The Celtics may be exploring a buy-back of publicly held units in the Boston Celtics Limited Partnership in a bid to take the company private again, according to Joan Vennochi in this morning's BOSTON GLOBE. The "goal would be to make even more millions for the team owners as well as protect them from the scrutiny that goes along with public filings." As reported in a FINANCIAL WORLD piece, the reason to suspect such a move is the possibility that the Celtics could lose their master limited parntership (MLP) tax advantage at the end of '97 due to changes in the law. At that point, the general partners would have to pay taxes on earnings at the corporate rate of 35%. However, there is a proposal before Congress to preserve the MLPs' favored tax status, which probably would cause the stock to go up. Vennochi: "In other words, there is now an ideal window of opporutnity to buy the stock as cheaply as possible and then lock in more of the Celtics profits, which wouldn't have to be distributed to shareholders." Celtics CFO Joseph DiLorenzo said the team "really hasn't talked about" a buyback, but added that, generally, "it makes "100% sense to do it when the stock is undervalued" (BOSTON GLOBE, 5/10).
ITT Corp. reportedly plans to make a decision in the "very near future" about a previously announced plan to consider breaking up into three separate companies. Analysts believe that the long-awaited split of ITT's hotel/entertainment, manufacturing and insurance segments would "boost" the company's overall value. Since "growing speculation about the breakup and in response to the company's strong earnings" in mid-December, ITT's shares have "shot up" more than 30%. Analysts and investment bankers speculate that the announcement could come as soon as the company's board meeting on June 13. ITT's recent purchase, through a partnership with Cablevision, of Madison Square Garden, the Knicks, the Rangers and MSG Network would be included in the hotel & entertainment segment. ITT CFO Robert Bowman is expected run the entertainment company on a day-to-day basis (Eben Shapiro, WALL STREET JOURNAL, 5/10.
The Nordiques have until Thursday to examine a proposal by the Province of Quebec intended to keep the team in Canada. Nordiques Co-Owner Marcel Aubut was given the proposal yesterday, according to Premier Jacques Parizeau. Parizeau said both sides agreed to keep the details of the deal a secret: "During these 48 hours, we will discuss it and try to get it moving" (TORONTO STAR, 5/10). The offer was expected to include a demand that the Province have part ownership of the team, in exchange for the team dropping its demands that a casino or lottery help finance the team (Toronto GLOBE & MAIL, 5/10). The team reportedly has a US $75M offer from Comsat Video to relocate to Denver. RAPTORS COOL TO IHL: The Raptors' interest in buying an IHL team "may have cooled," according to Craig Daniels in this morning's TORONTO SUN. IHL VP Communications Tim Bryant: "They've backed off on their interest at this time, is what they told us." Raptors President John Bitove said the team's interest in the IHL was "preliminary at best" and that they are focused on their efforts to get the Air Canada Centre through the zoning process (TORONTO SUN, 5/10).
Jets Owner Barry Shenkarow told the WINNIPEG FREE PRESS that a sale of his team to MN-based investors would be announced today. The sale price was expected to be in the $65M range. In Minneapolis, health care entrepreneur Richard Burke said an announcement of the sale was "reasonably imminent." Dana Warg, Manager of the Target Center: "The offer was made on Saturday. I don't know exactly when the deal will be announced, but I know it's close." One "hurdle" was cleared yesterday when the Minnesota Sports Facilities Commission recommended to the MN State Legislature that is pass a funding package to help buy the franchise. That is expected to be worth $10-$20M and could be passed by the end of the week. Burke: "It's down to haggling now" (Scott Taylor, WINNIPEG FREE PRESS, 5/10). CFL and IHL franchise Owner Horn Chen reportedly submitted a bid to purchase the team and move them to Hamilton. Chen and his group of investors reportedly offered $65M to Shenkarow with another $25M "targeted" for the Maple Leafs for territorial rights (Gary Picknell, TORONTO SUN, 5/10).