46.83 -0.41: Wal-Mart's management stated previously that March same-store sales were expected to be weaker than they were a year ago since Easter is three weeks later this year. For better or worse, they were on the mark with that outlook as Wal-Mart said on Saturday that it expects March sales will be just 1.3% - the lowest comparative sales growth since April 2004 - versus a 4.3% increase last year when Easter fell in March. 

That estimate, which will become official on Thursday - the day when most other retailers are also scheduled to report potentially uninspiring March sales results - was at the low end of Wal-Mart's earlier forecasted range of 1-3% same-store sales growth. Wal-Mart added that it anticipates stronger sales in April.  J.P. Morgan, which attributes more of Wal-Mart's March weakness to concerns that the retailer's new ad campaign and merchandise adjustments are "failing to resonate with its customers" than a late Easter, believes Easter likely cost Wal-Mart 0.2% in its same-store sales growth.

Meanwhile, rival Target Corp (TGT) expects to continue doing what it has done so often in recent months -- exceed Wal-Mart's monthly sales growth. Target expects to report an increase of 1.5-2.5% on Thursday.

-- Brian Duhn, Briefing.com

24.43 -1.36: Ameristar Casinos said on Monday it has proposed an offer to acquire Phoenix-based casino operator Aztar Corp. (AZR 44.45 +2.46) for approximately $2.25 billion in cash, or $42 per share, including the assumption of debt.  The proposal is valued slightly higher than Aztar's closing price of $41.99 on Friday, March 31, and exceeds previous offers from Pinnacle Entertainment and Colony Capital. 

Ameristar said the deal is clearly superior to all previous proposals and would create the fifth largest publicly traded owner and operator of gaming properties in the U.S.  The combined companies would generate annual revenues of about $2 billion and control approximately 21,000 slot machines, 650 table games, and 7,000 hotel rooms.  "Ameristar is prepared to enter into a merger agreement that, apart from providing superior value to Aztar's shareholders, would be substantially identical to Aztar's merger agreement with Pinnacle," the company said in a statement. 

If approved, Ameristar expects the deal to be completed by the end of the year and for it to be immediately and substantially accretive to Ameristar's earnings per share.  Analysts on average are expecting the company to post earnings of $1.36 per share, according to Reuters Estimates.  At the current price level, shares of Ameristar are trading at 18.0x forward earnings, compared with 22.9x for MGM Mirage (MGM), 20.8x for Harrah's Entertainment (HET), and 45.3x for Las Vegas Sands (LVS). 

Separately, the proposed acquisition further supports our positive outlook for investment banks, which benefit from the fees received from advising on mergers and acquisitions, and underscores our Market Weight rating on the Financial sector. 

--Richard Jahnke, Briefing.com

72.46 -0.29: Inching Amgen even closer to becoming the oncology powerhouse envisioned by CEO Kevin Sharer, the world's largest biotech company has completed its $2.2 bln all-cash deal for Abgenix. More notably, though, have been reports that pivotal Phase 3 results demonstrating that its experimental drug Panitumumab significantly improved progression-free survival and disease control (response rate and stable disease) compared to best supportive care in metastatic colorectal cancer patients who had failed standard chemotherapy. Panitumumab is a colon-cancer treatment which was developed in collaboration with Abgenix.  It is now in late-stage clinical trials and could eventually contribute $2 bln a year in global sales. Amgen expects an FDA decision on Panitumumab for advanced colon cancer in the second half of 2006.  

According to results presented at the 97th Annual Meeting of the American Association for Cancer Research, patients who received Panitumumab every two weeks during the eight month study showed a 46% decrease in the rate of tumor growth versus those who only received supportive care. After 24 weeks of treatment, 18% of Panitumumab patients were alive and progression-free, compared with 5% of those treated only with supportive care, while after 32 weeks, 10% of Panitumumab patients were alive and progression-free, compared with 4% of the group not treated with the drug.   

Amgen is currently trading at a level that provides a good entry point for investors looking for an attractive alternative to big drug stocks like Pfizer (PFE) and Merck (MRK). Amgen, which historically does well financially in the first half of the year and has averaged a three-year gain of 18%, is down 8.5% on the year compared to a 4.7% gain for the AMEX Biotech Index. While historical feats are no guarantee of future performance, Amgen entertains the best margins in biotech and should see earnings visibility improve as the year progresses and trades at a discount to its peers. Amgen trades at only 19.9x fiscal 2006 earnings of $3.62 per share compared to richer forward P/E multiples of 24.1x and 50x for Biogen Idec (BIIB) and Genentech (DNA), respectively.

-- Brian Duhn, Briefing.com

3.05: Shares in Alcatel SA are soaring in Europe after the world's biggest maker of broadband Internet equipment agreed to buy Lucent Technologies in a $13 bln share swap. Both companies announced Sunday that they expect annual savings of 1.4 bln euros within three years of the combination. The Paris-based Alcatel and Murray Hill, New Jersey-based Lucent forecast cost savings will be achieved in part due to a 10% workforce reduction, or roughly 8,800 jobs. The new company will have annual sales of $26 bln and a market cap of $36 bln, overtaking Ericsson AB as the world's largest supplier of wireless networks and nearing rival Cisco (CSCO).

Alcatel has agreed to pay 0.1952 of its American depositary shares, worth $3.01 at its closing price on March 31st for each share of Lucent, which is 4 cents less than LU's closing price. ALA shareholders will control 60% of the merged company, which will be led by Lucent's Chief Executive Office Patricia Russo. The deal, which carries considerable integration risks considering the size, scope, and culture of these companies, is expected to close in 6 to 12 months. The parties confirmed two weeks ago that they had begun preliminary talks, sparking a run in shares. The potential merger has been well received by the market due to the synergistic opportunities and the potential cost savings.

The merger creates a powerhouse in the global communication equipment market. The new entity will garner considerable purchasing power from its suppliers, but considering the competitive landscape, these opportunities will most likely be passed through to its customers - namely the carriers like Verizon (VZ) and AT&T (T). Geographically, sales will be evenly distributed with the US and Europe making up over sixty percent, and another 15% coming from Asia.

The deal has already sparked further consolidation speculation, which is a real possibility. All of the competing companies are in play, including Siemens (SI), Motorola (MOT), Nokia (NOK), Nortel (NT), Qualcomm (QCOM), Tellabs (TLAB), and Juniper (JNPR), with the last two being likely acquirees. While an ALA/LU merger will change the competitive landscape, it does not change our positive position on Cisco given its competitive position.

--Kimberly DuBord, Briefing.com

25.05: Constellation Brands said on Monday that it will acquire Canada's Vincor International (VN.TO), whose brands include Inniskillin and Jackson-Triggs, for approximately C$1.52 billion, or US$1.31 billion.  Under the terms of the deal, Constellation will purchase all of the issued and outstanding common shares of Vincor for C$36.50 each.  The company will also assume approximately C$250 million, or US$220 million, of Vincor debt.  The transaction price represents a 15.9% premium to Vincor's closing price on March 31, 2006, and a 55.5% premium to Vincor's closing price on September 27, 2006, when Constellation first approached the company.

"Through this combination, Canada will become a core market for Constellation, while adding new and existing brands to our already formidable portfolio in other key markets," said Richard Sands, Constellation's chairman and chief executive officer in a statement. 

Constellation expects the deal, which is still subject to regulatory approval and certain conditions, to close in the first week in June and should be modestly accretive to the company's fiscal 2007 earnings per share.  Currently, analysts are expecting the company to post earnings of $1.77 per share on revenue of $4.96 billion, according to Reuters Estimates.  Based on analysts' estimate, shares are trading at 14.2x forward earnings.  Consolidation within the global beverage market will likely remain a key driver for the industry in 2006 and should bolster Constellation's already strong portfolio of brands and help create long-term value. 

--Richard Jahnke, Briefing.com

21.27: After months of speculation, General Motors today finally announced the sale of a 51% controlling interest in General Motors Acceptance Corp (GMAC) to a consortium of investors led by Cerberus Capital Management, LP, a private investment firm, and including Citigroup Inc. and Aozora Bank Ltd. The Wall Street Journal preempted GM's announcement, having reported this morning that a sale was imminent. GM expects to receive $14 bln in cash from this transaction over three years, including distributions from GMAC with an estimated $10 bln by closing, according to the press release. The news will be viewed with a sense of relief after much conjecture has arisen over the timing and/or pricing of the sale.

The deal provides GM with necessary funding and liquidity, while allowing the struggling automaker to participate in GMAC profitability with its 49% stake. This is certainly an important milestone for GM, but the road to recovery will remain a long one. The $14 bln price tag, which is on target with what the market was expecting, includes $7.4 bln from the Cerberus-led consortium at closing and an estimated $2.7 bln cash distribution from GMAC related to the conversion of most of GMAC and is subsidiaries to limited liability companies. GM will retain $20 bln of automotive lease and retail assets and associated funding with an estimated net book value of $4 bln that will be monetized over three years.

The board approved the sale on Sunday and also reiterated "its confidence in Rick Wagoner, his management team and the plan they are implementing to restore the company to profitability."  GMAC Chairman and CEO Eric Feldstein will continue to lead the company after the equity sale. As part of the transaction, GM and GMAC will enter into a number of 10-year agreements under which GMAC will continue to support GM's automotive operations and provide financial services. After five months, the deal brings GM closer to regaining an investment-grade rating for GMAC, which along with its parent was cut to junk last year. The news will certainly be well received by the bond market, but equity holders should continue to tread with caution.

--Kimberly DuBord, Briefing.com