Microsoft, Yahoo! at it again; B of A names post-merger staff; Calpine, NRG decision this quarter

By Aaron Hochman-Zimmerman

New York, May 28 - Stocks ran hot and cold on Wednesday, not unlike the story of Microsoft Corp. and Yahoo! Inc. which, according to the day's rumors, may soon be back for Round: Whatever of their awkward merger tug-of-war.

Carl Icahn has mustered enough internal support at Yahoo! to bring something serious to Microsoft, sources said.

Shares of Countrywide Financial Corp. were better as Bank of America Corp. sounded serious about its acquisition of the troubled lender.

BofA announced that its own Barbara Desoer will sit in David Sambol's chair in Calabasas, Calif. after the two are combined.

Also, NRG Energy Inc. is expecting an answer from Calpine Corp. within the quarter.

Meanwhile in technology, Learning Tree International Inc. shares bounced after it announced it is looking for buyers.

Elsewhere, licenser CKX Inc. successfully reworked the terms of its deal with 19X Inc.

The stock movers conducted business as the Dow Jones Industrial Average ended better by just 45.68, or 0.36%, at 12,594.03, while the Nasdaq Composite Index added 5.46, or 0.22%, to finish at 2,486.70.

The S&P 500 improved by $5.49 or 0.40%, to close at 1,390.84.

Microsoft is back

After Carl Icahn had a few days to round up support at Yahoo!, rumors of a deal with Microsoft were back out of the bottle where they had been stewing quietly for a short time.

BusinessWeek used the word "imminent" to describe the possibility of uniting the two once and for all.

"What it came down to was just a difference in price," said Paul Martin of Martin Capital Management.

Microsoft wanted to pay $33 per share, Yahoo! would not sell for less than $37 per share, he said was his understanding of the previously unsuccessful negotiations.

The deal between the two seemed to break down and begin again to the sound of plenty of criticism for both sides, but the criticism continued after the deal fizzled.

"I'm sure the Yahoo! board is getting a lot of heat from various shareholders," Martin said.

Still, "it definitely looks like it'll be in Yahoo!'s ultimate best interest to figure something out," he said.

Shares of Yahoo! (Nasdaq: YHOO) picked up $0.16, or 0.59%, to end at $27.16.

Shares of Microsoft (Nasdaq: MSFT) lost $0.26, or 0.91%, to end at $28.18.

BofA staffs Countrywide's turf

Bank of America made investors feel more certain about its deal with Countrywide by announcing a shuffling of its future staff, including a replacement for Calabasas-based Countrywide president David Sambol, who is expected to retire.

"Barbara Desoer, who has been chief technology and operations officer, will now be president of the consumer real estate operations of Countrywide Financial Corporation and Bank of America when they are combined. She will be based in Calabasas, Calif. David Sambol, president of Countrywide Financial Corp., will retire after assisting Desoer with the transition," a Bank of America release said tersely.

"Bank of America was making comments today regarding Countrywide management succession, et cetera ... seems like the deal is going through," an equity analyst told Prospect News.

The $4 billion deal is expected to close in the third quarter.

Shares of Bank of America (NYSE: BAC) gave up $0.30, or 0.88%, to end at $33.87.

Shares of Countrywide Financial (NYSE: CFC) improved by $0.39, or 8.50%, to close at $4.98.

Contemplating Calpine

NRG Energy made what it called a friendly and private offer to Calpine for $21.36 per share.

Harbinger, with just less than a 25% stake in Calpine, made the deal public and encouraged its completion, but Calpine has not made a serious response, said NRG chief executive officer, David Crane.

Whether or not the deal is completed, investors can expect a decision "by the end of the second quarter," Crane said.

Shares of Calpine (NYSE: CPN) tacked on $0.06, or 0.26%, to close at $22.75.

Shares of NRG (NYSE: NRG) added $0.67, or 1.66%, to end at $41.03.

Learning Tree leans toward offers

Shares of Learning Tree (Nasdaq: LTRE) jumped by $1.35, or 8.23%, to $17.75 after the announcement that the company is seeking purchase offers.

"In the past year we achieved significant improvements in profitability and revenue, further enhancing our already strong financial position. We believe this is an appropriate time to solicit offers to determine if a sale is the best way to maximize shareholder value," said chief executive officer Nicholas Schacht in a statement.

CKX, 19X wanna be tied

Unlike Elvis Presley, who "don't wanna be tied," according to the song, the owners of the rights to the name, image and likeness of The King, CKX Corp. would like to be tied to Robert Sillerman's 19X.

However, the two sides were compelled to work out different terms than the original agreement of almost one year ago.

After noting a "seismic shift in the buyout world," on May 13, 19X owner Sillerman was able to renegotiate the terms of the buyout of CKX Corp. to $12 per share, down from $13.50 per share.

For its part 19X will owe CKX a larger break-up fee if the deal is not completed.

Under the new terms, it will now take a 73% vote of CKX's shareholders to approve a deal rather than the original 50%.

Also, the outside deadline for closing the deal was moved back to Oct. 31.

Shares of CKX (Nasdaq: CKXE) took on $0.26, or 2.55%, to finish the session at $10.47.

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