Compiled by Julie Leupold
TOP STORIES
Chapman University is predicting a national recession with the first decline in jobs locally in five years in early 2008. Economists at the school see a brief downturn,with a decline in the national economy in first and second quarters, and then a pickup in the second half. For the year, Chapman sees the national economy growing 0.9%. For Orange County, Chapman predicts a 0.2% decline in employment here next year, the first overall loss in jobs since 2002. The county could lose 2,400 jobs next year.
Irvine’s Blizzard Entertainment Inc., the top maker of video games played on the Web, is combining with Santa Monica-based Activision Inc. in a complex $19 billion deal that’s set to form the world’s biggest video game company (see story, page 20). France’s Vivendi SA, Blizzard’s parent, is set to combine its video game unit with Activision and own 68% of the venture. Robert Kotick, Activision’s longtime chief executive, is set to lead Activision Blizzard. The deal is expected to close in the first half of next year.
TECHNOLOGY
Aliso Viejo-based Quest Software is buying PassGo Technologies Ltd., a British maker of software to control who is allowed to use a company’s computers. Terms of the deal weren’t disclosed.
HEALTHCARE
Advanced Medical Optics Inc. elected two new directors, including one from ValueAct Capital Partners LP, an activist hedge fund that’s the Santa Ana company’s largest stockholder. The directors are G. Mason Morfit, a partner at San Francisco-based ValueAct, and Daniel Heinrich, a senior vice president and chief financial officer for Clorox Co. ValuAct now owns some 15% of Advanced Medical. ValueAct opposed Advanced Medical’s $4.23 billion unsuccessful bid this summer for rival Bausch & Lomb Inc.
The University of California, Irvine School of Medicine is spending $40.5 million on a medical education building. The 65,000-square-foot building’s scheduled to be finished in November. Features are set to include a telemedicine facility to train students who’ll be delivering healthcare to underserved agricultural and remote regions of California. The building also is set to house UCI’s Program in Medical Education for the Latino Community.
REAL ESTATE
Santa Ana-based real estate investor NNN Realty Advisors Inc.’s buy of Chicago-based brokerage Grubb & Ellis Co. was approved by both companies’ shareholders. The companies said they now expect the deal to close as soon as practical and begin moving Grubb’s headquarters to Santa Ana.
APPAREL
Wet Seal Inc. of Foothill Ranch plans to slow its opening of stores after weaker-than-expected quarterly earnings and declining same-store sales. The retailer now plans to open stores at a 5% growth rate in 2008, down from 15% now. For the quarter ended Nov. 3, Wet Seal reported a loss of $3.3 million, versus a gain of $2.4 million a year earlier. Same-store sales in November dropped 1.7%.
Anaheim’s Pacific Sunwear of California Inc. posted a 2.3% gain in November same-store sales driven by its dominant PacSun chain. The company is selling its demo chain offering urban styles and closing its small shoe store chain to focus just on PacSun. In November, PacSun stores saw a 7% gain in same-store sales.
FINANCE
Billionaire Gerald J. Ford said he reduced his stake in Newport Beach-based thrift Downey Financial Corp. to 4.9% from 6.8%. Ford’s company, Dallas-based Hilltop Holdings Inc., said it sold 510,000 shares of Downey at $40 to $41.14 per share, according to a Securities and Exchange Commission filing. Hilltop initially bought 1.89 million shares of the company three weeks ago at $30.96 to $34.89 a share. Ford now has 1.38 million shares. Hilltop had expressed interest in buying Downey or working on a sale of the savings and
loan operator.
Private equity firm Cerberus Capital Management has backed away from a deal to buy Irvine-based Option One Mortgage Corp., according to the subprime lender’s parent company, H & R; Block Inc. As a result of the nixed deal, the Kansas City-based tax and accounting services company said that Option One has stopped making loans and will close that part of its operations. H & R; Block also plans to sell Option One’s mortgage-servicing business. The closure of Option One’s mortgage business will result in 620 lost jobs in three offices. Most are believed to be in Orange County.
GOVERNMENT
Treasurer-Tax Collector Chriss Street said he discounted 17 county investments by nearly $14 million after a ratings agency warned it might downgrade the securities, known as structured investment vehicles. The investments pool together mortgages, student loans, corporate bonds and other debt. The discount amounts to less than half of 1% of the county’s $6 billion investment pool. So far the discount exists only on the county’s books. If the county holds the investments, it eventually should get full value for them, according to Street.
