5-Hour Energy: A Success Equal Parts Caffeine, Chemistry and…
Suddenly, Amazon Doesn't Love Its Moms Anymore
Charles Schwab (SCHW) has announced its decision to acquire optionsXpress (OXPS) in a friendly all-stock deal. This deal will help Schwab compete with other firms like E-Trade (ETFC), Ameritrade (AMTD), and Bank of America (BAC), which all have large online brokerage services and are vying to provide investors with the best tools and services.
The deal, which is expected to close by the third quarter of 2011, will cost Schwab $1 billion, and the company will issue 60 million new shares to swap each outstanding share of optionsXpress with 1.02 of its own shares. Our $19.74 price estimate for Charles Schwab is at a premium of almost 12% to its current market value.
Merger posts
FeedChuck Adds optionsXpress to Schwab's Portfolio
Continue reading Chuck Adds optionsXpress to Schwab's Portfolio
NYSE Euronext and Deutsche Boerse Merger Spells Promising Margin Outlook
NYSE Euronext (NYX) and Deutsche Boerse AG of Germany recently announced a merger that will create the world's largest financial exchange. NYSE is the world's largest stock exchange in the world by market capitalization of its listed companies and Deutsche Boerse AG is the largest stock exchange operator in Germany. NYSE Euronext's main competitors are Nasdaq OMX (NDAQ) and CME Group (CME).
We have a price estimate of $34.77 for NYSE Euronext's stock, which stands below market price.
Continue reading NYSE Euronext and Deutsche Boerse Merger Spells Promising Margin Outlook
Continental Lifted by Merger's Regulatory Approval
Continental Airlines (CAL - option chain) shares are rising today after the US Justice Department said over the weekend that it has no more antitrust concerns about CAL's proposed merger with UAL Corp. (UAUA). Now the merger only needs to gain approval from UAUA and CAL shareholders as well as the Transportation Department. The deal is expected to close by October 1. If you think that the stock won't fall by too much in the coming months, then now could be a good time to look at a bullish hedged trade on CAL.CAL opened this morning at $22.23. So far today the stock has hit a low of $22.02 and a high of $25.99. As of 12:20, CAL is trading at $22.09 up 0.29 (1.3%). The chart for CAL looks bullish and S&P gives CAL a positive 5 STARS (out of 5) strong buy ranking.
Continue reading Continental Lifted by Merger's Regulatory Approval
Noble to Acquire Frontier Drilling
Noble Corporation (NE) announced Monday morning that it has entered a definitive merger agreement with FDR Holdings, also known as Frontier. The deal values the joint venture at $2.16 billion. NE expects the deal to close by the end of July, and noted that it will be accretive to cash flow immediately and to earnings in 2011. NE will acquire a fleet of roughly 23 rig years of contracts that generate roughly $3.2 billion in gross contract backlog. NE CEO David W. Williams sated that, "Frontier is an excellent strategic addition to NE's existing asset, customer and employee base ... This acquisition is a highly complementary extension of our mid- and deepwater presence and positions us for additional growth in new market segments that can provide further opportunities for Noble and our customers."
Covidien Acquiring Somanetics to Expand Medican Devices
Somanetics (SMTS) was the most advancing stock in the Nasdaq Wednesday morning, with shares up more than 31%, or nearly $6 to $24.85. Shares reacted to news that Covidien (COV) is buying Somanetics, acquiring all of the outstanding shares of Somanetics for $25.00 per share in cash, a 32% premium to Tuesday's close. Covidien will pay a total of $250 million, for a total transaction value of approximately $300 million.
Covidien, a drug and medical devices maker, is already the distributor for Somanetics' noninvasive diagnostic equipment called INVOS (In-Vivo Optical Spectroscopy) Cerebral/Somatic Oximeter in Europe, the Middle East and Africa. INVOS monitors patients and continuously measures blood oxygen levels in the brain and in the body to help detect and correct complications.
Continue reading Covidien Acquiring Somanetics to Expand Medican Devices
Call Buying Climbs on US Airways Group
US Airways Group (LCC) has been in the spotlight ever since word hit the street that the airline was considering a potential merger with UAL Corp.'s (UAUA) United Airlines. Now the shares are attracting even more attention, thanks to an industry report suggesting that average summer airfares could rise 25% on a year-over-year basis.
As a result, LCC's call options have been drawing a crowd. On Tuesday alone, call volume surged to more than double the norm, with 7,345 contracts crossing the tape. During the course of the session, traders on the International Securities Exchange (ISE) alone bought to open 4,129 calls on the airline, compared to just one put.
United Airlines and US Airways Discussing Possible Merger
On Wednesday evening, reports began to surface that UAL Corp (UAUA) and U.S. Airways (LCC) may be discussing a merger. The New York Times noted that the two airlines are "deep" in merger discussions, which would create the nation's second-biggest airline. According to the report, this is the third time in the past decade that the two have talked merger. Will this time be different? I honestly believe that this time will be different, in large part because of the economy. As The Times points out, Southwest Airlines (LUV) was the only low-cost air carrier to turn a profit last year. A merger between UAUA and LCC could turn the companies a profit faster than as separate entities.
Continue reading United Airlines and US Airways Discussing Possible Merger
Oracle Completes Sun Merger
Software giant Oracle (ORCL) finally completed its $7.4 billion acquisition of Sun Microsystems on January 26, for $9.50 per share in cash and debt deal, setting up an opportunity for the company to dominate its competition in the database software and enterprise computing systems markets.Sun has been delisted from the Nasdaq and all Sun stock holders were to have cash payouts mailed to them within a week.
Will Kraft dump assets to sweeten the Cadbury bid?
Earlier today, the Street was abuzz with rumors that Kraft Foods (NYSE: KFT) was investigating the sale of brands such as Maxwell House and Oscar Mayer in order to raise capital to up its Cadbury (NYSE: CBY) bid to something a little bit sweeter (and one the confectionery giant might not reject). Kraft responded to the rumors saying they were just that - unfounded conjecture - and noted that it would not in fact need to ditch hot dogs and coffee for creme eggs and Trident gum. A spokeswoman for the company told Reuters "The financing for this proposal does not require any divestitures." So where did these rumors get started, anyway? Is Kraft protesting too much?
Continue reading Will Kraft dump assets to sweeten the Cadbury bid?
Allergan, Inc. option volume surges on buyout speculation
As Jon Ogg reported, Allergan, Inc. (NYSE: AGN - option chain) rallied sharply on Tuesday amid rumors that GlaxoSmithKline (NYSE: GSK) was mulling a takeover bid. Speculative investors jumped all over the news, as option volume on AGN skyrocketed well beyond normal levels yesterday. Interestingly enough, it seems that some traders took advantage of the stock's surge to initiate new bearish positions.
Specifically, AGN on Tuesday saw 15,850 puts cross the tape, which represents about 14.5 times its average daily put trading volume. Meanwhile, 59,943 call contracts changed hands, marking 11.5 times the norm.
Continue reading Allergan, Inc. option volume surges on buyout speculation
Roche and Genentech (DNA) believed close to a deal
With news of the Merck/Schering-Plough merger, Roche (RHHBY) is nearing a deal with Genentech's (NYSE: DNA) board that would give Roche the remaining 44% of Genentech that it doesn't already own. Reports from the Wall Street Journal suggest that the two companies may have been close to a deal Monday afternoon, with timing and closing conditions yet to be agreed upon. In fact, the Journal noted that these terms could cause the deal to fall apart. Roche is offering $95 per share for the remaining Genentech's shares, up from Friday's offer of $93 per share, which was already higher than the earlier offer of $86.50 per share. Reportedly, Genentech's board has pegged the company's worth at $112 per share. However, Roche's chairman noted that this price is not realistic, stating the firm's current offer is still fair.
Continue reading Roche and Genentech (DNA) believed close to a deal
Whole Foods, New Seasons come to agreement over financial data
The FTC won't give up its battle with Whole Foods (NYSE: WFMI) over the company's long-complete merger with Wild Oats Markets, but an agreement has been reached between Whole Foods and a small, local organic and natural foods' grocery, New Seasons Market. About six weeks ago in the New Seasons blog, popular CEO Brian Rohter highlighted an invasive subpoena received from Whole Foods' attorneys, claiming that his company's secrets are party to the FTC/Whole Foods dispute. The subpoena demanded a wide variety of documents, including all documents relating to competition with Whole Foods or Wild Oats; financial information, by store; market studies and strategic plans; and all plans for future stores, expansion and renovation. Local shoppers and business owners cried foul; the subpoena, many believed, was Whole Foods playing dirty pool.Today, thanks to pressure from both the local and national community, Whole Foods came to an agreement with New Seasons whose terms weren't released, but in which the small Pacific Northwest chain will be required to release far less sensitive information. Rohter wrote that he was "pleased" with the outcome.
It could be that Whole Foods has far bigger fish to fry than whatever advantage it could have gained from New Seasons. The FTC recently asked a judge to order Whole Foods to bring back the Wild Oats signs, and to voluntarily halt whatever integration it still hasn't completed. What's more, rumors that the company is a takeover target could be distracting management as they (depending on these reports' truth) spin the rumor mill or wheel and deal with the potential acquirers. On the days' news, the stock was down 21 cents to $12.16, about four dollars higher than its five-year low, recorded just before Thanksgiving in November 2008.
Don't sell your Genentech (DNA) stock just yet
After the initial rebuff of Swiss-based pharmaceutical giant Roche's offer to acquire the 44% of Genentech (NYSE: DNA) stock Roche does not currently own, DNA is coyly encouraging the completion of a deal at a higher price.
Genentech is among the leading biotech companies in the world. It is engaged in the discovery, development, manufacturing and commercialization of pharmaceutical products intended for treatment of previously untreatable illnesses.
In 1990, Roche acquired a 56% stake in the company. Since that time, the relationship between the two companies has been a model for similarly structured combinations.
Roche's offer of $89 per share for DNA was characterized by DNA as significantly undervaluing the company.
But this was hardly a "hit the road, Jack" response. DNA's board of directors has been encouraging the two sides to continue discussions, and recent comments suggest that the deal could come together soon.
Continue reading Don't sell your Genentech (DNA) stock just yet
Whole Foods fights back against FTC in rare corporate move
With the FTC, argues Whole Foods Markets (NYSE: WFMI), it's personal. Ever since the federal agency began its review over the company's merger with Wild Oats Markets about a year and a half ago, Whole Foods says, the deck has been stacked against the organic and natural foods store chain. What's more, the FTC has continued to pursue Whole Foods to undo its deal even though the merger closed in August 2007, after the FTC lost its first challenge to the merger in federal court. Just last week, reports of an intrusive subpoena had many watchers crying foul over Whole Foods' behavior; this week, the FTC is getting its own harsh spotlight.Whole Foods is appealing to Congress, and yesterday filed a lawsuit to stop the FTC from continuing its challenge to the long-completed merger. The FTC is running a rigged game, says CEO John Mackey, and what's more -- "we would be better off today if we hadn't done this deal" with Wild Oats. With the depressed economy (and, grocery analysts like myself would argue, Whole Foods' inability to develop a cohesive mission that resonated with sustainability-conscious shoppers), Whole Foods sales have been bottoming out, and the debt the company accrued to complete the merger is now weighing heavy on the balance sheet.
Indeed, this battle over a minority of the grocery market -- a minority the FTC inexplicably argues is called "premium and natural grocery" and is unfairly dominated by Whole Foods -- has gone on long enough.
Continue reading Whole Foods fights back against FTC in rare corporate move
Merger of beer giants all comes down to Rochester
Who knew that the fate of world beer would one day be in the hands of the beer faithful in Rochester, New York? The tastes of this blue-collar town, along with neighbors Syracuse and Buffalo, are key in the pending acquisition of Anheuser-Busch (NYSE: BUD) by Belgian giant InBev, SA. The three cities make up half of the U.S. consumption of Labatt Blue and Labatt Blue Light. Due to the popularity of Labatt brews and Budweiser brands in upstate New York, the U.S. Justice Department worries that beer prices might rise in Rochester.
So, if the acquisition is to be approved, giving Europeans control over America's iconic beer brands, InBev is being asked to sell the Labatt USA subsidiary. Other major InBev brands, including Stella Artois, Becks, and Bass, are not considered competitive enough in any markets to reduce competition between beers and provide upward pressure on prices.
Nope, it all comes down to Rochester and its surprisingly European tastes. Who would have thought?
Goldman Earnings Sink After Buffett Dividend
Johnson & Johnson's Income Falls 23%
Burberry Shares Leap on Sales Update
