Opening View: Yahoo! and Take-Two Interactive Targeted for Takeover

Turning to the equity market, Microsoft (MSFT: sentiment, chart, options) has reopened talks with Yahoo! (YHOO: sentiment, chart, options) about a deal that would not involve a full acquisition. The move comes just days after billionaire investor Carl Icahn said he would seek to oust Yahoo's board. In a statement Sunday, Microsoft said it "has raised with Yahoo an alternative that would involve a transaction with Yahoo but not an acquisition of all of Yahoo." However, the company did not specifically rule out a full acquisition.

Also in Monday merger activity, Electronic Arts (ERTS: sentiment, chart, options) is expected to extend its offer for Take-Two Interactive Software (TTWO: sentiment, chart, options) after a hostile tender offer failed to get majority support, The Wall Street Journal reported. The original $2-billion offer expired on Friday at 11:59 p.m. Take-Two management and some of the company's shareholders say the company deserves a higher offer, especially following record sales results of Grand Theft Auto IV, which have exceeded $500 million since its launch.

In broker activity, Goldman Sachs upgraded Amazon.com (AMZN: sentiment, chart, options) to "buy" from "neutral," and added the firm to its conviction buy list. Goldman cited strong revenue growth prospects, as it expects Amazon.com's investor base to widen as growth-oriented investors begin to take note of the shares. "We believe that a long recession could hurt Amazon's stock but help its business model, by removing offline retail capacity and pushing consumers to shop online," the broker added.

Finally, Lowe's Companies (LOW: sentiment, chart, options) reported that fiscal first-quarter earnings slid to $607 million, or 41 cents per share, from $739 million, or 48 cents per share, a year earlier. Analysts, on average, predicted earnings of 40 cents per share for the quarter. Net sales for the quarter fell to $12.01 billion from $12.17 billion a year ago, as same-store sales declined 8.4%. The company expects to open about 23 new stores in the second quarter. In addition, Lowe's expects second-quarter total sales to grow about 1% and same-store sales to fall 6% to 8%.

Opening View: Yahoo! and Take-Two Interactive Targeted for Takeover