Big-Ticket Acquisitions Will Remain Theme In ‘96

Last year, a great deal of wealth was put into investors’ pockets through corporate merger and acquisition deals - a record $458 billion worth. Megabuck investor Mario Gabelli sees no reason for the craze to slow down in 1996.

Gabelli, chairman of Gabelli Funds, dated the M&A boom to the hostile bid by General Electric to acquire Kemper in March 1994. Kemper was acquired last year by Zurich Insurance of Switzerland.

He believes big-ticket deals - some involving bidding wars - will be a mainstay of 1996 business news, especially among banking, broadcasting, brokerage and health-care companies.

Gabelli said many leveraged-buyout funds, some of which virtually became household names during the 1980s M&A boom, are raising millions in fresh cash “to go out and do deals.”

Beware shuffled cards

The Better Business Bureau of the Inland Northwest has a few tip for those who don’t know what to do with unsolicited credit cards that arrive in the mail constantly:

Photocopy the card, then cut it into pieces. Write the issuer to decline the offer and request that any information added to your credit record be removed immediately.

Keep a copy of the card offer and your letter in response.

If interested in keeping the card, first verify terms of the credit agreement, including fees, interest rate, and credit line.

According to the Federal Trade Commission, you are not responsible for charges on a card for which you did not sign a credit application.

But if an issuer replaces a card you already use, a department store card with Visa or MasterCard, for example, you could be opening the associated line of credit when you activate it.

You must inform a creditor in writing to terminate a credit agreement.

Market cooks book values

Although price-to-earnings ratios are only slightly elevated by historical standards, price-to-book ratios are up there in the ionosphere.

That makes life tough for investors who like to search for stocks with low price-to-book values as investment bargains.

The price-to-book ratio is a measure of the amount the stock market is paying for a stock compared to the company’s net worth.

But assets, used to determine net worth, are recorded on corporate balance sheets at their original cost. Investors may adjust the price of the stock to allow for inflation.

, DataTimes