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BCE Deal to Go Private May Fall Apart


(BCE) - Get BCE Inc. Report

just reported a preliminary review has found the proposed $35 billion privatization deal may not meet solvency requirements.

BCE -- the parent of Bell Canada -- is being privatized by an investment group led by the Ontario Teachers Pension Plan Board and several U.S. partners. The deal, which had been set to close on Dec. 11, would also be the biggest takeover in Canadian history.

A review by accounting firm KPMG found that BCE would not meet the solvency tests of the privatization agreement -- with the focus on the amount of debt involved in the transaction and current market conditions.

The banks that agreed to finance the deal would be off the hook for what could have been billions of losses.


(C) - Get Citigroup Inc. Report

is directly on the hook for at least $11 billion of the $35 billion in loans backing the deal. There seems to be a lot of pressure from lenders to either push deals back or terminate them in this present economic environment. We had removed shares of BCE from our "Recommended" list back on Sept. 17, when the shares were trading at $34.58. This was our concern with deals that were on table now, and is why we removed recommendations for this specific event. The downside risk appears to be around the $16 level. The stock may be an interesting play if shares could stabilize here for a day or so. We'll keep an eye on it.

BCE is not recommended at this time, holding a Rating of 3.4 out of 5 stars.

Tiffany's Feels the Brunt of Slow U.S. Sales


(TIF) - Get Tiffany & Co. Report

just reported that it earned $43.8 million, or 35 cents per share -- less than half its year-ago profit of $101.5 million, or 73 cents per share.

The company's sales slipped 1% to $618.2 million as soft U.S. markets offset increased overseas sales. Sales in Tiffany's Americas region declined 7% to $331.8 million, with same-store sales dropping 14% in the U.S.

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For the company's outlook, it now sees 2008 in the range of $2.30 to $2.50 per share, which is below analysts' estimates of $2.58 per share.

We removed the shares of Tiffany's from our "Recommended" list back on Sept. 17, when the stock traded at $38.98. The company has a dividend yield of 2.88%, based on last night's closing stock price of $20.83. The stock next level of support appears to be in the $12 area. We don't see much support at these levels. The brand is strong, but we are concerned about consumers pulling back on higher-end purchases.

Tiffany's is not recommended at this time, holding a Rating of 3.2 out of 5 stars.

Deere's Guidance Dismal


(DE) - Get Deere & Company Report

just reported its fourth-quarter profit fell 18% to $345 million, or 81 cents a share, from $422 million, or 94 cents a share in the year-ago period.

The company did see solid demand for its agricultural equipment with sales climbing 43%. Sales of its commercial and consumer products, such as lawnmowers, dipped 11% during the quarter.

The company sees weaker earnings next year, citing the global economic downturn, with equipment sales remaining virtually flat. Management is projecting earnings will plunge more than 25% to $275 million compared with $369.1 million last year. This is way below the consensus estimates for first-quarter earnings of $363.1 million.

We had removed shares of Deere from our "Recommended" list on Aug. 6, when shares were trading at $66.67. The company has a dividend yield of 3.02%, based on last night's closing stock price of $33.10. The company is approaching some technical support in the $28 area, but if that fails to hold we would look at the $20 area for the next level of support. We would look elsewhere for better investing opportunities at this time.

Deere & Co. is not recommended at this time, holding a Rating of 3.3 out of 5 stars.

J. Crew Group Trims Guidance

J. Crew Group

( JCG) just announced its third-quarter profit fell 29% to $19 million, or 30 cents per share, from $26.8 million, or 42 cents per share, a year earlier.

The company's bulging inventory had been a concern for analysts, despite management's appeal it was tightening up the inventory control.

The apparel retailer expects EPS outlook in the range of $1.11 to $1.16, compared with a previous forecast of $1.44 to $1.54. The consensus is for a profit of $1.35 per share.

Shares of J. Crew Group are trading in "no man's land" right now with stocks at new historic lows. We would avoid going near the shares, until we see the stock and fundamentals stabilize. The retail area is giving us a bounce in other areas as we head into December. This is not a surprise considering how beat up the sector has been.

J. Crew Group does not currently pay a dividend.

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At the time of publication, the author had no positions in stocks mentioned, although positions may change at any time.

Tom Reese and Paul Rubillo are senior editors of Visit for more dividend stock ratings, picks, news, and analysis for long-term and income-seeking investors.