The Miami Herald from Miami, Florida • 736

NYSE18C AMEX19C NASDAQOTC20C Business EsettGir Stocks retreat again Dow falls 88 points From Herald Staff and Wire Reports Unable to hold its momentum from the previous day the Dow Jones industrial average slumped Wednesday closing down 881 to 177517 Trading continued at sluggish pace Volume totaled 117 million shares on the Big Board compared with 112 million on Tuesday The New York Stock Exchange composite index was 13575 down nine cents Declining issues outnumbered advancing issues by 774 to 755 The American Stock Exchange volume totaled 112 million shares compared with 119 million the previous day Declining issues outnumbered advancing issues by 310 to 261 gets new boss NEW YORK (AP) James Olson who cleaned out manholes in his first job at American Telephone Telegraph in 1943 was named Wednesday to become chairman and chief executive of the world's biggest communications company Olson 60 president and chief operating officer will move into the top job Sept 1 after Charles Brown takes mandatory retirement at age 65 Brown had been chairman since 1979 The board also named Robert Allen 51 now chairman of Information Systems to succeed Olson as president and chief operating officer NEW YORK (AP) American Telephone Telegraph Co said Wednesday it was adding $450 million to its planned June 1 long-distance rate cuts bringing the total to about $2 billion the biggest rate reduction in history filing with the Federal Communications Commission will include an overall 118 percent reduction the company said The FCC had ordered to lower itsrates because its costs for connecting to phones have decreased Competing longdistance companies are also lowering rates The additional cut was disclosed by James Olson president and chief operating officer The new rates will go into effect June 1 unless the FCC rejects the plan The cut in direct-dial interstate calls starting June 1 because the FCC has given local phone companies permission to raise subscriber line charges to $2 a month from $1 a month That wipes out most of the savings from cheaper long-distance Businesses will benefit more than individuals from the reduction because the biggest cuts are in day and evening hours when businesses make a higher proportion of their calls said Gene Kimmelman legislative director of the Consumer Federation of America will cut long-distance rates by 138 percent for day and evening calls and 5 percent for night and weekend calls up from decreases of 114 percent and 27 percent respectively in the earlier proposal said it would cut WATS service 152 percent for day and evening hours up from 128 percent in its earlier proposal Olson comes to $102 in savings on the average $10 total monthly interstate bill including dial credit- card collect calls and service charges However local phone bills across the country will go up by $1 a month Trends WTVJ owner expects from sale Tho 010 Pillion Boal purchase of seven TV stations thrusts the movie- and TV-production company into some of the major TV markets in the United States NEW HOMES in Knoxville are the cheapest in the country The average price for a typical new three-bedroom 1600-square-foot home with 1 12 or two baths in a desirable neighborhood is $123299 in 100 US communities surveyed The same house would cost $102738 in the resale market But the average prices for new homes cover a broad range from $475000 in Wilton Conn the most expensive market in the survey to $62000 in Knoxville the cheapest for a new home Companios Lorimar- Telepictures WHO Lorimar-Telepictures is best known for producing such TV shows as Dallas Falcon Crest and Knots Landing Baaad in Culver City Calif formed in February by the merger of Lorimar Inc with Telepictures Corp of New York Lorimar has interests in movie production and advertising Talepictures holds interests in TV production syndication and publishing and owns TV stations in Midland-Odessa Texas Chico-Redding Calif Springfield Mo and two in Puerto Rico WHAT IT BOUGHT From SCI Holdings: WJBK Detroit (CBS) WJW Cleveland (CBS) WAGA Atlanta (CBS) WITI Milwaukee (CBS) WSBK Boston (Indep) KCSTSan Diego (NBC) Storer Programs Inc Storer Television Sales Storer Washington News Bureau From Womatco: WTVJ Miami (CBS) PRICE TAG $1445 billion for the Storer properties $405 million for WTVJ OCCIDENTAL Petroleum plans to sell oil and gas exploration facilities It intends to sell the division of its recently acquired subsidiary to financier Marvjn Davis and Apache Petroleum Co for $500 million In addition Occidental the llth-largest oil company said it would purchase the chemical division of Dallas-based Diamond Shamrock Corp for $800 million Investment banker Drexel Burnham Lambert will be an equal partner with Occidental in the deal CITICORP will make a $680 million tender offer for Quotron System The $19-a-share cash tender offer will commence Thursday and is subject to tender of more than half of shares Citicorp which has been wooing Quotron for months made a $19-a-share offer to Quotron management March 18 which was rejected The tender followed approval by the Federal Reserve Board on Monday of application to acquire Quotron Citicorp said its management had Wednesday morning with Quotron Chairman Milton Mohr TAUBMAN MEDIA sued Pulitzer Publishing Co seeking $150 million in damages The company wants a court order to force a new election of the board The suit was filed Wednesday in St Louis Circuit Court one day after attorneys for Pulitzer and a group of dissident shareholders announced an out-of-court settlement over a battle for control of the company which owns the St Louis Post-Dispatch Taubman controls about 206 percent of Pulitzer stock gramming for its television stations Storer Television Sales which sells national accounts and Washington news bureau planned acquisitions from SCI Holdings are WJBK-TV in Detroit WJW-TV in Cleveland WAGA-TV in Atlanta and WITI-TV in Milwaukee all CBS affiliates KCST-TV in San Diego an NBC affiliate and the independent WSBK-TV in Boston The sale of television stations and the three divisions is Kohlberg first move to sell off the communications assets Kohlberg Kravis had to sell WTVJ because the Federal Communications Commission prohibits media companies from controlling one market It was forced to sell either WTVJ or Cable systems in Dade and Broward counties Once WTVJ went up for sale Kohlberg Kravis attracted more than a dozen offers to buy the station and eventually offers to buy six stations In April CBS offered Kohlberg Kravis and Wometco Broadcasting $350 million to purchase WTVJ-Channel 4 But Kohlberg Kravis rejected offer and the other -bids Lorimar-Telepictures must get the necessary financing approval from the board of directors and the Federal Communications Commission The company has retained Drexel Burnham Lambert to raise the financing but has yet to provide specifics of how it will come up with the $185 billion It hopes to close on the deal by early 1987 said Barbara Brogliatti a spokesman for Lorimar-Telepictures Lorimar already owns television stations in Midland-Odessa Texas Chico-Redding Calif Springfield Mo and two in Puerto Rico The company also owns Bozell Jacobs Kenyon Eckhardt a New York advertising agency with annual billings of more than $635 million By CORNELIUS FOOTE Jr Herald Business Writer The owner of WTVJ-Channel 4 stands make a from the sale of the CBS affiliate and six other stations to the producers of Dallas Dynasty and Falcon Crest a source close to the negotiations said Wednesday Kohlberg Kravis Roberts Co the New York investment firm said it plans to sell WTVJ and six other stations for $185 billion to Lorimar-Telepictures based in Culver City Calif A Kohlberg Kravis source who declined to give his name said the company stands to a but would not give a figure a grand plan to sell seven said Tom Dailey a spokesman for Kohlberg Kravis "But they were attractive to Lorimar They could do more things with the stations than KKR Kohlberg Kravis agreed to sell WTVJ-TV Channel 4 owned by Womet-co Broadcasting Corp for $405 million and six stations owned by SCI Holdings the parent company of Storer Communications for $1445 billion Wometco and SCI Holdings both based in Miami still operate the cable systems In 1984 the New York investment firm acquired Wometco in 1984 and Storer Communications in 1985 in leveraged buyouts each worth more than $1 billion Such a takeover usually involves borrowing money to buy a company and take it private using the assets and sales as security for the loan Since the investment firm bought Wometco it has sold the Coca-Cola bottling division for $300 million as well as its television subscription operations and movie theater chain As part of the $1445 billion Storer deal Lorimar also is acquiring Storer Programs Inc which negotiates pro SCI Holdings WHO SCI based in Miami is the holding company for Storer Communications It was purchased in 1985 for nearly $1 billion by the New York investment firm of Kohlberg Kravis Roberts Co in a leveraged buyout LEFT SCI still has WTVG Toledo Ohio (NBC affiliate) and cable TV systems in 17 states Wometco WHO Wometco Enterprises of Miami was purchased in 1984 by Kohlberg Kravis in a leveraged buyout LEFT Wometco has cable TV systems in 163 communities WWHT-TV in Newark (an independent station) and WLOS in Asheville NC (ABC affiliate) In Florida Prices slide for 3rd month CPI Down Again The unadjusted Consumer Price Index for April dropped for the third consecutive month JAPANESE owner plans to take the company private Konishiroku Photo Industry Ltd the Tokyo-based maker of Konica cameras and owner of 61 percent of the stock plans to buy the remaining 39 percent of the stock The St Petersburg photo processing company has lost $30 million in the last two fiscal years Konishiroku made a $1625-a-share offer for 10 million shares still held by the public The offer is expected to run from Friday until June 20 PROFITS ROSE sharply at Heico Corp in Hollywood Heico formerly known as Heinicke Instruments said profits for the three months ended April 30 were $14 million or 80 cents per share compared with $741000 or 48 cents per share in the same period a year ago Quarterly sales increased to $118 million from $83 million a year earlier ROYAL PALM Savings sold two branches to Ensign Bank Royal Palm of West Palm Beach agreed to sell branches in Boynton Beach and Deerfield Beach to New York-based Ensign Bank Royal Palm said part of the $12 million earned on the sale will be placed in a loan-loss reserve The rest will be recorded as profits in the quarter The deal gives Ensign Bank and Royal Palm seven offices in South Florida was offset by a 36 percent gain in fruit and vegetable costs Transportation costs pulled back by the collapse in oil prices were down 25 percent in April Wholesale prices for April announced last week fell 06 percent in a fourth straight monthly decline credited largely to a 104 percent dip in the price of gasoline Wholesale gas prices sank a record 219 percent in March Producer food prices also declined last month by 08 percent but the cost of consumer goods overall edged up 01 percent Excluding food and energy costs wholesale prices rose 06 percent in April Analysts agree that the deflationary effects of the oil-price drop will have just about played themselves out by the end of this month WASHINGTON (UPI) Retail prices dropped a healthy 03 percent in April thanks to a another sharp drop in energy costs the third consecutive monthly decline the Labor Department said Wednesday The February-March-April decline was the first three-month drop in consumer costs since 1952 and the largest since 1949 Gasoline pump prices fell 58 percent in April and fuel oil and other energy goods fell back 4 percent to lead the decliners on the seasonally adjusted Consumer Price Index released by the Bureau of Labor Statistics Prices have fallen 43 percent at an adjusted annual rate over the last three months the largest three-month decline since the November 1948-January 1949 period according to bureau analyst Patrick Jackman Consumer costs dropped 04 percent in both February and' March following a 03 percent increase in January The April decline adjusted for seasonal variations and extended for 12 months translates into a 33 percent annual deflation rate hesitate to call attention to that because one knows very well the situation is going to turn around next after energy prices bottom out Jackman said not going to see runaway inflation definitely going to see some positive he said Excluding energy costs prices rose 04 percent overall Food costs overall increased 03 percent in April A 12 percent drop in meat poultry fish and egg costs and a 06 percent dip in the price of cooking oil 1985 1986 SOURCE: Commerce Department The tlonoy Linn Bank failures keep pelting FBIC umbrella Florida Prime Rate 85 Florida Fixed Mortgage Rate 1014 13-week T-bills 622 26-week T-bills 628 Money-Market Fund 7-day Avg 625 Fla Avg Money Market Account 622 The Bottom Lino lames Bussell Financial Editor Home Intensive Care of Miami reported net income for the quarter of $27042 or 1 cent a share on revenues of $533515 up from a net loss of $12071 or 1 cent a share on revenues of $189397 the year before Royal Caribbean Cruise Line says it will add three small ships the Nina the Pinta and the Santa Maria to its Caribbean fleet to ferry passengers from the Song of Norway to the beach at Labadee Haiti The news releases from the Federal Deposit Insurance Corp keep trickling in each telling a tale of woe in some obscure American community Rainsville Ala Malad City Idaho Bedford Iowa Carter Okla Bandera Texas Huntsville Mo Stockholm SD White Cloud Kan Ruston La Occasionally a recognizable city name appears Los Angeles Tulsa But most reflect actions in towns and hamlets far from the big city lights There is a somber sameness to the routine public announcements which report bank failures in gradually increasing numbers board of directors of the Federal Deposit Insurance Corp today approved the assumption of the deposit liabilities of Fill in the blanks Rainsville Bank by Jacobs Bank Scottsboro Ala First State Bank White Cloud Kan by Silver Lake Bank Silver Lake Kan And on and on Last year there were 120 bank failures across the United States So far solved them largely by arranging for other banks to take control In a few instances they found no takers and simply paid off the insured depositors They gave the 2300 account holders at the Peoples Bank of Mercer Mo their $93 million last month and closed up shop The straight payoff is a route FDIC is trying to avoid whenever possible Finding rescuers however is getting harder got about 1200 troubled banks out of a total of said CC Hope a FDIC director getting fewer and fewer bids for failed So the regulators are seeking congressional authority to move in on ailing banks before they fail and to let out-of-state institutions in on the bidding FDIC spokesmen say none of the rescue actions and jockeying for new strategies should bother federally insured depositors in US banks Through all the failures in all the little communities no one who is under that insurance umbrella is getting wet loans bad management The farm belt produces many of the collapses for understandable reasons the FDIC characterizes as agricultural Occasionally however government regulators become a little more specific in assessing blame Reporting an especially costly flop of the Bank of Commerce and Trust Co of Tulsa the FDIC included a quotation from state banking commissioner: aggressive growth and lending practices of a testy board of directors resulted in a disastrous condition of the The federal agency had to fork over $130 million from its insurance fund to persuade another Tulsa bank to take over that turkey FDIC had to pay only $52 million to rescue the Bedford National Bank in Iowa and a mere $18 million to encourage a healthy institution to run South Dakota's Stockholm State Bank Through all the banking troubles of recent years the regulators have this year averaging about 10 a month I said a spokeswoman for the FDIC in Washington the other day better check I think there have been a couple 45 and counting It take long for the number to reach 50 That end it The FDIC is gearing up to handle the largest number of bank collapses since the Great Depression before there was a federal agency insuring bank deposits up to 1 00000 per account Some common threads run through the list of 1986 bank failures Bad Setting tho Record Stiaight The Herald reported Tuesday that Miami lawyer Eugene Stearns had said in a past interview that he wanted to prove in the divorce case of ESM co-founder Robert Seneca that ESM had little money Actually Stearns said in that interview he intended to show that Seneca was insolvent Stearns also said the expert witness was inflating the value of ESM Steams said he know the net value of ESM and did not have access to that information A.