Arizona Republic from Phoenix, Arizona • Page 99

LIST AVAILABLE COPY ALL EDiiiONS USIN1E The Arizona repuhlic SATURDAY, JUNE 11, 1988 ABCOLucky potential In Brief ABCO chain to buy Lucky stores in state Major Valley grocery stores before an ABCOLucky combination: Market Number Chain share of stores Price index up 0.5 Wholesale goods rise moderately 27 24 9 8 7 7 23 31 36 32 31 22 Smitty's Fry's Safeway Bashas' ABCO Lucky Dow gains 8.36 points Stock prices closed higher Friday. The Dow Jones industrial average rose 8.36 points, to 2,101.71. Further details in chart at bottom of page. Story on Page F3. Judge delays Macmillan split A Delaware judge Friday granted a group of Texas investors a temporary restraining order to prevent Macmillan Inc.

publishers from splitting itself in two to avoid a hostile takeover attempt. The judge said he issued the order because such a restructuring could not 'be reversed later. The Robert M. Bass Group is offering $73 a share for 28 million outstanding shares of Macmillan, or about $2 billion. The judge has not set a date for a petition on a permanent restraining order involving Macmillan's takeover defense.

He said the temporary halt will give both sides time to prepare their cases. The ABCOLucky combination will form a chain with the third-largest market share and the most stores in the Valley: Market Number Chain share of stores By Lisa Morrell The Arizona Republic Lucky Stores Inc. has agreed to sell 38 Arizona stores to Odyssey Partners, a New York investment company that controls Phocnix-bascd ABCO Markets Inc. If the purchase is approved, ABCO will become the largest grocery chain in the Valley and the second-largest in the state in number of stores. Safeway Stores Inc.

is the largest. In market share in the Valley, however, ABCO will be third, behind Smilty's Stores and Fry's Food Stores of Arizona Inc. There arc no market-share studies for the slate. Terms of 'the sale, which was announced Friday, were not revealed. But documents filed with the Securities and Exchange Commission suggest the deal is worth significantly more than $75 million.

In the next two months, Odyssey Partners will buy the Lucky stores from American Stores Co. of Salt Lake City, said Meredith Anderson, investor-relations director of Lucky. She said the money from the sale will help reduce American's debt incurred in its May 20 purchase of the 487-store Lucky chain. American paid $2.5 billion in cash for the Lucky stores. Last month, Lucky disclosed in an SEC filing that it had entered into a letter of intent "with an unaffiliated third party" to sell its Arizona assets for $60 million in cash, debentures of $15 million and notes on current assets for an undisclosed sum.

See ABCO, page F6 Smitty's Fry's ABCOLucky Safeway Bashas' 27 24 14 9 8 23 31 53 36 32 The Source: Inside Metro Phoenix 1988, Arizona Republic research AsW Greyhound picks official Ronald Sustana has been named corporate vice president of public relations and advertising for Greyhound Corp. He succeeds Lawrence I'. Lamb, who resigned to pursue other interests. Sustana has more than 20 years of experience including early work as a reporter in Tampa, and as an Associated Press editor in Columbia, S.C. Most recently, Sustana was senior vice president of corporate relations for RJR Nabisco Inc.

in Winston-Salem, N.C. He also worked for CNA Financial Corp. and Hunt Foods and Industries Inc. Ronald Sustana Graduated from Kent State University Payless leveraged buy-out considered Senior officials at Payless Cashways Inc. are exploring a leveraged buy-out of the building-materials retailer at $30 a share.

But financier Asher Edclman, who is leading an investor group considering a takeover of Payless, said he plans to ask the company to share information so his group can consider a competing offer. Heileman to sell division G. Heileman Brewing Co. Inc. has signed a letter of intent to sell its Machine Products Co.

Inc. to an investment group led by Machine Products' president. No purchase price was disclosed. Texaco takeover studied TEXACO Carl Icahn, Texaco largest The Associated Press WASHINGTON Despite the biggest increase in food costs since January, wholesale prices rose a moderate 0.5 percent in May, the government said Friday, supporting beliefs that inflation is accelerating but not dangerously. The rise in the Labor Department's Producer Price Index for finished goods in May was between a 0.4 percent increase in April and a 0.6 percent jump in March.

If it continued for 12 months, the annual rate of inflation would amount to 5.8 percent. "There clearly is some inflation in the system, but the fears of an inflationary boom are overblown," said Larry Chimcrinc, president of the WEFA Group, formerly Wharton Econometrics, an economic forecasting consultant in Bala Cynwyd, Pa. Also taking comfort in the May numbers were officials at the White House, where spokesman Marlin Fitwater said, "Inflation remains low and under control." Food replaced energy as the primary impetus behind higher wholesale prices last month. For grocery stores, prices paid for food rose 0.9 percent in May, the biggest increase since a 1.7 percent jump in January. Egg prices jumped 12.5 percent, mostly offsetting a 16 percent decline in April.

Poultry prices were up 8.2 percent, pork was up 5.5 percent and vegetable prices rose 3.3 percent. However, wholesale prices for fruit declined 0.9 percent and rice was down 3.2 percent. Wholesale food prices at the grocery-store level arc still only 0.6 percent higher than they were a year ago. That trend is not expected to continue, however, particularly with near-record dry weather in the Farm Belt pushing raw commodity prices for food upward 2.4 percent in May. "We've got a couple more months of bad food prices coming everybody knows that and then everything will calm down," said Michael Evans, who runs a forecasting firm in Washington.

Donald Ratajczak, an economist at Georgia State University who runs his own wholesale price survey, said the danger of higher food prices setting off an inflationary spiral is much less than the fear that they will. "Unfortunately," he said, "inflationary perceptions are being formed from the performance of a commodity index (the Commodity Research Bureau Index) that depends heavily on grain prices. "Dry weather has increased fears that crop yields may be harmed, but sufficient surpluses of all products except soybeans should reduce the significance on prices." Energy prices, which had surged 3.1 percent in April, rose only 0.2 percent in May, largely because of a 3.8 percent drop in natural-gas prices. Home-heating oil rose a modest 0,7 Sec PRODUCER, page F6 Jftg snarenoioer, nas positioned nimsen 10 launch a hostile takeover hid tor the Reuters OVER THE TOP Investors in Taiwan toast the hit a record 5,070.18. Many brokerage houses broke out Taipei Stock Exchange after the exchange's stock index champagne to celebrate the occasion.

oil giant if its management blocks a shareholder vote on his current $12.4 billion acquisition bid. Icahn, who owns 14,8 percent of Texaco, said he was forming a holding company to be his takeover vehicle. Factory-made pagodas criticized The Mitsubishi latest product factory-assembled pagodas has received considerable criticism from the Japanese public. Traditional Buddhists believe the five-story concrete structures could reduce the religious and. cultural value of Japan's 40 authentic five-story pagodas.

The factory pagodas could also be manipulated by the "new religions" to lure unsuspecting believers, they say. Mitsubishi says the pagodas sell for about $1.3 million. Arizona denied a second area code 'Interchangeable dialing' to make up for number shortage Chrysler plans furloughs A four-week layoff for 1,200 Chrysler Corp. production workers in Kenosha, will start Aug. 1 because of shortage of steel and other materials.

A spokesman said the shortage resulted from a switch in telephone numbers in two years, said Pat Evers, a Mountain Bell spokesman. "We really lobbied for the new area code, but they said this is the way to go," Evers said. "Some may think Arizona is like a stepchild not getting an area code, but the whole country is expected to go to interchangeable dialing by 1995." Interchangeable dialing alters a policy set by BcllCore in its 1947 North American Numbering Plan. Under that plan, three-digit area codes could use only a "0" or a "1" for a middle digit. The middle digit of prefixes could be any number between 2 and 9.

Under the new plan, area codes and prefix codes are interchangeable. When Mountain Bell hands out new telephone numbers in Arizona after July 1990, some prefixes may contain a "0" or "1" as a middle digit. Each prefix has 10,000 telephone numbers available. The interchangeable dialing pattern now exists in 11. area codes, a BcllCore spokesman said.

For most Arizona telephone customers, the new dialing pattern will mean using only seven digits instead of eight to make a direct-dial call within the state. Some rural areas with old switching equipment will continue to have different dialing patterns. Currently, most customers calling direct long distance within Arizona must begin the call with a "1." "We've fostered in the customer that there's a cost in dialing i and that's going to have to change," Evers said. "You won't have any indication that the call you are placing in-state has a long-distance charge." The new dialing pattern will not affect rates or the way customers dial out-of-state See ARIZONA, page 16 plans for building Dodge Omnis and Plymouth Horizons. Chrysler had announced in January it would halt such production in mid-July, putting 5,500 employees out of work.

But the automaker decided in late April to continue building the L-body cars through the end of the year. By Kathie Price The Arizona Republic Arizona will not be getting a second area code, at least not soon, Mountain Bell representatives said Friday. BcllCore, the research and development pool for the seven regional Bell operating companies, has turned down a Mountain Bell request made in August. Instead, Arizona will switch in July 1990 to an interchangeable dialing pattern that will provide the state with 1,520,000 new telephone numbers. The change is necessary because the state's 602 area code is expected to run out of Settlement in thrift dispute has U.S.

regulators fuming OPEC to tackle member demands to increase output Dollar gains The dollar firmed in narrow trading Friday as dealers looked to next week's new U.S. trade figures for direction. Gold and silver both mixed Gold closed in New York at $449.27 an ounce, down from $457.00. Gold closed higher in London $457.25 an ounce, up from Thursday's $455. Silver closed in New York at $6.98 an ounce, down from $7.14.

Silver closed higher in London at $7.16 an ounce, up from $7.04. Oil prices tumble Oil prices fell on the spot market, with West Texas Intermediate, the U.S. bench-mark crude, quoted Friday at per barrel, down from Thursday's on the New York Mercantile Exchange. Federal funds rate stable The federal funds market rate, the interest rate on overnight interbank loans, was quoted Friday at a low of 7.25 percent and a high and last of 7.3125 percent. The last quote Thursday was 7.3125 percent.

Charles Keating Jr. Action on his thrift institution has angered some regulators. The agreement ended a three-year dispute in which the and the bank board accused each other of improper conduct. As part of the settlement, the bank board transferred supervision of Lincoln from the federal agency's field office in San Francisco to its main office in Washington. For its part of the settlement, Lincoln, which is run by Charles Keating agreed to raise $160 million in new funding.

Chairman Robert L. Clarke of the Office of the Comptroller of the Currency and FDIC Chairman L. William Seidman refused to discuss the controversy, and Fed Chairman Alan Greenspan was out of town and could not be reached for a comment, Sources in all three agencies said that Clarke, See THRIFT, page F5 The Washington Post Federal bank regulators are said to be angered by a decision by savings and loan regulators to transfer government supervision of a California that had complained it was treated unfairly. The chief officials of the Federal Reserve Board, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. the federal agencies that regulate commercial banks are angry at the action taken three weeks ago by the Federal Home Loan Bank Board, which regulates the industry.

The controversy centers on an unprecedented agreement the bank board reached last month with Lincoln Savings Loan of Irvine, which is a subsidiary of Phoenix-based American Continental Corp. Markets United Press International VIENNA, Austria OPEC oil ministers began arriving Friday for their regular semiannual meeting amid strong pressure from Persian Gulf states to increase production despite the threat the move would pose to already weak oil prices. The meeting, which begins today, is expected to focus on whether to increase the 13-nation cartel's production ceiling of 15.06 million barrels a day, which expires June 30, for the second half of the year. The quota was set in December by 12 of the 13 ministers. Iraq refused to join and insists on quota parity with Gulf war foe Iran, which was allocated 2.3 million barrels a day.

Kuwait, supported by other gulf producers, is pressing for a production increase despite the potentially depressing effect on prices, ministerial sources said. OPEC oil currently trades for an average price of about $16 a barrel, well below the Organization of Petroleum Exporting Countries' official target price of $18 a barrel. Kuwait's action is based on its projection of increased demand in the second half of 1988. Kuwait expects demand for the cartel's oil to be nearly 900,000 barrels a day higher than official OPEC estimates of 18.4 million Dow Jones Industrial average TH 2100 4-v NYSE Composite volume 181,581,920 Issues traded 1,974 Advanced 875 Declined 585 Unchanged 514 New highs Top rates paid by credit-worthy, expert says mm 2,050 8.36 to 4 2,101.71 i pa i i I 2,000 4 High I Close 1 Low 36 New lows 9 10 3 6 7 8 June barrels a day. Kuwait's position is bolstered by projections 3 for credit are also likely to carry large monthly balances, They are turning to lower-cost providers of credit because of the 1986 tax-reform law, which phased out tax deductions for consumer credit interest, Sullivan told the Columbus Dis- See HIGHEST, pagcFd client meeting that heavy borrowers are more likely to seek the lowest interest rates available and, at the same time, have the highest default rates.

"Very-good-credit-quality people are providing a very large subsidy for low-credit-quality people," she said this week. She said heavy users of revolving- United Press International COLUMBUS, Ohio The most credit-worthy consumers often pay the highest interest rates, therefore subsidizing their less reliable fellow borrowers, says an economist and associate director of the Credit Research Center at Purdue University. A. Charlcne Sullivan told the Franklinton Financial Services annual the reasonably strong industrial growth, particularly in Amex NYSE and major oil-consuming nations of the United States Comp. 1.06 1 I 0.71 to ijf! 1jB 1309.33 Japan, in the second half of the year.

Cc OPEC, pagcFf.