The San Francisco Examiner from San Francisco, California • 39

pys5imss IT 1 1' nn l'ranrioro Examiner Friday, August 8. icog section i OffTheTickerI Another Beatrice unit sold: $1.25 billion By Vivian Marino ASSOCIATED PRESS Reid-Ashman cuts salaries, lays off 1 5 MUD-ASHMAN INC. said today (hat it has laid off about 15 of its 200 employees and rut employee salaries 10 percent. The Santa Clara-based maker of equipment used in mo development of computer chins blamed nn concern was taken private in Apri' by the New York investment firm Kohl-berg, Kravis, Roberts Co. in a $6.2 billion leveraged buyout.

Analysts have said the series of sales including Beatrice's Coca-Cola bottling properties, Avis Inc. car-rental unit and its knit ware group was needed to help reduce the debt BCI took on in its buyout of Beatrice. In a leveraged buyout a group of investors buys a corporation with largely borrowed funds, using later income or sales of assets to reduce the debt. "It does Increase cash flow and serves to reduce debt incurred during the takeover," Beatrice spokesman Charles Long said of the latest agreement in principle. BCI, a holding company formed during the acquisition, said it would obtain a 20 percent common equity interest in the new company formed as a result of the sale to the management group.

The group is led by Joel Smilow, chairman and chief executive officer of Playtex. He said the investment firm Drexel, Burnham Iambert was arranging for financing of the acquisitions through "a combination of equity and bank debt and subordinate debt." "Drexel has indicated that it is 'highly confident' that it will be able to arrange for all the financing necessary to reach the acquisition," BCI added in a statement. Beatrice's personal products division consists of such products as Playtex gloves and baby bottles, Max Factor cosmetics and Halston perfumes. The proposed sale of the cosmetics industry-wide slurim. J.

Scott Kamsler. chief and fragrance division to Revlon, Smilow said, "assumes that Playtex management's purchase of all BCI personal products operations is consummated." He expects the sale to be completed by year-end. In July, Beatrice said it had agreed to sell its Coca Cola bottling operation to Coca-Cola Co. for about $1 billion. That 6ame month, it announced its intention to sell Its knitware division, which includes Pennaco Hosiery and Danskin, at an undisclosed price.

In April it also agreed to sell Avis at an undisclosed price. I-ast month, BCI said it also was considering making a public offering of its international food operations, once one of the company's four main units. NEW YORK DCI Holdings Corp. said yesterday it had reached an agreement to sell its Beatrice personal products operation for $1.25 billion to a management group led by the head of its International Playtex Inc. division.

That management group, in turn, said It was selling Playtex's cosmetics and fragrances businesses to rival Rev-Ion Group a New York based producer of beauty and vision-care products, for an undisclosed price. The BCI-management group agreement represents the fourth announced sale of Beatrice businesses since the Chicago based food and consumer products cial officer, said the move resulted from the consolidation of operations of several recently purchased companies that make chip manufacturing equij-ment. For fiscal 1985, Reid-Ashman had profits of in cents per share) on sales of $7.5 million. For its second quarter this year it reported a loss of $12 million on sales of $1.5 million, which included a one time write-off of intangible assets related to me acquisitions. Kamsler said Held Ashman is invest ino in re- Allegheny search and development to prepare for "if and wnen tne semiconductor industry rebounds, and he cited a $5.3 million research-and-dcvelopment investment last December from Prutech II, a Pru rir a era nr dential Ilaehe-funded limited partnership.

ICC orders lower railroad rates THK INTERSTATE COMMERCE CnminkdAn yesterday ordered railroads to reduce rates to reflect recent declines in diesel fuel prices. The commission ordered railroads to roll back a 1.1 percent rate increase imnosod at the hfpinnint of the year because of expected increased costs. The. ica. saici tne rate increase no longer reflected the be in i wuxsfn is! Dcn is aim it am gl aeciine in on prices that have affected railroad 111 ll MM I.

I I jl-imiMllg gllMIWIi i 1 i.i I 1 I I operating costs. Convergent plans 2 acquisitions CONVERGENT TECHNOLOGIES a computer systems develoner based in Sun W. tui.i yesterday it had signed a letter of intent to acquire Dallas based UCCEL Cora's Difital Svilpms Mivi. tit i I sion and a UCCEL-owned subsidiary, Open Systems Odea I 1 rm ior minion casn. Digital Systems, of Pensacola, supplies computer systems to accountants and contractors.

Open Systems, of Minneapolis, develops and sells personal computer accounting software. Interco merges with Converse ft 1 si 1 1 chairman quits under fire Lawsuit alleges unfair, extravagant practices ASSOCIATED PHESS PITTSBURGH Robert J. Buckley, embattled chairman of Allegheny International resigned today, and the board named a divi--sion president, Oliver S. Travel to put the troubled company back on track. Buckley, 62, voluntarily accelerated his plan to resign by year's end because "he felt he no longer could provide effective leadership to the company in light of recent publicity," the board said in a letter to shareholders.

The resignation followed the filing of shareholder suits alleging that AI officials: Borrowed $32.3 million in company money for personal use at 2 percent interest. Spent $16 million to buy the controlling interest in two money-losing Florida projects, including a condominium project, even though the. company's own real estate experts opposed it. Approved "excessive salaries and bonuses" to certain senior executives, including a $1 million cash payment to Buckley in 1984 when the company made only $14.9 million. Shareholders further alleged that Buckley led a "personality cult" that allowed top managers to put relatives on the payroll in questionable positions, including Buckley's son as manager of a New York hotel and resident in the hotel's $1 million marble penthouse.

A recent cover story in Business Week magazine outlined similar charges. Allegheny International lost INTERCO INC. and Converse Inc. announced New Oakland YMCA with independently owned garage above: Critics say now stands foTyuppie Private spas sweat as builds fitness centers yesterday they had entered into a definitive merger agreement in which Interco will buy all outstanding Converse stock at $28 per share $131 million. The agreement was up $2 a share from an earlier Interco offer.

By Mireya Navarro CONSUMER AFFAIRS WRITER The companies said the merger had been approved by the Converse board and awaited approv- amy iwomiras oi converse stockholders. St. Louis-based Interco manufactures and sells consumer products and services through four operating groups: Apparel Manufacturing, General Retail Merchandising, Footwear Manufacturing, and rurnuure ana Home furnishings. Converse is an athletic-shoe maker based in North Reading, Mass. called the as in YMCA, as in Young Men's Christian Association.

The new YMCA at 2350 Broadway is one of at least three multimillion-dollar fitness centers going up around the Bay Area in the next few years. It is also the kind of that private health club owners around the country are challenging as unfair competition. As a tax-exempt charity, the YMCA doesn't pay income or property taxes. Club owners in some major U.S. cities have lobbied or threatened to sue to take that advantage away, arguing that some Ys look like their spas and go after the same upscale clientele, yet are able to charge less because of the tax break.

The concern is shared by Bay Area club owners, ho haven't mounted a challenge here but say they're closely watching the YMCA's growth in the area. new fitness center in San Rafael scheduled to open in October 1987; a similar facility in San Mateo to be completed by 1988; and $4 million in renovations at the Embarcadero to add a new pool as well as expand the exercise and locker rooms. "We're going to be getting together in the near future and take a hard look at what the is doing in Northern California," said Howard Wasserteil, co-owner of Schoeber's Athletic Clubs in Pleasanton, Fremont, South San Francisco and San Jose. "There are certainly many Ys that do not compete unfairly with athletic clubs," he said. "We're just against Ys that build multimillion-dollar clubs very similar to ours with untaxed dollars." To help it respond to the criticism, Chicagobased YMCA of the USA this year hired Hill and Knowlton the Come October, a new fitness center that rivals the plushest health clubs in the Bay Area will open its doors in downtown Oakland.

Members will need computerized cards to get in. They'll exercise to piped-in music, jog on an indoor track with pacing lights and play in an 80-by-lOO-foot gymnasium. They'll swim in a 25-meter, seven-lane pool, then drop their wet suits in dryers that get the water out in 10 seconds. That's in addition to the usual aerobics program, weight-training equipment, saunas, steam rooms, whirlpools and racquet-ball and squash courts. Pastel-colored on the outside, state of Candy giant Mars buys DovcBsr THOSE LUSCIOUS chocolate-covered Dove-liars are becoming part of Mars Inc.

The giant candv maker, based in lw Jprcnv said yesterday it is acquiring the business and assets of DoveRar International, a privately held company in suburban Chicago. Terms weren't disclosed. The move is sionifieanf the art inside, the foot, $10 million facility due to open Oct. 20 is because it brings Mars, a firm with Chicago roots, into the ice cream freezer for the first time. lnat growth includes a $7.3 million See YMCA, C-2 See RESIGN, C-3 TWA must collect dues again A FEDERAL JUDGE has ordered Trans World Airlines to renew collection of union dues frmn Computer company mergers Data reported semiannually Small software firms being gobbled up flight attendants, a practice suspended since the, nine-week strike that ended May 17.

The rulino bv U.S. District Howard Snrhe $2,000 Value of transactions M.980 ASSOCIATED PRESS (in millions) in Kansas City appeared to be a victory for the Independent Federation of Flight Attendants and a setback for the nation's fourth-largest airline, which replaced many of the strikers with new hires at lower pay. 1,500 1,000 846 834 This is the best news I've heard since the strike began," said Victoria Frankovich, president of the union, which returned to work Mav 17. A rontrart 601 597 553 409 rtS 500 clause requires flight attendants to become union inemncrs or ai least pay tneir share of union dues. 1903 1984 1985 1986 (first half) 1VVA will appeal, said Lawrence Milliard, the New York-based airline's vice president for corporate communications.

Gold climbs as buyers return THE DOLLAR put on a varied performance in 150 130 Number of acquisition 9 -i 12! 1 NEW YORK The number of mergers and acquisitions involving companies in the field of computer software and services hit a record in the first half of 1980, up 58 percent from a year earlier, according to a new report. The deal-making was driven In part by the increasing interest of companies in other fields wanting to buy into software and services, according to Broadview Associates, a Fort Lee, N.J., investment banker for technology companies. The number of deals rose to 130 in the half-year from 82 a year earlier, and the value of those transactions more than doubled, to $1.9 billion from $840 iniliion, Broadview said. The report covers companies that make the programs that run computers as well as the companies that provide computer-related services such as data-processing, programming and consulting. Broadview partner George Grodahl said the median value of takeovers this year was $3 million, reflecting the rrpid absorption of small companies.

In a similar report, W.T. Grimm Co. of Chicago said recently that the computer software and services industry ranked second only to banking and finance in See MERGERS, C-5 96 100 88 82 Mi rope today while gold prices rose more than $7 an ounce in hectic trading bouyed by new optimism about metals. Gold rose to a late bid price of $370 a troy ounce in London, compared with late yesterday's $302.75. 55 75 50 25 In Zurich, the closing hid was $371 vs.

$302.25. dealers reported the return of buyers thev had not seen for several vears. and others said Profit rates cut for state's largest utilities FHOM EXAMINER STAFF AND WIHE REPORTS California utility regulators have ordered profit rates cut by the state's four largest utilities in a change that is expected to lower revenue requirements by more than a quarter billion dollars. The state Public Utilities Commission adopted the new rates of return for 1W10-87 to take into account reduced inflation and a lower cost of borrowing money. The rates of return are adjusted up or down regularly to reflect changes in inflation or costs of doing business.

Under the new order, a 1980 rate of 14.6 percent was sit for the Southern California Edison and Southern California Gas Co. A 1987 rate of 13.9 percent was set for SoCal Gas, SoCal Edison and San Diego Gas Electric. The reductions reflect a one-year cut of $98.9 million fur two-year cuts of million for SoCal Edison and $37 1 million for SoCal Gas, and a one Avar cut of $14 0 million for The changes were expected to show up in lowered utility bills for customers, but will not mean an automatic dollar -for-dollar reduction, PCC staff spokesman James Weil said. lie said the owrall reduction in bills is "in the 1 percent range." The commission has moved from a tw year cycle of setting oveiall utility rates and allowable profits to a three-year cycle. During the two intervening years the utilities are allowed to seek adjustments in the rates, known as an attrition allowance.

spokesman Frank Thors-berg said general rate eyc Would come lip next 0 new investors appeared to be making small purchases in a cautious move away from stock markets. Silver rose at I)ndon to $5.27 compared with yesterday's $5.22. Late dollar rates in Eurone com oared with Excludes extraordinary $2.5 billion takeover of Electronic Data Systems by General Motors Corp. Source Broadview Associates E6minerCBron yesterday: 2. 0745 West German marks, up from 2.0600; 1.6687 Swiss francs, down from 1.6695; 6.7300 French francs, up from 6.7175; 2.33-15 Dutch guil Dow industrial stocks down 3.66 in quiet session ders, up ironi 2 3.hu, Italian lire, down from and 1.3854 Canadian dollars, up from 1.3809.

The iiomid: SI 4745 vs. SI. 4765. In Tokvn the CiOW JONl NtWL. 5FHVIU dollar closed at yen vs.

yesterday's 153.75. Compiled by Examiner staff and wiro reports. IHIWHIWW )) W. VM. WM' McDonald's to the max McDonald's targets the LA.

upscale crowd with fresh flowers, harp music, plug-in phones, and the same old were reluctant to make major commitments to the market, since they remain confused about the outlook for the economy and corporate profits. That confusion made its presence felt in the metals markets as well, sending spot gold prices up $13 an ounce in New York to $375.50 and bolstering the price of some mining stocks. Analysts and bullion dealers cited unexpected Swiss buying, short-covering, the weakness of the dollar and worries about possible economic sanctions hurting South African gold and platinum mines. On the NYSK, Ilomestake Mining rose 1 to 24V and Campbell Red Lake 1 to lJHi, making them among the few stocks to benefit from what some saw as a flight to hard assets from paper. The stock market wavered between plus and minus territory throughout the day, but never generated a lot of enthusiasm.

"There's no definitive answer on the direction of the market or interest rates," observed Ed Unix, a block trader at Kidder l'eabody. "We're getting fu7y indicators and people are not quk to jump into the market." Retail slocks were mixed following yesterday's reports on sales for July. Sears Roebuck rose to 42' but mart, the number two department store chain, fell to 51. J.C. I'enney slipped to 70,,4 and Woolworlh fell' l3-4 to 40' a.

Investors were more kind to Federated Department Slores, which rose tollO-V NEW YORK Itlnc-chip slock prices ended lower today after a seesaw session marked by thin, nervous trading. The Dow Jones industrial average, after posting gains for four consecutive sessions, fell 3.00 points to 1,782.62, ending with a gain of 18.08 for the week. market measures also registered losses, as the Standard Poor's 500 stocks index fell 0.10 to and the New York Sloc Exchange composite index fell 0.01 to 130.41. Volume on the NYSK fell to 107,089,000 shares from 122,410,000 yesterday. Gainers outnumbered losers by a slim margin.

Traders and analysts said investors Dig Macs at us nnanciai district restaurant, rage v-j State, Tradevest reach agreement The state attorney general's office expects to allow Tradevest, a Florida-based catalog sales firm it had accused of operating an illegal pyramid scheme, to resume operations. Pago C-3.