' Merrill Lynch Plans for Cable Merger Business Acting as Principal In S2.3 Billion Deal Thursday Morning Section 18, 1985 July B Page? By Handy Wbitestone : 1 BankAmerica Corp. Reports Loss Of $338 Million in 2nd Quarter $Ik Suit ittkr Sribnn Associated Press Writer PHILADELPHIA In an unusual cable television merger deal, Merrill Lynch & Co. has guaranteed it will dispose of or buy seven television stations as part of its $1.2 billion position in Comcast Corp.'s $2.3 billion offer for Storer Communications Inc. Officials of Comcast on Wednesday spelled out the Bala Cynwyd firms merger offer, presented late Tuesday to the board of Miami-baseStorer, the nation s No. 3 cable television company. Bernard P. Gallagher, Comcasts treasurer, said a merger of the two companies would create the nation's third-largecable television concern J With more than 2 million subscribers and annual revenues of $450 million. Sign of Faith' Merrill Lynch's role in financing some 52 percent of the offer was a sign of faith and confidence on the part of the New York investment company, Gallagher said. He said Merrill Lynch has guaranteed its share of the deal, even at the risk of being forced to buy the television stations it could not otherwise d st By Skip Wollenberg Associated Press Writer BankAmerica Corp., the nation's second-largebanking company, reported Wednesday it had a loss of $338 million in the second quarter, one of the largest quarterly losses ever by a U.S. financial organization. The San Franciscc-base- d company said the loss was primarily due to a substantial increase in its reserve for possible loan losses. It said it fortified the reserve in part on the advice of national bank examiners and partly because of continuing pressure on some of its loan customers, including the agricultural, shipping and commercial real estate industries and foreign borrowers. The report of the loss surprised many Wall Street analysts because the company said only six weeks ago that it would break even for the quarter. "No one expected this. said Stephen Berman, a banking industry analyst at the investment firm LF Rothschild, Unterberg, Towbin. Double-Digi- Gains Two other leading banking companies, First Interstate Bancorp and Bankers Trust New York Corp., reported double-digi- t profit gains in the second quarter despite increases in their provisions for loan losses. The loss at BankAmerica fell short of the $1.16 billion loss at Continental Illinois Corp. in the second quarter of 1984 and the $512.1 million loss at Financial Corp. of America in the fourth quarter of 1984. In the second quarter of 1984, BankAmerica had posted net income of $110 million, or 60 cents a share. sell. Barbara Dalton Russell, an analyst for Prudential Bache Securities Inc., said it was unusual for Merrill Lynch to be so deeply involved in a merger deal. We havent seen them do that, she said. They dont typically act as a principal. Junk Bonds The stations are valued at about $880 million; the rest of the $1.2 billion will be funded through high-ris"junk bonds high yield debt. Storer owns television stations in Boston, Detroit, Cleveland, Atlanta, Milwaukee, San Diego and Toledo, For the first six months of the year, BankAmerica had a loss of $224 million in contrast with net income of $211 million, or $1.15 a share, in 1984. Samuel H. Armacost, president of Ohio. Dalton Russell said the television stations should be worth slightly more than $900 million, and there was little chance Merrill Lynch would have to buy them itself. They believe very strongly in the television stations. she said. Ken Miller, managing director and head of Merrill Lynchs mergers and acquisitions department, said his company had no comment on the Comcast offer because it was not yet completed. Comcast buying Storers cable properties is a lot like Cap Cities and ABC," said Dalton Russell, referring to the largest-eve- r media merger the $3.5 billion takeover of ABC Inc. by Capital Cities Communications Inc. Comcast brings a lot to the table y in terms of a management team." A Good Chance She said she thought the deal had a good chance of succeeding and with Comcast's expertise, we should see a higher growth rate under Comcast than otherwise, Analysts said the Comcast offer amounted to between $97 and $100 per share of Storers 21.2 million fully diluted shares. , , Storers chairman, Peter Storer, has estimated that a previous offer for Storer, by certain interests of the New York investment firm Kohlberg Kravis Roberts & Co., amounted to $87.50 per share. Storer said in a statement Wednes- , day that it received the Comcast , merger offer. A. A. Church, vice president, secre-- ' tary and general counsel, said the of- fer will be studied by Storers board and its financial advisers and that an ' appropriate response will be made as soon as it is feasible. "The best way to win board and shareholder approval is to mirror the ' original offer and better it, Bernard P. Gallagher, Comcasts treasurer, said. high-qualit- . ' -' - Profit t Tribune Staff Photo bv Dan Miner The final steel beam was hoisted into place last of 2,900 tons of structural steel at Eagle Gate Plaza and Qffice Tower. Gala Hails Topping-O- ff Eagle Gate Plaza Project The final steel beam for the Eagle Gate Plaza and Office Tower, 70 E. South Temple, was hoisted into place Wednesday dur- ing a topping-of- f ceremony. Zions Securities Corp., project developer for its owner, the Church of Jesus Christ of Latter-ja- y Saints, held the presentation across the way in the 26th floor of the Beneficial Life Building for church officials, project, city and state officials, tenants and potential tenents, and the media. As the 50 invited guests watched, Simon Christiansen, Christiansen Brothers Construction, general contractor, directed placement of the final beam some 320 feet above the street. ; President Gordon B. Hinckley, second counselor in the First Presidency of the LDS Church, called it a significant and happy day" and said the project would be a "significant addition to the business sector and was designed with great care as the result of many hours and consideration. He said the project's design, with includes a stepped design on tower on the east and the the west, was made to enhance rather than dwarf surrounding buildings, including the Church Office Building one block north. said the open corner will add to the attractiveness of the areas and, With a little bias , . will be the most attractive corner in the city. Brigham Young (who at one time owned the property) would be happy with what has been accomplished so far and what' will come. Upon completion (set for April 1986), the project will be one of the largest multitenant office buildings in the downtown area. , He . ' 384,000-square-fo- Construction of the building began 11 months ago with the demo-- ' lition of the Medical Arts Building. Once completed, the stucture will have used a total of 12,397 cubic yards of concrete, enough to build 42 miles of curb and gutter. The foundation alone contains 3.775 cubic yards of contrete some five feet thick and was done in one continous pour of 26 hours. The final steel beam was the last of 2,900 tons of structural steel used in construction. Cooper Carlson Day and Ritchie are project architects. BankAmerithe San Francisco-base-d ca, said the company decided in the past six weeks to make a larger provision for loan losses. The provision amounted to $892 million, which the company said accounted for nearly 80 percent of the quarterly loss and "significantly strengthens the bank against credit problems. The loan loss provision was $206 million in the second quarter in 1984. Affected Portfolio Armacost said the increased provision partly reflected growing weakness in important sections of the economy which particularly affected our portfolio." He said it also reflected tentative conclusions of examiners of the U.S. Comptroller of the Currency, who have substantially completed a routine audit they began in April. year earlier. It ranks second only to Citicorp, based in New York, among the nation's bank holding companies. On Tuesday, Citicorp posted a 22 percent profit gain In the second quarter. First Interstate, w hich is based in Los Angeles and ranks eighth among the nation's banking companies, renet income ported its second-quarte- r rose 13.7 percent to $76.7 million, or $1.67 a share, from $67.5 million, of $1.50 a share, a year ago. For the first six months, its profit rose 12 9 percent to $148.2 million, or $3.24 a share, from $131.2 million, or $2 92 a share, a year earlier. J.J. Pinola, chairman and chief executive, said the earnings growth reflected substantial increases in earn- - normal provisions for possible future loan losses. Loan-Los- Provision s First Interstate took $73 9 1984. a second-quarte- r provision for loan losses of million, up from $49.7 million in Bankers Trust, which is based in New York and ranks ninth, reported its second-quarte- r profit rose 21 percent to $87.2 million, or $2.55 a share, from $72 million, or $2.25 a share, a year earlier. For the first half, it said its profit rose 23 percent to $179.8 million, or $5.28 a share, compared with $146 million, or $4.62 a share, a year ago. Hopes for Better Economy Lift Stocks to New Highs - NEW YORK (AP) The stock market kept pushing ahead to record highs Wednesday, advancing on the heaviest trading volume in almost six months amid hopes for lower interest The Market In Brief New York Stock Exchange July 17, 1985 rates and improved economic UP growth. The Dow Jones average of 30 indus- VOLUME 977 159,920,000 a trials rose 10.08 to 1,357.97, bringing its gain over the past two sessions to 22.51 points. Turnover on the New York Stock Exchange reached 159.92 million shares, up from 132.50 million Tuesday and the largest total since 170.02 million changed hands on Jan. 30. SHARES unchanged 384 0 ISSUES TRADED 2,045 DOWN 684 Analysts said the market continued to benefit from reports that President Reagan was recovering quickly from surgery last weekend. Traders also responded enthusiastically to word that the Federal Reserve Board had reset its targets for growth of the money supply from a new base. The move was taken as an Indication that the Fed plans to stay with its recent relatively stimulative credit policy. Federal Express climbed 2 to 50. The company reported Tuesday that its earnings for the fiscal quarter ended May 31 increased to 89 cents a share from 61 cents in the like period a year earlier. International Business Machines to 129. The stock has been rose N.Y.S.E. Index 113.49 0.44 S. & P. 195.65 0.93 Comp. Dow Jones Ind 10.08 1,359.97 moving up since early this wees when IBM issued a quarterly report? that many analysts interpreted as for the companys outlook. ' Among other computer and tech-- ; issues. Digital Equipment to 99; Texas Instruments added t to 99; and Hewlett-Packar- nology d 37. First Boston, which reported, sharply higher quarterly earnings Tuesday, gained 1 to 92. oq; 124 Million Saying Charge It! - percent more than there-weryear ago, the company said. We have been seeing a double-dig-it increase for quite some time, said David Brancoli, a Visa spokesman. He said growth has surged for at least the past two years as people come to rely more heavily on the convenience of cards. During the first quarter of 1985, the company said its card was used for more than 460 million transactions, a 19 percent rise from the year before. More SAN FRANCISCO (AP) people are using more plastic than world, Visa 15 a ever before. ,; international reported vol- "While the decision to increase the loan loss provision is painful in terms of short-terresults, our management and board believe that bolstering the reserve is a prudent course e for the benefit of the cor- that the worldwide ume for its credit card increased 28 percent to $23 billion during the first quarter ended March 31. Thats up from $18 billion in the first quarter of poration," Armacost said. The loan loss provision boosted its loan loss reserve fund to $1.5 billion, or 1.81 percent of total loans and leases, up from 1.20 percent a year earlier. Rothschild's Berman said that percentage is unusually high. I think they wanted to strengthen confidence in the institution and the regulators were probably badgering, them in terms of current and probably future losses," he said. Still Exposed James Wooden, a banking analyst at Merrill Lynch, said there may be more problems ahead for the banking company depending on what happens to the economy. Unlike other instances where you take a one-shhit, there obviously is still some exposure he here to further deterioration, said. BankAmerica's assets were $121 billion on June 30, unchanged from a In all, there are now some 124 million Visa cardholders around the long-rang- ing assets, led by commercial and installment loan growth. But he noted these gains were offset by higher than Wednesday 1984. COMPUTER TAPE STORAGE SECURE STORAGE OFF-SIT- E FIREPROOF VAULT CLIMATE CONTROLLED VAULT LOW PRICES 24-HOU- R PICK-U- P ACCESS AVAILABLE & DELIVERY SVC. AVAIL. CONVENIENT LOCATION Interwest Depository NORTH SALT LAKS 627 W. 5300 So. 40,000 Sq. Ft. WjrehouJ spoc, 30 ft. ceilings 262-991- 4 dock high, rail BETTILYON REALTY 972-250- 0 Annual Percentage Rate SALE LOOK WHAT'S UNDER OUR HAT PARDNER!" 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