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            B R E A K F A S T   W I T H   T H E   F O O L
                      Monday, November 20, 2000

benjamin.rogers@enron.com
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COKE MAY BE SOWING OATS
Coke makes $16 billion bid for Quaker Oats and its Gatorade
brand.

By Tom Jacobs

Reuters reports that soft drink giant Coca-Cola Co. (NYSE: KO)
has offered $16 billion for Quaker Oats Co. (NYSE: OAT), eyeing
its powerful Gatorade brand sports drink. Coke's offer tops
PepsiCo's (NYSE: PEP) $14.8 billion proposed purchase, which
Quaker rebuffed earlier this month.

Coke is believed to be offering 1.9 shares per Quaker share, or
about $116.70. France's Groupe Danone (NYSE: DA) has reportedly
made an offer as well, and the Quaker board is probably prepared
to hear from PepsiCo again -- or even another possible suitor,
such as Nestle.

Coke is currently trying to regain investor confidence after
shaky times. The deal would give Coke a lock on the sport drink
market, which Quaker's Gatorade currently dominates with an 84%
market share, compared to 11% held by Coke's PowerAde and 3.1%
for PepsiCo's All-Sport. Industry analysts note that the
non-carbonated beverage market is growing faster than the bubbly
kind, and Gatorade is the solid-gold brand. The appeal of the
Gatorade label explains why other suitors may appear once they
know Gatorade's in play. But any buyer would have to deal with
Quaker's cereal business, and there's only so much you can do
with oats after you toast them or sugar them up in breakfast
bars.

Any deal for Quaker would join a gaggle of recent food world
acquisitions: Philip Morris (NYSE: MO) purchased Nabisco
Holdings (NYSE: NGH) in June; Unilever -- Anglo-Dutch parent of
Unilever PLC (NYSE: UL) and Unilever N.V. (NYSE: UN) -- acquired
Bestfoods Oct. 5; and Keebler Foods Co. (NYSE: KBL) combined with
Kellogg Co. (NYSE: K) on Oct. 26.

Coke closed Friday at $61.83, down $0.50, while Quaker finished
off $0.19 to $90.31, just shy of its 52-week high of $92. Quaker
has jumped 13% since its suitors appeared, while Coke stock
currently sells for 1997 prices.
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NEWS TO GO

Agilent Technologies (NYSE: A) is selling its medical products
business to Dutch electronics whiz Philips Electronics for $1.7
billion, capping Philips' two-year, $4 billion buying spree in
the industry. The deal leaves Philips the number three medical
equipment maker, behind General Electric (NYSE: GE) and Siemens.
This is an interesting move for Agilent, which apparently views
its dragging medical equipment business separately from its
booming life science manufacturing biz, growing through
partnerships with such biotechs as Caliper Technologies (Nasdaq:
CALP) and Rosetta Inpharmatics (Nasdaq: RSTA).

Programmable logic company Xilinx (Nasdaq: XLNX) won its
seven-year-old patent infringement suit Friday against
competitor Altera (Nasdaq: ALTR) and said it would seek an
immediate injunction against the loser. Back atcha, Altera
promised an immediate appeal of the jury verdict. Altera sought
to minimize the damage, asserting that the verdict covers only
Flex 8000 product sales, representing just 2%, or $30 million,
of its annual revenues. Xilinx is a favorite of telecom guru
George Gilder.

Alas, still darker days for Sunbeam (NYSE: SOC). The Securities
and Exchange Commission has recommended enforcement action
against the company and individual officers -- including former
Chairman and CEO "Chainsaw" Al Dunlap -- for alleged accounting
irregularities that created a sunny picture of actual cloudy
days for the camping goods and appliance manufacturer. Sunbeam
limped home Friday to $0.68.

Online auto dealer Autoweb.com (Nasdaq: AWEB) is laying off 25%
of its staff in an effort to save $10 million a year and become
profitable. The company's difficulty in attracting buyers to
online car showrooms joins priceline.com's (Nasdaq: PCLN)
similar woes. Autoweb's chart since its March 1999 IPO is an
emblem for the dot-com debacle. The company squeaked home to
$0.53 on Friday, a true penny stock.
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