<BREAKFAST WITH THE FOOL>

Monday, March 15, 1999

"Every morning, I get up and look through the Forbes list of the richest people in America. If I'm not there, I go to work." -- Robert Orben

Latest Market Numbers

Fleet to Buy BankBoston

Fleet Financial Group (NYSE: FLT) announced it will acquire BankBoston (NYSE: BKB), the nation's oldest bank, for $16 billion, or $53 per share, in stock. That represents a 13% premium over BankBoston's closing price Friday of $46 15/16 but is short of its 52-week high of $59. BankBoston shareholders will receive 1.1844 Fleet shares for each BankBoston share. The deal, slated to be completed in the fourth quarter of this year, is expected to be accretive to earnings in the first year thereafter and save about $600 million. The combined entity will be called Fleet Boston and will be the nation's eighth largest bank -- and a powerhouse in the Northeast -- with around $180 billion in assets and 20 million customers.

Fleet's shareholders will own 62% of the combined company, leaving BankBoston shareholders with the remaining 38%. Fleet's chairman and CEO, Terrence Murray, will become chairman and CEO of Fleet Boston, while BankBoston's chairman and CEO, Chad Gifford, will become president and chief operating officer. Gifford will then take over as CEO at the end of 2001 and as chairman the following year. The new board of directors will comprise 12 current Fleet board members and 10 current BankBoston board members.

Fleet CEO Terrence Murray said the new company will have a "healthy mix of earnings streams, with greater emphasis on higher growth businesses," such as commercial finance, asset management and investment banking. BankBoston CEO Chad Gifford added that the merger will "create greater value for shareholders than either company could on its own." Because of overlap in their banking operations, the companies, both based in Boston, anticipate divesting a "significant number" of branches, customers and ATMs, plus $13 billion in deposits in order to win regulatory approval from the U.S. Justice Department and the Federal Reserve.

News to Go

Microsoft (Nasdaq: MSFT), Intel (Nasdaq: INTC), Hewlett-Packard (NYSE: HWP) and Nortel Networks (NYSE: NT) are set to announce a four-way alliance to deliver telecommunications equipment that would combine voice, data, and video traffic on a single corporate network, The Financial Times reported. The plan is for Nortel to build routers, switches and servers for corporate computer networks using Intel's Pentium microprocessors and running Microsoft NT software. HP would market the computer under its brand name.

Chemicals giant DuPont (NYSE: DD) reportedly will buy the 80% of Pioneer Hi-Bred International (NYSE: PHB) that it doesn't already own for about $7.7 billion, or $40 a share, in cash and stock. That's about an 80% premium over the price at which Pioneer was trading last week before news of a possible acquisition bid by DuPont drove up its share price. On Friday alone, Pioneer shot up 40% to $34 5/16. DuPont's acquisition of the nation's biggest seed company is bad news for Pioneer rival Monsanto (NYSE: MTC), which itself had had discussions with DuPont about a possible deal.

United Airlines parent UAL Corp. (NYSE: UAL) announced that it expects first-quarter earnings of about $1.35 a share and full-year EPS of $10 to $12, significantly ahead of current First Call analysts' mean estimates of $1.12 for the quarter and $9.12 for the year. The company said it benefited from the pilot sick-out at rival AMR Corp.'s (NYSE: AMR) American Airlines and anticipates "strong performance," especially in the U.S., throughout 1999.

Online services provider America Online (NYSE: AOL) won clearance from antitrust regulators to complete its planned acquisition of Netscape Communications (Nasdaq: NSCP) as well as the go-ahead for AOL's related alliance with Sun Microsystems (Nasdaq: SUNW). Netscape shareholders are scheduled to vote on the acquisition at a meeting on Wednesday, and the deal is expected to be completed soon thereafter.

Telecommunications equipment maker Ciena Corp. (Nasdaq: CIEN) said it will acquire two privately held companies, Lightera Networks Inc. and Omnia Communications Inc., for a total of about $980 million in stock. Ciena expects the deals to become accretive to earnings during its fiscal year 2000.

Aerospace giant Boeing (NYSE: BA) expects to cut another 6,700 jobs from its troubled commercial-jet group by the end of the year due to better-than-expected progress in battling factory overtime work, The Wall Street Journal reported. The unit's president, Alan Mulally, said its massive reorganization is "going better than we thought."

RJR Nabisco Holdings' (NYSE: RN) R.J. Reynolds Tobacco Co., the nation's second-largest cigarette maker, on Friday filed an antitrust lawsuit against rival Philip Morris Cos. (NYSE: MO) for allegedly monopolizing the retail cigarette market through exclusive contracts with retailers. According to RJR, programs requiring retailers to devote a certain amount of display space and advertising to Philip Morris brands and to discount only Philip Morris brands for three months a year prevents competitors from gaining any meaningful retail presence and restricts price competition.

Senior executives of NBC and Sony Corp. (NYSE: SNE), including the presidents of both companies, held a series of meetings in Tokyo last month to discuss a possible alliance linking Sony's TV production studios in Hollywood with the television network, The Wall Street Journal reported. Unlike Fox Entertainment's (NYSE: FOX) FOX network and Walt Disney Co.'s (NYSE: DIS) ABC, NBC, a unit of General Electric (NYSE: GE) has no sister studio of its own and is looking to own more of its programming to increase syndication revenue.

Salomon Smith Barney analyst Henry Dickson told Barron's that Bank One Corp. (NYSE: ONE), the nation's fifth-largest bank, may be undervalued and could be worth as much as $75 a share. Bank One closed Friday at $54 15/16.

El Paso Energy (NYSE: EPG) will acquire Sonat Inc. (NYSE: SNT) for about $4 billion in stock, plus $2 billion in assumed debt. The deal, expected to close in the third or fourth quarter, would create the nation's largest natural-gas pipeline company.

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Yi-Hsin Chang (TMF Puck), Writer
Jennifer Silber (TMF Amused), Editor