Ahold in $7.1bn US sell-off deal

Dutch supermarket group Ahold has sold its US Foodservice catering business to two private equity groups in a deal worth $7.1bn (£3.5bn).

The move will allow the world's fourth biggest food retailer to focus on overhauling its other US operations.

Ahold said it had sold US Foodservice to private equity firms Kohlberg Kravis Roberts and Clayton, Dubilier & Rice.

Ahold has been attempting to rebuild its fortunes since a $1.3bn accounting scandal hit US Foodservice in 2003.

The ex-chief financial officer of the US business was last year given three years' probation, after pleading guilty to one count of conspiracy to commit accounting fraud.

"(Ahold) can move on to the next stage now, paying back some of the proceeds to shareholders, reducing debt and focus on sales growth in the US," said Kepler Equities analyst Ton van Ooijen.

Maryland-based US Foodservice employs 27,000 workers and operates 70 distribution centres across the US, delivering food to major customers including McDonald's.

Time Warner beats estimates as cable sales grow

Net profit at Time Warner, the world's largest media company, was pulled down by weakness at its film division, but surging cable television earnings meant the figure was higher than analysts had estimated.

Net income declined 18 percent to $1.2 billion, or 31 cents a share, from $1.46 billion, or 32 cents, a year earlier, Time Warner said. Sales rose 9.2 percent to $11.2 billion.

Profit was dragged down by a 27 percent profit decline at the film division, which failed to produce a hit to beat the DVD release last year of "Harry Potter." Profit from cable rose 54 percent after the purchase of Adelphia Communications. The AOL unit gained 27 percent as advertising revenue increased, a sign that the chief executive, Richard Parsons, may be succeeding in his effort to revive the Internet unit.

"The company seems to be on the right track," said Tuna Amobi, an equity analyst at Standard & Poor's. "The highlights of the quarter were the cable unit and AOL."

Excluding one-time items, profit of 22 cents beat the 21-cent average of 17 analyst estimates from a survey.

Time Warner raised its 2007 forecast for earnings before one-time items to $1.05 a share, from $1 on Jan. 31.

Shares of Time Warner rose 69 cents, or 3.35 percent, to $21.29 in afternoon trading in New York. Shares in Time Warner Cable rose 56 cents, or 1.5 percent, to $36.78.

Earnings were buoyed by a $670 million gain on the sale of AOL's Web access division in Germany and $146 million from investments related to cable assets in Kansas City, Missouri. Excluding one-time items, profit a year ago was 26 cents a share.

Time Warner Cable, one of the largest U.S. cable companies, began trading publicly in January, as part of the parent company's purchase of cable franchises from Adelphia.

The cable division, 84 percent owned by Time Warner, benefited from demand for packages of phone, digital cable and Internet services. The unit reiterated Wednesday that sales and earnings would rise more than 30 percent in 2007. Revenue rose 61 percent to $3.85 billion, making it the fastest-growing Time Warner division for the fourteenth straight quarter.

Comcast, the industry leader, said Tuesday that its cable revenue would increase 12 percent a year through 2009. The company last week posted an 80 percent jump in first-quarter net income, as revenue rose 32 percent.

Profit at AOL rose to $542 million as ad revenue rose 40 percent. The growth in ad sales beat the 28 percent estimate by Bear Stearns.

Sales dropped 25 percent after AOL started offering its e-mail and software for free to broadband users last year to attract Web surfers and advertisers. Its Web access division lost 1.2 million subscribers in the quarter.

Parsons, the chief executive, hired the TV veteran Randy Falco in November to run AOL and implement the new strategy.

Profit at the film division fell 27 percent to $332 million. Revenue declined 1.3 percent to $2.7 billion.

DVD sales of "The Departed" and "Happy Feet" failed to match the figures turned in last year by the "Wedding Crashers" and "Harry Potter," according to the Goldman Sachs analyst Anthony Noto. Warner Bros. will release "Harry Potter and the Order of the Phoenix" in theaters in July.

Dolans take Cablevision

The third time was the charm for the Dolan family in its efforts to take Cablevision private in a deal worth about $10.6 billion.

Cablevision has about 3 million cable TV customers, mainly in the New York area, and also owns Madison Square Garden, the Knicks and Rangers, and Radio City Music Hall.

The Dolans, led by Charles Dolan, the chairman, and his son James, the CEO, control Cablevision through a special class of supervoting shares.

The first two buyout attempts by the Dolans were rejected as inadequate by a two-person committee of independent directors on its board.

They had to sign off on any going-private transaction to ensure that public shareholders got a fair deal.

That committee, and the full board of directors, approved the Dolans' latest offer of $36.26 per share, saying it was in the best interests of public shareholders.

Last fall the Dolans offered to take the company private at $27 a share in cash, and in January raised the offer to $30, but that offer too was deemed inadequate by the board committee.

Those directors had also rejected a more complex bid the Dolans made in 2005 to pay $21 in cash plus stock from a newly created public company containing Madison Square Garden and a group of cable channels.

As one of the conditions of the deal, the transaction must be approved by a majority of the holders of Cablevision's publicly traded stock that is not held by the Dolan family.

Cablevision's shares climbed $3.23, or nearly 10%, to $35.90 yesterday, a 52-week high and nearly double the 52-week low.