The Miami Herald from Miami, Florida • 81

laws usinGss NYSE7D AMEX8D NASDAQ0TC9D The Miami Herald 5D Tuesday April 29 1986 Business Letter Channel 4 is up for sale )WTVJ networks may be bidders FCC rules are forcing the owners to sell either WTVJ or Storer cable operations WTVJ-CHANNEL 4 is Miami's oldest television station THE CBS affiliate was previously owned by Wometco Enterprises but was acquired in April 1984 by the New York investment firm of Kohlberg Kravis Roberts and Co IN the February ratings sweeps WTVJ was rated No 1 in the 6 pm flagship news broadcast and the 5:30 pm early news by Arbitron down with us" "We would certainly take a look at it" said George Schweitzer vice president of communications for CBS Broadcast Group "but the economics and 10 other things have to be right We'll look at WTVJ like we have a dozen other stations but that doesn't mean we're buying it" Schweitzer said CBS Broadcast President Gene Jankowski has targeted Sunbelt stations in cities such as Atlanta Dallas Houston Miami Orlando Tampa Phoenix and Tucson Ariz for future network acquisition NBC officials could not be reached for comment Steve Rattner of Morgan Stanley said the New York investment banking firm will be distributing information on the station over the next few weeks Serious contenders will visit the station he said and Morgan Stanley will ask for offers by June If the station changes hands the sale will be completed by mid-summer when it purchased Wometco Enterprises in 1984 It acquired Storer Communications last year On Monday Wometco Broadcasting announced it had hired the investment banking firm of Morgan Stanley to evaluate offers for the station Anthony Cassara president and chairman of the board of Wometco Broadcasting said the company had received an offer of $350 million for the CBS affiliate station from one company "not in the broadcast business" but it was rejected he said A Wometco insider who asked to remain anonymous said "The networks have indicated to us in the past year that they're interested in the property and that if the property becomes available they'd like to sit By DORY OWENS Herald Business Writer Miami's oldest television station WTVJ-Channel 4 is up for sale and among the dozen companies interested in buying it are NBC and CBS The station formerly owned by Wometco Enterprises is owned by the New York investment firm of Kohl-berg Kravis Roberts and Co which also owns Miami-based Storer Communications Inc Kohlberg Kravis has put WTVJ up for sale because under Federal Communications Commission rules prohibiting media companies from controlling one market it must either sell WTVJ or Storer's cable systems in Dade and Broward counties Kohlberg Kravis acquired WTVJ "If the result is a value that is attractive to us we'll sell it" Rattner said "If not we'll go back to business as usual As for why Kohlberg Kravis decided to sell WTVJ Rattner said "Cable stations are bought and sold daily A television station in a market as large as Miami is virtually unique We expect to attract premium prices" Miami is the 13th largest television market in the country Dollar hits new lows in Europe Japan From Herald Staff and wire reports The dollar fell sharply Monday hitting a post-World War II low against the Japanese yen and a five-year low against the West German mark despite efforts to support the US currency by the central banks of West Germany and Japan Currency dealers attributed the dollar's decline to the perception that the US economy remains weak and the belief that the Reagan administration wants the dollar to continue dropping in value Dealers said the dollar rallied in early US trading after West Germany's central bank the Bundesbank and the Bank of Japan intervened in the market by buying dollars But as trading progressed the dollar's decline resumed though it still closed slightly higher against the mark in New York In Tokyo the dollar plunged to a postwar low of 16735 yen down from 17025 late Friday Later in Europe the dollar also traded at 16735 yen By the time trading concluded in New York the dollar was quoted at a new low of 16720 yen-down from 167425 yen late Friday The dollar hit 21635 West German marks in London down from 22015 late Friday and the lowest in five years Trends THE STOCK market was mixed The Dow Jones average of 30 industrials closed up 818 at 184375 in moderately heavy volume of 124 million shares Losers outnumbered gainers by about 8 to 7 among all issues listed on the New York Stock Exchange INTEREST rates on short-term Treasury securities rose slightly The Treasury Department sold $7 billion in three-month bills at an average discount rate of 608 percent up from 586 percent last week Another $7 billion was sold in six-month bills at an average discount rate of 614 percent up from 587 percent last week The new discount rates understate the actual return to investors 626 percent for three-month bills with a $10000 bill selling for $984630 and 642 percent for six-month bills selling for $968960 Company Profilss ModComp Fort Lauderdale makes high-speed computers for research and companies in heavy industries such as metals and petrochemicals 1985 revenues: $70 million AEG based in Frankfurt and 56-percent owned by Mercedes-Benz makes electronics products that Include Olympla typewriters and Tetefunken semiconductors 1985 revenues: $5 billion worldwide Gabriel Rosica ModComp chief executive says the merger will provide the resources his company needs to pursue its strategy ModComp accepts $51 million offer Companies Productivity gain largest in two years WASHINGTON (UPI) -Productivity in nonfarm American businesses surged ahead at a 34 percent annual rate in the first quarter of this year the largest quarterly gain in two years the Labor Department said Monday The surge in labor efficiency was a welcome rebound from a revised 41 percent decline in the last quarter of 1985 the steepest drop in four years Gains in productivity allow employers to increase wages while not increasing prices Nonfarm business productivity generally the most reliable index of output per hour because it excludes the agricultural sector scored the best quarterly gain since the first quarter of 1984 when it rose 36 percent The preliminary figures released by the Bureau of Labor Statistics which refer to an annual rate of growth adjusted for seasonal differences will be revised next month Including the farm sector overall business productivity increased 23 percent in the three-month period That follows a 39 percent decline in the fourth quarter of last year The increase in non-farm productivity was attributed to a 4 percent gain in output against a 06 percent gain in hours worked Economists in general believe 1986 will witness substantially stronger growth in productivity as the effects of a cheap oil a weak dollar and lower interest rates combine to stimulate capital investment and industrial production "We expected a large rebound after that terrible fourth quarter" commented economist Jesse Abra-hamson of Data Resources Inc Lexington Mass because of takeover speculation it has traded close to $9 a share in the past few weeks Some analysts said ModComp has been a prime takeover candidate because of its low debt and favorable long-term prospects But lately the company's earnings have been erratic Sales dropped to $69 million in 1985 from $927 million in 1982 forcing the company in recent years to pare its work force to 850 from 1500 The company lost $288 million in 1983 earned $329 million in 1984 and then lost $338 million in 1985 Rosica has blamed the firm's problems on a slowdown in the computer industry and a decline in steel and petrochemical industries ModComp pulled out of one of its four Broward buildings late last year and pared its corporate divisions to three from six Costs of the consolidation accounted for $327 million of the company's 1985 fourth-quarter loss of $547 million For the same period in 1984 ModComp reported a $574000 profit Robert Christopher III an analyst with Blackstock Co of Jacksonville said ModComp's earnings are "a function" of the capital spending of its customers "The economy is not growing quickly enough for them" Christopher said He speculated that if ModComp had waited another six months falling interest rates might have stimulated new capital spending by its customers IBM SAID it views 1986 with caution Lingering troubles in the US economy have prompted the giant computer maker to continue a cautious approach in 1986 company officials told shareholders Monday "The US economy continues to show only moderate growth and has yet to emerge from the long year-and-a-half period of disappointing corporate profits and capital investment now compounded by uncertainty over tax reform legislation" said ohn Akers IBM president and chief executive officer TEXAS AIR Corp posted a first quarter net loss of $65 million The Houston-based holding company which has agreed to acquire Eastern Airlines made $128 million in the first quarter last year Continental Airlines a Texas Air subsidiary lost $136 million in the first quarter after earning $151 million for the same period in 1985 Analysts expect Miami-based Eastern which lost $2 million a day in February will announce a first quarter loss of more than $100 million today PEOPLE EXPRESS Airlines introduced a frequent traveler program Rewards range from a free upgrade to first class at 6000 miles to a trip for four on the Orient Express including free first class roundtrip tickets to London and Venice at 250000 miles AEG based in Frankfurt and 56-percent owned by Mercedes-Benz makes electronics products that include Olympia typewriters and Tele-funken semiconductors AEG reported $5 billion in sales last year including $185 million in the United States It employs about 75000 people worldwide In a press release AEG Chief Executive Officer Heinz Durr said ModComp's sales and service organization will help AEG market its products while Rosica predicted AEG will help ModComp develop industrial automation products AEG a longtime ModComp customer bought 25 percent of ModComp's stock in 1980 and now owns 19 percent of the outstanding shares Hans Gissel a member of AEG's Board of Management has been a ModComp director since 1980 ModComp stock traded on the New York Stock Exchange closed Monday at $887 a share up 62 cents The stock has been trading the past few months for about $650 a share but By MARLENE SOKOL Herald Business Writer Modular Computer Systems of Fort Lauderdale has agreed to be taken over by AEG-Telefunken Aktienge-sellschaft the second-largest electronics firm in Germany The cash acquisition which will cost AEG about $51 million or $9 a share could occur within 30 days subject to shareholder approval Both companies' managers have endorsed the merger So has First Boston Corp ModComp's financial adviser None of ModComp's top executives would comment Monday but several analysts said the company has been considering a merger for months ModComp President Gabriel Rosica was in Germany Monday Company spokesman Robert Tur-kovic said he didn't know how the merger will affect ModComp's 434 Florida employees ModComp founded in 1970 makes high-speed computers for research and companies in heavy industries such as metals and petrochemicals I la ids Ex-Lloyd's underwriter agrees to pay $15 million his associates Cameron-Webb's top associate Peter Dixon was expelled from Lloyd's and fined with $14 million Cameron-Webb resigned from Lloyd's and moved to Miami in 1983 where he worked for two years as an underwriter at the Insurance Exchange of the Americas He resigned last year and currently heads a Miami consulting firm called International Consultory Management Services according to insurance industry reports Cameron-Webb's attorney Sitterson would not comment on Cameron-Webb's activities in Miami money will come from the sale of Cameron-Webb's home in New York according to spokesmen for the firms that had sought reimbursement from the British insurance man The house was on the name of Cameron-Webb's wife they said Cameron-Webb was a prominent underwriter at Lloyd's of London until an estimated 300 wealthy investors in his PCW Underwriting Agencies charged him and other top PCW officials in 1982 with diverting almost $20 million into offshore re-insurance firms controlled by Cameron-Webb and cies in 1982 "There is an agreement that has been reached between Peter Cameron-Webb and his wife and parties on the other side" confirmed Curtis Sitterson a Miami attorney who represents Cameron-Webb "The settlement has been signed by both sides and has been submitted to a high court of Justice in London" Sitterson said the agreement contains "absolutely no admission of any wrongdoing" by his client Cameron-Webb also has denied any wrongdoing About $1 million of the settlement By ANDRES OPPENHEIMER Herald Business Writer Former British insurance underwriter Peter Cameron-Webb accused of misappropriating millions from a top Lloyd's of London underwriting company four years ago has reached a $15 million settlement British insurance industry officials say Cameron-Webb who now lives in Miami and worked at the Insurance Exchange of the Americas has agreed to pay the money to a group of firms headed by Richard Beckett Underwriting Agencies which took over Cameron-Webb's PCW Underwriting Agen CORDIS Corp's losses continued in its third quarter The Miami medical device manufacturer and marketer reported a loss of $17 million or 13 cents a share for the quarter ended March 31 compared to a profit of $16 million or 12 cents a share a year earlier Sales slipped 10 percent to $439 million from $49 million Cordis attributed the loss to the previously announced return of nonimplanted neurosurgical valves in response to a product notification and "continued weakness" in the pacemaker division MIAMI'S PLANNED World Trade Center has hired a new manager March Davenport who until recently headed the Hong Kong Trade Development Council's offices in Miami will be in charge of directing the center scheduled to open in October at the Brickell Station Towers on 801 SW Third Ave WINDMERE Corp first quarter profits rose 67 percent The Hialeah maker of personal care products earned $122 million or 13 cents a share compared to $759200 or 8 cents a share a year ago Sales rose 29 percent to $248 million The Money Line Florida Prime Rate 85 Florida Fixed Mortgage Rate 1016 13-week T-bills 586 26-week T-bills 587 Money-Market Fund 7-day Avg 650 Fla Avg Money Market Account 629 The Bottom Line Morgan Stanley Group Inc announcing quarterly financial results publicly for the first time said its first-quarter profit more than tripled from a year earlier to $58 million or $292 a share Service economy: Worrisome opportunity? lames Russell Financial Editor Salomon American Express and JP Morgan More than 10 percent of its money was in those three stocks It also had substantial ownership of McDonald's Marsh McLennan (insurance) Toys Us Suburban Bancorp and American International Group (insurance) New America clearly is aiming at growth through capital gains not dividend income The yield on its portfolio at the end of last year was a mere 1 percent The Price people are projecting a nearly 19 percent annual earnings gain for their selected service companies over the next five years But some independent economists also think the trend toward taking in each other's washing will be around a while "The change to a services economy is a 'fait accompli not easily reversible and represents a new step in the evolution of the American economy" said Allen Sinai economist for Shear-son Lehman Brothers strengthen as it should Leave it to one element of the service business the purveyors of investment services to try to capitalize on the trend worrisome or not Last fall one of the big mutual fund organizations Rowe Price in Baltimore created a new fund to "invest in the fast-growing service sector of the US economy" "If you analyze your family budget today compared with a decade ago you will probably find that you are spending a greater percentage of your income on services" said Steve Nor-witz a vice president of the Price firm Similarly he said people entering the work force or changing jobs in that period probably went into services rather than agriculture or manufacturing In its first six months of life Price's New America Growth Fund posted a return of more than 40 percent The fund's most recent report showed a preference for financial services stocks Its three largest holdings were Phibro- Long before the emergence of high-tech industry and sophisticated banking in Florida the natives often joked when visitors asked how they made a living "We just take in each other's washing" one old-timer would say He didn't know it at the time but he was describing in rudimentary fashion the service industry which now is dominant in the nation as well as in Florida "Employment in service-providing industries continues to rise at a record pace while goods-producing industries remain sluggish at best" noted Mark Vitner an economic research analyst for Barnett Banks of Florida How do you identify a service business? The economists usually distinguish between businesses that provide some kind of service and those that make things General Motors makes cars so it's a manufacturer Boeing maes airplanes and it too is a manufacturer But Aetna and Travelers are insurance companies that provide services Burger King and McDonald's offer food service (although they obviously make hamburgers as well) Lawyers doctors accountants lawn cutters and shoe shine boys are part of the service field The Barnett report expressed concern about the nation's headlong trend toward services calling "healthy gains in the service sector and job losses in the goods' sector" a worrisome pattern Vitner suggested that industries that produce goods must begin posting consistent job gains if the'conomy is to Setting the Record Straight A Miami-based high tech company that manufactures microchip-based fitness monitors was incorrectly identified in the April 28 edition of Business Monday as Biogenics The firm's name is Biotechnology Inc i.