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   Strategies & Market TrendsSpeculating in Takeover Targets

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From: richardred9/29/2014 10:13:36 AM
   of 6649
New buy today MLR-Miller Industries Inc. Just over a 3% yield and some earnings momentum, sales growth, low insider ownership, low shares outstanding, Zero debt.

All the things I like in a potential target.

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To: richardred who wrote (3119)9/29/2014 12:51:40 PM
From: richardred
   of 6649
Coffee & a Bagel
Will GMCR be interested in controlling its supplier JVA?

Bagel Maker Einstein Noah Sold to German Firm for $374 Million
By William Alden September 29, 2014 10:13 amSeptember 29, 2014 10:13 am


Credit Einstein Brothers Bagels

On today’s menu: bagels, with a Wall Street buyout.

The Einstein Noah Restaurant Group, whose bagel shops include Einstein Brothers Bagels, Noah’s New York Bagels and Manhattan Bagel, said on Monday that it would sell itself to JAB Holding Company, a German conglomerate formerly called Joh. A. Benckiser, for about $374 million.

The price of $20.25 a share in cash represents a 47 percent premium over Einstein Noah’s 30-day average trading price, the company said.

Shares of Einstein Noah, listed under the ticker symbol BAGL, shot up 50 percent at the start of trading on Monday, to $20.11 a share.

The deal, in theory, could yield some breakfast-oriented synergies. The buyer, an investment vehicle for the wealthy Reimann family of Germany, already controls a coffee empire: Through three deals in 2012 and 2013, it acquired Peet’s Coffee & Tea, Caribou Coffee and D.E Master Blenders.

But JAB’s interests are not confined to the most important meal of the day. It also owns shoe brands like Jimmy Choo and Bally, and has a majority stake in the beauty company Coty.

Einstein Noah will remain headquartered in Lakewood, Colo., should the deal close. And it said it would operate as a stand-alone business in the JAB portfolio. Michael Tattersfield, the chief executive of Caribou Coffee, would become Einstein Noah’s chairman.

David Einhorn, whose hedge fund is Einstein Noah’s largest shareholder, with a stake above 35 percent, said he supported the sale to JAB. He called the deal a “win-win for all parties.”

“For more than a decade, we have worked closely with the Einstein Noah Restaurant Group to execute a turnaround plan, reducing debt and expanding its store footprint,” Mr. Einhorn said in a statement. “J.A.B. is an experienced firm that will lead Einstein Noah Restaurant Group into its next phase of growth.”

The deal has been approved by the bagel maker’s board but is subject to a majority of investors tendering their shares. Mr. Einhorn’s hedge fund, Greenlight Capital, plans to tender its shares in support of the deal.

E. Nelson Heumann, the chairman of Einstein Noah, said in a statement that the deal would help the company “continue to revitalize our brand, enhance our nationwide footprint and solidify our position as the leader in the fresh-baked bagels industry.”

BDT Capital Partners, a merchant bank in Chicago run by Byron D. Trott, is a minority investor in the deal alongside JAB. The bank, along with Citigroup, also provided advice to JAB, while Skadden, Arps, Slate, Meagher & Flom provided legal advice.

Einstein Noah was advised by Stifel and the law firm Alston & Bird.

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To: richardred who wrote (3741)9/30/2014 8:04:23 AM
From: richardred
   of 6649
Cavco Shows Interest in Acquiring Skyline Corporation

Manufacturing housing company, Cavco Industries, Inc. ( CVCO), formally expressed its intention to purchase Indiana-based manufacturing housing company, Skyline Corp. ( SKY), sending shares of the latter soaring by around 23%.

Over the past several weeks, Phoenix, AZ-based Cavco tried to persuade Skyline’s board to engage in a friendly discussion. Cavco claims it has various proposals to improve Skyline’s shareholder value which also includes an outright purchase of Skyline at a significant premium to its current market price.

However, Skyline’s board failed to respond within the stipulated time coaxing Cavco to announce the proposed buyout offer which it claims will provide liquidity for Skyline shareholders at a premium of 29% to 66% above the Sep 24, 2014 closing price of $2.71 per share.

Skyline has reported pre-tax losses for seven consecutive financial years — 2008 to 2014 — due to distressed manufacturing housing industry conditions, tightening credit markets and unfavorable economic conditions. The company is also facing cash crunch. Its share price has declined 45% year-to-date through Sep 25. Last month, Skyline’s independent accounting firm also issued a qualified opinion regarding its ability to continue as a going concern.

Cavco claims that Skyline’s management has not taken proper steps to address its challenges. Cavco believes that it has the experience to improve results at troubled manufacturing housing companies and thus a merger would be in the best interest of Skyline shareholders, employees and customers.

A day earlier, Skyline expressed interest in selling its Recreational Vehicle Division whose sales declined 33% in the first nine months of fiscal 2014 to another company to improve its cash position. However, Cavco believes that this would only provide the troubled company short-term liquidity without addressing challenges at its larger housing segment which has been accounting for the majority of its losses.

Neither Cavco nor Skyline has been assigned a Zacks Rank. Other stocks in the broader housing sector worth considering include PGT, Inc. ( PGTI) and United Rentals, Inc. ( URI). Both the stocks carry a Zacks Rank #2 (Buy).

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To: richardred who wrote (3806)9/30/2014 8:38:57 AM
From: richardred
   of 6649
Cavco Industries Inc. attempting hostile takeover of Elkhart-based Skyline Corp.
The news comes as the Elkhart-based company negotiates a deal to spin off its recreational vehicle division and sell it to Evergreen RV.

Jennifer Lamirand cleans up a weather sealed joint on a Skyline travel trailer at the Elkhart RV Open House Week Sept. 15, 2014. A Phoenix-based competitor is trying to acquire the Elkhart company in a hostile takeover bid. (The Elkhart Truth/file photo)

Jeff Parrott
Posted on Sept. 29, 2014 at 6:06 p.m.

Phoenix-based Cavco Industries Inc., a competitor in the manufactured housing industry, is attempting a hostile takeover of Elkhart-based Skyline Corp.

After making several offers to buy the struggling manufactured housing and recreational vehicle maker, Cavco said in a statement released Friday, Sept. 27, that it never received a reply from Skyline.

In an open letter to Skyline’s board of directors, Cavco chairman and CEO Joseph Stegmayer said Cavco will “pursue other approaches” if Skyline didn’t agree to promptly meet with and “discuss a potential transaction” by Monday, Sept. 29.

In the letter, Stegmayer says he first contacted Skyline’s founder Art Decio in October 2011 about Cavco’s interest in buying Skyline, but he did not hear back from him. Last year, on Aug. 7, he visited with Skyline’s president and CEO, Bruce Page, in Skyline’s offices. After Stegmayer again expressed Cavco’s interest, Page indicated that he would discuss Cavco’s interest with Decio and contact Stegmayer again, but Page never responded again, Stegmayer says in the letter.

Then came news on Aug. 22 in Skyline’s annual statement that its independent auditing firm, Crowe Horwath, had expressed “substantial doubt” that Skyline could continue operating because of its recurring losses and lack of capital from outside funding sources.

Skyline has reported annual losses before income taxes for seven consecutive years, with losses totaling about $122 million.

Cavco then formally expressed its interest to buy out the company in two separate letters dated Aug. 25 and Sept. 5 to CEO Page and the members of the Skyline board of directors, Stegmayer wrote.

Cavco was offering Skyline’s shareholders a price between $3.50 and $4.50 per share in an all-cash transaction. That would represent a 29-percent to 66-percent premium to the Sept. 24 closing price of $2.71 per share.

The stock closed at $3.50 on Friday following Cavco’s announcement of its takeover bid and news that Skyline had signed a letter of interest to spin off its recreational business division and sell it to Middlebury-based Evergreen RV.

Stegmayer declined Monday to discuss what “other approaches” Cavco would take if Skyline continued to ignore its overtures.

“This is an ongoing situation and we’re not in a position to comment on day-to-day operations,” Stegmayer said. “We’re hoping they’ll want to talk to us. Really, the question is are they going to have a friendly discussion with us?”

The Elkhart Truth left a message Monday with Decio’s secretary seeking his comment. A man who declined to identify himself returned the call later in the day and said that a Skyline official would not be available to comment until Tuesday.

In a hostile takeover, a corporate raider attempts to gain control of a target corporation over the target’s objections. If the raider can elicit no response from the target, its next step could be to approach shareholders directly and offer to buy its stock at a price significantly higher than its current market value, said certified public accountant Dan Smogor, a partner who specializes in corporate accounting at Kruggel Lawton, a South Bend/Elkhart accounting firm.

Noting he was speaking generally and not specifically about the Cavco-Skyline situation, Smogor said the raider could buy at least 51 percent of the target’s outstanding shares, or it could buy a smaller percentage while attempting to persuade shareholders who own more than half of the stock to vote the raider’s way on key moves it thinks will improve the company’s value, in what’s known as a “proxy fight.”

“20 percent is pretty influential if you have a good game plan behind it,” Smogor said.

According to Skyline’s most recent annual statement listing those with at least five percent of Skyline’s nearly 8.4 million outstanding shares, Decio owns 17.1 percent, followed by Wells Fargo & Co. with 14.1 percent and New York-based GAMCO Investors Inc. with 11.9 percent.

Stegmayer said Cavco wants to keep Skyline operating.

“As we stated clearly in our press release, we have a good admiration for the operations of the Skyline brand,” Stegmayer said. “Our intention is not to close them down. Certainly not.”

In its press release Friday, Cavco cited several reasons that its proposal “makes sense” for Skyline shareholders:

  • Skyline shares declined about 80 pecent for the three-year period that ended Dec. 31.
  • Its shares declined an additional 48 percent for this calendar year, as of Sept. 24.
  • Skyline has exhausted its cash position and recently borrowed $6.3 million on life insurance policies, which contradicts what Skyline described as recently as Sept. 25 when it stated that its balance sheet “is among the soundest in American industry with a strong cash position and no corporate debt.”
In the press release, Stegmayer also says his attempts to discuss the acquisition included his attendance at Skyline’s annual shareholder meeting Sept. 22. At the meeting, management did not present a report on operations, discuss any plans to address its current challenges, or open up the meeting to questions from shareholders, Stegmayer said.

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To: richardred who wrote (3807)9/30/2014 8:48:24 AM
From: richardred
   of 6649
Any interest in SKY Warren? Sure fits with Clayton.

How Warren Buffett Would Cash In On Mobile Home Deregulation

Posted: 05/22/2014 9:35 pm EDT Updated: 05/22/2014 9:59 pm EDT

WASHINGTON -- Warren Buffett's Berkshire Hathaway conglomerate owns the two dominant lenders in the mobile home business -- 21st Mortgage Corp., and Vanderbilt Mortgage and Finance Co. Buffett's companies on Thursday manhandled the House Financial Services Committee, securing bipartisan passage of a bill to let them charge borrowers higher fees and interest rates on loans for manufactured housing.

The bill passed along with other deregulation measures that would eliminate many investor protections and allow lenders to charge higher fees on mortgages. Democrats overwhelmingly opposed seven of the bills that would punch loopholes in Securities and Exchange Commission rules requiring firms to disclose business information to their investors. Two more modest measures -- one changing the definition of investment advisors, another requiring an SEC study -- garnered unanimous support.

But the mobile home bill and separate legislation to increase title insurance fees passed with substantial Democratic backing, despite objections from consumer protection advocates and progressive members, including Rep. Keith Ellison (D-Minn.).

The extent of bipartisan support for the consumer bills is unclear, since both passed via voice vote -- meaning there was no official tally of lawmaker positions, giving cover to Democrats who don't want to go on record supporting the bill as it stands. The most prominent Democratic supporter of the mobile home deregulation, Rep. Terri Sewell of Alabama, is working to lower the sky-high interest rates proposed under the version that passed Thursday.

Loans for manufactured housing are tricky for consumer advocates. Traditional mortgages offer buyers of traditional homes the ability to own an asset that may increase in value. That's not the case for the vast majority of manufactured homes, which lose value as soon as they are purchased, much like automobiles. More than 22 million Americans live in manufactured homes, and about 8 million loans are issued each year, most of them short-term. Most loans are for less than $75,000, much lower than the dollar amount for traditional mortgages, resulting in slimmer total profit on interest rates for lenders.

The mobile home bill is not likely to become law. But the mobile home lobby, which includes Buffett's companies, hopes that a bipartisan show of support will pressure the Consumer Financial Protection Bureau to relax its current definition of what constitutes a "high-cost" loan for manufactured housing. Industry experts say it's unprofitable to issue loans deemed "high-cost," because they carry a stigma and include requirements like mandatory borrower counseling from independent experts.

Dodd-Frank allowed the CFPB to write rules setting "high-cost" loan standards, and the agency currently includes loans with an interest rate 8.5 percentage points higher than the prime rate. The bill approved by committee on Thursday would set the rate at 12.5 percentage points over prime for some loans, and give the CFPB the authority to boost it as high as 14.5 percent -- unlikely under the current administration, but plausible under a Republican-appointed CFPB director. Higher interest rates would mean bigger profits for mobile home lenders. The prime rate on traditional mortgages is currently about 3.25 percent.

The mobile home lending lobby, led by the Manufactured Housing Institute (Buffett companies 21st Mortgage and Clayton Homes, which owns Vanderbilt, serve on its board), said the industry has been unable to make many loans since the new Dodd-Frank rules went into effect in January. The CFPB has been seeking market data from the mobile home industry since 2011, and Ellison offered an amendment on Thursday requiring the CFPB to conduct a study on access to credit in the industry, which was rejected by a voice vote.

“This legislation would ensure that manufactured housing remains a viable affordable housing option, particularly in rural, distressed and underserved areas," Nathan Smith, chair of Manufactured Housing Institute, said in a press release applauding passage of the bill.

Reps. David Scott (D-Ga.), Gary Peters (D-Mich.), Betty McCollum (D-Minn), Greg Meeks (D-N.Y.) and Michael Doyle (D-Pa.) and five Republicans introduced a bill that would allow mortgage brokers and title insurance companies to charge borrowers higher fees, and still qualify for perks in the securitization market. The 2010 Dodd-Frank bank reform law established a new rules making it easier and more profitable to sell high-quality, low-risk mortgages to investors. The rules cap the total fees that lenders can charge borrowers at 3 percent of the loan value. But a bill passed Thursday would exclude some charges for title insurance from this limit.

The National Consumer Law Center said the bill "leaves the door open for abuses that were typical in the recent subprime crisis." The bill passed by a voice vote.

Ellison, who did not support the overall bill, presented amendments to ban kickback payments from mortgage brokers to title insurance companies and to strengthen judicial review of the process. Both were thrown out without a vote by Committee Chair Jeb Hensarling (R-Texas).

The bills will now go to the House floor, where the Republican majority has the votes to secure passage. The Democratic Senate is unlikely to bring them up, although both chambers approved legislation deregulating SEC investor disclosure requirements was approved in 2012 with support from President Barack Obama.

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To: richardred who wrote (3717)9/30/2014 10:01:24 AM
From: richardred
   of 6649
Close only counts in Horseshoes- Missed the Move In Move and then the Takeout. Oh Well

News Corp. to buy Move Inc. for about $950 million News Corp. to buy online real estate business Move for$950 million in cash

NEW YORK (AP) -- News Corp. is spending about $950 million to buy the online real estate business Move Inc. in a deal that aims to speed up the media company's digital expansion.

News Corp. says it will pay $21 per share in cash for each outstanding share of Move. That represents a 37 percent premium over the stock's closing stock price of $15.29 on Monday.

Move operates the website and News Corp. says it displays more than 98 percent of all for-sale properties listed in the United States. The media company says Move's network of websites reaches about 35 million people per month.

New York-based News Corp., which is controlled by Rupert Murdoch, expects the deal to close at the end of the year. Move's board has unanimously approved the acquisition.

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From: Glenn Petersen9/30/2014 1:19:51 PM
1 Recommendation   of 6649
EBay Without PayPal Makes Both Tempting Targets

By Joshua Brustein
Bloomberg Businessweek
September 30, 2014

Photograph by Matt Cardy/Getty Images

EBay ( EBAY) has decided that Carl Icahn was right after all, and said on Tuesday that it would spin off PayPal into an independent company, a move it until now roundly opposed. The company says now is the time to split because PayPal does a decreasing proportion of its business through EBay. Currently 30 percent of PayPal’s business comes through the e-commerce site, and PayPal’s non-EBay business is growing three times as fast.

By splitting up, both companies can focus on what they’re good at, says EBay Chief Executive Officer John Donahoe. He quickly adds that neither is for sale. That doesn’t mean companies won’t be interested in buying either EBay, PayPal, or both. Both companies might be more valuable as part of a larger company than they will be on their own.

So let’s undertake a thought experiment: Who would buy them? PayPal’s payment platform, with 150 million users, would seem attractive to payment networks eager to get a firmer grip on e-commerce and mobile payments. If Visa ( V), Mastercard ( MA), or American Express ( AXP) were to purchase the company (American Express executive Dan Schulman has been named president of PayPal and CEO-designate) each could subtly tilt customers toward its own network without changing the service simply by making it the default payment method. A further potential buyer could be Google ( GOOG), which is probably feeling pressured to jump start its struggling mobile wallet business by the introduction of Apple Pay.

PayPal wouldn’t come cheap. The split is likely to value the payments business at $47 billion, according to Bloomberg Industries—about 31 times what EBay paid for it in 2002.

EBay has but a single obvious suitor. “There wasn’t really a natural buyer for EBay up until about a week ago,” says Gil Luria, an analyst at Wedbush Securities. “Now there’s a heavily capitalized, cash rich, fast-growing company with ambitions of getting into the west that could easily, easily buy it.”

Alibaba’s ( BABA) initial public offering has left it with a huge cash hoard, and Jack Ma has shown an acquisitive streak. A main concern during the company’s road show was whether it was buying too many businesses. While you can question the wisdom of an e-commerce giant buying a stake in a soccer team, an EBay purchase would give Alibaba a logical way into the U.S. market—removing a major competitor in the process.

EBay would be expensive. Its market value is just under $70 billion, counting PayPal. If PayPal walks away with $47 billion of that value, the company will be worth $23 billion. As of 10 a.m. East Coast time, EBay’s stock had risen about 7 percent since the announcement, increasing the value of Icahn’s 2.5 percent stake by over $110 million.

Brustein is a writer for in New York.

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To: richardred who wrote (3733)9/30/2014 4:17:45 PM
From: Sr K
   of 6649

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From: Glenn Petersen10/1/2014 2:21:18 PM
   of 6649
ANGI is up 19% this afternoon. The company has never posted a profit. The company - or its future owners - may want to revisit their business model. I suspect that the sharing economy companies such as TaskRabbit are starting to nibble away at their client base.

Angie's List May Be Shopping for a Good Buyer

By Justin Bachman
Bloomberg Businessweek
October 01, 2014

Photograph by Scott Eells/Bloomberg

Angie Hicks, co-founder of Angie's List in New York on June 6, 2013

Angie’s List ( ANGI), the recommendation portal that works somewhat like a Yelp ( YELP) for plumbers, painters, and dentists, might be ready to sell itself. The website has hired bankers to sound out prospective buyers but has not definitively decided on the next step, according to a report in the Financial Times.

The company gets about 10 percent of its revenue from e-commerce sales and is working to increase its business in that area, allowing people to purchase services just as they do products. But one trouble with the current model is the heavy marketing expenses needed to secure new members alongside a renewal rate that has been flat year over year. Angie’s List claims 2.8 million members who pay for access to reviews of vendors.

Shares of Indianapolis-based Angie’s List have tumbled more than 70 percent over the past year and hit a 52-week low of $6.28 on Tuesday. The shares surged 25 percent Wednesday, to nearly $8, on news of the potential sale.

The most logical buyers would be Home Depot ( HD), ( AMZN), or Google ( GOOG). All those companies would probably consider moving Angie’s List from paid to a free reviews, which would complement online sales and cut marketing costs, wrote Northland Securities analyst Darren Aftahi in a client note. He upgraded the stock from “underperform” to “market perform.”

Angie Hicks, a Harvard MBA, started the company in Ohio in 1995. She took it public in November 2011 at $13 per share. An Angie’s List spokeswoman said the company does not comment on rumors.

Bachman is an associate editor for

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To: Glenn Petersen who wrote (3812)10/1/2014 3:09:50 PM
From: Ahda
   of 6649
Angies list was very popular here however there is no guarantee that recommendations on one source or the other are totally correct. That brings up a legal question of can there be a suit of some sort under the name of false advertising if there can be it limits the interest larger companies would have as that they do not need.

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