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Company News: Zillow, Trulia, Darden Restaurants, Chipotle, Herbalife, UPS, Twitter


Zillow (Z) will buy rival Trulia (TRLA) for $3.5 billion in stock, creating the largest player in online real estate listings. The price represents a 25 percent premium over Trulia’s recent market value. Neither company is profitable, but they promise to cut $100 million in collective expenses. Shares of both jumped on the news. Real estate brokers, meanwhile, are worried the cost of advertising listings will rise.

• Now that Darden Restaurants (DRI) has sold Red Lobster, CEO Clarence Otis has promised to step down by yearend. Darden also said it would nominate only nine directors to its board, leaving three seats open for activist investors. The company’s Olive Garden and LongHorn Steakhouse restaurants are struggling to compete with lower-cost options such as Chipotle Mexican Grill (CMG).

Herbalife (HLF), a maker of fitness supplements, missed Wall Street’s earnings expectations for the first time in five years. Second-quarter profits slipped 17 percent to $119.5 million as Herbalife spent heavily to fend off shareholder attacks on its business model and a federal trade inquiry.

United Parcel Service (UPS) said preparing for its annual avalanche of holiday gifts will weigh heavily on profits this year. UPS will spend $175 million on about 30 projects to upgrade its network in advance of the yearend Web-shopping frenzy. Slammed by last-minute orders and winter storms, it failed to meet some Christmas deadlines in 2013.

Twitter (TWTR) sent a bullish message to Wall Street, announcing a 6 percent increase in active monthly users in the recent quarter. The micro-message platform said sales more than doubled to $312 million, but its second-quarter loss widened from $42 million to $145 million.

Kyle-stock-190
Stock is an associate editor for Businessweek.com. Twitter: @kylestock

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