Business Digest

By Compiled from Times wires

© St. Petersburg Times, published November 7, 2000

MUSIC COMPANY RESTRUCTURES: Less than a week after announcing a radical alliance with Napster Inc., entertainment giant Bertelsmann said it plans to oust its two top music executives and overhaul its entire record division. BMG chairman Michael Dornemann and BMG chief executive Strauss Zelnick will leave the music group within months. They will be replaced by Rudi Gassner, a BMG veteran who quit in January after a series of disputes with Zelnick and Dornemann. The German conglomerate also plans to strip from Bertelsmann Music Group its manufacturing, direct marketing, digital distribution and record club operations. The move is a signal that the record company -- home to such pop stars as Britney Spears and 'N Sync -- intends to move aggressively online.

TECH BUYOUT: Broadcom Corp. has agreed to acquire chipmaker SiByte Inc., for about $2.1-billion in stock. Broadcom is a communications chipmaker whose integrated circuits allow huge amounts of data to move through broadband computer connections. SiByte is developing microprocessors used in gear that moves and directs data on large and small networks.

HERSHEY TO BUY CANDY BUSINESSES: Hershey Foods Corp. agreed to buy Nabisco Holdings Corp.'s breath-mints and chewing-gum businesses for $135-million. The unit includes Ice Breakers and Breath Savers mints, and chewing gums Care Free, Stick Free, Bubble Yum and Fruit Stripe. The sale requires approval by the Federal Trade Commission, Hershey said.

BRITISH AIRWAYS TO SELL LOW-FARE UNIT: British Airways PLC said it plans to sell Go, its profitable cut-price subsidiary launched just two years ago. BA set up Go when smaller rivals began nibbling away at its market share by offering cheaper flights across much of Europe. Rod Eddington, British Airways' chief executive, said Go has made a profit every month this year. BA announced the sale as it reported 400 percent growth in its second-quarter pretax income. This income growth indicated that BA's new strategy of trying to attract more business and first-class passengers has started to pay off.

PUBLIX DETAILS ONLINE SHOPPING: Publix Super Markets is placing its first fulfillment center for online grocery shopping and delivery in Pompano Beach. The 140,000-square-foot facility will serve customers within a 25-mile radius, which includes cities in and surrounding Broward County. Construction is expected to be completed by April. Publix last month announced plans to offer online shopping through its PublixDirect subsidiary.

OFFICE DEPOT ISSUES WARNING: Office Depot Inc. said fourth-quarter profit may be lower than expected because of sluggish computer sales, more competition and higher warehouse costs in North America. The Delray Beach company isn't providing a specific forecast, but it said last week in a regulatory filing that sales haven't met expectations, and it may have a fourth-quarter loss or "much lower earnings" because of a charge for possibly closing or moving some stores. Shares of Office Depot fell 69 cents to $6.94.

FURNITURE.COM FOLDS: Online retailer Furniture.com Inc. has folded, saying it was unable to secure enough capital to continue operations. The decision comes just four months after Furniture.com withdrew an initial public offering and slashed its work force by half. The Framingham, Mass., company said it laid off 76 of its 88 employees.

TREASURY AUCTION: Interest rates on short-term Treasury securities rose in Monday's auction. The Treasury Department sold $11-billion in three-month bills at a discount rate of 6.220 percent, up from 6.180 percent last week. An additional $10-billion was sold in six-month bills at a rate of 6.105 percent, up from 6.075 percent. The new discount rates understate the actual return to investors: 6.406 percent for three-month bills and 6.386 percent for a six-month bill. In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills rose to 6.11 percent last week from 6.01 percent the previous week.

SOUTHWEST, UNION REACH TENTATIVE DEAL: Southwest Air lines Co. and a union representing ramp workers and other employ ees reached a tentative contract that could avert labor unrest over the busy holiday season. Negotiators for the Transport Workers Union, representing 5,300 ground workers, accepted the plan, which requires approval by the union's executive board before employees vote on it. The union said it would announce the terms of the proposed contract after it had been reviewed by the union's executive board.

KFORCE BUYS BACK SHARES: Showing confidence that it can rebound from its problems, Kforce.com Inc. is aggressively buying up to 10-million shares of its own stock, or about 24 percent of the outstanding shares. The Tampa staffing company will spend between $47.5-million and $55-million on the purchases, financing them through a new line of credit it has secured with Bank of America. Kforce's stock has struggled since the company moved online. The stock closed at $4.97, up 50 cents.

IMRGLOBAL NAMES CFO: IMRglobal Corp. named Michael J. Dean, 40, as its chief financial officer, effective immediately. Dean has served several duties for the Clearwater company since 1994, including controller and vice president of finance. He replaces Robert Molsick, who IMRglobal said has accepted another position with an entrepreneurial organization.

OIL INDUSTRY MERGER: Amerada Hess Corp. said it has agreed to buy Lasmo PLC, the U.K. oil exploration and production group, for $5-billion in cash, shares and assumed debt. Like larger rivals such as Exxon Mobil Corp. and BP Amoco PLC, Hess wants to expand oil production, which has provided higher profits than refining oil into fuel. Amerada Hess is the eighth-largest U.S. oil and natural gas company.

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