Compiled by Julie Leupold
TOP STORIES
Taiwan’s Acer Inc. is set to pay $710 million for Irvine-based computer maker Gateway Inc. Acer is offering 57% more than what Gateway shares were trading at before the deal. With Gateway, Acer is set to have about $15 billion in yearly sales and ship more than 20 million computers a year, it said in a statement. Computer industry watchers had expected the buyout.
Irvine-based Palace Enter-tainment Inc., operator of Boomers in Irvine and other family amusement centers across the country, is being bought for $330 million by Spain’s Parques Re-unidos SA. The deal follows Palace Entertainment’s $200 million sale last year to MidOcean Partners, a private equity firm with offices in New York and London. Palace owns and runs more than 30 centers in eight states, some under the Boomers name. Palace counts yearly sales of about $150 million. The buy is big for Parques Reunidos, which also counts yearly sales of about $150 million. The buy is set to close in the quarter.
Irvine-based Option One Mortgage Corp. might be shut down as the mortgage slowdown has put a sale of the troubled subprime lender in doubt, parent H & R; Block Inc. said. In April, H & R; Block said it was planning to sell Option One to New York-based private equity firm Cerberus Capital Management LP, for an estimated $800 million. Option One’s loan volumne and ability to borrow aren’t meeting the minimum conditions needed for the deal to close. H & R; Block said it is in talks with Cerberus to modify the terms of the sale agreement. The sale originally was expected to close by the end of the year.
Los Angles Angels of Anaheim baseball team owner Arte Moreno raised the specter of legal action to block the city’s proposed development in the Angel Stadium of Anaheim parking lot. The city recently gave development rights to Archstone-Smith Trust and Hines Interests LP, which have proposed 1,100 apartments and possible offices, hotels, shops and entertainment venues. The city owns the land, but the Angels hold a lease that blocks housing on the site. Sources said the sale price of reportedly more than $150 million could increase by about $50 million if the city persuaded Moreno to waive the restriction. In a meeting last week, the city said it could move ahead without Moreno’s blessing on development other than homes.
Lake Forest-based disk drive maker Western Digital Corp. has lined up a short-term $1.25 billion loan for its pending buy of San Jose-based drive parts maker Komag Inc. In June, Western Digital said it planned to pay $1 billion in cash for Komag, which makes thin-film metal disks, the part of a drive that stores data. Western Digital also is taking on Komag’s outstanding debt and other expenses. The deal is expected to close in September. The buy is aimed at giving Western Digital all of the components it needs to make drives on its own and better compete with rivals Seagate Technology and Hitachi Ltd.
Walt Disney Co. plans to run two hotels in the upscale retail center GardenWalk on Katella Avenue going up across the street from Disney’s Anaheim theme parks. Disney had been an outspoken naysayer of the proposed development for years. One hotel is planned to be a moderately priced “family hotel” with rooms having themes including Disney and Pixar characters. The other would be smaller and more luxurious, similar to a W Hotel. Disney would run but not own the hotels.
Some local doctors have canceled contracts with Blue Cross of California, the state’s largest health insurer, saying they can’t afford to accept lower reimbursement rates that went into effect last week. Blue Cross said most of the cuts are to specialists, and more than 70% of doctors won’t see cuts.
Whole Foods opened its relocated Tustin supermarket at The District last week. The store, the only Whole Foods in Orange County, has nearly tripled in size from the prior store and added services and takeout options.
ECONOMIC INDICATORS
Down: The S & P;/Case-Shiller home price index for Orange and Los Angeles counties fell in June from a year earlier, marking the fifth consecutive month of decline. June’s drop of 4.06% was the worst since July 1994.
