation Unit of the former Sperry Systems Manage- "We don't expect changes in the organizational Susan M. Eich Honeywell spokeswoman ment Group. The Albuquerque operation had been part of the Sperry Aerospace and Marine Group, which was renamed and realigned earlier this week when Sperry Corp. and Burroughs Corp.

merged to form Unisys Corp. In September, Detroit-based Burroughs acquired Sperry for 4.78 billion. The Aerospace Group, headquartered in Phoenix, had revenues of about $700 million for the fiscal year ended March 31 and has about 9,000 employees, according to Ms. Gibbons. The letters to employees from Campanella said, in part: "I would like to restate that I don't believe we will see major changes overnight in the way we operate.

I think it is reasonable to expect that we will now enter a transition period as we work to become a full, contributing operation of Honeywell." Ms. Eich said the Sperry operations will be incorporated into Honeywell's Aerospace and Defense operation, currently headed by Executive Vice President Warde F. Wheaton. Campanella will report to Wheaton, she said. "We really don't believe there is duplication, and as far as layoffs are concerned we really don't anticipate any at this time," Ms.

Eich said. "The strength and experience of the Sperry management team was one of the considerations in the acquisition." Unisys Chairman W. Michael Blumenthal, "Though the avionics technologies and markets of the group are not central to our core businesses of advanced information Revlon Launches Gillette Co. Bid; Backs Away From Other Takeover Transworld's stock climbed 87 Vi cents to $40.50. THE ASSOCIATED PRESS Boston-based Gillette, the subject of takeover rumors for months, said its board would consider the offer but asked its stockholders to withhold action on the bid until the directors respond.

Revlon clearly sees potential gains from merging its own well-known brand of cosmetics with the array of grooming aids produced by Gillette, which also carries brand names known worldwide. Both companies' products are sold to many of the same outlets, and Revlon presumably expects to enjoy increased economies of scale by combining their marketing and distribution efforts. But it is widely believed that Gillette, armed with a variety of takeover defenses, will fight to keep its independence perhaps by restructuring or seek a merger partner more to its liking. NEW YORK Revlon Group having backed away from threats to take over two other companies, launched a direct assault on Gillette Co. with a tender offer Friday to buy the personal-products giant for about $4 billion.

In directing its attention to Gillette, Revlon said it already owned 9.23 million, or 13.9 percent, of the company's 66.4 million common shares outstanding and began a $65-a-share tender offer to buy the remaining stock. Wall Street signaled its belief that the bidding would not end with Revlon's offer, as Gillette's stock soared $9.87 Vi a share to $67.50 in late trading on the New York Stock Exchange. Revlon's stock rose 62V2 cents a share to and I III. mi iVHjy i jjM ''SHW'W. iMUiqil 4J'JWj Wm Business digest Legal Battle Ends For Summa, Syncor COMPILED FROM JOURNAL WIRES EGT, Principal Sign Agreement for Sale DES MOINES, Iowa The Principal Financial Group and EGT Financial Corp.

of Dallas, have signed a definitive agreement for the acquisition of EGT Financial Corp. by the Principal Financial Group. The Principal will acquire 100 percent of the stock of EGT Financial for $62 milli in cash. The acquisition is subject to EGT Financial shareholder approval and is expected to be completed by year-end 1986. Eppler, Guerin Turner a subsidiary of EGT Financial, is the largest independent investment banking and brokerage firm in the Southwest.

Incorporated in 1951, the company has retail offices in Texas, Oklahoma and New Mexico. The Albuquerque office of the firm is at 1650 University Blvd. NE. Unions, Churches Divest Shell Holdings WASHINGTON Union pension funds and church groups have divested their portfolios of more than $12.4 million in Royal Dutch-Shell Group stocks and bonds because of the multination energy company roie in boutn Africa. The divestments were announced on the eve of coordinated protest demonstrations scheduled for Saturday at Shell facilities in Houston, Boston, Washington and Birmingham, and in nine foreign coun- a consultant to the pharmacy division.

Hopkins was also a defendant in Syncor's suit. The dispute stems from a shortage of licensed nuclear pharmacists, Beatty said. Few universities teach nuclear pharmacy, and the University of New Mexico was the first school to offer this course as a sub-specialty of the pharmacy degree course. Nuclear pharamacies supply radiopharmaceuticals (radioactive compounds) on a prescription basis to the diagnostic imaging (nuclear medicine) departments of hospitals, clinics and imaging centers. Summa pharmacies store, compound, dispense and dispose of radiopharmaceuticals used in the diagnosis and treatment of cancer and other diseases.

"We expect our two newest units to generate revenues of approximately $800,000 in their first full year of operation," Beatty said. "With seven more units slated to open by March 1987, we expect fiscal 1987 pharmacy revenues to approach $3 million." In fiscal 1986, the parent company, Summa Medical, lost $2.5 million on revenues of $935,000. Earlier, the company had announced plans to open 22 nuclear pharmacies before the end of its 1987 fiscal year. Pharamacy openings have been delayed in some markets, but, said Beatty, "our first three pharamacies are performing well beyond our initial expectations." Chicago which has already caputured 35 percent of its market Philadelphia and New Orleans are producing revenues at an annualized rate of $3.5 million, he said. By Sherry Robinson JOURNAL BUSINESS WRITER Summa Medical Corp.

and Syncor International Corp. have ended a Louisiana legal battle over noncompetition agreements. At the same time, Summa announced its continued expansion with the opening of the fourth and fifth nuclear pharmacies since April. Syncor sought to prevent Summa Pharmacy of New Orleans a Summa subsidiary, from luring away its Metairie, employees and to prevent two licensed nuclear pharmicists, who were previously employed by Nuclear Pharmacy from working for Summa in the area. Syncor filed a similar suit in Bernalillo County District Court in June.

When Syncor and Nuclear Pharmacy, a sister company of Summa, merged last year, Syncor was the surviving entity. Thursday, Judge Albert Kollins, of the 24th Judicial District Court in Jefferson Parish, ruled that Janet Reuther and Anthony Edmond could not be prevented from working for Summa in New Orleans. He declared non-competition contracts signed as employees of NPI invalid. The order lifts an August restraining order against Summa, Reuther and Edmond. The order also forbids Summa, Reuther, Edmond and two others to solicit or hire away any other Syncor employees in New Orleans.

R. Glenn Beatty, president of Summa Pharmacy said Syncor had tried to hire some of Summa's top employees and succeeded with Wade Hopkins, Summa's director of administration and vS IH 1 "The shareholders are the owners 1 rw the comPany ancl are tnus re" sponsible for Shell's support of apartheid," said United Mine Work ers President Richard Trumka, who is co-chairing a 10-month-old, multiunion boycott of Shell products. BankAmerica Details New Program SAN FRANCISCO BankAmerica the ailing bank holding company that is the target of a takeover threat, announced a tviAa-ranaina program Friday, including 1 plans to lay off 5,000 of its JOURNAL PHOTO DEAN HANSON Computer Printed Signs Mark Zettel, owner of Instant Signs, checks a sign project being executed by Shirley Chavez on a computer. The signs look handpainted because the printer uses a tight dot matrix, Zettel says. The signs are used for indoor advertising, sports and parties, he says.

staff. The company said the program is aimed at restoring profitability, reducing costs and increasing the company's book value by more than $3 a mx share to a total of some $24 a share..

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Pages Available:
2,169,863
Years Available:
1882-2024