Filed under: Deals, Rumors, Books

The performance of Borders (NYSE: BGP) has given investors tiny to smile about. From its 52-week high of $24.15 reached in May, the stock has descended all the way down to $6.35. Back in March the company put itself up for sale with one obvious interested party being Barnes & Noble (NYSE: BKS). I can’t see any reason for the company to double-down on bricks-and-mortar retailing.

Now, The Wall Street Journal reports (subscription required), citing an unnamed source, that Barnes & Noble has “assembled a team of executives and advisers to study the possibility” of acquiring Borders.

The Journal adds that “When Borders made its announcement, Barnes & Noble Chairman Leonard Riggio stated he would feel compelled to take a look at Borders. But the formation of the team advocates Barnes & Noble is a serious contender.”

I’m not so sure about that. Given Borders’ status as the number two in the industry and the beating the stock has taken, Barnes & Noble is compelled to look at the company now that it’s looking to sell. I question whether the assembly of a team to analyze the company means that the company is that serious about an acquisition. It’s just a necessary step in exploring an acquisition.

Add in the possible antitrust hurdles of combining the top two bricks-and-mortar booksellers and you’ve a deal that would appear to be in the very early stages of coming together. It seems likely that the stock will pop on the report, but I wouldn’t buy into the hype just yet. The same factors that make Borders unattractive as a stand-alone company combined with its massive debt load might make finding a buyer tough in this market.

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Filed under: Other issues, Deals, Blackstone Group L.P (BX)

Yesterday was a tough day in the markets, with the Dow falling 199 points. But, if you follow some of the legends of finance - such as Carl Icahn, T. Boone Pickens and The Blackstone Group’s (NYSE: BX) Steven Schwarzman - you’ll notice that they’re getting aggressive.

Keep in mind that these guys have been through multiple market cycles. And, if history is any worthy benchmark, it’s during times of instability where the huge money is made.

Pickens is focusing on the energy industry. He sees major demand/supply imbalances and is buying various stocks. He’s also interested in natural gas and substitute fuels.

As for Icahn, he’s doing what he does ideal - shareholder activism. He senses when companies are vulnerable and seems to relish an attack on corporate managements and boards. Of course, he’s gearing up for a fight with Yahoo! (Nasdaq: YHOO). Interestingly enough, he persuaded Pickens to purchase 10 million shares.

And, with Schwarzman, he’s buying up the bank debt of companies that went private. Because Blackstone sees many deals, it has an extensive database of opportunities.

In other words, the legends of finance are confident in the long-term. They’re making some big bets — based on lots of experience and due diligence — and not listening to the short-term noise. All in all, these are some valuable lessons for investors.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Filed under: Deals, Competitive strategy, Amazon.com (AMZN)

When I go to a Barnes & Noble (NYSE: BKS) or a Borders (NYSE: BGP) store, I really can’t tell much of a difference. That’s not a bad thing - at least for me. Hey, I have lots of choices - and not just books.

But for investors, the situation is a problem. So, instead of fighting, why not B&N and Borders join forces?

Well, according to the Wall Street Journal [a paid publication], there are signs of a possible deal as B&N has put together a team to explore the option.

However, there’s a huge hurdle: antitrust regulators. The federal government will scrutinize the deal heavily given that Barnes & Noble is #1 and Borders is #2 in the US marketplace.

Barnes & Noble will argue that the market is much different now with on the web operators like Amazon.com (NASDAQ: AMZN).

And timing is another key. After all, if there’s a change in the White House, antitrust enforcement is prone to get tougher.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates MergerBook.com.

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Filed under: Before the bell, Earnings reports, Deals, Microsoft (MSFT), General Motors (GM), Gap Inc (GPS), Limited Brands (LTD), salesforce.com inc (CRM)

General Motors (NYSE: GM) reached an agreement with workers at its Kansas City, Kan., assembly plant Tuesday that could help it end a string of labor problems. The deal could end the strike of 2,500 workers at the factory, which makes the hot-selling Chevrolet Malibu as well as the Saturn Aura, since Might 5.

Barnes & Nobel (NYSE: BKS) is exploring a possible bid for rival Borders (NYSE: BGP), according to a report in the Wall Street Journal.

Reporting today: Limited Brands Inc. (NYSE: LTD) which is forecast to post earnings of 8 cents a share in the first quarter and Salesforce.com Inc. (NYSE: CRM), which is forecast to post earnings of 7 cents a share in the first quarter among other companies.

This plan may have been in place long before Yahoo (NASDAQ: YHOO) has rejected Microsoft (NASDAQ: MSFT), but it seems that after that failed too, the software giant is set to announce a new program Wednesday, the Live Search Cashback where it will return money to on the internet users who find and buy selected products through its Live Search engine. Only a portion of the buy price, of course, between 2-30%. Silicon Alley Insider say it’s a great idea that won’t work.

Gap Inc. (NYSE: GPS) will introduce its Gap and Banana Republic brands in Russia through a partnership with Fiba Holding AS.

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Filed under: Before the bell, Earnings reports, Deals, Hewlett-Packard (HPQ), Time Warner (TWX), Market matters, Staples Inc (SPLS), Economic data, Time Warner Cable (TWC), Oil

Stock futures were somewhat lower early Wednesday morning as as oil prices managed to set yet another record high, going through yet another milestone and move above $130 a barrel.

U.S. stocks plunged Tuesday, after a Labor Department report showed wholesale inflation in April rose more than forecast and as the price of oil continued to rise following a prediction from T. Boone Pickens of $150 oil. The Dow industrials fell 199 points, the S&P 500 dropped 13 points and the Nasdaq Composite dropped 23 points.

At 10:30 a.m. this day, weekly crude inventories data will be released. In the meanwhile, Light, sweet crude for July delivery reached a trading record of $130.47 a barrel. It has been supply concern, rather than a lower dollar, that has been moving oil lately.

Also today, the minutes of the latest Federal Reserve meeting will be released at 2:00 pm EDT. No doubt investors will scrutinize the minutes, searching for more clues on the Fed’s next step, which would hope help strengthen the dollar somewhat.

On the corporate side of things, Time Warner (NYSE: TWX) shares are rising in premarket trading after the media conglomerate stated that its and Time Warner Cable Inc. (NYSE: TWC)’s boards have approved the companies’ legal separation, and that Time Warner will get $9.25 billion of the hefty $10.9 billion one-time dividend to shareholders TWC is paying, amounting to $10.27 per share of TWX.

Hewlett-Packard Co. (NYSE: HPQ) reported late Tuesday. It seems that rising international demand helped the results, but investors remained concerned about the company’s exposure to the U.S. economy and worried how the company plans to digest and integrate newly acquired Electronic Data Systems.

Meanwhile Staples (NASDAQ: SPLS) may find it more troublesome to bid for Netherlands-based Corporate Express after the Dutch firm said its is buying Lyreco of France for around $2.7 billion.

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Filed under: Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Motorola (MOT)

Comments by Microsoft (NASDAQ: MSFT) CEO Steve Ballmer might leave raider Carl Icahn in a difficult position. Ballmer states his company will not bid for Yahoo! (NASDAQ: YHOO) Ballmer made his comments overnight from Israel.

According to Reuters, Ballmer said “Yet, we’re trying to have discussions about deals with Yahoo that might create value but not a whole acquisition of the company,” he said without elaborating further.

It is generally understood that Icahn and his fellow investors don’t think they get much benefit from their move to control Yahoo! if they do not get Microsoft to come back to the bargaining table with a $33 bid. A link-up with Microsoft or Google (NASDAQ: GOOG) in the search business might save Yahoo! some money, but not enough to keep its share price high. Before the Microsoft bid, Yahoo! traded at $19. $27.48.

The news from Microsoft points out the danger of being a raider. Icahn put money into Motorola (NYSE:MOT) thinking the company would spin-off its handset unit. Sales at that business are so bad that selling it has become nearly impossible.

Icahn wins his share, but Yahoo! might not get onto that list.

Douglas A. McIntyre is an editor at 247wallst.com and author of Ten Stocks Under $10.

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