<BREAKFAST WITH THE FOOL>
Tuesday, January 5, 1999
"All great businesses begin by being Rule Breakers."
-- David and Tom Gardner, Rule Breakers, Rule Makers
Another Bid for AirTouch
Bell Atlantic's <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: BEL)") else Response.Write("(NYSE: BEL)") end if %> talks to acquire wireless communications company AirTouch Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: ATI)") else Response.Write("(NYSE: ATI)") end if %> just got more interesting, as another suitor reportedly stepped into the picture. Vodafone Group <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: VOD)") else Response.Write("(NYSE: VOD)") end if %> of Britain has offered to buy AirTouch for more than $45 billion, mostly in stock, according to The Wall Street Journal, which cited "people familiar with the situation." On Sunday, Bell Atlantic and AirTouch confirmed they were discussing a "possible business combination between the two companies" reportedly valued at around $45 billion in stock.
Bell Atlantic and Vodafone have been the two names long bandied about as likely suitors for AirTouch, a 1994 spin-off from Pacific Telesis Group, the San Francisco-based Baby Bell that has since been acquired by SBC Communications <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SBC)") else Response.Write("(NYSE: SBC)") end if %>. The businesses of Bell Atlantic and AirTouch dovetail nicely domestically, while AirTouch and Vodafone could create a near pan-European network. One possible obstacle to a Vodafone bid is that AirTouch has a major joint venture with Bell Atlantic. At the same time, AirTouch shareholders might not go for Bell Atlantic's practice of not paying big premiums on acquisitions.
Yesterday investors bid down both AirTouch and Bell Atlantic -- AirTouch lost $4 3/16 to $68 1/4, while Bell Atlantic fell $2 1/16 to $51 15/16. The deal between the two may fall through if Bell Atlantic can't account for the acquisition as a pooling of interests -- AirTouch's use of put options to manage its share buybacks could make a pooling transaction difficult, if not impossible, the Journal reported. And if a bidding war ensues, raising its proposed offer would make the deal even more dilutive to Bell Atlantic's earnings.
News to Go
Gourmet coffee vendor Starbucks Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SBUX)") else Response.Write("(Nasdaq: SBUX)") end if %> reported a 1% increase in same-store sales for the five weeks ended December 27. That figure and total revenue growth of 22% both fell short of recent trends due primarily to soft sales of the company's holiday merchandise.
The nation's largest computer retailer CompUSA <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CPU)") else Response.Write("(NYSE: CPU)") end if %> said comparable store sales fell 4.7% in its fiscal second quarter ended December 26 as the average selling price of personal computers fell by 20% from the same quarter a year ago.
The New York Times reported that CBS Corp.'s <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CBS)") else Response.Write("(NYSE: CBS)") end if %> CBS News may replace ABC News, a unit of Walt Disney Co. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: DIS)") else Response.Write("(NYSE: DIS)") end if %>, as the sole broadcast news source for America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %>. The deal would boost CBS News' online presence and give AOL better financial terms than its deal with ABC.
Internet access provider EarthLink Network <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ELNK)") else Response.Write("(Nasdaq: ELNK)") end if %> warned it expects to report losses for Q4 1998 and throughout 1999. The company, which just signed up its 1 millionth member, also anticipates Q4 revenue will double to roughly $58.3 million.
Desktop publishing software maker Adobe Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: ADBE)") else Response.Write("(Nasdaq: ADBE)") end if %> announced it has acquired professional Web design and publishing software GoLive CyberStudio and the GoLive Web Publishing System from privately held GoLive Systems Inc. for an undisclosed price.
The government of Sweden will sell all or part of its 7% interest in pharmaceutical firm Pharmacia & Upjohn <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: PNU)") else Response.Write("(NYSE: PNU)") end if %>. The drug company said the Swedish government plans to sell at least 31.1 million of the 35.8 million shares it owns and may sell the entire stake.
More Foolishness
A look back at 1998: Tom Gardner reflects on the year's highlights in Fooldom... The Rule Breaker Portfolio (formerly called the Fool Portfolio) stomped the S&P 500 and 100% of all mutual funds... 1998 winners and losers, Internet mania, and a timeline of the year's most newsworthy events... Plus Foolish resolutions for the new year.
-- Monday's Evening News
-- Fool Community