Sale of PetSmart will fetch $8.7B

NEW YORK » PetSmart is being sold to a group of investors led by buyout firm BC Partners for $8.7 billion.

The Phoenix-based pet store retailer says the investors have agreed to pay $83 per share in cash to the company. That’s a 39 percent increase from its closing price July 2 before the company announced it was looking to sell. The price is also a 7 percent increase from PetSmart’s closing price Friday.

In addition to BC Partners, the buyers include StepStone and Canadian pension manager La Caisse. The sale requires approval from PetSmart shareholders.

10 banks fined in Toys R Us conflict

NEW YORK » The Financial Industry Regulatory Authority is fining 10 banks a total of $43.5 million, saying they tried to win roles in the initial public offering of Toys R Us by offering the company favorable analyst coverage.

FINRA says the banks violated its conflict-of-interest rules by telling the company their analysts would write favorable reports about Toys R Us if they were named as underwriters of the offering. The toy retailer filed for an IPO in 2010 but ultimately decided did not go public.

The agency says the companies consented to its findings but did not admit or deny the allegations.

"Each of these firms used their analyst to solicit investment banking business from Toys R Us and offered favorable research" to the company, said Susan Axelrod of FINRA.

Eight of the banks that were fined were listed as underwriters of the Toys R Us IPO.

Barclays PLC, Citigroup Inc., Credit Suisse Group AG, Goldman Sachs Group Inc., and JPMorgan Chase & Co. were fined $5 million each. Deutsche Bank AG, Bank of America Corp., Morgan Stanley and Wells Fargo & Co. were each fined $4 million and Needham & Co. was fined $2.5 million.

Southwest Air will fly to Belize

DALLAS » Southwest Airlines expects to begin flights to Belize City next year as it expands international service.

The airline said last week it will fly to Belize from Houston beginning next October.

Southwest says it also plans to fly to four other destinations in Mexico and one in Costa Rica from a new international concourse being built at Houston’s Hobby Airport. Southwest needs federal government approval for the flights.

Southwest has taken over flights to Mexico and the Caribbean that were operated by AirTran Airways, which Southwest bought in 2011 and is now shutting down. AirTran’s last flight will be Dec. 28.

Back order of premium seats delays Boeing 787 deliveries

Aircraft seat suppliers are struggling to meet the demand for new high-end, lie-flat seats for business and first class in big wide-body jets, and the supply chain squeeze has begun to slow Boeing jet deliveries.

The shortage of premium seats — and new Federal Aviation Administration certification requirements for seats — are prime reasons American Airlines pushed back delivery of two Boeing 787 Dreamliners from this month into sometime in "the first quarter" of next year.

"This is not something specific to American," said airline spokesman Matt Miller. "It’s an issue the entire industry is facing."

American’s 787 business class seats are made by French supplier Zodiac. B/E Aerospace, based in Florida, is the other leading seat manufacturer, supplying for example the business class seats in United Airlines’ 787s.

Boeing insists that, despite American’s deferral of two deliveries, it will still meet its 2014 target of 110 Dreamliner deliveries by year-end. To do so, it will have to deliver seven more 787s by the end of the month.

"Our delivery guidance for the year has not changed," said Boeing spokes­man Doug Alder.

"Zodiac and other suppliers are having a hard time meeting demand," said Ken Herbert, an industry analyst with investment bank Canaccord Genuity. "I think Boeing will find a way to make that number, but I’m sure it’s having an impact on other aircraft and other airlines."

The soaring production rate for large jets that fly internationally has created heavy demand for new premium seats. Higher levels of seat customization by airlines adds to the pressure.

This year through November, Boeing had delivered a record 207 widebody jets. In all of last year, Boeing delivered only 133 widebodies.

"We’re working on several fronts to increase seat production capacity," said Alder.

Airbus is facing the same pressures. Spokeswoman Mary Anne Greczyn said maintaining the seat supply is "a daily challenge."

Total Recall

About 10,000 Dream On Me Incredible two-level deluxe adjustable-height play yards with model numbers starting with 436A, 436B, 436G, 436O, 436P and 436R are being recalled. "Dream On Me" is printed on the bottom left-hand side outside of the product.

The model number is printed on a label attached to the play yard’s mattress. The play yard can be folded for storage. They were sold at Amazon, Kohls, Toys R US, Walmart, Wayfair and other online retailers from March 2010 through January 2014.

The play yard’s rails can collapse, presenting a strangulation hazard to young children.

Call Dream On Me at 877-201-4317 from 4 a.m. to noon Hawaii time Monday through Thursday and 3 to 11 a.m. Friday or visit www.dreamonme.com and click on the Recalls tab.

Coming Up

Monday: Federal Reserve releases industrial production for November. National Association of Home Builders releases housing market index for December.

Tuesday: Commerce Department releases housing starts for November.

Wednesday: Labor Department releases Consumer Price Index for November. Commerce Department releases current account trade deficit for the third quarter. FedEx Corp. reports quarterly financial results.

Thursday: Labor Department releases weekly jobless claims. Mortgage company Freddie Mac releases weekly mortgage rates. Conference Board releases leading indicators for November.

Ship Ahoy!

Monday’s ship arrivals and departures: