Business Digest

BUSINESS DIGEST

October 20, 2004

In the Region

Canceled deal sends Advancis stock plunging

Shares of biotech company Advancis Pharmaceuticals Corp. plummeted more than 62 percent yesterday after drug giant GlaxoSmithKline said it planned to end a deal to use Advancis' technology.

Under a deal signed in July, Glaxo used Advancis patents and technology for its Augmentin drug, which is used to treat bacterial sinusitis and pneumonia. But Glaxo told Advancis Friday that it would terminate the deal by Dec. 15, according to Advancis.

That sent shares of Advancis down $4.53 to close at $2.75 each in trading yesterday on the Nasdaq market. Advancis also reported that its third-quarter loss shrank from $9.2 million, or 41 cents per share, compared with a loss of $29.1 million, or $20.19 per share from the third quarter of 2003.

Stock split approved at Annapolis Bancorp

Annapolis Bancorp's directors approved a 4-for-3 stock split in the form of a stock dividend, the company said yesterday.

Shareholders of record on Nov. 5 will receive one additional share of Annapolis Bancorp common stock for every three shares they own. The dividend will be payable Dec. 3, when new shares will be distributed by the company's transfer agent. No fractional shares will be issued in connection with the stock dividend, the company said.

Annapolis Bancorp has more than 3 million shares outstanding. It is the parent of BankAnnapolis, which has six branches in Anne Arundel and Queen Anne's counties, and $267.3 million in assets.

Elsewhere

Constellation Brands offers $1.3 billion for Robert Mondavi

Constellation Brands Inc., the world's largest winemaker, has offered $1.3 billion in cash to acquire Robert Mondavi Corp., saying it's a better deal for shareholders than Mondavi's proposed sale of its luxury wines.

The $53-a-share offer for Mondavi's publicly traded Class A shares represents a 33 percent premium over the Monday closing price. The offer includes $970 million to purchase Mondavi's shares and assumption of $333 million in debt, Fairport, N.Y.-based Constellation said in a statement.

Constellation, the maker of lower-priced Almaden and Paul Masson wines, is trying to cater to the increasing demand for more expensive bottles, such as Mondavi's Opus One. Mondavi, which helped spark California's winemaking boom, said last month that it might raise as much as $500 million by selling its stakes in Opus One and Vina Sena wines to focus on less expensive products such as Woodbridge.

Judge delays trial for ex-WorldCom chief

A federal judge yesterday delayed the trial of former WorldCom chief executive Bernard J. Ebbers until January, granting his lawyers more time to prepare their defense.

The trial, among the most closely watched cases in the recent spate of white-collar prosecutions, was set to begin Nov. 9.

U.S. District Judge Barbara Jones said it may have been an error for lawyers for Ebbers to agree to the November trial date in the first place, but said she would not penalize him for it.

Ebbers is accused of orchestrating the $11 billion accounting fraud at WorldCom Inc., a telecommunications giant that collapsed in 2002 in the biggest bankruptcy in U.S. history. His lawyers had unsuccessfully asked the judge twice before to delay the trial, arguing that they did not have sufficient time to prepare a defense.

3rd-quarter profit rose 42% at McDonald's

McDonald's Corp. reported a 42 percent jump in third-quarter profits yesterday as its turnaround continued at full speed well into a second year, fueled by a U.S. sales boom.

A fast-food juggernaut again on its home turf, the Oak Brook, Ill.-based chain benefited from longer U.S. restaurant hours, higher-priced new menu items, the "I'm lovin' it" ad campaign and accepting payment from customers via credit and debit cards.

For the July-through-September quarter, the company earned $778 million, or 61 cents a share, up from $547 million, or 43 cents a share, a year earlier. That matched its estimate last Wednesday when it disclosed that results would be much stronger than Wall Street expected.

Revenues were up 9 percent to $4.9 billion from $4.5 billion a year earlier. The fast-food chain's shares were unchanged at $22.50 per share in trading yesterday.

SEC probe has begun, Fannie Mae reports

Fannie Mae, the biggest financer of U.S. home loans, said yesterday that the Securities and Exchange Commission has opened a formal investigation into its accounting. Its shares fell in trading after exchanges closed.

The government-chartered company's regulator accused it last month of wrongly accounting for hedging transactions on its $895 billion mortgage portfolio, improperly using "cookie jar" reserves and deferring expenses to meet executive bonuses. Fannie Mae announced the SEC investigation in a regulatory filing. It didn't elaborate.

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