Evening Update: Vivendi, Canal Plus Reportedly Eyeing Seagram

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M&A Earnings/revenue Offerings/stock actions Miscellany

French media group Vivendi and its pay-television subsidiary Canal Plus are in talks with beverage and entertainment giant Seagram (VO) about a joint stock-swap bid that would value Seagram at more than $70 a share, or $30.6 billion in stock, according to a report in the The Wall Street Journal's online edition. Earlier today, the Financial Times reported that Vivendi had resumed talks with Seagram after they collapsed earlier this year over price and management issues.

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Microsoft (MSFT) filed formal notice to appeal federal judge Thomas Penfield Jackson's order that the company be broken up for violating antitrust law. Microsoft also said it asked the U.S. Court of Appeals in Washington, D.C., to stay a number of business restrictions that were issued as part of the ruling.

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Standard & Poor's said it plans to make changes to its S&P 500 index by dropping soon-to-merge paper company Champion International (CHA) and computer firm SGI (SGI) from the roster. Semiconductor equipment maker Novellus Systems (NVLS) will replace Champion, which is set to merge with International Paper (IP), after the market closes Friday. Luxury retailer Tiffany (TIF) will replace SGI after the close of trading June 20. SGI is being removed for lack of representation.

Major Indices INDEX CHANGE % VALUE YR TO DATE Dow 57.63 +0.6% 10,621.84 -7.6% S&P 500 23.44 +1.6% 1469.44 --% Nasdaq 83.21 +2.2% 3851.12 -5.4% Russell 2000 5.24 +1% 513.75 +1.8% TSC Internet 13.55x +1.5% 913.63 -20.9% NOTE CHANGE PRICE YIELD 10-Year Treasury 8/32 102 25/32 6.113%

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

BellSouth (BLS) confirmed it will take a controlling stake in Columbian wireless operator Celumovil to estabish a national cellular presence in that country. Internet investment company CMGI (CMGI) posted a third-quarter loss of $1.53 a share, narrower than the seven-analyst expected loss of $1.83, but wider than the year-ago loss of 15 cents.

For more on CMGI's earnings, see coverage from TheStreet.com/NYTimes.com joint newsroom.

Online auction site eBay (EBAY) said it agreed to buy Half.com in an all-stock transaction. Half.com, which allows consumers to buy and sell used books, CDs and movies, typically at half-off the list price, currently has 250,000 users and 4 million items for sale.

Network Appliance (NTAP), which makes storage devices widely used by Web sites, said it has agreed to acquire privately software maker Orca Systems for about $49 million in stock, assumed options and cash with an obligation to provide about 280,000 shares if certain performance criteria are achieved.

Parker Hannafin (PH) said it will buy Wynn's International (WN) in a deal valued at $438 million in cash. Hannafin will pay Wynn's shareholders $23 for each share and assume about $59 million of Wynn's debt.

Communications equipment maker Xircom (XIRC) said it agreed to acquire Omnipoint Technologies, a unit of VoiceStream Wireless (VSTR), in exchange for stock valued at $52.2 million. VoiceStream becomes a minority investor in Xircom with a seat on its board of directors. Xircom will take a one-time charge against its earnings of between $15 million and $25 million in the current quarter, which ends June 30, to account for the deal.

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Earnings/revenue reports and previews

Fatbrain.com (FATB) reported a first-quarter pro forma loss of 65 cents a share, narrower than the five-analyst estimate of a loss of 88 cents, but wider than the year-ago loss of 46 cents. Pro forma results exclude revenues and expenses from MightyWords, a unit that offers digital versions of books and texts that can be downloaded to a personal computers Last Tuesday, Fatbrain announced the separation of MightyWords as an independent, privately-held company. Including MightyWords, basic and diluted net loss-per-share in the latest quarter was $1.00 including a gain of $3,000.

The company said it expects pro forma 2001 revenues between $70 million and $72 million. Fatbrain also said it anticipates profitability within the 2002 calendar year and projects revenues of $125 million to $130 million.

Y2 what? Restaurant and hotel service company Micros Systems (MCRS) warned it sees fourth-quarter and 2000 revenues below analyst expectations, due to a slowdown in customer orders because of after-effects of Y2K and longer-than-normal sales cycles of information technology purchases. Micros is expecting a net loss between 15 cents and 20 cents a share, far below the three-analyst estimated profit of 73 cents a share.

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Offerings and stock actions

Patterson Dental (PDCO) said its board approved a 2-for-1 stock split.

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Miscellany

SBC Communications (SBC Communications) said it won endorsement from the Justice Department for its application to provide long-distance service in Texas. The Justice Department had previously recommended the Federal Communications Commission deny the application, in part because SBC had failed to show it was treating competitors fairly.

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