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Report: Forbes restructured to satisfy lenders

Fortune magazine, citing confidential documents that had been leaked to its staff, recently reported that Forbes Media "has been under more financial strain than previously believed." Forbes Media's Forbes magazine competes with Fortune.

The Fortune report said:

Forbes Media violated covenants on a revolving credit line that it took out in 2006, according to a letter sent to the company by J.P. Morgan. The loan, which was part of a series of transactions that allowed the Forbes family to cash out more than $100 million from the company, is due next July.

According to Fortune, Forbes hired a turnaround firm to develop an emergency plan. J.P. Morgan and six other lenders agreed to amend the loan in August 2010, but only if one of three conditions were met: selling its online financial dictionary, Investopedia; replacing Steve Forbes as CEO; and meeting financial targets. Forbes Media met all three conditions, Fortune noted. Investopedia was sold for $39.6 million, Steve Forbes stepped down in November 2010, and the company met its targets.

The Fortune report said the problems stemmed from the 2006 deal in which Forbes Media sold 45% of itself to Elevation Partners, a private equity firm, for a price that was less than had been believed. The article said the deal was "a windfall for the family, which took $107.4 million, about a third of the profits, for itself." Elevation, which based its investment "on rosy 2006 projections that looked downright absurd by 2008," believed it would make a lot of money on the deal.

Fortune called the Elevation deal "a failure" because it burdened Forbes Media with so much debt that the company had to cut costs aggressively.

Five years later Forbes Media's earnings power has declined precipitously, and Elevation is nowhere near the return on investment it had predicted. The Forbes family was able to take a lot of money off the table.

According to Dow Jones' All Things Digital website, Steve Forbes responded to the Fortune report in a statement that said:

Fortune was aware that this was highly confidential, private information and of no value to release to the public. Though the intention is to harm our business, it will not adversely impact Forbes because it highlights a very difficult time in the past when all the media industry was going through unprecedented upheaval.

Jim Romenesko's media blog noted that in 2006, Steve Forbes told the New York Times that the Elevation deal "was a way to expand the empire." (Sources: Fortune, July 28, 2011; All Things Digital, July 28, 2011; Romenesko, July 28, 2011.)



Ex-News Corp. executives question James Murdoch’s testimony

Two former executives of News Corp.'s News International unit issued a statement on July 21 that contradicted James Murdoch's July 19 testimony to a U.K. parliamentary committee. Murdoch, the son of News Corp. CEO Rupert Murdoch, runs News Corp.'s operations in Europe and Asia, including News International, its British subsidiary.

Colin Myler, former editor of the company's now-shuttered tabloid News of the World, and Tom Crone, News International's former legal manager, said in the statement that they told Murdoch in 2008 about evidence of an e-mail that suggested that phone hacking at the tabloid was more widespread than just the work of a lone "rogue reporter."

Myler and Crone also said they informed Murdoch that an out-of-court settlement he authorized in a lawsuit filed by a hacking victim was unusually large. The case was settled for about $1.4 million, according to a New York Times report.

The lawsuit -- the first filed by a hacking victim -- was brought by a soccer union leader, Gordon Taylor. The Times report said:

Mr. Myler and Mr. Crone spoke out because they were angered that the company was telling reporters that they had failed to tell James Murdoch about critical facts in the civil lawsuit....

Murdoch told the committee "that he ‘did not get involved in any of the negotiations directly' and that the settlement seemed reasonable at the time," the Times article said. The Times report said that in addition to Myler and Crone,

other News International executives, as well as members of Mr. Taylor's legal team, painted a picture of Mr. Murdoch as being quite engaged in keeping the case from going to trial. They say that the size of the settlement he authorized reflected that.... The officials said that even employees who were typically involved in legal decisions did not learn of the settlement until it leaked in a newspaper.

report in the Wall Street Journal -- which is owned by News Corp. -- said:

The settlement was one of [Murdoch's] first major decisions after becoming head of News Corp.'s Europe and Asia operations in 2007. He didn't work at News Corp. at the time of the alleged hacking.

According to a Reuters report:

In a letter to the media committee's chairman James Murdoch said he had answered questions in parliament truthfully.

The Reuters article added that lawmakers may contact Myler and Crone to investigate their claims. (Sources: New York Times, July 21, 2011; Wall Street Journal, July 22, 2011; Reuters, July 25, 2011.)



Family increases its stake in Ferragamo

The Ferragamo family's ownership stake in their Italian shoe company has increased as Hong Kong businessman Peter Woo has cut his minority stake, Reuters reported.

Woo's Majestic Honour exercised a put option to sell 2% of the company's capital. As a result of the dear, family holding company Ferragamo Finanziaria raised its stake to 58.24%. In February, Woo had bought an 8% stake in Ferragamo.

In June, Ferragamo listed in Milan by selling 25% of the family's shares for more than 378 million euros, according to the Reuters report. (Source: Reuters, July 25, 2011.)



News Corp. polls shareholders on family control

News Corp. is surveying its largest shareholders to get their views on succession and the Murdoch family's control of the company, Bloomberg reported.

Shareholders were also asked for their views on the independence of News Corp.'s board, its dual-class share structure and its corporate governance....

The report, citing three anonymous sources, said the survey results may be shared with the company's board and that "News Corp.'s goal is to inform and frame shareholder communications."

The Bloomberg article said that the public relations firm that News Corp. is using to respond to allegations of phone hacking and police bribery is calling the shareholders. (Source: Bloomberg, July 27, 2011.)



Soros’s firm to become a family office

Billionaire George Soros is ending his career as a hedge-fund manager and returning money to outside investors, Bloomberg reported. The Bloomberg report cited a letter to investors that noted that the firm will focus on managing assets only for the Soros family. The letter, which was signed by Soros' sons Jonathan and Robert -- co-deputy chairmen of the firm -- said chief investment officer Keith Anderson would leave the firm.

The New York Times' DealBook blog noted that of the nearly $26 billion managed by the firm, only $1 billion belongs to outside investors.

The Bloomberg report noted:

Soros's sons said they took the decision because new financial regulations would have made it necessary for the firm to register with the Securities and Exchange Commission by March 2012 if it continued to manage money for outsiders. Because the firm has overseen mostly family assets since 2000, when outside money accounted for about $4 billion, they decided it made more sense to run it as a family office, according to the letter.

(Sources: Bloomberg, July 26, 2011; "DealBook," New York Times, July 26, 2011.)



Major News Corp. shareholder backs Murdochs

Prince Alwaleed bin Talal, who owns 7% of News Corp.'s voting shares, has spoken out against calls to change the conglomerate's dual-class share structure or its leadership, the Financial Times reported.

The prince is News Corp.'s "most powerful shareholder after the Murdoch family," the FT article said. He is a nephew of Saudi Arabia's King Abdullah and a longtime friend of News Corp. CEO Rupert Murdoch. The prince, whose net worth is nearly $20 billion, owns Mideast broadcaster Rotana Media (in which News Corp. holds a 14.5% stake), controls 95% of investment vehicle Kingdom Holding and is the largest individual investor in Citigroup, according to the report.

The Murdoch family controls nearly 40% of the company, though the family's financial stake is only 12%, the report noted. Prince Alwaleed told the FT:

"Investors went into News Corp. knowing the class A and B share structure. No one can cry wolf now."

The prince told the FT he supports the handling of News Corp.'s phone-hacking crisis by Rupert Murdoch and his son, James. (Source: Financial Times, July 25, 2011.)



Family presses for shake-up at Thomson Reuters

A recent management shake-up at Thomson Reuters, in which six executives in the markets division (including the division's CEO) left the company, occurred because the family that controls the company pressed company CEO Tom Glocer for a turnaround, according to news reports.

The controlling Thomson family and officials in Woodbridge Co., its investment company, "[have] grown inpatient with the company's performance," the Wall Street Journal reported. Sales of financial data, news and analysis to financial professionals had been slow, the Journal reported.

The Journal article said that Woodbridge and the Thomson family had opposed Glocer's restructuring plan "and pressed for a wider shake-up." The family is led by brothers David and Peter Thomson, according to the report.

The Journal report noted:

... [T]he Thomson family's move to flex its muscle at the company spotlights the uncertain payoff from the $17 million deal in 2008 that united Thomson, a big Canadian publisher and data provider, and U.K.-based news and data company Reuters Group PLC.

According to the report, the Thomson family, which held a 70% stake in Thomson Corp., took a 55% stake in the combined company.

People familiar with the company said Woodbridge has methodically set financial goals for the Thomson family's businesses, and then expects executives to meet them, or face losing their jobs.

(Source: Wall Street Journal, July 26, 2011.)



Jury sides with federal government against jeweler’s family

A federal court jury decided that the descendants of a Philadelphia jeweler must return ten rare 1933 Double Eagle gold pieces -- worth millions of dollars -- to the U.S. Mint.

All 445,500 of the $20 coins produced in 1933 were supposed to have been melted into bullion after the country went off the gold standard. The Mint never legally issued any of the coins to the public, a Philadelphia Inquirer article said.

In the civil trial, the government argued that jeweler Israel Switt and his friends stole the coins from the Philadelphia Mint. Switt died in 1990.

Switt's daughter, Joan Langbord, and two of her sons had contended that there was no evidence the coins had been stolen and that the government should return them to the family.

In 2002, a 1933 Double Eagle -- traced to Switt -- was sold for $7.59 million, a record for any coin, the Inquirer article said. After the record sale, Langbord gave the ten coins to the Mint to be authenticated.

Langbord contends she found the coins in a safety deposit box. The Inquirer reported that in her testimony,

Langbord explained that she had inherited the safety deposit box from her mother and had never fully sorted the contents. Langbord said she only occasionally opened it to remove a piece of her mother's jewelry for sale at I. Switt, the [Philadelphia] store founded by her father and still in operation.

At least 21 Double Eagle coins have appeared since 1937, "and all can be traced back to Switt," the Inquirer article said.

[Langbord] testified that while she had worked in her father's store from age 9, she had not been involved in purchasing goods and had never known he had the coins.

The Langbords are expected to appeal the case, the Inquirer article said. (Source: Philadelphia Inquirer, July 21, 2011.)



News Corp. shares rise during Murdochs’ testimony

Shares in News Corp. rose as CEO Rupert Murdoch and his son James, the company's deputy chief operating officer, appeared at a hearing before U.K. lawmakers on July 19. Shares closed up 84 cents to $15.80, a 5.6% rise.

The Financial Times reported:

Shareholders expressed relief that the session had revealed little in the way of new damaging information, and News Corp.'s stock climbed steadily through the three-hour hearing....
Most investors said the hearing had been positive for the company.

However, some shareholders interviewed by the Wall Street Journal -- which is owned by News Corp. -- said Rupert Murdoch didn't come across well in his testimony. One shareholder told the Journal:

"It was painful to watch. He seemed like an old man."

Several news reports speculated that News Corp.'s stock price would rise if Rupert Murdoch were to step down.

Reports in the Journal and by Bloomberg said James Murdoch performed well at the hearing. But some institutional investors told the Journal they were dissatisfied with how James Murdoch and the company's directors have handled the hacking scandal. (Sources: Financial Times, July 20, 2011; Wall Street Journal, July 20, 2011; Bloomberg, July 20, 2011.)



Murdoch family’s News Corp. shares fall by $1 billion

The value of the Murdoch family's stake in News Corp. has dropped by $1 billion since the news broke on July 4 about phone hacking by the company, the Financial Times reported.

The company's market value on July 18 was down 17.4%, or $8.3 billion, from the July 4 figure, the FT article said.

Standard & Poor's warned that it could cut News Corp.'s credit ratings, saying recent events had materially increased its reputational, management, litigation and other risks.

(Source: Financial Times, July 19, 2011.)



S. Korea’s planned move pits chaebol against small firms

The South Korean government plans to make a range of business sectors exempt from competition or buyouts from the powerful family-run conglomerates known as the chaebol, the Financial Times reported.

The FT article said a commission is reviewing a list of 230 business areas that could be reserved for small to medium-sized enterprises, including tofu, soap, light bulbs, satellite receivers, bottles, toys and vacuum cleaners. The designations will be announced in September, according to the report.

The report noted that small to medium-sized firms are not providing enough jobs for young people. Jeong Yeong-tae, secretary-general of Korea's commission on shared growth, told the FT:

"In recent decades, small companies in Korea have not been able to grow. They are extinguished by the chaebol that encroach on their business areas."

The government's plan is controversial, the article said. The chaebol say it undermines the free market; consumers say protectionism is keeping prices high; and European Union officials fear the plan could affect the EU's trade deal with South Korea, according to the report.

(Source: Financial Times, July 18, 2011.)



Some in Bancroft family regret sale to Murdoch

A number of members of the Bancroft family say they would not have sold Dow Jones, publisher of the Wall Street Journal, to News Corp. CEO Rupert Murdoch if they had been aware of the phone hacking committed by News Corp.'s News International unit, according to a report by ProPublica, a non-profit organization, that was co-published with The Guardian.

Christopher Bancroft, a Dow Jones board member who had sole voting control of a trust that represented 13% of Dow Jones shares in 2007, told ProPublica that the allegations that have been made public "would have been more problematic for me. I probably would have held out."

Other Bancroft family members expressing similar views included Lisa Steele and Elisabeth Goth.

Family member Bill Cox III said he was happy with the price the family got and was "pretty happy being out of the newspaper business altogether." But he also emailed ProPublica to add, "We did a deal with the devil." (Source: ProPublica, July 13, 2011.)



Nestle to acquire 60% of stock in Chinese family firm

Nestle announced that it has entered into a partnership agreement with the founding family of Hsu Fu Chi, a leading manufacturer and distributor of confectionery products in China. Nestle will acquire 60% of Hsu Fu Chi; the Hsu family will own the remaining 40%.

Hsu Fu Chi's current CEO and chairman, Hsu Chen, will continue to lead the company, Nestle announced.

Nestle will acquire the shares of Hsu Fu Chi's independent shareholders, representing 43.5% of the total, plus a 16.5% stake from the Hsu family's current 56.5% holding, according to the announcement.

Hsu Fu Chi is publicly listed in Singapore. Its products include sugar confectioneries, cereal-based snacks, packaged cakes and sachima, a traditional Chinese snack.



N.Y. Times Co. to repay Slim loan early

The New York Times Company plans to prepay in full the $250 million loan from Mexican billionaire Carlos Slim, the company announced. The company plans to make the payment on Aug. 15, 2011; the notes are due on Jan. 15, 2015.

The company took out the loan and instituted cost-cutting measures, including a suspension of dividends for family members, during the advertising recession in January 2009, a Wall Street Journal report noted.

Slim and members of his family currently hold 6.9% of the Times Company's Class A shares. That is one of the largest percentages held by anyone outside the founding Sulzberger family, according to Jim Romenesko's Media News blog.



News Corp. board called into question

Directors at News Corp. have been "unwilling or unable to stand up to the wishes of Rupert Murdoch and his family," a Financial Times report noted. The Murdochs control nearly 40% of the votes via a dual-class share structure, the article said.

Saudi Arabial Prince Al Waleed bin Talal, who controls 7% of the voting rights, told the FT, "this is the time for a loyal shareholder to stand by his friends and allies."

In the wake of the phone-hacking scandal, observers expect a change in corporate structure at News Corp., the article said. One shareholder lawsuit has been filed, and more are possible, the report noted.

Murdoch and his sons Lachlan and James serve on the board, and his daughter Elisabeth is expected to become a director upon completion of News Corp.'s purchase of her YV and film production company, Shine, the FT report said.

Meanwhile, News Corp. has dropped its bid to gain full control of British Sky Broadcasting Group Plc, Bloomberg reported. (Sources: Financial Times, July 13, 2011; Bloomberg, July 13, 2011.)



Family Business Magazine surveys U.S. business owners

Family Business Magazine is conducting a survey of U.S. family business owners (http://www.surveymonkey.com/s/BKY7YRW) in an effort to measure the scope of their diversity in ownership, leadership and management philosophies.

The deadline for completing the survey is August 15, 2011. You can find the survey by clicking the link below:

http://www.surveymonkey.com/s/BKY7YRW

To obtain the most accurate results, we request that only one member of the owning family (preferably the senior leader, or someone in an executive position) complete this survey. (Advisers: Please forward the link to your clients.)

The results of this confidential, online survey will be included in Family Business Agenda 2011 -- a special issue focusing on "The State of U.S. Family Businesses." This special edition will be published in late October.

Your answers and will be held in the strictest confidence; no identifying details will be linked to the responses.

Thank you for helping us to take a snapshot of U.S. family enterprise.



News Corp. scandal threatens Murdoch family empire


Fallout from the phone-hacking scandal at News Corp. may threaten the Murdoch family's $48 billion empire, recent news articles suggest.

The Financial Times reported that "as many as 4,000 celebrities, politicians, sports stars and ordinary members of the public had had their phones hacked."

According to an article in Crain's New York Business:

Analysts and observers believe that the fallout could bring down [News Corp. CEO Rupert] Murdoch and his son James Murdoch, who admitted ... that he had approved payments to phone-hacking victims....
The scandal has jeopardized the company' $12 billion purchase of the 61% of British pay-TV service BSKYB that News Corp. doesn't already own. The pending deal was orchestrated by James Murdoch, News Corp.'s CEO, International, and is seen as confirming the heir apparent's bona fides.

The FT article said:

The handover to James freed his father to concentrate on a new prize, his newly acquired Wall Street Journal -- a deal said to have rejuvenated [Rupert's] newspaper passions after unhappy digital flirtations. With this, his focus turned to a new enemy, the New York Times.... His older titles simply lost much of his attention.
One family counsellor claims members of News Corp.'s tight London team have let Mr. Murdoch down by trying to insulate him. If there was a cover up, "they were trying to cover it up from Rupert."

The FT report said that supporters of James Murdoch's siblings Lachlan and Elisabeth "agree with one leading shareholder that the saga ‘could be a big blow' to James's chances." Citing an anonymous source, the report said Rupert Murdoch had told the three children "that it was time to have ‘all hands on deck.'"

The FT article said Rebekah Brooks, the News Corp. executive and former News of the World executive at the center of the phone-hacking scandal, is "beloved" by the Murdoch family.

Her Murdoch charm offensive began with the children, says and adviser to News Corp.'s chairman.... 
Thus far the family has stood firmly by her. Rupert and James have named her as the right person to lead the company through the crisis even though critics say she is hopelessly compromised....
[News Corp.] insiders say standing by Ms. Brooks is akin to the family strapping itself to a time bomb. Rupert Murdoch does not like being told by others whom he may employ. Furthermore, the Murdochs recognise the demands for scalps would not stop with her and that while she remains she is a lightning conductor for others the patriarch holds even more dear.

(Sources: Financial Times, July 9/10, 2011; Crain's New York Business, July 10, 2011.)



Chicago produce distributor seeks to grow his company

Peter Testa, 58, the president of Chicago-based Testa Produce Inc., aims to build his wholesale food distribution company, which generates annual revenues of more than $70 million, into "a one-stop shop of produce, dairy, meat and dry goods for restaurants, hotels and institutions in Illinois and Wisconsin," a profile in the Chicago Tribune reported.

Testa is the largest family-operated produce wholesaler in the city, but it's clearly the underdog in a battle with titans like Sysco Corp. and U.S. Foodservice, which measure their sales in billions, not millions, of dollars.

Last spring, Testa relocated the business to a $20 million "green" building in Chicago's Stockyards neighborhood. He plans to seek LEED (Leadership in Energy and Environmental Design) Platinum certification for the building, the article said.

The company's roots date from 1912, when Testa's grandfather sold produce from a horse-drawn cart, the article said.

It was not a given that Testa, the middle of five children, would one day run the family business. But on a Friday in 1971, Testa graduated from New Trier West High School, and the following Monday went to work for his father, Steve, as a $75-a-week van driver for Dominick Testa & Sons, the company founded by his grandfather. Other drivers made $225 a week.

Testa got a second job as a bartender and in 1976 became a police officer in Morton Grove, Ill. He was on the Morton Grove police force for three years and continued to work for his father on his days off.

In 1991 a "huge" family fight prompted Peter to quit Dominick Testa & Sons, run by his father and uncle, and open Testa Produce at another stall in South Water Market. His brother and father, along with many of the customers, followed him. At the time, Dominick Testa's sales were $12.5 million.

Today, Testa's older brother and his 83-year-old father are vice presidents of the company, the article said. Testa's daughter, Stephanie -- who is the first family member to go to college and is expected to be her father's successor -- is distribution manager. Stephanie's husband, Todd Morgan, is a buyer; her younger brother, Steve, works in the warehouse and another brother, 11-year-old Tyler, helps out for $5 an hour, the article said. (Source: Chicago Tribune, July 11, 2011.)



Simon Property CEO gets 1 million shares in new agreement

The board of Simon Property Group approved a new employment agreement for company CEO David Simon that will give him a base salary of $1.25 million and 1 million shares, according to news reports that cited the company's recent filing with the Securities and Exchange Commission.

The Wall Street Journal reported:

The agreement is for at least eight years and includes a target cash bonus of 200% of his base salary that is based on attainable performance goals. In addition, Simon is also allowed to continue in the company's annual long-term incentive program that awards him one million in long-term performance units valued at $12 million at the beginning of the year, the filing said.

A Reuters report valued the retention bonus of 1 million shares at $120.3 million based on the share price on July 6, the date of the agreement. Simon's share of the long-term incentive program bonus is $12 million, according to Reuters.

The Reuters report noted:

Simon Property Group is the largest U.S. real estate investment trust. David Simon became CEO in 1995, when the market capitalization was $1.5 billion, according to the filing. As of July 6, when the board and its Compensation Committee approved the plan, the market capitalization of the Indianapolis-based company was more than $42 billion.

(Sources: Wall Street Journal, July 7, 2011; Reuters, July 7, 2011.)



News Corp. scandal puts James Murdoch in spotlight

The phone-hacking scandal at News Corp. that prompted the media giant to cease publication of News of the World has put James Murdoch, son and presumed successor of CEO Rupert Murdoch, in the spotlight.

The weekly tabloid is accused of intercepting voice mails from a wide range of people, including a 13-year-old murder victim.

The scandal has reached U.K. Prime Minister David Cameron, who had hired as his press chief Andy Coulson, a former News of the World editor who had resigned over the phone hacking. Coulson, who resigned from Cameron's staff in January, was arrested July 8 over the phone hacking, Bloomberg Businessweek reported.

The Wall Street Journal -- which is owned by News Corp. -- reported that James Murdoch has been playing "the role of crisis manager." The younger Murdoch was the one who announced the closing of News of the World and explained the decision on television, the Journal report said.

How he performs in containing the damage may help determine whether he one days succeeds his father, Rupert Murdoch, at the helm of the media empire.... [D]espite a recent promotion to deputy chief operating officer that makes him the company's No. 3 executive, his ascension to the top is not seen as assured.

The Journal article noted that James Murdoch became chairman and CEO of News Corp.'s international division, which includes News International, the U.K. unit where News of the World resided, in late 2007. Most of the alleged hacking had already occurred by then, but observers have criticized the company's response to the scandal, the report noted.

The Financial Times reported that in a speech to News International executives, James Murdoch said:

"The Company paid out-of-court settlements [to phone-hacking victims] approved by me. I now know that I did not have a complete picture when I did so. This was wrong and is a matter of serious regret."

James Murdoch is also being criticized for standing by former News of the World editor Rebekah Brooks, who is now chief executive of News International and, unlike other employees of the tabloid, will not lose her job when the paper is shuttered.

The scandal may threaten News Corp.'s attempt to take full control of U.K. satellite broadcaster British Sky Broadcasting, according to news reports. (Sources: Bloomberg Businessweek, July 8, 2011; Wall Street Journal, July 8, 2011; Financial Times, July 8, 2011.)



Pa. heir accused of theft from parents’ estate

Boyd C. Davis Jr., who once ran his family's Pennsylvania company with his brother, was arrested July 5 on charges of "massive theft" from his parents' estates, the Philadelphia Inquirer reported. Charges against the 70-year-old Davis include allegations of forgery and receiving stolen property from fraudulent transactions, the article said.

Davis allegedly used his power of attorney to misappropriate money from his parents' account or put up their properties as collateral, the Inquirer article said. His father, Boyd Davis Sr., died at 91 in 2007; his mother, Nelda Wynn Davis, died at 96 in August 2010.

... Davis had been at odds with his younger brother Brooke W. Davis Sr. and his sister, Jane Helmstaedter over the terms of their parents' wills, which appear to leave nothing to the latter two siblings.

About ten years ago, Brooke Davis had sued his brother, claiming he had financially ruined the family company, Davis Oil Co. of West Chester, Pa., which the two of them had run together after their father retired in 1981, the Inquirer article said. A judge ordered Boyd Davis Jr. to pay Brooke Davis $12.5 million in 2009 for "neglect ... which resulted in the demise ... of the value of the company," according to the Inquirer report.

Davis Oil Co., begun in the 19th century as a lumber business, began selling auto fuel and heating oil in 1909, the article said. Boyd Davis Sr. took over the fuel division in 1955 and grew it into a chain of gas stations and convenience stores. (Source: Philadelphia Inquirer, July 6, 2011.)



Belgian family brewer’s growth outpaces competitors’

Duvel Moortgat SA, a Belgian brewer founded by the Moortgat family in 1871, has doubled its sales in the past five years. The company, Belgium's second largest after the giant Anheuser-Busch InBev SA, increased net profit to 18.9 million euros ($27.5 million) from 14.9 million euros in 2010, and its share price has risen to about 74 euros from 16 euros in 2003, the Wall Street Journal reported. "The family still owns three-quarters of the shares and has declined to sell," the article said.

The company's signature brew is Duvel, which is sold in the U.S. The name means "devil."

Duvel lumbered along until the 1990s, when a new generation of family leadership decided to transform the business into a more modern company. In 1999, a new generation of family leaders, led by CEO Michel Moortgat, went on the Brussels stock exchange. Mr. Moortgat, who is still in charge, hired away marketing talent from Anheuser....

The company now owns six breweries: four in Belgium, one in the Czech Republic and one in the U.S., the article said. (Source: Wall Street Journal, July 6, 2011.)



N.Y. Times Co. sells part of its Red Sox stake

The New York Times Co. sold more than half of its 17% stake in the holding company of the Boston Red Sox baseball team to three separate buyers for $117 million in cash, the Wall Street Journal reported.

The holding company, Fenway Sports Group, owns the Red Sox and most of the cable network that airs the team's game, the article said. Times Co. didn't disclose the buyers, according to the report.

The Journal article said Times Co. began trying to sell its stake in the team in late 2008, "when steep declines in revenue at its core newspaper business were threatening the company's ability to manage its debt."

The report noted that more than a year ago, the company sold 50 of its then 750 units in the asset. The latest sale represents 390 of Times Co.'s 700 shares. The company said "it is exploring the sale of its remaining stake in whole or in parts," according to the Journal article. (Source: Wall Street Journal, July 2, 2011.)



TransUnion, part owned by Pritzkers, files for IPO

TransUnion, a credit-rating agency that is owned by Chicago's Pritzker family and private equity firm Madison Dearborn Partners, plans to sell up to $325 million in stock in an initial public offering, the Chicago Tribune reported.

The company said in a filing with the Securities and Exchange Commission that it would use the proceeds to reduce "a substantial amount of indebtedness," according to the Tribune report.

Madison Dearborn acquired a 51% stake in the company in June 2010, the article said.

The 11 heirs of Jay Pritzker, who died in 1999 after building a portfolio estimated at $15 billion, reached an agreement in late 2001 to divest the family's assets by 2011. It has taken Hyatt Hotels Corp. public, most recently. In March 2008, the family sold a majority stake in the Marmon Group to Berkshire Hathaway Inc. for $4.5 billion. And in 2006, the family sold Conwood, a smokeless tobacco company, for $3.5 billion.

According to the Tribune report, TransUnion's filing mentioned the Pritzkers' stake in the company as a risk factor.

"In the past, disputes have arisen among certain Pritzker family members, and among beneficiaries of the Pritzker family trusts and the trustees of such trusts, with respect to, among other things, the ownership, operation, governance, and management of certain Pritzker family business interests," it said.

(Souce: Chicago Tribune, July 5, 2011.)



Johnson Publishing sells stake to JPMorgan Chase unit

Johnson Publishing, the Chicago-based publisher of Ebony and Jet magazines, is selling a "substantial" minority stake in the company to JPMorgan Chase & Co.'s special investments group, a private equity unit, the Chicago Tribune reported.

Johnson Publishing has been a family business for nearly 70 years, the report noted. CEO Desiree Rogers told the Tribune, "We've never had a partner in the business before.. It's always been 100 percent family owned."

The Tribune report said the partnership will facilitate an initiative under Rogers, a non-family executive, "aimed at boosting revenues, stabilizing circulation and expanding the company's digital footprint." (Source: Chicago Tribune, July 6, 2011.)



Two Phila. family printing companies merge

Smith-Edwards-Dunlap Company and Graphic Arts Inc., two family-owned printing companies based in Philadelphia, have merged. Each company will continue to trade under its present name, the companies announced.

Both companies are owned and operated by third-generation family members. Smith-Edwards-Dunlap, established 1880, is owned by the Lobel family; Graphic Arts Inc., established 1928, is owned by the Koontz and Binder family.

Smith-Edwards-Dunlap Company, a sheetfed, web and digital printing firm, offers bindery capability, mailing and packaging operations, and typesetting and proofreading services. Graphic Arts Inc.'s expertise is in pharmaceutical printing, HIPPA requirements and inventory and fulfillment.



Family Business Publishing Company • 1845 Walnut Street • Suite 900 • Philadelphia, PA 19103 • (800) 637-4464