Special Feature, 12/17/98: The 1998 Year In Review, Timeline

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'98 Year In Review
December 17, 1998

Third Quarter 1998

by Yi-Hsin Chang (TMF Puck)

July

06... Saks Fifth Avenue parent Saks Holdings <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SKS)") else Response.Write("(NYSE: SKS)") end if %> agrees to be acquired by Birmingham, Alabama-based regional department store operator Proffitt's Inc. in a stock swap valued at around $2.1 billion. Proffitt's will change its corporate name to Saks Inc.

Fish oil company Zapata Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ZAP)") else Response.Write("(NYSE: ZAP)") end if %> surges $11 5/8 to $21 1/2 after announcing it will split into two companies: Zapata Corp., which will include its marine protein business, and ZAP Corp., which will operate its Internet operations and acquire or invest in 21 websites to create an Internet portal. The move follows a failed bid to acquire Excite <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: XCIT)") else Response.Write("(Nasdaq: XCIT)") end if %>, an offer widely dismissed as a publicity stunt. In October, Zapata backs out of its planned Internet acquisitions, sparking a wave of shareholder lawsuits alleging that the company misled investors about its online strategy.

16... Defense contractor Lockheed Martin <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LMT)") else Response.Write("(NYSE: LMT)") end if %> calls off its proposed $10.7 billion merger with Northrop Grumman <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: NOC)") else Response.Write("(NYSE: NOC)") end if %> after talks with the U.S. government regarding antitrust concerns break down the day before.

20... SunTrust <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: STI)") else Response.Write("(NYSE: STI)") end if %> announces it will swap 0.96 of a share of its stock for each share of Crestar Financial Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CF)") else Response.Write("(NYSE: CF)") end if %> in a deal valued at around $9.5 billion. The deal brings SunTrust north for the first time from its home regions of Georgia/Florida as it acquires Crestar's more than 560 banking branches throughout Virginia, Maryland, and Washington, D.C.

26... AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> and British Telecom <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BTY)") else Response.Write("(NYSE: BTY)") end if %> say they will invest in a global joint venture expected to have revenues of $10 billion per year in its first year of operations, grow at a rate of 15% to 20% per year, and contribute positively to both companies' earnings from day one.

28... General Motors <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GM)") else Response.Write("(NYSE: GM)") end if %> reaches a tentative agreement with representatives of the United Auto Workers for a settlement to end an eight-week strike that has crippled production at the world's largest automaker.

Bell Atlantic <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BEL)") else Response.Write("(NYSE: BEL)") end if %> and GTE Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GTE)") else Response.Write("(NYSE: GTE)") end if %> announce plans to merge in an all-stock deal valued at $53.36 billion. The new company will be the nation's largest local exchange carrier and cellular phone service provider, carry more than 30% of the world's international phone traffic, and be the world's largest phone directory publisher.

Cendant <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CD)") else Response.Write("(NYSE: CD)") end if %> Chairman Walter Forbes resigns along with nine other company board members also associated with the old CUC International, the part of the merged company now having to account for disclosures of accounting fraud.

30... Hollywood Video parent Hollywood Entertainment <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: HLYW)") else Response.Write("(Nasdaq: HLYW)") end if %> announces it will acquire online movie video store Reel.com Inc. for around $100 million. The nation's second largest video rental chain also says that CMG Information Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CMGI)") else Response.Write("(Nasdaq: CMGI)") end if %>, Intel Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %>, Paul Allen's (co-founder of Microsoft) Vulcan Ventures Inc., and private investor Scott Beck (former CEO of Boston Market and vice chairman of Blockbuster Entertainment) will invest in Hollywood Entertainment by purchasing 5 million shares of restricted common stock at $13.50 a share.

31... U.S. District Court Judge Stanley Sporkin effectively kills two mergers in the works in the wholesale drug industry -- McKesson Corp.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: MCK)") else Response.Write("(NYSE: MCK)") end if %> acquisition of AmeriSource Health <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AAS)") else Response.Write("(NYSE: AAS)") end if %> and Cardinal Health's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CAH)") else Response.Write("(NYSE: CAH)") end if %> buyout of Bergen Brunswig <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BBC)") else Response.Write("(NYSE: BBC)") end if %> -- by ruling in favor of the Federal Trade Commission's objections based on antitrust concerns. The proposed mergers would''ve brought together the nation's four largest drug wholesalers and made them into two industry giants.

August

03... Supermarket chain Albertson's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ABS)") else Response.Write("(NYSE: ABS)") end if %> says it will acquire American Stores <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ASC)") else Response.Write("(NYSE: ASC)") end if %> for about $11.7 billion. The deal would create the nation's largest food store chain if not for Kroger's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KR)") else Response.Write("(NYSE: KR)") end if %> announcement later that it will buy out Fred Meyer <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: FMY)") else Response.Write("(NYSE: FMY)") end if %> for $13 billion.

04... Online book and music purveyor Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %> says it plans to acquire two privately held Internet companies for stock worth about $280 million: PlanetAll, which provides a Web-based address book, calendar, and reminder service, and Sunnyvale, Calif.-based Junglee Corp., whose virtual database technology helps shoppers find products online. The acquisitions will better position Amazon against Internet portals such as Yahoo! <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: YHOO)") else Response.Write("(Nasdaq: YHOO)") end if %> as Amazon becomes more an entertainment center than just a bookstore.

Aerospace, engineered materials, and automotive parts maker AlliedSignal <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ALD)") else Response.Write("(NYSE: ALD)") end if %> makes a hostile bid to acquire electronic connectors maker AMP Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AMP)") else Response.Write("(NYSE: AMP)") end if %> for $44.50 a share, or $9.8 billion, in cash. Thanks to tough anti-takeover laws in its home state of Pennsylvania, AMP begins a nearly four-month campaign to ward off the bid. AMP finally gets off the hook November 23 when white knight Tyco International <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TYC)") else Response.Write("(NYSE: TYC)") end if %> offers to buy the company for $51 a share in stock, a price AlliedSignal is unwilling to match.

11... British Petroleum <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BP)") else Response.Write("(NYSE: BP)") end if %> announces it will acquire Amoco Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AN)") else Response.Write("(NYSE: AN)") end if %> in a stock swap valued at about $48 billion. The combined company will be called BP Amoco PLC, with BP shareholders holding 60% of the shares.

GeoCities <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GCTY)") else Response.Write("(Nasdaq: GCTY)") end if %> goes public, gaining $20 5/16 to $37 5/16 from an initial offering price of $17 a share in its first day of trading in the face of mostly hostile market conditions. The company operates a community of more than 2.1 million individual personalized homepages at its website.

15... Apple Computer <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AAPL)") else Response.Write("(Nasdaq: AAPL)") end if %> launches its new translucent iMac computer, as its factories work 24-7 to meet the burgeoning demand.

17... Waste Management <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: WMI)") else Response.Write("(NYSE: WMI)") end if %> says it will acquire Eastern Environmental Services <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EESI)") else Response.Write("(Nasdaq: EESI)") end if %> in a stock swap valued at around $1.3 billion. The acquisition is the latest in the rapidly consolidating waste management industry.

18... Privately held desktop publishing software company Quark Inc. makes an unsolicited bid to acquire much larger rival Adobe Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADBE)") else Response.Write("(Nasdaq: ADBE)") end if %> at an unspecified premium to Adobe's then market price. After getting the cold shoulder (can we say "frigid"?) from Adobe for nearly a month, Quark decides to abandon the bid -- for now.

27... Radio broadcasting company Chancellor Media <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMFM)") else Response.Write("(Nasdaq: AMFM)") end if %> tunes in to acquire Capstar Broadcasting Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CRB)") else Response.Write("(NYSE: CRB)") end if %> in an all-stock transaction valued at $4.1 billion that will make Chancellor the nation's largest radio broadcaster with 463 stations in 105 markets.

September

10... Northwest Airlines <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: NWAC)") else Response.Write("(Nasdaq: NWAC)") end if %> reaches a tentative agreement with its pilots' union on the terms of a proposed settlement of their contract. Two days later, the union votes to approve a new four-year contract, ending a two-week strike.

14... Telecommunications systems makers Tellabs <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: TLAB)") else Response.Write("(Nasdaq: TLAB)") end if %> and Ciena <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CIEN)") else Response.Write("(Nasdaq: CIEN)") end if %> call off their proposed merger. The decision comes after Ciena says it won't be getting expected contracts from AT&T <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: T)") else Response.Write("(NYSE: T)") end if %> and privately held Digital Teleport.

20... Aerospace and defense giant Lockheed Martin <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: LMT)") else Response.Write("(NYSE: LMT)") end if %> announces plans to acquire government-sanctioned international satellite communications and digital networking services company COMSAT Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CQ)") else Response.Write("(NYSE: CQ)") end if %> in a deal valued at around $2.7 billion.

23... The New York Federal Reserve Bank brokers a deal for a consortium of major financial institutions including Goldman Sachs, Merrill Lynch, Morgan Stanley, J.P. Morgan, Chase Manhattan, and UBS to bail out Long-Term Capital Management to the tune of $3.5 billion in cash.

28... Toymaker Hasbro <% if gsSubBrand = "aolsnapshot" then Response.Write("(AMEX: HAS)") else Response.Write("(AMEX: HAS)") end if %> announces it will acquire Galoob Toys <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: GAL)") else Response.Write("(NYSE: GAL)") end if %> for $220 million in cash, or about $12 per share. The deal combines the two firm's separate licenses for toys based on the Star Wars franchise.

29... The Federal Reserve decides to "ease the stance of monetary policy slightly" by cutting the federal funds rate by a quarter percentage point to 5.25% while making no change to the discount rate. "The action was taken to cushion the effects on prospective economic growth in the United States of increasing weakness in foreign economies and of less accommodative financial conditions domestically." (How's that for Fed-speak?)

Next -- Fourth Quarter 1998