In Business This Week: HEADLINER
DAVID COULTER: WHY BofA'S PRESIDENT IS OUT
David Coulter, 51, stunned Wall Street when he announced on Oct. 20 he was stepping down as BankAmerica president. But some insiders say the departure was no surprise.
Sanford Robertson, an ex-BankAmerica board member and Coulter's longtime friend, says that ever since NationsBank announced its merger with BofA last spring, it was clear that the Charlotte (N.C.) giant wanted more control. That put Coulter in jeopardy: Many had seen him as in line for the top job when ex-NationsBank chief Hugh McColl Jr. retires as BofA chairman and CEO.
Neither Coulter nor McColl would comment beyond expressing shared regret. But Robertson says plunging quarterly earnings, largely due to a $372 million write-off of a $1.4 billion loan backed by BofA under Coulter for hedge fund D.E. Shaw, provided the ammo McColl and his board needed. "I thought they would look for their opening to get rid of Dave, and they saw it with D.E. Shaw," says Robertson. Industry sources say other heads may now roll--especially those close to the old BofA.EDITED BY KELLEY HOLLANDReturn to top
NEWELL PUTS A MAT UNDER RUBBERMAID
NEWELL IS NOT EXACTLY A household name, even though it sells such consumer staples as Calphalon pots and Goody hairbrushes. But the Freeport (Ill.) company leaped to prominence on Oct. 21, when it announced a deal to pay $5.7 billion in stock and debt for troubled Rubbermaid. It's making us "more important quickly," says Newell CEO John McDonough. Newell, the world's leading seller of window treatments and housewares, estimates the acquisition will hurt earnings, but only for one year. And Newell Rubbermaid, as the merged company will be known, will have major clout with big discounters such as Wal-Mart Stores, Kmart, and Target Stores. Let the battle for shelf space begin.EDITED BY KELLEY HOLLANDReturn to top
KAUFMAN & BROAD'S NEW ADDITION
BRUCE KARATZ HAS BEEN ON a mission to become the biggest homebuilder in the country, and on Oct. 20, he achieved his goal. The CEO of builder Kaufman & Broad inked a friendly deal to pay $545 million in cash and stock for a California and Nevada rival, Lewis Homes Management. It's the latest in a string of deals for K&B, and it gives the company a dominant share of the currently robust California and Southwest markets. The move also comes at what many in the industry say is the tail end of a housing boom. But Karatz insists that he isn't worried. "I just don't see a recession," he says.EDITED BY KELLEY HOLLANDReturn to top
SUNBEAM'S PROFITS GO BEHIND A CLOUD
OOPS: SUNBEAM ANNOUNCED on Oct. 20 that it actually earned $52 million in 1997, not the $123 million first reported. Ex-chairman Al Dunlap, ousted last summer, had extolled the original results as evidence of his turnaround. Sunbeam also said the company under Dunlap had understated the red ink for 1998's first quarter. Dunlap says in a statement that he had no involvement in accounting matters and that the results had been reviewed by the board's audit committee.EDITED BY KELLEY HOLLANDReturn to top
HE BAGS $1 BILLION IN GROCERY SALES
RONALD BURKLE STARTED HIS career as a grocery bagger. Now, he's carrying off big bags of money from back-to-back deals. Burkle, chairman of Fred Meyer Stores, sold the 14% stake that his Yucaipa Management holding company had in Dominick's Supermarkets to Safeway for $1.85 billion. Then, on Oct. 20, Burkle sold Fred Meyer to Kroger in a $13 billion deal. Burkle's take: about $1 billion in stock and cash. But the paper billionaire isn't about to retire. He is a major Democratic Party fund-raiser, and he's part of the group assembled by former agent Michael Ovitz to land a football franchise for Los Angeles at an Oct. 27 NFL owners' meeting.EDITED BY KELLEY HOLLANDReturn to top