Star Tribune from Minneapolis, Minnesota • Page 51

TODArS BUSINESS BRIEFING WEDNESDAY, DECEMBER 22 1999 STAR TRIBUNE PAGE D3 REGIONAL NEWS Funco sees same store sales fall Wells Fargo will buy National Bancorp, Alaska's largest bank, for $907 million Deal is expected to close in 2nd quarter By Dee DePass Star Tribune Staff Writer Wells Fargo plans to buy National Bancorp of Alaska Inc. for $907 million in stock. The purchase requires regulatory and shareholder approval but is expected to close in the second quarter. The deal will allow Wells to regain its presence in the 40-year-old state. Anchorage-based National Bancorp is Alaska's largest bank with $3 billion in assets, 1,250 employees and 53 branches through its subsidiary, National Bank of Alaska.

The bank has operations in 29 Alaska communities and one branch in Seattle. The company also has insurance, mortgage and leasing Last month, Wells agreed to pay roughly $206 million for Michigan Financial an $834 million bank that will give Wells a foothold in Michigan. In October, Wells said it would pay about 1 12 million for San Diego-based North County Bancorp, which has $349 million in assets. Wells also is buying the Seattle-based Ragen MacKenzie brokerage firm for $260 million. Norwest's traditional strategy was to buy smaller community banks.

But some analysts expect the new Wells Fargo to buy a much larger institution in the next few years. They point to possible targets such as Detroit-based Comerica Bank, which has about $37 billion in assets; Cleveland-based National City Bank Ohio-based Key Chicago-based Bank One and North Carolina-based First Union. Dow Jones News Service Funco Inc. expects that a "significant softening" of sales in December will result in third-quarter sales and earnings below analysts' expectations. A First CallThomson Financial survey of four analysts produced a mean earnings estimate of $1.01 a share for the third quarter.

In a news release Tuesday, Funco said same-store sales, up 11 percent after the first two months of the quarter, are running below last year and are expected to finish about 5 percent down for the quarter. Funco said third-quarter revenue will reach record levels and is expected to exceed $100 million, primarily because of growth in store count The company operates 400 stores, up from 310 stores last year. The company attributed the sales slowdown to "severe shortages" of high-demand products like Nintendo Game Boy Color systems and Poke-mon Yellow games, as well as an overall lack of big-hit title re Before Wells merged with Minneapolis-based Norwest Corp. 13 months ago, it had three offices in Alaska. Those branches, acquired during Wells' 1996 hostile acquisition of First Interstate Bancorp, were subsequently sold.

The 83-year-old National Bancorp has been largely controlled by three generations of the Elmer Rasmuson family. Wells spokesman Larry Haeg said that if the deal goes through, National Bancorp would not adopt the Wells name or computer systems for at least two years. Wells Fargo and Norwest are still integrating their systems, Haeg said. Wells Fargo has announced more than five acquisitions in the past three months. Last week Wells said it would buy First Place Financial a New Mexico-based bank holding company with four banks and $849 million in assets, for an estimated $207 million.

Minge wants probe of canceled alfalfa-energy plant BRIEFS Georgia scolds General Mills on charity promotion Cox News Service ATLANTA General Mills Inc. could owe $4.5 million in new charitable contributions to breast cancer research if other states follow a formula Georgia imposed after investigating a recent yogurt marketing campaign. The company had promised on the outside of specially marked Yoplait yogurt lids to donate 50 cents to breast cancer research for each returned lid. A statement on the inside of the lid said the company's donation would be limited to $100,000. But consumers had to purchase the yogurt and open it before they could read the statement.

Consumers nationwide returned 9.4 million fids to General Mills, far more than expected. The company would have had to donate $4.7 million to keep the promise on the outside of the Yoplait lids. It donated $200,000. Secretary of State Cathy Cox found that the campaign deceived Georgia consumers. "We must make sure Georgia consumers are not misled," Cox said.

A spokesman for Cox said Georgia planned to share with charity regulators in other states its formula for calculating how much extra General Mills should contribute. The formula is based on a projection that Georgians purchase about 1.32 percent of all Yoplait yogurt sold in the United States. To settle the matter, General Mills has agreed to pay an additional $63,000 to cover donations that should have been made on behalf of Georgians who returned lids. General Mills spokesman Austin Sullivan said the company was "frustrated with Georgia's stance. We felt we had acted in good faith and were forthcoming in every respect." Settling with Georgia for $63,000 was "a fairly easy business decision," he said.

Sullivan said General Mills had no indication that the lid-mailback campaign was an issue outside Georgia. The company said it will contribute more than $1 million to breast cancer research this year and is conducting another Yoplait lid-return campaign. In the new campaign, the company promises to donate 10 cents per lid to breast cancer research, with a $500,000 minimum donation and up to $500,000 more depending on how many lids are returned. Those terms are shown on the outside of the container. Sullivan said the initial Yoplait lid campaign was General Mills' first venture into cause-related marketing.

"In all things you do for the first time, you learn a few things," he said. "We were bowled over by the response." By Susan E. Peterson Star Tribune Staff Writer Rep. David Minge, is seeking an investigation into the scuttling of a proposed biomass power plant that would have burned alfalfa stems to produce electricity for Northern States Power Co. Minge sent a letter to Gregory Scott, chairman of the Minnesota Public Utilities Commission (PUC), asking why the Minnesota Valley Alfalfa Producers (MnVAP) project collapsed.

He said the failure has cost alfalfa farmers in his district nearly $6 million that they had invested in MnVAP, which planned to build a $260 million plant in Granite Falls, in addition, the U.S. Department of Energy spent about $12 million on what was to be a "model of a federal, state and private partnership," Minge said in the letter. "Why did such a promising venture never get off the ground?" he asked. "Who answers to the farmers that lost so much leases for Nintendo 64 and Playstation game consoles compared with last year. The company said the impact of the sales slowdown was magnified by price-cutting on Playstation and Nintendo 64 For the third-quarter ended Dec.

28, 1998, Funco reported net income of $42 million, or 63 cents a share, on sales of $67 million. Trading in the company's shares were halted Tuesday afternoon. The shares closed up 75 cents, or 4.2 percent, at $18.50 on Nasdaq volume of 42,500 shares. Average daily volume is 34,301 shares. Funco expects the slowdown may continue until the launch of the Playstation 2 game console next fall.

The company said Nintendo is also expected to release a more powerful Game Boy Advance system next fall and the next-generation Dolphin system in late 2000 or 2001. Funco sells new and used video games and related hardware and accessories. company's common shares. The dividend will provide the sufficient number of shares needed to meet the Nasdaq SmallCap listing requirements. Shareholders of record as of Dec.

31 will receive one additional share of stock for every 10 shares they hold. Distribution is expected Jan. 17. Larson Investments LLC, Eau Claire, has opened a Microtel Inn Suite hotel at 801 E. 78th Bloomington.

Larson also owns Microtel Inns in Eagan, Rochester and Onalaska, Wis. Nortech Forest Technologies, St. Louis Park, said it has signed a letter of intent today to acquire 100 percent of FL Floral a retail chain operating under the name Stems and Vines. Terms were not disclosed. Angeion Plymouth, said it has completed its previously announced acquisition of Medical Graphics Corp.

by acquiring all of the outstanding Medical Graphics shares for $2.15 per share for a total of about $16.2 million. Medical Graphics will become a wholly owned subsidiary of Angeion. Hidden Creek Industries said it has acquired Hadley Auto Transport Inc. and its affiliates, Santa Ana, Calif. Hidden Creek and its partner Onex will acquire a majority of Hadley's currently outstanding shares.

Certain Hadley stockholders will retain ownership of 20 percent of the company. Musicland Stores Min-netonka, and Stockwalk.com have signed Internet agreements with Advants, a system of public access Internet terminals. Under the two agreements, Advants will waive the customary per-minute access charge for users wanting to connect to Musicland and Stockwalk.com Web sites from any Advants terminal. Musicland and Stockwalk.com have taken an ownership interest in Advants. Agio Capital Partners and Larry Johnson, former development officer of REM, have formed Crystal Care LLC, which wall develop and operate senior housing, assisted-care and memory-care facilities.

Read your horoscope every day. Call 6 i 2-673-4343 for home delivery 'i of the Star Tribune newspaper. I StarThne money, resources that few could afford to lose?" On Monday, the PUC approved two other biomass projects that would help NSP meet a state mandate to buy or build 125 megawatts of biomass-fueled power; at that meeting, NSP said it had terminated a contract for MnVAP to supply 75 megawatts of alfalfa-fueled power. Minge pointed to both NSP and state regulators as potential culprits, saying that NSP's contract negotiations with MnVAP "dragged on and on, driving up the project's cost to investors" and that the PUC's "delay in approving the project" may have contributed to the failure. Al Krug, an NSP business-development consultant, said the Minneapolis-based utility agreed to a contract with MnVAP that was approved by the PUC in March, but that MnVAP later lost a major equity partner, Enron Corp.

something he called "a serious obstacle to overcome." Shortly thereafter, the Energy Department withdrew further this morning, in five months we'll all be saying, 'I can't believe we raised those questions in said Mary Sheehan, director of the tobacco endowments implementation program at the department. Malcolm and Sheehan met with the firms' representatives Tuesday morning. Jeanne Weigum, president of the Association of Nonsmokers-Minnesota, said that although she would have preferred that the state hire a firm that did not have tobacco connections of any kind, the ultimate test will be how well they perform. "If they deliver what they are supposed to deliver, we've won," said Weigum, a member of the state advisory group that helped funding. "We regret that the MnVAP project was unable to meet our requirements," Krug said.

"Also, we believe the commissioners, as well as the regulatory process, made every effort to maintain MnVAP as a supplier to NSP." Burl Haar, executive secretary of the PUC, said the MnVAP project "was a controversial case" that generated lots of questions. The PUC "has to follow due process," he said. "That's not always the most efficient process, and it did involve some unexpected delays. That may have contributed, but I don't think it was the sole cause of the failure of the project far from it." Minge didn't specify who should investigate; Haar said "it's typically not the PUC's function" to undertake such a broad investigation, particularly one that would involve agriculture policies and other issues outside the commission's focus on benefits to utility ratepayers. design the selection process.

Weigum said the group considered ruling out any firm that had direct or indirect tobacco connections. But it dropped the requirement because so many advertising and public-relations companies are affiliated with multinational firms that are likely to represent tobacco clients in some way. Sheehan said Campbell Mithun and Shandwick fully disclosed the tobacco connections of related subsidiaries, as required by the proposal process. Once a contract is set. the firms will design a multimedia campaign designed for miD uGn Kin or tao State names firm to run antitobacco campaign Union office workers employed by the Air Line Pilots Association are prepared to strike as early as Jan.

1 unless they reach contract agreement. The union represents 165 professional employees in the United States and Canada, including some in the Twin Cities. Members overwhelmingly approved a strike-authorization ballot in voting completed Monday. ABNAMRO initiated coverage of shares of St. Jude Medical Little Canada, at "hold." Needham Co.

Inc. reinstated coverage of shares of FSI International Minneapolis, at "buy." Northwest Airlines, Eagan, has increased the limit it will pay for lost luggage from $1,250 to $2,500. Northwest also has streamlined its luggage tracing procedures. About 15 flight dispatchers for Sun Country Airlines have signed their first-ever labor contract. The four-year agreement was reached after less than three months of negotiations.

Ciprico Inc. said it expects reduced earnings for the first quarter of fiscal 2000 because of delays in new original equipment manufacturer programs and a decline in revenue in the geospatial imaging market. The company said lower revenue could result in a small loss for the quarter. The First Call Corporate Monitor service reports analysts' consensus estimates for the first quarter at 10 cents per share. Insignia Systems Minneapolis, said The Kroger Delta Marketing Area, Memphis, has joined the company's point of purchase services network.

The Kroger Delta Marketing Area operate 1 1 1 supermarkets in Arkansas, Kentucky, Mississippi, Missouri and Tennessee. RSI Systems Inc. said its board of directors has approved repurchase of up to 600,000 common shares over the next year. Personnel Strategies Inc. and Star Tribune said they have formed a joint venture to present seven job fairs to the Twin Cities market next year.

The technical job fairs will be held Feb. 15, April 25, June 13, Aug. 28 and Nov. 21. Diversity job fairs will be held May 22 and Oct 4.

Deluxe Shoreview, said it has completed the sale of National Revenue Corp. to Risk Management Alternatives Inc. of Atlanta. Terms were not disclosed. The Chromaline Duluth, said its board of directors has approved a 10 percent stock dividend on the By Glenn Howatt Star Tribune Staff Writer Minnesota Health Commissioner Jan Malcolm approved on Tuesday an advisory group's recommendation that Campbell Mithun Esty and Shandwick International be hired to conduct the state's $8 million antitobacco campaign.

Although the two companies are owned by the Interpublic Group of Companies, which has subsidiaries that represent tobacco firms, health department officials expressed confidence in the ability of the local offices to produce an effective campaign. "If they give me a public-information campaign that is as edgy and out-there as they proposed The s399-a-inonth lease comes with one hitch. Its attached to the rear bumper. This New Year, you're going to meet many interesting people. must notit cn iimbMKMiNoimMnuNC first month payment t.tS cWti payment jtJMW dueltsgnirut fXCUJOE' TAOS TTTtf UOt TO kf Director.

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