Final OK Given to $110M CVS Settlement
Boston, Afederal judge gave final approval to the $110 million settlement of a shareholders’ lawsuit accusing CVS Corp. of making misleading statements to artificially raise its stock price.
The lawsuit, which also accused the retailer of delayed accounting for merchandise discounts, was filed in 2001 in U.S. District Court in Boston.
Shareholders also alleged that CVS chief executive Thomas Ryan delayed reporting the company’s plans to close 200 underperforming stores and sold more than 95,000 shares of CVS stock before telling investors that the company’s second quarter and full-year earnings would fall below projections in 2001.
CVS had no immediate comment on the settlement. When CVS filed the proposed settlement in June, it said the shareholders’ allegations were unfounded and that it agreed to the settlement “purely as a business decision” to avoid diverting resources for a trial.
Albertson’s 2Q Profit Smaller Than Expected
Boise, Idaho, Albertson’s Inc., which recently put itself on the selling block, posted a smaller-than-expected 3% gain in quarterly profit and said it would sell some property to cash in on the U.S. real estate boom.
Net profit rose to $107 million, or 29? a share, in the second quarter ended Aug. 4, vs. $104 million, or 28? a share, a year earlier. Total sales inched up to $10.2 billion from $10.17 billion a year ago. Same-store sales were down by 0.1%.
Albertson’s said capital spending would be between $1 billion and $1.1 billion this year, or $300 million less than it had originally expected, as it focuses on a smaller number of markets.
Feds Approve GameStop, Electronics Boutique Merger
Grapevine, Texas, The Securities and Exchange Commission (SEC) approved the proposed $1.4 billion merger of video-game retailers GameStop Corp. and Electronics Boutique Holdings Corp. The two companies will seek shareholder approval of the merger on Oct. 6.
The merger would give the combined company more than 3,200 stores in the United States and 600 internationally.