Lawsuit against Genzyme thrown out

GE to buy HPSC for $72.4m in stock

General Electric Co., the biggest nonbank financial company, said it will buy the Boston-based lender HPSC Inc. for $72.4 million, adding $1 billion in assets as it expands into financing equipment for doctors and dentists. GE will pay $14.50 a share in stock, a 60 percent premium to HPSC's closing price Tuesday, the companies said. The transaction is expected to close this year or early next. GE Healthcare Financial Services will add 130 HPSC employees in 13 states to its 700 employees. HPSC shares rose $5.17, or 56.9 percent, to $14.26. (Bloomberg)

Raytheon pension plans gain 13.3%

Raytheon Co., the fourth-largest US defense contractor, said its pension plans earned 13.3 percent from November 2002 through September 2003, exceeding assumptions. The Lexington-based company had assumed an 8.75 percent return on investments, it said in a regulatory filing. In the 12-month period ended Oct. 31, 2002, Raytheon reported a 5 percent drop in returns, missing its assumption of 9.5 percent, which led to expenses that weighed down earnings. Raytheon currently expects pension expense of $300 million in 2003 and $625 million in 2004, forecasts it gave in June. For every 2.5 percent increase or decrease in the return for this year, Raytheon said, its pension expense for 2004 will change by about $12 million. (Bloomberg)

M-Qube raises $8m in venture funding

M-Qube, a Boston start-up that sells services to allow companies to advertise through messages on cellphones, closed an $8 million round of venture funding that brings its total raised to $14.9 million. The company recently signed Universal Domestic Television, the Warner Bros. film studio, and Procter & Gamble for systems that let customers use short-messaging technology to get product information and participate in sweepstakes. Sigma Partners, based in Boston and California's Silicon Valley, led the $8 million round, with prior investors General Catalyst Partners and Bain Capital Ventures also investing. (Peter J. Howe)

THE NATION

Reed wants to cut NYSE copresidents' pay

Reed New York Stock Exchange interim chairman John Reed is seeking to cut the pay of copresidents Robert Britz and Catherine Kinney, who must stay at the exchange to collect about $22 million owed to them in deferred pay, said seat holders whom Reed has briefed. Reed told members, who have called NYSE executives' pay excessive, that Britz, 52, and Kinney, 51, won't be eligible to collect the deferred pay unless they remain at the exchange until they turn 55, said members who declined to be identified. "I would think that if they want to keep their jobs, they'd have to be open to negotiations," said William Higgins, a former floor broker and owner of a NYSE seat since 1974 who met Reed privately last month. NYSE spokesman Ray Pellecchia declined to comment. Britz and Kinney didn't return voice mail messages. (AP)

Various ways planned to value options

The Financial Accounting Standards Board plans to offer companies a variety of ways to value stock options under a draft rule it expects to propose by February, chairman Robert Herz said. FASB will probably allow the Black-Scholes pricing model used by many corporations and the intrinsic value method, Herz said at a hearing of the Senate Banking securities and investment subcommittee. Many computer, software, and semiconductor makers have objected to FASB's plan to require companies to account for options as an expense because they say it would cut profits and force them to abandon options. Black-Scholes estimates the fair market value of options. Intrinsic value examines the difference between the security's market price and the price at which the option can be exercised. (Bloomberg)

Liz Claiborne buys clothing maker Enyce

Liz Claiborne Inc., the maker of Elisabeth and Liz Claiborne clothing, agreed to buy clothing designer Enyce Holdings LLC for about $114 million to expand its brands of young men's clothing. The purchase price, which includes debt, will boost 2004 earnings by 5 cents a share, Liz Claiborne said. Enyce, which gets about 84 percent of sales from men's clothing, is expected to have sales of $95 million this year. Chief executive Paul Charron has expanded the business beyond women's career clothing by buying or licensing brands, including the Juicy Couture line in April. Profit this year will be unaffected by the purchase. Sales next year are now expected to increase as much as 8 percent while profit will rise to as much as $2.77 a share. (Bloomberg)

Amtrak to receive $1.2b from Congress

Congressional negotiators agreed to give Amtrak $1.2 billion in subsidies, but it was not certain if the railroad could operate for another year without more help. That is $300 million more than the House and the Bush administration have supported, but $600 million less than what Amtrak said it needed to operate through next September. The Senate, acting on a provision pushed through by Washington Democrat Patty Murray, had agreed to $1.34 billion. Amtrak said it would probably have to begin shutting down if it were forced to accept the House figure. But rail officials said recently that they could live with the Senate proposal even though it would mean deferring some long-term capital projects. (Reuters)

Sentencing of HealthSouth officials put off

Five former HealthSouth Corp. officials will have to wait at least a day to learn their fate as a hearing to determine sentences for their parts in the healthcare company's $2.7 billion accounting fraud adjourned without a decision. Motions by attorneys to have sentencing put off until after completion of the trial of former HealthSouth chief executive Richard Scrushy, who was indicted last week on 85 criminal counts as the accused mastermind of the fraud, were denied by federal Judge Inge Johnson. But when testimony ended for the day only one of the five, former assistant controller Emery Harris, had taken the stand to plead his case. Harris and four other former officials of the company's finance department are among 14 ex-HealthSouth executives who have pleaded guilty to various criminal fraud and conspiracy charges. (Reuters)

THE WORLD

3 ex-Elf officials convicted in graft trial

A French court convicted three former executives of helping to loot $350 million from the Elf oil company to finance lavish lifestyles, closing a chapter in a scandal that sullied the nation's political and business elite. Former chairman Loik Le Floch-Prigent, 60, and senior director Alfred Sirven, 76, were given five-year prison terms for masterminding the mass embezzlement in the late 1980s and early 1990s, when Elf was under state ownership. Sirven, the company's former number two official, was ordered to pay $1.16 million, while Le Floch-Prigent must pay $435,000. Andre Tarallo, former head of Elf's hydrocarbons division, was sentenced to four years and fined $2.3 million. Twenty-seven accomplices, among them other former Elf officials, also were convicted. (AP)