Business News short takes
Posted on Thursday, August 3, 2006
Saks sells Parisian stores to Belk
BIRMINGHAM, Ala. — Saks Inc. said Wednesday it has agreed to sell its Parisian specialty department store chain to Belk Inc. for $ 285 million in cash, a move that will allow the high-end retailer to focus on its core luxury business.
The Parisian sale is the latest asset sale for Saks, which has been shedding its mid-brow regional department store chains over the past year. Saks in January said it was exploring strategic options for Parisian, which operates department stores in nine states in the Southeast and Midwest, and had revenue of about $ 723 million last year.
Parisian’s Little Rock store is scheduled to open this fall in the new Pleasant Ridge Town Center, an open-air center under construction at Cantrell and Pleasant Ridge roads in west Little Rock. That center will be about 300, 000 square feet.
A Parisian will be one of the anchor stores of the Pinnacle Hills Promenade in Rogers when it opens in October.
Under terms of the deal, Belk will acquire assets comprising real estate, operating leases and inventory from 38 Parisian stores, along with a headquarters building and a distribution center, both located in Alabama.
Belk is the nation’s largest privately owned department store operator with 277 stores in 16 Southeastern states.
After divesting Parisian, Saks will be left with Saks Fifth Avenue Enterprises comprising the flagship Saks Fifth Avenue chain and outlet stores. It will also still retain Club Libby Lu, a specialty retail chain.
Belk operates stores in Arkansas in Conway, Hot Springs, Paragould, Rogers and Stuttgart, according to the company’s Web site. Yukos, mystery investor talk buyout
MOSCOW — A day after a Moscow judge declared OAO Yukos bankrupt, the company’s liquidator said Wednesday a mystery investor was in talks to buy what was once Russia’s biggest oil producer and pay off Yukos’ debts.
Analysts, however, said that Yukos’ core shareholders were unlikely to agree to a deal, and expect the company to be carved up in its entirety among state oil enterprises.
Last week Yukos’ board chairman Viktor Gerashchenko said he was talking with an investor who was prepared to pay off the company’s debts and buy out its core shareholder GML — the vehicle through which Yukos’ jailed billionaire founder Mikhail Khodorkovsky once controlled the company.
“Such negotiations are under way,” Yukos bankruptcy supervisor Eduard Rebgun told the Ekho Moskvy radio station Wednesday. “They have the right to do this.”
Rebgun said Gerashchenko had not told him who the talks were with, however, and GML director Tim Osborne said he had no information about the negotiations.
The decision to begin the liquidation of Yukos has been widely seen as the culmination of a three-year campaign by President Vladimir Putin’s Kremlin to punish Khodorkovsky’s financial and political clout and regain control of the oil sector. It included trials of other Yukos officials and multibillion-dollar tax claims against the company.
Yukos’ biggest production was sold to state oil company OAO Rosneft in a disputed auction against its back-tax debts in December 2004.
Rosneft, together with the state gas monopoly OAO Gazprom, are seen as the likeliest buyers of Yukos’ assets in the pending liquidation. Rosneft is already Yukos’ second biggest creditor after the Federal Tax Service.
While Rebgun has valued Yukos assets at $ 17. 7 billion and its liabilities at $ 18. 3 billion, the company’s property must be separately evaluated by an auditor ahead of any auction. MTV to buy Y 2 M for college market
Viacom Inc. ’s MTV cable television network agreed to buy Y 2 M: Youth Media & Marketing Networks to expand the reach of its 24-hour college network MtvU to students with Y 2 M’s 450 online campus newspapers.
Terms weren’t disclosed, and MTV expects the deal to close in the third quarter.
The purchase will help MtvU reach 5 million college students online, New York-based MTV said in a statement. Closely held Y 2 M is the parent of College Publisher, the nation’s largest college media network. Court allows Eurotunnel bankruptcy
PARIS — A Paris court accepted Eurotunnel’s request for bankruptcy protection on Wednesday after talks failed on restructuring its $ 11. 6 billion debt.
The decision by the Paris Commercial Court gives the Anglo-French company that operates a tunnel linking England and France beneath the English Channel a six-month stay from creditors, allowing it to return to the negotiating table.
The tunnel operator filed the request for protection from creditors last month after it was unable to reach a deal with bondholders on debt restructuring.
Passenger and freight rail traffic through the tunnel has not been disrupted by the financial problems.
Eurotunnel and its main creditors had agreed on a restructuring plan in May, but the deal was rejected by holders of Eurotunnel bonds who said it didn’t give them enough back on their investments.
Eurotunnel chairman and CEO Jacques Gounon expressed his “great satisfaction” at the decision, saying he was “convinced” the company would reach an agreement with shareholders during the six-month stay.
Eurotunnel’s troubles date back to the project’s start in the 1980 s. The costs of digging the 30-mile undersea rail tunnel between Britain and France were underestimated, and traffic predictions proved optimistic. Krystal seeks buyer for restaurants
CHATTANOOGA, Tenn. — The Krystal Co., the oldest fastfood chain in the South and the second oldest in the U. S., is trying to find a buyer for the restaurant company.
Chattanooga-based Krystal has hired Credit-Suisse First Boston Group to help market the 74-year-old privately held company to potential buyers, officials said Tuesday.
Company spokesman Brian Cooley said in a statement Krystal “is currently providing information” to interested parties.
“We are still in the preliminary stages of the process and cannot comment further at this time,” he said.
The chain has been owned for the past decade by a group of Tennessee investors, who took the company private in a $ 108 million buyout in 1997 but now want to capitalize on a strong market for restaurants. There have been at least 27 acquisitions of restaurant businesses by private equity firms since the beginning of 2005.
Founded in 1932, Krystal was begun by R. B. Davenport Jr. and J. Glenn Sherrill, whose families continued to own the business until it went public in 1992.
Coca-Cola Enterprises Vice President Phillip H. Sanford bought Krystal in 1997 with the help of former Coca-Cola Enterprises Chairman Summerfield Johnston Jr., the Probasco and Ingram families and other investors.
Sanford left the company in August 2003, and Krystal since has been headed by Fred Exum, who previously managed Wendy’s franchise restaurants across the country.
Krystal has restaurants in Alabama, Arkansas, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, Tennessee, Texas and Virginia.
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