Warner-Lambert is preparing a lawsuit to end its agreement with Pfizer to jointly market the blockbuster anti-cholesterol drug Lipitor, alleging a breach of contract, a person familiar with the situation said. The Warner-Lambert board is scheduled to meet today to vote on a management recommendation to proceed with a lawsuit against Pfizer, the person said. Pfizer said last week that it will seek to remove Warner-Lambert's board as part of its $74 billion hostile bid.
Mobil and Exxon are prepared to sell more than 2,100 retail gas stations to win approval from federal regulators for their landmark merger, according to sources familiar with the matter and Oil Express, a newsletter in Virginia. In an Exxon memo obtained by Oil Express, the two companies sought bids from competitors for about 1,730 stations in the Northeast and 360 in California. Negotiators have been haggling over final terms for months.
Viacom asked the Federal Communications Commission to give it two years to shed stations to come into compliance with national ownership rules if its $41.3 billion purchase of CBS is approved. A single company is now barred by FCC rules from owning stations that reach more than 35 percent of TV households in the country. Viacom-CBS would reach about 41 percent and would have to sell 16 stations affiliated with the UPN Television Network to comply with the rules, the company said last week.
Cray Research is up for sale by owner SGI, a computer maker that bought its competitor three years ago. SGI is in talks with little-known Gores Technology Group to sell the onetime supercomputer giant that has struggled to grow amid declining U.S. research and defense budgets. Gores offered $100 million but has since lowered its offer. The talks come as Cray develops a new computer, the SV2, with financial support from the National Security Agency.
Rite Aid's debt ratings were cut by Moody's Investor's Service after the drugstore chain's auditor quit and the Securities and Exchange Commission began a formal investigation. The move affects about $9.4 billion of debt and bank loans. Moody's cut its senior debt rating two notches to "B1," from "Ba2," putting it further into junk-bond territory. The rating service cited Rite Aid's "high adjusted leverage, modest financial flexibility, challenged execution capabilities and uncertainty about future strategy."
Excite At Home, which provides Internet access through cable-television lines to about 1 million homes, said it will issue a tracking stock for the Excite Web site business it acquired six months ago. The approval of a tracking stock would enable America Online, which has 19 million subscribers, to negotiate with Excite At Home for access to its network.
The Alaska Supreme Court issued a pair of opinions arising from the 1989 Exxon Valdez oil spill that allow local governments to pursue further damages from Exxon. The court will allow seven local governments to pursue compensation from Exxon for the services its municipal workers could not provide because they were diverted to help control the spill. David Oesting, a lawyer representing communities and others suing Exxon, estimated that the seven municipalities could be entitled to as much as $50 million.
Californians paid $1.3 billion more for gasoline this year than they would have if they lived in states where there's a competitive market for oil, but oil companies are playing within the law in their pricing, said state Attorney General Bill Lockyer. Instead, the inflated prices that forced residents in some spots to pay more than $2 a gallon in April when Lockyer started his probe are the result of inadequate competition, California's stiff clean-air laws and the state's slightly higher gasoline taxes.
Nike said it will sell custom-designed shoes to U.S. customers over the Internet. Consumers can place orders for customized Air Turbulence running shoes and Air Famished cross-training shoes at the Nike.com Web site under the NikeID program, which allows customers to select colors and add an eight-character identification, such as a name or number, to their shoes.
Qwest Communications, the long-distance phone company that is merging with local provider US West, said it will build a coast-to-coast fiber-optic network so that it can offer new services while holding down costs. The network, which will link with Qwest's current 18,500-mile fiber-optic network, could cut operational costs by as much as 70 percent, the company said.
T-bill rates were mixed. The discount rate on three-month Treasury bills auctioned yesterday fell to 5.105 percent, from 5.115 percent last week. Rates on six-month bills rose to 5.235 percent from 5.215 percent. The actual return to investors is 5.256 percent for three-month bills, with a $10,000 bill selling for $9,872.40, and 5.466 percent for a six-month bill selling for $9,736.80. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, rose to 5.56 percent last week from 5.50 percent the previous week.
Nearly a quarter of about 16,000 U.S. companies surveyed will want to add employees in the first quarter of next year, but they may have trouble finding skilled workers, according to Manpower, an employment staffing firm. "The type of worker being sought in the new year increasingly is more skilled or higher educated than in the past. The pool of such people is running dry," said Jeffrey Joerres, Manpower's president and chief executive.
Bacardi, the maker of Bacardi rums and Bombay gin, has scrapped plans to sell $1 billion worth of stock to the public. The Bermuda-based beverage company said it does not have the "desired consensus of our shareholders" to proceed with a stock offering. Bacardi is controlled by about 540 descendants of its founder--Don Facundo Bacardi--who reportedly would need to approve any offering.
Vodafone AirTouch has hired three investment banks to arrange a $34 billion syndicated loan, the world's biggest, to finance its hostile bid for Mannesmann, the Financial Times reported, without citing sources. Goldman Sachs Group, Warburg Dillon Read, and Donaldson Lufkin & Jenrette were hired to be lead arrangers of the loan and will bring in commercial banks to share the debt.
Celera Genomics of Rockville confirmed that it has agreed to a five-year deal with Pfizer to develop drugs based on Celera's sequencing of the human genome. Pfizer will be given, on a nonexclusive basis, isolated full-length genes to use in the development of small-molecule therapeutic products. Pfizer will be given access to five Celera databases until 2005, the company said.
America Online of Dulles announced a five-year alliance with Redwood City, Calif.-based Electronic Arts to develop online games. Electronic Arts, the world's leading make of video games, which markets such classics as SimCity and Need for Speed, guaranteed $81 million to AOL and will become the exclusive provider of games to the Internet service provider. AOL also agreed to purchase 10 percent of stock in a newly established spinoff of EA that will focus on Web content.
Aetna U.S. Healthcare is building a $27 million, 190,000-square-foot regional headquarters in Largo. The company, which merged with Prudential HealthCare in August and NYLCare Health Plans of Mid Atlantic last year, said it is consolidating its sales, marketing and patient management for the District and surrounding five-state region, where 2 million of its 29 million clients live. The new building, which will open in July, will house 850 existing employees and about 250 more later.