The Boston Globe from Boston, Massachusetts on December 25, 1981 · 30
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The Boston Globe from Boston, Massachusetts · 30

Boston, Massachusetts
Issue Date:
Friday, December 25, 1981
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30 THE BOSTON GLOBE FRIDAY. DECEMBER 25. liM Other business news 29 Steel cleared to buy stock in Marathon Associated Press ' U.S. Steel Corp.' can begin buying Marathon Oil Co. shares Jan." 7. a federal judge ruled yesterday, but meantime another company might make a rival offer for. the nation's 17th largest oil concern, some analysts said. If another company did enter the fray, it undoubtedly would have to be in a business other than oil in light of an appeals court's ruling Wednesday that Mobil Corp.'s $6.5 billion bid probably would violate antitrust laws, the analysts said. As a result of that ruling, the success of Mobil's offer is In serious doubt, they added. Mobil spokesman Anthony DeNigro in New York said yesterday, "We're continuing to study the court opinion." He declined further comment. A key factor in whether another company bids for Marathon and the success of U.S. Steel's $6.3 billion offer was the "withdrawal date" of the steelmaker's bid. That is the date after which Marathon shareholders who have tendered shares to U.S. Steel can no longer withdraw and 'tender to a rival suitor, and after which U.S. Steel can begin buying the shares. ' ; About 90 percent of, Marathon's approximately 58.7 million" shares already have been tendered to U.S. Steel. The 6th US Circuit Court of Appeals in Cincinnati earlier had set the withdrawal date for five business. days after its decision. But in its decision released Wednesday night, the panel said the period before the withdrawal date '.'should be sufficient" to permit other offers, and it sent the case back to US District Judge Joseph P. Kinneafy in Columbus, Ohio. 'Kinneary yesterday ordered that the withdrawal date be extended until midnight Jan. 6. The appeals court requested the "sufficient" time period in light of its ruling that two options granted U.S.. Steel by Marathon as part of their friendly merger proposal were illegal and had discouraged rival bids; ' ; One option would have allowed U.S. Steel to rfiy Marathon's 49:5 percent interest in the rich Xates oil field in Texas if a third party acquired Marathon. The other would have let U.S. Steel tjuy 10 million new Marathon shares at $90 apiece a price far below the $125 a share U.S. S;teel is offering for 51 percent of Marathon's stock. ' .' ... ' - I The court said those options effectively blocked others from bidding for Marathon, Based in Findlay.Ohio, arid that by deleting the options other companies still interested in Marathon should be allowed time to come forward before U.S. Steel's withdrawal date. During Thursday's hearing before Kinneary, ij.S. Steel lawyer" Dan Hammer said the steelmaker would agree to drop the two options. ; Kinneary's order leaves seven business days fbr another company to prepare an offer for Marathon, which' some analysts said might not be enough time.' ';' i '1 Ml 14 Changing lines on Rte. 3, guincy-Braintree line. GLOBE PHOTO BY DAVID L. RYAN G&W boosts stake in Polaroid The multl-billion-dollar New York conglomerate. Gulf & Western Industries, said it boosted its 5.7 percent stake in Polaroid Corp. in recent weeks to 6.7 percent of the company's outstanding common stock. G&W said the stock was bought for investment purposes. Papers filed with the Securities and Exchange Commission in Washington indicate that G&W purchased an additional 339,100 shares for $7,297,606 In open market transactions between Nov. 30 and Dec. 18 at prices ranging between $20,125 and $22. Earlier in the month, G&W announced it had raised its investment in Polaroid to 5.7 percent. Polaroid had no official comment but an executive noted the additional purchase was not a large increase. G&W spokesmen explained that the additional purchases were made for the corporation's securities portfolio, which as of Oct. 31 had an unaudited value of approximately $372 million. Government filings also disclosed yesterday that G&W on Dec. 21 had sold 512,500 common shares, or 9.88 percent of Jonathan Logan Inc., a women's apparel manufacturer, to the company for $7,431,250. According to industry sources, G&W made $600,000 on the transaction, having had an investment in Jonathan Logan common since 1976. - JOAN FITZGERALD Vt. opposing Guilf orcP s bid for the B&M From wire services MONTPEL1ER - Transportation secretary Tom Evslin said yesterday that the state will oppose acquisition of the Boston and Maine Railroad by Guilford Transportation Industries of Durham, Conn., because it might result in unfair competition for the Lamoille Valley and Canadian Pacific lines in Vermont. Evslin said the state shed its previous neutrality in the case because it was denied assurances that Guilford will not discriminate against two Vermont railways if it controls the B&M. He said the Interstate Commerce Commission, which must approve the merger, was notified of the state's opposition. Guilford is owned by financier Timothy Mellon and wants to acquire the B&M and the Delaware and Hudson railroads. It already owns the Maine Central. Evslin said he was "generally happy to see private capital come into New England railroading but that I can't support this acquisition unless we have assurances that it will not be predatory." He said Guilford has refused to promise that will not happen. Goods from southern Maine now are routed either through the Vermont lines via the Maine Cen tral's mountain division, or through the Boston and Maine line, which connects with other railways in Massachusetts. "Shippers get to pick the route, and they have used both routes." Evslin said. Consequently, he said, "it has always been in the Maine Central's Interest to keep both routes available." He said the proposed merger gives Mellon an "obvious incentive" to funnel as much connecting traffic as possible to the Boston and Maine. One way that could be done, he said, would be to downgrade the Maine Central's service to St. Johnsbury. where it connects with the Lamoille Valley line. He said it could run fewer mountain division trains or raise rates. He said the state would not object to competitive strategies aimed at improving the the Boston and Maine's service. "We do not object to fair competition," he said. "We want to see competition make service better for shippers, not worse." Evslin said by Guilford's own estimates, the merger would allow the companies to divert 87Q railroad cars each year from the Lamoille Valley line, which is owned by Vermont. LFE laying off 350 LFE Corp., the Waltham process controls company, delivered a very un merry Christmas message yesterday when it announced it was furloughing 350 employees at its Waltham plant for two weeks in January. The company said the furlough was in connection with the previously announced decision to transfer manufacturing operations to a new plant in Clinton, Mass. The furlough reportedly will last from Jan. 18 through Jan. 29. The company characterized the timing of the plant closing as "opportune," according to the Dow Jones wire service, explaining that "the depressed national economy has reduced order input and resulted in a lower level of production requirement." LFE sold the Waltham plant earlier this year for $8 million to move into a larger, leased manufacturing space in Clinton. Profits on the sale were $2.4 million. The sale bolstered recent quarterly earnings which would have been down otherwise. Sales for LFE have been depressed all year and resulted in. a decision to omit the semiannual dividend of three cents a share in June. In the second quarter ending October 23, the company reported sales of $17.1 million, down from the $19.3 million reported in the second quarter of 1980. Wait in a major revision of plan for drilling on US coastline Associated Press j WASHINGTON - Interior Secretary James Watt,, after months of criticism, has scaled back his controversial plan to open up virtually . the entire US coastline for oil and gas drilling oven the next, five yjears, aides announced yesterday. J': Watt had originally proposed leasing entire offshore planning ajeas, which range in size up to ISO million acres. That represented aj dramatic change, from current leasing practices in which a lease siale covers about 2 million acres. '-" i However, in a memo :issued last week and released by t he department yesterday. Watt directed, the leasing program to focus on those offshore tracts determined by the US Geological Survey, oil companies or state governments to be areas of high potential. Under this approach, the 1 billion acres originally included in Watt's leasing plan would be available for industry consideration, but only specific tracts actually will be offered for lease. Sarah Chasis, a lawyer with the Natural Resources Defense Council, said Watt's decision was a "major shift" in emphasis and came about because of the universal criticism the earlier program had received. "States, environmental groups and even the oil companies were saying that such large offerings just didn't make good sense," she said. "This is a step in the right direction." But Michael Shapiro, an aide to California Gov. Edmund G. Brown Jr., said he did not believe Watt's revision went far enough. He said the areas offered for lease will still be too large to properly judge the environmental impact. Interior Department officials said the change was made partly in response to the adverse comments the original proposal generated. Even some oil companies, which have been after the government for years to open up more land for leasing, had complained that they would not be able to handle lease sales of more than 3 to 10 million acres per sale. ' Some department officials estimated that Watt's modified proposal would reduce the actual number of acres leased each year by one-third, but other officials said any such estimate would only be a guess. Department spokesman Harmon Kallman called the memo "fine-tuning and not a major change in approach." Kallman said the workload of the department and coastal states would be reduced because the required environmental impact statements will only be done on tracts in which companies express an interest. "We never expected to lease 1 billion acres, only to offer that muchfor consideration," Kallman said. Watt first announced his five-year leasing program last April, but final publication of the plan has been held up because of a court challenge. Aides now say it will be late March at the earliest before the plan is released. Watt's memo did not alter the number of lease sales offered each year - a total of 42 in five years -an increase of five sales over the program proposed by the Carter administration. Many of the new sales will be in frontier areas of Alaska which geologists believe have high potential for oil and gas finds. Watt's leasing plan would cover about 200 million acres each year, a ten-fold increase over the Carter program, covering almost all the US coastline. However, with the modification, the amount offered for lease will be much less. Eastern Utilities may hike dividend 1st time since '77 John F.G. Eichorn Jr., nrpci- clent and chief executive of Eastern Utilities Associates 6f Boston, told Qow Jones, he may recommend that directors of the utility holding company increase dividend's 5 percent to 6 percent a share next year. I The increase, in the quarterly payout to 42 Cents; or.43;Certts a share from 40 cents would be the fjrst since 1977.' "We recognize that our shareholders haven't been well taken care of," said Donald G. pardus, vice president and treasurer- . ;'..! ':'-'; . The two executives also said they expec( net Income for the year ending Dec. 31 to climb ?.0 percent to 25 percent to $300 million on revenue that is expected to increase about 22.6 percent.,Last year', Eastr ern Utilities posted net incoine of $9 million, or $1.63 a share, on sales of $244.6 million. Pardus said that by year's end the company will have about a' 12 percent return on equity. . ,. For th$ nltie-nionths ended Sept. 30,'lhe comapny had ni t in- come of $9.2 million, or $1.54 a share, on revenue of $219.4 million, up from $7.4 million, or $1.35 a share on revenue of $176.7 million. The Boston-based company owns two retail utility distribution subsidiaries - Eastern Edison Co. of Brockton and Blackstone Valley Electric Co. of Lincoln. R.I. - and a unit that owns and operates generating plants, Montaup Electric Co. . of Somerset. . It also owns EUA Service Corp. of Boston, which provides services for the company's other subsidiaries. Together, the companies serve 225,900 customers in southeastern Massachusetts and northern . Rhode Island. It was disclosed during the interview that the holding company plans to sell about 900,000 com mon shares to raise $10 million in the second quarter next year. It currently has 5.9 million shares. Eastern Edison plans a $25 million offering of first mortgage bonds in the second quarter of next year. Sir Freddie Laker . . . "best Christmas present Bankers in accord to keep Laker flying GIOBE FILE PHOTO Associated Press LONDON - Sir Freddie Laker's bankers announced agreement yesterday on restructuring Laker Airways finances to enable the cheap-flight pioneer to meet debts of some $380 million and keep his airline flying. After the Christmas Eve statement from merchant bankers Samuel Montagu, Sir Freddie, who championed low-fare air travel with his Skytraln service across the Atlantic, said: "It is the best Christmas present of all time. We have secured our long-term future. We are not going to lurch from one crisis to an-olher." The bankers' statement, after weeks of negotiations, said: "Agreement has been reached in principle on the restructuring of Laker's financial affairs with a view to securing the airline's long-term viability." Final details are to be worked out with Laker's creditors next month. This year's recession in the airline industry hit Laker Just as he was expanding -his fleet of McDonnell-Douglas DClOs and European Airbus Industrie airbuses. Yesterday's agreement was approved by Britain's Civil Aviation Authority and the Bank of England and will enable Laker to continue scheduled Skytrain service to New York, Los Angeles and Miami, as well as flying thousands of charter passengers to, sunshine vacations and starting up his first-ever European scheduled service between London and Zurich next April. The London Sunday Times reported last week that Laker, who employs 2500 people and whose airline flew nearly two million passengers last year, has overall liabilities totaling $416 million. Laker, knighted by Queen Elizabeth II in 1978, founded his independent airline in 1966. iiif lift tmm 111 n tlll,llMlll

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