Business news briefs for May 4, 2004

Tuesday, May 4, 2004 | 11:15 a.m.

Hughes Supply buys distributor

Las Vegas-based Standard Wholesale Supply Co., a distributor of waterworks, electrical and plumbing products, was acquired Monday by Florida-based Hughes Supply Inc. Terms of the acquisition were not disclosed.

Standard Wholesale Supply is majority-owned by Gary Crowe, whose father founded the company in 1939. The company's waterworks, electrical and plumbing segments serve primarily the residential and infrastructure new construction markets in the Las Vegas area. Standard Wholesale Supply generated sales of approximately $73 million in 2003 and has 90 employees. Crowe and Russ Soderquist, general manager, as well as the company's employees are expected to remain with the company.

Hughes Supply, Inc., founded in 1928 and a Fortune 500 company, is one of the nation's largest diversified wholesale distributors of construction, repair and maintenance-related products, with 486 locations in 38 states. Headquartered in Orlando, Fla., Hughes employs approximately 8,400 people and generates annual revenue of over $3 billion.

Host on leave for cancer

Louis Rukeyser, the host of financial network CNBC's "Louis Rukeyser's Wall Street" program, has been diagnosed with cancer and is going on medical leave, CNBC said.

"Although the tests indicate a complete recovery is in the cards, my doctors told me further rest is needed," Rukeyser said in a statement read on the air by an anchor.

His program will continue to air on Friday nights with rotating host, the network said. It termed his illness a "low-grade malignancy."

Rukeyser had been scheduled to moderate two panel discussions next week at the Las Vegas Money Show investment conference. Event organizers last week confirmed that he will not attend.

Leaseholder loses again in dispute

NEW YORK -- The World Trade Center leaseholder suffered a second major defeat in as many weeks in his bid to enlarge his $3.5 billion insurance payout when a jury ruled Monday that the largest insurer was bound by a form defining the terrorism attack as one event.

Larry Silverstein, the leaseholder, has tried to double his payout by insisting that insurance companies were bound by policy terms that made it possible that the Sept. 11, 2001 terrorist attacks could be considered two events for insurance purposes.

Such a finding would make it possible for Silverstein to receive $7 billion in insurance proceeds, enough to ensure he had clout to call the shots in the reconstruction of the trade center complex.

Despite the ruling, Silverstein pledged to break ground in coming weeks for the Freedom Tower, the world's tallest building at the World Trade Center site, saying it will be built as scheduled by 2009.

The same jury that last week ruled that the majority of the insurance companies in question were responsible for only one payout finished its verdict Monday, saying Swiss Re International Business Insurance Co. Limited owed $877 million, a single payout.

Combined with last week's ruling, the jury found that more than $1.87 billion of the $3.5 billion insurance policy could not be doubled.

In a second trial, a new jury will determine whether the trade center attack can be considered two events for insurance purposes for companies holding more than $1 billion in coverage.

Hospital chain names CEO

BIRMINGHAM, Ala. -- HealthSouth Corp., the U.S. hospital chain being probed by the Justice Department over a possible $2.7 billion fraud, Monday named Jay Grinney as chief executive officer.

Grinney, 53, has run HCA Inc.'s hospital operations east of the Mississippi River since 1996. He will replace Robert P. May, who has served as HealthSouth's Interim CEO since March 2003, on May 10, the Birmingham-based company said in statement.

One of Grinney's first tasks will be to convince bondholders to accept a company offer to pay them for a waiver on restrictions that may cause HealthSouth to default on loans. Talks are still ongoing, a bondholders group said. HealthSouth is trying to avoid bankruptcy after the Securities and Exchange Commission sued former CEO Richard Scrushy and the company last year for fraud.

"It was very wise on their part to select someone from HCA because that is the best training ground for anyone in the hospital business," said Leo Dierckman, an analyst for 40/86 Advisors Inc., which holds HealthSouth bonds. Grinney is "a leader, and he's done a really good job for HCA," he said.

Shares of HealthSouth, the largest U.S. operator of rehabilitation hospitals, rose 22 cents, or 5.1 percent, to $4.52 Monday afternoon. A year ago, they traded at 17 cents.

Billionaire fined $800,000

WASHINGTON -- Microsoft Chairman Bill Gates agreed to pay a $800,000 fine for failing to follow pre-merger requirements for two past stock purchases made for his personal portfolio, the Federal Trade Commission said Monday.

The violations surround Gates' purchases of shares of trash hauler Republic Services in 2001 and medical firm ICOS in 2002 through his investment entity, Cascade Investment.

Federal rules require investors to disclose any planned transaction of $50 million or more that gives them 10 percent ownership of a company. The filing gives regulators 30 days to approve the transaction before the investor can buy shares.

The law aims to give regulators a chance to stop any large purchases that can hinder competition, he says.

Mark Beatty, general counsel of Cascade Investment, said in a statement that Gates was not personally involved at any time. He also said Cascade admitted its error. "We missed a filing but voluntarily notified the FTC of our mistake upon our own discovery of this," Beatty said in the statement. "A series of procedures has been implemented to avoid this type of oversight in the future."

Companies still cautious

CHICAGO -- Challenger, Gray & Christmas Inc. Chief Executiv John Challenger today said U.S. companies are waiting until the "last minute" before hiring workers.

Companies are waiting until they receive sufficient orders and business that "makes it impossible for them to get that work out the door without hiring workers," Challenger said in an interview. "Then they start to add those workers."

Business has been good for about six months, and some companies that hired temporary employees or delayed hiring now have no choice except to add workers, Challenger said.

"A lot of those temps who came in had really what amounted to as extended interviews with those companies," Challenger said. Companies are converting temporary workers into full-time employees and are "dipping into the labor pool, the unemployment pool, and bringing new people on," he said.

The health-care, construction, housing, mortgage banking and insurance industries have been hiring more workers for the last six months, Challenger said.

Small businesses are creating a lot of jobs, Challenger said.