In the wake of last week's public offering of Dollar General, more IPOs are expected to be coming down the pipeline as private equity firms seek a monetary return on investments made during the boom years. Speculation is that Toys "R" Us and Dunkin' Donuts could be next.

Toys "R" Us Inc. is owned by Bain Capital, KKR, and Vornado Realty Trust (NYSE: VNO). The world's leading dedicated toy and baby products retailer was a public company from 1978 until its acquisition by the private equity consortium in July 2005 for $6.6 billion. It has more than 1,500 stores in 33 countries, and its businesses include Babies "R" Us, eToys.com, and FAO Schwarz, the latter two acquired earlier this year. Main competitors include privately owned KB Toys, as well as big-box retailers Target Corp. (NYSE: TGT) and Wal-Mart Stores Inc. (NYSE: WMT).

MOST NOTEWORTHY: Advanced Micro Devices, Intel Corporation, Netscout Systems, Guidance Software and Nasdaq were today's noteworthy initiations:

• Morgan Stanley started shares of Advanced Micro Devices Inc (NYSE: AMD) and Intel Corporation (NASDAQ: INTC) with Underweight ratings and a $11 target and $22 target, respectively. The firm recommends selling shares of both as they expect an inventory correction and increasingly aggressive price environment.
  
• Kaufman Brothers initiated shares of Netscout Systems Inc (NASDAQ: NTCT) with a Buy rating and $13.50 target. The firm is positive on the Network General acquisition and believes successful integration as well as continued improvement in sales execution will drive shares higher.
  
• Roth Capital resumed coverage of Guidance Software Inc (NASDAQ: GUID) with a Buy rating and $15 target and said the company is the market leader for digital forensics and that new regulations have accelerated electronic discovery in the forensic market.
  
• Jefferies started shares of The Nasdaq Stock Market Inc (NASDAQ: NDAQ) with a Buy rating and $45 target and believes the company's relative underperformance over the past two years creates an attractive entry point as earnings are poised to accelerate.

OTHER INITIATIONS:

• Credit Suisse initiated the small-cap biotechnology sector, starting shares of Poniard Pharmaceuticals Inc (NASDAQ: PARD), Dyax Corp (NASDAQ: DYAX) and Dynavax Technologies Corporation (NASDAQ: DVAX) with Outperform ratings and targets of $9, $7 and $8, respectively.
  
• Broadpoint initiated Lululemon Athletica Inc (NASDAQ: LULU) with a Neutral rating.
  
• JP Morgan started shares of Vornado Realty Trust (NYSE: VNO) and Douglas Emmett Inc (NYSE: DEI) with Neutral ratings.

MOST NOTEWORTHY: CKE Restaurants (CKR), Cardinal Health (CAH), eBay (EBAY) and CA Inc (CA) topped today's noteworthy initiation list today:

• Nollenberger believes the Hardee's franchise is entering a period of accelerated growth and initiated shares of CKE Restaurants (NYSE: CKR) with a Buy rating and $27 target.

• Goldman views Cardinal Health (NYSE: CAH) as a as a high quality, focused franchise with strong fundamental outlook driven by margin expansion and improvements in non-drug wholesale businesses and restructuring efforts, reinstating its Buy rating on the company.

• American Technology initiated eBAY Inc (NASDAQ: EBAY) with a Buy rating and $43 target, believing the company is the top play on growth of U.S. e-commerce and they expect upside to numbers tonight.

• Needham believes CA Inc (NYSE: CA) Inc remains in transition as it continues to work on the repackaging of its vast product array into five solution sets and started the company with a Hold rating.

OTHER INITIATIONS:

• Lazard initiated F5 Networks Inc (NASDAQ: FFIV) with a Buy rating and $100 target.

• Citigroup started Clearwire Corp (NASDAQ: CLWR) with a Hold rating and $23 target.

• Morgan Stanley assumed coverage of Vornado RealtyTrust (NYSE: VNO) with an Equal Weight rating.

• SourceFire Inc (NASDAQ: FIRE) was initiated with a Hold rating and $12 target.

• The Wet Seal (NASDAQ: WTSLA) was initiated with an Outperform rating at Cowen.

• Roth Capital initiated shares of Vivus Inc (NASDAQ: VVUS) with a Buy rating and $15 target.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

MOST NOTEWORTHY: Cisco Systems Inc (CSCO) and Cheesecake Factory Inc (CAKE) were today's most notable upgrades:

• Cisco Systems Inc (NASDAQ: CSCO) was upgraded at DA Davidson to Neutral from Sell with a $32 target, following better-than-expected second-quarter results.
• Piper Jaffray upgraded Cheesecake Factory Inc (NASDAQ: CAKE) from Market Perform from Underperform on valuation.

OTHER UPGRADES:

• Goldman Sachs added both Hewlett Packard Co (NYSE: HPQ) and McDonald's Corp (NYSE: MCD) to its Conviction Buy List.
• JP Morgan upgraded Quest Communications Int'l Inc (NYSE: Q) to Overweight from Neutral based on valuation.
• Citigroup upgraded Alcoa Inc (NYSE: AA) and Alcan Inc (NYSE: AL) to Buy from Hold to reflect a favorable outlook for metal prices.
• Raymond James upgraded EMC Corp (NYSE: EMC) to Outperform from Market Perform following VMware's IPO announcement.
• Wachovia upgraded Vornado Realty Trust (NYSE: VNO) to Outperform from Market Perform citing the company's withdrawal from the Equity Office Properties Trust (NYSE: EOP) bid process.
• Baird upgraded Maguire Properties Inc (NYSE: MPG) to Neutral from Underperform with a $42 target.
• Brean Murray upgraded Aeropostale Inc (NYSE: ARO) to Hold from Sell.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

The old saying goes: "Sometimes your best deal is the one you didn't do."

That could be the case with Vornado Realty Trust (NYSE: VNO), which backed-out of its mega bid for Equity Office Properties Trust (NYSE: EOP).

Now, by default, the prize goes to Blackstone -- for a whopping $39 billion. Actually, this will be the biggest buyout ever.

In Vornado's latest press release, the company provided a simple explanation; that is, the deal would " not be in its shareholders' interest."

And, Wall Street agrees, as Vornado's stock price is up 5.5% to $134.02.

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

Blackstone, which is a massive private equity firm, has increased its bid to $55.50 for Equity Office Properties (NYSE: EOP).

True, Vornado's (NYSE:VNO) bid is 50 cents higher. However, it is also composed of a chunk of stock and the deal will take at least three months to close. Also, Blackstone was able to increase the break-up fee from $500 million to $720 million, which means the overall offer is higher (by about 3%).

So, it looks like -- at least for now -- Blackstone is the winner.

But, the deal is now at a nose-bleed valuation. In fact, the cap rate for EOP's real estate properties is actually below 5%, which is not very appealing. In other words, Blackstone will be under lots of pressure to wring value out of EOP and pay the huge debt obligations.

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

In the bidding for Equity Office Properties Trust (NYSE: EOP), there are two offers. One is from Blackstone and it is all cash. The higher bid, which is a combination of cash and stock, is from Vornado Realty Trust (NYSE: VNO).

Last week, EOP's board rejected the Vornado offer. The board was not thrilled that it would take at least three months to close the deal.

But Vornado is now making an interesting tweak: that is, the company will pay its cash faster. This is according to the Wall Street Journal.

However, it will still likely take a month, because there will be a tender offer. And, of course, the equity payment will still take at least three months, because of approvals and filings.

All in all, it's not much of a change and is likely that the EOP board will reject this offer too. But what about EOP shareholders? What might they do in this week's vote? They may actually prefer Vornado's higher bid.

In other words, the move from Vornado does look particularly savvy -- and, in fact, could force Blackstone to increase its bid yet again.

EOP's current stock price is $55.24, which is above Blackstone's all-cash offer of $54.

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

General Electric Co. (NYSE:GE)-- In a widely expected move, General Electric is expected this week to name one-time "Today" show executive producer Jeffrey Zucker as the CEO of NBC Universal. Robert Wright, who has run NBC since GE acquired it during the 1980s, is retiring. He had wanted to stay on the job until a turnaround is completed but Chief Executive Jeffrey Immelt wanted a new generation of management in place to deal with the media conglomerate's many challenges, according to the Wall Street Journal. The New York Times reports that several other executives including Time Warner Inc.'s (NYSE:TWX) Jeffrey Bewkes, News Corp.'s (NYSE:NWS) Peter Chernin and former Viacom Inc. (NYSE:VIA) Chief Executive Tom Freston were under consideration for the job but none were serious candidates because if Immelt's "unswerving confidence" in Zucker.

Triad Hospitals Inc. (NYSE:TRI) -- Triad Hospitals Inc. (NYSE:TRI) said it accepted a $6.4 billion buyout offer from CCMP Capital Advisors and Goldman Sachs Group Inc.'s (NYSE:GS) GS Partners. The deal is $50.25 a share, a premium above Friday's closing price of $43.27, and includes $1.7 billion in debt. Hedge fund TPG-Axon Capital Management LP has threatened a proxy fight against the chain, which was spun off from HCA Inc. in 1999. No word on TPG-Axon's reaction. Even as a private company. Triad faces a tough road ahead from stagnant admissions and rising bad debt, according to the Wall Street Journal (subscription required).

Vornado Realty Trust (NYSE:VNO) -- Vornado Realty Trust (NYSE:VNO) upped the ante in its fight for Equity Office Properties Trust (NYSE:EOP) with Blackstone Group. On Sunday, the company agreed to pay the cash portion of its $23.2 billion bid for Equity up front, according to Reuters. Equity Office had said Friday that it preferred Blackstone's bid because of the "certainty of value" and "virtual certainty of closing in the immediate future," according to the wire service. To shareholders, the Vornado offer sounds tempting ``All the institutional holders are behind Vornado's bid and that's before this'' latest revised offer, said Dean Frankel, a portfolio manager at Urdang Securities, which owns Equity Office shares, in an interview with Bloomberg News. ``If they're paying us cash right now, that sounds smart, unless Blackstone steps up.''

State Street Corp. (NYSE:STT) -- State Street Corp. (NYSE:STT) said it will acquire Investors Financial Services Corp. (NYSE:IFIN) for $4.5 billion in stock. The offer values Investors Financial at $65, a 38 percent premium to Investors Financial's closing price Friday.

Over the past day, the investment bankers for Equity Office Properties Trust (NYSE:EOP) crunched the numbers on the latest bid from Vornado Realty Trust (NYSE:VNO). And, the board of trustees of EOP wasted little time in getting to a decision: EOP is going to stick with its $54 deal with Blackstone, which is a top private equity firm. Key reasons include: its all-cash and the paperwork.

As for Vornado, a big chunk of its price is in the form of stock. And, of course, this can be volatile. Besides, it will take at least three months for a closing.

No doubt, EOP's CEO and founder, Sam Zell, is playing this auction with incredible savvy. Basically, Vornado needs to up its offer. In fact, it looks like it will need to be about $57.50 to $58 to get any traction.

But, in the meantime, Zell is guaranteed a huge cash windfall. Yes, at the age of 64, he is certainly doing the deal of a lifetime.

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

MOST NOTEWORTHY: Amazon.com Inc (AMZN) and Vornado (VNO) were on today's list of most notable downgrades:

• Bear Stearns downgraded Amazon.com Inc (NASDAQ: AMZN) to Underperform from Outperform to reflect the company's margin erosion, lack of near-term earnings leverage and valuation. They note that margins declined for the fourth consecutive quarter year-over-year in Q4.

• Wachovia downgraded Vornado Realty Trust (NYSE: VNO) to Market Perform from Outperform citing the higher bid of $56 for Equity Office Properties Trust (NYSE: EOP), which increases the company's risk profile.

OTHER DOWNGRADES:

• Citigroup downgraded shares of Apache Corp (NYSE: APA) to Hold from Buy on concerns that the company's poor 2006 reserve replacement cost in the Gulf of Mexico may suggest maturing project inventory.

• JP Morgan downgraded Avid Technology Inc (NASDAQ: AVID) to Underweight from Overweight to reflect the company's weak forecasting and execution after disappointing fourth-quarter results and guidance.

• Matrix USA downgraded J.B. Hunt Transport Services (NASDAQ: JBHT) to Buy from Strong Buy on valuation.

Analyst summaries provided by TheFlyOnTheWall.com (subscription required).

As Wall Street expected, Vornado Realty Trust (NYSE: EOP) made a counter bid for Equity Office Properties Trust (NYSE: EOP). The new offer is for $56 per share, which comes to about $41 billion.

The prior bid – which came from the private equity firm, Blackstone – was $54 per share.

However, Blackstone's bid is all-cash, whereas the Vornado bid is a combination of $31 in cash and $25 in stock.

There is a hitch, though. That is, Vornado has a collar on the deal. Basically, this means that if its stock price falls, more shares will be issued.

Vornado actually does not want all of EOP. Instead, it wants to sell-off billions of the portfolio – but keep choice properties in top markets, such as NY.

But the Vornado bid is far from secure. While the collar does help, the fact remains that it will take the firm about three months to close the deal. And, of course, as the old saying goes: "time is money."

Also, the deadline for the shareholder vote on Blackstone's bid is Monday. Thus, EOP's board has a lot to think about – and fast.

As for Blackstone, it says it will not up its bid. In light of the uncertainly regarding Vornado's offer – as well as the rich valuation for EOP – it looks like a smart move.

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

In the latest proxy filing from Equity Office Properties Trust (NYSE: EOP), the company provides key reasons for accepting the latest bid from Blackstone, which is a top private equity firm.

They include: price ($54 in cash); timing (the expected close is on February 8, 2007); and the structure of the Vornado (NYSE: VNO) offer (which is a bit dicey, since part of the deal relies on the value of the company's stock).

Well, according to a report from Reuters, it looks like Vornado is not giving up. That is, a new offer may be imminent.

Currently, the stock price of EOP is at $55.23, which indicates that investors think there will be a new bid.

Then again, if Blackstone loses the deal, it will get a check for $500 million (which is the termination fee). Not bad for a losing a battle, huh?

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

Today's WSJ.com [a paid service], has an in-depth piece on the high-stakes dealmaking to buy Equity Office Properties Trust (NYSE: EOP), which involves two suitors: Vornado (NYSE: VNO), which is a real estate investment trust, and the Blackstone Group, which is a major private equity firm.

Sam Zell, known as the "Gravedancer," took EOP public in 1997. His vision was that – with massive scale in commercial real estate holdings – he could realize economies. It was nice in theory. But, it didn't pan out. Actually, he made some bets on markets that went sour (such as in the Silicon Valley -- at the end of the dot-com heyday). And with the surge in private equity – as well as cheap debt – Zell sees a buyout as his way to catch-up.

In contrast, Vornado has done quite well over the years. While it has paid top-dollar for properties, the firm has nonetheless been savvy in terms of the regions it has focused on (such as New York City). What's more, it has participated in several private equity buyouts, like the purchase of Toys "R" Us.

So, given Vornado's background, it would seem that it would have an edge in buying out EOP, right? Not really.

Interestingly enough, it looks like Zell likes cash. Vornado, however, is offering partial stock as consideration. Might this indicate that Zell sees bad things in the offing for commercial real estate? Maybe so. But, he probably realizes it is impossible to time the market. No doubt, as he has seen over the years, commercial real estate can be volatile. So, why not just get a big payday?

And, yes, there is another development: according to a report in today's Reuters, it looks like Blackstone is preparing to top Vornado's bid.

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