A major acquisition is coming to light this morning, as Berkshire Hathaway (NYSE: BRK.A, BRK.B) has announced that it is acquiring Burlington Northern Santa Fe (NYSE: BNI). The deal calls for BRK to dish out $100 per share in cash and stock for the 77.4% of BNI shares that BRK doesn't already own. The deal will cost BRK $44 billion.

The acquisition gives us a glimpse into the mind of the Oracle of Omaha, BRK's CEO Warren Buffett. He feels that the "country's future prosperity depends on it having an efficient and well-maintained rail system." Buffett is betting that railroads are going to do well, which would stem from prosperity in the American economy.

Twitter's much-hyped $100 million round of financing closed Friday, cementing the company's (illiquid) value at $1 billion, though Twitter itself would not confirm the amount. T. Rowe Price and Insight Venture Partners participated in the deal, as expected, which is believed to be a precursor to an eventual liquidity event -- such as an IPO or acquisition.

In a way, it feels like 1999, where you have investors rushing to invest in high-profile companies, despite the absence of revenue models. Yet, Twitter may not be as bad off as the traditional folks think, especially if the goal is an acquisition. The company does say that it's pursuing revenue via corporate accounts. But, it's been saying this for a while, and we haven't seen anything yet. Also, it's leaving open the possibility of running ads on the site, though this wouldn't happen within the next three months.

Early on Monday morning, Dell (NASDAQ: DELL) announced that it has agreed to buy Perot Systems (NYSE: PER) for roughly $3.9 billion. Perot is an information technology services company, which was created by former presidential candidate Ross Perot.

Dell will offer $30 per share in cash for Perot, which represents a 68% premium over Perot's Friday close. Overall, the deal is reportedly worth $3.9 billion (according to Dell). The deal is expected to close in the quarter running from November to January -- Dell's fiscal fourth quarter.

After filing for bankruptcy protection a month ago, Eddie Bauer Holdings Inc. (OTC: EBHIQ) is already seeing the suitors line up. Iconix Brand Group Inc. (NASDAQ: ICON), which owns Rocawear, is showing some interest. Hilco Consumer Capital and Gordon Brothers Group LLC are also looking to make a joint offer for the embattled clothing retailer, and Golden Gate Capital is said to be interested. Hudson Capital Partners LLC may throw its hat in the ring, as well.

Tomorrow's the bidding deadline, and there's an auction lined up for Eddie Bauer's assets on Thursday.

Already in the game, CCMP Capital Advisors ponied up $202 million in a "stalking horse bid," meaning that it will make the acquisition if nobody else beats its offer.

For now, Bauer's is living on borrowed time -- and cash. The company got court permission to take a loan for $100 million to keep the operation moving until an acquisition or auction is complete.

The private equity firms rumored to be eyeing Eddie Bauer have retail and apparel companies in their portfolios, which suggests a possibility that the company could be turned around with the right investment and management team. If not, I wonder if they'll sell the window decorations at the auction . . . always wanted my living room to look like a mall.

As Jon Ogg reported, Allergan, Inc. (NYSE: AGN - option chain) rallied sharply on Tuesday amid rumors that GlaxoSmithKline (NYSE: GSK) was mulling a takeover bid. Speculative investors jumped all over the news, as option volume on AGN skyrocketed well beyond normal levels yesterday. Interestingly enough, it seems that some traders took advantage of the stock's surge to initiate new bearish positions.

Specifically, AGN on Tuesday saw 15,850 puts cross the tape, which represents about 14.5 times its average daily put trading volume. Meanwhile, 59,943 call contracts changed hands, marking 11.5 times the norm.

The Coca-Cola Company (NYSE: KO) is, as Zac Bissonnette recently discussed, in the process of trying to purchase juice-maker China Huiyuan Juice Group. He was a bit skeptical about this deal, wondering if it will truly add value to Coke's operations. I have to admit, when I heard about this $2.5 billion bid, I wasn't overly excited. I thought to myself, will this multibillion-dollar potential transaction be as exciting as the Glaceau purchase (Glaceau, of course, gave Coke access to the wonderful Vitamin Water brand)? Billions here and billions there do add up, and one has to make sure that such acquisitions do not screw too badly with things like share repurchases and dividends.

Now comes word from the DealBook blog over at The New York Times that the transaction has a legal hurdle to go through. It doesn't seem to give odds on the possibility of approval, but it says that this will be the first case presented under a new antitrust law put into effect by China a little over a month ago. Traders have sent shares of China Huiyuan Juice Group lower under speculation that the transaction is not a sure bet.

As a shareholder of Coke, I do have mixed feelings, but I have to say that I understand where management is coming from. Coke wants to grow, and China is definitely a country that big brands in America need to exploit. And juice categories are expanding as consumers step away from carbonated beverages in search of a healthier drink experience. Consider that arch rival PepsiCo, Inc. (NYSE: PEP) is looking at deals around the world all the time. Coke obviously wants to pick its spots carefully and see where it can do a transaction that makes sense before its number-one competitor does the same.

MAJOR PAPERS:

• The Wall Street Journal reported that it is the Bush Administration versus Democrats versus Republicans to decide the strategy to stabilize Federal National Mortgage Association (NYSE: FNM) -- Fannie Mae -- and Federal Home Loan Mortgage Corporation (NYSE: FRE) -- Freddie Mac. The Administration's plan would let the Treasury Department advance a credit line and the opportunity for the government to buy equity in either firm. A package is expected to pass but not before the political and economic ramifications are battled out. Democrats and Treasury want it to be a part of a housing rescue plan; Republications oppose it.
• The Clinton Foundation, headed by former President Clinton, believes it has a pricing agreement in place that it expects will make malaria drugs affordable and available to millions of poor people worldwide, the Wall Street Journal reported.
• The Financial Times reported that UBS AG (NYSE: UBS) and Liechtenstein's LGT Group will today be accused by U.S. Congressional investigators of using the "cloak of bank secrecy laws" to help American clients evade billions of dollars in taxes.

OTHER PAPERS:

• Globes reported that Teva Pharmaceutical Industries Limited (NASDAQ: TEVA) is talks to acquire Barr Pharmaceuticals Inc (NYSE: BRL). The price tag is said to be between $7B and $7.5B.

MAJOR PAPERS:

• The Wall Street Journal reported that worries are deepening among regulators, executives and consumers about the U.S. banking industry following the federal government's seizure of IndyMac Bancorp Inc (NYSE: IMB).
• According to a person familiar with the situation, the Wall Street Journal reported that Banco Santander SA (NYSE: STD) is nearing an agreement to buy Alliance & Leicester for around $2.38B.

OTHER PAPERS:

• Yahoo! Inc (NASDAQ: YHOO) chairman Roy Bostock called Microsoft Corporation's (NASDAQ: MSFT) proposal "ludicrous". Bostock said that "while this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders." Yahoo reaffirmed that it is open to a sale of the company for $33 a share, the New York Times reported.

WEB SITES:

• CNet reported that the price of the Xbox 360 Pro model with a 20GB hard drive was cut by Microsoft to $299 from $349. The company also introduced introduced a 60GB model to go on sale in the U.S. and Canada in August for $349.

MAJOR PAPERS:

• The Financial Times reported that Bain Capital, The Blackstone Group LP (NYSE: BX) and General Electric Company's (NYSE: GE) NBC universal will acquire The Weather Channel properties from Landmark Communications for approximately $3.2B in a leveraged buy-out. The Weather Channel will be run separately.
• A top Goldman Sachs Group Inc (NYSE: GS) trader is defecting to GLG Partners Inc (NYSE: GLG), the UK's second-largest hedge fund. Goldman's Driss Ben-Brahim, a partner in the firm and the head of its emerging market trading business, will take over GLG's $1.2B emerging markets special situations fund, the Financial Times reported.

OTHER PAPERS:

• Take-Two Interactive Software Inc (NASDAQ: TTWO), which makes video games, will probably sign video game creator Ken Levine to a new contract. The deal would bolster Take Two's argument that its value exceeds the $25.74 per share that Electronic Arts Inc (NASDAQ: ERTS) has offered as a takeover price for the company, The New York Post believes.

WEB SITES:

• Reuters reported that Deutsche Bank AG (NYSE: DB) is the only bidder remaining for Citigroup Incorporated's (NYSE: C) German retail operations. Sources said Commerzbank AG (OTC: CRZBY) dropped out of the running on Friday.

Citing unnamed sources, The New York Post reports that Blockbuster (NYSE: BBI) could come back to Circuit City (NYSE: CC) to try to acquire the company.

The sources said that Circuit City pulled out because of weakness in the credit markets, but still feel that a deal could have strong long-term benefits. I don't think it makes sense for Blockbuster to acquire the company but, if it does, pulling out for now is probably a good idea. Shares of Circuit City tanked when Blockbuster announced that it was no longer pursuing a deal, and, according to the Post, Best Buy (NYSE: BBY) isn't interested because of antitrust concerns. With few indications that there is anyone else bidding for Circuit City, and the company's fundamentals in a rapid state of decline, it seems like the longer Blockbuster waits the less it will have to pay. Unless another bidder emerges, there's no real rush.

Back in April, Blockbuster made a preliminary proposal to acquire Circuit City "with an all cash offer in the range of $6.00 to $8.00 per share, subject to due diligence." With shares of Circuit City down 9% to $2.32 on Wednesday, Blockbuster could probably get the company for considerably less if it made another offer today.

With Circuit City bleeding cash, continued consumer weakness could make it really cheap on the courthouse steps later this year. Maybe then Blockbuster shareholders would be more supportive of a deal.

Monday, June 16

• Lehman Brothers Holdings Inc. (NYSE: LEH) reporting Q2 earnings; conference call at 10:00 am.
• Nvidia Corporation (NASDAQ: NVDA) to discuss new GPU products at 1:00 pm.
• Lime Energy Co. (NASDAQ: LIME) to discuss acquisition of Applied Energy Management at 4:00 pm.
• Adobe Systems Inc. (NASDAQ: ADBE) reporting Q2 earnings; conference call at 5:00 pm.

Tuesday, June 17

• La-Z-Boy Inc. (NYSE: LZB) to report Q4 earnings; conference call at 8:30 am.
• The Hershey Company (NYSE: HSY) to hold business update conference call at 8:30 am.
• Best Buy Inc. (NYSE: BBY) to report Q1 earnings; conference call at 10:00 am.

Discretion is the better part of valor -- that's what I was always taught. Perhaps the time for a strategic withdrawal has come in the battle of Microsoft Corp. (NASDAQ: MSFT) vs Yahoo Inc. (NASDAQ: YHOO). Somehow, though, I can't imagine it will take that turn, as I read the analysts, strategists and pundits. How could it have become so adversarial? Surely something ugly may be at hand.

Did Steve Ballmer envision this type of scenario when launching his original bid for Yahoo? Did he ever imagine the attempted synergy would become a battle of wills as much as money? To what degree does pride factor into this pending recipe for disaster? I dare say that is what it has all come down to now. Pride goes before a fall, they say.

Does Steve Ballmer have the grace within him to fold his tents and quietly withdraw? Or shall his siege works be lain against the walls of Yahoo in an attempt to forcibly take it? Already he has warned that he will appeal to the sensibilities of Yahoo's investor rank and file. It's a tactic which has been used in many a war. However, attempting to romance the populace away from their leaders seldom, if ever, has worked. In the meantime, Microsoft's own shares are on the decline, diluting the strength of its acceptable offer.

I submit to you that at this time Microsoft should disengage from the situation entirely. Giving Yahoo some time to fully digest the reality of what it is facing might be a worthwhile strategy. To force the matter any further right now may only lead to the degradation of the reputations of both companies. That is something that no one desires.

The powerful silence emanating from an adversary which has quietly withdrawn places nothing but unanswerable questions on the horizon.

Gary Sattler is a freelance blogger. He does not knowingly have interest in the companies mentioned in this blog post.

An International Paper (NYSE: IP) press release announced today that the company is intending to purchase the Containerboard, Packaging and Recycling (CBPR) businesses of Weyerhaeuser (NYSE:WY)for $6 billion in cash. The deal is expected to close in Q3 2008, subject to regulatory approval and financing.

Due to the realization of tax benefits based upon International Papers purchase of Weyerhaeuser assets rather than stock, IP shall realize tax benefits in the amount of approximately $1.4 billion, making the actual purchase price closer to $4.6 billion.

International Paper Chairman and Chief Executive Officer John Faraci is quoted in the press release as stating: "This deal represents a compelling opportunity for International Paper and our share owners at a very attractive valuation... integrating Weyerhaeuser's CBPR business into our North American packaging platform fits very well with our strategy to improve our earnings, cash flow and returns by strengthening existing businesses. We expect the combined packaging business will generate stronger cash flow and higher EBITDA margins than either standalone business."

Even though International Paper sees considerable upside potential in this acquisition, as of this writing, shares of International Paper have lost nearly 8.5 percent on the day. This may signal a good near term opportunity to buy into company shares when considering that the company indicates this deal holds income increase potential of as much as $400 million annually. The company sees this acquisition improving profitability over a three year period of assimilation, with approximately 40% of that improvement to be realized within the first 12 months of closing the deal.

MAJOR PAPERS:

• Japanese bank Mizuho Financial Group Inc (NYSE: MFG) is today expected to announce that it will invest $1.3B in ailing Merrill Lynch & Co Inc (NYSE: MER), reported the Wall Street Journal. Merrill will also sell a Mizuho unit, Mizuho Corporate Bank.
• According to people familiar with the plans, the Wall Street Journal reported that Citigroup Incorporated (NYSE: C) is expected to announce a "sizable dividend cut" when it reports fourth quarter earnings this morning. The company is also expected to receive a cash infusion of at least $10B and a mortgage related write-down of as much as $20B.

OTHER PAPERS:

• The Tories will not hinder Northern Rock nationalization, the UK Times reported. Shareholders are set to vote today on key proposals that could block a private sector sale of the bank.

WEB SITES:

• According to a source, VentureBeat reported that Facebook is "one hundred percent buying" early social-networking site Plaxo.

BEA Systems (NYSE: BEAS), received a proposal on 10/12/07 from Oracle (NYSE: ORCL) to be acquired for $17 a share in cash. ORCL announced on 10/23, "ORCL has no interest in a long, drawn-out process to acquire BEAS. BEAS said on 10/26, ORCL $17 per share proposal is unacceptable. Carl Icahn, the largest shareholder of BEAS, holding over 58 million BEAS shares and equivalents, said on 10/26 BEAS should allow its shareholders to decide the fate of BEAS by conducting an auction process and BEAS should not agree to dilute voting by issuing stock, entrench management of derail a sale of BEAS. BEAS said today, 10/29, we are not opposed to an acquisition of the company. In fact, we are currently exploring ways to maximize shareholder value, including the possible sale of the company. Smith Barney says, "We continue to think the likelihood of BEAS being acquired remains high, although the process and the timeframe are unclear a point." BEAS call option volume of 33,577 contracts compares to put volume of 8,064 contracts. BEAS December & January option implied volatility of 38 is near its 26-week average of 39 according to Track Data, suggesting non-directional risk.

Daily options Update is provided by Stock Specialist Paul Foster of theflyonthewall.com.