Business Services Industry
Zell stake pays dividends; Glenview-based Anixter borrows so Chairman Zell, other investors can pocket millions.(Markets)(Anixter International Inc.'s dividend payment to Sam Zell)
Crain's Chicago Business, February, 2006 by Johnsson, Julie
Byline: JULIE JOHNSSON Telecom gear distributor Anixter International Inc. paid a special dividend in October that cheered shareholders like Chairman Sam Zell-who pocketed $20 million-but strapped the company with added debt. Glenview-based Anixter borrowed to help pay for the $154-million payout, an unwise maneuver that weakens the balance sheet, says Jason Pompeii, a Fitch Ratings analyst who lowered his rating on $485 million of the company's bonds to junk status last fall.
"Sam Zell and the management team own a lot of shares and have a lot of influence over the way the company is managed. That makes something like this easier to do and more likely to happen again,'' Mr. Pompeii says. The recent dividend "was the last straw for us.'' Mr. Zell, who...
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