The State from Columbia, South Carolina • 68

10-D The S.C. Business Friday, April 13, 1984 IBM Reports Profits Climb Associated Press member, surged 26.17 points to NEW YORK 1,157.14. International Business MaIBM's stock has been under chines Corp. said Thursday its firstpressure for the past few months, quarter profit climbed 23.1 percent Wall Streeters even though are from a year earlier as revenue 15.7 hard pressed to find corporate percent. flaws that would account for the gained The world's largest computer decline in what many consider the maker said net income in the latest stock market's bellwether issue.

quarter rose to $1.2 billion, or $1.97 The stock is down from 52-week a a share, from $976 million, or $1.62 high of $134.50 a share last Octoa share, a year earlier. ber. Revenue increased to $9.56 billion from $8.29 billion. think it's purely psyIt was the first time IBM chological," said George D. Elling earned more than $1 billion in its of Oppenheimer Co.

"My feeling first quarter. IBM's first $1-billion is everybody's looking over their quarter came in the fourth quarter shoulders assuming the next guy of 1978, when net income was $1.02 knows that something is wrong a at billion. IBM that they don't know." The latest earnings gain was at the high end of Wall Street esti- Stephen S. McClellan of mates, yet the price of IBM's Salomon Brothers noting shares tumbled a point after the IBM's enormous popularity among figures were announced. money managers, said that "as the However, the stock later moved market goes, so goes IBM." sharply higher in heavy trading and He said money managers seekpaced the overall market to its best ing to reduce their stock portfolios gain in seven weeks.

IBM advanced in a declining market "don't sell 30 a share, to $112.50, on the or 40 stocks. They lighten up on New York Stock Exchange. their IBM position," often still at The Dow Jones average of 30 a profit despite the recent slide in industrials, of which IBM is a IBM's price. MI Plunges $5 Billion United Press International NEW YORK The basic money supply known as M1 dropped $5 billion in the latest week, and other data showed a "high degree" of restraint by the Federal Reserve. The broader money supply measure known as M2 rose $6.6 billion in March.

"Although the markets took comfort from the M1 decline, it's clear that some reversal is likely in next week's report," said William V. Sullivan senior vice president at Dean Witter Reynolds, Inc. "Specifically, it appears as though the Fed's seasonal adjustment factor over-compensated and in the process pushed money supply lower," Sullivan said. "We would expect a large gain when this process 1 reverses itself next week." Any positive reaction was also offset by disclosure of a $847 million net borrowed reserve position by banks borrowings from the Fed's discount window less excess reserves in the banking system. A net borrowed position signals the Fed is making less money available and a free reserve position signals the opposite.

"The $847 million net borrowed suggests the Fed is applying a high degree of restraint and there's little likelihood of any relaxation on the federal funds," Sullivan said. "If anything it could point to higher carrying costs." Sullivan did say that this week's $5 billion drop and unexpected weakness in retail sales, gives the Fed breathing room to await further data on the economy. The bond market posted a modest gain, with the benchmark Treasury 30-year bond, the 12s of 2013 rising point to 97. M1, comprised of cash, checking accounts NOW accounts money that is available: for immediate spending was a seasonally adjusted average of $533.2 billion in the week ended April 2 compared with $538.2 billion the previous week. GRAND DACHE FREE! WIN A $250 IT'S SHOPPING SPREE.

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Investment Firm Acquires Wometco By NORMAN BLACK Associated Press WASHINGTON A New York investment firm completed its $1 billion acquisition of Wometco Enterprises Inc. on Thursday, taking the firm private after winning authorization from the Federal Communications Commission to proceed. Kohlberg Kravis Roberts the New York firm, assumed control of the Miami-based Wometco just hours after the FCC granted its approval, according to Wometco spokesman and vice president Gerald F. Whaley. The commission, in a 12-page opinion, denied a petition filed by Ferris E.

and Irene V. Traylor formerly minority stockholders in Wometco challenging the firm's acquisition by Kohlberg Kravis Roberts. The Traylor petition "fails to raise any substantial and material questions of fact to establish that the grant of these applications would be, on its face, inconsistent with the public interest," the FCC wrote. The deal between Wometco and Kohlberg Kravis Roberts was valued at $842 million, based on the payment of $46.50 a share in cash for Wometco's 18.1 million outstanding shares. The transaction also included the buyout of the 15 percent interest held by private stockholders in Wometco Cable TV however, as well as the assumption of Wometco's outstanding debt.

When added together, the total transaction was worth slightly more than $1 billion. According to the FCC, Kohlberg Kravis Roberts put together two limited partnerships with outside investors to finance the deal and to place Wometco into the hands of a privately held subsidiary known as the WBC Broadcasting Corp. Now that the deal has been consummated, Wometco's stock will be de-listed from the New York Stock Exchange. Thursday's action by the agency was the second in three days approving such a huge transaction involving a communications firm. On Tuesday, the commission gave its blessing to a $1 billion leveraged buyout that will place Metromedia Inc.

under the private control of its top four officers. Wometco, founded in 1925 by Mitchell Wolfson and Sidney Meyer, is a Miami, leisure-time conglomerate with extensive interests in broadcasting, cable TV, vending and food services, motion picture theaters and entertainment parks and CocaCola bottling. The FCC became in- Charter Dicaltors Proudly announces Effective April 13, 1984 It's Joining With REALTY We look forward to continuing to serve our customers and clients in a quality way. REALTY WORLD-CHARTER REALTORS 782-9110 14009-05 AT Kle On The FREE! JORDACHE MAKE-UP KIT WITH ANY JORDACHE PURCHASE LEVI'S BIKE CAP WITH LEVI'S SHEETING PANTS PURCHASE LEVI'S GALS' T-SHIRT WITH LEVI'S GALS' PURCHASE LEVI'S OLYMPICS BIKE CAP WITH ANY LEVI'S PURCHASE FROG LIPS, HACKY SACKS, POSTERS, PENCILS WITH ANY SPECIAL GRAND OPENING PRICES. LIMITED TIME.

volved in reviewing the deal because of the broadcast and cable TV holdings. Wometco controls six TV stations, which are part of the deal, as well as one radio station. The radio station, WLOS-FM in Asheville, N.C., is being sold separately for $1.75 million to WISE Radio Inc. of Asheville, N.C., a transaction that was also approved Thursday. The TV stations involved in the deal include WTVJ-TV in Miami; KVOS-TV in Bellingham, WZZM-TV in Grand Rapids, WLOS-TV in Asheville, N.C.; WWHTTV in Newark, N.J., and WSNL-TV in Smithtown, N.Y.

On the cable TV front, Wometco is one of the nation's 25 largest system operators with more than 256,000 subscribers in Georgia, Louisiana, Mississippi, North and South Carolina', Alabama, Oklahoma and New York. Kohlberg Kravis Roberts Co. is an investment banking firm founded in 1976 by Jerome Kohlberg Henry R. Kravis and George R. Roberts, all former partners in the Wall Street investment banking firm of Bear Stearns Co.

Kohlberg Kravis Roberts broke into broadcasting in 1983 by acquiring KTLA-TV in Los Angeles from Gene Autry and The Signal Companies for $245 million, the highest price ever paid for a single independent TV station. The leveraged buyout of Wometco was announced last September, eight months after Wolfson's death. Wolfson, with his family, had maintained control of the company for 58 years. The Traylors had challenged the deal on grounds Wometco is facing two stockholders' suits alleging violations of security laws. They also charged Kohlberg Kravis Roberts would not be the real party in control of the Wometco because it is relying on heavy investments by outside parties for financing.

After reviewing the legal documents, the commission responded Thursday it was satisifed that Kohlberg Kravis Roberts, through a firm known as KKR Associates, was the sole general partner in the deal and thus vested with control over WBC Broadcasting. Considering a mortgage loan? Call First South FIRST. At First South, we want you to realize that whatever your loan needs, we would like to help. Call our professionals today and let them put together a loan package that's just right for you. You'll make more money banking with us.

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