Business & Finance
Metro-Goldwyn-Mayer (MGM) dropped out of the bidding for the US entertainment assets of Vivendi Universal, saying it wasn't going to overpay for them. Executives of the French multimedia conglomerate reportedly insisted on a minimum of $14 billion. MGM's $11.5 billion offer was considered the highest cash bid among six contenders, among them NBC and Liberty Media.
To try to avert a strike by 80,000 Verizon workers, federal mediators joined talks Tuesday between company management and two unions, the Communications Workers of America and the International Brotherhood of Electrical Workers. Current three-year contracts for workers in 13 Eastern and mid-Atlantic states expire at midnight Saturday. Verizon, based in New York, is the nation's No. 2 provider of telecommunications services, after AT&T.
AOL Time Warner Inc. insisted it still can meet its financial objectives for the year, despite reporting the loss of 846,000 subscribers to its Internet services over the second quarter, a corresponding 23 percent drop in operating income, and a new request for documents relating to its bulk-subscription program by Securities and Exchange Commission investigators. AOL itself trimmed many of the accounts, reports said, because they were nonpaying or returned substantially less revenue than regular accounts. Under the company's bulk-sales program, large employers - known as "strategic partners" - acquired thousands of subscriptions at little or no cost, then offered them to employees at deep discounts as an introduction to AOL's services. The division's subscription base has slipped for three straight quarters, but AOL remains the world's largest Internet service provider. Overall, the communications giant posted a $1.06 billion second-quarter profit last week.
Fruit of the Loom announced plans to close its plant in Harlingen, Texas, by year's end. The plant, near the border with Mexico, employs 791 people. Its demise will mark the end of a regional textile industry that has steadily relocated overseas, where labor is cheaper. Fruit of the Loom, specializing in underwear and casual apparel, is based in Bowling Green, Ky., and was acquired by Warren Buffett's Berkshire Hathaway last year.