Ge Capital

Making good on its promise to take its $2.2 billion hostile bid directly to the shareholders of Kemper Corp., GE Capital Corp. notified the Securities and Exchange Commission yesterday that would seek four seats on Kemper's board.Only four of Kemper's 11 directors are up for election at the annual meeting, which is scheduled for May 11, so even a victory would not assure GE Capital of a successful deal.Yet the vote would likely serve as a referendum on the offer, making it unlikely that Kemper's board could continue to refuse to negotiate the company's sale.

U.S. seeks class action vs. Wal-Mart SAN FRANCISCO: The Obama administration sided with women suing Wal-Mart Stores Inc. for discrimination yesterday, urging a federal appeals court to let current and former workers sue as a group and proceed with the biggest sex-bias case in U.S. history. The Equal Employment Opportunity Commission rejected Wal-Mart's argument that as many as 2 million workers shouldn't be allowed to seek back pay and punitive damages as a group because that would violate the company's right to defend itself against each worker's claims before a jury.

PHH Arval, the auto fleet management business founded in Baltimore more than 60 years ago, will become part of a corporate giant for the second time in a decade. GE Capital Solutions, the leasing, financing and asset management unit of General Electric Co., said yesterday that it will buy all of PHH Corp. for $1.8 billion, integrate the Sparks-based fleet management business with its own and immediately sell off the Mount Laurel, N.J., residential mortgage business to the Blackstone Group, a private investment firm, for an undisclosed amount.

The mortgage crisis and resulting credit crunch could sink a deal to buy the parent of PHH Arval, a vehicle fleet leasing company with 1,000 employees in Sparks, the company said yesterday. The disclosure sent shares of parent PHH Corp. down nearly 15 percent, or $4.26, to close at $24.24, reflecting investor skepticism that PHH will be able to close a deal announced in March to be sold for $31.50 a share. Under that deal, which valued the company at $1.8 billion, General Electric Co. subsidiary GE Capital Solutions planned to buy all of PHH, fold the fleet leasing operations into its own and immediately sell PHH's larger mortgage unit to Blackstone Group, a New York-based private equity firm.

STAMFORD, Conn. - Xerox Corp. said General Electric Co.'s GE Capital agreed yesterday to take over its U.S. equipment-financing business and gave the largest copier company $1 billion in secured financing. Customer financing and administration operations will be run through a joint venture that will be 81 percent owned by GE Capital, Xerox said in a statement. The financing GE Capital agreed to provide is backed by U.S. lease receivables, Xerox said. Xerox had said earlier that it would switch to third-party financing to reduce debt by as much as $11 billion as part of a plan to return to profitability by year's end. Xerox leases 75 percent of the equipment it makes, and about 65 percent of the company's debt comes from its financing business.

FAIRFIELD, Conn. -- General Electric Co. said yesterday that it plans to split its stock 2-for-1, increase its dividend and buy back more shares because it's churning out record amounts of cash.The plans again reward investors who have held shares during the 15 years that Chairman and Chief Executive Jack Welch spent building General Electric's basket of businesses, which range from light bulbs to loans to jet engines.GE has almost reached Welch's long-stated goal of being No. 1 in everything it does.

STAMFORD, Conn. -- General Electric Co.'s financial services unit said it will buy First Colony Corp. for $1.8 billion as it expands into insurance and retirement planning.General Electric Capital Corp. will pay $36.15 a share for Lynchburg, Va.-based First Colony, a life insurer that sells annuities, term insurance and structured settlements.The acquisition will add $11 billion of assets to GE Capital's insurance and savings businesses, bringing the assets at GE Capital to $185 billion.GE Capital is trying to offer more retirement-related financial services and advice.

WASHINGTON -- The GE Capital Corp., one of the country's biggest financial companies, has agreed to buy nearly $1.1 billion in troubled real estate loans that the government acquired from failed savings and loans. The purchase would be the largest such bulk sale of assets so far by the Resolution Trust Corp., the agency charged with selling them.The deal was approved by the Resolution Trust board in a closed meeting on Tuesday and is subject to the execution of a final contract in about 10 days.

In a critical move to help continue daily operations, Bethlehem Steel Corp. said yesterday that it closed a deal for $450 million in financing just two days after filing for Chapter 11 bankruptcy protection. GE Capital's Commercial Financing group is providing debtor-in-possession financing for the 97-year-old steel maker, which has been hit hard by foreign competition and the ailing economy. Bethlehem Steel will use the financing for general operating expenses, a company spokeswoman said.

Kemper opens bidding, stock risesKemper Corp. stock jumped yesterday after it put itself up for sale, with GE Capital Corp. expected to finally bring home a sweetened deal for the mutual fund company that has resisted its advances for almost two months.Kemper threw open the bidding to any potential buyers Sunday, and, analysts said, GE Capital remains the favorite to win the prize.Kemper stock rose $1.625 to close at $59.125 on the New York Stock Exchange.Despite putting itself up for sale, Kemper is considered unlikely to find another buyer to outbid GE Capital, although GE itself may raise its already sweetened $2.4 billion offer.

PHH Arval, the auto fleet management business founded in Baltimore more than 60 years ago, will become part of a corporate giant for the second time in a decade. GE Capital Solutions, the leasing, financing and asset management unit of General Electric Co., said yesterday that it will buy all of PHH Corp. for $1.8 billion, integrate the Sparks-based fleet management business with its own and immediately sell off the Mount Laurel, N.J., residential mortgage business to the Blackstone Group, a private investment firm, for an undisclosed amount.

Q. I'm very concerned about my shares of Fannie Mae. What are the company's prospects? - C.J., via the Internet A. The largest U.S. buyer of home mortgages is trying to get its house in order. To accomplish this it must overcome its recent scandalous history of allegations of shoddy accounting and earnings manipulation that led to unbridled growth and the ouster of its management. Shares of Fannie Mae (FNM) are down 28 percent this year, after last year's 5 percent decline. Fannie Mae is in the business of buying mortgage loans from banks, packaging them into securities and selling them into the market.

CHICAGO - The board of the UAL Corp., the parent company of United Airlines, voted last night to allow management to file for bankruptcy protection. The vote came shortly after bankers and lawyers for the company agreed on the terms of a loan that would allow the airline to keep flying while in bankruptcy court, shielded from its creditors. The bankruptcy filing could come as early as this morning, according to people briefed on the company's plans. The 12- member board met at United's headquarters here for a final review of the financing package.

FAIRFIELD, Conn. - General Electric Co. agreed yesterday to buy Deutsche Bank AG's U.S. leasing unit for about $2.9 billion in cash and assumed debt, its second takeover of a European-owned financing business this month. Deutsche Financial Services provides financing of office equipment, industrial machines and recreational vehicles for more than 1,000 manufacturers and about 14,000 companies. It has 1,200 workers and receivables of $2.7 billion, it said in a statement. GE Chief Executive Officer Jeffrey Immelt has been expanding in Europe.

In the Region AAI parent sells rest of its transportation equipment business United Industrial Corp., the parent of Hunt Valley defense contractor AAI Corp., has sold the last remnants of its transportation-overhaul business to Alstom Transportation Inc. for about $19.2 million. United Industrial, rumored to be for sale, has long tried to shed its underperforming transportation equipment business, possibly to make it a more attractive takeover candidate. The contracts were with New Jersey Transit Corp.

FAIRFIELD, Conn. - General Electric Co.'s net income fell for the first time in more than seven years because of a decline in the value of some of its acquisitions. Sales were little changed. First-quarter profit dropped 2.7 percent to $2.5 billion, or 25 cents a share. Excluding the accounting change, earnings increased 17 percent, GE said. Sales rose less than 1 percent to $30.52 billion after declining the final nine months of last year. GE shares fell nearly 9.3 percent yesterday because the sales were less than the company's forecast.

1st Chicago sale to GE CapitalFirst Chicago Corp. agreed yesterday to sell a large chunk of its troubled commercial real estate portfolio to GE Capital Corp. Under a definitive agreement, the Chicago banking company will sell distressed real estate with a contractual value of $1 billion to GE Capital for $500 million, or 50 cents on the dollar.The price, while steeply discounted, is slightly higher than the 46 cents on the dollar First Chicago put on its entire disposition portfolio of almost $2 billion at the end of 1992.

CHICAGO -- Some buyers of "handyman specials" and other homes in need of repair will soon be able to apply for mortgages that will enable them to get funds both for purchase and rehab work in the same loan.The program, called community home improvement loans, was announced last month at the Mortgage Bankers Association of America convention in Chicago by the Federal National Mortgage Association, also known as Fannie Mae, and GE Capital Mortgage Insurance Companies.Up to now, two separate loans have typically been issued for purchase and repair work.

In the Region Md., 4 other states in study on quality of nursing homes Maryland will be one of five states in a federal pilot project to collect and publish more detailed data on nursing home quality, the Department of Health and Human Services said yesterday. HHS will release 11 measures of how people receive care - for example, how many patients in each nursing home are physically restrained, how many have lost weight and the frequency with which they contract new infections. Besides Maryland, the Centers for Medicare and Medicaid Services will begin in January collecting information on homes in Colorado, Ohio, Rhode Island and Washington state.

US Airways said yesterday that it has arranged $404 million in financing and will end the year with more than $1 billion in cash, which could help it survive the airline industry's continuing financial crisis. Sources said the financing was provided by GE Capital, the financing arm of General Electric Co. The deal involved buying airplanes and engines owned by US Airways, then leasing them back to the airline. US Airways announced the financing arrangement after the stock market closed.