Winnipeg Free Press

Winnipeg Free Press (Newspaper) - December 15, 1978, Winnipeg, Manitoba Frustrated by filing problems Call office overload 7750151 Tot office overload Winnipeg free press december 1978 pages 1724 title business report a division of Drake International inc 0 f 1mb i can you r car phones we have All models in Stock rent lease buy National sound 3ss Sherbrook Bay clobbered As okays Simpsons bid by Paul Moloney Hudson Bay of Winnipeg has effectively dropped its bid to acquire Simpsons of Toronto because the Federal Cabinet has Given its Blessing to a competing proposal for a merger of Simpsons and Simpsons ears Secretary of the said Huband said Ottawa had shut the door on the Bays million bid in a move which would Likely give control of Simpsons and Simpsons Sears to Roebuck and Industry minister Jack Horner said the govern ments announced in no Way interferes with the Bays he said the company was still free to compete against Simpsons ears in its race to gain control of the roughly 47 million Simpsons shares held by about share hold said his company didst agree with hornets he said Ottawa decision clobbered the Bays prospects of acquiring Simp sons and the decision has therefore denied Simpsons shareholders the Freedom to choose Between the two competing Huband was careful not to indicate that his company was totally out of the we Are continuing to look in the hat to see if there Are any rabbits while the Bay had not made any firm decisions on an alternate scheme at press the prospects were that the company will drop he Donald president of the said in a statement he was surprised and disappointed by the Mcgiverin added he regrets that yet another Canadian Industry appears to be falling under foreign while Mcgiverin was unavailable for Huband said Mcgiverin statements would appear to mean the Bay would make no new the hitherto Canadia owned Simpsons would fall under the grip of ownership under a with Roebuck holding the largest Block of voting the Cabinet ruling ratified the position of the Federal foreign investment review Agency which granted an Al Clear to the proposed Horner said Fira had determined that foreign ownership implications of a merger were offset by significant benefits to canadians which would be he listed several benefits which Simpsons and Simpsons ears had promised to provide following a merger including creation of additional opening of new stores and reduction of Roebuck voting control in the merged Huband said these promises were a joke when compared to benefits promised by the Bay had a takeover of Simpsons gone the Bay disclosed wednesday that it had committed itself to far More generous undertakings in terms of both new Job creat Ioji and investment in new store he the Bay was in no Way impressed by the justification Cabinet gave for its he said Simpsons and Simpsons ears will now Likely join woolco and Kmart As american controlled out combined sales significantly greater than those of the major Canadian full line depart ment the Eaton and shareholders of both Simpsons and Simpsons Sears Are scheduled to meet in Toronto sometime in january to vote on the merger Huband of the Bay appeared heartened earlier thursday by news that Toronto Stock Exchange said Simpsons had breached a dividend bylaw in the Way it had formulated a sweetened merger announced by the company tuesday in an attempt to thwart the Bays competing Simpsons which favors a merger Over a Bay said it would begin distributing shares it owns in Simpsons ears to the Simpsons shareholders of record thursday As an initial step toward a the tse and suspended trading in Simpsons thursday on grounds that the company haunt Given the Exchange proper notice of the Huband initially suggested the tse might Block the Simpsons merger proceedings for the time and allow the Bay a Chance to counteract it was subsequently Learned the share distribution could go ahead despite the tse trading Simpsons will distribute to its shareholders the million shares the company owns in Simpsons Roebuck also owns million shares continued on Page Horner marketplace will decide Horner says merger Canada by Carol Goar Ottawa up the Cabinet thurs Day approved a controversial Multi Mil lion Dollar proposal by Simpsons to merge with the american controlled Simpsons ears the proposed merger would mean an increase in foreign control of the department store business and could also spell the death of a competing offer by Hudson Bay company to take Over Industry minister Jack Horner said the foreign investment review Agency Fira had determined the merger would significantly Benefit Simpsons ears is about 40 per cent owned by Roebuck and of the bid by the Canad unowned Bay would not have needed Fira Donald president of the made it Clear in an interview hours before the Cabinet decision that by giving the Green Light to the Simp the government would almost Force him to withdraw his company takeover Horner said cabinets decision in no Way interferes with the Bays the Bay can still buy Simpsons or Sears can still buy he told whatever happens after this will be determined by the Market Simpsons and Simpsons ears have both scheduled shareholders meetings for at those shareholders from both companies will be asked to approve the proposed merger Between their two the new unit which would be called Simpsons ears would be two thirds Canadian who arrived in Ottawa on the eve of the Cabinet ruling and left Early thursday said he would find it incredible if the Cabinet approved the merger but i am told it is in which event we might either forget the whole thing or maybe Well think about a new he i Haven even started to grapple the he said it would be unthinkable to pursue the Bays november offer of per share of Simpsons Stock Fol lowing a merger Between Simpsons and Mcgiverin said Simpsons previously announced commitment to distribute its interest in Simpsons ears among Simpsons shareholders would drastically reduce the value of these shares from his company Point of this would Force him to withdraw his Horner said in a news release the Cabinet decision should not be interpreted As a sign the government sees More Merit in the Simpsons ears offer than in the million takeover bid by the he said the governments intention is to leave both companies to compete freely for ownership of the minister listed the following benefits of the proposed Simpsons Imp sons Sears merger the companies have promised the merger would Lead to the creation of about Fullor Par time jobs within the next five the merger is accompanied by commitment to open at least 10 new department stores and 100 catalogue offices by the end of under an agreement Between Fira and canadians will be Given an Opportunity to acquire up to 75 per cent of the merged retail Chain and will be allowed to double their owner ship of the Canadian branches of All state insurance to 50 per Allstate is owned by the two stores have promised to preserve their separate while meshing some of their operations for increased the application was accompanied by an undertaking to increase Pur chases of Canadia made in addition Simpsons ears has promised to provide financial and other Assis Tance to Canaan companies which appear capable of developing into replace ments for foreign if the merger goes it is Esti mated by financial analysts that the new company would have a profit next this compared with a combined profit for the two companies during the current fiscal year of a projected this would be an increase of 14 per reflecting both increased efficiency and higher total earlier this the director of the governments combines investigation Branch said the government has no objections to the proposed merger be tween the Bay and this followed a two week investigation to determine whether the takeover would concentrate so much Power in the hands of a single owner that Competition would after receiving a written Assurance from the Bay that it would maintain Simpsons ears As an Independent and competing Chain in the event of a Robert director of the called off his inquiry finance firms skirt Legal limits costlier Loans by Paul Moloney some finance companies get around Legal limits on what they can charge for Small Loans by enticing customers to borrow More than they originally says Ruth past president of the Manitoba chapter of the Consumers association of Berry said that because finance companies cant by Law charge More than about per cent annual interest on Loans of some of these lenders will encourage customers to borrow a somewhat higher amount so that the Lender can charge higher rates of perhaps 22 to 25 per John a spokesman for Avo said his company generally wont make Loans in the to Range because of outdated and unrealistic inter est rate limits required under the Federal Small Loans a customer borrow for but he could get either or from and because the company can charge higher rates on than on it will attempt to get the customer to go for the larger Well try to get him to a higher Paul director of the Consumers said lenders Arent required to disclose to a Cus Tomer differences in interest rates on varying he said its up to the Borrower to ask questions about rates and to negotiate his Best finance companies tend to have a High Success rate in trying to convince customers to raise their intended borrowing said Wayne assistant manager of the Bank of Nova Scotia main Branch Harden said borrowers go along with the termed up sell because they tend to assume interest charged by finance companies would be the same on either or and at least some lenders dont explain that there is a rate i think in most cases the con Sumer would think the rate would be the same regardless of the amount this is the Case with the who now Are charging about per cent on consumer Loans whether the amount is or he free press business reporter Paul Moloney finds that at you really Are Good for the finance company advertising slogan received added weight through recent state ments by a company who said if a customer comes in asking for the Loans officer Doest Point out the person could save interest if he borrowed Only a spokesman for the Consumers association of Canada says finance companies often entice borrowers to opt for higher loan amounts because this would mean the companies could charge higher in some cases As much As 10 per cent More a finance companies Are limited by the Federal Small Loans act on what they can charge for Loans of and above this there Are no similar Harden Felt that if finance companies pointed out their rates might be about 17 per cent in the to Range but 22 to 25 per cent on the customer who originally wanted would opt for the lower if it was the customer take the extra manager of the household finance Branch at 205 notre Dame said his company does not pfc wont lend Money in the to Range but it will quote the customer what its rates would be on amounts above and below this he said its then left up to the customer whether he wants to borrow More than at a higher rate than if he borrowed less than Carroll was critical of competitors who do engage in saying the practice was Irre Spon a customer should be Given the Choice of opting for either a or knowing what the rates would be for if Hes not Given an alternative on i think that Carroll also said the practice was a very outdated Way of doing youre going to defeat your whole purpose by doing this kind of people Arent sooner or the customer is going to find out about the rate differential and youre going to lose a custom its not Worth he added theres a lot of in stances where a Guy is pushed into a loan he cant newbery of Avo asked if his company Points out to a prospective customer that rates Are different for and said i dont think we do he said interest charges Are Only one indicator of a Loans the total Dollar Cost of paying off a loan was a More meaningful statistic for the he there Are other considerations for it May be cheaper for a consumer to borrow at whatever rate in order to buy an item before it goes up in he newbery added that borrowers usually have a fairly Good idea of How much Money they need to theres no real need to suggest that the customer think about borrowing less Money than he intended in order to take advantage of a lower if borrowers underestimate the amount so the knowledge that they could Bor Row a lesser amount at lower Cost would be he Sug Ken manager of the beneficial finance Branch at 241 Vaughan said we try to give the customer what he asks if a Guy wants we dont Tell him hed save interest if he took the Way to turn him off is to Tell him Hes not were in business to make he added theres no Money to be made on Loans greater than and running up to he newbery agreed with say ing the interest rates allowed on Loans in that Range Are ridiculously the Small Loans act requires that interest rates be no More than 24 per cent a year on the first 12 per cent on the next but Only six per cent on the next rates calculate out to an acceptable 17 per cent or so on a loan but on Loans be tween and fall to the unrealistic 15 per cent he on amounts Over there Are no rate he added Banks Are Able to charge lower rates than finance companies because Banks have customer a relatively cheap source of because Banks have uniform rates regardless of loan theres no incentive to manipulate loan amounts to Jack up said Harden of Bank of Nova the Banks rely on raising their volumes of lending in order to increase Revenue from this in this a Bank May de Mand that a potential Borrower Transfer Loans from other Banks if he wants to secure an additional while this has the effect of raising loan the primary reason its done is to give the Lender and Borrower tighter control Over the borrowers financial Harden of Canadian Impe rial Bank of Commerce main said i think its always better for a person to Deal through one its easier to lose control if you have Loans there and if a Borrower has Loans from several the potential is much greater that he May forget a payment or become overextend Harden added Banks May also demand that a prospective Bor rower switch his savings and Che Quing accounts to that Bank in re turn for getting a this is done primarily to ensure the borrowers finances Are control Willson office specially 1558 Willson Manitoba r3toy4 Call Wil Call 2845100 Call us once and youll never have to worry about office supplies again Call us today arid save on our Down to business specials heres How Wil Call works for we give you a generous Supply of Wil Call want books to keep track of your you Tell us when you want to be How often and what time of Day is most when we All you do is Check your Wil Call want Book and place your we process it and deliver your supplies its a reliable one Way to keep your supplies up to Date and it leaves you time for other our business is your business ;