NEWS AT A GLANCE
Microsoft and Yahoo return to the table
Microsoft said it and Yahoo are discussing a new form of partnership that wouldn’t involve a full takeover, although Microsoft reserved the right to revive its $47.5 billion buyout offer later. Microsoft approached Yahoo again after activist investor Carl Icahn revealed a plan to replace Yahoo’s board with a more Microsoft-friendly slate of directors. (AP in Yahoo! Finance) Microsoft reportedly is now offering Yahoo a joint venture in search-related advertising, to compete with Google but also to prevent a pending Yahoo-Google deal. (The New York Times) “Microsoft walking away from Yahoo was a total head fake,” said analyst Kim Caughey at Fort Pitt Capital Group. “Microsoft is a terrible poker player.” (Reuters)
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Lowe’s profit drops amid housing slump
Lowe’s Cos., the No. 2 home-improvement retailer, reported an 18 percent drop in quarterly profits, to $607 million, as the worst housing slump in at least 25 years led to a cut in remodeling projects. The earnings beat analysts’ forecasts by about a penny a share. (AP in Yahoo! Finance) Lowe’s said same-store sales dropped 8.4 percent versus a year ago, and that it expects another decline of up to 8 percent, and an anemic 1 percent rise in total sales, in the second quarter. (MarketWatch) “The industry is still feeling the effects of a significant drop in existing home sales,” said analyst Chris Horvers at Bear Stearns & Co. (Bloomberg)
Ice-maker Manitowoc ups bid for hot-food services firm
Manitowoc Co. raised its bid for London-based Enodis PLC, which makes fryers and other kitchen gear for McDonald’s, to $2.11 billion, topping a rival offer from Illinois Tool Works. The new offer is 5 percent higher than ITW’s bid, and more than twice the price of Enodis’ shares before Manitowoc’s initial offer in April. (MarketWatch) Manitowoc is the top U.S. ice-machine maker, but construction cranes make up 81 percent of its sales. Enodis would allow it to expand overseas and into hot-food-service catering as U.S. construction slows. “Enodis would bulk up their foodservice equipment businesses in a way that they can’t do with any other acquisition I can see,” said Arbuthnot Securities analyst Michael Blogg. (Bloomberg)
The improbable exercise game
Video games tend to bring to mind hours of couch-sitting and little activity other than finger exercises, but Nintendo is looking to change that image. The Japanese game maker is launching its new “Wii Fit” exercise game in the U.S. today, for its Wii game console. Analysts expect “Wii Fit” to be a blockbuster, even though it acts as a virtual coach, instructing gamers in more than 40 exercises, from push-ups to yoga. Nintendo has already sold more than two million copies in Japan, and says sales are “strong” in Europe. “It is a perfect intersection of entertainment with health and fitness, and I don’t think anyone’s been able to pull that off,” said Geoff Keighley, host of GameTrailers TV. (Reuters)
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