DealBook: Anheuser-Busch InBev Revises Grupo Modelo Deal

11:38 a.m. | Updated

LONDON – Anheuser-Busch InBev moved on Thursday to rescue its $20.1 billion proposed takeover of Grupo Modelo of Mexico, the maker of Corona beer, by making concessions aimed at persuading American antitrust authorities to let the deal proceed.

Under the revised terms, Anheuser-Busch InBev offered to sell the rights to Corona and other Grupo Modelo brands in the United States to Constellation Brands, the world’s largest wine company, for $2.9 billion.

The agreement also would include the sale of a brewery close to the United States-Mexico border currently owned by Grupo Modelo, as well as the perpetual licensing rights to Grupo Modelo’s brands in the United States. If the revised deal goes through, Anheuser-Busch InBev will gain greater access to emerging markets like Mexico.

Anheuser-Busch InBev’s decision to sell Compañía Cervecera de Coahuila, the Mexican brewery that produces Corona, Corona Light and Modelo Especial, is an effort to satisfy regulators after the Justice Department sued last month to block the deal.

United States authorities had said the original merger proposal would increase Anheuser-Busch InBev’s control of the American beer market, enabling it to raise prices while reducing choice for local consumers.

Grupo Modelo is currently the third-largest beer company in the United States. Anheuser-Busch InBev is the largest, ahead of MillerCoors.

Analysts say that Anheuser-Busch InBev hopes the moves will address the antitrust issues raised by American authorities.

“We decided to restructure the transaction to address the concerns from the Justice Department,” Anheuser-Busch InBev’s chief executive, Carlos Brito, said in an interview with DealBook. “We are focused on getting this to the finish line.”

Mr. Brito declined to comment on the continuing negotiations with the Justice Department.

A Justice Department spokeswoman declined to comment on the company’s efforts to reduce its operations in the United States, though she added that authorities would give any proposal serious consideration. “At the same time, we would continue to prepare for litigation,” she added.

Anheuser-Busch InBev, which is the world’s largest brewing company, was itself created in 2008 through the $52 billion merger of Anheuser-Busch and the Belgian-Brazilian brewer InBev. The proposed $20.1 billion deal for Grupo Modelo would rank as the second-largest takeover in the beer industry after that merger, according to figures from the data provider Thomson Reuters.

In the last five years, Anheuser-Busch InBev also has announced more than 15 additional takeovers, according to the data provider Capital IQ. In a series of multibillion-dollar deals in the beer and liquor sector, a small number of companies like SABMiller and Diageo have gained control over many of top brands.

The move by the Justice Department to block the proposed takeover of Grupo Modelo is the first time in more than a decade that American regulators have tried to slow consolidation in the global beer industry.

The government’s lawsuit, announced last month, quoted internal company documents from Anheuser-Busch InBev to demonstrate that the company’s prices had been undercut by Grupo Modelo. Authorities contend that the proposed deal for Grupo Modelo would eliminate competition from the domestic beer market.

“This is the sort of product that matters to consumers,” William J. Baer, head of the Justice Department’s antitrust division, told reporters on Jan. 31. “If you have a very slight price increase that happens because of this deal, it could mean that consumers will pay billions of dollars more.”

The concessions also maintain Anheuser-Busch InBev’s focus on gaining access to the fast-growing Mexican market, which could help offset a slowdown in more mature markets like the United States and Western Europe.

“The quick settlement is no doubt surprising, but also shows practicality from the Anheuser-Busch InBev side,” Pablo Zuanic, an analyst at Liberum Capital, wrote in a note to investors on Thursday.

Anheuser-Busch InBev also said it had increased its projected annual cost savings from the Grupo Modelo deal by 66 percent, to $1 billion, from estimates provided when the deal was first announced last year. The terms of the original deal for Grupo Modelo remain unchanged, according to a company statement.

The brewing giant’s shares rose more than 6 percent in afternoon trading in Brussels on Thursday, while Constellation Brands’ stock price jumped almost 36 percent in trading in New York on Thursday morning.

For Constellation Brands, the agreement will give it greater access to the American beer market.

As part of the original terms of Anheuser-Busch InBev’s proposed takeover of Grupo Modelo, Constellation had agreed to pay $1.85 billion for the 50 percent stake that it did not already own in Crown Imports, a joint venture with the Mexican brewer.

Constellation would now gain control of the Corona brand across the United States, and plans to invest $400 million in the brewery that is being sold by Grupo Modelo to expand its business in the United States.

“This is a transformational acquisition,” Constellation’s chief executive, Robert S. Sands, said in a statement.

Lazard is advising Anheuser-Busch InBev on the deal, while Morgan Stanley is advising Grupo Modelo.

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Dorner manhunt: Investigators work to ID charred human remains

After what LAPD Chief Charlie Beck called "a bittersweet night," investigators Wednesday were in the process of identifying the human remains found in the charred cabin where fugitive ex-cop Christopher Dorner was believed to have been holed up after trading gunfire with officers, authorities said.

If the body is identified as Dorner’s, the standoff would end a weeklong manhunt for the ex-LAPD officer and Navy Reserve lieutenant suspected in a string of shootings following his firing by the Los Angeles Police Department several years ago. Four people have died in the case, allegedly at Dorner’s hands.

Beck said he would not consider the manhunt over until the body was identified as Dorner. Police remained on tactical alert and were conducting themselves as if nothing had changed in the case, officials said.

PHOTOS: Manhunt for ex-LAPD officer

The latest burst of gunfire came Tuesday after the suspect, attempting to flee law enforcement officials, fatally shot a San Bernardino County sheriff’s deputy and seriously injured another, officials said. He then barricaded himself in a wooden cabin outside Big Bear, not far from ski resorts in the snow-capped San Bernardino Mountains east of Los Angeles, according to police.

"This could have ended much better, it could have ended worse," said Beck as he drove to the hospital where the injured deputy was located. "I feel for the family of the deputy who lost his life."

The injured deputy is expected to survive but it is anticipated he will need several surgeries. The names of the two deputies have not been released.

TIMELINE: Manhunt for ex-LAPD officer

Just before 5 p.m., authorities smashed the cabin's windows, pumped in tear gas and called for the suspect to surrender, officials said. They got no response. Then, using a demolition vehicle, they tore down the cabin's walls one by one. When they reached the last wall, they heard a gunshot. Then the cabin burst into flames, officials said.

Last week, authorities said they had tracked Dorner to a wooded area near Big Bear Lake. They found his torched gray Nissan Titan with several weapons inside, the said, and the only trace of Dorner was a short trail of footprints in newly fallen snow.

According to a manifesto that officials say Dorner posted on Facebook, he felt the LAPD unjustly fired him several years ago, when a disciplinary panel determined that he lied in accusing his training officer of kicking a mentally ill man during an arrest. Beck has promised to review the case.

DOCUMENT: Read the manifesto

The manifesto vows "unconventional and asymmetrical warfare" against law enforcement officers and their families. "Self-preservation is no longer important to me. I do not fear death as I died long ago," it said.

On Tuesday morning, two maids entered a cabin in the 1200 block of Club View Drive and ran into a man who they said resembled the fugitive, a law enforcement official said. The cabin was not far from where Dorner's singed truck had been found and where police had been holding news conferences about the manhunt.

The man tied up the maids, and he took off in a purple Nissan parked near the cabin, the official said. About 12:20 p.m., one of the maids broke free and called police.

FULL COVERAGE: Sweeping manhunt for ex-cop

Nearly half an hour later, officers with the California Department of Fish and Wildlife spotted the stolen vehicle and called for backup, authorities said. The suspect turned down a side road in an attempt to elude the officers but crashed the vehicle, police said.

A short time later, authorities said, the suspect carjacked a light-colored pickup truck. Allan Laframboise said the truck belonged to his friend Rick Heltebrake, who works at a nearby Boy Scout camp.

Heltebrake was driving on Glass Road with his Dalmatian, Suni, when a hulking African American man stepped into the road, Laframboise said. Heltebrake stopped. The man told him to get out of the truck.

INTERACTIVE MAP: Searching for suspected shooter

"Can I take my dog?" Heltebrake asked, according to his friend.

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Bowlus Travel Trailer Is So Retro-Cool It Hurts

Think there’s nothing better than a vintage Airstream, those old-school Twinkie-shaped campers that define Americana? Think again. The Bowlus Road Chief is even cooler, and it’s coming back.

The original Road Chief dates to the 1930s and was created by Hawley Bowlus, the aviation designer who brought us the Spirit of St. Louis. They’re also crazy expensive because they’re incredibly rare. Just 80 were built before World War II, when the company stopped production. John Long and Helena Mitchell, a husband-and-wife team of Canadian tech entrepreneurs, bought the rights and patents and are launching an update of the 1935 Vintage Bowlus Travel Trailer. They’ve made the first and have been driving around the United States. Four more are under construction, and they’re taking orders.

It’s got a vintage vibe, but the inside is thoroughly modern, with features like Wi-Fi and solar panels. There’s a full bathroom, a kitchen with two-burner stove, twin beds that can convert into a king, latch points to carry kayaks and paddle boards, polycarbonate seating fabric, and an awning. As for the lavatory, the toilet empties into a sealed container that can be emptied into a regular toilet — regular trailers use hoses that dump into special RV stations. Seals and filters keep the stink contained. The whole interior, down to the bedsheets, is fully customizable.

The whole thing stands almost eight feet tall, is 23.5 feel long, and weighs in at under 2,000 pounds. It’ll retail for around $100,000, but the price tag includes having your trailer’s name etched in the wheel skirts.

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Phys Ed: Getting the Right Dose of Exercise

Phys Ed

Gretchen Reynolds on the science of fitness.

A common concern about exercise is that if you don’t do it almost every day, you won’t achieve much health benefit. But a commendable new study suggests otherwise, showing that a fairly leisurely approach to scheduling workouts may actually be more beneficial than working out almost daily.

For the new study, published this month in Exercise & Science in Sports & Medicine, researchers at the University of Alabama at Birmingham gathered 72 older, sedentary women and randomly assigned them to one of three exercise groups.

One group began lifting weights once a week and performing an endurance-style workout, like jogging or bike riding, on another day.

Another group lifted weights twice a week and jogged or rode an exercise bike twice a week.

The final group, as you may have guessed, completed three weight-lifting and three endurance sessions, or six weekly workouts.

The exercise, which was supervised by researchers, was easy at first and meant to elicit changes in both muscles and endurance. Over the course of four months, the intensity and duration gradually increased, until the women were jogging moderately for 40 minutes and lifting weights for about the same amount of time.

The researchers were hoping to find out which number of weekly workouts would be, Goldilocks-like, just right for increasing the women’s fitness and overall weekly energy expenditure.

Some previous studies had suggested that working out only once or twice a week produced few gains in fitness, while exercising vigorously almost every day sometimes led people to become less physically active, over all, than those formally exercising less. Researchers theorized that the more grueling workout schedule caused the central nervous system to respond as if people were overdoing things, sending out physiological signals that, in an unconscious internal reaction, prompted them to feel tired or lethargic and stop moving so much.

To determine if either of these possibilities held true among their volunteers, the researchers in the current study tracked the women’s blood levels of cytokines, a substance related to stress that is thought to be one of the signals the nervous system uses to determine if someone is overdoing things physically. They also measured the women’s changing aerobic capacities, muscle strength, body fat, moods and, using sophisticated calorimetry techniques, energy expenditure over the course of each week.

By the end of the four-month experiment, all of the women had gained endurance and strength and shed body fat, although weight loss was not the point of the study. The scientists had not asked the women to change their eating habits.

There were, remarkably, almost no differences in fitness gains among the groups. The women working out twice a week had become as powerful and aerobically fit as those who had worked out six times a week. There were no discernible differences in cytokine levels among the groups, either.

However, the women exercising four times per week were now expending far more energy, over all, than the women in either of the other two groups. They were burning about 225 additional calories each day, beyond what they expended while exercising, compared to their calorie burning at the start of the experiment.

The twice-a-week exercisers also were using more energy each day than they had been at first, burning almost 100 calories more daily, in addition to the calories used during workouts.

But the women who had been assigned to exercise six times per week were now expending considerably less daily energy than they had been at the experiment’s start, the equivalent of almost 200 fewer calories each day, even though they were exercising so assiduously.

“We think that the women in the twice-a-week and four-times-a-week groups felt more energized and physically capable” after several months of training than they had at the start of the study, says Gary Hunter, a U.A.B. professor who led the experiment. Based on conversations with the women, he says he thinks they began opting for stairs over escalators and walking for pleasure.

The women working out six times a week, though, reacted very differently. “They complained to us that working out six times a week took too much time,” Dr. Hunter says. They did not report feeling fatigued or physically droopy. Their bodies were not producing excessive levels of cytokines, sending invisible messages to the body to slow down.

Rather, they felt pressed for time and reacted, it seems, by making choices like driving instead of walking and impatiently avoiding the stairs.

Despite the cautionary note, those who insist on working out six times per week need not feel discouraged. As long as you consciously monitor your activity level, the findings suggest, you won’t necessarily and unconsciously wind up moving less over all.

But the more fundamental finding of this study, Dr. Hunter says, is that “less may be more,” a message that most likely resonates with far more of us. The women exercising four times a week “had the greatest overall increase in energy expenditure,” he says. But those working out only twice a week “weren’t far behind.”

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Deal Professor: Unusual Moves in Confronting Apple's Huge Pile of Cash

The fight over Apple’s $140 billion cash pile is proving the adage that money can make people do strange things.

And it is not just Apple that is doing things it would not have done before. The hedge fund manager David Einhorn, famous for shorting stocks like Lehman Brothers, has gone long on Apple, betting heavily that Apple’s stock is undervalued — and blaming that eye-popping mountain of money.

While most of us would think that having tens of billions would be wonderful, it’s actually a problem for Apple. The money just sits there, not earning much in an environment of extremely low interest rates. And the problem is only getting worse. Apple is accumulating money at an enormous rate — more than $23 billion in the last quarter alone.

It was a more manageable issue when Apple was a rapidly growing stock, but since September Apple’s share price has fallen to roughly $470, from over $700.

According to Mr. Einhorn, roughly $145 of that share price represents Apple’s cash mountain. This means that the market is assigning a low multiple, about seven times earnings, to the rest of Apple’s business.

Multiples for Google are almost three times as much. Apple’s multiple is even less than Microsoft’s — a company whose revenue largely comes from PC operating software, which some people worry is a melting iceberg.

When it came to the buildup of cash, Steven P. Jobs, Apple’s co-founder and former chief executive, simply ignored a problem he had helped create. Mindful of Apple’s past financial difficulties before his return in 1997, he wanted a fortress of cash to protect the company. So he drew a line in the sand, saying no to dividends. After his death, Apple caved a little, announcing a dividend and share repurchase program worth $45 billion.

It’s still not enough for shareholders who want to increase Apple’s multiple and stock price. The fundamental idea is that shareholders could put this money to better use than Apple can, and that its stock would trade higher without the cash.

The problem is that even if Apple wanted to return all its cash to shareholders, it can’t. Much of the cash is held abroad in foreign subsidiaries. If the company repatriates it to return to shareholders, it would have to pay taxes on it. Instead, the company is letting the cash sit there in the apparent expectation that there will be federal tax relief.

It’s here that Mr. Einhorn enters the picture. He has been buying Apple shares for a few years, and his fund owns more than 1.3 million shares. The hedge fund magnate wants Apple’s stock to earn a higher multiple by dealing with the cash problem.

But Mr. Einhorn is also impatient and unwilling to wait for federal tax relief. Instead, he has a clever idea. At an investment conference last May, Mr. Einhorn proposed that Apple issue $500 billion of perpetual preferred stock free to all shareholders. The preferred stock would yield 4 percent and be freely tradable.

So, how will this increase the value of the company? It’s financial wizardry. If Apple issued debt, the market would be expected to subtract this value from Apple’s worth. But the preferred stock would not be treated as debt, for accounting purposes at least.

The only change would be that Apple’s income would be reduced by the amount of the interest paid on $500 billion, or $20 billion a year. If Apple stays at the same multiple, it would give the company a net worth of $300 billion or so. But now the $500 billion in preferred stock would be added, making the company worth $800 billion.

How can one plus one equal four? It depends on whether the market thinks that the $500 billion is not debt and never has to be repaid. If so, then this amount will not be deducted from Apple’s worth. It’s something that may work in theory in our sometimes puzzling financial markets, but no company has ever tried it.

Some experts are skeptical. Aswath Damodaran, a finance professor at New York University, has called the plan financial alchemy and written that it would “not add value to the company, not one cent.” When asked to comment, Mr. Einhorn said, “Professor Damodaran’s analysis brings to memory the old joke about the economist who refused to pick up a $100 bill on the street because in an efficient economy, there can’t be $100 bills lying around.”

Apple’s response to Mr. Einhorn has been equally clever. One would think that the maker of the iPad would just sit above the fray and do what it has traditionally done — ignore its shareholders. But with a declining stock price, that may no longer be a luxury Apple can afford. So, it has engaged with Mr. Einhorn to discuss his proposal. And the notoriously shareholder-unfriendly company has turned strangely in favor of good corporate governance.

In its latest proxy statement, Apple proposes to amend its charter to allow for election of directors only by a majority of shareholders. It also proposes to eliminate a provision called “blank check preferred,” which allows a company to issue preferred shares in unlimited number and type. Almost every company has this provision, but shareholder activists hate it because it can be used as a takeover defense, allowing a company to issue preferred stocks with significant voting rights to a friendly party.

While the proposal to eliminate the preferred shares appears worthy and has been endorsed by the California Public Employees’ Retirement System, the giant pension fund, this proposal is really about Mr. Einhorn.

The amendment has the convenient effect of eliminating the board’s ability to adopt the hedge fund magnate’s plan. Apple says that it just wants to be a good corporate citizen and shareholders can still vote to adopt Mr. Einhorn’s plan. But let’s face it, Apple would be one of the few companies in the United States to ever abolish its blank check preferred provision.

Apple has not been a paragon of corporate governance. That may not be surprising, given that its board has directors like Millard S. Drexler of J. Crew, who surreptitiously took his company private. And Apple has received negative marks in recent years from proxy advisory firms like Institutional Shareholder Services for giving its chief executive, Timothy D. Cook, almost $400 million in stock options in one year.

It’s an odd state of events.

By all accounts, it would appear to be a topsy-turvy world. Apple has turned defensive, while Mr. Einhorn is picking a public fight with a company he is betting on, instead of betting against.

Perhaps this column should have instead started with an adage from the movie “Wall Street” that money “makes you do things you don’t want to do.”

Yet Apple is not doing itself any favors by trying to do an end run around Mr. Einhorn.

He has sued Apple, claiming that the company’s proposal violates the securities laws, but the dispute is “a silly sideshow,” as Mr. Cook put it on Tuesday. Even if Mr. Einhorn wins, it would only force Apple to have a separate vote on the preferred share issue, something it is likely to win.

Even so, it might be better if Apple simply addressed Mr. Einhorn’s proposal head-on. After all, his proposal is clever, but untested. It may work, but it may not. Why should the world’s most valuable company be run as an experiment in finance?

Still, the world is changing. Apple may be a highflier, but its growth prospects are not as exciting as they seemed to be a year ago. Its stock may simply be deflating from an overheated place.

And that’s the oddest thing of all. Despite Apple’s growing cash pile, the company’s value is shrinking. But instead of focusing on making Apple an even better business, shareholders are trying to rescue their bubblelike bets with financial gimmickry, and Apple is engaging in its own gimmicks to defeat them. Even Apple can be consumed by the strange world of Wall Street.

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A version of this article appeared in print on 02/13/2013, on page B7 of the NewYork edition with the headline: Unusual Moves in Confronting Apple’s Mountain of Cash.

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Ex-Bell officials defend themselves as honorable public servants

Less than three years ago, they were handcuffed and taken away in a case alleged to be so extensive that the district attorney called it "corruption on steroids."

But on Monday, two of the six former Bell council members accused of misappropriating money from the small, mostly immigrant town took to the witness stand and defended themselves as honorable public servants who earned their near-$100,000 salaries by working long hours behind the scenes.

During her three days on the stand, Teresa Jacobo said she responded to constituents who called her cell and home phone at all hours. She put in time at the city's food bank, organized breast cancer awareness marches, sometimes paid for hotel rooms for the homeless and was a staunch advocate for education.

"I was working very hard to improve the lives of the citizens of Bell," she said. "I was bringing in programs and working with them to build leadership and good families, strong families."

Jacobo, 60, said she didn't question the appropriateness of her salary, which made her one of the highest-paid part-time council members in the state.

Former Councilman George Mirabal said he too worked a long, irregular schedule when it came to city affairs.

"I keep hearing time frames over and over again, but there's no clock when you're working on the council," he said Monday. "You're working on the circumstances that are facing you. If a family calls … you don't say, '4 o'clock, work's over.' "

Mirabal, 65, said he often reached out to low-income residents who didn't make it to council meetings, attended workshops to learn how to improve civic affairs and once even made a trip to a San Diego high school to research opening a similar tech charter school in Bell.

"Do you believe you gave everything you could to the citizens of Bell?" asked his attorney, Alex Kessel.

"I'd give more," Mirabal replied.

Both Mirabal and Jacobo testified that not only did they perceive their salaries to be reasonable, but they believed them to be lawful because they were drawn up by the city manager and voted on in open session with the city attorney present.

Mirabal, who once served as Bell's city clerk, even went so far as to say that he was still a firm supporter of the city charter that passed in 2005, viewing it as Bell's "constitution." In a taped interview with authorities, one of Mirabal's council colleagues — Victor Bello — said the city manager told him the charter cleared the way for higher council salaries.

Prosecutors have depicted the defendants as salary gluttons who put their city on a path toward bankruptcy. Mirabal and Jacobo, along with Bello, Luis Artiga, George Cole and Oscar Hernandez, are accused of drawing those paychecks from boards that seldom met and did little work. All face potential prison terms if convicted.

Prosecutors have cited the city's Solid Waste and Recycling Authority as a phantom committee, created only as a device for increasing the council's pay. But defense attorneys said the authority had a very real function, even in a city that contracted with an outside trash company.

Jacobo testified that she understood the introduction of that authority to be merely a legal process and that its purpose was to discuss how Bell might start its own city-run trash service.

A former contract manager for Consolidated Disposal Service testified that Bell officials had been unhappy with the response time to bulky item pickups, terminating their contract about 2005, but that it took about six years to finalize because of an agreement that automatically renewed every year.

Deputy Dist. Atty. Edward Miller questioned Mirabal about the day shortly after his 2010 arrest that he voluntarily told prosecutors that no work was done on authorities outside of meetings.

Mirabal said that if he had made such a statement, it was incorrect. He said he couldn't remember what was said back then and "might have heed and hawed."

"So it's easy to remember now?" Miller asked.

"Yes, actually."

"More than two years after charges have been filed, it's easier for you to remember now that you did work outside of the meetings for the Public Finance Authority?"

"Yes, sir."

Miller later asked Mirabal to explain a paragraph included on City Council agendas that began with the phrase, "City Council members are like you."

After some clarification of the question, Mirabal answered: "That everybody is equal and that if they look into themselves, they would see us."

corina.knoll@latimes.com

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Haters Don't Hate Amazon (Facebook On the Other Hand ...)

Check the comments section on any tech blog: People love to hate Apple. They love to hate Microsoft. And Facebook. Each of these companies has spawned a parallel online hater community.

But Amazon? Not so much.

The Amazon haters are no doubt out there. But I contend that the intensity of that hatred just isn’t as high.

Backing me up on that is a new survey from Harris Interactive (HPOL) that found the general public respects Amazon more than any other U.S. corporation.

The marketing firm polled 19,000 U.S. residents in deep detail to find out how they felt about the country’s 60 “most visible” companies. For the first time in the “reputation quotient” poll’s 14-year history, Amazon came out on top.

Rounding out the top five were Apple, Disney, Google and Johnson & Johnson. (Apple’s number-two ranking shows great hate does not exclude great love.)

The poll — independently funded by Harris — broke down reputation into six main categories. Amazon trounced the competition in the category of “emotional appeal,” beating second-place Disney by five points on a 100-point scale – which seems bizarre considering the only contact most of us ever have with Amazon is via a cardboard box.

“Amazon is predominantly a virtual company where you don’t get to see the people. You don’t see brick and mortar,” says Robert Fronk, executive vice-president of reputation management at Harris. “For them to first of all have the highest reputation, but more importantly to be the company with far and away the highest emotional appeal, is amazing.” Harris defines emotional appeal as trust, admiration and respect, not whether you get weepy when your package arrives.

Amazon also topped the products and services category, which Fronk attributed not so much to Amazon-branded products like the Kindle, but the millions of other products it brings together and sells. Even Amazon’s customer service, which is sometimes criticized for being opaque and inaccessible, gets very high marks in the Harris survey from customers and non-customers alike.

Amazon is also helped in the overall survey results by what Fronk describes as the tech industry bump: Americans simply admire the tech industry more than any other. (In what other industry, he says, can a company take a swing at a product and miss and still get credit for taking a chance?) Industries at the bottom of the reputation rankings were tobacco in dead last, followed by government and banking.

Still, tech companies did not escape entirely unscathed. Despite its high rank, Fronk says Apple’s positive reputation is anchored in the survey by positive perceptions of its financial performance — the aspect of its business over which it has the least control. As the company’s plunging stock over the last several months shows, the investing public has no problem tarnishing the reputations of tech companies that don’t live up to expectations

“You don’t want to have the conversations about you moving from innovation and the joy you bring, to always being about the share price,” Fronk says.

Of the most talked-about tech companies, Facebook by far received the least love. While Amazon, Apple and Google all ranked in the top five with total scores above eighty out of 100, and Microsoft ranked 15th with a “good” score above 75, Facebook came in 42nd – sandwiched between Best Buy and T-Mobile – with a score of just over 65, or what Fronk described as the borderline between “average” and “poor.”

“Facebook suffers badly from lack of trust,” Fronk said.

Amazon arguably collects as much personal data about its customers as Facebook does about its users, or at least if not as much, then possibly more intimate: purchase history, product search history, home address, credit card numbers. The Harris survey didn’t ask specifically about individual companies’ use of personal data. Yet it’s hard not to infer that privacy concerns were on the minds of survey participants when answering questions about trust.

Forty-six percent of all respondents said they “definitely would trust” Amazon “to do the right thing.” Only 8 percent said the same about Facebook. Add in “probably would trust” and Amazon’s total shoots to 91 percent, while Facebook’s reaches 49 percent.

Whatever Amazon is doing, or not doing, to earn itself so many points, Facebook apparently needs to take some notes, at least according to this poll’s results. By Harris’ tally, Amazon is the first company in the survey’s history to score negligible negative results across every category. If the results are to be believed, no one really hates Amazon. Says Fronk: “There’s not a detractor base whatsoever.”

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CNN slots Jake Tapper Show, cuts length of Wolf Blitzer’s “Situation Room”

LOS ANGELES (TheWrap.com) – CNN slotted new anchor Jake Tapper‘s upcoming show for 4 p.m. on weekdays, cutting Wolf Blitzer‘s “The Situation Room” back one hour, a CNN spokeswoman told TheWrap.

Tapper, lured away from ABC News in December, was CNN boss Jeff Zucker‘s first major hire since taking charge of the network. Now, with his own show coming in March, Blitzer’s program will but cut from three hours to two as it moves to the 5 p.m. to 7 p.m. time slot.

A CNN spokeswoman told TheWrap Tapper‘s show has no specific starting date yet because it is still in development.

Last month, Turner Broadcasting posted LinkedIn job openings for a senior producer at a new daily program called “Tapper.”

And on Monday, CNN named Federico Quadrani, MSNBC’s executive producer of “Jansing and Company,” as the show’s new executive producer.

Choosing Quadrani – who served as an Emmy-winning producer for NBC’s “Today” show from 2003 to 2009 – is one of Zucker’s higher profile hires as the former “Today” producer attempts to replicate his morning show success at CNN.

After taking charge of the show in 1992, Zucker led “Today” to its ratings highs before Katie Couric‘s departure for CBS. The subsequent exit of Meredith Vieira, who replaced Couric, made it vulnerable to rival “Good Morning America.”

Late last month, CNN announced that it had bought “20/20″ anchor and former “GMA” host Chris Cuomo to lead a new morning show with Erin Burnett.

TV News Headlines – Yahoo! News

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DealBook: Ryanair Indicates Regulators Will Reject Aer Lingus Deal

Ryanair, the discount European airline, is preparing for a fight with regulators over its deal to buy Aer Lingus.

On Tuesday, Ryanair said the European Commission “intends to prohibit” its offer for Aer Lingus, despite the airline’s attempts to appease antitrust concerns. Ryanair added that it planned to appeal the decision.

“It appears clear from this morning’s meeting, that no matter what remedies Ryanair offered, we were not going to get a fair hearing and we’re going to be prohibited regardless of competition rules,” Robin Kiely, head of communications for the airline, said in a statement.

The deal has been troubled from the start.

Ryanair moved to buy Aer Lingus last summer, offering 694 million euros ($931 million) in its third attempt to buy the Irish carrier. Management trumpeted the opportunities, saying the deal would create “one strong Irish airline group capable of competing with Europe’s other major airline groups.”

But the board of Aer Lingus immediately rejected the hostile takeover bid, saying it undervalued the airline and would raise antitrust concerns. Ryanair’s first bid to buy Aer Lingus in 2007 was blocked for antitrust reasons.

Since then, Ryanair has sought to assuage concerns about competition, lining up buyers for various operations and routes.

Even so, regulators notified Ryanair on Tuesday that they would block the deal. Ryanair now says it has instructed its lawyers to “appeal any prohibition decision” to the courts.

“This decision is clearly a political one to meet the narrow, vested interests of the Irish government and is not based on competition law,” Ryanair said in a statement.

Aer Lingus supported the regulatory decision, saying it was “a much stronger airline today than it was at the time of the previous Ryanair offers” and that it was the only rival to Ryanair on a large number of routes.

“The reasons for prohibition are therefore even stronger in this instance than with the previous offers,” Aer Lingus said in a statement. “Therefore, it was and remains Aer Lingus’ position that the offer should never have been made.”

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Grammys 2013: Fun., Mumford, Gotye lead a newer generation

Grammy Awards voters gave their top honor to British roots music band Mumford & Sons for their album "Babel" on Sunday at the 55th awards ceremony. Other top honors were distributed to a broad array of younger acts, including indie trio Fun., electronic pop artist Gotye, rapper-R&B singer Frank Ocean and rock group the Black Keys.

"We figured we weren't going to win because the Black Keys have been sweeping up all day — and deservedly so," Mumford & Sons front man Marcus Mumford said after he and his band members strode to the stage at Staples Center in Los Angeles to collect the award from last year's winner, R&B-soul singer Adele.

Pop culture historians may look back at 2013, however, as the year the Grammy Awards gave up its long fight against new forms of music dissemination, embracing songs and videos that consumers soaked up by way of YouTube and other Internet outlets as opposed to purchasing them.

PHOTOS: 2013 Grammy Award winners

"Somebody That I Used to Know," the wildly popular collaboration between Gotye and New Zealand pop singer Kimbra, took the top award presented for a single recording upon being named record of the year, which recognizes performance and record production.

"Somebody…" not only was one of the biggest-selling singles of 2012 but also has notched nearly 400 million views on YouTube, powerfully demonstrating the increasingly vital role of the "broadcast yourself" video Internet phenomenon. Different YouTube posts of Ocean's "Thinking About You" single have totaled nearly 60 million views.

New York indie rock trio Fun. was named best new artist, an acknowledgment of the good-time music the group brought to listeners and viewers last summer largely through its runaway hit single "We Are Young," which has racked up nearly 200 million YouTube views. It also was named song of the year, bringing awards for the group's songwriters, Jack Antonoff, Andrew Dost and Nate Ruess, and collaborator Jeff Bhasker.

GRAMMYS 2013: Full coverage | Pre-show winners | Winners | Ballot

"Everyone can see our faces, and we are not very young — we've been doing this for 12 years," Ruess said as they collected the award.

The song's title could also serve as a theme for the evening, which was dominated by other relatively young acts in the most prestigious Grammy categories.

Singer, rapper and songwriter Ocean emerged the victor in the one category that pitted him directly against real-life rival Chris Brown, as his critically acclaimed solo debut album, "Channel Orange," won the urban contemporary album award. A few minutes later Ocean got a second Grammy with Kanye West, Jay-Z and the Dream in the rap-sung collaboration category for their single "No Church in the Wild."

GRAMMYS 2013: Winners list | Best & Worst |  Red carpet | Timeline | Fashion | Highlights

Ocean's tuxedo covered all but his hands, but it appeared as he picked up the urban album award that his left arm remained in a wrist brace he'd exhibited Thursday at rehearsals for this year's broadcast, a remnant of his scuffle last month with Brown over a parking space at a recording studio. Los Angeles Police Department investigators said Ocean informed them that he would not press charges against Brown.

It was the Black Keys' Dan Auerbach who quickly built up steam as the front-runner to dominate this year's awards, taking several statuettes barely an hour into the show, including producer of the year for himself and three with his group including rock performance, rock song and rock album for "El Camino."

The Black Keys homed in on the fundamentals of rock 'n' roll — big guitar riffs, lustful lyrics and a bevy of musical hooks on "El Camino," one of the best reviewed albums of the group's career.

FULL COVERAGE: Grammy Awards 2013

Auerbach picked up another award as producer of the blues album winner, Dr. John's "Locked Down."

Carrie Underwood grabbed the country solo performance Grammy for the title track from her album "Blown Away," which also won the country song award for writers Josh Kear and Chris Tompkins earlier during the pre-telecast ceremony at Nokia Theatre, across the street from Staples Center.

The Zac Brown Band added to its growing place as a new-generation country powerhouse with a win of the country album trophy for its "Uncaged," built on muscular Southern rock guitar riffs, elaborate multipart vocal harmonies and jam-band instrumental excursions.

Last year's big winner, Adele, collected the first statuette of the night for her single "Set Fire to the Rain" in the pop solo performance category.

The show got off to an eye-popping start with a Cirque du Soleil-inspired performance by Taylor Swift of her nominated single "We Are Never Ever Getting Back Together."

The preponderance of youthful acts not broadly known to mainstream TV audiences heightened the use of cross-generational pairings. Rising songwriter and singer Ed Sheeran shared the stage early with veteran Grammy darling Elton John, while Bruno Mars teamed with Sting and Rihanna in a Bob Marley tribute later in the show. Several members of Americana acts, including Alabama Shakes and Mumford & Sons, sang alongside veterans John, Mavis Staples and T Bone Burnett in a salute to drummer Levon Helm of the Band.

But it was the young guns to whom the evening — and perhaps the future — of the Grammy Awards belonged.

The Grammys are determined by about 13,000 voting members of the Recording Academy. The eligibility period for nominated recordings was Oct. 1, 2011, to Sept. 30, 2012. The show aired on CBS live except on the West Coast, which gets a tape delay.

randy.lewis@latimes.com

Twitter: @RandyLewis2

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