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To Hell And Back

Thursday, 29 May 2008 | 6:50 PM ET

Sometimes a deal from hell can become one hell of a deal. Following are three takeover stories that could be worth a trade.

Microsoft / Yahoo!

Yahoo Chief Executive Jerry Yang said Wednesday a potential deal with Microsoft has tremendous power, but the software giant appears no longer interested in a full merger.

In his most public comments to date about his thinking on the four-month-old, on-again, off-again Microsoft merger saga, Yang signaled his company remained open to a potential deal, but said Microsoft had ruled out a merger for now.

Earlier this month, Microsoftwalked away from a proposal to acquire Yahoofor $47.5 billion, or $33 per share, after Yahoo rebuffed its offer, saying it would only settle for $37 a share.


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How do you trade it?

I think Yahoo emerges from this mess either married or dead, says Jeff Macke. Microsoft is my play.

I agree, says Guy Adami. Look at Microsoft .

Boston Scientific / Guidant

In January of 2006 MSNBC reported Guidant Corp. jilted longtime suitor Johnson & Johnson in favor of a $27.2 billion offer from rival Boston Scientific ending one of the most highly charged bidding wars in years.

The move capped nearly two months of negotiations and sweetened deals from J&J and Boston Scientific, which saw the Indianapolis-based company as an opening to the $10.3 billion cardiac device market.

But Guidant also is grappling with months of product recalls and is less than a month away from the first of what could be several product liability trials. Securities analysts say it ultimately could be liable for as much as $2 billion in damages.

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How do you trade it?

Look at Boston Scientific, says Karen Finerman. They’ve now made meaningful in-roads from the merger and could really benefit going foreward.

Hewlett-Packard / Compaq

Six years after Hewlett-Packard and Compaq merged, HP is flourishing as the world's leading personal computer maker. But success took time and has meant less prominence for the Compaq brand name.

Tomorrow's Trades #3
Assessing how to make fast money in the aftermath of deal disasters, with the Fast Money crew.

And Carly Fiorina lost her job over this deal, reminds Guy Adami.













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Trader disclosure: On May 29, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders: Adami Owns (BTU), (C), (AGU), (NUE), (GS), (INTC), (MSFT); Finerman Owns (GS); Finerman's Firm Owns (MSFT), (SUN), (TSO), (VLO), (AAPL); Finerman's Firm Owns SPX Index Puts; Finerman's Firm Is Short (BIG); Finerman's Firm And Finerman Own (C) And (C) Leaps; Finerman's Firm And Finerman Own (GLNG); Finerman's Firm Is Short (IYR), (IJR), (MDY), (IWM), (SPY Pete Najarian Owns (AAPL), (ANR), (BHI), (TSO), (XTO), (XLF), (HPQ), (BKC) (MAS), (ENER), (SYMX) (SVNT)

Pete Najarian Owns (BAC) Puts

  Price   Change %Change
BSX
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HPQ
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JNJ
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MSFT
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YHOO
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  • Finerman is president of Metropolitan Capital Advisors, Inc., a company she co-founded.

  • Founder of EmergingMoney.com

  • Chief Market Strategist for Virtus Investment Partners & CNBC Contributor

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