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   Strategies & Market TrendsSpeculating in Takeover Targets


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From: richardred12/15/2010 1:04:31 PM
   of 6275
 
ETFs to Play Biotech M&A
By Kevin Grewal, Contributor 12/15/10 - 11:40 AM EST

This activity has been fueled by cash-heavy companies looking to diversify and broaden their horizons.

To put this into perspective, in just two days, nearly $3.1 billion in biotech-related deals were announced, and some suggest more activity is to come.

Big Pharma front-runners such as Pfizer(PFE_), Sanofi-Aventis(SNE_), Amgen(AMGN_) and Merck(MRK_) are expected to find themselves in something of a rut because of expiring patents and lackluster drug pipelines.

As a result, Big Pharma is likely to look at smaller, more nimble companies that are focusing on specific treatments and medical specialties.

Some ETFs that are likely to be influenced by this increased activity include:

* SPDR S&P Biotech ETF, which allocates nearly 51.5% of its assets to small-cap companies and 30.75% to medium-cap companies, which are the most susceptible to M&A activity.
* iShares Nasdaq Biotechnology ETF, which tracks big players like Amgen as well as small and mid-cap stocks that are prime targets for M&A.
* Biotech HOLDRs, which predominantly allocates its holdings to large-cap companies such as Amgen, Gilead Sciences(GILD_) and Biogen Idec Inc(BIIB_). These are the likely acquirers in the sector.
* iShares Dow Jones US Pharmaceuticals, which includes drug giants Pfizer and Merck among its top holdings.
thestreet.com

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To: richardred who wrote (2296)12/21/2010 10:56:09 AM
From: richardred
   of 6275
 
I Hit the Takeover bullseye today with MATK-Entered at 20.60-in July-Nice weighted position for me also. :+ )

DSM to buy US biotech company Martek for $1.09B
Martek Biosciences accepts $1.09 billion cash bid from Dutch chemicals maker DSM
ap

On Tuesday December 21, 2010, 10:09 am

AMSTERDAM (AP) -- Royal DSM NV, the world's biggest maker of vitamins, said Tuesday it will bid $1.09 billion (euro830 million) in cash for U.S. biotech firm Martek Biosciences Corp., in a management-endorsed buyout that would improve its presence on the American infant formula market.

The Dutch chemicals company's $31.50 per share offer for Martek represents a 35 percent premium to Martek's closing price on Dec. 20. In U.S. premarket trading, Martek shares surged $8.04, or 34.4 percent, to $31.40.

DSM, based in Heerlen, the Netherlands, makes nutritional supplements, fibers used in bulletproof vests, and ingredients used in vaccines, as well as industrial chemicals.

DSM's CEO Feike Sijbesma said the purchase "will add a new growth platform to our nutrition business," while Martek would benefit from DSM's larger distribution network.

Martek, based in Colombia, Maryland, sells nutritional oils, ingredients for infant formula and dietary supplements. Its customers include Danone, Nestle, Kellogg's and General Mills, among others.

DSM said its offer will begin in mid-January and is conditional on receiving a majority of shares. It expects the deal to close sometime in the second quarter.

DSM said the deal, which must also be approved by regulators, would add at least euro0.15 to annual per share earnings in the first year.

Shares in DSM rose 4.5 percent to euro42.845 in Amsterdam.

In November, DSM reported a third quarter net profit of euro79 million, or euro0.76 per share, on sales of euro2.15 billion. As of Tuesday, the company has a stockpile of more than euro2 billion in cash due to profits and recent sales of several low-margin businesses.

Martek earlier this month reported a fiscal fourth-quarter loss of $6.2 million on higher costs and a hefty restructuring charge linked to the sale of assets at its Winchester, Ky., manufacturing facility. Revenue rose 36 percent to $119.1 million, on higher sales of nutritional ingredients and branded consumer health products. The results topped analysts' average estimates.

finance.yahoo.com

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To: richardred who wrote (2317)12/21/2010 1:26:24 PM
From: richardred
   of 6275
 
MMI continues to press hard.

MMI Investments, L.P. Calls on EMS Technologies Board to Pursue a Sale of the Company
prnewswire


Press Release Source: MMI Investments, L.P. On Monday December 20, 2010, 9:15 am EST

NEW YORK, Dec. 20, 2010 /PRNewswire/ -- MMI Investments, L.P., one of the largest stockholders of EMS Technologies (Nasdaq:ELMG - News), announced today that it has sent a letter to the Board of Directors of EMS in which MMI argues that a sale of the company would deliver substantially greater value to shareholders than its present stock price with considerably less risk than management's current operating plan.

The full text of the letter follows:

December 20, 2010




The Board of Directors


c/o William S. Jacobs, Secretary


EMS Technologies, Inc.


660 Engineering Drive


Norcross, Georgia 30092


Dear Members of the Board,

During the four weeks since our meeting with Chairman Mowell, Director Bolton and members of senior management, we have spent considerable time and effort reviewing our analysis of EMS Technologies, Inc. ("EMS"). We have reaffirmed our conclusion that despite EMS' subscale and disjointed operations and its poor financial and stock price performance over the long-term, it remains a highly valuable franchise with assets that should be monetized through a sale of the company at a value substantially higher than its present stock price. We have furthermore reconfirmed our conclusion that such an outcome could be achieved with considerably less risk than management's operating plan, which even if successful could take several years to fully implement and still not generate a higher nominal value.

We have also reflected on Chairman Mowell's and Director Bolton's resolute confidence in EMS' historical execution and future strategy. We believe an accurate appraisal of EMS' track record and proper risk assessment of its outlook is wholly incompatible with this version of the past and vision of the future.

We could not have demonstrated this disconnect any clearer than was done by Chairman Mowell's own letter to us of November 8th, and management's recently released presentation to stockholders. We believe it is disingenuous to boast of the stock's performance since the day you had to replace your CEO because the company had just lost its largest contract, reported disastrous earnings and lowered its full-year EPS forecast by 35%, causing the stock price to plummet by 40% from the month prior. I can assure you your stockholders know all too well that 40% up after 40% down means you've still lost value.

(Photo: photos.prnewswire.com

Long-term performance matters to investors. Allow us to cite other stock price return statistics that we believe more accurately illustrate the long-term trend in EMS' performance:



-7%


EMS' stock return in the last 15 months (from prior to the disclosure of 3Q09 earnings, reduced guidance and the loss of the B2 contract);


-32%


EMS' stock return for the last two years;


-39%


EMS' stock return for the last three years;


-6%


EMS' stock return for the last four years;


+5%


EMS' stock return for the last five years;


-21%


EMS' average underperformance relative to the S&P 500 over these time periods; and


-37%


EMS' average underperformance relative to the Russell 2000 over these time periods.





This record is consistently poor, and I note it merely covers the last five years of the Board's eight year average tenure, Chairman Mowell's ten years as Chairman and his 27 years as a director. Still, the Board's position, as we understand from the new investor presentation, is that investors should trust management and the Board to create stockholder value by executing a "stay-the-course" strategy. This is despite the fact that investors who have trusted EMS with their capital have been punished consistently over many years, and that EMS continues to be highly undervalued relative to its peers and precedent transactions despite the new strategies and products described in the investor presentation.

Instead of staying-the-course and expecting a different result, EMS should explore a sale of the company – an effort that according to the investor presentation "would deprive EMS shareholders of significant future value." If the strategies you have implemented and products you have developed are indeed so valuable, a competitive sale process to knowledgeable potential acquirors would in our view be virtually certain to monetize them in a way the public markets have not over so many years. Moreover, we believe such an outcome could be achieved promptly and generate significantly higher value without the time and operational risk of maintaining the status quo (not to mention the risks of a declining US defense budget). On a risk-adjusted basis, considering EMS' track record, we believe there is no comparison.

Importantly, an EMS strategic alternatives review process at this time would also benefit from a robust mergers and acquisitions market – a window of opportunity that is unlikely to remain open forever. This highly conducive environment coupled with EMS' attractive, undervalued assets provide the Board with an excellent opportunity to achieve an optimal outcome for stockholders. We strongly urge the Board to seize it. As always, we remain available to you for further discussion of these issues.

Sincerely,

Clay B. Lifflander
bizjournals.com

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To: richardred who wrote (2641)12/21/2010 3:12:33 PM
From: Paul Senior
   of 6275
 
"I Hit the Takeover bullseye today with MATK"

Good shooting! Congrats!

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To: Paul Senior who wrote (2643)12/22/2010 11:16:46 AM
From: richardred
   of 6275
 
Thanks-

BTW-New first for me today. I bought my first bank stock. In all my years of investing. I've never bought any airline or bank stock.

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To: richardred who wrote (2644)12/22/2010 11:28:38 AM
From: richardred
   of 6275
 
New buy today. LYBC-Lyons Bancorp, Inc. (LYBC.OB) A backyard company for me. Very Ill liquid though. Less than one mill shares outstanding. IMO- Good dividend yield, Good value stock, and speculative appeal to boot. All qualities I like. Picked up 200 shares at 40.00.

finance.yahoo.com

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To: richardred who wrote (2345)12/22/2010 11:55:07 AM
From: richardred
   of 6275
 
UPDATE 3-Teradata to buy cloud software firm Aprimo for $525
By Himank Sharma and Saqib Iqbal Ahmed

BANGALORE, Dec 22 (Reuters) - Enterprise data warehousing company Teradata Corp (TDC.N) agreed to buy privately held Aprimo for $525 million to expand into cloud software services, as it gears to meet challenges from larger rivals IBM (IBM.N) and Oracle (ORCL.O).

Indianapolis-based Aprimo provides software to its enterprise customers, who use it to analyze data to map out their marketing and advertising efforts.

Cloud computing -- a technology that allows users to access data, software and services over the Internet and corporate networks -- is being touted as the next big trend in the technology sector.

Companies like Teradata, Oracle, EMC Corp (EMC.N) and IBM are shifting their focus from increasingly commoditized hardware to higher-margin software and services, particularly analytics, which help clients analyze market data to plot trends or prevent fraud.

Teradata's peers -- Netezza Inc and 3PAR -- have been snapped up in recent months by IBM and HP (HPQ.N) respectively.

The Aprimo deal follows IBM's $480 million purchase of marketing software firm Unica Corp, Aprimo's rival, in October. [ID:nN13175286]

BRANCHING OUT

The Aprimo buy appears to be "uncharacteristic" of Teradata, Susquehanna Financial analyst Derrick Wood said.

This acquisition puts Teradata more into application space instead of just a database provider, Wood said.

"As competition in Teradata's core market intensifies, it is looking towards related markets to branch out and diversify its total revenue," Wedbush Securities' Michael Nemeroff said.
reuters.com

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To: richardred who wrote (2645)12/22/2010 12:12:54 PM
From: richardred
   of 6275
 
IMO-The small regionals have the best speculative appeal.

Legacy Bancorp shares soar on acquisition
Legacy Bancorp shares soar on news of acquisition by Berkshire Hills

On Wednesday December 22, 2010, 11:37 am

NEW YORK (AP) -- Shares of Legacy Bancorp Inc. soared by 42 percent Wednesday after the regional bank said it was being purchased by its larger rival, Berkshire Hills Bancorp Inc., in a $108 million deal.

THE SPARK: The banks said Tuesday that 90 percent of the deal will be in the form of Berkshire stock and 10 percent will be in cash. Each outstanding share of Legacy common stock will be exchanged for 0.56385 Berkshire common shares plus $1.30 in cash.

THE BIG PICTURE: Berkshire Hills said the acquisition will create a combined institution with $4 billion in assets. Both banks are based in Pittsfield, Mass. and have branches in western Massachusetts and northeastern New York.

After taking into account Berkshire's pending merger with Rome Bancorp, the new bank will have more than 60 offices serving Berkshire County, the Pioneer Valley, New York, and Southern Vermont.

The Legacy acquisition is expected to be complete by June 30 of next year and should be accretive to Berkshire's core earnings by 10 per share in 2012, Berkshire said.

SHARE ACTION: Legacy shares rose $3.61 to $12.21. Berkshire shares fell $1.08, or 5 percent, at $20.20.
reuters.com

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To: richardred who wrote (2498)12/22/2010 12:55:19 PM
From: richardred
   of 6275
 
SFE has another small winner I presume, 25% stake. No disclosure as to the buyout price.

North Jersey firm acquires Quinnova Pharmaceuticals

We may not be seeing a rush of blockbuster acquisitions as 2010 draws to a close, but each December day seems to bring word of a small deal here and there.

On Monday, three transactions involved local companies. Just like some of those Christmas gifts you may have tossed into your shopping cart, they were missing price tags.

Quinnova Pharmaceuticals Inc., of Newtown, Bucks County, was acquired by a unit of Amneal Enterprises L.L.C., a Bridgewater, N.J., maker of generic and specialty pharmaceuticals.

Quinnova develops and sells prescription dermatology drugs, such as Neosalus. And it had attracted a total of $31 million from venture-capital firms in 2006 and 2009.

A privately held company founded in 2002, Amneal tends to keep its financials close to its medicine chest even as it shows a healthy appetite for acquisitions.

Amneal bought Akyma Pharmaceuticals L.L.C., a sales and distribution firm in Kentucky, in June 2007. No terms announced.

In June 2008, Amneal bought Interpharm Holdings Inc., of Hauppage, N.Y. While Amneal again didn’t say what it paid, documents filed by Interpharm with the Securities and Exchange Commission put the purchase price at $61.6 million in cash. The year before it was acquired, Interpharm’s annual sales were $75.6 million.

As for Quinnova, we may yet learn how much Amneal paid because one of Quinnova’s outside investors is publicly held. Wayne-based Safeguard Scientifics Inc. owns 25.7 percent of Quinnova, having invested $5.7 million since October 2009.

In Monday’s second deal, CDI Corp., a Philadelphia supplier of technical and engineering staffing, acquired DSPCon Inc., a software firm in Bridgewater, N.J. Like Amneal, CDI did not disclose the terms of its latest purchase in the press release, only that DSPCon had 40 employees working on aerospace systems.

Finally, Wolters Kluwer Health, the huge Center City-based medical publisher, completed its purchase of Pharmacy OneSource Inc., a Bellevue, Wash., developer of software used in about 1,200 hospitals.

Let’s sing the chorus: Terms were not disclosed.

Read more: philly.com
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From: richardred12/23/2010 8:35:58 AM
   of 6275
 
Conditions Are Ripe for an M&A Boom in 2011
Corporations have the cash and motivation to go back on the hunt for acquisitions after a long drought

By Frank Aquila

Conditions that facilitate mergers and acquisitions are changing—positively, dramatically, and rapidly. Corporate boardrooms are once again abuzz with discussions regarding the next deal. After several years in which worldwide M&A activity dropped steeply, 2010 was a recovery year both worldwide and in the U.S.—but it looks like corporate dealmaking could really roar back into the headlines in 2011.

Many of the largest global companies appear ready to make one or more major acquisitions in the year ahead. That may be good news for shareholders: Studies have shown that M&A deals struck during soft economic periods yield higher returns than those completed during economic booms. While some companies may continue to be reluctant to proceed with acquisitions until conditions are perfect, opportunities for those that do proceed could be greater, because less competition might translate into reasonable prices for target companies.

So why are companies again focused on making acquisitions? While every deal is unique, a few key themes have emerged as M&A activity has picked up since the summer. Deals at the moment are highly strategic while also focusing on short-term revenue and profit growth. Acquisitions can be an effective strategic tool to accelerate growth in both revenue and market share. Companies understand that acquisitions can provide access to markets, products, and technologies that might otherwise be available only after many years of significant capital investment.
Wallowing in Cash

Large corporation clearly have the means, motive, and opportunity to make large acquisitions in 2011:

• MEANS: The largest global public companies have more than $3 trillion in cash reserves on their books, and that is growing every day. In addition, these companies have access to trillions of dollars in debt financing that is currently available at extremely low rates and on very favorable terms.

• MOTIVE: After almost three years of difficult economic times, companies are seeking growth. If organic growth is not available to them in the current slow economy, then an acquisition can provide it. In addition, companies have been able to identify their weak spots during the recession, and acquisitions are an effective means of filling those gaps.

• OPPORTUNITY: Given the length and severity of the economic downturn, many companies have not performed as well and are therefore for sale, shedding assets, or vulnerable to an unsolicited bid. Activist investors are more than happy to push these companies toward a deal.

Of course, companies must also have confidence in the overall economy as well as the desire to pursue a significant acquisition. Signs are that confidence is returning: According to a survey of 150 global businesses conducted by Thomson Reuters and Freeman Consulting, worldwide M&A activity is forecast to increase 36 percent in 2011. Similarly, a recent mergermarket.com survey showed that 82 percent of U.S. business executives and 87 percent of European business executives expect increased M&A activity over the next 6 to 12 months. Not only will corporations be doing deals in 2011; private equity groups have also become increasingly active in the past few months, and they will likely continue to be busy.
Enter Non-U.S. Buyers

What sort of transactions can we expect to see? Sectors where M&A activity is likely to be quite strong include energy, mining, health care, and technology. In addition, look for significant transactions in the consumer product and financial service sectors. Real estate M&A activity may also see a revival. We will probably also see more airline deals in the wake of the recent hook-ups.

Cross­border deals will figure to be a hot spot, with acquirers from Asia and Brazil particularly active.

A few notes of caution are warranted. With lingering high unemployment in the U.S. and elsewhere, the recovery will probably remain fragile and somewhat restrained. The sovereign debt crises in Europe are not fully resolved, and a significant default would have negative effects on the euro and unsettle global capital markets. Since business confidence is an essential ingredient for sustained M&A activity, anything that suggests the recovery is at risk could bring dealmaking to a screeching halt.

If business confidence is maintained, however, M&A activity will likely reach its highest levels since 2007.
businessweek.com

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