In other items: European company EADS signs pact for air tankers; OfficeMax delays buyback for investigation; judge declares mistrial in Westar Energy fraud case; and British liquor maker Diageo buys Chalone Wine.
The Walt Disney Co. agreed yesterday to settle federal regulators’ charges that it failed to disclose benefits received by some directors and their relatives, including former directors Roy E. Disney and Stanley Gold, who led a shareholder revolt this year against Chief Executive Michael Eisner.
Disney was not fined in the agreement with the Securities and Exchange Commission (SEC) but did agree to refrain from future violations of securities laws. The media giant neither admitted nor denied wrongdoing in the settlement.
The SEC said that between 1999 and 2001, Disney failed to disclose the transactions benefiting directors and their families in its proxy statements distributed to shareholders and annual reports filed with the SEC.
European company signs pact for tankers
European Aeronautic, Defence & Space, Europe’s biggest aerospace company and parent of Boeing rival Airbus, signed a contract to supply refueling aircraft to the Royal Australian Air Force.
The order, announced in April, went to EADS over a competing tender from Boeing. EADS will provide five Airbus A330-200 aircraft, the company said in a statement yesterday. The new planes will replace the Australian Air Force’s existing Boeing 707 tankers.
Airbus also is expected to bid on a contract to supply tankers to the U.S. Air Force. The Pentagon said in November that it would open the contract to new bidders after Congress withdrew an earlier proposal to acquire 100 planes worth $23 billion from Boeing.
Buyback delayed for investigation
OfficeMax is delaying a planned stock buyback as it investigates allegations that workers inappropriately sought promotional payments and falsified documents involving $3.3 million in claims billed to a vendor, the office-products company announced in Chicago yesterday.
The former Boise Cascade took the name of the Cleveland-based office-products seller it bought late last year for $1.2 billion in cash and stock. The sale of its paper and timber assets closed Oct. 29.
OfficeMax had earlier said it would use a portion of the proceeds of the sale to return equity to shareholders, according to Vince Hannity, a company investor-relations spokesman. The Itasca, Ill.-based company said yesterday that it intends to buy back $775 million to $815 million of its common stock, although that will be delayed during the investigation.
Hannity did not have a timetable for the investigation.
OfficeMax shares tumbled on the news, falling $1.37, or 4.2 percent, to close at $31.13 yesterday.
Judge declares mistrial in fraud case
The federal fraud trial of former Westar Energy Chief Executive David Wittig and his top deputy accused of trying to loot the company ended yesterday in a mistrial after jurors could not reach a verdict on more than half the charges.
U.S. District Judge Julie Robinson in Kansas City, Kan., decided not to hear the jury’s verdict on the remaining charges, all of which related to money laundering. The jury deliberated for more than six days after a trial that lasted more than seven weeks.
The jury deadlocked on a single charge of conspiracy, and several counts of wire fraud and circumventing internal accounting controls. Robinson had directed the jury to resume deliberations on Friday after they initially reported they could not reach a verdict on those counts.
British liquor maker buys Chalone Wine
Diageo, the maker of Smirnoff vodka and Guinness stout, agreed to buy Chalone Wine Group for $260 million to gain a range of upscale California wines as more Americans choose wine over beer.
The world’s largest liquor maker will pay $14.25 a share for Chalone, based in Napa, Calif., where the U.K. company already has two wineries, Diageo spokeswoman Isabelle Thomas said yesterday. Chalone said yesterday it was Diageo that topped an $11.75 bid from closely held Domaines Barons de Rothschild by offering $13.75 a share on Dec. 13. The bidder had not been identified before.
London-based Diageo is pursuing a greater share of the U.S. market for top-end wines as slower economic growth and an aging population crimp sales of alcoholic drinks in Europe.
Compiled from The Associated Press and Bloomberg News