Business briefs for May 14, 2001

Monday, May 14, 2001 | 10:42 a.m.

Former Sierra Pacific executive to run water system

RENO -- The former president and chief operating officer of Sierra Pacific Resources was named as general manager of a new public agency that will operate the Reno area's water system.

The Truckee Meadows Water Authority board approved Malyn Malquist on a 5-1 vote Saturday, with Reno City Councilwoman Jessica Sferrazza-Hogan the lone dissenter.

Malquist had served as interim project manager since mid-February to assist the water authority's purchase of Sierra Pacific's water division, a deal that could be completed by mid-June.

Malquist now will begin negotiating a contract with the six-member water authority board comprised of Reno, Sparks and Washoe County.

Sierra Pacific is selling its water division so it can concentrate on its core electric and gas service. The division serves 72,000 customers in the Reno area.

Sferrazza-Hogan said she did not support Malquist because Sierra Pacific's stock dropped under his leadership and another company he led closed earlier this year.

Prudential steps aside, AIG buys big insurer

HOUSTON -- American General Corp. celebrated its 75th anniversary this week, and Prudential granted the Houston insurer's birthday wish.

London-based Prudential stepped aside Friday to allow American International Group to purchase American General for $23 billion in stock without a prolonged legal battle.

Prudential dropped the lawsuit it filed in April against AIG that accused the New York insurer of interfering with its own contract to buy American General, violating securities laws and mischaracterizing its offer.

For its part, Prudential, which is not affiliated with Newark, N.J.-based Prudential Financial, received a sizable parting gift from American General.

"We have $600 million in the bank from American General," Geraldine Davies, a Prudential spokeswoman, said Friday.

Prudential's definitive agreement with American General prescribed the payment if American General asked to walk away from the deal for a "superior proposal."

Hours after wiring the money, American General Chairman Robert Devlin said AIG's offer was just that.

He and AIG Chairman Maurice R. "Hank" Greenberg announced Friday that their two companies signed a definitive agreement for AIG to buy the Houston insurer for $46 per American General share in AIG common stock.

SunTrust enters the bidding for North Carolina bank

NEW YORK -- SunTrust Banks Inc. is making an unsolicited $14.7 billion bid for Wachovia Corp., a move that could derail First Union Corp.'s planned $12.5 billion purchase of the North Carolina bank.

SunTrust's board has approved the offer, which would create a bank with nearly $180 billion in assets, the eighth-largest bank holding company in the United States, the Atlanta-based bank said in a statement today.

The new bank would have branches in seven states throughout the Southeast and serve more than 7.5 million retail customers.

The bidding war for Winston-Salem, N.C.-based Wachovia comes after it agreed last month to be purchased by the Charlotte, N.C.-based First Union in a deal to create the nation's fourth biggest banking company.

Gun manufacturer sold

SPRINGFIELD, Mass. -- Smith & Wesson Corp., a manufacturer of handguns since 1852, has been sold by its British owner to Saf-T-Hammer Corp., a firearm safety and security device developer.

Saf-T-Hammer, based in Scottsdale, Ariz., announced the agreement today with Tomkins PLC, which has owned Springfield-based Smith & Wesson since 1987.

"Smith & Wesson, a brand name for 147 years, would be at the top of any list of immediately identifiable corporate logos recognized worldwide," said Bob Scott, president of Saf-T-Hammer and former vice president of Smith & Wesson.

Smith & Wesson has struggled in recent years, with the sharp decline in the American handgun market and the burden of lawsuits brought against the industry by 32 cities and other governments.

In March 2000 Smith & Wesson agreed to install safety locks on all its guns and adopt other safety features and marketing changes. In return, federal, state and local agencies agreed to drop the company from their lawsuits.

Travelocity joins e-commerce network

Las Vegas-based PurchasePro and America Online, which have co-developed an online marketplace for companies to conduct business, said travel wholesaler Travelocity.com has agreed to establish a new travel marketplace linked to the AOL-PurchasePro network.

The Netscape Netbusiness Marketplace, developed and powered by AOL and PurchasePro, allows companies like Travelocity to establish industry-specific marketplaces for various companies to buy and sell goods online.

LV shopping mall operator posts big earnings increase

Pan Pacific Retail Properties Inc. of San Diego, operator of six Las Vegas-area shopping centers, reported a 75 percent increase in net income for the quarter ending March 31.

Net income was $14.5 million, or 45 cents per diluted share, compared to net income of $8.3 million, or 39 cents per share, in the year-ago quarter. Revenue increased 67 percent to $45.3 million, while funds from operations -- a common measure of profitability used by real estate investment trusts to determine dividends -- reached $22 million, up 65 percent.

The increase came as the result of Pan Pacific's acquisition of California-based Western Properties Trust late last year, as well as an average 24 percent increase in rent on new and renewed leases during the quarter.

Pan Pacific properties in Las Vegas include Sahara Pavilion North, Sahara Pavilion South, Cheyenne Commons, Rainbow Promenade, Green Valley Town & Country and Winterwood Pavilion.

State seeks fine, injunction against unlicensed operator

The Nevada Attorney General's office filed a lawsuit against the former operator of a Las Vegas group home, claiming the owner operated the home without a license from the state.

The attorney general's office said Colleen Phillips did not have a license from the health division of the state's department of human resources when she operated a group home for the elderly and infirm at a residence located at 3504 Miramar Drive in Las Vegas. The state is seeking an injunction barring Phillips from operating a group home without a license and a civil penalty of up to $10,000.

Deputy Attorney General Linda Anderson said Phillips relocated the three residents of the home following an investigation, and said that, to her knowledge, Phillips is not currently operating an unlicensed group home.

Phillips could not be located for comment.

Las Vegas office owners sued by partner

A partner in a Las Vegas office building is suing the rest of the partnership for a share of rental profits.

Ira Bradshaw, Las Vegas, a partner in Ichabodd Investments, Las Vegas, helped open an office at 5851 W. Charleston Blvd., in 1984. The entire office was subleased to Bradshaw, Smith & Co., an accounting firm for which Bradshaw also is a partner.

In a suit filed in Clark County District Court earlier this month, Bradshaw said the accounting firm was charged, without his knowledge, a higher rental rate per square foot than what Ichabodd normally assesses.

Bradshaw seeks dissolution of the Ichabodd partnership and an unspecified share of the profits over the life of the lease.

Accountants Mark A. Jolley and Jeffrey M. Cooper, also partners in both Ichabodd and Bradshaw, Smith & Co., were named as defendants in the suit. Also named were Paul M. and Steven Thornock and Ronald L. Smith.

The Ichabodd partners could not be reached for comment.