UAL, US Airways in $4.3 Billion Merger Talks

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M&A Earnings/revenue Offerings/stock actions Miscellany

UAL(UAL Quote), parent of United Airlines, reportedly intends to purchase rival US Airways(U Quote) for $4.3 billion in cash, or $60 a share, according to the Financial Times' and Wall Street Journal's Web sites. US Airways stock closed at 26 5/16 today.

UAL would also assume about $7.3 billion in debt and lease agreements as part of the deal. Reports have said that both boards have met separately to discuss the merger, but opinions vary as to whether both or one of the boards have already approved it. It is likely that a merger of this size, involving two of the world's largest airlines, would result in a lengthy approval process and would have to be vetted by government agencies including the Securities and Exchange Commission, Federal Aviation Agency and the Justice Department.

UAL already is the world's largest airline, and US Airways is the nation's sixth largest. The Journal noted that the new airline would have 6,500 daily flights, while the world's second-biggest airline, AMR (AMR Quote), parent company of American Airlines, and its affiliates have 3,600 daily flights.

See TheStreet.com/NYTimes.com's joint newsroom coverage of the issue. Also, columnist Holly Hegeman takes a look at some of the issues behind the merger.

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Intuit(INTU Quote), which supplies Web software products to small businesses, posted third-quarter earnings of 36 cents a share, topping the 15-analyst estimate of 33 cents a share and up from the year-ago 25-cent profit.

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Rambus(RMBS Quote) shareholders favored raising the number of outstanding shares in order to set a previously announced 4-for-1 stock split. The holders voted to boost the company's outstanding stock to 500 million shares from the current 23.9 million shares.

Major Indices INDEX CHANGE % VALUE YR TO DATE Dow 120.28 -1.1% 10,422.27 -9.3% S&P 500 26.86 -1.9% 1373.86 -6.5% Nasdaq 199.78 -5.9% 3164.43 -22.2% Russell 2000 12.66 -2.7% 459.01 -9.1% TSC Internet 59.57 -7.3% 758.81 -34.3% TSC New Tech 30 75.43 -14.8% 433.97 -29.8% NOTE CHANGE PRICE YIELD 10-Year Treasury 5/32 100 16/32 6.428%

In other postclose news (earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified):

Mergers, acquisitions and joint ventures

International Specialty Products(ISP Quote) scaled its offer for Dexter(DEX Quote) back to its initial bid of $45 a share. The move is the latest development in the takeover effort, which began last December, when ISP, which already holds a 10% stake in Dexter, launched its first bid. ISP, which upped its bid to $52 a share, said it was reinstating its first offer, even after Dexter said last week that it was ready to negotiate a possible merger.

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Earnings/revenue reports and previews

Elcor(ELK Quote) warned investors that it would post fiscal 2000 earnings between $1.48 a share to $1.53, missing the seven-analyst estimate of $1.63 profit. The industrial products maker blamed the shortfall on higher expenses and lower-than-expected results from its Cybershield division.

Fluor(FLR Quote), an engineering services company, posted second-quarter earnings of 68 cents a share, beating the five-analyst estimate of 65 cents and up from the year-ago 62 cent-profit.

Novell(NOVL Quote) posted second-quarter earnings of 9 cents a share, which included a royalty that added 7 cents. The six-analyst estimate was a penny profit. The year-ago report was an 11-cent profit.

3dfx Interactive(TDFX Quote), a graphic chip maker, reported a first-quarter loss of 51 cents a share, narrower than the two-analyst estimate of a 56-cent loss but wider than the year-ago 14-cent loss.

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Offerings and stock actions

Asia Global Crossing, a venture between Global Crossing(GBLX Quote), Microsoft(MSFT Quote) and Softbank, has filed with the SEC for an IPO. According to the filing, the Asian telecommunications carrier hopes to raise $100 million through the offering.

Station Casinos(STN Quote) set a 3-for-2 stock split.

Merrill Lynch and Salomon Smith Barney priced a 7-million share IPO for Universal Compression(UCO Quote) in mid-range at $22 a share.

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Miscellany

Veeco Instruments(VECO Quote) said it would cut its workforce by 180 jobs as part of its restructuring plan. The company, which produces line equipment used by semiconductor makers, said it would the plan would amount to savings of $6 million a year.

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