This past week’s news from www.ocbj.com and other sources
TOP STORIES
Newport Beach-based Pacific Investment Management Co. is raising $1 billion to buy problem loans from banks across the country. Pimco, one of the largest bond fund managers, will acquire commercial and home mortgage loans and other debt, according to a report by Bloomberg, which relied on information from prospective investors. There were 829 problem banks with $403 billion in assets in the U.S. at the end of the second quarter, according to the Federal Deposit Insurance Corp. Pimco controls about $1.2 trillion in assets.
Irvine-based communications chipmaker Broadcom Corp. has a deal to buy Redwood City’s Gigle Networks Inc. for up to $83 million. Gigle Networks makes what’s called powerline networking chips, which allows Ethernet signals to run over existing electrical wires within a home. Broadcom agreed to pay $75 million for Gigle Networks, with another $8 million if it meets goals. Both companies’ boards have signed off on the deal. Separately, Broadcom and other chipmakers have been mentioned in a government probe of insider trading. Federal prosecutors in New York arrested Don Ching Trang Chu, an employee at Mountain View-based research consulting firm Primary Global Research LLC, on allegations that he arranged for hedge fund traders to get insider information from employees at Broadcom, Canada’s Sierra Wireless Inc. and Santa Clara’s Atheros Communications Inc., all publicly traded. Broadcom declined comment.
REAL ESTATE
Shares of Irvine-based homebuilder Standard Pacific Corp. slumped to a market value of about $370 million on news that it’s discounting shares for an investment firm that provided it with a lifesaving deal two years ago. The company said it reworked an agreement with New York-based MatlinPatterson Global Advisers LLC that allows the firm to exercise warrants to buy Standard Pacific stock at $2.09 a share. That’s about half the price called for originally. MatlinPatterson now controls about half of the voting stock of Standard Pacific and holds warrants that convert into 89 million preferred shares, worth about $188 million at the discounted rate.
Fariborz Maseeh, the head of Newport Beach investment firm Picoco LLC and one of the county’s wealthiest residents, has bought Corona del Mar’s Portabello Estate in what appears to be the most expensive home sale OC’s ever seen. A Massachusetts-based limited liability company managed by Maseeh bought the estate for $34.1 million, according to a report in the Wall Street Journal. The deal also reportedly includes the transfer of a property valued at around $7 million to the estate’s seller, Frank Pritt, founder of Seattle software maker Attachmate Corp. The combined $41.1 million price bests the previous high mark of $35 million for a Newport Bay mansion previously owned by actor Nicolas Cage and sold in 2008.
RETAIL
Anaheim-based clothing retailer Pacific Sunwear of California Inc. saw news of a better-than-expected third-quarter loss overshadowed by its warning of worse results for the current period, which runs through January. The 877-store chain said it expects to lose between $4.6 and $11.9 million in the current quarter, with revenue about even with a year earlier. Pacific Sunwear didn’t offer an overall revenue projection, but said the key same-store sales total likely will be anywhere from flat to down 5%. Shares of the retailer fell on the forecast to a market value of about $415 million. The third quarter saw Pacific Sunwear with revenue of $258, down 4% from a year earlier but better than the $251 million expected on average by analysts. The company reported a loss of $4.3 million after deferred tax assets. Wall Street expected a $6.3 million loss.
Austin, Texas-based Whole Food Markets Inc. said it plans to open a fourth OC store next year. The Laguna Niguel store will be part of a return to expansion including six others across the country for the 301-store natural food chain.
HOTELS
The Dana Point City Council voted to continue a voluntary assessment district that collects a $3 fee on room rentals at four large hotels for a tourism business improvement district to promote overnight visits. The fund generates about $850,000 annually for marketing and advertising.
OTHER NEWS
Phoenix-based Republic Service Inc.’s Consolidated Disposal Service said it will pay legal defense fees for the city of Los Alamitos and council members Troy Edgard, Marilynn Poe and Ken Stephens. The city and officials are subjects in a lawsuit charging that Consolidated Disposal Service was awarded a multi-million contract in return for political contributions. A group called Citizens for a Fair Trash Contract is pressing the lawsuit.
The La Habra City School District arranged for extra substitute teachers after its teachers union, the La Habra Education Association, authorized a strike in response to 2% cut in salaries and reductions in benefits.
ECONOMIC INDICATOR
Up: Commercial construction in Orange County, where developers have gotten permits for $359 million of work on office, industrial, retail and hotel projects so far this year. That’s a 43% increase from the first 10 months of 2009, according to the Construction Industry Research Board. The improved total still trails the average of $732 million for the same period over the prior decade.
