Merger deal amended

        Wachovia Corp. and First Union Corp. on Wednesday announced a revision of a controversial component of their $12.9 billion merger agreement.

        The amendment to a stock option clause allowing Wachovia or First Union to buy a portion of each other's shares places a $780 million cap on profits from the arrangement, Wachovia said.

        Rival Wachovia suitor SunTrust Banks Inc. of Atlanta had sued to challenge the option agreement, saying that under the original terms, First Union could have made $1 billion or more if Wachovia ultimately decides to reject a combination with First Union.
       

Sun Microsystems falls

        Sun Microsystems Inc. shares fell 13 percent after the maker of server computers for corporate networks reduced fiscal fourth-quarter sales and profit forecasts for a second time.

        Sun fell $2.42 to $16.25. Trading of 119.2 million shares made it the most active stock in U.S. markets.

        Sun late Tuesday said it will have a profit of 2 cents to 4 cents a share in the quarter ending June 30. It was expected to earn 6 cents.
       

Internet retailer sold

        PC Connection Inc., which sells computers through its PC Connection and MacConnection catalogs, agreed to buy Internet retailer Cyberian Outpost Inc. for as much as $25.9 million in stock.

        Cyberian Outpost stockholders will receive 40 cents to 82 cents of PC Connection stock for each Cyberian Outpost share they own, PC Connection said.
       

Loan backed gun deal

        The former owner of a Washington state aerospace company provided the $5 million down payment for the purchase of Smith & Wesson by a tiny startup company that makes trigger locks.

        Colton Melby of Kent, Wash., loaned Saf-T-Hammer the money to finance the purchase of the nation's oldest handgun maker, according to documents the company filed Tuesday with the Securities and Exchange Commission.
       

Legg Mason adds firm

        Legg Mason Inc., the Baltimore-based investment firm, agreed to buy fund manager Private Capital Management LP for as much as $1.38 billion in cash, making its fourth acquisition in two years to bolster its business with wealthy clients.

        Legg Mason will pay $682 million when the transaction closes and will make two additional payments based on Private Capital's growth over three and five years that will total no more than $700 million, the company said in a statement.
       

FTC criticizes Amazon

        Bookseller Amazon and its Alexa Internet subsidiary probably deceived consumers when their Internet software secretly passed on personal information to the company, the Federal Trade Commission said.

        But the FTC said it will not take any action against the online bookseller because one of the software programs in question — the comparison shopping service zBubbles — is no longer operational and Alexa has changed its stated privacy policy.

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