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Crain's
Office space glut .p ossible in 1986 PAGE 22 '" ~
ANRawash in takeover rumors PAGE 7
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Too many Woodward retail plans? PAGE 3 WEEK OF MARCH 4 - 10, 1985 VOLUME 1 0 NO.5
More shark repellent? Michigan National disperses voting power BY CHARLES CHILD CRAIN'S DETROIT BUSINESS
Michigan National Corp. has eliminated the power of small groups of trustees to control a substantial share of its stock. The move, which transferred voting power of more than 22 percent of the stock to the bank holding company's employees, came shortly before the board rejected a merger offer by Comerica Inc. One Michigan National board member said the action was "shark repellent," providing protection against a takeover attempt. The voting transfer also quietly removed some of the remaining influence at Michigan National of its former chairman, Stanford Stoddard. The stock in question was held in eight employee profit-sharing and benefit trusts. Before January, the boards of trustees of the stock plans held the voting power of the roughly 2% million shares, which have been trading recently at about $25 a share. Three of the eight boards of trustees controlled 21.4 percent of the stock as oflast spring, according to the company's 1984 proxy statement. Stoddard, who resigned under pressure last summer, was a leading member of those three trust boards. The trustees lost control of the stock in January when the board transferred the voting power of the
GARY YERKEY
Michigan's man on the street in Brussels, James Reilly, sees "enormous potential" for trade between state and European businesses.
Global connections State's man in Brussels optimistic
In Tokyo, image takes priority
BY GARY YERKEY
BY JACK BURTON
CRAIN NEWS SERVICE
CRAIN NEWS SERVICE
BRUSSELS - From his townhouse office overlooking downtown Brussels, James Reilly can see Michigan - a land of opportunity for U.S. and foreign companies alike. Yet for Reilly, who heads Michigan's European Office of Economic Development (OED), there's a land of opportunity in Western Europe, as well. But Michigan companies, for the most part, don't see it. "There's enormous potential over here," he says. "The problem is finding Michigan companies
TOKYO - Televised images of unemployed Detroit auto workers smashing a Toyota to bits with sledgehammers are not exactly designed to endear potential Japanese investors to Michigan. But that graphic illustration of the hostility felt in Michigan toward Japan during the recession greeted Hiroshi Yokoyama when he went to Michigan in early 1982. The demonstrations just added difficulty to the task that Yokoyama was about to confront persuading Japanese companies to
See BRUSSELS, PAGE 31
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See TOKYO, PAGE 30
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trusts' shares to the employees who owned them, said Lawrence Gladchun, the firm's general counsel. One board member suggested that transfer of the voting power to the employees provided protection against a takeover bid. On Feb. 20, Michigan National's board rejected an offer to merge with Comerica Inc., the state's second largest bank holding company. But a banking consultant said Michigan National's managers could provide more takeover protection by maintaining control of the shares. Comerica officials have talked to the trustees. In exploring a possible merger, Comerica Chairman Donald Mandich has said Comerica had "favorable reactions from major shareStoddard holders and senior officials" at Michigan National, including trustees of the stock trusts, said David Taylor, the firm's vice president for public relations. "But Mr. Mandich has not and will not name names. These are very sensitive and delicate conversations," said Taylor. See SHARK, PAGE 30
Great Scott! Allied sees opportunity here BY AMY BODWIN CRAIN'S DETROIT BUSINESS
To those who don't understand why Allied Supermarkets Inc. is selling stores in western states and keeping its supermarkets in the fiercely competitive southeast Michigan market, David Page has the answer. "We see an opportunity here that we didn't see out there," said Page - Allied's new chairman and CEO - of the company's decision to sell 44 supermarkets in Kansas, Texas and Oklahoma. "Here, the economy is rebounding and we are marginally profitable. Out there, the economy is flat and we were losing money." By selling its Humpty and Ideal supermarkets to two national food wholesalers for an undisclosed price, Allied will cut the number of its supermarkets by nearly twothirds. If the 'sale is completed at the end of the month as scheduled, Allied Supermarkets will own only 19 Great Scott! supermarkets. It will still own a K mart food store in South Dakota, six Family drug stores in Michigan, eight Abner Wolf Cash & Carry grocery wholesale outlets and the Abner Wolf Co., which serves independent grocery stores in Michigan and Ohio.
Hospital told it can't sell
Allied employs about 3,100 people, but that figure will drop to some 1,500 people when the sale of the western supermarkets is consummated. Although the sales price was not disclosed, Page said the company will reap at least $22 million in cash and that Allied's total reserves will increase to more than $37 million. Page said the company will not declare special dividends, instead saving the money for renovation and expansion. Allied's 20 Ideal supermarkets are being acquired by Nash-Finch Co., a Minneapolis-based wholesaler, or by Nash-Finch's affiliated independent retailers. Allied's 24 Humpty supermarkets are being sold to independent retailers affiliated with Oklahoma City-based Fleming Companies Inc., a food wholesaler in 31 states, with 1984 sales of about $5.6 billion. Supermarket industry analyst Richard Singer, at Mesirow & Co. in Chicago, said Allied received "a good price" for the supermarkets. Singer said the Oklahoma, Kansas and Texas stores would be the best prospects for a sale, because the company could get a better See ALLIED, PAGE 2
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Attorneys for the People's Community Hospital Authority told the authority Thursday that it could not be dissolved or sell its assets. The legal opinion comes amid bitter fighting among some authority members who want to sell its five Downriver hospitals to a for-profit corporation. Hospital Corp. of America, the nations's largest for-profit hospital, flew a number of authority members to its Nashville, Tenn., headquarters last fall to persuade them to pressure the authority to sell its hospitals. The opinion of Cozadd, Shangle, Smith and Andrews, the Dearborn law firm representing the authority, said that, because the authority still owes at least $22 million in bonds, its dissolution could violate the contract with bondholders.
'Love Kitchen' to tour U. S. A traveling pizza kitchen designed to feed the poor will be introduced by Farmington Hillsbased Little CaesaI: Enterprises Inc. at its annual convention March 17-20 in San Francisco. Called "The Love Kitchen," the 55-foot-Iong trailer will tour the See LATE NEWS, PAGE 2
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