Monday, May 21, 2007


The WSJ reports that TPG Capital and the private-equity arm of Goldman Sachs last night agreed to purchase Alltel (AT) for about $27.5bn. The deal could signal still more ambitious gambits by buyout shops, which have shown increasing interest in telecom and wireless assets. The buyers will pay about $71.50 per share for the co. That represents a price of about 10% higher than where the shares traded on Fri, and about 23% higher than where its shares traded in late Dec, when The WSJ identified it as a buyout tgt. Top mgmt also has been asked to stay, though they are still "working out the details." Alltel's top 5 execs would get a combined $250m if they were to leave during a change in control.

According to the WSJ, Consolidated Edison (ED) provider of electricity to 9m ppl in NYC and Westchester County, is pursuing a sweeping plan to upgrade its aging electric system, including installation of state-of-the-art superconducting electrical cable in midtown Manhattan. The $39m installation, set to be unveiled today, will be largely funded by the Dept of Homeland Security. Agency officials say they are making the investment b/c the hardiness of electrical infrastructure in financial hubs like Manhattan is vital to the nation's economy. Superconducting cable, sold by several co’s, carries far more power than conventional cable but is expensive and poses certain technical challenges. The Con Edison project will use cable able to deflect power surges that was developed by American Superconductor (AMSC). American Superconductor hopes the marquee project will spur use of the cable by more utilities, which are notoriously cautious about new technology. "We hope this breaks the logjam," said CEO Grey Yurek.

The WSJ reports that Google (GOOG) and Salesforce (CRM) are discussing an alliance that could help them compete more effectively with Microsoft (MSFT). The co’s are still hashing out details of a potential partnership, expected to be announced in the next few weeks. But one outcome could be a Web-based offering that integrates some of Google's online services such as email and IM with those of Salesforce, whose "customer-relationship mgmt" tools help salespeople track their accounts.

“Heard on the Street” reports that national retailers of big-ticket items such as houses, boats and motorcycles aren't the only co’s facing the prospect of more late payments and losses on their consumer loans these days. So, too, are smaller regional retailers. But unlike mortgage lenders, which have been forced to tighten their underwriting standards amid the subprime meltdown, these smaller players are trying to encourage customers to keep buying by offering more zero-interest loans and extended payment plans. "At the end of the day, you do what it takes to get business," says Dennis Fink, CFO of Haverty Furniture (HVT). In the 1Q, 55% of loans that Haverty made to customers were no-interest for longer than 12mo’s, compared with 40% a year earlier. Another co mentioned is Conn’s (CONN).

“Ahead of the Tape” out saying that Microsoft (MSFT) Vista may not meet optimistic views. The tech co that really seems to be enjoying MSFT’s new OS is Apple (AAPL). The co has used Microsoft's Vista as an opportunity to make hay over the self-proclaimed superiority of the OS in its own Macs. Microsoft doesn't agree with that message, noting it has shipped 40m copies of Vista for consumers. Still, Apple has the hotter hand. Mac sales were up 35% in the 1Q. PC sales were up by 9%, a bit better than the prior 2 qrtrs, but below the avg rate of the past 3 years. "Somebody in Cupertino ought to send flowers to Redmond and a nice 'Thank You' note," hedge-fund manager Jeff Matthews noted.

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