Filed under: Business, News, Windows, Microsoft

Windows 7 can’t come fast enough! The New York Times is reporting that Intel has decided against upgrading its 80,000 employees to Windows Vista. An Intel spokesperson told the Times that Vista is being tested and deployed in certain departments, but not company-wide.

Although the enterprise push to upgrade to Vista has fallen short of expectations, this is a particularly brutal blow. Intel is one of Microsoft’s oldest and most important partners; both companies became industry leaders in huge part because of that partnership.

Even though the Times’ Intel source made efforts to say that the decision wasn’t about “dissing Microsoft,” we doubt that’ll make Steve Ballmer feel any better. Can you envision what that conversation is going to sound like?

Despite the lack of widespread corporate adoption, the install base for Windows Vista is 140 million worldwide — hardly peanuts. Still, with huge corporations declining to upgrade their systems, Microsoft has had to extend support for Windows XP through 2014.

Thanks Mike!

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Filed under: Deals

According to a number of studies, Wall Street’s initial reaction to a proposed buyout is a good indication of whether a deal will pan out or not. So when Pier 1 Imports (NYSE: PIR) recently made an $88 million bid for Cost Plus World Markets (NASDAQ: CPWM), and the response from investors was immediately negative (the stock price fell 20%), it was probably telling.

I guess Pier 1 was listening. On Wednesday, the company said it was revoking its bid.

Funny enough, the CEO of Pier 1, Alex W. Smith, originally called the deal “compelling” and that it “would create significant value for the stakeholders of both companies.”

Oops.

But now, according to Smith, it looks like the deal will be too pricey. After all, it appears that Cost Plus is going to fight.

Yet, why not try to fight back? Pier 1 does have some leverage. Plus, there are certainly cost synergies (basically, the industry really needs consolidation).

Then again, when it comes to Wall Street, sometimes it is easier to just give in.

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: Deals, Law, Bank of America (BAC), Countrywide Financial (CFC)

More states have filed charges against Countrywide (NYSE: CFC) for aggressive marketing and giving loans which were highly risky. Washington and California have joined Illinois in the actions.

Up until now, Bank of America (NYSE:BAC), which is buying Countrywide, has been sticking to its story that it will close on its buy of the mortgages company. The media has written a million times that the massive money center bank might pull out of the deal. That actually became a bit more likely with the new states’ actions.

According to The Wall Street Journal, Kurt Eggert, a law professor at the School of Law at Chapman University stated, “Countrywide could be required to give back its profit on all those loans and conceivably give back houses on which it has foreclosed.” Since that number could be well into the billions of dollars, the potential damages are rising fast.

Countrywide could spend tens of millions of dollars on legal fees and countless hours in court over the next several years. That has become much clearer in the last few days.

BAC would be better off to let CFC go out of business and just buy its assets. Maybe the bank never intended to shut the deal. Maybe that was its plan all along.

Douglas A. McIntyre is an editor at 247wallst.com.

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

Jerry Yang, Yahoo! (NASDAQ: YHOO)’s CEO, and the company’s chairman Roy Bostock sent a letter to shareholders defending the company’s actions following the Microsoft (NASDAQ: MSFT) bid. There was nothing to defend. Those owning the web portal company’s stock got slaughtered.

“Our board of directors and management made a great effort — and conducted in-depth negotiations — to elicit a feasible proposal from Microsoft that made strategic and financial sense for Yahoo, but without success,” the executives wrote, according to The Wall Street Journal.

The comments are bogus on the face of it. Microsoft’s offer got as high as $33 toward the end of negotiations. Yahoo! now trades at $22. That number nearly certainly factors in two things that the market already knows. One is that Yahoo! plans to reorganize management to make the company more efficient. The other is that Google (NASDAQ: GOOG) will sell some of Yahoo!’s search ads, which should make the process more profitable.

Looking back on the entire Yahoo! and Microsoft mess, there is only one thing to remember. Yahoo! traded at $21.94 a week before the offer. It trades near the same price now. The only reason the company was ever worth more is because Microsoft needed it.

And, now that is over.

Douglas A. McIntyre is an editor at 247wallst.com.

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Filed under: Deals, Management, Anheuser-Busch Cos (BUD)

It’s been about two weeks since InBev NV made its blockbuster $46.3 billion bid for rival Anheuser-Busch Cos Inc (NYSE: BUD). Yes, the silence has been deafening. And, of course, the rumors have been rampant.

In fact, InBev has been getting antsy. For example, this week the company reaffirmed its bid (it’s the third letter from InBev’s CEO, Carlos Brito).

There is also a lending group ready to pull the trigger. The banks include: Banco Santander, Bank of Tokyo-Mitsubishi, Barclays Capital, BNP Paribas, Deutsche Bank, Fortis, ING Bank, JP Morgan (NYSE: JPM), Mizuho Corporate Bank and Royal Bank of Scotland.

But, according to the Wall Street Journal [a paid publication], it looks like the company’s board is close to making an announcement. Even though, it appears that the company will reject the deal. Essentially, Anheuser-Busch thinks the deal is too cheap.

That may be the case. But there’s a problem: who can pay a higher price for the company?

Interestingly enough, it appears that Anheuser-Busch will make some restructuring moves (such as selling non-core assets). But why didn’t it do this several years ago?

The fact remains that the company doesn’t have a viable substitute - that is, unless InBev wants to bid against itself. But why?

Instead, it’s a good bet that InBev will go directly to shareholders and pull off a hostile bid. In such a move, it will certainly put lots of pressure on Anheuser-Busch - which has few defenses - and perhaps get a deal done fairly swiftly.

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: Before the bell, Major movement, Earnings reports, Analyst reports, Analyst upgrades and downgrades, Deals, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO), Apple Inc (AAPL), General Motors (GM), Anheuser-Busch Cos (BUD), ConAgra Foods (CAG), NIKE, Inc’B’ (NKE), Red Hat Inc (RHT), Palm Inc (PALM)

Before the bell: Futures lower on financials, tech concerns

Reporting today:
Palm Inc. (NASDAQ: PALM) is expected to post a loss of 22 cents a share in the fourth quarter.
ConAgra Foods (NYSE: CAG) is expected to post earnings of 34 cents a share in the fourth-quarter .

Nike Inc. (NYSE: NKE) reported late Wednesday a rise in quarterly profit of 12% to $437.9 million, or 86 cents a share, helped by gains in Europe and Asia. Sales jumped 16% to $5.1 billion. The earnings beat Wall Street’s forecast. Shares are down 4.8% in premarket trading.

Anheuser-Busch Cos. (NYSE: BUD) will likely officially reject InBev NV’s $46.3 billion takeover bid this week and announce plans to lower $1 billion in costs, pay a special dividend and sell off divisions like its theme-park unit to increase its stock price. InBev may then raise its offer.

Yahoo Inc. (NASDAQ: YHOO) defended the deal it made with online search leader Google Inc. (NASDAQ: GOOG), saying it is a more desirable partner than Microsoft Corp. (NASDAQ: MSFT). Yang, Yahoo’s CEO, wrote so in a letter Wednesday. The letter is part of Yahoo’s campaign to protect its strategy and board against a revolt led by activist investor Carl Icahn.

Goldman Sachs downgraded General Motors Corp. (NYSE: GM) to Sell from Neutral and cut its price target to $11 from $19. Most troubling is that the broker stated that liquidity concerns could increase. Goldman cut its rating of two other sector stocks as well. Shares are down 5.6% in premarket trading to $12.09.

Red Hat (NYSE: RHT) reported first-quarter results Wednesday after the close. Profit rose nearly 7% and revenues grew 32%, inline with estimates. Shares are down 4% in premarket trading.

Telefonica SA said Wednesday it has received 300,000 pre registrations in the U.K. and Spain to purchase Apple Inc.’s (NASDAQ: AAPL) new third- generation iPhone.

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