BUSINESS BRIEFS
Longs favors bid from CVS over Walgreen offer
Associated Press
Longs Drug Stores Corp., the California retailer that received a $75-a-share offer from Walgreen Co., said it recommends shareholders accept CVS Caremark Corp.'s month-old $71.50-a-share bid.
Walnut Creek, Calif.-based Longs confirmed the $3 billion Walgreen offer and said yesterday it will consider the bid. Walgreen of Deerfield, Ill., the largest U.S. pharmacy chain, offered to buy Longs on Friday, one month after CVS disclosed its offer.
Walgreen's bid puts pressure on CVS to either increase its price or risk losing a chance to add drugstores in two of the fastest-growing U.S. states, Nevada and Arizona. Longs, which has 521 stores, also operates in California and Hawai'i.
The Walgreen bid may involve "some complexities associated with getting the transaction completed on a timely basis," said Matt Kaufler, a fund manager at Rochester, N.Y.-based Clover Capital Management Inc., which oversees $2.8 billion, including more than 440,000 CVS shares. "They just don't think it's worth the effort and the risk for $3.50-a-share more."
CVS yesterday extended the deadline for its offer to midnight New York time Oct. 15.
SHERATON LOUNGES RE-CREATED IN PARK
NEW YORK — Frits van Paasschen, president and chief executive of Starwood Hotels & Resorts Worldwide Inc., wants New Yorkers to go to work in Central Park today.
Over 34,000 square feet of the park, Starwood plans to re-create the high-tech lounges it's introducing in the lobbies of Sheraton hotels and resorts. The company also is offering free Wi-Fi to the public through the rest of September in the park's famous Sheep Meadow.
The new lounges — with free Internet access, webcams, televisions, daily newspapers and snacks — are designed to lure business travelers and vacationers to Sheraton properties.
The lounges — whose sleek design contrasts with their name, "The Link (at) Sheraton experienced with Microsoft" — are part of a $4 billion effort to revitalize the Sheraton brand that includes $1.3 billion in renovations to its guest rooms, bathrooms and lobbies. By the end of 2008, the company expects to have "Links" in 300 lobbies, or about three-quarters of Sheraton brand hotels.
ELECTRONIC ARTS DROPS BUYOUT BID
NEW YORK — Video game publisher Electronic Arts Inc. said yesterday it ended talks to buy smaller rival Take-Two Interactive Software Inc., best known for the "Grand Theft Auto" series of games.
EA, the publisher of games such as "Madden NFL 09" and "Spore," said it decided not to make an offer to buy Take-Two.
Redwood City, Calif.-based EA had signed a nondisclosure agreement with Take-Two in August after letting a deadline for a $2 billion tender offer to buy the company expire.
ALITALIA LAYOFFS, WAGE CUTS LIKELY
ROME — Italy's government held emergency talks with unions and investors yesterday over a plan to save Alitalia, as the bankrupt airline risks having to ground flights for lack of fuel.
The rescue plan would have investors buying profitable assets and investing $1.4 billion. But the plan also envisages wage cuts and layoffs opposed by the unions. Among the sticking points in the talks are new contracts, salary cuts and layoffs that might run to 5,000, out of the airline's 20,000-strong workforce.
SECOND VACATION COMPANY FAILS
LONDON — A second British vacation company has gone bust, the country's aviation regulator said yesterday, the same week the U.K.'s No. 3 tour operator collapsed.
XL Leisure Group PLC went into liquidation Friday, leaving around 50,000 of its customers stranded abroad, and the Civil Aviation Authority said it had so far managed to arrange flights home for a little less than half of them. A second tour operator, K & S Travel, ceased trading Saturday, the authority said, affecting around 150 people in the Turkish coastal town of Bodrum.
