Archive: January, 2010
MetLife Inc. is negotiating to buy Wilmington, Del.-based Alico, a global life insurer, from American International Group, for $15 billion, with the U.S. Government collecting $9 billion in return for bailing out AIG last year, reports the Wall St. Journal and other financial media here.
A good thing for taxpayers, but too bad for metro Philadelphia, which would have gained a corporate headquarters and probably hired a bunch of folks if AIG's original plan to spin off Alico into an independent company had gone through.
Benjamin Foods is moving from Philadelphia and two Bucks County sites to the vacant 125,000-sq-ft former Sam's Club warehouse on 19 acres at
Benjamin is consolidating smaller sites in Northeast Philadelphia, Southampton and
Benjamin sells "restaurant equipment, supplies and food," mostly boxed and canned, president Howard Klayman told me. Customers include federal prisons, medical facilities and schools. He also plans a "cash-and-carry" market, open to the public, later this year.
After the closings of Sunoco's Eagle Point and Valero's Delaware City refineries on the Delaware last year due to high cost and low demand for US-made gasoline and other fuels, the Obama administration is weighing proposals to tax cheap imported petroleum products, writes Forbes' Christopher Hellman here. The article says an oil tax might get around international free-trade rules by using a "green" angle: focusing on foreign refiners that don't meet US emissions standards.
Tyco International, based in suburban Trenton, says it's paying $2 billion in cash and stock to buy Texas-based Brink's Home Security, which sets up home alarms as "Broadview Security", and merge it with Tyco's own ADT. Statement here.
Moody's new credit report on the $3 billion-a-year University of Pennsylvania Health System (rating: Aa2, a notch below the University's own Aa3, corrected) shines a light on the challenges and complexity of running a big, growing hospital system in a tough market. Highlights:
- Several years of rapid revenue growth slowed in fiscal 2009 due to opening costs for the Perelman Center and other new facilities, investment losses, and weak Medicare and Medicaid reimbursement, among other expenses. Cash-on-hand fell from nearly six months' worth, to a little over four months.
- In response, the system ordered $58 million in cost reductions "focusing on productivity, containing growth in non-clinical staff, and reducing discretionary costs." Capital spending has fallen to $162 million this fiscal year, from $302 million last year.
- The system rebounded last fall, with operating cashflow more than doubling to $147 million over five months. And since Penn "is at the end of several major projects," it's likely to enjoy higher patient admissions and lower expenses, to balance expected future Medicare and Medicaid cuts.
- Patient admissions had grown 3% to 8% a year in 2003-08, but were flat at 80,000 in fiscal 2009, before rising 3% last fall. Penn's been growing, while other area hospitals aren't, thanks to "the successful recruitment of physicians, the opening of the Perelman Center for Advanced Medicine, the expansion of outpatient centers, and allinces with large specialty physician groups."
- Growth followed Penn's "core clinical strengths, including oncology, cardiology, neurosurgery, transplantation and women's services," all of which have "higher margins and strong revenue growth.. We believe the system's focus on stregnthening suburban referrals and completing major pojects on its main campus will enhance market share."
- Penn has been able to add more than 100 beds since 2007 by moving psychiatric care to Pennsylvania Hopsital and rehabilitation to its Rittenhouse facility, among other changes. Also, the imminent opening of the Roberts Proton Therapy Center "is projected to be very profitable."
- The hospitals have had to support Penn's School of Medicine, transferring $81 million to it in fiscal 2008 and $75 million in fiscal 2009.
Hershey Co. bosses have "made progress about resolving their differences" about making an expensive offer for global candymaker Cadbury Plc, and are preparing a bid to top Kraft Corp.'s hostile Cadbury offer, Bloomberg News reports here.
"Hershey has been using former Goldman Sachs Group Inc. banker Byron Trott and his new firm, BDT Capital Partners, to look for the new equity investors, which could include wealthy individuals," Bloomberg added, citing unnamed sources.
A sale of UK-based Cadbury has been a dilmma for Hershey. Hershey has been losing market share to larger, global rivals as its US market slumps. Buying Cadbury would win Hershey new markets, but saddle it with billions in debt. Even if Kraft beats Hershey to buy Cadbury, Hershey could force Kraft to pay extra, hurting the larger company's future ability to compete with Hershey once a deal is done.
Fisker Automotive, the California-based electric sportscar maker that's raised over half a billion dollars in US loans to reopen General Motors Corp.'s former Pontiac factory in Wilmington (a short drive from Vice President Biden's house) as a Fisker production site, has raised an additional $125 million from potential suppliers and other investors to help close the loan, says the Wilmington News Journal here, citing Wilmington dealmaker Barry Yerger Jr. of Barley Mill Capital Management.
Fisker signed a battery supply-and-investment deal with Massachusetts-based A123 Systems, Fisker says here (1/14 item).
Philadelphia Planning Commission to meet next Tuesday, Jan. 19, 1 pm, upstairs at 1515 Arch. Among other things, they'll talk about:
- new Development Approval regulations and Community Planning guidelines
- Waterview Grande development proposal for the first block of Brown Street and the 800 block of North Delaware Ave. in the "Central Delaware Riverfront Overlay District"
- Stamper Square development, the latest proposal
- Center City: LSNA and CCRA Neighborhood Plans
- Another attempt to legalize, after the fact, work done at the Oak Lane Diner, which planners say illegally intruded onto city streets. Would make the 6500 block of Old York Road one-way south, among other things.
- Amendment of the University of Pennsylvania's Master Plan allowing it to demolish Pepper Hall - the Law School building between 34th and 36th, Sansom to Chestnut - and replace it with a new building.
- Proposal for 60 homes on 3.2 acres in Paschall Village
- Closing a piece of Adams Ave. in Fishtown near the new SugarHouse betting hall, and a length of Saybrook Ave. near 72nd St. in Southwest Philly.