MARKET CURRENTS
real-time news and commentary for investors
MARKET CURRENTS
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Monday, May 21
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4:53 PM Shaw Group (SHAW) +1.2% AH after agreeing to sell its energy and chemicals business to Technip (TKPPY.PK) for ~$300M. Shaw says the move will allow it to pursue opportunities in its primary industries, which include providing engineering and facilities management services to oil companies and electric utilities. Comment!
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2:05 PM Bandera Partners, a large shareholder in Kenneth Cole Productions (KCP +2.2%), calls the buyout offer from founder Kenneth Cole too low. Bandera disclosed that it owns 5.7% of Kenneth Cole shares outstanding. Comment!
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1:40 PM BMC Software (BMC +2.8%) follows the tech sector higher after 5.5% activist shareholder Elliott Associates issues a PR questioning recent comments from BMC about the health of its business, and the company responds with a short PR defending its remarks. BMC rallied a week ago on news of Elliott's stake in the company, even though it adopted a poison pill in response. Comment!
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12:56 PM With the final hurdle to its acquisition of Motorola Mobility (MMI +2%) having been cleared, Google (GOOG +2.2%) plans to conduct a "listening tour" of Motorola's ops, a source tells TechCrunch, with layoffs expected to follow soon afterwards. Though Motorola's profits are a tiny fraction of Google's, it has 20.5K employees to Google's 33K. Comment!
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12:44 PM NGL Energy Partners (NGL +10.9%) acquires crude oil transportation and water treatment services from in High Sierra Energy in a $693M deal. High Sierra's crude oil segment handles ~50K bbl/day of crude and controls 32 pipeline injection facilities and three crude oil terminals; its water services segment handles ~80K bbl of water per day. Comment!
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12:29 PM With just days remaining before a deal deadline, Cove Energy (CNVGF.PK) says it continues to believe the $1.8B offer from Royal Dutch Shell (RDS.A, RDS.B) is in the best interests of shareholders. Cove's earlier announcement that it found even more gas on its license in Mozambique has not sparked a bid battle for the company. Comment!
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11:12 AM Silicon Labs (SLAB) has acquired Ember, a developer of low-power wireless mesh networking chips based on the ZigBee standard, for $72M in cash. SLAB predicts Ember, whose chips are used in smart grid and home automation systems, will contribute $10M-$12M in 2H revenue, and be accretive to 2013 EPS. The purchase comes as SLAB weighs an exit from the competitive touchscreen controller market. Comment!
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10:58 AM Blackstone (BX +0.8%), BC Partners and PAI are the three left standing in the bidding for Iglo Group, Europe's biggest frozen food company, in a deal the could reach €2.9B, Reuters reports. While Iglo increased sales and profit in 2011, it operates in a low-growth sector as consumers shift to fresh and chilled products. Comment!
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10:32 AM Eaton (ETN +1%) is paying about 14X EBITDA for Cooper (CBE +26%), Bloomberg calculates, in a deal that Eaton shareholder CAIM calls "pretty amazing," as "they're going to dominate that electrical power equipment segment," especially when the economy improves. The purchase is also sending shares of Hubbell (HUB.A) +6.3% and Accuity (AYI +5.4%). Comment!
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9:58 AM Goodrich Petroleum (GDP +11%) surges after Canaccord calls it a takeover candidate. The firm believes GDP's 103K net acre Tuscaloosa leasehold is too large for the company to develop alone given its current capitalization; a larger entity could buy GDP in its entirety or the company could enter into a JV and issue equity to fund Tuscaloosa's development. Comment!
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9:15 AM Global power manager Eaton (ETN) will buy Cooper Industries (CBE up 25% premarket) for $72/share in cash and stock and become a new company incorporated in Ireland: Eaton Global Corp. The whole deal has a value of $11.8B and should close in the second half. Comment!
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8:30 AM Cytec Industries (CYT) begins the process of selling its coating resins business and hopes to complete a deal by the end of 2012. The unit is having a tough time because of weakness in housing and manufacturing, particularly in Europe, although coating products accounted for half of Cytec's 2011 revenues. Comment!
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8:22 AM General Cable (BGC) agrees to acquire Alcan Cable, the wire and cable business of Rio Tinto (RIO), for $185M in cash. BGC says it expects to use its revolving credit facility to principally fund the transaction. BGC +0.7%, RIO +1.9% premarket. 1 Comment
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8:13 AM A group of Elpida Memory's bondholders oppose Micron's (MU +2%) bid to buy the bankrupt Japanese firm as too low, Reuters reports. The creditors have therefore contacted South Korea's Hynix (HXSCF.PK) - which dropped out of the auction - and U.S.-based GlobalFoundries about selling the company to them. 1 Comment
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6:27 AM Barclays (BCS) plans to sell its $6.1B stake in BlackRock (BLK) via an offering and a related buyback by the U.S. asset manager of up to $1B in shares. Barclays' holdings represent a 19.6% economic interest in the firm. (PR) Comment!
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1:15 AM China's Dalian Wanda Group agrees to buy AMC Entertainment for $2.6B including debt, expanding into the U.S. and creating the world's largest movie chain, while highlighting the growing ties between the U.S. and Chinese film industries. AMC is owned by buyout firms including Apollo (APO) and Carlyle (CG). 1 Comment
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