Business Briefs

Reported by Star-Bulletin staff & wire

Monday, April 12, 1999

Starwood confirms casino sale talks

NEW YORK -- Upscale resort operator Starwood Hotels & Resorts Worldwide Inc. confirmed the premise of recent rumors today by saying it was in talks to sell its gambling business, including the Caesars casino line. The company did not disclose details of the negotiations, including the other party involved or the potential price tag on any deal.

Last week, shares of Starwood and casino giant Park Place Entertainment Corp. rose on rumors that Park Place would acquire an interest in Starwood. Reports of the talks first surfaced in January. Estimates of a sale price ranged from about $2.5 billion to $3 billion.

Competition grounds air-fare increase

CHICAGO -- An attempt by some major U.S. airlines to raise fares fizzled over the weekend when others, including AMR Corp.'s American Airlines and Northwest Airlines Corp., failed to match the increase.

But some increases on ticket prices outside the airlines' normal fare structure were still in place today, industry sources said. Also, rising fuel prices and slowing revenue growth caused by a drop in full-fare business travel is likely to force carriers to try again soon for an increase, analysts said.

Continental Airlines Inc. last week tried to spark a fare hike by raising leisure fares 3 percent and business fares 1 percent. UAL Corp.'s United Airlines and Delta Air Lines Inc. matched the increase.

In other news . . .

ARLINGTON, Va. -- Gannett Co., the largest U.S. newspaper publisher, said first-quarter profit from operations rose 12 percent on strong advertising at its newspapers. The publisher of USA Today, the Honolulu Advertiser and 72 other daily newspapers said net income rose to $178.9 million, or 64 cents a share, from profit from operations of $159.2 million, or 56 cents, in the year-earlier period.

COUDERSPORT, Pa. -- Adelphia Communications Corp. is buying the cable television systems owned by Harron Communications Corp. for $1.17 billion in a deal solidifying its ranking as the fourth biggest U.S. cable TV operator.

Of Mutual Concern

News for mutual fund investors

Permanent Portfolio must repay investors

PETALUMA, Calif. -- A Securities and Exchange Commission chief administrative judge has ordered a mutual fund company to repay investors $2.8 million, ruling that the company charged investors for expenses it should have paid itself.

Terence Coxon of Cotati, Calif., and Alan Sergy of Novato, Calif., are the principals of World Money Managers, the advisory company to the Permanent Portfolio Family of Funds Inc.

Both have been slapped with a three-month suspension and ordered to pay an additional $140,000 in civil penalties. According to the SEC, Coxon and Sergy used the fund's marketing plan to improperly charge shareholders for operating expenses for which World Money Managers, as the fund's adviser, was responsible. Coxon denied any wrongdoing and said the company will appeal the ruling.

Funds' assets grewto $8.2 trillion in 1998

LONDON -- The world's top 35 fund managers' assets grew by a third in 1998 to $8.2 trillion, rivaling U.S. gross domestic product in size. Funds were boosted by mergers and acquisitions and rising financial markets, a British pension adviser said.

"Companies are acquiring capability and distribution," said Julia Hobart, head of manager advisory services at London-based William M. Mercer, presenting the consultant's European Pension Fund Managers Guide for the 12 months to end of June. Of 173 fund managers monitored by Mercer, 39 either bought a rival or merged. The top five asset managers, Fidelity International, Barclays Global Investors, State Street Global Advisors, Capital International and CDC Asset Management Europe, have funds worth $2.5 trillion.