Stocks to Watch: KLM, BFO, UN, CPB, IBM, MRA

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M&A Earnings/revenue Analyst actions Offerings/stock actions Miscellany

Primark(PMK Quote), a global information service provider of financial, economic and market research information, agreed to be bought by Canadian publisher Thomson for $38 a share, or about $842 million, in a cash tender offer. The merger agreement, which was approved by both companies' boards, calls for Thomson to assume about $235 million in Primark debt. Primark jumped 8 5/16, or 28.7%, to 37 5/16.

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Mergers, acquisitions and joint ventures

British Airways and KLM Royal Dutch Airlines (KLM Quote) are exploring a possible merger that could link the two airlines. Published reports say both companies have been hurt by increasing competition within Europe and on trans-Atlantic routes, though talks remain at a very preliminary stage, according to people close to the situation. KLM Royal Dutch Airlines advanced 1 5/16, or 5.7%, to 24 7/16.

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The board of Bestfoods(BFO Quote) is expected to meet as early as today to discuss the newest bid from Unilever NV(UN Quote), the Wall Street Journal reported.

The newspaper, quoting people familiar with the matter, said Unilever is offering Bestfoods' shareholders close to $72 a share, or $20.5 billion. The company earlier offered $66 a share, but it was rejected as "financially inadequate."

People close to the negotiations also told the newspaper that Bestfoods is in intensive talks to acquire Campbell Soup(CPB Quote), whose stock has fallen 46.5% during the past two years. Campbell Soup has a market capitalization of $12.6 billion. USA Today reported that Bestfoods is in talks to buy the company for more than $15 billion. Unilever gained 13/16 to 50 5/8; Bestfoods slipped 2 15/16 to 62 3/16; Campbell Soup increased 1 7/16 to 31 3/8.

Restaurant operator Buffets (BOCB Quote) is being acquired by a private equity firm for $643 million or $13.85 a share, according to Reuters. Buffets increased 7/8, or 7.2%, to 13.

CDNow (CDNW Quote) said it is in talks with five groups about a possible investment or merger deal. The company said it expects to announce a merger or investment deal by June 30 and has drawn up a short list of prospective investors or merger partners from more than two dozen companies. CDNow fell 13/16, or 16.7%, to 4 1/16.

Cherry (CHER Quote), which manufactures electronic components, said it accepted a buyout proposal from Chairman and President Peter Cherry and his affiliates for $26.40 a share in cash. Cherry hopped 5 5/16, or 26.1%, to 25 11/16.

Cisco (CSCO Quote) will buy communications company Elbit's (ELBTF Quote) Hynex subsidiary for about $127 million . Elbit said it expects to realize a $47 million net capital gain from the sale. Cisco shed 7/8 to 63 7/16, while Elbit gained 9/16, or 5.7%, to 10 3/8.

IBM (IBM Quote) and start-up Salesforce.com are expected to announce a partnership to help small businesses become e-businesses, the New York Times reported. IBM lifted 3 1/4 to 112 1/16.

Meritor Automotive(MRA Quote) and Arvin Industries(ARV Quote) received antitrust approval from the European Union Commission for a proposed merger between the two U.S automotive parts companies. Meritor Automotive traded up 7/16 to 13 1/4, while Arvin Industries moved ahead 3/8 to 19 1/8.

Motorola (MOT Quote) said it received a $535 million pact from Adelphia Business Solutions (ABIZ Quote)for digital set-top terminals and modems. Motorola improved 5/8 to 37 7/16, while Adelphia fell 1/16 to 29 15/16.

China's Unicom (UCM Quote) confirmed it will not use Qualcomm's (QCOM Quote) code-division multiple access (CDMA) mobile phone technology for at least three years, the Journal reported. Qualcomm's stock fell sharply last week when talk of Unicom's about face began to hit the market. Unicom slipped 15/16 to 40 1/16, while Qualcomm fell 5 5/8, or 7.7%, to 67 1/16.

Verisign (VRSN Quote), American Express (AXP Quote) and Ariba (ARBA Quote) are in an alliance to provide card payment processing for B2B e-commerce. Verisign lowered 3 1/2 to 178 7/8; American Express declined 1 5/8 to 54 7/8; Ariba boosted 7 1/8, or 10.1%, to 77 5/8.

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Earnings/revenue reports and previews

Sportwear manufacturer Oakley (OO Quote) said it sees second-quarter earnings at 21 cents a share, above the two-analyst estimate of 18 cents . Oakley rose 1 1/4, or 13%, to 10 7/8.

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Analyst actions

Upgrades

AES (AES Quote) shares fell 1 1/4 to 44 3/4: UP to intermediate-term accumulate from neutral; target price: 55.

Cigna(CI Quote) shares were off 13/16 to 88 9/16: 2001 EPS UP to $7.50 from $7.40 at Donaldson Lufkin & Jenrette, price target: UP to 120 from 110.

Citigroup (C Quote) lost 3/4 to 65 7/8: UP to strong buy from buy at ING Barings by analyst Ernest Jacob; price target UP to 78.

Goodyear(GT Quote) rose 3/8 to 28 3/16: BUY from market performer at Deutsche Banc Alex. Brown, price target: 35.

Human Genome Sciences (HGSI Quote) jumped 7 11/16, or 7.3%, to 113 5/8: UP to long-term buy from long-term accumulate at Merrill Lynch.

Pharmacia (PHA Quote) gained 5/8 to 49 15/16: UP to attractive from neutral at PaineWebber; price target up to 60 from 55.

Schlumberger(SLB Quote) edged up 1 to 70 9/16: UP to top pick from buy at DLJ.

Downgrades

Computer Motion (RBOT Quote) was off 1/8 to 7 5/8: DOWN to neutral from buy at U.S. Bancorp Piper Jaffrey.

Golden West Financial (GDW Quote) slipped 2 1/4 to 43 3/4: DOWN to neutral from attractive at PaineWebber.

MGIC Investment Group (MTG Quote) dropped 1 3/4 to 52 3/4: DOWN to attractive from buy at PaineWebber.

Initiations

Autonomy (AUTN Quote) dropped 8, or 7.3%, to 118: NEW buy at Banc of America

LSI Logic (LSI Quote): NEW buy at Lehman Brothers. Price target: $85.

MIPS Technologies(MIPS Quote) sank 1 to 63 1/2: NEW buy at Lehman Brothers, price target: 45.

NRG Energy (NRG Quote) shares slipped 5/16 to 16 15/16: NEW buy at Credit Suisse First Boston by analyst Neil Stein; price target: 25; and NEW buy at ABN Amro.

CSFB analyst Erach Desai assumes coverage of Wind River Systems (WIND Quote) with a STRONG BUY rating. Wind River Systems hopped 2 15/16, or 6.3%, to 38 15/16.

Texas Instruments (TXN Quote) shares were off 1 13/16 to 83 7/8: NEW outperform at Lehman Brothers; year-end price target: 105. Group moves

DLJ downgraded three banks:

• Bank of America (BAC Quote) fell 2 3/4 to 58 1/4: DOWN to market perform from buy.

• Firstar (FSR Quote) shed 1 5/8, or 5.9%, to 25 13/16: DOWN to market perform from buy.

• Wells Fargo (WFC Quote) lost 2 1/16 to 45 11/16: DOWN to market perform from buy.

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Offerings and stock actions

NTL (NTLI Quote) said it is examining a tracker stock or spinoff of its five divisions and will start with its broadcast business this year.

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Miscellany

Chip maker Advanced Micro Devices (AMD Quote) said it is introducing its new Athlon processor, which ranges from 750 megahertz to one gigahertz in speed and $319 and $990 in price. The company said Compaq (CPQ Quote), Gateway (GTW Quote), Hewlett-Packard (HWP Quote) and IBM are planning to introduce computer systems based on its Athlon processor. Advanced Micro Devices shares gained 4 5/8, or 5.1%, to 94 3/4; Compaq shares rose 1/8 to 26 3/4; Gateway was off 3 1/16, or 5.6%, to 51 11/16; Hewlett-Packard was up 9 1/2, or 8.6%, to 120 7/16; and IBM was up 3 1/4 to 112 1/16.

American Express Publishing, a partnership between Time Warner (TWX Quote) and American Express (AXP Quote), is expected to announce it has appointed Ed Kelly as president and CEO, according to the Journal. Kelly has been group publisher for American Express' Travel & Leisure magazines. Time Warner was down 13/16 to 81 15/16.

Charles Schwab (SCH Quote) is expected to announce wireless trading for its online customers, the New York Times reported. According to the story, the move comes a year and a half after competitor Fidelity Investments introduced the service though the wireless trading market remains small enough that Schwab does not consider itself late to the game. Charles Schwab lowered 1 3/16 to 32 5/16.

Cypress Communications(CYCO Quote) named W. Frank Blount chairman and chief executive, while R. Stanley Allen, the company's co-founder and current chief executive, was appointed vice chairman.

The company said Blount was chief executive of Australian telecommunications company Telstra(TLS Quote) until March 1999. Cypress Communications rose 3/4, or 9%, to 9 1/8, while Telstra slipped 5/16 to 20 1/8.

Ford's(F Quote) newly acquired British-based Land Rover unit said it will recall about 10,000 Discovery and Defender TD5 models to replace engine flywheels on manual transmission models.

Land Rover, which makes sport utility vehicles and was recently sold to Ford from BMW, said it also planned to inspect the vehicles' clutch parts for signs of wear, saying new tests had shown that "high energy inputs" into the clutch and flywheel system could lead to failure of the flywheel assembly.

It was also recalling about 1,300 Discovery Series 2 V8 models to upgrade the engine idler pulley. Ford declined 1 to 49.

Heller Financial(HF Quote), a U.S. leverage-finance firm, said it would launch a new European Leverage Finance Group with initial funding of $1 billion. Heller Financial boosted 3/8 to 20 9/16.

The company said in a statement that the group, which will be based in London, will offer cashflow financing solutions to venture capital markets and companies throughout Europe.

Microsoft (MSFT Quote) is expected to unveil part of its next generation Internet technology today, despite the overhanging worry of a federal antitrust ruling, the Journal reported. The new feature, BizTalk Server, will assist businesses with their e-commerce transactions. Microsoft added 2 to 68 5/16.

Drug developer PathoGenesis (PGNS Quote) said it will explore strategic options but said it is still on track to meet expectations for 2000. PathoGenesis increased 1 15/16, or 10.7%, to 20 1/16.

The Heard on the Street column in the Journal looks at bookseller Borders Group (BGP Quote), which announced in March it was exploring strategic alternatives to help its troubled stock price. After he acquired a 2.8% stake, shareholder activist and fund manager Barry Lafer urged the company to consider options including a leveraged buyout and stock buyback. But, the story says, none of those actions will necessarily translate into a boost for the stock price. Borders Group decreased 9/16 to 16 15/16.

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