The Los Angeles Times from Los Angeles, California on January 28, 1969 · 37
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The Los Angeles Times from Los Angeles, California · 37

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Tuesday, January 28, 1969
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37
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mm & f inance TUESDAY, JANUARY 28, 196? National News Businessmen expect sales gains in 1969, but some feel overstocked. In Fortune magazine's quarterly survey of inventory plans, manufacturers expect a rise of 5 to 6 in sales volume but merchants expect only a 2 to 3 rise. Because businessmen have been buying heavily for inventory in recent months, many say they are becoming more overstocked than they wanted. Steel users said they will shrink stockpiles from about 55 days' supply to 52 days by year's end. Auto makers say dealers' stocks have risen so fast that they must eventually be cut. B.F. Goodrich petitioned the ICC to control Northwest's short offer. B. F. Goodrich Co. said its petition . asked the ICC to require Northwest Industries Inc. to obtain ICC approval of all securities issued by that carrier holding company. Northwest Industries is already subject to the ICC in certain respects, Goodrich noted. The petition charges the proposed tender offer of securities of Northwest Industries to shareholders of B. F. Goodrich will, if successful, increase the debt of Northwest Industries by about $650 million. Northwest called the petition "wholly without merit." Steel production rose 2Vz lost week but still trails last year's level. The total output was 2,575,000 tons last week, the American Iron & Steel Institute reported. It was an increase over the 2,513,000 tons produced in the previous week, bringing the total for the year to date to 8,836,000. This compared with last year's total to the same date of 9,586,000. Zapata Norness agreed to terminate its offer for United Fruit shares. The Houston firm and AMK Corp., New York-based rival to its bid for the Boston-based banana and food producer, agreed that Zapata would stop soliciting tenders for United - Fruit stock but would keep its offer open until Jan. 31. AMK will pay i Zapata $3.8 million under the agree-; ment, and give Zapata the right to - sell its United Fruit stock to AMK. ' AMK would pay for the stock with a J 6.7 10-year subordinated note for the balance of the price over $3 - million. ?, Greyhound Corp. made a tender f offer to acquire shares of Armour. William Wood Prince, chairman of . the Chicago meat packer, said the : 499,072 shares held by his family ' would be tendered to Greyhound in ; support of its offer of $65 a share. : The Armour board also supported the Greyhound offer for at least 2.5 l- million of the 6.1 million Armour ; shares outstanding. General Host Corp., New York, said it will press r its rival bid for Armour, however. A feaaral judge denied Armour's re- que, it for an order to restrain the ,; General Host bid. Yields on Treasury bills rose again i in the weekly auction held Monday. Average yield on $1.6 billion of 91- day bills climbed to 6.167 from the week-earlier level of 6.076. On $1.1 : billion of 182-day bills the average t rose to 6.255 from 6.233. The ! rates were the highest since the Jan. t 13 auction, when the averages stood : at 6.215 and 6.375, 5 Tht CAB ordered a review of the t decision to outlaw youth fares. !: The board acted without waiting. ( tor any airline to petition for a i vievv of the Jan. 21 initial decision h- by an examiner, which would out-law youth standby fares and young adult reservation fares. No hearing . date was set, and the special fares r meanwhile remain in effect. The I decision, if approved, would end the 50 discounts many airlines offer youths from 12 to 21, on standby, I', and the 33 13 discount others ' offer the same age groups on a j reserved-seat basis. The examiner f- said the fares were unfair to persons of other ages. Pennzoil called off its offer for f ' ; Asarco because of a court order. j A preliminary injunction was ISC' sued by a federal court against the I Houston oil company's exchange of-fer for American Smelting & Refin-.: ing Co., New York. Pennzoil said I the case could linger six months or s more before being determined, and that this left no alternative but to t cancel the offer, formerly valued at $1.5 million. Asarco's management challenged the Pennzoil offer on the Z ground that a merger would have violated antitrust laws. , . Men at the Top Walter C. Straus became chairman and senior officer of Newberry Co. Straus, formerly president of the J. J. Newberry Co., Is succeeded in that post by Dean Campbell, execu Part in 9 tive vice president, who also becomes chief executive officer. Daryl D. Milius, senior vice president, merchandising, becomes executive vice president and chief administrative officer. Franklin M. Jarman is to be elected Genesee president, chief executive. Genesco Inc.'s board has been called to a special meeting Feb. 3 to elect Jarman. Ben H. Willingham, president, is taking a leave of absence because of a continuing health problem, the board was told. The announcement was made by W. Maxey Jarman, chairman. California I mperial Corp. of America agreed to take over Newport Balboa S fir L The San Diego savings and loan holding company agreed in principle to acquire all or at least 80 of the Newport Beach savings firm, which was valued at about $16 million. It has about $112 million in assets, and more than $90 million in outstanding loans. Imperial's assets at Dec. 31, 1967, were about $1.1 billion. Newport Balboa, founded by Board Chairman Paul A. Palmer and President Agnes Blomquist in ,1936, is closely held by them and their associates. The agreement is subject to approval by the Federal Home Loan Bank Board and the California Savings & Loan Commissioner. Briefly Told Gould-National Batteries Inc. anticipates earnings of $2.80 to $2.90 per share in the fiscal year ending April 30, vs. $2.42 last year. Handy & Harman will publish a daily gold base price starting Feb. 3 . . . Kaufman & Broad applied to list its stock on the Big Board . . . Metromedia stockholders will vote Feb. 28 on their merger with Transamerica Corp. . . . Rheingold Corp. completed the acquisition of Pepsi-Cola Bottling Co. of Santa Ana ... Piper Aircraft Corp. urged its shareholders to reject the tender offer by Chris Craft and said it hopes to announce by Friday merger talks with a "major industrial corporation" . . . The SEC suspended OTC trading of Crestline Uranium & Mining common through Feb. 5 after it rose from 8 cents last November to a recent 25 cents . . . INA and World Airways delayed their special shareholder meetings until Feb. 4 to vote on a proposed merger. 109 108 107 106 105 104 103 102 101 100 30 IS 1 14 12 10 t4M 10) m Miuiom 12201227 13 110 117 124 131 MIKttNDINO YESTERDAY 4 NEW YORK Standard fir Poor's 500-stock index closed at 102.40, up 0.02. High during the da was 103.15; the low, 101.64. The industrials closed at 111.31, down 0.04; the rails at 56.06, up 0.55; the utilities at 68.64, up 0.24. The "500" 1968-69 high of 108.37 was set Nov. 2?. The 1968-69 low of 87.72 was set March 5. Volume declined to 11,020,000 shares, compared to 1 2,520,000. OVtR-THI-COUNTER The National Quo-tation Bureau index of 35 industrial stocks closed at 4 11. 84, down 0.94. The 1968-69 high of 433.41 was set Dec. 17. The 1968-69 low of 321.51 was set March 6. LONDON The Financial Times indtx of 30 industrial stocks closed ot 512.1, up 2.3. The 1968-69 high of 521.9 was set Sept. 19. The 1968-69 low of 385.0 was set Jan. 2, 1963. Western Plans 41 Round Trips on Hawaii Route BT PAUL E. STEIGER Times Steff Writer Western Air Lines said Monday it plans to inaugurate Hawaii service with an Initial pattern of 41 weekly roundtrip flights from nine mainland cities beginning April 27. The Los Angeles-based carrier also said it is ordering 12 new jet aircraft from Boeing Co., including three Boeing 747 "jumbo" jetliners. The aircraft, including spare parts, will cost about $150 million. Western said plans to finance the purchases are being made with its underwriters, Merrill Lynch, Pierce, Fenner & Smith, and other financial advisors. Considering Airbuses The order for the 747s is Western's first for any of the new generation of wide-body jet aircraft. However, the carrier's president, Terrell C. Drinkwater, said after a board of directors meeting in San Francisco that the choice of the Boeing airplane "does not mean we have closed the door on our consideration of other wide-bodied jets." He said Western is "still interested" in the so-called airbuses now under production by Lockheed Aircraft Corp. and McDonnell Douglas Corp. "for use on our mainland routes." Western said its planned initial service between Hawaii and the mainland will cover all the cities involved in route awards to Western in the domestic phase of the transpacific route case. President Nixon has recalled the international portion of the case for a possible revision. His authority extends only to the international awards, but changes in the International phase could cause some revision or postponement of the domestic route authorizations, airline sources say. 19 Trips From L.A. Western's plans to begin Hawaii service include inauguration of 19 round trips a week from Los Angeles, three daily except for Monday and Thursday, when there will be two trips a day. All these flights will use Los Angeles International Airport. Western also was given authority to fly to Hawaii from Ontario and Long Beach airports, and a spokesman said the carrier plans to inaugurate service from them once it obtains additional aircraft. Other plans for initial service include: " ' Fourteen flights a week from the San Francisco Bay area, using both the San Francisco and the Oakland airports. Seven weekly trips from San Diego. Seven a week from MinneapolisSt Paul, with an intermediate stop at San Francisco. Seven from Denver, with a stop at Oakland. Please Turn to Page 17, CoL 2 Court Extends Ban on Sinclair Merger ' NEW YORK UP) A temporary court ban on the proposed merger of Sinclair Oil Corp. into Atlantic Richfield Co. was extended Monday for 10 days. U.S. District Court Judge Frederick van Pelt Bryan lenghtened the stay so he could consider whether to grant the Department of Justice a preliminary injunction against the proposed deal. The Justice Department filed a civil antitrust suit Jan. 15, arguing that the merger of the two major oil companies would cut competition or tend to create a monopoly, in violation of the Clayton Act. of Rock Island, Justice Dept WASHINGTON (0 The Justice Department unexpectedly filed with Ihe Interstate Commerce Commission Monday a brief saying it supports the merger of the Rock Island railroad with Union Pacific under "appropriate conditions." The department's antitrust division said railroad merger proposals which hold out potential for more' effective use of railroad properties are preferable if the resulting realignments "do not have significantly adverse affects upon the public . . v such as substantial sacrifices of competition." The ICC has had the consolidation proposals of the Rock Island, Chica-' go and Northwestern, Union Pacific, Southern Pacific and the Santa Fe railroads under consideration nearly six years. In its brief, the Justice Department points out that the ICC is faced with reorganizing Rock Island railroad facilities into long haul, competitive rail systems or reorganizing large parts of them under regional ownerships. t - 7 ii V iiMitowawiiMrfcKsT-wi irnr- i r n IT WASNT EASY Lester L Kilpatrick, left, California Computer Products president, discusses with John F. Bishop, president of Dana Laboratories Inc., the hazards of starting a small electronics firm. Both addressed a meeting of Western Electronic Manufacturers Assn. Times photo by Steve Fontaninl Knotty Problems of Shoestring Start Solved by Right Product BY ROBERT E. WOOD Timet Stall Wrlter About nine years ago Lester Kilpatrick and his small staff left the relative comfort of secure jobs with a big company and struck off to start their own enterprise. "All we had was 10 or 11 years of computer technology training that the government and our employer (North American Aviation's Au-tonetics division) had invested in," Kilpatrick said last week. "We just quit our jobs, hung up our shingle, and got enough contract work on weapons systems and similar projects to pay our bills." Kilpatrick's concern, California Computer Products Inc. of Anaheim, has since grown and prospered as the dominant maker of an unusual product line computer-related graphics and plotting equipment. But perhaps the most unusual part of the CalComp story is that the company even survived its first few months. One industry expert estimates that, of the approximately 150 new Parvin-Dohrmann to Pay $15 Million Plus Debts for Stardust Parvin-Dohrmann Corp., a Los Angeles hotel-restaurant supply and interior decorating company, plans to buy the Stardust Hotel in Las Vegas, both organizations confirmed Monday. The transaction had been rumored for about a month. The announcement from William C. Scott, president of Parvin-Dohr-manu, and M. B. Dalitz, president of the Stardust, said the price was $15 million in cash for "all of the capital stock of the Stardust." In addition, according to a Stardust official, Parvin-Dohrmann would assume payment of all the organization's debts. This total could amount to $20 million, the official said. Last year, the Stardust agreed to sell to industrialist Howard Hughes for $31.5 million. That price included all encumbrances. The transaction was blocked by the Department of Justice on antitrust grounds. Hughes currently owns five hotel and casino facilities on the Las Vegas Please Turn to Page 11, Col. 7 lorts Merger Union Pacific The latter choices, the brief declared, would result in the "substantial diminution of and prejudice to rail competition." The department placed certain conditions on the acquisition of Rock Island by Union Pacific, including the sale of about one-fourth of the Rock Island properties to the Santa Fe and the Southern Pacific railroad companies. The department also strongly recommended that if the Chicago and Northwestern Railway Company is. authorized to merge with the Chicago, Milwaukee, St. Paul and Pacific Railroad Co., Chicago and Northwestern should not be authorized to acquire ' control of Rock Island. , - The Justice Department has in the past consistently raised objections to big railroad mergers but in this case it says the acquistion of the Rock Island by Union Pacific into a competitive, long haul system would eliminate far less rail competition than would acquisition of the Rock ; Please' Tnrri to Page 13, Col. 5 Supp if-' W ";'f :rH - M - 1 i i,nmrnWHwwri mmmn ijltzjsZ electronics firms formed every year in California, about 40 fail during the first year; another 20 fail during the ensuing four years; and 20 more are bought out by bigger companies before they've reached their fifth birthday. In other words, only about 30 of those 150 annual new creations actually survive the incubation period. CalComp is one of these fortunate exceptions. In the year ended last June 30 the company earned $1.21 million on $16.6 million revenues, and results for the six months just ended show jumps of 27 in revenues and 20 in profits over the same period in 1967. What was CalComp's closest brush with the risk of going under? "We waited too long to sell stock to the public," Kilpatrick said. "We lived from hand to mouth; and with a little less luck we could easily have gone broke because we had so little capital." By 1961, two years after its founding, the company had gone public with a $316,000 stock offering and set its course into the market which it dominates today. With its position fairly secure, Kilpatrick says he's now more willing to plan far into the future. "One early partner used to worry because we didn't have a five-year plan," he said. "My response at that time, when we were busy keeping afloat, was that we needed a one-week plan. Now I admit we probably could use some longer-range planning." Kilpatrick made his remarks at a panel discussion entitled "New Corporate Entities Plans, Pitfalls and Pratfalls" sponsored here by the Please Turn to Page 11, Col. 1 High Court Edict Broadens SECs Power Over Mergers BY JOHN P. MACKENZIE Exclusive te The Times (rem the Washington post WASHINGTON The Supreme Court ruled Monday that the anti-fraud provisions of the 1934 Securities Act and the Securities and Exchange Commission's rules can be used to attack corporate mergers accomplished through the exchange of stock. . By a 6 to 3 vote the court . significantly broadened the power of government regulators, and potentially the power of dissatisfied stockholders, to attack certain mergers as securities law violatlons even though, in the language of the 1934 law, there has been no cash "purchase" or "sale" of stock. As far as the law is concerned, Justice Thurgood Marshall said for the court, it is a "purchase" of stock when shares are traded to consummate a merger. Arizona Case Cited Marshall said the SEC had the right to invoke the 1934 law when it went to court three years ago to block a merger of two Arizona companies, National Life &Casualty Insurance Co. with Producers Life . Insurance Co. The SEC charged misrepresentations in the proxy solicitation issued by National Securities Inc. of Phoenix, a holding company that proposed the merger after, acquiring sizeable stock In both firms. Lower courts ruled against the SEC with a threshhold decision that the transaction was immunized from federal regulation by the 1945 McCarran-Furguson Act, a law passed to overcome a 1944 high court decision that insurance was "commerce" subject to antitrust and other federal laws. Congress responded by saying that no state law "enacted for the .'( Commonwealth; Kinney Pursue ' Warner Bros. : BY ARELO SEDEBBERG Timet Staff Writer Commonwealth United Corp., a Beverly Hills conglomerate, and Kinney National Service Inc., a New York conglomerate, said Monday' each of them wants to acquire Warner Bros.-Seven Arts Ltd. The Commonwealth offer could amount to as much as $266 million, or some $70 per Warners share. Warners stock closed at $58 Monday. Eliot Hyman, chairman and chief executive of Warner Bros., Toronto, indicated the company really isn't very interested in being acquired or -merging, however. He said both offers were not firm ones and referred them to Allen & Co., Warner Bros.1 investment banker. Hyman said Warner Bros, is neither soliciting nor encouraging offers from anyone and on the . contrary is interested in developing appropriate acquisitions itself. P Talks Terminated Warner Bros.-Seven Arts, itself a product of a 1967 merger, was to be acquired by National General Corp. of Los Angeles, but negotiations were terminated last week, after there were indications of opposition from the U.S. Department of Justice. National General owns a string of theaters and produces motion pic- tures. Warner Bros, produces mo-J vies and television films. Also Chris-Craft Industries Inc., a New York manufacturer of pleasure' boats, terminated negotiations to acquire Warner Bros, last week. Neither Commonwealth United nor Kinney placed a cash value upon their offers, and Kinney didn't even detail its bid. It just said its offer will be "fully competitive' with Commonwealth's. Commonwealth said it would offer this package of securities for each of the 3.8 million shares of Warner Bros. '' Two shares of Commonwealth common stock, selling at $23.50. That amounts to a market value of $47. $16 in a new 5 (dividend rate) convertible preferred stock. One-half of a warrant to purchase Commonwealth common stock. $70 Per Share The warrant would entitle the, holder to buy one share of Common-' wealth stock at $25 for 10 years.. Ascribing a value of about $14 to the warrant, the offer would add up to about $70 per Warners share. . : The new preferred stock would be convertible into Commonwealth common based on the average price for the common stock for the five trading dates preceding the date of the exchange offer. The conversion range, however, would be not less than $21 nor more than $30. .; Commonwealth has a couple other deals pending. Last Friday, it announced agreement to purchase a pair of racetracks, Golden Gate Fields and Bay Meadows, and on Jan. 11 said it will pay cash and convertible preferred stock worth some $55 million for the retail drug operations of Rexall Drug & Chemical. purpose of regulating the business of insurance" could be considered superseded by any federal law. Monday the court said Arizona's law' governing the merger was no such a ; law because it dealt with insurance company relationships with stockholders rather than their "business1' policy holders. Chrysler Guts Auto Production; Industry Sales Trailing 1968 1 DETROIT In a move it said was to bring production in line with projected sales, Chrysler Corp. Mon; day announced a cutback of 36,720 cars In its scheduled output for this year's first three months. The move will result in a layoff of one to two weeks for 32,081 workers at six Chrysler assembly plants, q General Motors, with January sales running above those of a year ago, was reported by a spokesman to have no cutback plans for the immediate future. , A Ford Motor Co. spokesman emphasized his firm never publicly forecasts production more than ' a week in advance, and declined ariy comment, except to say, "we plan to operate five days this week." As a whole, industry sales for January are running behind those for the similar 1968 month and some sources have predicted , a record inventory of close to 1.7 million vehicles in dealer hands by the end of the month. ,

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