======================== THE MOTLEY FOOL ========================
                   B R E A K F A S T   N E W S
                    Monday, October 8, 2001
benjamin.rogers@enron.com
=================================================================

IN THIS ISSUE
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- TOP STORY: Defense Sector Buyout Battle
  http://www.fool.com/m.asp?i=511719

- NEWS TO GO: Staples, Enron, and Compaq
  http://www.fool.com/m.asp?i=511720

- POST OF THE DAY: BEA - What is Application Server Software?
  http://www.fool.com/m.asp?i=511721

=================================================================

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"When a stupid man is doing something he is ashamed of, he
always declares that it is his duty." -- George Bernard Shaw

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TOP STORY
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DEFENSE SECTOR BUYOUT BATTLE
With defense stocks in the spotlight amid a heated-up political
and military environment -- which yesterday saw the U.S. begin
what is reportedly a broad-reaching campaign in Afghanistan --
merger and acquisitions activity in the sector appears to be hot
as well. On Friday, Newport News Shipbuilding (NYSE: NNS) said
it may receive a buyout proposal from Northrop Grumman (NYSE:
NOC) that beats General Dynamics' (NYSE: GD) current offer.
http://www.lnksrv.com/m.asp?i=511723

Paul Larson in early May reported that Newport, a maker of
nuclear-powered Naval vessels -- agreed to sell to defense
contractor General Dynamics for $67.50 per share in cash. It
looked to be a happy ending to a long-running soap opera: The
companies were set to merge in 1999 before Newport, unhappy with
the buyout price and concerned about regulatory problems, balked.
http://www.fool.com/m.asp?i=511724

Those problems seemed taken care of earlier this year -- but
there was still the matter of Northrop, which tried to divert
Newport News with a similar offer that, because it contained
less cash than did General Dynamics', didn't get the job done
with Newport News.

This time Northrop hopes to be successful. According to a
Newport News press release, a revitalized offer from Northrop is
worth approximately $72.67 per share, and that was enough to get
the companies back around the negotiating table.

The talks are just talks -- and with the new offer potentially a
superior one, Newport News would be remiss in its duty to
stockholders were it not to consider it -- but it appears that
the intrigue in the defense business is heating up again. (Two
Fools debated the merit of defense stocks in last week's Dueling
Fools feature.)
http://www.fool.com/m.asp?i=511725


>>FULL STORY: http://www.fool.com/m.asp?i=511726

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NEWS TO GO
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Office supply retailer Staples (Nasdaq: SPLS) said it is
reportedly liquidating its stock of PCs to lower inventory as
the market for computers continues to slow. The company will
then focus on build-to-order. "Stocked computers are a
relatively low margin category for us," a Staples spokesman told
Reuters, "and they do take up valuable shelf and stockroom space
which we could use for other products."

Enron (NYSE: ENE) agreed to sell its Portland General Electric
utility subsidiary to Northwest Natural Gas (NYSE: NWN) in a
deal that will include, among other things, $1.55 billion in
cash, a total of $250 million in preferred and common stock, and
other considerations. The deal is expected to close by the end
of last year. Jeffrey Skilling surprised Enron investors when he
up and left the company back in August.
http://www.fool.com/m.asp?i=511727

Compaq (NYSE: CPQ) announced a five-year deal to provide IT
services to GE Aircraft Engines, a division of General Electric
(NYSE: GE) in North and South America. The deal, which extends a
current pact, is worth $95 million.

Apple Computer (Nasdaq: APPL) continues to open retail stores as
it looks for ways to market its products effectively to
consumers. Stores in New York and Germantown, Tenn., were
announced today, while a Palo Alto, Calif., store was announced
last week. (Mike Trigg visited Apple's first store back in May.)
http://www.fool.com/m.asp?i=511728

Sausage and restaurant company Bob Evans Farms (Nasdaq: BOBE)
said it sold its Hickory Farms smoke flavorings subsidiary to
Irish company Kerry Farms for an undisclosed cash sum. The
company expects a one-time gain of between $0.08 and $0.10 per
share in its fiscal second quarter ended Oct. 26. The proceeds
will be used to repurchase shares and pay off short-term debt.

Dave Marino-Nachison owns shares of General Electric. More
importantly, he congratulates the U.S. Men's Soccer Team for
qualifying for next year's World Cup. The Motley Fool is
investors writing for investors.
http://www.fool.com/m.asp?i=511729
http://www.fool.com/m.asp?i=511730

-----------------------------------------------------------------
POST OF THE DAY
-----------------------------------------------------------------

BEA - WHAT IS APPLICATION SERVER SOFTWARE?
Yes, application server software is traditionally considered
middleware. It is often compared to any operating system because
it doesn't do anything on its own, but instead provides services
to developers. Rather than giving a detailed feature list of
services provided by an application server, let me give a simple
scenario.

>>FULL POST: http://www.fool.com/m.asp?i=511731

=================================================================

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MBNA offers preferred rates on Money Market Accounts and
CDs for fellow Fools. Make your savings work for you with
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http://www.lnksrv.com/m.asp?i=511732

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