Business news in brief
In the Region
Pa. retirement system posts 4.1 pct. quarterly loss
The Pennsylvania State Employees' Retirement System's investments lost 4.1 percent in value in the first quarter. The system plans to increase the "employer contribution rate" from state agencies whose workers get SERS pensions to 5.7 percent of payroll, from the current 4 percent. The rate had been projected at up to 30 percent in 2012, but investment gains in recent years have reduced the need for a subsidy. Still, the system might not make its annual target of 8.5 percent investment returns this year, SERS said in a statement. Gov. Rendell wants SERS to invest state highway funds at 12 percent.
- Joseph N. DiStefano
Pep Boys' credit rating downgraded by Moody's
Moody's Investors Service, New York, downgraded its corporate family credit rating for Pep Boys - Manny, Moe & Jack, Philadelphia, to B2 from B1, with a negative outlook. Moody's cited Pep Boys' "weak credit metrics, slim margins, negative comparable-stores sales trend, and negative free-cash flow," and said "financial ratios will not significantly improve over the next 12 months."
- Joseph N. DiStefano
N.J. high court rules for Merck in Vioxx case
The New Jersey Supreme Court ruled that Merck & Co. Inc. was not liable for the medical monitoring of Vioxx users not claiming injury. Merck has major operations in the Philadelphia area. The 5-1 ruling means a class-action lawsuit by people who used the once-popular painkiller will be dismissed. One justice did not participate. The users are not eligible for a settlement that Merck announced in November since they are not claiming any injuries from using the drug. Merck agreed to pay $4.85 billion to settle thousands of U.S. personal-injury lawsuits involving heart attack, stroke or death. About 45,000 eligible claimants had initiated enrollment as of March 31.
Animas insider-trade case yields $384,095 settlement
A retired California podiatrist agreed to pay $384,095 to settle insider-trading charges involving a company in West Chester, the Philadelphia office of the Securities and Exchange Commission said. Burr B. McKeehan, of Monarch Beach, Calif., allegedly received a tip in December 2005 that Animas Corp. was going to be sold to Johnson & Johnson. The SEC said McKeehan received the inside information from Joseph A. Fontanetta, of Paramus, N.J., the chief executive and a board member of a privately held medical-instrument company. McKeehan's penalties include the forfeit of $183,018 in profits, a civil penalty of the same amount, and $18,059 in prejudgment interest. The case against Fontanetta is pending in U.S. District Court for the Southern District of New York.
- Harold Brubaker
Mass. concert center named for Comcast
The Tweeter Center has become the Comcast Center under a naming-rights switch at the outdoor concert amphitheater in Mansfield, Mass. Cable TV provider Comcast Corp., of Philadelphia, and the center's owner, Live Nation, announced the change yesterday. Terms were not disclosed. The switch took effect last night for a concert by Eric Clapton. The nearly 20,000-person-capacity venue, which is about 45 minutes southwest of Boston, has 35 to 40 concerts a year. The site had carried the name of the Tweeter Home Entertainment Group Inc., the Canton, Mass.-based chain of electronics stores that entered bankruptcy protection last year. The bankruptcy prompted Tweeter to pull out of four naming-rights deals at outdoor concert sites on the East Coast. The Tweeter Center on the Camden waterfront was renamed the Susquehanna Bank Center under a $10 million deal announced Feb. 4.
Draeger Medical gets FDA approval for ventilator
Draeger Medical Inc., of Telford, Pa., announced it had received clearance from the Food and Drug Administration to market a new ventilator in the United States. The device, called the Carina ventilator, can compensate for leakage and provide effective breath delivery. It can be used for the emergency room, general ward, ICU, or subacute facilities. Draeger Medical is the U.S. headquarters of Draeger Medical AG & Co. KG, a German maker of air masks and anesthesia equipment.
- Suzette Parmley
Copyright suit filed over technology used by Stern
A Southampton software company filed a copyright-infringement lawsuit over technology used on Howard Stern's Web site that enables characters to pop up and begin talking to the viewer. Live Face on Web L.L.C., an Internet-based service, filed the suit in federal court against Howard Stern Productions Inc. and others. The suit seeks unspecified damages. Messages left for Stern's agent were not immediately returned, and there was no answer at several telephone listings for Howard Stern Productions. Robert Clothier, an attorney for the plaintiffs, declined to comment on the suit.
Verizon Wireless reported seeking to acquire Alltel
Verizon Wireless is in talks to buy Alltel Communications L.L.C., the country's fifth-largest wireless carrier by subscribers, for $27 billion, according to news reports. If consummated, an acquisition would be the biggest telecom deal since AT&T Inc. bought BellSouth Corp. at the end of 2006. Adding Alltel's 13.2 million subscribers to Verizon Wireless' 67.2 million would create the largest wireless carrier in the country, far ahead of AT&T, which has 71.4 million customers. Talks on the acquisition were at a sensitive stage, according to CNBC and the Wall Street Journal. Both reports cited unnamed sources close to the discussions. Representatives of Verizon Communications Inc. and Alltel had no comment.
U.S. and China to hold economic talks
The United States and China will hold the fourth round of high-level economic talks on June 17-18 in Annapolis, Md. The Treasury Department announced that the discussions would take place at the U.S. Naval Academy. The U.S. delegation will be led by Treasury Secretary Henry M. Paulson Jr., who previously has pressed the Chinese to move more quickly to allow their currency to rise in value against the dollar. U.S. manufacturers have complained that China's currency is undervalued as much as 40 percent, giving Chinese producers a huge price advantage against U.S. companies.
J.M. Smucker to acquire Folgers coffee
Jams and jellies maker J.M. Smucker Co. made a $2.95 billion bid for more of the breakfast table, announcing an all-stock deal for Folgers coffee. Smucker also will assume about $350 million of Folgers' debt in the deal with current owner Procter & Gamble Co. J.M. Smucker expects the acquisition will boost profits about 9 percent, excluding costs, if it owns the brand for the entire 2009 fiscal year.
Yields mixed on money market funds
The average seven-day yield on taxable money market funds was 1.94 percent this week, up from 1.92 percent last week, according to iMoneyNet Inc. A seven-day yield is an annual yield that is based on the preceding seven days' level of income by a fund. The average yield on tax-free funds fell to 1.31 percent from 1.37 percent last week.
- Rhonda Dickey