Business briefs
Ruby Tuesday chain to be taken private
Ruby Tuesday is being acquired for about $146 million in a deal that will take the struggling chain private. Like other sit-down restaurant chains, Ruby Tuesday has lost customers to cheaper, faster and more casual places. Comparablestore sales at Ruby Tuesday have fallen for six consecutive quarters, and the company has not reported a quarterly profit in two years, even as it has tweaked its menu and made small changes, like adding salad bars, in an attempt to boost traffic. The private-equity firm NRD Capital said Monday that it will pay $2.40 for each share, a 21 percent premium from the chain’s closing price of $1.99 on Friday. When debt is included, the companies value the deal at $335 million. Ruby Tuesday, which has about 600 restaurants, said in March that it was considering a buyout.
Sears sinks as key investor plans to leave board
Bruce Berkowitz, the largest outside shareholder at Sears Holdings Corp., is leaving the retailer’s board, a move that sent the stock tumbling Monday. Mr. Berkowitz, chief investment officer and founder of Fairholme Capital Management, will step down Oct. 31, about 20 months after he joined the board. Concern that one of Sears’ biggest backers is reducing his involvement sent the shares on their worst intraday slide since March. Sears has been kept afloat in recent years by CEO Edward Lampert, who has used his own money to prop up the company.
High court to consider American Express fee dispute
The Supreme Court is taking up an appeal by 11 states that argue American Express violated antitrust laws by barring merchants from asking customers to use other credit cards that charge lower fees. The justices said they would review a ruling by the federal appeals court in New York that sided with American Express. The case stems from a lawsuit filed by the states and the Obama administration in 2010 against American Express, Mastercard and Visa. The lawsuit said that letting merchants steer customers to cards with lower fees for merchants or to other preferred cards would benefit consumers and increase incentives for networks to reduce card fees.
Daimler to recall over 1 million cars due to wiring
German automaker Daimler, maker of Mercedes-Benz cars, is recalling more than a million vehicles worldwide over a wiring defect that could unexpectedly trigger the air bag to deploy. Germany’s dpa news agency reported that 400,000 of the vehicles were registered in Britain and several hundred thousand in Germany, with other countries to follow. Affected models include certain Mercedes-Benz A-Class, BClass, C-Class and E-Class models, as well as CLA, GLC, GLK and VClass. Daimler says faulty wiring in the steering column means that static electricity could build up and cause the air bag to deploy when it
wasn’t needed.
Nordstrom family halts buyout effort
Nordstrom family members have suspended their effort to put together a buyout offer for the Seattlebased retailer, citing “the difficulty of obtaining debt financing in the current retail environment prior to the conclusion of the approaching holiday season.” Led by Bruce Nordstrom, the group disclosed in June its plan to take the company private by buying out the publicly traded shares. While the group owns 31.3 percent of Nordstrom’s shares, such a move would require billions in additional financing, most likely in the form of debt. In recent weeks, reports have said the Nordstrom group had been in discussions with private equity firms that might have supplied some of the funding.