Paperstand (SAP to acquire BOBJ; AMR, BMY)

According to the WSJ, SAP (SAP) agreed to acquire Business Objects (BOBJ) for €4.8bn ($6.78bn). The boards of the two companies voted to agree to the deal yesterday. SAP said it plans an all-cash offer of €42 a share for Business Objects, about a 20% premium to Friday's closing price.

“Heard on the Street” out saying that investors feeling ebullient about the recent lift in American Airlines' sputtering share price should be cautious. The co is setting a slower recovery pace than its competitors, and that drag on the stock isn't likely to go away soon. The airline is burdened with higher costs and hasn't been able to muster the kind of recent rev gains seen by its legacy-airline peers. Despite the latest uptick, shares of American's parent, AMR (AMR), are down 15% so far this year. Shareholders have been getting antsy with CEO Gerard Arpey's adherence to a long-term strategy that often eschews short-term, investor-pleasing fixes. During the industry downturn after the 911, American was one of the most frugal spenders and, in some areas, aggressive cost-cutters as Mr. Arpey avoided the easier path taken by rivals in bankruptcy-court proceedings. Now, investments to improve operations for the long haul, including better customer service and new aircraft interiors, are adding to the carrier's high costs. "They have a lot more work ahead of them than other names b/c of the fact that they haven't been through bankruptcy," said S&P's analyst Jim Corridore. Some argue that American could bounce back fast if industry fundamentals improved. "There's such huge financial and operating leverage at American that when they start turning, you're going to see kind of an explosive upside," said FTN analyst Michael Derchin.

According to the WSJ, the FDA is preparing to warn physicians about hazards with drugs used to enhance the diagnosis of heart problems using ultrasound imaging machines. A spokeswoman for the agency said it "has been investigating reports of deaths and serious cardiopulmonary reactions" in patients. The FDA will alert health-care professionals about "these serious risks and to provide guidance regarding the safe use" of the drugs, she said. The warning about the drugs could come this week. The principal drug at issue is Definity, made by Bristol-Myers (BMY). A second drug called Optison, from General Electric (GE) is also expected to receive beefed-up warnings.