<BREAKFAST WITH THE FOOL>
Monday, February 22, 1999
"Forecasts are dangerous, particularly those about the future." -- Samuel Goldwyn
Energy Consolidation Continues at Rolling Boil
Just as telecom continues to consolidate with the integration of the Baby Bells back into a few large telecom companies and Ma Bell consolidating telecom and media distribution assets, the energy distribution industry's consolidation continues along at a rolling boil.
Virginia Power parent company Dominion Resources <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: D)") else Response.Write("(NYSE: D)") end if %> and natural gas pipeline and oil & gas exploration and production company Consolidated Natural Gas <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: CNG)") else Response.Write("(NYSE: CNG)") end if %> agreed over the weekend to a $6.3 billion stock swap. CNG shareholders would receive 1.52 shares of Dominion for each CNG share, which puts the offer price at $64.22, or 14% above Friday's closing price. The combined company would have $8.8 billion in revenues and annual gross cash flow of more than $2 billion, according to the companies.
Another energy deal was agreed upon over the weekend and announced this morning. Gas utility Sempra Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SRE)") else Response.Write("(NYSE: SRE)") end if %>, formed through the merger of Pacific Enterprises and Enova, and natural gas pipeline operator and energy services firm KN Energy Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: KNE)") else Response.Write("(NYSE: KNE)") end if %> have agreed to get together. KN Energy shareholders can choose between receiving 1.115 Sempra shares, valuing KN at $24.88 as of Friday's close, or $25.00 per share in cash. KN is the country's second-largest gas pipeline operator, and Sempra is the parent of Southern California Gas and San Diego Gas & Electric.
News to Go
Computer systems and telecom operator Olivetti SpA announced this weekend an uninvited takeover bid for Telecom Italia for $58 billion. Olivetti plans to sell its interests in wireless and wireline telecom companies to help raise cash for the deal, 60% of which is a cash offer.
BancBoston Robertson Stephens kicks off its Technology '99 conference today in San Francisco. Starting the day today are Cisco Systems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: CSCO)") else Response.Write("(Nasdaq: CSCO)") end if %>, Sun Microsystems <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SUNW)") else Response.Write("(Nasdaq: SUNW)") end if %>, America Online <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: AOL)") else Response.Write("(NYSE: AOL)") end if %>, and Sanmina <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: SANM)") else Response.Write("(Nasdaq: SANM)") end if %>. Later today, Texas Instruments <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: TXN)") else Response.Write("(NYSE: TXN)") end if %>, Amazon.com <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: AMZN)") else Response.Write("(Nasdaq: AMZN)") end if %>, privately held web-based employee benefits information management company Employease, Intel <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: INTC)") else Response.Write("(Nasdaq: INTC)") end if %>, and a host of other companies will present. The conference runs through Thursday. Robbie Stephens has kindly provided a phone number and web page for more information.
Aerospace electronics company Sundstrand Corp. <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: SNS)") else Response.Write("(NYSE: SNS)") end if %> announced an agreement to be acquired by aerospace components, building systems, and automotive components company United Technologies <% if gsSubBrand = "aolsnapshot" then Response.Write("(NYSE: UTX)") else Response.Write("(NYSE: UTX)") end if %>. The cash and stock deal values Sundstrand between $70 and $74 1/4 per share.
Crunchy supermarket company Whole Foods Market Inc. <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: WFMI)") else Response.Write("(Nasdaq: WFMI)") end if %> announced it will launch an "e-commerce subsidiary" planned to "re-define the on-line grocery segment." The company will launch the site this spring and will initially ship non-perishables at "aggressive discounts compared to the company's brick-and-mortar counterparts and other on-line competitors."
More Foolishness
Begin the week with a review of what happened last week... Warren Gump (TMF Gump) says investors are warming up to casino stocks. See Friday's Fool on the Hill column... Yi-Hsin (TMF Puck) talks to DoubleClick CEO and co-founder Kevin O'Connor in the latest StockTalk interview... Daily Trouble: Host Marriott Corp.
-- Friday's Evening News
-- Fool Community
-- Post of the Day
-- Latest Fribble
Also, check out the Lunchtime News at 12:30 p.m. for updates on the top stories of the day, and remember to start each business day with Breakfast With the Fool at 9 a.m.
Let us know what you think of this feature. Send all comments and suggestions (including Foolish quotes) to the Breakfast Fools.
Dale Wettlaufer (TMF Ralegh), Writer
Jennifer Silber (TMF Amused), Editor