Monday's Winners & Losers: Old Kent, @plan, Juniper, eBay, Oracle
Updated from 1:02 p.m.
Less than a month after
PepsiCo
(PEP) - Get PepsiCo, Inc. Report
failed in its bid to buy
Quaker Oats
(OAT)
, rival
Coca-Cola
(KO) - Get Coca-Cola Company Report
is looking to pay about $16 billion for Quaker, the maker of Gatorade and other consumer products.
Quaker is also reportedly considering a bid from French company
Danone
.
Pepsi and Quaker reportedly couldn't
agree on a price. Pepsi had been holding talks to acquire Quaker Oats for more than $14 billion in stock.
TheStreet Recommends
What's the draw? The beverage makers want to get the popular Gatorade under their label.
This morning,
Salomon Smith Barney
cut Coca-Cola to outperform from buy and lowered its 12-month price target to $65 from $68. PepsiCo closed up $1.06, or 2.4%, to $45; Quaker Oats was up $4.69, or 5.2%, to $95; Coke closed down $4.88, or 7.9%, to $56.56.
Storage-management software maker
Veritas Software
(VRTS) - Get Virtus Investment Partners, Inc. Report
named former
Oracle
(ORCL) - Get Oracle Corporation Report
executive Gary Bloom as president and chief executive of the company.
Bloom worked for 14 years at software-maker Oracle, where he was executive vice president. He was also in charge of Oracle's core database business and led the company's Internet and e-business units.
Oracle CFO Jeff Henley recently denied rumors that he was about to leave the company. Ray Lane, Oracle's COO, left the company in July.
Veritas also said Mark Leslie, who has been chairman and CEO of the company since 1990, will continue as chairman and will maintain a full-time active role in the business. Veritas closed down $2.88, or 2.6%, to $107.25; Oracle closed down $4.06, or 14.1%, to $24.75.
Mergers, acquisitions and joint ventures
Midwestern bank
Fifth Third Bancorp
(FITB) - Get Fifth Third Bancorp Report
has agreed to buy
Old Kent Financial
(OK)
, a financial holding company headquartered in Michigan, in a stock deal valued at $4.9 billion.
Under the terms of the deal, Cincinnati-based Fifth Third will exchange 0.74 shares of its common stock for each share of Old Kent stock. The deal, expected to close in the second quarter of 2001, values Old Kent Financial shares at $35.56, or a 42% premium based on Friday's closing prices. Fifth Third ended the trading day down $1.69, or 3.5%, to $46.38, while Old Kent was up $8.56, or 34.3%, to $33.56.
France Telecom's
(FTE)
Global One unit will merge with
Equant
(ENT) - Get Global Eagle Entertainment Incorporated Report
in a cash and stock deal.
The deal calls for Dutch-based Equant to acquire Global One's data services business and $300 million in exchange for 80.6 million newly issued Equant shares, while France Telecom will exchange some of its existing shares to acquire the SITA Foundation's 34% stake in Equant. The SITA Foundation, which is Equant's leading shareholder, provides telecommunications and information systems for the world's airline industry.
Terms have SITA marketing the services of Equant and Global One to the air transport community. Also, France Telecom will invest $1 billion in cash in the merged companies in exchange for 10 million new Equant convertible preferred stocks.
France Telecom held talks with Equant earlier this year, but nothing came of it. The French operator said in October it was still interested in Equant, but would not carry out a deal until its shares hit levels seen at the start of September. Friday, the stock closed at $91. On Sept. 1, the stock closed at $131. It had a rough two months, and in the middle of October hit a low of $82.19. France Telecom closed down $4.50, or 4.95%, to $86.50; Equant was up 63 cents, or 2.2%, to $29.75.
After Friday's Close
WorldCom
(WCOM)
received conditional approval from the Justice Department to acquire
Intermedia Communications
(ICIX)
, which controls Web-hosting firm
Digex
(DIGX)
.
WorldCom will obtain a 55% equity stake and a 94% voting stake in Digex. Because of antitrust concerns, WorldCom must divest the remaining Intermedia business operations and assets.
The deal was valued at $3 billion in stock when it was first announced in September, but WorldCom's stock has dropped significantly since then. In addition, the companies must still get approval from the
Federal Communications Commission
. WorldCom was down 69 cents, or 4.4%, to $15.06; Intermedia was down 31 cents, or 2.1%, to $14.94; Digex was down $2.94, or 10.1%, to $26.06.
DoubleClick
(DCLK)
, an Internet advertising company, revised the terms of its proposed acquisition of
@plan
(APLN)
, a provider of online market-research planning systems, and moved back the expected completion date.
According to the revised terms, @plan shareholders will receive $8 for each @plan common share. The @plan shareholders will either receive all cash for their shares, or cash totaling $1.60 to $4 a share, with the remainder being paid in DoubleClick common stock.
When the acquisition was disclosed in September, DoubleClick said it would pay $9.25 for each share of @plan, whose shareholders were set to receive 20% of the consideration in cash, and the remainder in DoubleClick common stock. DoubleClick also previously expected to complete the acquisition in the fourth quarter, but now expects to close the deal in the first quarter of 2001. DoubleClick closed down $1.25, or 8.2%, to $13.94; @plan was up $1.94, or 36.5%, to $7.25.
Oil and gas services company
Schlumberger
(SLB) - Get Schlumberger NV Report
said its Schlumberger Technology subsidiary would extend its tender offer for
Convergent Group
(CVGP)
, which builds Web sites, to Nov. 30 from Nov. 27.
Schlumberger is buying about 71.7% of the company for $8 a share. Schlumberger closed down $1.63, or 2.1%, to $74.75.
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Earnings/revenue reports and previews
After Friday's Close
In an attempt to ease investor concern,
Commerce One
(CMRC)
reiterated its guidance for the fourth quarter and 2001. The stock fell more than 10% after a company memo was misconstrued as meaning that sales were weak. The company said the memo was routine and meant to motivate its salespeople.
In a press release, the company said it expects a fourth-quarter loss of about 7 cents a share, in line with the
First Call/Thomson Financial
30-analyst estimate. Commerce One closed down $7.38, or 15.5%, to $40.25.
OmniVision Technologies
(OVTI)
said it expects second-quarter earnings of 9 cents a share. The two-analyst estimate is currently 10 cents a share. The company plans to release its second-quarter results Tuesday.
The company, which completed its IPO in July, said continued demand for its single-chip CMOS image sensors, which are used in electronic cameras and other camera-related devices, contributed to its earnings growth. OmniVision closed down $2.94, or 26.7%, to $8.06.
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Analyst actions
Morgan Stanley Dean Witter
downgraded
Juniper Networks
(JNPR) - Get Juniper Networks, Inc. Report
and
Redback Networks
(RBAK)
to outperform from strong buy. The firm also cut
Cisco's
(CSCO) - Get Cisco Systems, Inc. Report
price target to $75 from $90.
Also this morning,
Lehman Brothers
cut
eBay
to neutral from buy.
Juniper closed down $32.50, or 21.1%, to $121.88; Redback was down $8, or 9.9%, to $72.75; and Cisco was down $1.50, or 2.8%, to $51.25. eBay closed down $8.94, or 20.6%, to $34.50.
Lehman strategist Jeffrey Applegate came out this morning with a note saying that Lehman is modestly reducing its earnings per share forecast for the
S&P 500
, but leaving its equity returns alone as "valuation has moderately improved." Lehman lowered its EPS growth for the third quarter to 10% from its previous 13% expectation. Lehman cut its forecast for the fourth quarter by 60 cents to $15.05, for growth of 8%. For full-year 2001, Lehman is reducing its EPS forecast to $64 from $67, or 10% growth. These are its estimates for the S&P 500 as a whole, put together as an average.
Applegate said he wasn't changing his firm's expected equity returns as valuation has moderately improved.
Upgrades
Tyco
(TYC)
: ADDED to
Merrill Lynch's
"Focus One" list, citing the company's solid track record, healthy business mix and strong management. Tyco closed down $1.88, or 3.3%, to $55.50.
Downgrades
Bank of America
(BAC) - Get Bank of America Corp Report
: fourth-quarter earnings estimate DOWN to $1.13 from $1.33 at
Credit Suisse First Boston
and lowered 2001 earnings estimates to $5.50 from $5.75. Bank of America closed down $1, or 2.5%, to $39.31.
Digex
(DIGX)
: DOWN to buy from strong buy at
Deutsche Banc Alex. Brown
. As noted above, Digex closed down $2.94, or 10.1%, to $26.06.
Macerich
(MAC) - Get Macerich Company Report
: DOWN to neutral from outperform at Lehman. Macerich closed up 6 cents, or 0.3%, to $19.
Initiations
Heidrick & Struggles
(HSII) - Get Heidrick & Struggles International, Inc. Report
: NEW buy at CSFB. H&S closed up 75 cents, or 1.4%, to $55.
Group moves
Put under group moves:
Deutsche Banc Alex. Brown cut earnings on three car companies:
- General Motors (GM) - Get General Motors Company Report: fourth-quarter EPS estimate DOWN to $1.65 from $1.75; 2001 EPS estimate DOWN to $8.65 from $9. General Motors closed down $4.31, or 7.7%, to $51.56.
Ford (F) - Get Ford Motor Company Report: fourth-quarter EPS estimate DOWN to 81 cents from 86 cents. Ford's 2001 EPS estimate of $3.71 remains under review for possible reductions. Ford closed down $1.44, or 5.8%, to $23.50.
DaimlerChrysler (DCX) : fourth-quarter EPS DOWN to 77 euros from 1.05 euros and 2001 EPS estimate DOWN to 3.70 euros from 4.70 euros. DaimlerChrysler closed down $2.75, or 6.4%, to $40.10.
Wit Soundview
downgraded computer-hardware makers. The firm slashed
Dell
(DELL) - Get Dell Technologies Inc Class C Report
,
Apple
(AAPL) - Get Apple Inc. Report
and
Intel
(INTC) - Get Intel Corporation Report
to buy from strong buy, and
Gateway
(GTW)
to hold from buy. Dell closed down $1.56, or 6.3%, to $23.38; Apple was up 44 cents, or 2.4%, to $18.94; Intel was down 38 cents, or 0.9%, to $41.13; and Gateway was down $3.53, or 8.9%, to $36.20.
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Offerings and stock actions
Hewlett-Packard
(HWP)
said its board approved increasing its stock buyback programs by $2 billion to offset dilution from shares issued through employee benefit programs and for "opportunistic" share repurchases.
Also, the company declared a regular cash dividend of 8 cents a share. Hewlett-Packard closed down $1.06, or 2.98%, to $34.56.
After Friday's Close
Guilford Pharmaceuticals
(GLFD)
filed with the
Securities and Exchange Commission
to sell up to 3.5 million shares. Guilford closed down $1.19, or 5.4%, to $20.81.
Teradyne
(TER) - Get Teradyne, Inc. Report
said its board has authorized a buyback of 10 million shares. Teradyne closed up $3.06, or 9.1%, to $36.56.
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Miscellany
DaimlerChrysler
(DCX)
in an effort to revitalize its U.S. operations, cut the Chrysler Group's executive vice president of global sales and marketing, Theodor Cunningham; its chief administrative officer, Kathleen Oswald, and its head of global communications, Tony Cervone. Cervone will be replaced by Ken Levy, former spokesman for
General Motors
(GM) - Get General Motors Company Report
in Europe.
DaimlerChrysler, as noted above, closed down $2.75, or 6.4%, to $40.10.
After Friday's Close
Delta Air Lines
(DAL) - Get Delta Air Lines, Inc. Report
and its pilots union requested the assistance of a federal mediator in their ongoing contract negotiations. They asked that mediation start Dec. 1. Delta closed flat at $48.19.
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By the Numbers
The data on NYSE and Nasdaq percent winners and losers are filtered to exclude stocks whose previous day's volume was less than 25,000 shares; whose last price was less than 5; and whose net change was less than 1/2.
Dow point gain and loss data are based on New York closing prices and do not reflect late composite trading.
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