The U.S. Treasury this year will launch its first-ever cash buyback of government debt and snap up as much as $30 billion in high-yielding securities to save money, Treasury Secretary Lawrence H. Summers said. The buyback--aimed at issues paying as much as 13 7/8 percent interest, compared with a coupon rate of 6 1/8 on the most recently sold 30-year bonds--will begin soon, with the Treasury conducting several purchases during the first half of the year. The total amount bought back will depend on investor willingness to sell the securities, and many investors might decline to dispose of such a secure source of income.
Warner-Lambert said it will hold merger talks with hostile suitor Pfizer, despite its November decision to be acquired by American Home Products. Either combination would create the world's largest drugmaker. Because Pfizer's stock price has been rising and American Home's has been falling, Pfizer's offer is now worth about $77 billion and American Home's about $57 billion. The deal between American Home and Warner-Lambert called for either company to pay the other $2 billion if it wanted to walk away from the arrangement.
AT&T has asked federal regulators for an additional 18 months after completing its purchase of MediaOne Group to comply with cable television ownership limits, if the combined company violates the rules. AT&T, the biggest U.S. cable TV operator, is seeking Federal Communications Commission approval for its $61 billion purchase of MediaOne. The combined company's ability to influence programming decisions of Time Warner Entertainment, a MediaOne-Time Warner partnership, is a crucial issue in the FCC review. Under FCC rules, Time Warner's cable customers will be considered "owned" by AT&T unless the company proves it won't have influence over programming. If AT&T fails to make its case, the agency could require the company to shed customers before clearing the transaction.
Koch Industries was hit with $35 million in fines and penalties as part of a settlement with the Environmental Protection Agency over contamination of lakes and streams in six states. Koch Pipeline said pipeline leaks had been reduced by 90 percent since 1990 and when leaks occur the company is committed "to clean them up quickly and completely."
HMOs that enroll senior citizens get billions of dollars too much from Medicare because their fees are based on overblown cost estimates, government investigators say. Medicare administrator Nancy-Ann DeParle said in a letter responding to the report by the Department of Health and Human Services that President Clinton has proposed legislation to change the way HMO fees are calculated, eliminating the problem.
Dayton Hudson said it is changing its name to Target Corp. to reflect the large role that Target stores play in its business. The fourth-biggest U.S. retailer said it remains committed to operating its 267 Mervyn's and 64 Dayton's, Hudson's and Marshall Field's department stores.
UAL, faced with rising fuel costs and likely wage increases for pilots and other workers at its United Airlines unit, said its earnings will fall short of analysts' expectations. The company said it expected earnings of $7 to $9 a share this year on a fully distributed basis, which takes into account its employee stock ownership plan. Analysts on average had predicted earnings of $9.82 a share on that basis, according to First Call/Thomson Financial.
A teddy bear company and a toy retailer are recalling about 15,500 miniature-skateboard key chains because their wheels may come off, posing a choking risk to young children. The key chains were attached to Z.Z. Jamboarder teddy bears, which were produced by Vermont Teddy Bear Co. The toy bears were sold nationwide by Zany Brainy through its stores, catalogue and Web site. The teddy bear has a tag under its left arm that reads "Z.Z. Jamboarder" on one side and "Limited Edition 1999" on the other. The key chain is about 4 inches long and has red wheels and an emblem of a bear head in a red circle. Consumers were advised to take the key chains away from young children and return them to any Zany Brainy store to receive an animal toy. The bear and key chain can also be returned for a refund. For more information, consumers can call Vermont Teddy Bear Co. at 1-877-293-2327.
Comcast will open a 90,000-square-foot operations center in Silver Spring today, adding 250 new technology-related jobs to Montgomery County. The Philadelphia-based entertainment and telecommunications firm said the facility will be a call center for its 350,000 customers in Alexandria and Prince George's and Prince William counties. A TV production studio and a training facility will also be a part of the center.
McCormick, the Sparks, Md.-based worldwide spicemaker, said it is negotiating with the Federal Trade Commission to settle FTC claims that it violated price-discrimination rules in three contracts with grocery chains. While disagreeing with the FTC's conclusions, the company said it decided to settle the claims as long as the settlement won't impede its ability to compete in the future.
Time-Life said it will lay off about 50 editorial employees in the Alexandria headquarters of its Time-Life Books unit. Time-Life Books employs about 500 people. Laid-off employees will receive a severance package and have been invited to apply for other positions within Time Warner.
Washington Post Co. directors approved an increase in the common stock dividend to $5.40 a share from $5.20. The company also was authorized to acquire up to 500,000 shares of its Class B common stock, although no ceiling price or a time limit for the purchases were announced. Last month, The Post completed the repurchase of 666,106 shares of Class B stock, at $575 a share, an offering that was oversubscribed.
Marc Teren, former chief executive of Washingtonpost.Newsweek Interactive, The Washington Post Co.'s Internet subsidiary, has been appointed chief executive of Cahners Business Information in New York, a subsidiary of the Reed Elsevier PLC publishing group. Cahners operates 140 Web sites as well as Variety and more than 125 other business-sector magazines. Teren has been replaced by Christopher M. Schroeder, WPNI president. In another personnel shift, Christopher Ma, senior vice president of WPNI and a former deputy editor of U.S. News & World Report, had previously been named a vice president of The Washington Post, focusing on business development and acquisitions.