BCE, Corn Products wait for bounce; Delta, Northwest pilots agree; Microsoft, Yahoo! make more noise

By Aaron Hochman-Zimmerman

New York, June 24 - Some in the market shuddered at the thought of more talks between Yahoo! Inc. and Microsoft Corp., but someone sounded the alarm that talks just may be back on between the two.

The excitement caused Yahoo!'s shares to jump; but what went up, for the most part came right back down.

Elsewhere, despite strong signs of progress, neither BCE Inc. nor Corn Products International Inc. saw big jumps in price.

BCE still has financing issues to deal with, but many consider both companies to have clear paths to completed deals.

Also, out of the clear blue sky the pilots unions of Delta Air Lines Inc. and Northwest Airlines Corp. announced they have reached a preliminary deal to mingle their seniority standings.

Meanwhile, the market had a difficult day as the Dow Jones Industrial Average ended off by 34.93, or 0.29%, at 11,807.43, while the Nasdaq Composite Index slipped 17.46, or 0.73%, to finish at 2,368.28.

The S&P 500 gave back 3.71, or 0.28%, to close at 1,314.29.

Yahoo!-Microsoft: The deal that won't die

Technology blog TechCrunch reported that the deal would not go away ... has not gone away.

If the blog's sources are correct, and notwithstanding a search ad deal with Google Inc., the Yahoo!-Microsoft circus is back in town and not everyone is excited about it.

The report claimed Microsoft is in talks with Yahoo! for a complete buyout.

"I'm trying to ignore all these rumors," an equity analyst told Prospect News.

Recent shuffling of the deck crew on the (still) sovereign ship Yahoo! has not been enough to change course with regards to a deal, with the fearless captain and mates still at the helm.

Carl Icahn reportedly has a half-slate ready to be nominated to the board during the shareholder meeting on Aug. 1, when "we should see some fireworks," the analyst said, but fireworks are no cannons.

"I don't know how much is going to happen at this point," he said, admitting that many people can only speculate what Carl Icahn or anyone is planning to do.

"I don't think he has one," the analyst said about Icahn's long-term plan. "I don't think he has any idea how to run one of these companies," he added, noting a report which claimed Icahn does not even use a personal computer.

Another analyst guessed that at the outset Icahn's new board will root out the "poison pill" severance plan.

Still, that "isn't going to change anything for the business," he said.

If there is a long-term plan, it must be well guarded.

Shares of Yahoo! (Nasdaq: YHOO) tacked on $0.59, or 2.75%, to end the day at $22.04.

Shares of Microsoft (Nasdaq: MSFT) gave back $0.24, or 0.86%, to finish at $27.73.

Hold the phone on BCE

BCE won its big court case, but reality set in on Tuesday that there is still a long road ahead for the telecom's privatization.

"It's never done until it's funded," said National Bank Financial analyst Greg MacDonald.

The financing banks, with Citigroup and Deutsche Bank in the lead, are in negotiations for better terms, he said, adding: "I expect that the banks will probably make some headway."

Still, "it will be difficult to get as much as they did with Clear Channel [Communications Inc.]," he said.

The reason the banks will have an easier time with BCE is that "one of the major potential influences is the willingness on the part of the purchaser to negotiate," he said, "especially with Telus Corp. sitting in the wings."

Telus, a BCE competitor, presented itself as a potential buyer in the deal's early stages.

With greater flexibility on the part of Teachers Private Capital and friends, the deal may be able to avoid a courtroom showdown similar to Clear Channel's, but "I think anything's possible when there's that much money involved," MacDonald said.

If the negotiations manage to keep out of the courtroom "we could hear something next month," but if court comes into session it is "open ended," he said.

Shares of BCE (NYSE: BCE) improved by $0.70, or 1.94%, to close at $36.74.

Half-popped corn

Corn Products International's deal with Bunge Ltd. hit the market with much fanfare over the $4.4 billion deal to create one of the world's largest food producers.

Still, Corn Products (NYSE: CPO) stock dragged behind the all-stock offer price of $56 per share of Bunge, closing lower by $0.45, or 0.89%, at $50.16.

"It's got to come in a little bit, the spread," an equity analyst said, unsure of why exactly the trading price trailed the offer prices by almost $6 per share.

"Give it a couple weeks," he said, before wondering if there is some information that the rest of us are missing.

Shares of Bunge (NYSE: BG) slid by $0.97, or 0.88%, to $109.73.

Formation flying

After staying below the deal radar for weeks, Northwest and Delta's pilot unions announced that they have reached an agreement to blend their seniority ladders.

"We are pleased that the Delta and Northwest pilot groups have reached a tentative agreement and have outlined a process for seniority integration that will allow us to move forward with a unified pilot group," said Delta's chief executive officer Richard Anderson in a statement.

Achieving a joint contract and combined seniority list in advance of the closing of the merger is something that has never been done in this industry and is a testament to the leadership of ALPA [Air Line Pilots Association] and a working together culture," he added.

"That's pretty good for them," an analyst said, "it didn't look like it was going to happen."

Still, it is a "tentative agreement," he said, and "they were going forward without it anyway," but it is a positive step.

Shares of Delta (NYSE: DAL) took on $0.26, or 5.20%, to close at $5.26.

Shares of Northwest (NYSE: NWA) were better by $0.41, or 7.44%, to end at $5.92.

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