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Stocks to Watch: Alcatel Purchases Newbridge Networks

ADC Telecommunications will buy PairGain Technologies in another all-stock deal.

Alcatel

(ALA)

of France is

buying

TST Recommends

Newbridge Networks

(NN)

of Canada in a stock swap valued at $7.1 billion. Newbridge closed yesterday at 34 3/8. Under terms of the deal, Newbridge shareholders will receive 0.81 share of Alcatel ADRs, or $38.98125 a share.

Mergers, acquisitions and joint ventures

ADC Telecommunications

(ADCT) - Get Report

is buying

PairGain Technologies

(PAIR)

for $20.13 a share in stock, or $1.6 billion. ADC is a supplier of network equipment, software and integration services for broadband networks. PairGain, which closed yesterday at 16 1/16, is a designer, manufacturer, marketer and seller of digital-subscriber-line networking systems. ADC expects the buyout to be nondilutive to earnings for the balance of fiscal year 2000 and 5 cents accretive in fiscal year 2001.

MGM Grand

(MGG)

has offered to buy

Mirage Resorts

(MIR)

for $17 a share. In a letter to Steve Wynn, chief of Mirage, MGM Grand Chairman J. Terrence Lanni said that Mirage shareholders can receive the $17 either in all cash or a combination of $7 in cash and MGM Grand stock valued at $10 a share, based on MGM Grand's closing price of 40 3/8 yesterday. The $17-a-share offer is a nice premium over Mirage's close of 10 7/8 yesterday.

724 Solutions

(SVNX)

said

Motorola

(MOT)

bought an equity interest in the company. The investment was in part of 724 Solutions' IPO in January.

Earnings/revenue reports and previews

(Earnings estimates are from First Call/Thomson Financial.)

Consolidated Stores

(CNS) - Get Report

reported fourth-quarter earnings of $1.06 a share, which includes a loss from its

Kbkids.com

venture. Due to the loss, the report is in line with the year-ago earnings but beats the 15-analyst estimate of $1.03 a share, which reflects the effect of the venture.

Conseco

(CNC) - Get Report

posted fourth-quarter operating earnings of 64 cents a share, beating the 12-analyst estimate of 57 cents but down from the year-ago 89 cents.

Federated Department Stores

reported fourth-quarter earnings of $2.04 a share, beating the 18-analyst estimate of $1.99 and up from the year-ago $1.88 a share.

H&R Block

(HRB) - Get Report

posted a third-quarter loss of 7 cents a share, narrower than the six-analyst estimate of a 17-cent loss but wider than the year-ago report of a 3-cent loss.

Tandy

(TAN) - Get Report

reported fourth-quarter earnings of 63 cents a share, a penny better than the 17-analyst estimate and up from the year-ago 51 cents.

Offerings and stock actions

Capital One

(COF) - Get Report

said it set a share repurchasing program for up to 10 million shares.

Incyte

(INCY) - Get Report

said it set a 2 million-share offering for institutional investors at $211 a share. The offering could raise $422 million.

The 23.5 million-share IPO of

Nextel Partners

(NXTP)

was priced at $20 a share, the top of the $18-to-$20 range.

Goldman Sachs

and

Donaldson Lufkin & Jenrette

are the lead underwriters. Nextel Partners is an affiliate of

Nextel Communications

(NXTL)

, offering digital wireless communications services in small and midsize markets.

RSA Security

(RSAS)

raised its share repurchase program to 8 million from 4 million.

St. Joe

(JOE) - Get Report

said it set a $150 million stock buyback.

Weyerhaeuser

(WY) - Get Report

set a repurchasing plan for up to 12 million shares.

Zoll Medical

(ZOLL)

priced a 1.5 million-share secondary offering at $41.75 a share.

Miscellany

Scholastic

(SCHL) - Get Report

, in response to inquiries, said "there are no corporate developments to account for the recent drop" in its stock price and that the company anticipates it will "meet or exceed" consensus analyst estimates for the third quarter and full fiscal year ending May 31. Scholastic said, according to

I/B/E/S International

,

Nelson Information

and

Zack's

, estimates range from earnings of 6 cents to 7 cents a share for the third quarter, while for the full fiscal year the estimates range $3.05 to $3.08 a share. The full fiscal year estimates exclude a pretax nonrecurring charge that was recorded in the second quarter. The five-analyst First Call/Thomson Financial consensus estimate calls for the company to earn 6 cents a share for the third quarter and $3.06 for the full fiscal year.

On Jan. 18, Scholastic closed at 69 3/4. Since then its stock has tumbled badly and yesterday closed at 50, a drop of 28%.

Oil ministers from

OPEC

members Saudi Arabia, Kuwait, United Arab Emirates and Qatar and non-OPEC nations Bahrain and Oman, ended a day of talks in Saudi Arabia with a vow to work toward a stable balanced market that would avoid damaging the world economy,

Reuters

reported.

Waste Management

(WMI)

named William Trubeck CFO.

The Heard on the Street column in

The Wall Street Journal

said that stocks going into the four trusts

Merrill Lynch

(MER)

has sold so far, totaling $2.4 billion, have had a big run-up in the day before the HOLDRs begin trading because Merrill has to buy all the shares for a HOLDRs trust the day before it is formed. And the column notes that the shares are sold to the trust at their closing prices, sometimes as much as 5% to 10% higher than where they began trading that day. Merrill discloses which stocks will be included in the trust and their weightings in prospectuses for the trusts filed with the

Securities and Exchange Commission

weeks before the trusts start trading, the column notes.

For analysis of the market's preopen tone and trends, see the Wake-Up Call, published separately.