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PeopleSoft to buy J.D. Edwards

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"Merger Monday" has enterprise resource management software makers PeopleSoft (NSDAQ:PSFT) $16.39 and J.D. Edwards (NASDAQ:JDEC) $11.81 joining forces with PeopleSoft saying it will acquire rival J.D. Edward in a $1.7 billion stock deal in a bid that would create the world's second largest enterprise application company.

The deal is set for PeopleSoft to pay a 19% premium and J.D. Edwards shareholders to receive 0.86 PSFT shares for each outstanding commons share of JDEC. PeopleSoft said it expects the acquisition to add to its fiscal year 2004 earnings on an adjusted basis.

The news finds PSFT falling 3.2% to $15.85, while JDEC shares jump 14% to $13.48 in this morning's pre-market trade.

While the PSFT/JDEC merger grabs headlines today, it may be media stocks grabbing some merger headlines in coming months as the Federal Communications Commission (FCC) is expected to raise the ownership limits today on a tightly contested 3-2 vote. The plan would allow one company to own TV stations reaching 45% of U.S. households, which would be up from 35%, and to own a newspaper and TV station in the same city.

Media sector analysts believe Tribune (NYSE:TRB) $49.99, Media General (NYSE:MEG) $58.84 and Gannet (NYSE:GCI) $79.00 are likely to be acquirers.

Traders are looking at a higher open for markets here in the U.S. with S&P futures (sp03m) gaining 7.7 points at 971.00. NASDAQ futures (nd03m) are higher by 14.5 points at 1,213.50, while Dow futures (dj03m) are rising 48 points to 8,900.

Fair value for the S&P 500 today is $-0.09. That price will not change during the session. HL Camp & Company has their computers set for program buying at $0.96 and set for program selling at $-1.42. Fair value for the NASDAQ-100 today is $1.13.

Biotech company's Genentech (NYSE:DNA) $62.61 and ImClone Systems (NASDAQ:IMCLE) $28.50 are once again grabbing the sector spotlight this morning.

Genentech (DNA) shares are surging 14% to $71.45 over the New York ECN after the company presented its eagerly awaited Phase III Avastin data for treatment of colorectal cancer at ASCO. Results from an 800-patient trial of Avastin showed that previously untreated patients given a combination of the biotech drug and chemotherapy known as Salts regimen live an average of 20.3 months compared with 15.6 months for patients on chemotherapy alone.

ImClone Systems (IMCLE) are rocketing higher by 32% at $37.75 in pre-market trade after it said its cancer drug Erbitux is as effective as the company originally claimed, according to results of a trial presented on Sunday by its European partner German- based Merck KGaA. Analysts now expect ImClone to submit the drug to the FDA for approval in combination with chemotherapy.

Jeff Bailey

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