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Stocks to Watch Monday: Washington Mutual, Philip Morris, Wal-Mart, Swissair, Avis, Ford

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  • M&A
  • Analyst actions
  • Offerings/stock actions
  • Miscellany
  • Updated from 3:05 p.m. EDT

    Washington Mutual (WM) confirmed it would pay about $1.5 billion to buy Bank United (BNKU). The deal calls for each Bank United share to convert to 1.3 Washington Mutual shares. According to the companies, the acquisition's price is 11.6 times Bank United's 12-month earnings and 1.67 times its book value as of June 30. The purchase, which would create about $87 million in pretax savings in 2002, should add to EPS in 2002.

    TheStreet.com/NYTimes.com joint newsroom wrote about the merger in an earlier story .

    Mergers, acquisitions and joint ventures

    BOK Financial (BOKF) said it would buy CNBT Bancshares (CNBT), parent of Citizens National Bank of Texas, for $91.5 million in cash. BOK will pay about $18.22 per CNBT share, a 10% premium over the stock's 16 1/2 Friday closing price.

    Engineering company Kvaerner said it would build a $350 million ship in Helsinki for the Italian joint venture of Carnival (CCL) and Airtours, called Costa Crociere.

    Liberty Digital (LDIG) agreed to make a $275 million investment in Sony's (SNE) Game Show Network. The investment would give Liberty a 50% stake in the network.

    Motorola (MOT) said it was awarded China's approval to invest $1.9 billion in telecom equipment and semiconductor facilities in Tianjin. According to spokesman Michael Ning, the latest funding makes Motorola China's biggest foreign investor, with investments totaling $3.5 billion.

    Packard BioScience (PBSC) will buy the life-sciences business of GSI Lumonics (GSLI) for a combination of cash and stock worth about $120 million.

    SafetyTips.com has offered to buy online news service APB.com, which filed for bankruptcy in July, for $950,000, according to an internal electronic mail distributed to the crime Web site's employees. The internal email said SafetyTips.com, which is backed by Rare Medium Group (RRRR) and Apollo Management agreed to lend APB.com debtor-in-possession financing that would allow it to continue operating through the sale.

    The management of Seagram's (VO) liquor and wine division will probably launch an offer for the unit when it is auctioned off by Seagram's acquirer, Vivendi, reported The Wall Street Journal.

    Transocean Sedco (RIG) entered a $8.8 billion deal to purchase R&B Falcon (FLC). According to the terms, R&B Falcon stockholders would get 0.5 shares of Transocean for each share of R&B they own. Transocean will also assume $3 billion of R&B's debt.

    TheStreet.com/NYTimes.com joint newsroom wrote about the deal in an earlier story.

    Whitman (WH) said it agreed to buy PepsiAmericas (PAS). The terms call for Whitman to pay $3.80 in cash for each share of PepsiAmericas, while taking on about $330 million of debt.


    After Friday's Close

    Avis (AVI) announced that its board of directors has formed a committee to consider a proposal from Cendant (CD). Business-services provider Cendant last Tuesday offered to buy the outstanding shares of the car rental company it does not currently own for $29 a share in cash, or about $750 million.

    Last week, Avis stock jumped more than 21%.

    General Electric's (GE) financial services arm, GE Capital, is close to buying Chartered Trust, the consumer finance business of U.K.-based banking group Standard Chartered, according to the Sunday Telegraph. The paper said Associates First Capital, the leasing business spun off by Ford (F), and General Motors' (GM) leasing business, GMAC, are also believed to have put in bids for Chartered Trust.

    Swissair is trying to put a crimp in the merger talks between British Airways (BAB) and KLM Royal Dutch Airlines (KLM) by offering itself as a partner to British Airways, according to the U.K.'s Financial Mail.

    A Swissair spokesman declined to comment on the rumors, according to Reuters -- except to say that whenever there are merger talks in the airline business, "Swissair's name automatically always comes up."

    Wal-Mart (WMT) is considering a 6 billion ($9 billion) bid for Boots, the British health products retailer, the The Independent reported Sunday.

    Despite its acquisition of supermarket chain Asda last year, Wal-Mart has so far been stymied in its push to develop a large U.K. presence. The acquisition would mark a departure from the usual for Wal-Mart, however, as the Boots chain is somewhat high-end.

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    Analyst actions

    Lehman Brothers added Vodafone AirTouch (VOD) to its recommended global portfolio. The firm also said that it upped its telecom weighting to 8% from 6%.

    Meanwhile, Morgan Stanley Dean Witter rolled out coverage of the telecom giant with a strong buy rating.

    Upgrades

    Enron (ENE): price target UP to 105 from 75 at Banc of America; price target to 115 from 97 at Donaldson Lufkin & Jenrette.

    Dura Pharmaceuticals (DURA): 12-month price target UP to 35 from 28 at ING Barings.

    Highwoods Properties (HIW): UP to market outperform to market perform at Goldman Sachs.

    Intel (INTC): fiscal 2000 EPS UP to $1.74 a share from $1.70 at Lehman Brothers; fiscal 2001 EPS UP to $1.90 from $1.85.

    Tyco (TYC): price target UP to 75 a share from 65 at Banc of America.

    VeriSign (VRSN): UP to intermediate-term buy from accumulate at Merrill Lynch; calendar 2000 EPS UP to 24 cents a share from 21 cents; calendar 2001 EPS UP to 47 cents a share from 43 cents.

    Downgrades

    AFLAC (AFL): DOWN to neutral from outperform at Lehman Brothers.

    Deutsche Bank (DTBK): DOWN to intermediate-term neutral from accumulate at Merrill Lynch.

    Falcon (FLC): DOWN to neutral from buy at PaineWebber.

    PerkinElmer (PKI): DOWN to market performer from buy at Banc of America.

    Initiations

    Apria Healthcare (AHG): NEW buy at DLJ; mid-20s price target.

    Blue Martini Software (BLUE): NEW buy at U.S. Bancorp Piper Jaffray; added to recommended-for-purchase list at Goldman Sachs.

    Coca-Cola Femsa (KOF): NEW buy at J.P. Morgan; price target: 27.

    Gemini Genomics (GMNI): NEW buy at Chase Hambrecht & Quist; price target of 22; NEW strong buy at SG Cowen.

    IMS Health (RX): NEW buy at Salomon Smith Barney; price target: 23.

    KeySpan (KSE): NEW outperform at Lehman Brothers; price target: 42.

    Mainspring (MSPR): NEW outperform at Morgan Stanley; price target: 24; NEW buy at Chase H&Q, price target: 25.

    Sonus Networks (SONS): NEW buy at Piper Jaffray; 12-month price target: 214.

    TyCom (TCM): NEW intermediate accumulate, long-term buy at Merrill Lynch; NEW buy at UBS Warburg with a 12-month price target of 63; and NEW buy at J.P. Morgan with a 12-month price target of 63.

    Group Moves

    Lehman Brothers changed ratings on three financial stocks:

    • Commerce Bancorp (CBH): DOWN to outperform from buy.

    • Commerce Bancshares (CBSH): UP to buy from outperform.

    • Cullen/Frost Bankers (CFR): DOWN to neutral from outperform.

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    Offerings and stock actions

    Internet consulting firm Fort Point Partners said it was withdrawing plans to launch a $69 million IPO. The company didn't give a reason for the withdrawal, though others have dropped IPOs because of "unfavorable" market conditions. The company had applied for a Nasdaq listing under the symbol "FTPT."

    McClain Industries (MCCL), a manufacturer of waste-disposal equipment, announced that it will repurchase up to 100,000 of its own shares.

    ReplayTV's IPO is the latest casualty of unfavorable market conditions. The company has canceled the plan to offer 8.5 million share in a price range of $13 to $15 a share. ReplayTV had applied for a Nasdaq listing under the ticker "RPTV."

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    Miscellany

    Ford (F) said it will idle production for two weeks in three truck-assembly plants to free up about 70,000 tires for the Firestone recall efforts, Reuters reported. The move, which cuts Ford's third-quarter production schedule by 25,000 units, will have an impact on earnings.

    The Securities and Exchange Commission announced that the Japanese unit of Boston Scientific (BSX) recorded more than $75 million in false sales in 1997 and 1998. According to the SEC, employees of the Japan unit "carried out a scheme to record false sales to independent distributors in order to boost Boston Scientific Japan's sales revenue." Boston Scientific, a manufacturer of medical devices, consented to an SEC order to cease and desist from committing violations without admitting or denying SEC findings.

    Biotechnology company MedImmune (MEDI) announced that it will speed up by several months its planned appointment of CFO David Mott as chief executive.

    The Federal Trade Commission has called for additional information to complete its antitrust review of Philip Morris' (MO) acquisition of Nabisco Holdings (NA), according to Philip Morris. This type of request however is common for transactions this size.

    Verizon (VZ), the company formed by the merger of GTE and Bell Atlantic, tentatively settled negotiations with striking workers Sunday.

    About 87,000 telephone operators and technicians walked off the job 15 days ago when their contracts expired. At issue was what the representative unions said were excessive overtime hours, as well as forced relocation and job security due to the merger.

    TheStreet.com/NYTimes.com joint newsroom covered the negotiations in an earlier story.

    After Friday's Close

    Bristol-Myers Squibb (BMY) was getting a lift after a positive cover story in Barron's.

    Barron's contended that the third-largest U.S. drug-maker is undervalued. The magazine pointed out that the company has a number of drugs that are in late-stage testing or awaiting government approval. Moreover, its second-biggest seller, the ovarian-cancer treatment Taxol, may avoid expected competition from generic drug manufacturers for more than two years.

    Compaq (CPQ) CEO Michael Capellas told Reuters on Friday that the computer industry is seeing strong demand, but that there are severe component shortages.

    "I don't think there's any question there's a component shortage like we've never seen in the industry," he said in the interview. "We are absolutely facing it like everybody else." Capellas reconfirmed that the company would match analyst expectations that Compaq would earn $1.08 per share this year.

    The Federal Aviation Administration is expected to push for the accelerated inspection of 2,500 General Electric (GE) commercial aircraft engines to look for possible hazardous cracks, reported The Wall Street Journal.

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