News-Press from Fort Myers, Florida on December 31, 1998 · Page 29
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News-Press from Fort Myers, Florida · Page 29

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Fort Myers, Florida
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Thursday, December 31, 1998
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Page 29
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BOB RATHGEBER Assistant Managing Editor Business 335-0347 Monday-Friday 10a.m-7p.m. News-Press SECTION D Business THURSDAY, DECEMBER 31, 1998 HI i ( Deal will close by end of today The Associated Press WASHINGTON - British Petroleum Co. and Amoco Corp. said they vill complete their $53 billion merger today, after winning regulatory approval from the Federal Trade Commission. The FTC said Wednesday it Leading index on rise Gain the biggest in almost 3 years The Associated Press NEW YORK - Buoyed by the stock market's autumn rebound, a key gauge of future economic activity scored its biggest gain in nearly three years in November offering signs of optimism for the U.S. economy heading into the new year. The Conference Board, a private research group, reported Wednesday that its Index of Leading Economic Indicators rose 0.6 percent to 106.3 in November, up from an adjusted level of 105.7 in October. : The results surprised economists, who had projected a smaller gain, and marked the index's sharpest monthly increase since it rose 0.8 percent in February 1996. The leading index is designed to forecast economic activity six to nine months in advance. While the results offered an optimistic view for, 1999, they did not change expectations that the U.S. economy will continue growing in the coming year, but at a slower pace amid turmoil abroad. "It just gives us a little bit of comfort that the world's economic troubles are not going to tank the U.S. economy in 1999," said Mark Vitner, an economist with First Union Capital Markets. "Domestic demand is incredibly strong and our financial markets are going right off the charts, but the world economy is still very weak," he said. Seven of the leading index's 10 components rose in November, led by the stock market's strong turnaround from its summer slump. The most negative contribution was an increase in weekly unemployment claims. The report came a day after the Conference Board reported that consumer confidence held steady in December, reflecting growing caution in Americans' outlook for the new year. But the government reported sales of existing homes rose 2.7 percent in November and are ,poised for a record high in 1999. Dow drop ends Nasdaq, S&P 500 retreat from highs The Associated Press NEW YORK - The Dow stumbled Wednesday after eight winning sessions, halting a year-end run at the record books, but smaller-company stocks began hinting at their traditional "January effect" rally. TRADE SHOW ABWA MEETING: The Southwest Florida Council of the American Business Women's Association will host a networking trade show 10 a.m. to 2 p.m. Saturday, Jan, 9, at Exhibition Hall, Edwards Drive, Fort Myers. Carol Morgan, chairman, said women may display and sell their business products, services or crafts at the show. The public will be admitjed free. For more information, call Morgan at 936-8451. voted 4-0 to approve the deal after the companies agreed to address antitrust concerns by selling 134 gasoline stations and nine petroleum terminals. They also agreed to give owners of more than 1,600 gasoline stations in 30 cities permission to end their contracts. FTC Chairman Robert Pitofsky said the agency was satisfied that "the operations of these two companies rarely liyiit,aittiaaiAiiTni Georgia Irvin checks the Commerce Center east of Facility will be sole producer of pizza product By LAURA RUANE News-Press staff writer Fort Myers' Bagel Bites factory is coming out a winner in a $150 million restructuring of its parent company. The plant, which completed an $8 million expansion in June, is poised to grow again. This time, 6,000 square feet will be added to the facility at Billy Creek Commerce Center, at a cost of approximately $4 million. Company officials say it will mean: Creation of 25 or more full- and part-time jobs in Lee County; More Bagel Bites. Local production of the frozen snacks are expected to rise to 3.5 million daily from 2.7 million, said plant manager Sam Casey. The Standard & Poor's 500 and the Nasdaq composite fell modestly from Tuesday's record highs, pressured by a second-day of profit-taking in the volatile Internet group. The Dow Jones industrial average fell 46.34 to 9,274.64, finishing the day almost exactly 100 points below the Nov. 23 record of 9,374.27. The downturn halted the Dow's longest winning streak in two years, an eight-session Bagel Bites plant 2 INSURANCE SENIOR SETTLEMENT: A Cincinnati-based life insurance company has agreed to refund millions of dollars to settle its part in an alleged scheme by a California firm to pressure seniors into buying investments without fully explaining them. Great American Life Insurance Co., which admitted no wrongdoing, agreed to a complete refund, with interest, to purchasers of the annuities or their heirs. The total settlement amount will depend on how many people seek repayment. overlap in a way that threatens -competition. Formal FTC becomes final after comment period. The stock approval a 60-day merger, announced Aug. II, is among the largest in history. Chicago-based Amoco is the nation's fifth-largest oil company with roughly 9,300 gasoline stations. London-based British Petroleum, the world's third-largest oil company, sells its A Taste of I J -, ... tttr a., j. i , arrangement of bagels in the Fort Myers in Tice. "They keep growing, by little bites at a time. They're a solid company, showing con- t l n u e d growth," said Janet Watermeier, director for Lee County economic development. Bagel Bites is Lee County's sixth-biggest CASEY manufacturing company. The latest expansion will happen because H.J. Heinz Co. decided to combine its Ore-Ida Foods and Weight Watchers Gourmet Food operations into a new, Pittsburgh-based affiliate, Heinz Frozen Food Co. In the streamlining effort, Heinz chose to stop making Bagel Bites at the Ore-Ida plant in Pocatello, Idaho, and designate Fort Myers as the sole producer of Bagel Bites for North America. "We were already making year - end string that added 530 points to the blue-chip measure. In addition to making a year-end record less likely, the drop also seemed to dash any hope the Dow would finish with its fourth straight annual gain of 20 percent or more. Still, for a year that seemed to herald the demise of Wall Street's long-running bull market, it would be hard to complain about the Dow's 17.3 percent gain in 1998. HfcAmr ili F -it., I, I .A TRAVEL PARKING AT PREMIUM: Anyone flying out of Naples Airport this week is urged to hitch a ride rather than driving themselves because parking space is at a premium. "Although free parking spaces are currently available, passenger traffic is ' expected to increase as the holiday season comes to a close, reducing the number of parking spaces," said Gail Cureton, spokeswoman for the airport. Those who must drive to the airport are asked to arrive early and be patient. They may have to park in overflow areas, Cureton said. products through a network of about 17,900 stations. Stocks fall after approval Shares of both companies fell Wednesday on the New York Stock Exchange. Amoco dropped $3.25, or 5.6 percent, to $54.75 per share, and BP fell $6.75, or 7.5 percent, to $83.18. In a joint statement, British Petroleum and Amoco said they will complete the merger Expansion r T -iimiliwilifcf dough room at the Bagel Bites plant in the Billy Creek 1L 80 percent of the Bagel Bites. Now it will be 100 percent," Casey said. We re simply more efficient," said Casey, noting the Idaho plant will continue to make other frozen foods. "This is all we do." They do it WATERMEIER in three shifts, 365 days a year. The plant employs more than 300 people who are involved with every process, from making the bagel dough from scratch to blast freezing and boxing the snacks. Bagel Bites look like mini pizzas, and come in eight varieties, including cheese- and pepperoni pizza and nacho toppings. In area stores, a nine-count package currently retails for $1.59 and up. See BAGEL 2D winning streak While strong money flows from year-end bonuses and retirement plan contributions have fueled a strong finish to 98, analysts are concerned company profits may not justify the market's lofty levels in 1999. , Foreign demand for U.S. exports is expected to remain bleak for some time as the global economy tries to shake off this year's financial turmoil. But recent reports have also at 4 p.m. today, when U.S. markets close. The companies previously had said they wanted to complete the deal by year's end. "We set ourselves the demanding target of closure by year-end," BP Chief Executive John Browne and Amoco Chairman Larry Fuller said in a statement. "We are delighted that we will achieve that and, in the process, set a new record of 100 working days for the Hfc-L. K.T. WARNKENews-Press rows TIMELINE 1985: Bagel Bites founded in Lee County by Bob Mosher and Stan Garczynksi B 1987: Canadian beer-maker Labatt buys company. 1989: Bagel Bites debut at Sam's Clubs 1991: Factory moves to Billy Creek Commerce Center. Heinz Ore-Ida division acquires Bagel Bites. 1994: New bakery installed. 1996: Quality Improvement team wins state award. 1998: Bakery and packaging areas expanded. 1999: Bakery, sauce-storage and packaging areas to expand. shown the domestic economy continues to show some spark. "You can say that maybe the market has come back to a little bit of reality today with the selloff in Internet stocks," said Barry Hyman, senior equity analyst at Ehrenkrantz King Nussbaum. "That's healthy for a market where the level of speculation represented by Internet stocks could only lead to trouble down the road in terms of investor confidence." LAYOFFS BANK CUTS: The holding company for Republic Bank, Florida's largest independent bank, will lay off 340 employees at its mortgage banking unit and record a fourth-quarter pretax charge of about $7.5 million for severance and costs related to discontinued facilities. Republic Bancshares Inc., based in St. Petersburg, also said it has discontinued its loan telemarketing and direct mail loan solicitation operations. completion of such a large and complex transaction." Still, the deal is eclipsed by the pending $77.2 billion merger of Exxon and Mobil, which would combine the biggest U.S. oil companies. Analysts said Exxon and Mobil also probably will have to sell off gas stations and refineries in regions where, together, they would dominate the market. The FTC said it looked at business areas where British The Associated Press BAD DEBTS: A woman looks at prices for chicken at a street market in Moscow on Wednesday. Many people prefer to make purchases at wholesale markets where prices are lower than in retail stores. With Russia itself effectively in default on a major foreign debt, Western creditors must decide how to deal with a country that's struggling to pay its bills. anks irom Kussia s latest default But failure to pay could cost nation more future loans The Associated Press NEW YORK - Russia's default on $26 billion in Soviet-era debt to commercial banks worldwide this week won't sting top U.S. banks further since most wrote off their Russian debts months ago, economists said Wednesday. But the move gives banks an even stronger case for denying crucial new loans to help rouse the country from its crisis, analysts and economists in London and New York said. "Any U.S. bank is going to be extremely cautious about getting involved with Russia in the near future," said James McDermott, chairman of banking analysts Keefe, Bruyette & Woods in New York. "Russia is persona non grata as a borrower." Russia failed Tuesday to make a $363 million cash interest payment on $26 billion worth of Soviet-era loans that must be repaid to more than 600 commercial creditors worldwide. Bank of America, the payment agent for the lenders, on Wednesday officially declared Moscow to be in default on the payments, according to Dow Jones Newswires. "An event of default ... has occurred and has not been cured," Bank of America wrote to fellow creditors, according to Dow Jones. A spokesman for Bank of America said he could not confirm the report. Major foreign creditors now may be asked by Bank of America to either give Russia time to resolve the matter or RECALL FUEL FLAW: DaimlerChrysier AG is recalling 906,000 full-size sedans to inspect them for a potential fuel leak that could cause a fire. The recall involves 1993-97 model-year Chrysler LHS, Concorde, Dodge Intrepid and Eagle Vision cars with 3.5-liter V6 engines, as well as '93 models with the 3.3-liter V6, spokeswoman Sonya Bultynck said Wednesday. The company has received 16 reports of minor fires, none of which has resulted in injury. Petroleum and Amoco's operations might overlap and found few reasons for concern. "Where they do overlap, mainly in wholesale and retail sale of gasoline in local markets in this country, the commission with the cooperation of the companies has achieved substantial divestitures and other relief," Pitofsky said. Owners await impact 2D AT&T merger OK'd 2D . ..- H spared ask for an acceleration of payments. If more than 50 percent of principal debt holders ask for accelerated payment, Russia would be bound to repay the full debt a sum it doesn't have. Under a 1996 restructuring agreement, Russia was granted a grace period through 2002, during which it only had to make debt service payments. Russia maintained that missing the payment didn't constitute a default because more than 70 percent of debt holders agreed to accept new bonds instead of cash. But the commercial creditors' committee, known as the London Club, stoutly maintained that 95 percent of its members needed to approve such a plan to avoid calling the payment failure a default. Whatever Russia's move is called, economists and bankers agreed that big U.S. banks won't be hard hit by the country's payment failure. Most banks wrote off their Russian debt after August, when the country defaulted on $40 billion in domestic treasury bills, most of which was held by foreigners. "We didn't take a hit" this week, said Chase Manhattan Bank spokesman Andrew Tuck. "Our writeoffs for exposure in Russia took place earlier in the year." He said Chase had approximately $200 million in direct exposure to Russia as of Sept. 30 $250 million less than at the end of August. Russia now faces about $150 billion in total foreign debts, and the government has budgeted only $9.5 billion next year to make $17.5 billion in foreign debt payments. IIISIDE Dilbert2D H NYSE 3D BMutuals4D B Nasdaq SD FREE HELP Monday through Friday, 10 a.m. to 3 p.m., SCORE offers free help to small businesses. Renaissance Center, 8695 College Parkwav, Suite 345, Fort Myers. Call 489-2935 or e-mail score.219(" juno.com

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