Analyst Upgrades

• Janney Montgomery upgraded Microsoft (MSFT) to buy from neutral with a $30 price target, citing valuation and expectations for strong Q4 results.
• UBS upgraded SanDisk (SNDK) to buy from neutral based on favorable pricing and mobile design win momentum. The firm raised its target to $55 from $46.
• BMO Capital upgraded Medtronic (MDT) to outperform from market perform based on valuation and its product pipeline. The firm has a $48 price target on the stock.
• Lorillard (LO) and Qualcomm (QCOM) were upgraded to conviction buy from buy at Goldman.
• Monsanto (MON) was upgraded to buy from hold at Citigroup.
• FedEx (FDX) was upgraded to buy from hold at BB&T.

Analyst Upgrades

• Deutsche Bank upgraded Wells Fargo (WFC) to buy from hold as it believes the TARP repayment should remove uncertainty and that the company will report strong Q4 results. The firm raised its target price on shares to $36 from $29. Keefe Bruyette upgraded Wells Fargo to market perform from outperform following the TARP repayment and raised its target on shares to $28 from $24.
• Wells Fargo believes News Corp's (NWS) newspaper and TV station segments are finally outperforming budget, while cable nets continue to perform well. The firm upgraded shares to outperform from market perform and has a $16 to $17 Valuation range.
• BofA/Merrill upgraded Starwood Hotels (HOT) to buy from underperform as they expect "strong cyclical recovery in lodging earnings" in late 2010. The firm raised its target to $40 from $25.
• ArcelorMittal (MT) was upgraded to buy from neutral at UBS.
• JA Solar (JASO) was upgraded to hold from sell at ThinkEquity.
• Acxiom (ACXM) was upgraded to overweight from equal weight at Stephens.

Another private equity deal is crumbling. Acxiom (NASDAQ: ACXM), which was to be bought out by ValueAct Capital Partners LP and Silver Lake Partners for $2.25 billion , is now negotiating break-up fees with the firms. The private equity companies had made a $27.10 in cash offer for the data management company.

According to The Wall Street Journal "one of the issues likely to be discussed is whether the company has breached the deal's material adverse-effect clause." Operating income at the company did drop 89% in the June quarter and the company has made some lay-offs.

But, Acxiom's board may believe that one weak quarter is not material, especially if the trend of the company's business is up. At some point one of the private equity withdrawals is likely to bring a large suit both from a company and its shareholders.

Acxiom's stock holders are facing a share price that is below $20 and will probably drop further on the announcement. They may not take kindly to that.

Douglas A. McIntyre is a partner at 24/7 Wall St.

MAJOR PAPERS:

• The Wall Street Journal reported that Nokia Corporation (NYSE: NOK) is in talks to acquire Navteq, according to people familiar with the matter.
• The Wall Street Journal reported that Acxiom Corporation's (NASDAQ: ACXM) private-equity suitors are negotiating to break off the $2.25B buyout, according to people familiar with the situation.
• United Parcel Service (NYSE: UPS) reached a tentative agreement on a five-year contract with the Teamsters union that lets UPS withdraw from the union's pension fund, reported the Wall Street Journal.
• The Financial Times reported that the deal to transfer General Motors Corporation's (NYSE: GM) healthcare obligations to a union-managed trust could make the United Autoworkers union GM's largest shareholder.

• British energy giant BP (NYSE: BP) is searching for a new chairman, hiring a headhunting firm to search for a replacement for the current chairman, Peter Sutherland, reported the U.K. Times.

The trend of private equity firms buying out high tech companies continues. According to Bloomberg News, Silver Lake Partners and TPG will take Avaya Inc. (NYSE: AV) private for $8.2 billion -- the biggest LBO of a computer networking firm ever.

Investors will receive $17.50 a share. That's 4.7% more than yesterday's closing price and 28% more than before speculation about a purchase surfaced on May 29.

This is the latest in a string of high tech LBOs. Recent ones include:

• Acxiom Corp. (NASDAQ: ACXM), this computer and database services provider, said May 16 it's being bought by Silver Lake and ValueAct Capital Partners LP for about $2.24 billion.
• Alltel Corp. (NYSE: AT) this fifth-biggest U.S. wireless service, agreed May 21 to be bought by TPG and Goldman Sachs Group Inc. (NYSE: GS) for $27.5 billion.
• CDW Corp (NASDAQ: CDWC) agreed on May 30 to be acquired by Madison Dearborn Partners LLC for $7.3 billion.

I am not sold on the competitive advantages that will result from this deal. Maybe there's some overhead to be cut but I question how much private equity is willing to invest in R&D to jump start Avaya's product pipeline.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned in this post.

On the one hand, activist hedge funds are taking positions in companies and trying to get them to sell out. Then, there are hedge funds that protest when a buyout offer is too low.

It's certainly getting confusing -- but it's all very interesting.

Take the $2.25 billion buyout of Acxiom Corp. (NASDAQ: ACXM).

As I wrote in a post on BloggingStocks last week, the company was the target of activist hedge fund ValueAct Capital Partners. Now, the hedge fund has joined private equity firm Silver Lake Partners for the going-private transaction.

Well, Acxiom's second largest shareholder -- Millbrook Capital Management, which is a hedge fund -- is not too thrilled with the buyout offer and plans to challenge it. according to a filing with the SEC.

It's a serious problem. After all, Millbrook has an 8% stake. Also, it's probably a good bet that there are other agitated hedgies in Acxiom's stock.

In fact, Millbrook thinks the stock is worth more that $35 per share.

Yes, that's much better than the $27.10 offer, and Wall Street is thinking a higher bid will come to the table, as the shares closed today at $28.04.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.