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Analyst upgrades: NFP, BLKB and TWMC

Eric Buscemi — Thu, 08 May 2008 11:07:00 EST

Filed under: Analyst Reports, Analyst Upgrades and Downgrades

MOST NOTEWORTHY: National Financial Partners, Blackbaud and Trans World were today's noteworthy upgrades:

Citigroup upgraded shares of National Financial Partners (NYSE:NFP) to Buy from Hold on valuation, as they believe the recent weakness is overdone. Citigroup also added the stock to their Top Picks Live list.
Jefferies upgraded shares of Blackbaud (NASDAQ:BLKB) to Hold from Underperform on valuation, as they believe management did the right thing by lowering guidance while buying back stock more aggressively.
B. Riley lifted Trans World (NASDAQ:TWMC) to Buy from Neutral as they believe the company could ultimately go private should credit conditions improve

OTHER UPGRADES:

Keefe Bruyette raised Anworth Mortgage (NYSE:ANH) to Outperform from Market Perform.
Unit Corp (NYSE:UNT) was upgraded at Raymond James to Outperform from Market Perform.
RBC Capital upgraded Brandywine Realty Trust (NYSE:BDN) to Sector Perform from Underperform.

Analyst upgrades: NFP, BLKB and TWMC originally appeared on BloggingStocks on Thu, 08 May 2008 11:07:00 EST. Please see our terms for use of feeds.

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Trans World Entertainment CEO withdraws takeover offer

Zac Bissonnette — Wed, 07 May 2008 11:18:00 EST

Filed under: Deals

The strange saga of the Trans World Entertainment (NASDAQ: TWMC) takeover battle that wasn't is getting even stranger.

In a press release issued last night, the company announced that "Robert J. Higgins , its CEO and largest shareholder, has withdrawn his preliminary proposal to acquire the Company, which proposal was first announced in November 2007."

But wait: shortly after Higgins' $5 per share "preliminary offer," Sherwood Investments put out a press release announcing it would be willing to pay $7 per share but that "this offer may be increased as a result of the information obtained from the due diligence process." In an earlier post, I questioned the legitimacy of the offer, and we never really heard much more about it.

In the press release issued last night, Trans World added "that there are no other pending proposals by management and/or any third parties to acquire the Company at this time."

So whatever happened to the Sherwood offer?

Trans World Entertainment CEO withdraws takeover offer originally appeared on BloggingStocks on Wed, 07 May 2008 11:18:00 EST. Please see our terms for use of feeds.

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Sherwood Investments' flipflop on Trans World

Zac Bissonnette — Thu, 13 Dec 2007 08:38:00 EST

Filed under: Deals

Tuesday I wrote about Sherwood Investments' 13-D filing (the first in the firm's history) indicating a 5.48% stake in Trans World Entertainment (NASDAQ: TWMC), the owner of mall-based music and entertainment stores including f.y.e., Suncoast, and Sam Goody.

Obviously this lends a good deal of credibility to Sherwood's offer, but there are still a few things that investors need to wonder about.

The first, and most important question, is how many contingencies does the offer contain. If the offer is loaded with hedges and outs for Sherwood, it's a lot easier to dismiss it as blustering. If Sherwood's offer is contingent on the ability to secure financing and the Kansas City Royals winning the World Series, it's pretty easy to dismiss. How many contingencies does the offer have? It's hard to say because in the the 13-D filing, Sherwood actually contradicts itself:

On November 29, 2007, Sherwood sent a letter to the Issuer and the Special Committee, in which it made a preliminary proposal to acquire all of the Issuer's Common Stock not owned by Sherwood for $7.00 per share, subject to a due diligence review and complete and fair evaluation of the Issuer's business. A copy of that letter is attached hereto as Exhibit C.

Continue reading Sherwood Investments' flipflop on Trans World

Sherwood Investments' flipflop on Trans World originally appeared on BloggingStocks on Thu, 13 Dec 2007 08:38:00 EST. Please see our terms for use of feeds.

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Trans World Entertainment gets a 13-D filing from Sherwood

Zac Bissonnette — Wed, 12 Dec 2007 14:20:00 EST

Filed under: Deals

I've written about Sherwood Investments' offer of $7 per share for Trans World Entertainment (NASDAQ: TWMC) and I've expressed more than a little skepticism.

Now, at least some of the skepticism has been assuaged -- Sherwood has filed a 13-D indicating a 5.48% stake in the company. Should we take the offer more seriously now? Yes. We now have confirmation of Sherwood's ownership of the stock it reported in press releases and an assurance that the company was not trading on the hype its press releases generated. So the ethical worst case scenario has been eliminated.

But questions remain.

Right now, Trans World is a stock trading up about 40% in less than a month on two offers, both of which are contingent on financing.

Continue reading Trans World Entertainment gets a 13-D filing from Sherwood

Trans World Entertainment gets a 13-D filing from Sherwood originally appeared on BloggingStocks on Wed, 12 Dec 2007 14:20:00 EST. Please see our terms for use of feeds.

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Is Sherwood Investments tossing Trans World shareholders an air ball?

Zac Bissonnette — Fri, 30 Nov 2007 08:15:00 EST

Filed under: Deals

On November 19th, I reported that Sherwood Investments, an investment manager purporting to own a 4.34% stake in Trans World Entertainment (NASDAQ: TWMC) had put out a press release announcing its opposition to CEO Robert Higgins' proposed buyout of the company at $5 per share.

Now, Sherwood Investments has upped the ante, putting out another press release offering to buy the company for $7 per share, disclosing a 4.95% stake in the company.

The stock soared on the news, closing at $5.76, a rise of nearly 16%. But I think investors should react to the "news" with a good deal of skepticism.

Continue reading Is Sherwood Investments tossing Trans World shareholders an air ball?

Is Sherwood Investments tossing Trans World shareholders an air ball? originally appeared on BloggingStocks on Fri, 30 Nov 2007 08:15:00 EST. Please see our terms for use of feeds.

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Trans World chief's buyout plan runs into opposition

Zac Bissonnette — Mon, 19 Nov 2007 20:10:00 EST

Filed under: Deals

On November 9th, I wrote about Trans World Entertainment Corporation (NASDAQ: TWMC) CEO Robert Higgins' offer to acquire the company for $5 per share. On Friday, shares of TWMC closed at $5.25, indicating that investors expect that either Higgins will raise his offer, or a competing bidder will emerge. What happened?

Sherwood Investments, which owns 4.34% of the company, put out a press release containing a letter to Mr. Higgins and the board, voicing the opinion that the offer was "grossly inadequate", and urging the company to solicit other offers.

Sherwood's argument is pretty hard to dispute: At a price of only $8 per share the entire Trans World business would be valued at under $250 million or $259,000 per store (using the 963 stores reported as of August 4th, 2007) which is less than their replacement cost. Furthermore, $8 per share would represent less than the $11.81 per share of tangible equity on the most recent balance sheet and half the cost of current inventory. Let us remind you that just last year Trans World paid $78.8 million for 335 Musicland stores from bankruptcy. That deal equated to $235,000 per bankrupt store and now you are proposing to pay $161,000 per store for all the stores which represents a 31% discount, and Trans World is a going concern!

Why should shareholders accept $5 per share when liquidation should generate proceeds in excess of $8 per share? We are certain that in making a "preliminary proposal" you realize that significant additional consideration would need to be forthcoming in order to satisfy your minority shareholders.

The paltry valuation that Higgins is placing on the company with his offer is underscored when you consider that Trans World actually closed 125 of the 355 Musicland stores that it acquired, according to the most recent 10-K. Using the 210 stores from the Musicland acquisition that TWMC currently operates, it really paid more than $375 thousand per store -- 2.3 times as much as Higgins is offering for Trans World.

Trans World's board will in all probability have to solicit other offers to avoid a proxy fight and, if Sherwood is right, that auction process would make Trans World a screaming buy at its current price.

Trans World chief's buyout plan runs into opposition originally appeared on BloggingStocks on Mon, 19 Nov 2007 20:10:00 EST. Please see our terms for use of feeds.

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Analyst downgrades: U.S. banking sector, HBC, TWMC and MIPS

Eric Buscemi — Mon, 12 Nov 2007 09:55:00 EST

Filed under: Analyst Reports, Analyst Upgrades and Downgrades, Federal Natl Mtge (FNM)

MOST NOTEWORTHY: The U.S. banking sector, HSBC Holdings, Trans World and Mips Technologies were today's noteworthy downgrades:

CIBC downgraded the U.S. Banks sector to Underweight from Market Weight as they see another leg down as investors shift focus away from write-downs to the impact the write-downs will have on risk-weighted assets and capital ratios.
Morgan Stanley downgraded shares of HSBC Holdings Plc (NYSE: HBC) to Equal Weight from Underweight, as they believe the company may have to set aside more money for bad loans in the U.S.
B. Riley downgraded shares of Trans World Entertainment Corporation (NASDAQ: TWMC) to Neutral from Buy, as they believe the downside risk should the Bob Higgins acquisition proposal fall through outweighs the potential upside should the bid be raised or should another bidder emerge.
B. Riley also downgraded Mips Technologies Inc (NASDAQ: MIPS) to Neutral from Buy following the company's Q1 results to reflect the company's deteriorating balance sheet and licensing business softness.

OTHER DOWNGRADES:

Lehman downgraded Federal National Mortgage Association (NYSE: FNM) and Federal Home Loan Mortgage Corporation (NYSE: FRE) to Equal Weight from Overweight.
Bear Stearns downgraded Wyeth (NYSE: WYE) to Peer Perform from Outperform.
Concur Technologies Inc (NASDAQ: CNQR) was downgraded to Market Perform from Outperform at Piper.
Citigroup downgraded shares of E-Trade Financial Corporation (NASDAQ: ETFC) to Hold from Buy.

Analyst downgrades: U.S. banking sector, HBC, TWMC and MIPS originally appeared on BloggingStocks on Mon, 12 Nov 2007 09:55:00 EST. Please see our terms for use of feeds.

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Trans World CEO makes an offer for the company -- is it fair?

Zac Bissonnette — Fri, 09 Nov 2007 18:31:00 EST

Filed under: Deals

Shares of Trans World Entertainment Corporation (NASDAQ: TWMC) were up big today for the first time in a long time. CEO Robert Higgins handed the company's board a "preliminary proposal" seeking to take the company private for $5 per share in cash. Mr. Higgins already controls about 40% of the company's stock, and the board is evaluating the offer. The stock soared more than 27% to close at $4.96 -- so close to the "preliminary proposal" that it indicates that investors expect that the company could well sell for a higher price.

Here's what makes this interesting. According to the company's latest proxy statement, Mr. Higgins has been CEO for a little more than 5 years, although he founded the company more than 30 years ago. The chart at right shows how the stock has performed during that period. In early 2005, shares of Trans World were trading well over $14 per share -- Mr. Higgins' offer is for just over a third of that.

What has happened since then? Trans World is in the CD and DVD business, with stores including Fye, Strawberries, Sam Goody, and Suncoast -- some of the company's brands were acquired by the company out of bankruptcy. Of course, the internet has made those industries sluggish at best, and declining same store sales and profitability have sent the stock tumbling.

Does Higgins deserve all the blame for the company's woes? Of course not. But as an executive in the industry, he should have seen the changes coming and made adjustments. He didn't, and now he is looking to take the company private at a firesale price, way below the company's book value.

To some, this may be akin to hiring a carpenter to renovate your house, watching him trash it, and then receiving an offer from him to buy it -- at a small fraction of its value before he went to work.

Trans World CEO makes an offer for the company -- is it fair? originally appeared on BloggingStocks on Fri, 09 Nov 2007 18:31:00 EST. Please see our terms for use of feeds.

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