Kerkorian sale of GM stock tied to MGM deal’s tax issue
Billionaire investor Kirk Kerkorian, in a surprise move, said Tuesday evening he has sold 12 million General Motors Corp. shares, cutting his stake in the troubled automaker to 7.8 percent.
The sale was revealed a week after Kerkorian’s private investment firm, Tracinda Corp., and GM failed to reach an agreement that would have given the Las Vegas investor a representative on the company’s board.
GM shares fell $1.20, 5.7 percent, to $19.85 on Tuesday. It was its lowest close since October 1982 and came the same day Toyota Motor Corp. announced production estimates that could allow it to pass GM as the world’s No. 1 automaker next year.
The move doesn’t necessarily mean Kerkorian is backing off as a powerful investor in GM. Tracinda said it made the sale because of state and federal tax implications.
In April, Kerkorian scored a windfall when he sold the MGM movie studio for $4.9 billion to Sony Corp. and other partners.
Close observers said Kerkorian was likely dumping GM shares at a loss to offset some of the capital-gains taxes he will have to pay on the MGM deal.
DENVER
Vacation club adds 28 mountain units
Exclusive Resorts, a Denver- based luxury-destination club, announced Tuesday it has added 28 new mountain vacation residences to its portfolio.
The properties include 10 units at the Arrabelle at Vail Square, a $250 million luxury hotel and condo project in Lionshead being built by Vail Resorts. It is scheduled to open in late 2007. Exclusive Resorts owns more than 280 residences in 36 destinations, worth an average of $3 million each.
HOUSTON
Pipeline project gains client commitments
Kinder Morgan Energy Partners LP and Sempra Energy, which plan to build a pipeline in the Rocky Mountain region, said prospective customers have committed to shipping about 1.3 billion cubic feet of natural gas a day.
The shippers have until Jan. 31 to get approval from their boards of directors, Houston- based Kinder Morgan and San Diego-based Sempra said Tuesday in a statement. The $3 billion pipeline, called Rockies Express, would move gas to Ohio from the Cheyenne hub in Colorado.
DENVER
Frontier adds flights to Cozumel, Acapulco
Frontier Airlines has begun flying to Cozumel and Acapulco in Mexico from Denver. Flights to Cozumel started Dec. 17 as Frontier became “one of the first airlines” to fly there since Hurricane Wilma struck in November, the airline said.
Frontier started twice-weekly flights to Acapulco on Sunday. Frontier flies to seven destinations in Mexico.
HOUSTON
Ex-commerce chief rejects Russian post
Former Commerce Secretary Donald Evans has turned down Russian President Vladimir Putin’s offer of a senior job at the state-owned oil company OAO Rosneft, an Evans spokeswoman said. Evans gave the offer “careful consideration” and opted not to take the post because of family commitments, said Jill Angelo, the Evans spokeswoman.
Prior to serving as commerce secretary during President Bush’s first term, Evans ran Denver-based Tom Brown Inc., acquired by EnCana Corp. in 2004.
WASHINGTON
United workforce down 4,531 from 2004
United Airlines had 53,916 full-time equivalent employees in October 2005, down by 4,531 from the same month of 2004, according to a monthly Bureau of Transportation Statistics report.
Denver-based Frontier’s full-time equivalent employee count increased by 29 to 4,097 in October. About 79 percent of Frontier’s employees were full-time, while nearly 89 percent of United’s employees were full-time.
The U.S. airline industry had a 5.5 percent decline in workers in October 2005 from the same month a year earlier.
MELVILLE, N.Y.
Hain prices stock offer at $20 per share
The Hain Celestial Group Inc., the corporate parent of Boulder’s Celestial Seasonings, announced Tuesday that it priced a secondary offering of 5.3 million shares at $20 per share. The stock is held by an affiliate of H.J. Heinz Co.
WASHINGTON
U.S. airlines oppose toehold for Virgin
Virgin America Inc., a startup airline that is part of U.K. billionaire Richard Branson’s Virgin brand, shouldn’t be allowed to fly in the U.S. until it provides the government with more information about its ownership, three U.S. airlines said.
Continental Airlines Inc., AMR Corp.’s American Airlines and Delta Air Lines Inc. said the Transportation Department should suspend its evaluation of Virgin America until the airline can show that U.S. investors control at least 75 percent of its equity. U.S. law limits foreign ownership of airlines to 25 percent of voting stock.
GULFPORT, Miss.
Harrah’s to sell assets, rebuild Biloxi site
Harrah’s Entertainment Inc., the world’s largest casino company, will sell the Grand Casino in Gulfport, Miss., destroyed by Hurricane Katrina, and rebuild a property in Biloxi.
Harrah’s will sell the Gulfport assets “as is” to Gulfside Casino Partnership, owner of neighboring Copa Casino. Terms were not disclosed. Las Vegas-based Harrah’s said Monday in a statement it will retain all insurance proceeds.
NEW YORK
Shoppers pick up pace in latest figures
U.S. retailers’ sales rose 3.9 percent last week from the week before as shoppers stepped up purchases in the second-to-last full week of the holiday season.
Sales rose at the fastest pace since Thanksgiving week after increasing 3.2 percent last week over the prior year, the International Council of Shopping Centers and UBS Securities LLC said in a statement.
BEAVERTON, Ore.
Nike profit up, but orders data sink stock
Nike Inc.’s quarterly profit rose 15 percent, driven by sales of shoes endorsed by basketball stars Carmelo Anthony of the Nuggets and Cleveland’s Le Bron James.
The shares fell 4.4 percent after worldwide orders missed analysts’ estimates.
Second-quarter net income at the world’s biggest athletic- shoe maker increased to $301.1 million, $1.14 a share, from $261.9 million, 97 cents, a year earlier. Revenue climbed 10 percent to $3.47 billion, the Beaverton- based company said.
