In the Region Warburg Pincus buys 6% stake in...

BUSINESS DIGEST

August 31, 2002

In the Region

Warburg Pincus buys 6% stake in Manugistics Group

Warburg Pincus LLC reported yesterday acquiring a 6 percent stake in Rockville-based Manugistics Group Inc., a business software maker whose shares have declined 81 percent this year.

The New York-based private equity investment firm and affiliates bought about 4.2 million shares of Manugistics for $14.5 million, or an average of $3.48 a share, according to a shareholder filing with the Securities and Exchange Commission.

Warburg Pincus most recently purchased Manugistics shares for $2.88 to $4.11 each between July 29 and Aug. 29, the filing said.

Elsewhere

Winnick is focus of congressional investigation

Congressional investigators are examining whether Global Crossing Ltd.'s Chairman Gary Winnick acted to inflate the telecom's finances before selling $734 million in stock before the company filed for bankruptcy protection in January.

Internal e-mails, minutes of Global Crossing's board meetings and interviews with a cooperating former senior executive have raised investigators' "suspicions about possible insider trading" by Winnick and other executives, said Ken Johnson, spokesman for the House Energy and Commerce Committee.

The committee, which has been investigating Global Crossing since February, has so far been frustrated in its efforts to interview Winnick about the transactions, Johnson said. Winnick's lawyers are scheduled to meet with committee aides Tuesday to arrange an interview with the billionaire executive and company founder.

United attendants score proposed cuts

United Airlines flight attendants yesterday lambasted the carrier's plan to slash labor costs by 15 percent as exorbitant, and joined other unions in urging it to name a new chief executive to hasten financial-recovery efforts.

The Association of Flight Attendants, representing 26,000 United employees, followed the influential pilots' union in criticizing the airline's proposal to knock $1.5 billion off annual labor costs for the next six years as part of a restructuring.

But like the pilots, the flight attendants did not rule out agreeing to concessions - particularly if the airline moves quickly to replace interim CEO Jack Creighton with a permanent chief executive.

Creighton has set a Sept. 16 deadline for the unions to reach agreements on deep cuts needed to persuade the government to approve a federal loan guarantee, without which he says the airline faces a Chapter 11 bankruptcy filing.

Judge OKs $25 million to Enron from Dynegy

A federal bankruptcy judge has approved Enron Corp.'s $25 million settlement of a lawsuit it filed against rival Dynegy Inc. for backing out of a November merger.

Judge Arthur Gonzalez, who presides over Enron's bankruptcy case, said the settlement is in the best interests of Enron and its creditors.

Enron sued Dynegy for $10 billion on Dec. 2, the same day Enron sought bankruptcy-law protection. Enron alleged that Dynegy withdrew from the $23 billion proposed merger as part of a plan to wreck the ailing Houston energy trader.

Under the settlement, Dynegy agreed to pay Enron $25 million to resolve the dispute.

Cost-cutter from GE named CFO at Amazon

Thomas J. Szkutak, a General Electric Co. executive whose division is being merged in a reorganization, has been hired as chief financial officer of Amazon.com, the online retailer announced yesterday.

Szkutak's talent for cost-cutting was the main reason for his selection as senior vice president and CFO, said Amazon founder and chief executive Jeff Bezos.

Szkutak succeeds Warren C. Jenson, who left Amazon this summer. Jenson now is CFO at Electronic Arts Inc., the nation's largest video game publisher.

Ball is buying German beverage container maker

Packaging maker Ball Corp. is buying Europe's second-largest beverage container maker, Germany's Schmalbach-Lubeca, for about $882.7 million in cash.

The deal, announced yesterday, is subject to regulatory approval but is expected to be completed late this year or early next year.

Schmalbach-Lubeca, headquartered in Ratingen, Germany, operates 12 plants and expects sales of about $1 billion this year. It employs 2,500 people in five European countries.

Vivendi selling stake in Internet venture

Media and entertainment giant Vivendi Universal said yesterday that it is selling its money-losing Internet venture and several French magazines, chipping away at its troubled empire to help pay off massive debts.

The French conglomerate, whose financial problems prompted the ouster of Chairman Jean-Marie Messier in July, is selling its 50 percent stake in Internet venture Vizzavi SA to partner British mobile phone operator Vodafone PLC for 142.7 million euros ($140.27 million) in cash. The sale gives Vodafone majority control of the Internet portal.

Vivendi also said it has a deal to sell its French news magazine group, L'Express-L'Expansion, Comareg small-ads publications, and student magazine L'Etudiant to French publisher SocPresse for more than 300 million euros ($294.9 million).

This column was compiled from reports by Sun staff writers, the Associated Press and Bloomberg News.

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