Fort Worth Star-Telegram from Fort Worth, Texas • 47

0 usmess Friday October 17 1997 SECTION STAR-TELEGRAM UN Television Corp gets surprise bid from Raycom The offer reportedly tops the one of $17 billion from the Dallas firm Hicks Muse Tate Furst tions for $732 million in 1996 and seven stations owned by Aflac Inc for $485 million this year The $19 billion pension fund for state employees has made a name for itself in recent years with unusual often highly leveraged acquisitions Corp will have a big say in what happens to LIN Its Wireless Services unit owns 45 percent of UN and it (More on BID on Page 3) daily average Officials with Raycom or Retirement Systems of Alabama didn't return telephone calls seeking comment Retirement Systems of Alabama in the past two years has financed the acquisitions of about 25 TV stations in cities ranging in size from Memphis Tenn to Ottumwa Iowa said Bear Stearns Co analyst Victor Miller Those include Ellis Communica from the Dallas investment firm Hicks Muse Tate Furst sources familiar with the transaction said Raycom a TV company controlled by the Retirement Systems of Alabama is offering $51 to $54 a share in cash or as much as $193 billion the sources said UN said earlier that an unnamed company bid more than Hicks Muse's $4750-a-share offer The new offer is likely to spark a bidding war with Hicks Muse which has set its sights on becoming a large owner of TV and radio stations Companies such as Hicks Muse and Raycom are taking advantage of looser restrictions allowing them to own more stations which helps them cut costs and boost profits "The appetite of some of these investment funds is very strong" said Porter Bibb an investment banker at Ladenberg Thalmann Co Hicks Muse Chief Executive Tom Hicks was out of the country yesterday and unavailable to comment His office referred questions to company spokeswoman Lisa Le Master who wasn't immediately available to comment last night L1N's shares rose $41875 or 9 percent to a record $5075 in trading of 158 million yesterday nearly eight times the three-month From staff and wire reports PROVIDENCE RI UN Television Corp received a surprise bid from Raycom Media that tops an offer of $17 billion 4 00000000100010vgatommotttott 111 A Seniors are warned of phone scams Niumbers Indicate inflation ha check vc 07 k7( ') ----11 tI Proposed GTE-MCI merger could profoundly alter the telephone business but experts ask I merger coud profoundly alter the telephone business but experts ask I er 7 I Consumer Price Index core rose 02 for month th ey c()inectt I BY DAVID KALISH By JOHN BERRY The Washington Post WASHINGTOINT Consumer price inflation remained so low last month that it reduced any prospect that the Federal Reserve will raise short-term interest rates before the year is out analysts said yesterday The Labor Department reported yesterday that the Consumer Price Index rose 02 percent last month It was the third consecutive increase but the rate was extremely subdued coming in the face of solid economic growth and low unemployment During the past 12 months the Consumer Price Index covering the goods and services bought by urban residents increased 22 percent the Labor Department reported The so-called core CPI which excludes food and energy prices was also up 22 percent the smallest such change since the spring of 1966 Many analysts and investors had expected yesterday's price report to show more inflation than it did and to provide ammunition for any Fed officials who would like to raise rates to head off any (More on ECONOMY on Page 3) 'Reverse boiler-room operators give tips on detecting fraud From Staff and Wire Reports When Arlington resident Sharon Rodden 54 got a phone call from a man seeking donations on behalf of Tarrant County Jaw enforcement officers she was a little suspicious "The caller said 'We'll Send a man to your house to pick up the money' that evening "I didn't think they were on the up and up" she said She declined to contribute And now as part of a coalition that includes her employer Southwestern Bell Rodden will be advising elderly residents on how to detect telemarketing scams A statewide coalition of senior citizen groups state agencies and Southwestern Bell yesterday launched Operation Fight Back an effort to combat fraudulent telemarketers At a news conference in Austin Attorney General Dan Morales called telephone scams "one of the most alarming trends in our country" directed against the elderly "Just 10 years ago telemarketing fraud was estimated to be a $1 billion business Today it's a $40 billion business and unfortunately seniors are their best customers" Morales said Morales and volunteers from Seniors Against Fraud-Texas began making calls to warn elderly Texans about possible scams and give them tips on how to recognize scams and resist hard-sell pitches They called their effort a "reverse boiler room" the opposite of a typical boiler-room operation used by con artists to make fraudulent pitches The seniors called their peers from an Austin senior center to warn them against becoming potential victims Their message was simple: beware you may be a fraud target "We're going to beat fraudulent telemarketers at their own game" said Judy McCallum a spokeswoman for the group "Education is the first line of defense against phone fraud and it's time to get the word out about (More on FRAUD on Page 3) Female pilot gets $875000 in harassment case ever GTE Corp want to acquire the market yesterday $36875 15625 BT 6245 billion 635 billion $479 billion 22 million 129000 $76125 41125 The Associated Press NEW YORK If GTE's $28 billion bid for MCI is successful the combined entity could alter the phone business in a far more profound way than the recent spate of proposed mega-marriages between telecommunications companies But the emphasis is on the "if" industry experts said yesterday Unlike previous combinations GTE bids for MCI the merged MCI-9TE would be In a bid that would be the biggest all-cash strong across a range of businesses has offered $28 billion to buy MCI Commur from long-distance to local phone Bri ish Telecom and WerldCom also which service to Internet access And that could spur others to merge into A behemoths with the aim of selling How GTE one of the largest local lucrative packages of all-in-one telephone companies outside responc services to consumers and busi- of the restrictions of the Baby nesses Bells needs MCI to greatly Because of that far-reaching expand its long- distance and power GTE's bold all-cash offer Internet services and defend for MCI Communications is likely itself from WorldCom to face tough scrutiny by the Fed- eral Communications Commission and federal antitrust regulators It would also face strident protests from Baby Bell companies oto wIRILD CON that are now prevented by federal Revenues $213 billion $7 billion rules from entering the long-distance business Profits $28 billion Lost $221 billior "I think it's a big 'if" said Market value $459 billion $32 billion Christine Heckart of Tulsa Okla a Customers 279 million More than 500C telecommunications consultant with TeleChoice "Once the FCC Employees 102000 13800 cHz approves GTE-MCI it really opens How the the door And I think it's maybe a market responded can of worms they don't want to yesterday open the door to" $4475 $3375 The FCC has already expressed 'Year-end 1996 its opposition to marriages between SOURCE: The companies long-distance companies and big regional phone carriers This summer it zapped Corp's hopes of merging with SBC Communications the $178 billion regional phone company formed by the marriage of Southwestern Bell and Pacific Telesis Group and SBC had been in discussions when FCC Chairman Reed Hundt (More on TELEPHONE on Page 3) GTE bids for MCI In a bid that would be the biggest all-cashcleal has offered $28 billion to buy MCI Communications which Bri ish Telecom and World Com also A GTE one of the largest local How telephone companies outside responded of the restrictions of the Baby Bells needs MCI to greatly expand its long- distance and Internet services and defend itself from World Com oto wIRLD com Revenues $213 billion $7 billion Profits 628 billion Lost $221 billion Market value 6459 billion $32 billion Customers 279 million More than 500000 Employees 102000 13800 How the 1117Jor market responded yesterday $4475 $3375 Year-end 1996 SOURCE: The companies By JEFFREY GOLD The Associated Press NEWARK NJ A federal jury yesterday ordered Continental Airlines to pay $875000 to a woman pilot who was offended by her male colleagues' practice of leaving dirty pictures around the cockpit The jury of five women and two men ruled that the photos constituted sexual harassment because they created a hostile work environment The jury declined to make the Houston-based airline pay punitive damages and found that Continental had not retaliated or sexually discriminated against Capt Tammy Blakey in pay or assignment "I'm not disappointed" said Blakey 38 of Arlington Wash "The money wasn't as important as the message" The case exposed the long tradition among male airline pilots of leaving surprises in the cock-(More on PILOTS on Page 3) APStar-Thlegram Iraq 14 WANSEMMill -AMC Cohen says Pentagon needs to cut fat Dowoil report co J11DY A decade ago Sunday the stock market went into a dizzying tailspin In a special report in the Money section Sunday we look at the legacy of the crash The defense secretary says funds are being squandered on nonessentials MIELINSIDEME IITOPUR READERSII -i i 1- 1- 8100 Lir 1900 i i ::1 -1-- 1----- 7800 7700 f-----I- 7600 -t--4-- LLL 2 3 8 7 8 9 10 13 14 15 16 Yesterday: 793888 -11910 Oil futures Contract for Nov $2097 per barrel $040 Posted price: $1850 future is that we are still holding on to old ways of doing business" Cohen told the "Tail-toTooth Commission" an offshoot of a group known as Business Executives for National Security The coMmission focuses on the Pentagon's support functions the "tail" that perhaps could be performed more cheaply by private companies The result would be more money left for the war-fighting functions the "tooth" "What we need is a revolution in business affairs and that's where we are lacking today" (More on DEFENSE on Page 3) purchases since the end of the Cold War has left the military facing a shortfall of as much as $20 billion Defense Secretary William Cohen told a group of business leaders yesterday Cohen said that if the Pentagon hopes to field new fighter planes including the Lockheed Martin F22 Raptor and the joint strike fighter it will have to cut dramatically the money spent on tasks that have little or nothing to do with defending the country "We need to start investing in the future And the reason we are not investing as much in the Coca-Cola's board of directors meets but takes no action on the status of ailing Chairman Roberto Goizueta Page 10C BUSINESS DIGEST Page 2C NYSE Pages 4-6C AMEX Page SC NASDAQ Page 7C MUTUAL FUNDS Pages 8-9C Because of a data-transmission error at Lipper Analytical Services some mutual funds were inadvertently omitted from yesterday's listings Lipper provides much of the mutual fund data for The Associated Press which supplies the Star-Telegram listings By MICHAEL TOWLE Star-Telegram Washington bureau WASHINGTON If the United States is to pay for all the high-tech weapons it plans to field in the 21st century it may have to borrow a 20th-century idea from corporate America cut the fat A 66 percent decline in the Pentagon budget for weapons Gas futures: $3247 0208 Star-Miegram.