Analyst upgrades:

• Toll Brothers (NYSE: TOL) was upgraded to Buy at Citigroup. The firm views the recent sell-off in home building stocks as a buying opportunity and thinks Toll Brothers offers the best risk/reward in its coverage universe. Citi keeps a $23 price target on the stock.
• Kellogg (NYSE: K) was upgraded to Buy from Hold at Citigroup following the Q3 results, as it believes the company's reduced spending and share buyback will serve as catalysts. The firm raised its price target on shares to $63 from $50.
• Rogers Communications (NYSE: RCI) and Telus (NYSE: TU) were upgraded to Outperform from Sector Perform at RBC Capital, which said the CRTC unexpectedly denied Globalive's wireless application. The analyst said Globalive was potentially the biggest of new wireless competitors and the decision removes a big threat to the group. Rogers price target was raised to $40 from $33; Telus to $44 from $36.
• Stanley (NYSE: SXE) was upgraded at Wells Fargo to Outperform from Market Perform after the company reported better-than-expected Q3 results and raised its FY10 guidance.
• Texas Instruments (NYSE: TXN) was upgraded at Bernstein to Outperform from Market Perform. The analyst believes Texas Instruments' core business earnings power is underappreciated and valuation is attractive. Target raised to $30 from $28.

Analyst upgrades:

• Jefferies upgraded Check Point Software (NASDAQ: CHKP) to Buy from Hold as they believe the recently acquired Nokia security appliance business should drive 2009 revenue and EPS meaningfully higher. The firm raised their target price to $27 from $20.
  
• Goldman upgraded Motorola (NYSE: MOT) to Buy from Neutral and added shares to its Conviction Buy List. The firm expects shares to outperform even if phones don't given the overly negative value for the business.
  
• Research in Motion (NASDAQ: RIMM) was upgraded to Outperform from Sector Perform at RBC Capital. The firm cites improving margin visibility and execution, and lowered expectations for the upgrade.
• Ares Capital (NASDAQ: ARCC) was upgraded to Neutral from Underweight at JP Morgan.
  
• Canadian Pacific (NYSE: CP) was raised at Canaccord to Buy from Hold.
  
• Lloyds TSB (NYSE: LYG) was upgraded to Buy from Neutral at UBS.

Analyst downgrades:

• JP Morgan downgraded Venoco (NYSE: VQ) to Underweight from Overweight based on valuation and debt concerns.
  
• UBS downgraded MEMC Electronic (NYSE: WFR) to Neutral from Buy, added shares to the Short-Term Sell List and lowered their target to $14.50 from $20. The firm believes 2009 wafer sales will be much worse than expected.
  
• Deutsche Bank downgraded SINA (NASDAQ: SINA) to Hold from Buy to reflect integration risks from the recent acquisition of Focus Media's digital OOH assets as they see little room for near-term upside.
• Palm (NASDAQ: PALM) was lowered to Neutral from Overweight at JP Morgan.
  
• Polo Ralph Lauren (NYSE: RL) was cut to Sell from Neutral at Goldman.
  
• Telus (NYSE: TU) was downgraded at Banc of America/Merrill to Underperform from Neutral.

Analyst initiations:

• Societe Generale believes HSBC (NYSE: HBC) will need to cut its dividend and raise additional capital in order to strengthen its capital base. Shares were initiated with a Sell rating.
  
• Citigroup initiated United Technologies (NYSE: UTX) with a Hold rating and $55 target. The firm sees downside risk to the company's guidance and believes consensus estimates could be too high.
  
• B. Riley assumed Matrixx Initiatives (NASDAQ: MTXX) with a Buy rating and $22 target. The firm finds shares attractively valued and sees limited downside risk from current levels.
• ASML Holding (NASDAQ: ASML) was initiated at Deutsche Bank with a Hold rating.

Analyst upgrades:

• Oppenheimer upgraded Genzyme (NASDAQ: GENZ) to Outperform from Perform on expectations that upcoming regulatory events, mainly approvals of Mozobil and 2,000L Myozyme, will serve as positive catalysts.
  
• Ladenburg analyst Dick Bove raised Bank of New York (NYSE: BK) to Buy from Neutral as he now believes the Russian lawsuit is turning in the bank's favor and is no longer a significant risk.
  
• Societe Generale upgraded UBS (NYSE: UBS) to Buy from Hold on valuation and the company's deal with the Swiss government.
  
• Bed Bath & Beyond (NASDAQ :BBBY) was upgraded to Market Perform from Underperform at Friedman Billings.
  
• RC2 Corp (NASDAQ: RCRC) was lifted at Wachovia to Outperform from Market Perform.
  
• Cintas (NASDAQ: CTAS) was upgraded to Hold from Sell at Citigroup.

Analyst downgrades:

Bank of America cut the earnings outlooks of Goldman Sachs (NYSE: GS) and Morgan Stanley (NYSE: MS), according to Briefing.com. The news service also reports that UBS downgraded Burger King (NYSE: BKS) to Neutral from Buy.

Amedisys (NASDAQ: AMED) was started as Outperform at Baird, according to 24/7 Wall St. The financial website also reported that Telus (NYSE: TU) was raised to Buy at UBS.

BCE Inc. (NYSE: BCE) rose another nearly 4.5% today after The Globe and Mail reported a possible bidding war for BCE. The consortium of Canadian pension funds, led by Kohlberg Kravis Roberts & Co., might soon have two other groups considering the same deal.

To remind you, first there were rumors BCE is in talks with buyout firms. Then came a denial, followed closely by an acknowledgment: BCE is indeed considering taking the company private. Here are the reported players:

• KKR is considering taking control of one-third of the company with partners Canada Pension Plan Investment Board and two other pension funds, thus fulfilling the required majority Canadian ownership.
  
• Ontario Teachers Pension Plan is apparently assembling its own consortium and preparing to formally enter the bid process early next week. The group is said to be financed by Citigroup Inc. (NYSE: C) among others.
• And just to make shareholders happier, it is reported that two more U.S. private equity firms, giant Blackstone Group LP and Cerberus Capital Management LP, might form a third group. How this group would abide by the majority Canadian ownership law is still unclear, although Caisse de dépôt et placement du Québec might be shifting allegiances.
• Last time I also mentioned a possible merger between Bell (BCE) and smaller rival Telus Corp. (NYSE: TU). This might be more difficult from a regulatory point of view.
  

So far it seems that the groups are aligning themselves and preparing financing as "BCE has not prepared the data rooms that bidders need before deciding what they are prepared to pay."

After BCE closed up some 6% and Telus up over 3% during my last post, I was going to ask if you think hubby should sell his shares in both these companies. He wanted to sell all, I talked him down to selling half, but then he never got around to it. Lucky, or he would have missed today's 4.5% and 2.3% run for BCE and TU respectively.

Thank you Don for the FT link this morning.

The three Canadian telecommunication companies, BCE Inc. (NYSE: BCE), Telus Corp. (NYSE: TU) and Rogers Communications Inc. (NYSE: RG), are leading gains of telecommunication stocks following confirmed buyout talks.

Bell Canada, owned by BCE and the largest telephone company in Canada, has been rumored for the past month to have been talking to KKR and to Ontario Teachers about a possible offer to be taken private. Including today's gain, BCE has a market value of about C$30.8 billion ($27.3 billion), which would put the original rumored price of C$30 billion below its current market cap. Some mentioned C$40 per share as the magic number for a deal.

Of course, back when the rumors first started, BCE issued a denial, saying it had no plans to go private and wasn't in talks with buyout firms. Today is a different story. Today, the company issued a press release saying that it is reviewing its strategic alternatives and has entered into discussions with a group of leading Canadian pension funds to explore the possibility of taking the company private. Since the company needs to maintain a Canadian majority, Kohlberg Kravis Roberts & Co. will be a minority partner.

However, some analysts believe that a merger between BCE and smaller rival Telus is more likely to occur. According to Bloomberg, "That deal would value BCE at about C$42 a share, compared with the C$40 the company may get in a transaction with buyout firms." Even if regulators wouldn't allow such a merger, the prospects for Telus following such a deal are good.

Reuters expands on the Canadian pension funds involved here.

BCE shares are up over 6.6%, Telus shares are gaining nearly 3.5% and RG shares are rising 3.4%.

Well, Apple Inc. (NASDAQ: AAPL) will be releasing its much anticipated iPhone on June 11 according to the company's exclusive carrier (Cingluar) AT&T Inc. (NYSE: T) AT&T Mobility. Other than this date being two days after my birthday -- yes, yes, I know it's significant enough -- it is also the first day of Apple's Worldwide Developers Conference.

I've been drooling over the iPhone ever since I saw Jobs' Macworld keynote, especially the iPhone introduction. If you haven't seen it, it's an hour and half long but it's worth it. If you're pressed for time, just look at Apple's iPhone webpage. If you're not impressed and don't want one yourself, then you're just not a gadget lover!

Alas, I am completely disappointed. Other than the fact that the iPhone will be released after my b-day (so I can't even ask for it as a present), the Canadian release date is still unconfirmed. It is believed that the release date in Canada will be before the October European release. Last, the iPhone carrier in Canada, Rogers Communications Inc. (NYSE: RG) isn't my carrier and I won't switch, not even for the iPhone. Rogers always had close ties with AT&T and is the largest carrier in Canada with some 6.2 million subscribers (about a tenth of AT&T), but I'd have still expected Apple to sign with a company like Telus Corp. (NYSE: TU), a smaller, but hipper company. Alas, as a commenter remarked, Rogers (with Fido acquired) is the only GSM carrier in Canada.

Currently, Apple hasn't chosen a provider for the iPhone in Europe, although Vodafone Group (NYSE: VOD) is the favorite. Apple expects to sell 10 million iPhones in 2008. By then the iPhone should be available in Europe (Oct. 2007) and Asia (2008) as well.

As an American then, privileged enough to get the iPhone on June 11, are you going to switch over to AT&T if, say, you're one of the 59 million of Verizon Communications Inc. (NYSE: VZ) subscribers?

Update: The iPhone was recently rumored to be delayed.

From the absurd (that's how the Starbucks rumor reads to me) to the overexposed (have we heard enough about the sale of the struggling unit of an automaker yet?), and in between, here is this week's rumor round-up.


STARBUCKS CORP (NASDAQ: SBUX), THE COCA-COLA COMPANY (NYSE: KO)

Envision this: "Yes, I'd like a super-sized cherry vanilla Coca-Cola with a Starbucks mocha grande latte, please. Is that possible? Well, we hear a lot of things, and now it has surfaced that the colas might make a play for the coffees. How much fizz is there to it? Anybody's guess.

DAIMLERCHRYSLER AG (NYSE: DCX)

What began six weeks ago now looks like it has entered its final lap. Mercedes can begin to plan for a future without Chrysler. Here we go: Blackstone Group, Cerberus Capital Management, and Canadian auto supplier Magna International (MGA) are now expected to make their play for the company founded by Walter P. Chrysler. Once again, no one's talking, but bids are apparently to be received by J.P. Morgan Chase (JPM) for DaimlerChrysler before the company's annual meeting next Wednesday in Berlin. Gentleman, start your engines.

BCE INC (NYSE: BCE), TELUS CORPORATION (NYSE: TU)

If you were BCE, Canada's largest telecoms company (Bell Canada), would you loudly say you were not talking to any private equity investors about going private or some such thing? For goodness sakes, you're in the telephone business. Who's going to believe that? "Rumors and speculation" is all they'll say. Well, that's why we're here: r-u-m-o-r-s. Kohlberg Kravis Roberts has been mentioned. One Canadian paper even said BCE hired Goldman Sachs (GS) for advice. They don't lower their fees just for rumors, do they? Bet everyone's working the phones, with call waiting on. The latest says the company is looking to make "radical changes" which may include a merger with Telus.

Telus Corp. (TSX:T, NYSE:TU) shares had a 52-week return of nearly 29% in New York and over 31% in Toronto, despite being hammered over 10% due to Canadian legislation that required income trusts to pay taxes like corporations. Now Telus, Canada's second-biggest telephone company, might have to choose between losing its Catholic Church contract or losing revenue from providing adult content.

Telus is the first wireless company in North America that signed contracts with providers of adult material. While adult content is freely accessible by all companies, Telus claims that this way, it is providing it in a safe, secure and legal manner. The company has started doing so after discovering that half of the top 25 web sites accessed by its customers are adult sites.

The details about the archdiocese's contracts with Telus weren't provided, but regardless, Catholics in general are unhappy. Archbishops are actually going to discuss this with schools and parishes, and followers may boycott Telus should the Archbishop cancel services. In a country where a third of the population is Roman Catholic, this could present itself as a problem.