Briefcase: A roundup of business news

Factory shares rise on strong earnings

Shares of Cheesecake Factory Inc. rose 15 percent Friday after the restaurant and bakery owner reported better-than-expected second-quarter earnings.

Cheesecake Factory, based in Calabasas, Calif., said late Thursday it earned $2.4 million, or 22 cents a share, compared with $2.1 million, or 19 cents a share, in the year-ago quarter.

Analysts surveyed by First Call Inc. had projected earnings of 21 cents a share in the latest quarter.

Revenue rose to $51 million from $39.2 million in 1996. The company attributed the increase in revenue in part to a 37 percent increase in total restaurant sales.

Cheesecake Factory shares closed at $24.37-1/2, up $3.25 on the Nasdaq Stock Market.

Hilton denies report it's eyeing Circus Circus buy

Hilton Hotels Corp. denied a report Friday that it has targeted Circus Circus Enterprises Inc., an owner of Las Vegas casinos, for a takeover.

"There is no truth to that rumor," Hilton spokesman Marc Grossman said. Circus Circus said it had no comment on the report, or the Hilton response.

Business Week magazine quoted money experts who said they think Hilton is interested in Circus, which could be bought out for a price of $30 to $32 a share. These experts also said that Circus would be responsive to a reasonable offer.

Shares of Circus Circus closed at $24.18-3/4, up 18-3/4 cents on the New York Stock Exchange. Hilton shares fell 50 cents to $31.68-3/4 on the NYSE.

Boeing, McDonnell Douglas approve merger

The merger of longtime rivals Boeing Co. and McDonnell Douglas Corp. won overwhelming shareholder approval Friday, clearing the way for a combination that Boeing's chairman said "will redefine the future of flight."

The $15 billion merger blends McDonnell Douglas' success in fighter aircraft, rocket boosters and other defense work with Boeing's dominance of the commercial jet market.

The new company will have about 223,000 employees in 27 states, primarily Washington, Missouri, California, Kansas, Pennsylvania and Alabama, with estimated revenue this year in excess of $48 billion.

It's the second major acquisition for Boeing in a year that has seen a fundamental realignment of the U.S. defense industry. Last December, just days before the McDonnell Douglas deal was struck, Boeing completed its purchase of the defense and space segments of Rockwell International Inc.

Bolivia, Brazil launch construction of $1.8 billion pipeline

Construction began Friday of a $1.8 billion natural gas pipeline that will stretch nearly 2,000 miles carrying Bolivian natural gas to southern Brazil.

"This is a historic moment for Brazil and Bolivia," said Brazil's President Fernando Henrique Cardozo at a ceremony in Puerto Suarez, located on the border with Brazil.

The pipeline, the largest project of its kind in Latin America, is expected to be completed in 1999. It will run 1,898 miles from Rio Grande, Bolivia, crossing into Brazil at Corumba and then branching out to supply the cities of Sao Paulo, Curitiba and Porto Alegre.

Prime Hospitality to merge with Homegate for $132 million

Prime Hospitality Corp. said Friday it agreed to acquire Homegate Hospitality Inc., an operator of extended-stay hotels, for about $132 million.

Shares of Homegate surged 16 percent on the news, gaining $1.50 to close at $11 on the Nasdaq Stock Market. Prime Hospitality shares fell 8 percent, or $1.62-1/2, to $18.75 on the New York Stock Exchange.

Prime, a hotel owner and operator, said it will issue 0.6073 of a Prime common share for each Homegate share. Homegate, a hotel company based in Austin, Texas, has about 10.7 million shares outstanding.

Prime also said it will provide $65 million to Homegate for continued development of Homegate extended-stay hotels pending the merger.

Prime will manage the Homegate hotels after the acquisition. The combined company will operate about 150 hotels and have about 70 more under development.

US One files for bankruptcy protection

Dallas-based US One Communications Corp. and two subsidiaries have filed for Chapter 11 bankruptcy protection.

On June 6, the company was placed in involuntary Chapter 7 bankruptcy by its major creditor, Lucent Technologies Inc., which listed a claim of $57.3 million for products and services.

Later, US One asked the U.S. Bankruptcy Court to convert the involuntary case to a voluntary Chapter 11 and to grant the same status to subsidiaries US One Communications Services Corp. and US One Communications of New York Inc.

US One Communications Services listed assets of $82.4 million and liabilities of $116.2 million. The New York subsidiary listed assets of $27.8 million and liabilities of $29.8 million, court papers said.