Paper company Champion (CHA) - Get Report said it had received a takeover offer from International Paper (IP) - Get Report that values Champion at $75 a share. Champion International shares was up 6, or 9%, to 72 5/16, while International Paper was off 1 1/4 to 36.

The offer represents a significant premium over Champion's Tuesday closing price of 66 5/16 and poses a threat to Champion's merger plans with Finland's

UPM-Kymmene

(UPM)

. Champion said it believed International Paper's bid is better than UPM-Kymmene's, currently valued at $70 a share in cash. UPM-Kymmene was up 3/4 to 29 1/8.

Recently, UPM-Kymmene's CEO said that consideration of a new bid is underway. A Champion purchase would be funded with loans, and later with cash flow and asset sales, he said. Champion is not the only North American company UPM-Kymmene is interested in, according to the CEO.

Cisco

(CSCO) - Get Report

shares shed 4 1/4, or 6.8%, to 58 1/2 despite beating earnings estimates last night and receiving upgrades from several analysts. Some say the market is worried that its earnings performance going forward will fall drastically, especially if there is a slowdown in PC demand.

The company reported third-quarter earnings of 14 cents a share after yesterday's close, a penny above the 31-analyst estimate and up from the year-ago 9-cent profit. The data networking-equipment maker posted sales of $4.92 billion, a 55% increase from the third-quarter 1999's $3.17 billion report.

Cisco also announced today it will buy new manufacturing facility in Salem, N.H.

Credit Suisse First Boston

analyst James Parmalee initiated coverage of Cisco with a strong buy rating and a 12-month price target of 85.

Merrill Lynch

analyst Michael Ching today raised his estimates on Cisco. Estimates for 2000 were lifted to 53 cents from 51 cents and 2001 EPS estimates were raised to 70 cents from 66 cents. Revenue estimates for 2000 were raised to $18.6 billion from $18 billion and 2001 revenue estimates to $26.5 billion from $24.3 billion.

UBS Warburg

lifted Cisco's price target to 85 from 82, and its 2000 earnings outlook to 53 cents from 51 cents.

For more on Cisco's earnings, take a look at

coverage from the

TheStreet.com/NYTimes.com's

joint newsroom.

Mergers, acquisitions and joint ventures

Bestfoods

(BFO) - Get Report

rose 1 5/16 to 64 13/16. The company is looking for a possible merger partner after last week rejecting

Unilever's

(UN) - Get Report

unsolicited $18.4 billion offer, according to published reports. Unilever shares, meanwhile, were 3 5/16 higher, or 7.5%, to 47 3/16.

Separately, Unilever reported that first-quarter earnings before exceptional items rose 16% using constant exchange rates.

Lucent

(LU)

and privately held

Telia

said they signed a system supply deal worth $200 million over three years. Lucent shares lost 2 3/16 to 55 1/16.

Earnings/revenue reports and previews

(

Earnings estimates from First Call/Thomson Financial; earnings reported on a diluted basis unless otherwise specified.

)

Abercrombie & Fitch

(ANF) - Get Report

shed 1, or 9.2%, to 9 7/8 after it posted first-quarter earnings of 16 cents a share, in line with the 22-analyst estimate and up from the year-ago 14 cent-profit. However, the clothing retailer warned that it would report second-quarter earnings between 16 cents and 18 cents a share, falling below the 21-analyst estimate of 21 cents a share.

Credit Suisse First Boston analyst Richard Baum downgraded Abercrombie & Fitch to a hold from a buy.

Merrill Lynch

cut Abercrombie to near-term neutral, long-term accumulate.

J.P. Morgan

cut the stock to market performer from buy.

Circle International

(CRCL)

lost 1/2 to 26 3/8 after it reported first-quarter earnings of 18 cents a share, in line with the eight-analyst estimate and up from the year-ago 11 cents a share.

Imax

(IMAX) - Get Report

added 7/16 to 21 3/8 after it reported first-quarter earnings of 10 cents a share, in line with the four-analyst estimate, and up from the year-ago 7 cents which includes items.

McDonald's

(MCD) - Get Report

jumped 1 5/16 to 38 5/16 after it said sales through the first four month were $12.87 billion, up 9% from a year ago, after foreign currency changes are factored out. Including the currency changes, sales were up 7%.

Payless Shoesource

(PSS)

fell 11/16 to 54 11/16 after it reported first-quarter earnings of $1.19 a share, in line with the seven-analyst estimate and up from the year-ago $1.09 a share.

Sunbeam

(SOC)

declined 1/8 to 3 3/8 after reported a first-quarter loss of 55 cents, beating the 2-analyst estimate by two cents and less than the year-ago-loss of 60 cents.

Trammell Crow

(TCC)

slipped 1/4 to 12 3/4 after it reported first-quarter earnings of 10 cents a share, in line with the six-analyst estimate, but down from the year-ago 20 cents a share.

Meanwhile, the commercial real estate services company announced it was forming a strategic alliance with

Savills

, a British property consulting group, to form a new company that will provide real estate outsourcing services throughout the European Union.

Reuters

reported that Trammell Crow will buy a 10% stake in Savills for $21.7 million from Hong Kong conglomerate

First Pacific

.

XL Capital

(XL)

sank 3 7/8, or 7.5%, to 47 3/8 after it posted first-quarter earnings of $1.19 a share, in line with the 10-analyst estimate and up from the year-ago $1.09 a share. The company said it sees results for the year 5% below its annualized first-quarter earnings.

Offerings and stock actions

UBS Ag

, Switzerland's largest banking group, said its shares will begin trading on the

New York Stock Exchange

next Tuesday, under the symbol UBS.

Analyst actions

Salomon Smith Barney

cut its rating on

Motorola

(MOT)

to outperform from buy and lowered its price target to 120 from 200.

Salomon cut its earnings estimates from $3.20 to $3.10 for 2000 and to $4.12 from $4.25 in 2001. Salomon said though its long-term positive outlook on Motorola is unchanged, it believes the assumptions behind its more optimistic view may not materialize. It also mentioned that the "loss of a major customer to

Nortel

(NT)

suggests better-than-expected results are unlikely in 2000." Motorola declined 14, or 13.2%, to 90 7/16.

Upgrades

Tandy

(TAN) - Get Report

: rated a near-term buy and added to the Focus list at

Merrill Lynch

. Tandy added 9/16 to 46 5/16.

Downgrades

Activision

(ATVI) - Get Report

: DOWN to neutral from buy at

U.S. Bancorp Piper Jaffray

; price target lowered to 8 from 14. Activision slipped 1, or 18.4%, to 5 15/16.

Finova

(FNV) - Get Report

: DOWN to speculative neutral from speculative outperform at Salomon Smith Barney. Finova skidded 1, or 10.9%, to 8 1/16.

Jacobs Engineering

(JEC) - Get Report

: DOWN to hold from buy at

Credit Suisse First Boston

by analyst Charles Brady. Jacobs Engineering fell 13/16 to 30 7/8.

Initiations

Merix

(MERX)

: NEW strong buy at

Thomas Weisel

, six-month price target of 34. Merix edged up 3/8 to 26 3/8.

webMethods

(WEBM)

: NEW buy at Thomas Weisel. WebMethods shed 10 1/2, or 12.8%, to 71 1/2.

Group Moves

Lehman Brothers

said it selectively downgraded several steel producers to emphasize low cost producers as demand growth pulls back. The companies included

AK Steel

(AKS) - Get Report

,

National Steel

(NS) - Get Report

,

Bethlehem Steel

(BS)

and

WHX

(WHX)

.

AK Steel and National Steel were lowered to outperform from buy. AK Steel slipped 1/2 to 10 15/16.

Bethlehem Steel and WHX were cut to neutral from outperform. Bethlehem Steel lost 1/8 to 4 1/2.

Merrill Lynch cut auto maker

General Motors

(GM) - Get Report

to near-term neutral from accumulate, but raised

Ford

(F) - Get Report

to near-term accumulate from neutral. General Motors fell 3 to 81 7/8 and Ford slid 1 3/16 to 51 7/8.

Miscellany

Arrow Electronics

(ARW) - Get Report

declined 2 1/4, or 5.7%, to 36 5/8 after it said it plans to elect president and COO Francis Scricco as CEO effective July 1.

A number of major music companies are expected to agree to stop a pricing practice on compact disks that discourages discounting by retailers,

The Wall Street Journal

reported. The agreement is part of a settlement with the

Federal Trade Commission

and is expected to bring lower consumer prices for CDs, the story said.

Time Warner

(TWX)

has already settled charges.

Sony

(SNE) - Get Report

,

Seagram

(VO) - Get Report

unit Universal Music,

BMG Entertainment

and

EMI Group

have now agreed to join the settlement as well. Time Warner skidded 1 5/16 to 81 7/16, while Sony stumbled 7/16 to 212 15/16. Seagram fell 15/16 to 53 7/16.

The

New York Stock Exchange

is in talks with markets in Canada, Latin America and Europe about link-ups in the wake of the

Nasdaq Stock Market's

forays into Asia, Canada and Europe, the

Journal

reported.

To have bought

IBM

(IBM) - Get Report

ahead of CEO Louis Gerstner's annual meeting with analysts last year would have been a beautiful thing. Then, Gerstner's revelation that 20% of IBM's sales came from e-commerce was enough to drive the stock up more than 10% the following day.

Don't expect the same thing to happen this morning, following Gerstner's address yesterday evening before the analyst community at the Equitable Center in Manhattan. With the company coming off a couple of lackluster quarters, Sweet Lou was in relatively defensive position for much of the session, telling the crowd that the Y2K lockdown on corporate IT spending is a thing of the past. "We'll produce much better results as we move into the second half," he said.

On the positive side, Gerstner spent time pumping the company's initiatives in the middleware software, Web hosting and server segments -- the last of which it expects to bolster on Thursday, when the company will unveil a mid-range server based on the same copper-ship technology used it its high-end S-80 server.

Big Blue's boss offered no specific growth projections, but stressed that the company would maintain its long-term target of "high-single-digit revenue growth and double-digit earnings growth." IBM sank 5 3/8 to 103 9/16.

Intel

(INTC) - Get Report

was sustaining some injury, plummeting 6 5/8, or 5.7%, to 110 1/4 after it said it would replace motherboards that have a defective memory component. The chip maker said the problem caused some computer systems sold since last fall to reset, reboot or stall.

Merrill Lynch

analyst Joe Osha defended the stock and said, "The biggest impact for Intel is that the technology is a black eye for Intel," and reiterated his accumulate/buy rating.

The Heard on the Street column in the

Journal

says the nation's securities firms have hit an "earnings pothole" amid a larger market slowdown. Underwriting fees from IPOs are declining while higher interest rates have caused turmoil for Wall Street's bond business. The firms could face earnings declines of up to 20% in the next quarter, the story says.