Reno Gazette-Journal from Reno, Nevada on July 23, 1987 · Page 23
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Reno Gazette-Journal from Reno, Nevada · Page 23

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Reno, Nevada
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Thursday, July 23, 1987
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Page 23
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Business Thursday. July 23, 1987 Reno Gazette-Journal 5B GE swap From page 8B The announcement came about an hour before trading ceased on domestic stock markets. After the close, GE's stock stood at $56.12' per share, up a modest 37Ms cents a share in consolidated New York Stock Exchange trading. Welch said GE would receive substantially more than $500 million, but less than $1 billion, from Thomson, a description which analysts estimated to mean about $800 million. In addition, GE will initially retain the rights to licensing and fee income amounting to about $150 million a year before taxes. Altogether, GE will receive compensation worth about $2 billion, amounting to more than three times the book value of the consumer electronics division, said Nicholas Heymann, an analyst for Drexel Burnham Lambert Inc. and a former GE employee. "I would say it's a great deal," Heymann said. "You're getting out of a low-margin, low-growth business. You're expanding your almost dominant position in a high-margin, high-growth business," namely medical equipment, he said. Thomson, which is owned by the French government, is the world's 50th largest industrial company outside the United States, with interests in consumer electronics, defense electronics and compo nents. It made a profit of $265 million last year on revenue of $9 billion. GE, based in Fairfield, Conn., has interests in technology, services and manufacturing. It made a profit of $2.5 billion last year on revenue of $37 billion. The sale of consumer electronics heightened already-prevalent speculation that GE was poised to make a major acquisition. Names that circulated earlier this year in the investment community included such giants as United Technologies Corp., Raytheon Co., Honeywell Inc., Xerox Corp. and Eastman Kodak Co. GE said medical diagnostic imaging equipment such as CAT scanners and magnetic resonance imaging devices is one of GE's fastest-growing businesses in the United States and is central to the company's long-term plan. The addition of Thomson-CGR, the French company's medical equipment unit, will "significantly strengthen" GE's presence in the European and Latin American markets, GE said. "Consumer Electronics, although a large business in terms of sales, has not been central to GE's strategic plan," Welch said. Both GE and Thomson will retain a 19.9 percent interest in the businesses they are selling to assure a smooth transition and integration of the two businesses, the companies said. GE and Thomson will form a new company to fund consumer 1 would say it's a great deal. You're getting out of a . . . low-growth business. 5 Nicholas Heymann analyst Drexel Burnham Lambert electronics research and to own and license consumer electronics patents. The new company will nave access to Thomson's future consumer electronics patents as well as those of GE and RCA. Initially, GE will be the majority owner of the new company, but majority ownership will progressively transfer to Thomson, the companies said. The transactions are subject to various government reviews. The companies said it was expected that a definitive agreement would be signed shortly and that the transaction would be completed by the end of 1987. Under the deal, Welch said, GE will achieve parity in medical equipment with Siemens A G. of West Germany and N.V. Philips of the Netherlands, which is buying Picker. Thomson will be roughly tied in its world market share in televisions with Japan's Matsushita Ltd. and Sony Corp. and Philips, Welch said. NASDAQ From page 7B TCBY TCP T Cell TGX TMK .20 TP! 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V ' H 3 16 4'4 '. 21 'a 44 ' 11 6'-' V 1UMBO CERTIFICATE OFFERING FRONTIER SAVINGS ASSOCIATION A Federally Insured Deposit Institution Announces increased commitment to the Nevada construction market with accelerated loan activity for the third and fourth quarters of calendar 1987. To accommodate increased fundings, the company is offering to deposit investors of $100,000 or more, premium returns on investment as follow: Term Certificate Rate Term Certificate Rate 90 Days 180 Days 270 Days 6.40 6.80 7.00 lYear 2 Years 3 Years 7.25 7.50 8.00 Minimum deposit of $100,000 is required; maximum is negotiable. Rates are simple interest and a substantial forfeiture of earnings is required for withdrawal prior to maturity. Rates are current as of date of publication and are subject to change. Investment certificates as well as additional information can be obtained at any of the Association 's branch offices. 801 E. Charleston Las Vegas, NV 796-4523 2135 South Decatur Las Vegas, NV 796-4543 3885 S. Maryland Pkwy. Las Vegas, NV 796-4533 4320 E. Tropicana Ave. Lis Vegas, NV 796-4553 3301 South Virginia St. Reno, NV 689-8800 593 E. Prater Way-Sparks, NV 355-3150 Frontier Savin Association Casino owner: Change broadcast panel By Jane Ann Morrison Guette-Journal LAS VEGAS The gaming industry objects to the makeup of a new panel created by the 1987 Legislature regulating live broadcasts to sports books, casino owner Michael Gaughan said Tuesday. Gaughan voiced his objections at a special Gaming Control Board hearing attended by casino owners and operators as well as disseminators the middlemen who provide the live horserace broadcasts from the tracks to the casinos. The new law calls for a three-member panel to make recommendations to the board about which disseminators should be allowed to have contracts with which race track to provide service to Nevada's sports books. Any panel decision concerning contracts with disseminators would have to be affirmed by the board and the Nevada Gaming Commission. The first of two hearings on the proposed regulation was held last Friday in Carson City. It calls for the panel to be made up of an accountant, a lawyer and a gaming licensee who does not operate a sports book. Gaughan, whose sports book at the Barbary Coast is one of the most popular in Las Vegas, said the panel should include a casino industry representative. "All we're trying to do is make the disseminators become competitive, now they have no incentive to hold costs down," Gaughan said. "The panel isn't the best way, but it's a start." The intent of the law, requested by the casino industry, is to hold down disseminators' costs, which were being driven up by bidding wars. The disseminators competed to offer the highest prices to the tracks and then added their profits and passed the cost on to casino sports books. The disseminators objected to the race broadcast panel, saying that free enterprise is the best way. Dunes future From page 8B the Dunes for the past two weeks. Nangaku got interested in the Dunes when he was in Honolulu and a broker there who had visited Las Vegas told him about the troubled resort. Southmark Inc., which holds the mortgage on the property, is trying to foreclose on the Dunes and auction it. "Like all the other creditors, Southmark is pleased at any realistic possibility of a sale," said Southmark attorney Stan Hunt-erton. "However, we have heard many stories like this since the beginning of the bankruptcy and will await further developments on Aug. 3." Jones will decide Friday whether to grant a restraining order or let Southmark proceed with the foreclosure. Another key issue shaping up is how the Hilton and Nangaku plan to deal with the union contracts at the Dunes. That issue became a focal point of the Aladdin bankruptcy, and, to the outrage of local unions, Jones allowed Yasuda to turn the resort into a non-union operation. "Mr. Nangaku's impressions on that issue are that as long as contracts at the Dunes are comparable to other Strip hotels so that it does not put the Dunes at a competitive disadvantage, it would be his preference to assume those contracts and to work for good relationships with the unions in question," Goold said. "The Hilton's always been a union house," Giovenco said, but he would not comment directly on the Dunes. Nor would he discuss whether the Hilton would increase its price. The Minami Group's offer was finalized July 19 in Honolulu and approved the next day by the Dunes' Board of Directors. Gio-venco's letter of intent, dated July 20, was sent to the Dunes that same day. Part of the Hilton's terms include a provision that the Hilton will withdraw its offer if any other buyers are placed in contest with the Hilton's offer after July 20. Giovenco said that a Hilton takeover would mean a 60 percent increase in the current 900-mem-ber Dunes workforce. Goold said the hotel would not be closed if Nangaku buys it because they plan to let the current owners continue to own and operate it until the Minami Group is licensed. mm mm iui.il mm. '-g1'''; ' ; & m , mmm mm m$b& REE MONITOR and VIDEO BOARD Buy Epson's most powerful personal computer now with an extra plus: FREE monochrome monitor and multi-mode graphics video board.' That's a $348.00 suggested retail value; yours FREE during this special offer. See your participating authorized Epson Equity dealer now. But hurry this offer ends soon. " Available with purchase of Equity HIh single floppy disk drive units only. 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