Washington Mutual Expands
Washington Mutual, the nation's largest savings and loan, is expanding into the credit card business by buying Providian Financial. Seattle-based Washington Mutual initially valued the stock-and-cash deal at $6.45 billion, or $18.71 per share -- 4 percent above Providian's closing price last week.
Washington Mutual had been preparing to launch its own credit card before concluding it made more sense to buy the expertise and existing customers of a major lender such as San Francisco-based Providian, which ranks among the 10 largest issuers. With most of its profits tied to home lending, Washington Mutual expects credit cards to diversify its revenue as it strives to become more like a bank than a traditional savings and loan.
Wife of Enron CFO Leaves Prison
The wife of former Enron finance chief Andrew S. Fastow left a federal prison in Houston early Monday to serve the last month of her one-year sentence for a tax crime in a halfway house, said one of her lawyers, Mike DeGeurin. Lea W. Fastow, left, is slated to be released from the halfway house July 10. She pleaded guilty in 2004 to a misdemeanor tax crime for failing to report on her and her husband's joint tax returns ill-gotten gains from kickbacks they pocketed from his myriad illegal dealings at Houston-based Enron.
Bristol-Myers Settles Inquiry
Bristol-Myers Squibb may pay close to $300 million to end a criminal probe by federal prosecutors. The fifth-largest U.S. drugmaker also may appoint board member James Robinson III, the former American Express chief, as chairman under the settlement. The proposed settlement would end a probe by U.S. prosecutors in New Jersey into "channel stuffing," selling excess inventory to wholesalers to meet sales goals. Bristol-Myers accepted a "deferred prosecution" arrangement that requires a series of changes.
Scrushy Jury Remains Deadlocked
Deadlocked jurors in the corporate fraud trial of HealthSouth founder and fired chief executive Richard M. Scrushy deliberated an 11th day without reaching a verdict. With the talks bumping into prepaid vacations and other commitments, a court official said the jury was scheduled to deliberate only one more day this week despite U.S. District Judge Karon O. Bowdre urging them to reach a unanimous decision and avoid a mistrial.
Prologis to Buys Catellus
Prologis agreed to buy Catellus Development for $4.9 billion in cash and stock to almost double its holdings of land for warehouse development. The deal includes the Aurora, Colo.-based real estate investment trust's assumption of $1.3 billion of San Francisco-based Catellus's debt. It will create the world's largest network of distribution centers with more than 350 million square feet of space, the two companies said in a joint statement.
Lawsuit Filed Over New Tire Rules
Bridgestone, Goodyear Tire & Rubber and consumer group Public Citizen asked a U.S. appeals court to toss out federal tire-safety standards, saying the rules give motorists "a false sense of security." The National Highway Traffic Safety Administration issued rules in April that mandate a yellow dashboard light to warn motorists if at least one tire is 25 percent underinflated.
UAW Members Back Visteon Plan
United Auto Workers members approved by an 88.7 percent majority a plan to restructure and revive auto parts supplier Visteon. Ford would reacquire 24 plants and other facilities in the United States and Mexico and pay more than $1 billion to help Visteon avoid bankruptcy. Ford said the deal could eventually save it millions of dollars on parts. The UAW represents about 17,400 workers at 15 Visteon facilities.
Disney Ex-Directors' Suit Upheld
Former Walt Disney directors Roy E. Disney and Stanley P. Gold can proceed with a lawsuit that claims the company's board misled investors about its search for a successor to chief executive Michael D. Eisner, a judge ruled, rejecting a company request to throw out the suit challenging the board vote that elevated President Robert Iger to Eisner's post. The case will be scheduled for trial in August.
T-bill rates were mixed. The discount rate on three-month bills rose to 2.965 percent from 2.935 percent last week. Rates on six-month bills fell to 3.06 percent from 3.08 percent. The actual return to investors is 3.029 percent for three-month bills, with a $10,000 bill selling for $9,925.05, and 3.151 percent for a six-month bill selling for $9,845.30. Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for changing adjustable-rate mortgages, fell to 3.28 percent from 3.32 percent last week.
Compiled from staff and news service reports.