Buyout

NATIONAL Protest commemorates war On the fourth anniversary of the U.S. invasion of Iraq, as many as 20,000 people spilled into the heart of the nation's capital in a sometimes tense demonstration that reflected a deepening anger on both sides of the war debate. pg 3A Bush, religious right clash Supreme Court case about the free-speech rights of high school students, to be argued tomorrow, has opened an unexpected fissure between the Bush administration and its usual allies on the religious right.

Educate Inc. executives hope the tutoring company's new life as a privately held business will enable it to move beyond its financial struggles after shareholders approved yesterday management-led buyout of the Baltimore-based operation. Company executives announced that 75 percent of Educate shareholders approved the $535 million deal. Shareholders will receive $8 a share from the management-led investment group, including Chief Executive Officer R. Christopher Hoehn-Saric and others.

Baltimore investment firm T. Rowe Price became the largest shareholder to reject Laureate Education Inc.'s $3.8 billion buyout agreement, saying yesterday that the management-led deal undervalues the long-term potential of the company. T. Rowe Price, Laureate's second-largest institutional shareholder with 8.1 percent of its shares, said in a filing with the Securities and Exchange Commission that it plans to vote against the proposal because "it is not in our clients' best interests." The firm said it wants the for-profit higher education company to remain publicly traded given Wall Street analysts' strong financial forecasts about Laureate's future.

Unionized employees in The Sun's newsroom, advertising and other departments overwhelmingly approved a new four-year contract last night, averting the possibility of a strike at a time the paper is coping with declining revenue and increased competition. Representatives from management and the Washington-Baltimore Newspaper Guild struck a tentative agreement early yesterday on a contract covering about 480 employees. The deal was contingent on union members ratifying it last night. They did so on a voice vote.

John Peter Regiec, a plain-spoken handyman who raised 10 children in Wagner's Point and in illness became a symbol of the dying southern Baltimore neighborhood, died of leukemia late Thursday at his Leo Street rowhouse. He was 79.Over the past year, even as disease stole his stamina, Mr. Regiec mustered his energies to help the 270 fellow residents of his cancer-riddled neighborhood in their fight for a buyout and relocation of their homes.Interviews and pictures of the ruggedly telegenic man -- wearing a fishing cap and sitting in a wheelchair pushed by his daughter and nurse, Roseann Hudgins -- became a fixture in media accounts of the neighborhood.

DALLAS -- Exxon Corp.'s plan to create the largest publicly traded oil company with an $88 billion buyout of Mobil Corp. was overwhelmingly approved yesterday by both companies' shareholders.Exxon said 99.2 percent of shares voted by its shareholders were cast in favor of the merger. Mobil said 98.3 percent of its shares voted were cast for the buyout. The companies held separate shareholder meetings yesterday at hotels in Dallas, near Exxon's headquarters in Irving, Texas.The two companies announced the buyout Dec. 1 as oil prices were at historic lows and industry profits were plunging.

Beating the chemical industry to the buyout, Baltimore has begun acquiring a handful of remaining homes in the neighborhood of Fairfield, in effect extending the public purchase of Wagner's Point to all the communities on the Fairfield peninsula.Two large chemical plants in southern Baltimore -- detergent ingredient maker Condea Vista and herbicide producer FMC Corp. -- offered to buy the same homes this month in a "neighborly" gesture intended to ward off potential lawsuits over environmental exposure.

The two southern Baltimore chemical plants that have offered to buy out Fairfield peninsula residents want to resell those properties to the city at taxpayer expense.The two chemical companies -- FMC Corp., which makes herbicides, and Condea Vista, which makes detergent ingredients -- announced last week that they are offering to pay an appraised value plus up to $22,500 for each of the dozen or so remaining homes in two tiny neighborhoods near their plants. Both companies said the offer is a neighborly, generous effort to assist with relocation.

Longtime WMAR-TV weatherman and features reporter Tony Pagnotti will be leaving the station's news division, although he will remain with Channel 2 to work on unspecified projects.News that a familiar face at WMAR would be taken off the air seemed to support fears that a wide-scale shake-up was imminent at the station, which rates a distant third in the ratings among Baltimore's big-three network affiliates. In August, the station announced a buyout package aimed at reducing the payroll at the Scripps-Howard-owned ABC affiliate, and rumors pop up every few days that one big name or another at the station is on his or her way out.Although he declined to deal in specifics, Station Vice President and General Manager Steven Gigliotti said the buyout package met his goals, meaning there will be no layoffs at the station.

Management at WMAR, Channel 2, Baltimore's struggling No. 3 station, is putting together an employee buyout package to reduce jobs and costs.WMAR Vice President and General Manager Steve Gigliotti confirmed that the station will be offering a "voluntary termination program for some of our employees."Gigliotti would not detail the type of severance package being offered or the degree to which he hopes to reduce the station's staff -- other than to say it would be considerably less than the 50 percent reduction claimed in several anonymous calls to The Sun."

An employee buyout can lead to the best of times or the worst of times. The worst: A client of certified financial planner David Berman who accepted a buyout from a pharmaceutical company at 56 is struggling. He expected to land another job in six months, but a year and a half later still hasn't found one. He burned through his severance and the only money left is his retirement account. The best: "I've often seen a buyout provide a real kick in the pants for someone to make a career change they'd been contemplating anyway, or to relocate to another city they'd been considering before," said Berman, a principal of Berman McAleer Inc. in Timonium.

Carlyle Group co-founder David M. Rubenstein said yesterday that he sees a "great opportunity" for his private equity firm to buy distressed debt and assets amid a credit crunch that has slowed the buyout boom. Rubenstein said his firm - one of the world's largest - is evolving into a global company that invests in venture capital, real estate and debt from its traditional role of buying out assets. The Baltimore native made his comments before speaking at the annual Society of American Business Editors and Writers conference, which is being held at a downtown hotel this year.

Baltimore money manager T. Rowe Price mounted a public fight last year to block the management-led buyout of nearby Laureate Education Inc., saying the $3.82 billion deal shortchanged shareholders. Price lost the dispute but it now is pushing a bill that would amend the state corporation law to give shareholders of Maryland public companies appraisal rights in certain buyouts and mergers. The bill is scheduled for final passage today in the Senate before it moves to the House. While the measure would not have helped Price in its fight against Laureate, the money manager believes that such a law would give shareholders of Maryland companies more rights when it comes to buyouts.

Happy New Year? Not for Wall Street deal makers. PHH Corp. announced 18 minutes into 2008 that its sale to the Blackstone Group and a unit of General Electric Co. had collapsed. Now buyout specialists and lawyers are wondering which deals might go belly up next. Among the biggest pending buyouts is the $19 billion planned acquisition of Clear Channel Communications by Thomas H. Lee Partners and Bain Capital. Smaller deals outstanding include a $1.1 billion offer for Reddy Ice Holdings and a $794 million planned takeover of Myers Industries.

Blackstone Group Shares fell $2.02, or 8.3 percent, to $22.26 after the manager of the world's largest buyout fund said third-quarter profit missed analysts' estimates as the value of its real estate holdings declined.

CHICAGO -- Tribune Co. shareholders yesterday formally approved the company's $8.2 billion plan to be taken private, with 97 percent of the shares voted cast in favor of the $34-a-share buyout led by a group that includes Chicago real-estate mogul Sam Zell. The Chicago media holding company, whose properties include The Sun, had tentatively agreed to the complex plan earlier this year. 1st phase completed The first phase of the plan, in which about half the company's shares were bought back at the $34 price, has already been completed.

As Tribune Co. shareholders prepare to convene in Chicago tomorrow to vote on an $8.4 billion buyout led by investor Sam Zell, the noise in the background is Wall Street traders chirping that the deal might never get done - at least as proposed. Amid one of the most turbulent summers in years for the stock market, Tribune shares have slid steadily and steeply. The stock closed Friday at $25.67, just a few dimes above a multiyear low and 25 percent below the $34 offering price. The main reason for the investor skepticism is the heavy debt load that Tribune will be carrying after it goes private, plus the continuing decline in advertising revenue and cash flow from the company's TV stations and newspapers, including The Sun, the Chicago Tribune, the Los Angeles Times and Newsday.

Southwest Airlines Co., which has never laid off an employee despite the industry's tough times, offered buyouts yesterday to more than a quarter of its work force, a move that officials expect will help the carrier remain profitable as it grapples with its two largest costs: labor and fuel. The airline employs more than 33,200, including about 2,600 in the Baltimore region. It's targeting those with more than a decade of service, or 8,700 workers, though workers and observers expect that Southwest will replace each person who leaves with someone earning less money.

Henry Kravis has been doing deals for three decades. He has swung the largest leveraged buyouts in the United States, the Netherlands, Denmark, India, Australia, Singapore and France, say regulatory documents. He has more than doubled his company's assets under management to $50 billion in less than five years and has made himself a billionaire twice over. Now he's offering to cut you in on the action. But on this one you might take a cue from Groucho Marx: If the private equity club wants somebody like you as a member, you don't want to join.

Macy's Inc., the second-largest U.S. department store company, is an "attractive" target for a leveraged buyout and may fetch $50 to $52 a share, a Goldman, Sachs & Co. analyst said yesterday. Macy's cash flow and "valuable" real estate, as well as the company's potential to cut costs and take on additional debt make it a possible takeover candidate, New York-based Adrianne Shapira wrote in a note to investors. Macy's converted more than 400 former May Department Store Co. locations to its namesake chain in September, about a year after buying the rival for $11 billion.