Business briefs: Perry Capital sells off JCP stocks

October 2, 2013 

NEW YORK -- J.C. Penney Co. shareholder Perry Capital sold about half of its stake in the struggling retailer after it announced a share offering that diluted investors and pushed down the stock price.

About 84 million shares were sold at $9.65 apiece for proceeds of about $786 million after fees, Plano, Texas-based J.C. Penney said Monday in a prospectus. Underwriter Goldman Sachs may offer an additional 12.6 million shares under a 30-day option that could push the retailer's proceeds to about $904 million.

J.C. Penney said last week it would sell the shares, which diluted current holders by about 38 percent, to raise cash amid concerns that it may not have enough liquidity to fund its turnaround. Perry, a New York-based hedge fund, said Monday, after the share offering was announced, that it sold 9 million shares, cutting its stake in the chain by about half.

J.C. Penney declined 0.6 percent to $8.75 at the close in New York. The shares have sunk 16 percent from the market close on Sept. 26, the day the offering was announced. That pushed the retailer's drop this year to 56 percent, compared with a 19 percent gain for the Standard & Poor's 500 Index.

Walt Disney and Dish Network talks hung up

LOS ANGELES -- Walt Disney Co.'s contract renewal talks with Dish Network Corp. are hung up on Dish's ad-skipping technology and terms for two new Disney cable channels, according to people familiar with the discussions.Dish, the second-largest U.S. satellite-TV service, and Disney, owner of ABC, ESPN and Disney Channel, gave themselves one to two days beyond Monday's deadline to hammer out an accord, said the people, who sought anonymity because the discussions are private.

Dish's AutoHop technology, introduced in May 2012, presents an obstacle to a deal. The one-button feature allows subscribers to skip commercials on recorded broadcast TV shows, undermining the effectiveness of network ads.

Dish is embroiled in litigation with ABC, CBS, NBC and Fox over the feature.Disney, based in Burbank, Calif., is also trying to build distribution for two new channels -- Fusion, a venture with Univision Communications Inc. aimed at Hispanics, and the SEC Network, which will feature Southeastern Conference college sports beginning next year.

Dish, based in Englewood, Colo., and Disney said Monday they agreed to a "short-term" extension of their agreement, which was due to expire Sept. 30. The deal prevented a blackout of ESPN and the Disney Channel for Dish subscribers, including ABC viewers in markets where Disney owns the stations, such as New York, Los Angeles and Chicago.

Dish Chairman and co-founder Charlie Ergen has lamented the rising cost of sports programming for several years. He suggested in August a pay-TV com

pany may one day choose to go without the top-rated all-sports channel -- a strategy that would lower prices to consumers.ESPN charges pay-TV operators about $5.54 a month per subscriber, according to research firm SNL Kagan.

Cuban accused of insider trading

DALLAS -- A government lawyer says the drive to win that helps Mark Cuban succeed in business led the billionaire basketball owner to cheat by using insider information to sell stock in an Internet company.

"Mark Cuban violated the law, and he knew better," Securities and Exchange Commission lawyer Jan Folena said Tuesday during opening statements to jurors at Cuban's insider-trading trial.

One of Cuban's lawyers said that the SEC's chief witness was lying, and portrayed the case as government overreach.Cuban "is going to stand up to them when they call him a liar, he's going to stand up to them when they call him a cheat," said the lawyer, Thomas Melsheimer.

It's a civil lawsuit; Cuban is not charged with a crime. The SEC wants Cuban, the owner of the Dallas Mavericks and a regular on the ABC reality show "Shark Tank," to give up $750,000 he saved from selling his shares, plus pay a penalty that could be two or three times that amount.

The SEC alleges that Cuban promised not to trade on information he learned in 2004 from the CEO of Mamma.com, a Canadian search-engine company of which Cuban owned 6 percent of all shares.

The company planned a stock offering that would reduce the value of existing shares. Cuban broke his vow and sold, the agency says.

Folena said Cuban should have waited to sell his shares until the company publicly announced the stock offering so that he wouldn't take advantage of other investors.

Melsheimer said that the Internet billionaire neither promised to keep the information confidential nor to refrain from trading.

-- Herald wire reports

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