<BREAKFAST WITH THE FOOL>

Monday, February 22, 1999

"Forecasts are dangerous, particularly those about the future." -- Samuel Goldwyn

Latest Market Numbers

Energy Consolidation Continues at Rolling Boil

Just as telecom continues to consolidate with the integration of the Baby Bells back into a few large telecom companies and Ma Bell consolidating telecom and media distribution assets, the energy distribution industry's consolidation continues along at a rolling boil.

Virginia Power parent company Dominion Resources (NYSE: D) and natural gas pipeline and oil & gas exploration and production company Consolidated Natural Gas (NYSE: CNG) agreed over the weekend to a $6.3 billion stock swap. CNG shareholders would receive 1.52 shares of Dominion for each CNG share, which puts the offer price at $64.22, or 14% above Friday's closing price. The combined company would have $8.8 billion in revenues and annual gross cash flow of more than $2 billion, according to the companies.

Another energy deal was agreed upon over the weekend and announced this morning. Gas utility Sempra Corp. (NYSE: SRE), formed through the merger of Pacific Enterprises and Enova, and natural gas pipeline operator and energy services firm KN Energy Inc. (NYSE: KNE) have agreed to get together. KN Energy shareholders can choose between receiving 1.115 Sempra shares, valuing KN at $24.88 as of Friday's close, or $25.00 per share in cash. KN is the country's second-largest gas pipeline operator, and Sempra is the parent of Southern California Gas and San Diego Gas & Electric.

News to Go

Computer systems and telecom operator Olivetti SpA announced this weekend an uninvited takeover bid for Telecom Italia for $58 billion. Olivetti plans to sell its interests in wireless and wireline telecom companies to help raise cash for the deal, 60% of which is a cash offer.

BancBoston Robertson Stephens kicks off its Technology '99 conference today in San Francisco. Starting the day today are Cisco Systems (Nasdaq: CSCO), Sun Microsystems (Nasdaq: SUNW), America Online (NYSE: AOL), and Sanmina (Nasdaq: SANM). Later today, Texas Instruments (NYSE: TXN), Amazon.com (Nasdaq: AMZN), privately held web-based employee benefits information management company Employease, Intel (Nasdaq: INTC), and a host of other companies will present. The conference runs through Thursday. Robbie Stephens has kindly provided a phone number and web page for more information.

Aerospace electronics company Sundstrand Corp. (NYSE: SNS) announced an agreement to be acquired by aerospace components, building systems, and automotive components company United Technologies (NYSE: UTX). The cash and stock deal values Sundstrand between $70 and $74 1/4 per share.

Crunchy supermarket company Whole Foods Market Inc. (Nasdaq: WFMI) announced it will launch an "e-commerce subsidiary" planned to "re-define the on-line grocery segment." The company will launch the site this spring and will initially ship non-perishables at "aggressive discounts compared to the company's brick-and-mortar counterparts and other on-line competitors."

More Foolishness

Begin the week with a review of what happened last week... Warren Gump (TMF Gump) says investors are warming up to casino stocks. See Friday's Fool on the Hill column... Yi-Hsin (TMF Puck) talks to DoubleClick CEO and co-founder Kevin O'Connor in the latest StockTalk interview... Daily Trouble: Host Marriott Corp.

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Dale Wettlaufer (TMF Ralegh), Writer
Jennifer Silber (TMF Amused), Editor