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   Strategies & Market TrendsSpeculating in Takeover Targets

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To: richardred who wrote (2831)9/30/2011 12:55:00 AM
From: richardred
   of 6274
A small activist shareholder. I very much doubt they have any clout. IMO- It would be much better for someone to hypothetically pick up Kodak assets in bankruptcy court. RE: as what happened to Polaroid. It's all about the pension liability. Kodak Rochester employment went from 60,000 in 1982 to about 7500 today.

UPDATE 2-Investor urges Kodak to sell itself
Thu Sep 29, 2011 3:32pm EDT

* Investment Partners tells Kodak to put itself on market

* Kodak shares rise 5 percent (Adds background details, shareholder quote)

Sept 29 (Reuters) - A Eastman Kodak Co ( EK.N) shareholder has urged its board to sell the company due to worries about its financial condition, sending the stock up 5 percent.

Investment Partners Asset Management, which owns Kodak convertible bonds and about 220,000 shares, said on Thursday it wrote to the company's board to ask it to take immediate steps toward a sale.

Kodak did not respond to a request for comment.

The shareholder criticized the company's management and called on large shareholders to push for change. Investment Partners co-principal Gregg Abella told Reuters his firm was gaining some support from other investors.

"I've received messages of support from a number of shareholders, some with large positions," said Abella, who previously criticized Kodak Chief Executive Antonio Perez.

Shareholder Ken Luskin, who said his company Intrinsic Value Asset management holds roughly 4.1 million Kodak shares, also complained about its management.

"I support anything that would remove the current management from managing these assets if it requires selling the company or not. Anything is better than what is currently going on," said Luskin, who added his company had bought the bulk of its Kodak shares in recent months in the hope it could cash in on the value of its technology patents. Maybe Bill Gates will by Kodak as a hobby. <g> Last I knew he still owned about 2 percent.

The public push came days after Kodak shares hit a 38-year low as investors fled because it drew down a credit line by $160 million, raising concerns about cash flow generation and its ability to compete. [ID:nS1E78P17Z]

Kodak shares were up 8 cents, or 5 percent, at $1.63 in late afternoon New York Stock Exchange trading. By comparison shares of Kodak, which has not turned a profit since 2007, hovered at around $90 per share in 1997 before it began its steady descent. (Reporting by Sinead Carew; editing by Lisa Von Ahn and Andre Grenon)

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From: richardred9/30/2011 1:00:40 AM
   of 6274
UPDATE 1-Japan's Toyo Seikan to buy Stolle Machinery for $775 mln
Thu Sep 29, 2011 10:29pm EDT

* Toyo Seikan to buy Stolle from GSO Capital Partners

* Japan firms active in outbound M&A due to strong yen

* Japan outbound M&A at $48.5 bln so far in 2011, on target for record (Adds detail, background)

TOKYO, Sept 30 (Reuters) - Japan's top can and plastic bottle maker, Toyo Seikan , said on Friday it will buy U.S.-based Stolle Machinery for $775 million, adding to a growing list of Japanese companies taking advantage of the strong yen to make acquisitions overseas.

Toyo Seikan said it would pay cash for Stolle Machinery, a Colorado-based maker of canmaking machinery, owned by investment fund GSO Capital Partners.

The deal underscores a strong push by cash-rich Japanese firms to expand outside their mature home market by capitalising on the yen, trading near a record high on the dollar, and lower valuations amid weak U.S. and European share prices.

Japanese firms have so far this year struck $48.5 billion worth of deals abroad, up from $38.4 billion for all of 2010 and on target to match the 2008 record of $67.6 billion outbound acquisitions, according to Thomson Reuters data.

Toyo Seikan said in a statement that it was buying Stolle Machinery, which booked sales of $246 million in the past business year, to help it expand overseas and shift to a business model including both can and machinery production.

Mitsubishi UFJ Morgan Stanley Securities advised on the transaction, Toyo Seikan said.

Underlining the need to grow outside its home market, Toyo Seikan on Thursday warned that it now expected to post a net loss of 1.5 billion yen ($19.5 million) for the year to March 2012, down from the previously forecast profit of 3 billion yen. It cut its annual sales estimate by 1.3 percent to 709 billion yen.

Shares of Toyo Seikan were up 0.2 percent at 1,233 yen. The benchmark Nikkei average rose 0.3 percent. ($1 = 76.840 Japanese Yen) (Reporting by Tim Kelly and Nathan Layne; Editing by Joseph Radford)

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To: richardred who wrote (2849)9/30/2011 1:12:07 AM
From: richardred
   of 6274
NeoPhotonics to acquire manufacturer Santur
NeoPhotonics agrees to buy Santur in deal potentially worth up to $46.7 million

SAN JOSE, Calif. (AP) -- NeoPhotonics Corp., a maker of components for communications networks, said Thursday that it has agreed to acquire Santur Corp. in a deal potentially worth up to $46.7 million.

Under the terms of the deal, NeoPhotonics has agreed to pay $39.2 million in cash, plus an additional $7.5 million contingent on the financial performance of Santur products at the end of next year.

Santur, which is based in Fremont, Calif., designs and manufactures indium phosphide-based products, such as tunable laser arrays and packaging technologies for communications.

The company generated about $21 million in revenue for the six months ended June 30.

Both companies' boards of directors have approved the deal.

The transaction is expected to close later this year.

NeoPhotonics ended the regular trading session down 5 cents at $6.56.

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From: richardred9/30/2011 1:15:26 AM
   of 6274
New UK rules.

Corporate takeovers: rules change By Anousha Sakoui

Takeovers of public companies are always challenging. The way that negotiations play out in public and the need for certain funds (under some takeover rules) are among the factors making them more difficult than private deals. But private equity in particular faces new challenges when trying to take over UK-listed companies.

The UK is an important market for M&A, being one of the most open for corporate takeovers. However, that could be set to change after the Takeover Panel, which seeks to protect the interests of shareholders of target companies, introduced rule changes last week.

Over the past year, the panel has been consulting on a series of revisions of the rules that are designed to protect target companies from undue distractions caused by drawn-out bid processes. Under the changes, deals to take UK companies private are likely to become more difficult, say some M&A advisers, and private equity funds in particular face the brunt.

One key feature will be that upon a leak of talks, the identities of all bidders that have made an approach and not been rebuffed, must be revealed. Moreover, the clock then starts ticking on a four-week deadline by which they have to produce bids. This is expected to put particular strain on private equity funds that prefer to go about approaches to public companies in a consensual way, getting access to due diligence, before launching offers. A limit of four weeks creates an additional strain for private equity funds needing to get funding together. Moreover, they also face having failed attempts publicised.

Leveraged loans typically used for buyouts can be expensive and require both due diligence to have been carried out and time for banks to approve lending commitments. Corporates, many of which are cash rich today, will find meeting this requirement much less onerous. Being in the same industry, their need for due diligence will be less, and their high cash balances and likely synergies will mean funding is less of an issue.

On top of the new requirements, buyers will need to make much greater disclosure around the debt funding they secure for a buyout.

Another potential bugbear is a ban on break fees. These inducements can be important for private equity funds, for whom they offer reassurance that their costs will be covered should the target board seek to change its recommendation or if the fund’s offer is trumped.

Views among advisers are split, with some believing the revised rules will make take-privates much harder in the UK, while others expect no real change.

There are some elements of relief for financial sponsors under the new rules. For example, although there is an automatic so-called “put up or shut up” of four weeks, this can be extended with the consent of the target and the Takeover Panel.

Also, break fees can be paid in certain circumstances such as in the case of a “white knight”, where the target is already the target of a hostile bid, or if the process is an auction process initiated by the bidder.

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To: richardred who wrote (2820)10/1/2011 9:55:06 AM
From: richardred
   of 6274
Dow closes sale of polypropylene business
Dow Chemical closes sale of polypropylene business to Braskem SA
On Friday September 30, 2011, 7:08 pm EDT

MIDLAND, Mich. (AP) -- The Dow Chemical Co. said Friday it completed the sale of its polypropylene business to Brazil's Braskem S.A.

The deal was announced in July, when Braskem said it agreed to pay $323 million.

Dow said the sale would reduce debt and free up capital for faster growing, more profitable businesses.

Polypropylene is a resin that can be molded into plastic products and spun into fiber.

The sale includes two polypropylene factories in Texas and two in Germany with a total annual production capacity of more than 1 million tons.

Dow shares fell $1.28, or 5.4 percent, to close at $22.46 but rose 10 cents after hours.

Braskem shares dropped 60 cents, or 3.7 percent, to $15.62 and fell another 7 cents after hours

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To: richardred who wrote (2884)10/1/2011 10:06:59 AM
From: richardred
   of 6274
Kodak Said to Weigh Bankruptcy Filing to Clear Path for Selling Patents

By Jonathan Keehner and Jeffrey McCracken - Oct 1, 2011 12:01 AM ET Sat Oct 01 04:01:00 GMT 2011

Enlarge image
Kodak Said to Weigh Bankruptcy Filing to Spur Sale of Patent

Jacob Kepler/Bloomberg

A number of suitors, such as Google Inc., have signed confidentiality agreements to examine Eastman Kodak Co.'s assets.

A number of suitors, such as Google Inc., have signed confidentiality agreements to examine Eastman Kodak Co.'s assets. Photographer: Jacob Kepler/Bloomberg

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Sept. 30 (Bloomberg) -- Eastman Kodak Co., the unprofitable 131-year-old camera maker, is weighing options including a bankruptcy filing because of concerns raised by possible bidders for its patent portfolio, said three people with direct knowledge of the process. Zahra Burton, Jeffrey McCracken, Cris Valerio and Mark Crumpton report on Bloomberg Television's "Bottom Line." (Source: Bloomberg)

Play Video

Sept. 27 (Bloomberg) -- Mark Kaufman, an analyst at Rafferty Capital Markets LLC, discusses Eastman Kodak Co.’s stock and the outlook for the company. Kaufman speaks with Betty Liu on Bloomberg Television's "In the Loop." (Source: Bloomberg)

Enlarge image
Eastman Kodak Weighs Bankruptcy

A Kodak 'Bantam Special' camera, 1936. The 131-year-old camera manufacturer is weighing options including bankruptcy. Photograph: Science & Society Picture Library/Getty Images

A Kodak 'Bantam Special' camera, 1936. The 131-year-old camera manufacturer is weighing options including bankruptcy. Photograph: Science & Society Picture Library/Getty Images

Eastman Kodak Co. (EK), the unprofitable 131-year-old camera maker, is weighing options including a bankruptcy filing because of concerns raised by possible buyers of its patent portfolio, said three people with direct knowledge of the process.

Some potential bidders for the patents are wary of proceeding because a purchase may amount to a so-called fraudulent transfer if Kodak is insolvent, said the people, who asked not to be named because the talks are private. Kodak confirmed that it hired Jones Day to advise it on considering options and said it doesn’t plan to seek bankruptcy protection.

“As we sit here today, the company has no intention of filing, and there is no change in our strategy to monetize our intellectual property,” Gerard Meuchner, a spokesman for Kodak, said yesterday. “We’re not concerned about fraudulent conveyance in regards to the sale of our IP portfolio.”

The company will make a $14 million coupon payment due today, he said. Meuchner declined to comment on whether the company had discussed a potential filing with law firms, saying that Kodak is “focused on the fourth quarter and on delivering on our strategy to become a profitable, sustainable digital company.”

A number of suitors, such as Google Inc., have signed confidentiality agreements to examine the assets, said the people. If a sale was judged fraudulent, creditors may sue for more money, said one of the people. A bankruptcy filing may help clear the way for a patent sale, said the people. The sale could fetch about $3 billion, MDB Capital Group estimates.

Law Firms Kodak also has discussed its options with law firm Kirkland & Ellis LLP, the people said. Companies may hire bankruptcy or restructuring counsel to advise on options besides bankruptcy, including debt restructuring, asset sales or operational improvements. Lazard Ltd. (LAZ) is advising Kodak on options for the patent portfolio.

Kodak plunged 91 cents, or 54 percent, to 78 cents a share yesterday in New York Stock Exchange composite trading, the biggest drop since at least 1974. Trading was halted four times by circuit breakers introduced following the May 6, 2010, crash to prevent losses in one security from spreading throughout the stock market.

The cost to protect Kodak’s debt from default jumped. Credit-default swaps linked to the company rose 4 percentage points to 66.5 percent upfront, according to data provider CMA. That means investors would pay $6.65 million initially and $500,000 annually to protect $10 million of Kodak’s debt for five years.

Debt Rating Kodak’s debt is rated CCC by Standard & Poor’s and Caa2 by Moody’s Investors Service. The ratings are the eighth levels below investment grade at each firm.

A representative from Kirkland declined to comment. Katelin Todhunter-Gerberg, a spokeswoman for Mountain View, California- based Google, didn’t immediately respond to voicemail and e-mail messages seeking comment, nor did an official for Jones Day.

Moody’s cut Kodak’s bond ratings Sept. 27 and indicated further reductions may follow, citing “ongoing weakness” in the company’s operations. Kodak, which tapped a credit line last month, has seen its market value sink by more than $30 billion from its 1997 peak.

Chief Executive Officer Antonio Perez, who took the helm in 2005, has sharpened Kodak’s focus on the printing business to help revive revenue. Perez announced plans in July to explore options for the portfolio of more than 1,100 patents, including some for processing, editing and storing images.

‘A Conundrum’ “What’s facing Kodak is whether it can give assurances to third-party buyers that they’re not going to get sued,” Mark Kaufman, an analyst at Rafferty Capital Markets in New York, said yesterday by telephone. “Here’s the irony: If they sell the assets for a good price, the issues of insolvency are over. It’s a conundrum.”

A bankruptcy filing “would be a mechanism to get this asset sale done,” said Kaufman, the only analyst among seven tracked by Bloomberg who rates Kodak as “buy.” He values the patents at $2.4 billion.

Kodak’s sales have fallen by half since 2005 to $7.2 billion last year, with further declines predicted this year and next. The company’s losses since 2008 exceed $1.76 billion.

Kodak, whose origins date back to 1880, was founded by George Eastman, who introduced the Kodak camera eight years later, according to the company’s website. Kodak has shifted away from traditional film as consumers gravitated toward digital cameras.

Kodak Investors Kodak’s top debtholders include Fidelity Management & Research, Fidelity International, Banc One Investment Advisors, Davidson Kempner Capital Management LLC and OppenheimerFunds Inc., according to Bloomberg data.

Fidelity and its affiliates ranked as the largest Eastman Kodak shareholders as of June 30 with a combined 24.4 million shares, most of which was held in the form of bonds that are convertible into common stock, according to regulatory filings.

The largest owner of actual Kodak stock was Legg Mason Inc. (LM)’s LMM LLC, which held 18.2 million shares outright, the equivalent of a 6.8 percent stake, when the second quarter ended, the filings show.

To contact the reporters on this story: Jonathan Keehner in New York at; Jeffrey McCracken in New York at

To contact the editors responsible for this story: Jennifer Sondag at; David Scheer at; Robin Ajello at

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To: richardred who wrote (2820)10/4/2011 9:36:34 AM
From: richardred
   of 6274
PolyOne to acquire ColorMatrix for $486MResin maker PolyOne to acquire specialty additives maker ColorMatrix for $486 million
On Monday October 3, 2011, 11:25 am EDT
CLEVELAND (AP) -- PolyOne Corp., which makes resins used in plastic pipe and other products, said Monday it has agreed to acquire ColorMatrix Group Inc. for $486 million.

ColorMatrix is a manufacturer of specialty additives, liquid colorant and dosing technologies that serve niche markets, such as rigid beverage and food packaging, performance molding and fiber. The additives are used to increase product shelf life, preserve taste and make products more easily recyclable.

PolyOne intends to finance the purchase with a combination of cash on hand and $300 million of long-term debt.

PolyOne expects ColorMatrix to boost earnings by 2 to 3 cents per share in 2012 and between 10 and 12 cents in 2013.

This acquisition is expected to close late this year, once it clears regulatory hurdles. PolyOne said it will discuss the deal in more detail during its third quarter earnings conference call on Oct. 26.

PolyOne said the acquisition will speed up its plan to sell more specialized products. Geographically, it will expand its presence in Asia and Brazil and provide an entry into the Russian market. A majority of ColorMatrix's revenue is made outside North America.

PolyOne shares lost 50 cents, or 4.7 percent, to $10.21 in midday trading. The stock has traded between $9.96 and $16.61 in the past .

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To: richardred who wrote (2842)10/4/2011 10:45:23 AM
From: richardred
   of 6274
Added ECA & TC in quantity today, more than tripling positions. Will wait 30 days from now to take loss on TC highest cost shares.

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To: richardred who wrote (2809)10/4/2011 11:04:20 AM
From: richardred
   of 6274
Added HRS in quantity today.

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To: richardred who wrote (2843)10/5/2011 12:18:31 AM
From: richardred
   of 6274
We now have this thing called the Cloud. A Cloud back when these two were last together (IBM/XTRX )was something in the Big Blue sky.

What say you Big Blue.

IBM Plans Software Acquisitions to Boost Revenue By $20 Billion By 2015

Senior Vice President Steve Mills says IBM is planning more acquisitions in order to fuel growth in its $22.5 billion software business.

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Last week, IBM surpassed Microsoft to become the world’s second-most valuable technology company, after Apple . The company now plans to spend between $100 million to $300 million on targeted acquisitions in order to boost annual revenue by $20 billion by 2015 as its sets its sights on Apple’s number one spot. CEO Sam Palmisano says the company aims to double or triple the pace of sales growth at the companies it acquires, and will look for deals that will be accretive to earnings within two or three years.

IBM took in $99.9 billion in revenue last year, when its software unit had gross margins of 86.9%. The company has made nearly 50 software acquisitions since 2006, more than half of which have been in business-data analysis, on which IBM has spent $14 billion over the last five years. IBM expects its business-analytics products to yield $16 billion in sales by 2015.

The company is likely to make smaller acquisitions, worth less than $10 billion, according to Joel Achramowicz, an analyst at Blaylock Robert Van LLC, an investment bank in Oakland, California. He added that IBM is “making the right acquisitions at the right time.” However, he dropped coverage of IBM back in April, partly because of their unwillingness to make large acquisitions. “That’s one of the reasons we got kind of bored with the stock,” he said. “There are some big software companies out there, which could augment IBM’s position.” In terms of the existing business, “IBM’s done about everything it can to maximize their operating model,” said Achramowicz.

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IBM’s strategy is to look for deals that can augment products it already owns. When the company bought statistical-analysis software company SPSS Inc. for $1.2 billion in 2009, it was to complement the 2007 acquisition of Cognos Inc. , whose software creates executive “dashboards” for quickly perusing business data. The former lends the latter more robust statistics capabilities, while the latter lends the former its ability to visually depict data, which has helped accelerate SPSS’s growth since its purchase, said Mills.

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