MORNING COFFEE

HP Buys 3Par. Hewlett-Packard (HPQ) won the bidding war for with Dell (DELL) over 3Par (PAR).  HP’s winning bid was $2.4 billion, or $33/share.  Dell (DELL) said it would not increase their bid to match HP’s.  Analysts now expect Dell to build its own storage portfolio and several possible acquisition targets rose on the news.

Burger King Sold.  Burger King (BKC) has agreed to accept an offer from 3G capital to purchase the company.  The 3G offer of $4 billion or $24/share, including the assumption of debt, is the largest leveraged buyout of a fast-food chain ever. The deal represents a 46% premium to the company's share price before acquisition rumors began.

Upgrades

Digital River (DRIV): Wedbush raised their rating from Neutral to Outperform and raised their target price from $28.00 to $36.00.

Coverage Initiated

W.R. Grace (GRA): KeyBanc Capital Markets initiated coverage with a Buy and target price of $36.00.

Coverage Reiterated/Price Target Changed

Family Dollar (FDO): RBC Capital Markets reiterated their Sector Perform rating and raised their target price from $39.00 to $43.00.

3Par (PAR): RBC Capital Markets reiterated their Outperform rating and raised their target price from $27.00 to $33.00.

Micron (MU): Stifel Nicolaus reiterated their Buy rating and lowered their target price from $21.00 to $17.00.

Ulta Salon (ULTA): Oppenheimer reiterated their Outperform rating and raised their target price from $28.00 to $30.00.

Earning Reports

Ulta Salon (ALTR): Reported EPS of +$0.22 beating estimates by +$0.04.

H&R Block (HRB): Reported FQ1 EPS of -$0.36 beating estimates by +$0.05 on revenue of $275 million.

Campbell Soup (CPB): Reported EPS of +$0.30 in line with estimates.

·         Futures: Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude -0.35% to $74.76. Gold +0.1% to $1254.90.

·         Asia: Japan +0.6% to 9114. Hong Kong +0.5% to 20972. China 0.0% at 2655. India -0.1% to 18221.

·         Europe: London +0.5%. Paris +0.7%. Frankfurt +0.4%.