Message-ID: <7913798.1075857281805.JavaMail.evans@thyme> Date: Wed, 22 Nov 2000 01:28:00 -0800 (PST) From: fool@motleyfool.com To: benjamin.rogers@enron.com Subject: Breakfast With The Fool: Coke Loses Its Fizz for Quaker Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: The Motley Fool X-To: benjamin.rogers@enron.com X-cc: X-bcc: X-Folder: \Benjamin_Rogers_Dec2000_4\Notes Folders\Motley fool e-mails X-Origin: Rogers-B X-FileName: brogers.nsf _________________________________________________________________ B R E A K F A S T W I T H T H E F O O L Wednesday, November 22, 2000 benjamin.rogers@enron.com _________________________________________________________________ REGISTER TO BECOME A FOOL -- GET FREE STUFF! http://www.fool.com/m.asp?i=207489 _________________________________________________________________ Sponsored By: Away.com Discover the world's most extraordinary travel destinations! Get stunning photos and interesting travel facts delivered to your inbox. Click for Away.com's Daily Escape newsletter! http://www.lnksrv.com/m.asp?i=207490 "Everything's got a moral, if only you can find it." --- Lewis Carroll COKE LOSES ITS FIZZ FOR QUAKER Coke's board says "no thanks" to the Quaker Oats deal. Who's next in line? By LouAnn Lofton First it was PepsiCo (NYSE: PEP). Then it was Coca-Cola (NYSE: KO). Now it looks like it's the French food company Groupe Danone (NYSE: DA). What am I talking about? The latest bidder for cereal company and Gatorade-owner Quaker Oats (NYSE: OAT), of course. Talks between Coke and Quaker are over. Coke's board of directors met yesterday to discuss the potential $15.75 billion stock acquisition of Quaker. Coca-Cola wanted Quaker for the same reason that Pepsi did -- the Gatorade sports drink. Gatorade controls about 80% of the sports drink market, with Coke's Powerade coming in second. Coke would have been saddled, though, with those parts of Quaker's business that make up the majority of its revenues and are growing the slowest -- its cereal and oatmeal operations. It's likely that several factors led to the decision by Coke's board not to proceed with the Quaker acquisition. First, with value guru Warren Buffett as a director, you better believe that the price Coke was going to pay for Quaker was a very important consideration. Coke's shares had been driven down 10% since the potential deal was announced Monday, as many thought Coke would be paying too much for Quaker. Another factor that likely caused the board to reject the acquisition was the potential for antitrust hang-ups with the deal, given that Coke's sports drink Powerade controls the largest part of the market after Gatorade. A third contributing factor was probably one of focus. Coke refocused itself on its core beverages business in the late 1980s, and buying Quaker -- with its Cap'n Crunch and Rice-A-Roni, among other brands -- would have moved it beyond the beverage business once again. The company doesn't appear to want to take that route. So, Pepsi's out, Coke's out, and already, another company has announced that it's pulling a chair up to the bidding table. Danone issued a statement confirming that it is considering a bid for Quaker. The bottled water, dairy products, and biscuits company wants to develop its business to become "a world leader in focused, growth oriented, healthy nutrition and beverage business." Perhaps Quaker can help it get there. _________________________________________________________________ NEWS TO GO NTT DoCoMo, a subsidiary of Nippon Telegraph and Telephone Corporation (NYSE: NTT), is rumored to be interested in buying a 20% stake in AT&T Wireless (NYSE: AWE). The investment would be about $9 billion. A deal like this would give DoCoMo a presence in the strong U.S. wireless communications market. Currently, AT&T Wireless is a tracking stock of AT&T (NYSE: T). Once AT&T splits into four separate businesses, AT&T Wireless will become an independent company. Software company Novell (Nasdaq: NOVL) announced fourth-quarter and fiscal year-end earnings yesterday. Sales in the fourth quarter fell 21% to $273 million from last year's $344.5 million. A decline in sales of the company's packaged software to small businesses impacted results. On a diluted per share basis, Novell broke even in the fourth quarter, matching analysts' expectations. It earned $0.17 a share in the fourth quarter last year. For the fiscal year, net income dropped to $49 million, or $0.15 a diluted share, compared to $191 million, or $0.55 per share the year before. CacheFlow (Nasdaq: CFLO) reported second-quarter results yesterday. The company, which makes technology that improves the flow of content over the Internet, lost $0.09 a share on a pro forma basis. Analysts had expected a loss of $0.11 a share. CacheFlow's revenues grew to $32.55 million from last year's $22.45 million. This sales increase of 45% was below the 55% increase expected by some analysts, and shares traded down after-hours despite the company's smaller-than-expected loss. The president of fashion designer and retailer Liz Claiborne (NYSE: LIZ) resigned. Denise V. Seegal, whose last day is December 8, has been president of Liz Claiborne since 1996. Liz Claiborne's Chairman and CEO Paul Charron said that there are no plans to replace her, and that he'll be taking over her duties. Charron said, "We had different approaches. I wanted to get closer to the managers running the business units." 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Republication and redissemination, including posting to news groups, is expressly prohibited without the prior written consent of The Motley Fool. MsgId: msg-30695-2000-11-22_9-20-25-3362561_2_Plain_MessageAddress.msg-09:25:09(11-22 -2000) X-Version: mailer-sender-master,v 1.84 X-Version: mailer-sender-daemon,v 1.84 Message-Recipient: benjamin.rogers@enron.com