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Sears to buy Lands' End for $1.9 billion

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Retailing giant Sears Roebuck (NYSE:S) $51.81 said it would pay $1.9 billion, or $62 per share, in cash to buy catalog retailer Lands' End (NYSE:LE) $51.02. Sears (S) said the transaction will be "slightly dilutive to break-even in 2002 and 2003," but will not affect its 2002 financial guidance. The merger is expected to be "significantly accretive" in 2004.

Sears (S) continues to expect 2002 full-year comparable earnings per share, including Lands' End (LE), to increase approximately 17% from $4.22 in 2001. The retailer does not expect to record a special charge for the Lands' End transaction. Sears expects to complete the transaction in June, when Lands' End will become a wholly owned subsidiary.

Stock futures showing gains

Stock futures are showing gains this morning as S&P futures gains 5.2 points at 1,059.30. NASDAQ futures are higher by 13.5 points at 1,202.50 and Dow futures are gaining 45 points at 9,975.

Fair value for the S&P 500 today is $0.30. That price will not change during the session. HL Camp & Company has their computers set for program buying at $1.20 and set for selling at $-1.10. Fair value for the NASDAQ-100 today is $3.00.

Hanover Compressor reports

Natural gas services provider Hanover Compressor (NYSE:HC) $16.53 reported earnings $0.18 a share, which missed estimates of analysts looking for earnings of $0.24 a share. First quarter total revenues rose 13.4% to $260.9 million, compared to $229.9 million a year earlier. The company said lower results reflected reduced capital spending by gas producers, the effect of currency devaluations in Argentina and Venezuela and recent currency related changes in Argentina. The company said its revenue growth in the first quarter was due to strong growth in their core domestic compression rental business, but lower revenues that forecasted in their parts and services agreements, equipment fabrications business, and in the international compression rental business."

Jeff Bailey
Senior Market Technician
Option Investor

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