The Securities and Exchange Commission is investigating whether Raytheon Co. has violated Regulation FD, the fair disclosure rule passed last October, according to Bloomberg News.
Specifically, the SEC is probing the defense contractor to determine whether it violated the disclosure rules after the company privately briefed analysts on its profits forecast, according to Bloomberg.
The SEC has reportedly contacted the securities firms of analysts who in the past month have discussed the defense contractor’s first-quarter outlook with Raytheon CFO Franklyn Caine in a series of phone calls.
Meanwhile, Raytheon faces assaults on a few other fronts. For example, last week I pointed out that Washington Group International Inc. has sued Raytheon, alleging fraud regarding its July purchase of Raytheon Engineers & Constructors International Inc.
In addition, the defense contractor is trying desperately to fend off a bid by Lockheed Martin to replace Raytheon on a current contract to modernize computer and display systems at a number of air-traffic control facilities in the U.S.
PwC’s Consulting Unit Said to Plan IPO
PricewaterhouseCoopers said that an initial public offering of its consulting practice is in the works.
Scott Hartz, the firm’s global management consulting managing partner, said PwC is “actively working” toward an initial public offering for its $6.6 billion consulting practice, according to a story in the March 15 issue of Consulting Alert.
One reason for his optimism: KPMG Consulting’s successful $2 billion IPO last month. KPMG was the first of the Big 5’s consulting businesses to go public.
KPMG offered 112,482,000 million shares at $18 apiece. The stock closed Tuesday at $17.31. Morgan Stanley Dean Witter was the underwriter for the second largest IPO ever on Nasdaq, as measured by market value.
Cablevision Plans $1 Billion Junk Offering
Another day, another cancelled IPO…or two.
Software maker Kabira Technologies Inc. on Tuesday withdrew its plans to offer 4 million shares for between $10 and $12 per share.
On Wednesday, Orius Corp., a network services provider to the telecommunications industry, withdrew a $250 million IPO because of market conditions, the second time it has pulled an IPO for that reason.
However, the environment is different in the bond market. As early as today, CSC Holdings Inc, a holding company for cable operator and sports team owner Cablevision Systems Corp., plans to privately sell $1 billion of junk bonds.
If it’s successful, the offering would be the largest sale of junk bonds since Calpine Corp. sold $1.15 billion on February 8.
Cablevision plans to sell 10-year senior notes. Banc of America Securities LLC, Bear Stearns & Co. and Merrill Lynch & Co.are arranging the sale, according to published reports.
CSC’s existing debt carries the highest possible junk grades. Moody’s Investors Service rates CSC Holdings’ existing senior debt “Ba1” while Standard & Poor’s rates it “BB-plus.”
Today’s Layoff News
- CSFBdirect Inc., the online brokerage unit of investment bank Credit Suisse First Boston, said it would cut 150 jobs, or 10 percent of its U.S. workforce, because of weak online trading volumes.
- Electronic Arts Inc. said Tuesday it plans to lay off an undisclosed numberof workers, partly because of a recent acquisition by its Internet unit, EA.com.
- Britannica.com Inc. fired 68 of its 220 employees, or one-third of the total payroll.
From the CFO.com “Brief” Case
- Salomon Smith Barney said that Christopher Varelas, its global head of technology mergers and acquisitions, has taken charge of its technology investment banking efforts in the Western United States. He will also manage the Palo Alto, Calif. office. Varelas, who led Salomon’s technology mergers and acquisitions practice for the past five years, will retain his Global Head of Technology Mergers & Acquisitions title. Varelas is replacing John Denniston, who left Solly’s Palo Alto office in February to become chief operating officer for Kleiner Perkins Caufield & Byers venture capital firm.
- Intel Corp. said it is “reasonably possible” that the stock prices of holdings in its investment portfolio could decline by 30 percent in the near term. This would mean a loss of $575 million from its $1.9 billion value at Dec. 30, according to its annual report for 2000. Intel also reiterated in its 2000 annual report that gross margin expectations for 2001 are “uncertain at this time.” The company said gross margins this year will be hurt by rising unit costs from the increased production of Pentium 4 processors.
- Veeco Instruments Inc. said Tuesday it adopted a shareholder rights plan. However, it said it is not in response to any specific takeover offer or threat, the company said in a statement.
The plan is triggered if one person or company acquires 15 percent or more of its common stock. Under the plan, Veeco will issue one right for each outstanding share of common stock on March 30. The rights will expire on March 30, 2011, unless earlier terminated or extended.
- President Bush told Congress that he won’t regulate carbon dioxide emissions from power plants.
- The parent of Janus Funds has invested $20 million of its own money into Village Ventures Inc., of Williamstown, Mass., a venture capital firm that invests in small-town companies. Village Ventures works with 10 early stage venture capital funds in areas like Boise, Idaho, Tucson, Ariz. and Nashville, Tenn., places that do not usually catch the eye of investors looking for new companies to invest their money.
- The Senate voted down two Democratic efforts to restrict credit cards for minors Tuesday. Senators voted 55-42 against a proposal that would have imposed $2,500 limit on credit cards issued to people under 21 unless a parent co- signed the account or the minor could demonstrate sufficient income for a higher credit limit. Several hours later, the Senate rejected 58-41 a provision that would have required a minor seeking a credit card either to obtain a parent’s co-signature, show adequate income of his own or agree to take a credit-counseling course.
