Metropoulos brothers have big plans for Pabst

In May, billionaire C. Dean Metropoulos bought Pabst Brewing for $250 million. His sons Evan and Daren plan to scale up and possibly export the brand, Bloomberg Businessweek reported.

C. Dean Metropoulos, the article said,

started out with a feta cheese business in Vermont and has established a long record of turning around names like Bumble bee Tuna, Perrier-Jouët, Chef Boyardee, Duncan Hines, Aunt Jemima, Vlasic Pickles, Swanson frozen dinners, and Ghirardelli Chocolate. He bought Pabst from the charitable trust of Paul Kalmanovitz, the company's late owner....

Pabst Brewing's brands include Colt 45, Old Milwaukee, Primo, Rainier, Schaefer, Stroh's, Schlitz, Schmidt, Lone Star, National Bohemian and Pabst Blue ribbon. The beers are brewed through a contract with MillerCoors, the report noted.

In most of his previous deals, Metropoulos entered into partnerships with private equity firms and investment banks, and later sold out.... Pabst, says Metropoulos, is different. It's the first purchase Metropoulos has made without outside capital or an exit strategy. With Evan and Daren at the company's helm beside their father, the Metropouloses see Pabst as a platform for possible future acquisitions, and the foundation of the family's legacy.

Kalmanovitz, who oversaw a hostile takeover in the company in 1985, "quickly cut the company's advertising budget, bled the company of cash, and focused on developing the brewer's real estate," the Bloomberg Businessweek article said. In contrast, the Metropoulos brothers are taking Pabst into more restaurants, supermarkets and bars and are talking to the Hollywood connections. (Source: Bloomberg Businessweek, Sept. 20-26, 2010.)

Posted Wednesday, September 29, 2010 • Permalink

Family owners of Rollins Inc. undergoing ‘very public disintegration’

The family owners of pest-control conglomerate Rollins Inc. have traditionally maintained a low profile. But recently "the family has begun a very public disintegration," the Atlanta Journal-Constitution reported.

The children have filed suit against their father, the company CEO, over the family trust; their mother filed for divorce two days later; and ... the company fired the CEO's son.

Patriarch Orville Wayne Rollins -- for whom the family's charity, the O. Wayne Rollins Foundation, is named -- died in 1991. The family's battles come a year after the death of the 98-year-old matriarch, Grace Crum Rollins, the article said.

On Aug. 23, Glen W. Rollins, Ruth Ellen Rollins, Nancy Louise Rollins and O. Wayne Rollins II sued their father, Gary Rollins, 66; their uncle R. Randall Rollins, 78; and another board member, Henry B. Tippie, in Fulton County (Ga.) Superior Court, seeking information on two trusts established for them. On Aug. 25, their mother, Ruth M. Rollins, filed for divorce from Gary after nearly 45 years of marriage, according to the report.

On Sept. 7. the Rollins board, led by Gary and R. Randall Rollins, fired Gary's soon Glen, 44, who had been executive vice president of Rollins Inc. and leader of its most recognizable brand, Orkin pest control, the Journal-Constitution article said.

Rollins Inc. is majority-owned by the family, which also has interests in Dover Downs Entertainment, a Delaware company that owns a casino and hotel as well as horse and auto racing tracks, the report noted. (Source: Atlanta Journal-Constitution, Sept. 10, 2010.)

Posted Wednesday, September 29, 2010 • Permalink

Riggio prevails in Barnes & Noble proxy challenge

Shareholders backed Barnes & Noble chairman Leonard S. Riggio and two other company-backed candidates for the board over a slate led by investor Ronald W. Burkle, the New York Times reported.

Shareholders also rejected a proposal by Burkle's investment firm, the Yucaipa Companies to remove a poison-pill provision that limited Burkle's holdings to less than 20%, the Times report added.

The company "can now focus on a turnaround and a sale," the article said.

Mr. Riggio and the company criticized Mr. Burkle as an opportunist who sought a stealth takeover of the company. Mr. Burkle argued that the Riggio family had failed to prepare Barnes & Nobel for digital books and had used the company to profit at shareholders' expense.

Barnes & Noble put itself up for sale in August. Preliminary bids are due in October, the report noted. It is not clear whether Riggio will bid for the company or partner with a bidder, the article said. Meanwhile, Burkle "showed no signs of easing up his criticism of the bookseller's management," the Times report noted. (Source: New York Times, Sept. 28, 2010.)

Posted Wednesday, September 29, 2010 • Permalink

Alberto Culver to be sold to Unilever

Anglo-Dutch consumer products company Unilever has agreed to buy U.S. beauty care company Alberto Culver for $3.7 billion, according to news reports.

Alberto Culver is "part owned by the family of founder Leonard Lavin and ... dates its roots back more than 50 years," the Wall Street Journal reported. The company's sales for the fiscal year that ended in September 2009 were $1.4 billion. The Journal article said:

Mr. Lavin, a horse-racing enthusiast who turns 91 [in October], founded the company in 1955 and took it public six years later. Today he sits on the board after relinquishing management of the company in 1994. Alberto Culver's executive chairman now is Carol Lavin Bernick, his daughter. Together, they own more than 14% of the company, according to the most recent proxy filing late last year.

Alberto Culver, based in Melrose Park, Ill., makes TRESemme, Nexxus and Alberto VO5 hair products, as well as St. Ives and Noxzema skin-care products. According to the Journal report:

Unilever said in a statement that the acquisition makes it the world's leading company in hair conditioning, the second largest in shampoo and the third largest in styling.

(Source: Wall Street Journal, Sept. 27, 2010.)

Posted Monday, September 27, 2010 • Permalink

Washington Post authorizes stock repurchase, names CEO to board

The Washington Post Co.'s board of directors has authorized a stock repurchase of up to 750,000 shares of its class B common stock, or nearly 10% of its outstanding Class B common shares, the Washington Business Journal reported.

The Washington Post's Class A shares, owned by the Graham family, carry more voting heft than its Class B common shares.

Separately, the company named its CEO, Katharine Weymouth, to its board of directors, increasing the board to 12 members, the journal reported. (Source: Washington Business Journal, Sept. 23, 2010.)

Posted Friday, September 24, 2010 • Permalink

Benihana relents on proxy challenge, seeks sale of company

Benihana, the Miami-based operator of Japanese restaurants, has hired a financial adviser to help sell the company, the South Florida Business Journal reported.

The company announced it was seeking a sale after averting a proxy battle. An earlier South Florida Business Journal report said that two groups of dissident shareholders -- Benihana of Tokyo (BOT), a company belonging to the family of the late company founder, Rocky Aoki, as well as New York hedge fund Coliseum Capital Management -- would place representatives on the board.

The move follows a major shakeup within BOT, which owns a Benihana restaurant in Hawaii and is an international franchisor. Rocky Aoki's children lost control of the company after his widow, Keiko Ono Aoki, won a battle in New York State Curt on Aug. 31.

A July 22 DailyFinance article noted that Rocky Aoki led a complex life.

In New York, he had three children with wife Chizuro Aoki and, at the same time, he had fathered kids in California with mistress Pamela Hillberger and at least one other girlfriend. [He later divorced Chizuro Aoki, married Hillberger and had two more children with her before divorcing her in 1991.] In 2002 he married his third wife, the former Keiko Ono. By then, his six children ... were fully grown -- and they didn't approve of their new stepmother. Shortly after the marriage, the Aoki kids launched an unsuccessful attempt to get Keiko to sign a post-nuptial agreement renouncing any claim on Benihana. The plan backfired.

(Sources: South Florida Business Journal, Sept. 22, 2010 and Sept. 23, 2010; DailyFinance, July 22, 2010.)

Posted Friday, September 24, 2010 • Permalink

Lagardere names new Hachette CEO

Publishing industry veteran Steve Parr has been named as the new president of Hachette Filipacchi Media U.S. Inc., a unit of French conglomerate Lagardère SCA that publishes Elle, Woman's Day and Car and Driver magazines among other titles, the Wall Street Journal reported. Parr succeeds Alain Lemarchand, whose mission had been "to turn around the recession-battered business," the article said.

Though Mr. Lemarchand succeeded in cutting costs and reorganizing Hachette, speculation has grown that parent company Lagardère SCA planned to sell all or a piece of its U.S. magazine operation....

Didier Quillot, CEO of Lagardère Active, the company's magazine and media division, told the Journal that "Steve Parr is not here to sell the business..... He is here to develop the business."

Responding to the speculation about a sale, Mr. Quillot reiterated remarks made last month by Arnaud Lagardère, general partner of Lagardère SCA. In an earnings call, Mr. Lagardère had said the company has had interest from parties looking to buy all or part of Hachette, but that "there is no specific plan and no decision to really sell the magazines in the U.S. or in other countries outside France."

(Source: Wall Street Journal, Sept. 22, 2010.)

Posted Wednesday, September 22, 2010 • Permalink

Fiat shareholders approve business split

Fiat Group shareholders approved a split-off of the company's industrial business from its automotive unit.

The New York Times noted that Fiat Industrial, which makes Iveco trucks as well as agricultural and marine equipment, will operate independently, with its own management and board. It is expected to be listed on the Milan stock exchange next year.

The Times article said the company hopes the move will "lead the stock market to view the two halves more positively than the whole."

A Yahoo News report said that John Elkann, Fiat's president and the grandson of the late company leader Gianni Agnelli,

thanked the shareholders for their approval by a large margin, calling the vote a "historic" event that "gives birth to two Fiats."

(Sources: New York Times, Sept. 16, 2010; Yahoo News, Sept. 16, 2010.)

Posted Wednesday, September 22, 2010 • Permalink

Son of new Newsweek owner joins magazine’s staff

Before the closing of the Washington Post Co.'s sale of Newsweek to 92-year-old businessman Sidney Harman, the staff received an announcement that Harman's son Daniel would join the staff, according to a report by Keith J. Kelly of the New York Post.

Daniel Harman, who is in his twenties, is a second-year MBA student at Columbia University, Kelly reported. The report noted that he "apparently has no publishing experience but was involved in setting up and running a sports car accessories business called Harman Motive."

When Sidney Harman takes over as owner, up to 30% of the Newsweek staff are expected to be laid off, the article said. The elder Harman told Kelly that his son would be an intern at the magazine.

"He's an intern. He's a second-year MBA and one of the requirements of second-year MBAs is that they serve an internship.... I don't press anyone in the family to follow my drum. He is not the heir and it is not apparent."

(Source: New York Post, Sept. 22, 2010.)

Posted Wednesday, September 22, 2010 • Permalink

Family owners sell landmark L.A. cafeteria

Clifton's Brookdale cafeteria, a downtown Los Angeles landmark, is being sold by the Clinton family to Andrew Meieran, a developer and nightclub operator "who vows to preserve its comfort-food menu and kitschy charms," the Los Angeles Times reported.

The sale of a 40-year lease to the building at Broadway and 7th Street marks the end of family operations of Clifton's cafeterias in Los Angeles dating to 1931.

Robert Clinton, grandson of founder Clifford Clinton, and his father, Donald, are selling the business. Robert Clifton told the LA Times:

"We are excited that Clifton's will be in Andrew's hands and have a more secure future. Andrew respects the Clifford Clinton legacy that is very much a part of this business and he wants to respect our principles."

Meieran, co-founder of the hip Edison lounge in downtown Los Angeles, plans to convert a banquet space on Clifton's second floor into a separate cocktail lounge and restaurant, the article said. He will also remove a metal façade that dates from the 1960s and restore the original exterior.

But the cafeteria, where diners select from familiar foods such as pot roast, turkey, enchiladas and Jell-O, will remain, albeit with some additions to the restaurant, Meieran said.

The Clintons had owned eight cafeterias in the Los Angeles area since 1931; the Brookdale location, which dates from 1935, was the only one remaining, the report noted.

After being tenants for decades, the Clintons bought the downtown building in 2006 because the owners were anxious to sell it. But business has been challenging. In its heyday in the 1940s, lines would form on Broadway as up to 10,000 customers came to eat on a busy day. Now the restaurant serves 1,000 to 2,000 a day on a street that has changed significantly from the postwar era.

(Source: Los Angeles Times, Sept. 21, 2010.)

Posted Tuesday, September 21, 2010 • Permalink

Chairman’s brother takes over as LG Electronics CEO

Koo Bon Joon, the younger brother of LG Group chairman Koo Bon Moo, will take over at LG Electronics Inc., the world's third-largest maker of mobile phones, Bloomberg reported. He replaces Nam Yong, who is resigning after record losses at the company.

LG Group is South Korea's fourth-largest family-run industrial group. LG Electronics stock made its biggest gain in about six months after the announcement, Bloomberg reported.

Kim Sun Woong, executive director at the Center for Good Corporate Governance in Seoul, told Bloomberg that LG may face criticism for promoting a member of the founding family.

Koo Bon Joon, a grandson of LG Group founder Koo In Hwoi, previously was CEO of trading company LG International Corp. He also had been president of LG Semiconductor Co., which was acquired by Hynix Semiconductor Inc. in 1999. (Source: Bloomberg, Sept. 17, 2010.)

Posted Friday, September 17, 2010 • Permalink

Barnes & Noble defends its moves

In a letter to shareholders, Barnes & Noble defended its 2009 $514 million purchase of a college bookstore business owned by founder Leonard Riggio and his wife, the Financial Times reported. According to the FT report, the bookseller, which has an annual meeting scheduled for September 28, said that

the business "was delivering compelling shareholder value" and offered long-term strategic benefits. It also argued that Barnes & noble's 1999 purchase for $209 million of a video game retailer owned by Mr. Riggio eventually led to the successful spin-off of the GameStop business, delivering several billion dollars in shareholder value.

Billionaire investor Ron Burkle is seeking three seats on the Barnes & Noble board and has argued that the board "has been a rubber stamp for transactions benefiting the Riggio family," the FT article said.

Burkle's Yucaipa investment group holds nearly 20% of the company's shares and seeks to overturn a poison pill provision that prevents it from acquiring more. Leonard Riggio and his brother Stephen hold more than a third of the shares, the report noted. Barnes & Noble says Burkle lacks a strategic plan for the company, the FT reported. (Source: Financial Times, Sept. 10, 2010.)

Posted Monday, September 13, 2010 • Permalink

Tougher student loan rules could hurt Washington Post Co.

A proposed federal government crackdown on student loan repayment rules could hurt the Washington Post Co.'s Kaplan testing and education unit, Bloomberg BusinessWeek reported.

New regulations being considered by Congress and the Obama administration could make students at schools with the worst loan repayment records ineligible for federal loans. Department of Education data show that less than 35% of federal student loan aid is repaid at for-profit campuses operated by Kaplan and two other large companies, the article said.

In addition to its college admissions test preparation courses, Kaplan offers degree programs online and at campuses in four states, the report noted.

Although the Washington Post newspaper and its Newsweek magazine [which the Post agreed to sell in August 2010] are better known, Kaplan has become the Post's largest unit, accounting for nearly 60 percent of revenue last year, up from 11 percent 10 years ago. Kaplan's impact on profits [is] even greater. In 2009, Kaplan had operating income of $194.8 million, while the Post's newspaper business lost $163.5 million and Newsweek lost $29.2 million.

Post chairman Donald Graham has personally lobbied on Kaplan's behalf and contends that the regulations would punish schools that serve low-income students, Bloomberg BusinessWeek reported.

The warnings about Kaplan have shaken investors in Washington Post stock ... sending the shares at one point to a 14-year low. The stock has tumbled more than 18 percent this year.

The article also noted that the company may also face higher borrowing costs. (Source: Bloomberg BusinessWeek, Sept. 2, 2010.)

Posted Tuesday, September 07, 2010 • Permalink

Martha Stewart to provide programming for Hallmark Channel

Martha Stewart will provide eight hours of programming each weekday for the Hallmark Channel, which will change its focus to home and lifestyle improvement and cooking shows, the Los Angeles Times reported.

Studio City [Calif.]-based Crown Media Holdings Inc. -- which is controlled by the Donald Hall family of Kansas through its privately owned Hallmark Cards Inc. -- has spent nine years and burned through $2 billion trying to come up with a viable strategy for television.

Crown Media earlier had tried to sell the Hallmark Channel, the report noted.

Potential buyers were chased away by Crown Media's heavy debt load, low fees paid by cable operators and legions of gray-haired viewers who loyally tune it to the brand's comfort programming. Advertisers prefer youthful audiences, making it more difficult for Hallmark to command top dollar for commercial time on its two channels.

The LA Times article noted that an investor filed a lawsuit after Crown Media recapitalized $1.1 billion of its debt this summer.

[The] investor alleged that a low-ball valuation was placed on Crown Media that "unfairly diluted the voting interests of minority shareholders," according to the lawsuit, scheduled to go to trial Sept. 21. The recapitalization boosted the Hall family's ownership to 90.3% of the television enterprise, up from about 66%.

The report also said Hallmark had previously paid cable operators to carry the channel on their systems. Common practice in the industry is for operators to pay entertainment companies for the right to distribute their cable channels, the LA Times reported. Although Crown Media ended the practice after five years, it hampered the company's ability to negotiate higher fees for the Hallmark Channel and Hallmark Move Channel. In early September, AT&T U-Verse dropped the two channels after failing to reach a new agreement with Crown Media.

Now, instead of being available in 90 million homes, the Hallmark Channel can be found in 88 million homes, or about three-quarters of U.S. TV households; and the Hallmark Movie Channel is available in about 37 million homes, down from more than 38 million.

Bill Abbott, Hallmark's former advertising sales chief who became Crown Media's CEO in June 2009, "wants the channels to better capitalize on the relationship with Hallmark Cards, in part, by acquiring programming that ‘celebrates' holidays," the article said. (Source: Los Angeles Times, Sept. 7, 2010.)

Posted Tuesday, September 07, 2010 • Permalink

S.C. Johnson completes $550 million debt offering

S.C. Johnson & Son Inc. completed a $550 million debt offering, the Business Journal of Milwaukee reported. The article noted that "debt-ratings agencies applauded the company's ability to generate cash flow during the economic downturn."

Debt-ratings agencies Fitch and Standard & Poor's said the proceeds from the 30-year unsecured notes due in 2040 will fund a $194 million acquisition from Sara Lee Corp. and refinance upcoming debt maturities.

S.C. Johnson is acquiring brands sold in Asia, Europe, Russia and Africa from Sara Lee, the report noted.

S.C. Johnson received positive ratings of A- from both Standard & Poor's and FitchRatings. Neither ratings agency was able to disclose specifics of Johnson's revenue or net income because it is privately held.

(Source: Business Journal of Milwaukee, Sept. 3, 2010.)

Posted Tuesday, September 07, 2010 • Permalink

Malt-O-Meal’s instant oatmeal competes with Quaker’s

Malt-O-Meal Co. is launching a marketing campaign to promote its Better Oats brand of instant oatmeal that takes a stab at rival Quaker Oats Co., the Minneapolis/St. Paul Business Journal reported.

The campaign will start in Quakertown, Pa., and move to Philadelphia (home of the University of Pennsylvania Quakers), the Quaker Square Inn in Akron, Ohio, and Chicago (where Quaker is based). The final stop is Minneapolis, where Malt-O-Meal is headquartered, the journal reported.

Better Oats, Malt-O-Meal's first instant oatmeal brand, debuted last spring, the report noted.

Malt-O-Meal has been a growing presence in the cereal universe. Last year it acquired the Farina Mills hot cereal brand from U.S. Mills, and opened a new factory in Asheboro, N.C. ...

The article noted that in 2002, Malt-O-Meal acquired Quaker's bagged cereal business. Quaker is part of PepsiCo Inc.

Malt-O-Meal is privately owned by members of the Brooks and Fort families, descendants of John Campbell, who founded the company in 1919. (Source: Minneapolis/St. Paul Business Journal, Sept. 2, 2010.)

Posted Friday, September 03, 2010 • Permalink