Business briefs for December 13, 2001

Thursday, Dec. 13, 2001 | 10:13 a.m.

Prudential shares start trading

NEWARK, N.J. -- Investors grabbed a piece of the rock today, pushing shares of Prudential Financial Inc. up 6 percent in its first day of trading.

The Newark-based financial giant, formerly known as Prudential Insurance Co. of America, today raised $3.03 billion in an initial public offering, selling 110 million shares for $27.50. It also plans to distribute 454.6 million shares to its 11 million policyholders, who have owned the mutual company for 86 years.

In early trading, Prudential shares jumped $1.60 to $29.10 on the New York Stock Exchange, where it trades under the symbol PRU.

Prudential was the third largest IPO of the year, ranking behind Kraft Foods Inc. at $8.7 billion and the $3.6 billion raised by Agere Systems Inc., a spinoff of Lucent Technologies Inc.

Prudential changed its name to reflect its position as one of the world's largest financial services institutions. It had more than $606 billion in assets under management as of June 30.

Health care giant slashing 6,000 jobs

HARTFORD, Conn. -- Managed health care provider Aetna Inc. is slashing 6,000 jobs, or 16 percent of its work force, saying it did not need as many employees given lower membership levels and the company's withdrawal from certain markets.

Aetna, which employed 37,000 people as of Sept. 30, said today that 4,400 people would be laid off, while the other 1,600 jobs will be cut through attrition.

Retail sales plunge

WASHINGTON -- Retail sales plunged a record 3.7 percent in November as consumers, buffeted by huge job losses, terrorist attacks and a recession, got the holiday sales season off to a dismal start.

The Commerce Department today said the record drop in retail sales followed a 6.4 percent upward surge in October, also a record. That big increase was caused by a huge jump in auto sales as Americans responded eagerly to the free financing offers that dealers used to get shoppers back into showrooms following the Sept. 11 terrorist attacks.

In more positive news today, the Labor Department reported that the number of Americans filing first-time claims for unemployment benefits fell by 86,000 last week.

Restaurant sued by 21 black customers

WASHINGTON -- Twenty-one people filed a $100 million federal lawsuit against Cracker Barrel restaurants today, accusing the nationwide chain of widespread racism, from segregating black customers in the smoking section to denying them service.

It was the largest civil rights lawsuit against a restaurant chain since Denny's settled a $46 million discrimination lawsuit in 1994.

The suit in federal court in Rome, Georgia, accuses Cracker Barrel Old Country Store, Inc. of systematic discrimination and documents acts of alleged racism in 175 cities in 30 states.

The restaurant chain, which for years has been known for its country store motif and homestyle cooking, owns and operates a chain of 450 restaurants in 37 states.

Cracker Barrel officials did not immediately return calls for comment.

Yahoo! offers $436 million for website

SAN JOSE, Calif. -- Yahoo! Inc. is making a $436 million unsolicited bid for the career Web site HotJobs Inc. in hopes of beating an earlier offer from the parent company of Monster.com.

Yahoo said Wednesday it would pay $10.50 in cash and stock for each share of HotJobs, a significant premium over the shares' Wednesday closing price of $6.47.

Shares of HotJobs soared $4.14, or 64 percent, to $10.61 in trading on the Nasdaq Stock Market, while shares of Yahoo were off $1.32, or 7 percent, to $17.82.

Chairman and Chief Executive Terry Semel said Yahoo was offering HotJobs shareholders a better value, less regulatory risk, and faster merger execution than New York-based TMP Worldwide Inc., Monster.com's parent company.

Firm cutting 7,000 more jobs

DENVER -- Qwest Communications International said today it will cut another 7,000 jobs and warned that revenue for this year and next will fall short of Wall Street's expectations.

In a statement, Qwest said it was reducing its work force to 55,000 in order to meet reduced customer demand stemming from the deteriorating U.S. economy.

The company said it expects to eliminate the jobs through attrition and efficiency improvements, and will take a charge of $400 million to $600 million for severance costs and asset writedowns.

The cuts come on top of 4,000 previously announced in September. When completed by the middle of next year, Qwest will have cut its work force by 17 percent.

Qwest also warned that revenue for the fourth quarter will be $4.8 billion, below the $5.07 billion expected by analysts surveyed by Thomson Financial/First Call. Earnings before interest, taxes, depreciation and amortization will be $1.7 billion, the company said.

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