Business Digest


October 12, 2002

AT&T says IRS rules that cable sale will be tax-free

AT&T Corp. said yesterday that the Internal Revenue Service has ruled that its plan to sell its cable television business to Comcast Corp. will be tax-free to AT&T's U.S. shareholders. The sale is expected to close by the end of the year, AT&T said.

This week, the companies said the cable TV unit, AT&T Broadband, would cut about 1,700 jobs from its headquarters in Englewood, Colo., after its merger with Philadelphia-based Comcast.

In December, New York-based AT&T agreed to sell its cable TV business to Philadelphia-based Comcast for about $45.7 billion in stock and to assume nearly $25 billion in debt and liabilities. The deal would create a cable powerhouse serving more than 21 million households.

Dutch bank refuses N.Y. court in Enron case

Rabobank has refused to hand over to a New York court internal documents that could provide insight into deals related to collapsed energy-trading giant Enron Corp., a spokesman for the Dutch bank said yesterday.

Rabobank has information about Enron's 1999 spin-off of EOG Resources Inc., a transaction that was kept off the collapsed company's ledgers and allegedly booked as sales. Rabobank ended up taking over a $517 million loan from Royal Bank of Canada used to finance the deal and is claiming damages from the Canadian bank, saying it was misled.

Rabobank spokesman Roel van Veghel said the bank won't hand over documents requested by investigators in the Enron case unless their confidentiality is guaranteed.

The Dutch bank is worried that the documents, which the New York court had ordered released by Oct. 9, could hurt its case in its dispute with Royal Bank of Canada over the transaction.

Southwest mechanics ratify contract extension

Mechanics represented by the Teamsters union ratified a four-year extension of their contract with Southwest Airlines yesterday.

The mechanics' previous contract ran through August this year but remained in force, which is standard in the industry as a safeguard against strikes. The new contract is in effect until Aug. 16, 2005. Dallas-based Southwest, the largest airline at Baltimore-Washington International Airport, said the contract includes pay increases and stock options but did not release details.

Southwest has 1,300 mechanics represented by the Teamsters. Federal mediators were called in over the summer to help the airline and its mechanics work toward an accord.

BB&T's earnings rise to 68 cents a share

BB&T Corp. reported yesterday that it earned $328.16 million, or 68 cents a share, in the third quarter. The regional bank's earnings compared with $222 million, or 48 cents a share, in the July-September quarter last year.

Analysts had predicted that the bank would earn 70 cents a share in the recent quarter.

Excluding charges related to BB&T's acquisition of Kentucky-based AREA Bancshares Corp. and MidAmerica Bancorp, earnings were $336 million, or 70 cents a share, in the third quarter, compared with $283.5 million, or 62 cents a share, last year.

Purchase of Burger King clears EU regulators

European Union antitrust regulators have approved the purchase of Burger King Corp., the world's second-largest fast-food company, by a consortium of U.S. investors.

The deal with Britain's Diageo PLC would bring Burger King into the same group as Domino's Pizza, but the European Commission determined that the company would continue to face strong competition in European markets from McDonald's, Quick, KFC, Pizza Hut and smaller fast-food outlets.

U.S. antitrust investigators cleared the deal in August.

With more than 11,400 restaurants worldwide, Burger King is second behind fast-food market leader McDonald's.

This column was compiled from reports by the Associated Press and Dow Jones Newswires.

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