<BREAKFAST WITH THE FOOL>

Tuesday, May 11, 1999

"It isn't the people you fire who will make your life miserable; it's the people you don't fire." -- Harvey MacKay

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Start Your Engines

NASCAR racing promoter International Speedway Corp. (Nasdaq: ISCA) has agreed to acquire the 88% of Penske Motorsports (Nasdaq: SPWY) it doesn't already own for $50 a share, or $623 million, in cash and/or stock. The deal will create the nation's largest provider of motorsports entertainment with 10 facilities across the country with more than 800,000 seats and 400 suites. The transaction is expected to be accretive to International Speedway's earnings starting in fiscal 2001.

The combined company will be called International Speedway and promote more than 100 motorsports events. In fiscal 1998, International Speedway and Penske Motorsports generated revenues of more than $300 million and operating margins of 32% and 27%, respectively. International Speedway first acquired an equity interest in Penske three years ago.

International Speedway Chairman and CEO William France said the merger puts the two companies "in an excellent position to participate in the expected growth in television revenues and electronic media." In recent years, NASCAR has increased in popularity well beyond its traditional Southeastern stronghold. The combined company's expanded base and geographic reach will "allow us to pursue new national sponsorships and develop cross-marketing opportunities with a wider army of partners," France said.

News to Go

Discount retailing giant Wal-Mart Stores (NYSE: WMT) reported first-quarter earnings of $0.25 a share, up from $0.18 last year on a split-adjusted basis and ahead of analysts' forecasts of $0.22. Same-store sales for the quarter rose 9.3% -- 9.6% at Wal-Mart stores and 8.3% at Sam's Club. Total sales were up 16% year-over-year to $34.7 billion.

Intel Corp. (Nasdaq: INTC) reportedly will cut prices on its Pentium II and Pentium III chips by up to 34% next week to help speed the shift to the Pentium III chips. Its rival Advanced Micro Devices (NYSE: AMD) is expected to follow suit with price cuts of its own.

Motorola (NYSE: MOT), which last year announced a restructuring of its chip operations, is expected to sell a division that makes low-cost semiconductors to financier David Bonderman's investment firm, Texas Pacific Group, for $1.6 billion, The Wall Street Journal reported.

Biopharmaceutical firm Immunex Corp. (Nasdaq: IMNX) and Wyeth Ayerst Laboratories, a division of American Home Products (NYSE: AHP), said that a new Phase III study shows that their drug Enbrel slowed the progression of early and active rheumatoid arthritis and reduced signs and symptoms of the disease. Immunex plans to file with the Food and Drug Administration (FDA) for an expanded label for the product.

SAP AG's (NYSE: SAP) U.S. subsidiary, Qwest Communications International (Nasdaq: QWST), and Hewlett-Packard (NYSE: HWP) announced a strategic relationship that will combine Qwest's high-speed network with SAP's business software and HP's technology and services. SAP America will offer its R/3 business solution to customers via the Internet, and HP will invest $500 million in server hardware, software, and services into Qwest's application hosting CyberCenters in exchange for monthly fee revenue.

Antivirus and security software maker Network Associates (Nasdaq: NETA) said it intends to buy back up to $100 million of its shares in the next two years to boost its stock price.

More Foolishness

Dale Wettlaufer and Yi-Hsin Chang sat down and talked to Robert Hagstrom, author of The Warren Buffett Way and The Warren Buffett Portfolio. Read a transcript of the interview... Catch up on Berkshire Hathaway's annual meeting from a Foolish and fun perspective... Daily Double: Tricon Global Restaurants.

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