Up Front: THE DEAL MILL
MICROSOFT AND INTUIT MAY NOT DO IT
IS THE MICROSOFT-INTUIT deal a goner? Could be. Some company insiders are already resigned to a thumbs-down from the feds for antitrust reasons. Wall Street speculation is rife. Ominously, the Justice Dept. already is deep into a rare second round of fact-finding on the $1.5 billion deal. That has in turn forced Intuit, the leader in personal financial software, to extend its deadline for approval of the buyout by two months, to May 30.
When the offer was made, in September, investors were giddy. Intuit's stock jumped to more than $70 per share from its previous $40 range. The two companies crowed that they would be in the vanguard of a profitable new business--online financial management. Another plus: Intuit CEO and founder Scott Cook would be Microsoft's electronic-commerce honcho.
But on Feb. 14, U.S. District Court Judge Stanley Sporkin rejected a Justice Dept.-Microsoft antitrust settlement as too lenient. Legal experts say the Intuit deal could be a casualty of Justice's battle with Sporkin. They figure Justice, which is appealing the judge's decision, may block the Intuit deal to avoid looking like the patsy Sporkin makes it out to be.
Tea-leaf readers aren't encouraged by the delay. No wonder Intuit's stock has sunk to around $63--far below the $80 acquisition payout. Still, both companies say they remain hopeful the deal will succeed--one day.EDITED BY LARRY LIGHT, WITH RUTH COXETER Amy Cortese