| From: richardred | 8/19/2010 12:28:00 PM | | | | | | | New buy on weakness. ICUI -ICU Medical, Inc. This fills my watch list of homework relating to speculating on takeovers relating to the medical and medical device industry. This is where I wanted to be weighted. If nothing pans out. I'm still weighted in companies that can withstand a downturn. If the market goes into the tank. I will review in November to double up against loosing positions or take losses and move on. Hey, their always that possibility that something could even pan out. BTW ST.JUDE Medical was on that list, but I passed do to recent recall issues. Watch J & J bid for it now. |
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| To: richardred who wrote (2327) | 8/23/2010 10:20:43 AM | | From: richardred | | | | HP Tops Dell Bid For 3PAR
Carl Gutierrez, 08.23.10, 09:55 AM EDT
Company bids $1.6 billion for data storage provider, sets stage for bidding war with rival.
3PAR Inc.
08/23/2010 10:18AM ET
Computer maker Dell was criticized for paying too much when it offered to acquire data storage provider 3Par for $1.3 billion a week ago, but apparently the sum was not too exorbitanta as Hewlett-Packard topped the bid Monday.
On Monday Hewlett-Packard ( HPQ - news - people ) announced it submitted an offer to purchase 3Par ( PAR - news - people ) for $24.00 per share, or $1.6 billion, a 33.3% premium above the price proposed by Dell ( DELL - news - people ) on Aug. 16. The bid led 3Par's shares to surge 38.6%, or $6.96, to $25.00, while HP slipped 0.9%, or 34 cents, to $39.51, and Dell increased slightly, rising 0.3%, or 4 cents, to $12.11.
Article Controls
"HP's proposal offers superior value to 3PAR's shareholders. Our global reach, strong routes to market and commitment to innovation uniquely position HP as the ideal fit for 3PAR," said Dave Donatelli, HP's executive vice president of Enterprise Servers, Storage and Networking.
HP's offer comes nearly three weeks after its chief executive Mark Hurd was forced to resign in the wake of a sexual harassment investigation that found he had misused company funds totaling between $1,000 and $20,000. (See "A Mark Hurd Lesson: Standards Are Tough Now." and "Odds Rise Insider Gets HP Spot.") HP's chief financial officer Caterine Lesjak is serving as interim chief executive while the board of directors seeks a replacement.
At least one analyst thought Dell had gotten away with something special when it snagged 3PAR for $1.1 billion. Last week Pacific Crest analyst Brent Bracelin released what was meant to be his final note on 3Par, calling the firm a rarity that -- despite losing money -- was able to compete with storage giants EMC ( EMC - news - people ) and Hitachi ( HIT - news - people ). (See "Dell Lucky To Avoid Bidding War With HP, Oracle.")
Bracelin argued HP was too distracted with Hurd's departure to undergo an offer of this magnitude, while Oracle ( ORCL - news - people ) was too preoccupied with trying to profit from its Sun acquisition. HP clearly sees things differently.
forbes.com |
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| From: richardred | 8/23/2010 11:15:02 AM | | | | | | Art Cashin: Why M&A Bump Is Bullish for Stocks
Published: Monday, 23 Aug 2010 | 10:19 AM ET
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By: JeeYeon Park
CNBC News Associate
Stocks rose Monday morning, as investors moved back into the market after some signs of new merger and acquisition activity. Art Cashin, director of floor operations at UBS Financial Services, discussed his outlook.
“I think we do have a couple of things working for the bulls,” Cashin told CNBC.
Potential acquisitions are a sign that companies are confident the economy will grow and business will improve in the coming quarters, he noted.
“The interesting thing about the sudden bump in mergers is that the acquirors tend to be using cash, which says: ‘I don’t want to use my stock for currency because I think my stock is undervalued,’ so that helps the [equity] bulls out,” Cashin said.
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| To: richardred who wrote (2338) | 8/24/2010 2:03:17 PM | | From: richardred | | | | Are Mergers Back? Well, Sort Of
By ANDREW ROSS SORKIN
On Wall Street, it is called the “black car indicator” — a reference to the limousines lined up around investment banks to ferry home young analysts who have pulled near-all-nighters while working on deals.
Based on the surprising number of mergers and acquisitions this month, those black town cars must be double-parked.
August is shaping up to be the busiest month for M.& A. in recent memory.
On Monday, we drew near the threshold of $200 billion worth of deals worldwide for the year, including a $1.6 billion “deal jump” by Hewlett-Packard for the data storage company 3Par, pitting H.P. against Dell.
The animal spirits of corporate America appear to have awakened, with business leaders feeling bold again even as the economy remains sluggish.
Yet a chorus of senior deal makers, who ordinarily would be eager cheerleaders for a mergers revival, are saying: Not so fast.
If you ask them, they will suggest that all the recent merger hoopla may be a positive sign, but it is overdone.
“I’m as befuddled as anyone,” said Mark G. Shafir, head of global mergers and acquisitions at Citigroup. “This is a blow-away August. Yet I can’t call it a trend.”
As Roger C. Altman, chairman of Evercore Partners and a former deputy secretary of the Treasury, put it, “We’re not on the space shuttle.” Using another analogy, he added, “Has the dam just broken? No.”
Paul G. Parker, head of global mergers and acquisitions at Barclays Capital, concurred, saying, “I don’t expect a cork-popping explosion of M.& A.”
So while stock investors may take the recent spate of deals as a sign of confidence in the economy, they shouldn’t get too excited.
With unemployment hovering near 10 percent, the latest wave of deals is unlikely to bolster the job market any time soon.
Indeed, expect quite the opposite: Some of these deals are being driven by “savings,” an overused euphemism for layoffs.
Moreover, many of the deals are being driven by a slowing of organic growth as companies with cash look to pump up their bottom lines.
“If you can’t grow, how do you support your multiple?” Robert A. Profusek, head of mergers and acquisitions at the law firm Jones Day, asked rhetorically before answering his own question. “You do a deal.”
That’s not to say the recent spate of big deals — with BHP Billiton’s $38.6 billion unsolicited offer for the Potash Corporation last week being the largest — is a freakish storm.
Coupled with the cheap cost of capital, the enormous amount of cash on corporate balance sheets estimated at $2 trillion to $3 trillion, is a heady cocktail that may augur more deals.
“Shareholders are telling companies, either do something with all the cash or give it back to us,” Mr. Profusek said.
But the question remains: How can there be so much confidence in boardrooms at a time of so much uncertainty in the stock market and the larger economy?
“If you believe that M.& A. is a lagging indicator of economic confidence, it may make sense,” said Mr. Shafir, of Citigroup.
A confluence of issues has helped spur deals in technology and natural resources in the last several weeks, but the timing was most likely serendipity. “That’s just the vagaries of a schedule,” Mr. Altman said.
Yet the emergence of China and “its insatiable need for resources,” Mr. Altman added, should mean “we’ll see a gradual improvement.”
And Mr. Parker, of Barclays Capital, suggested that cross-border deals, which represented 35 percent of mergers this year, point to a shifting dynamic in the marketplace that might be less dependent on the health of the United States economy.
Still, it will take a broad pickup in the nation’s economic growth before merger mania can really take hold.
“It’s a business-led recovery, not a consumer recovery,” Mr. Parker said. “If consumers don’t ultimately kick in, it’s not sustainable.”
At least for now, however, businesses are not waiting for consumers to jump back into the fray. And deal-making may be as much about psychology as anything else.
“It’s momentum-building, and it builds on itself,” Mr. Parker said.
Mr. Altman estimates that we are in the second year of a five- to seven-year merger expansion. He says that he often shows clients a 40-year chart of M.& A. activity, which reflects cycles of five- to seven-year periods of expansion followed by a two- to three-year downturn.
Mr. Profusek of Jones Day, who is known as Bob and believes he “invented” the black car indicator, said that if August was any guide, it would be a busy rest of the year.
“I’m an avid golfer, and I have yet to play in August,” he said. “That’s the Bob indicator.”
nytimes.com |
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| To: richardred who wrote (2339) | 8/24/2010 2:05:41 PM | | From: richardred | | | | M&A: Only the Beginning?
Published: Tuesday, 24 Aug 2010 | 11:48 AM ET
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By: Maria Bartiromo
CNBC Anchor
Last week’s burst of M&A activity — and its continuation to start this week — suddenly made the often-quiet end of August a lot more interesting:
Jupiterimages | Brand X Pictures | Getty Images
BHP Billiton, the world’s largest miner, put $40 billion on the table in a hostile bid to take over Potash, the world’s largest fertilizer producer, only to be rejected by the board. Intel, the world’s biggest chip maker, is buying McAfee, one of the world’s biggest security technology companies, for nearly $8 billion. That works out to $48 per share, a whopping 60% over MFE’s closing price the day before the announcement. It’s also worth noting this is Intel’s largest acquisition ever. Dell said last week it would pay $1.3 billion for 3PAR, a data storage company. Today, Hewlett-Packard, upped the ante to $1.6 billion. Rank Group, the parent company of Reynolds Wrap, is shelling out about $4.4 billion to buy Pactiv, the maker of Hefty trash bags.
That’s a lot in a short period of time, but I’ve told my readers before to be on the lookout for more mergers and acquisitions. Conditions are ripe: Organic growth is hard to come by in the current sauntering economy, and companies have tons of cash right now. They are not hiring new workers with it, so it makes sense for stronger companies to pull some of that cash out from under the mattress and look to buy growth.
It will be interesting to see if we look back at the last few days as the key moment when a burst of deals kicked off a new round of M&A. I do expect to see more activity as we round out the year for the reasons we just discussed. In addition, companies in the financial services sector will likely sell or buy units to rationalize operations and, importantly, come into compliance with the Dodd-Frank financial reform law. And in energy, BP is selling $30 billion of assets to cover costs associated with the Gulf oil tragedy.
The current deals put the spotlight on tech and commodities. If you’ve been with us in Investor Brief or Wall Street for any length of time, then you probably know how important I think the commodities theme is for investors. The BHP/Potash deal highlights this importance.
Global Growth Drives Commodities
Potash the company is the world’s largest producer of this fertilizer. Potash the nutrient keeps soil healthy and helps produce bigger crops, both critical to meeting accelerating demand for food in developing economies. Fact of the week: China, with a GDP of $1.33 trillion, just surpassed Japan as the world’s second-largest economy.
Demographers expect world population to increase from 6.8 billion currently to about 9 billion in 2050, more than a 30% leap that will fuel demand for potash, precious minerals, oil, copper, water and everything else. At the same time, rising standards of living in developing nations will also increase demand and the competition for food, minerals, oil and water. The market hasn’t focused as much on water and agriculture, and I think they are a couple of areas to watch because of population growth and supply constraints and interruptions.
Commodity prices generally have been rising in recent years, pushed along by growing demand from China, India, Southeast Asia and other developing countries. The key question to answer: Are prices too rich, and where do they go from here?
Prices have dipped 3% to 10% recently for such commodities copper, silver and oil as investors fret over global economic growth and hence underlying demand. But rest assured: the long-term trend is up for most industrial and many agricultural materials. Put that together with the cash that many producers have on their balance sheets and more deals, like this week’s hostile run at Potash, seem certain.
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| To: richardred who wrote (2305) | 8/24/2010 2:15:22 PM | | From: richardred | | | | Will Medicis Pharmaceutical Leave Investors Looking Good?
By Christina Wise, Investor's Business Daily Posted 12:56 PM ET
Featured Stocks
*
MRX *
Medicis Pharmaceut Cl A
* Top-Rated Company
Today we're going to look at Medicis Pharmaceutical (MRX).
The drug maker specializes in products that make you look better. That includes treatments for wrinkles, acnes, rosacea and other conditions.
* Sales growth has ranged from 23% to 67% recently.
* On the earnings front, growth slowed a few years back. But things seem to have turned around. Earnings were up 44% last quarter. They got a boost from sales of the firm's acne treatments.
* For the full year, analysts see earnings rising 38% in 2010. But they also predict growth will slow to 11% next year, so that's something to factor in.
* Mutual funds own about 27% of the company's shares. But the number of funds owning the stock has dropped in recent quarters.
* The stock is a member of the Medical-Ethical Drugs industry group, which is ranked No. 13 among the 197 groups IBD tracks.
Chart Analysis
Will Medicis Pharmaceutical Leave Investors Looking Good?
Will Medicis Pharmaceutical Leave Investors Looking Good? View Enlarged Image
* Turning to its weekly chart, the stock formed a cup-shaped base (Point 1).
* The buy point was calculated by adding 10 cents to the peak on the left side of the base at 26.55 (Point 2). So the ideal buy point was 26.65.
* The stock broke out past that buy point on August 6 (Point 3). It hit a new high, then dropped back near its buy point (Point 4). That's not surprising given how choppy the broader market has been lately.
Stock Checkup
* Stock Checkup shows its Composite Rating is the fourth highest among the 50 stocks in its industry group.
* Its EPS Rating is the fifth highest.
* And its Relative Strength Rating is No. 10 in the group.
* It gets some mixed marks in the Stock Checklist. For instance, its recent earnings growth has been strong, so that gets a green light showing it passes in that category.
* But earnings growth hasn't accelerated, so it scores a red light in that area.
* And with the broader market uptrend under pressure, the yellow light in that category tells you to be careful about the stocks you invest in.
investors.com |
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| From: richardred | 8/25/2010 12:54:20 PM | | | | | | Stryker had 4 billion in cash now I know what there looking at.
UPDATE 1-Stryker to buy Gaymar for $150 million
* Stryker sees acquisition boosting earnings after 2011
* Gaymar now owned by two private equity firms
CHICAGO Aug 25 (Reuters) - Stryker Corp (SYK.N), a maker of orthopedic devices, hospital beds and surgical equipment, said it will acquire Gaymar Industries, which manufactures therapeutic mattresses and temperature-management products, for $150 million in cash.
The acquisition, expected to close by Oct. 1, is expected to be neutral to earnings in 2010 and 2011 and boost profits thereafter, Stryker said.
Gaymar, which had revenue of $77 million in 2009, has been owned by private equity firms Nautic Partners and Norwest Equity Partners since 2003.
Gaymar and Stryker, whose boards have approved the deal, have had a relationship under which Stryker has sold some Gaymar products.
"The acquisition of Gaymar Industries is consistent with our strategic goal of expanding our existing product offering and extensive sales force presence via innovative and value-added products," Chief Executive Stephen MacMillan said in a prepared statement.
Stryker is in advanced talks to buy Boston Scientific Corp's (BSX.N) neuromodulation business for about $1.5 billion, according to Bloomberg. (Reporting by Debra Sherman; editing by John Wallace)
reuters.com |
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| To: richardred who wrote (2158) | 8/25/2010 1:16:07 PM | | From: richardred | | | | Who's next in the tech M&A frenzy
Commentary: Why acquisitions make sense now
By Jeff Reeves
ROCKVILLE, Md. (MarketWatch) -- Wall Street is abuzz with buyout news.
The announcement that Intel Corp. (NASDAQ:INTC) will buy McAfee Inc. (NYSE:MFE) for nearly $8 billion in cash made a huge splash last week. Monday's move from tech giant Hewlett-Packard Co. (NYSE:HPQ) to outbid Dell Inc. (NASDAQ:DELL) for small-cap data storage firm 3Par Inc. (NYSE:PAR) also threw the tech sector for a loop.
All this merger mania is making things interesting. And given the fact that as of July nonfinancial corporations have $1.8 trillion in cash to burn -- roughly 25% more than when the recession began -- you can expect more cash buyouts in tech to emerge in the months ahead.
digits: Why it's not all rainbows for tech
Dow Jones Newswires' Brendan Conway tells the Digits show why he thinks the recent spate of M&A activity in the tech sector may not be enough to ignite technology stocks.
There are a few logical buyout targets and a few obvious buyers in tech right now (we'll get to those in a moment), but first it's important to understand the reasons acquisitions make so much sense in the current market.
Cash is worthless
With interest rates at rock bottom levels and with the specter of high inflation ahead thanks to massive U.S. debt, it is literally bad business to sit on cash. A dollar is worth more today that it likely will be tomorrow -- so why not spend it via buyouts, buybacks or dividends? Read about the top 10 Dow dividend stocks
Depressed equity prices
In case you haven't noticed, stocks haven't exactly been surging. That means many companies are relative bargains compared with a few years ago so a buyer can get more for its money.
Acquisitions replace organic growth
Few prospects for ensuring future profits and sales keep moving up? Then buy a business doing those things well. Intel saw the writing on the wall about mobile devices, and decided to diversify away from hardware and processors with the McAfee deal. The story is similar with HP and its buyout of troubled smart phone stock Palm and overtures at storage and cloud computing power 3Par.
Positive buzz
If all shareholders hear is news about slumping equity prices and weak consumer spending, that's probably not a good sign. Even small-time acquisitions can help give investors something to feel good about, and prove that your company is building for the future instead of just struggling along sleepily.
Given all this, it's easy to see why companies are so eager to go on a shopping spree. But who are the most likely suitors?
Google Inc. (NASDAQ:GOOG) is always at the top of the list. The company is sitting on over $20 billion in cash and has positive cash flow to increase that balance every quarter -- with no dividends to sap the war chest. The company has a history of buyouts with over 70 acquisitions in the last decade, including a rash of 22 purchases in 2010 for $1.1 billion so far. Read a full list of Google buyouts here.
Following the logic of Intel, a likely buyer in the near future could be Cisco Systems Inc. (NASDAQ:CSCO) , which has over $30 billion in cash and may want to diversify away from its networking business into other high tech areas. Same for Microsoft Corp. (NASDAQ:MSFT) . The company has almost $40 billion in cash, but the closest thing it has to a groundbreaking new technology is the upcoming Kinect motion controller for its Xbox video game console.
IBM (NYSE:IBM) is also a likely suspect in the tech sector. In July, the company reported that it ended the second-quarter with over $12 billion on hand and a free cash flow of $3 billion.
Now let's get to the potential targets:
NetApp Inc. (NASDAQ:NTAP) could be a possible takeover target due to its strong business in data storage. As the tech sector goes through some big shakeups in the wake of the Intel-McAfee deal and the bidding war for 3Par, NetApp could be quite a counterpunch. One hang up, however, is that NTAP is worth a hefty $14 billion at current stock valuations. But when you consider the fact that tech heavyweights Cisco is worth over $120 billion and IBM is worth over $150 billion, a NetApp buyout isn't impossible.
Another big player Juniper Networks Inc. (NYSE:JNPR) is in the same boat with a $14 billion price tag, though its focus is more on routing and network infrastructure. Read about how to profit as semiconductor stocks short circuit.
Smaller but more digestible networking, data storage and cloud computing stocks are the likeliest to make the merger list. Brocade Communications Systems (NASDAQ:BRCD) has a market cap of about $1.6 billion and is essentially in the same business as 3Par. That makes it a good counterpunch for Cisco or IBM, which you can bet are closely watching the bidding war over 3Par. Other small-cap tech targets in the data storage game could include Isilon Systems Inc. (NASDAQ:ISLN) , Compellent Technologies Inc. (NYSE:CML) and CommVault Systems Inc. (NASDAQ:CVLT)
But as we saw in Intel's bid for McAfee and H-P's acquisition of Palm earlier this year, sometimes tech stocks will reach out beyond the most obvious choices in an effort to enter new areas of business or diversify their revenue stream. The next buyout targets may be a big surprise. And let's not forget that tech is hardly the only sector seeing shakeups - just look at mining giant BHP Billiton (NYSE:BHP) and its hostile bid for ag giant Potash Corp. (NYSE:POT) late last week.
One thing is sure. It just doesn't make sense for cash-rich blue chips to keep sitting on their cash. And that means we're sure to see many more buyouts in 2010.
marketwatch.com |
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