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   Strategies & Market TrendsSpeculating in Takeover Targets

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To: Trader2015 who wrote (3941)5/22/2015 2:55:20 PM
From: Ahda
   of 7055
GURE is ripe for takeover. really?

Gulf Resources, Inc. is a holding company. The Company, through its subsidiaries, engaged in manufacturing and trading bromine and crude salt, and manufacturing and selling chemical products used in oil and gas field exploration, oil and gas distribution, oil field drilling, wastewater processing, papermaking chemical agents and inorganic chemicals. The Company operates in three segments, including bromine, crude salt and chemical products. The Company conducts operations through its two wholly owned China subsidiaries, Shouguang City Haoyuan Chemical Company Limited (SCHC) and Shouguang Yuxin Chemical Industry Company Limited (SYCI). Through SCHC, the Company produces and sells bromine and crude salt. Through SYCI, the Company manufactures and sells chemical products.

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To: Ahda who wrote (3942)5/22/2015 4:46:27 PM
From: Trader2015
   of 7055
This is exactly the type of microcap company to be taken over. Market capitalization says this company is worth about 114 mil. Seriously? Company has 111 mil in Cash as of 3/31/15. Tangible Book value is $ 8.07. And their revenue is expected to be 125 mil this year. Read about the Natural Gas potential in their Bromine Wells. I am just sharing. Do your own Due Diligence. Of course I own a few shares. I think much more upside.
Just sayin.

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To: Trader2015 who wrote (3943)5/23/2015 7:36:39 PM
From: richardred
   of 7055
RE- My personal preference is still not to invest in Chinese companies. Reasons in link. I wish you success in your investment. If I miss it . Let the board know how you made out.
Message 28492052

I's much rather speculate in companies that Chinese companies might acquire here. I've had one success of Chinese company buying a division of an American company. That was Datascope- DSCP. The DSCP division was one of the first acquisitions by a Chinese company that I can remember. The company was ultimately acquired by Getinge.

Message 24430951
Message 24390346
Message 25369452

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To: richardred who wrote (3944)5/24/2015 7:50:56 AM
From: Trader2015
   of 7055
Thank you for your response. I am torn on whether to accumulate more shares in this company.This
feedback does help.

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To: Trader2015 who wrote (3945)5/24/2015 9:03:38 AM
From: richardred
1 Recommendation   of 7055
Plain and simple you have the power to do what you want. From my prospective without knowing your personal situation objectives . Why would you want to add more shares in a company you are doubting? Myself, I'd stick with a company I was more confident in. You already have shares in the company to participate in an upside move. From an earlier post. Seems like you know what value is . In Speculating in Takeover Targets. These days Top line growth and the Hunter companies objectives play a bigger role. This more so than value and shareholder enhancement , IMO. There are plenty of fish in the investing sea to diversify your money.

Good luck to you


P.S. My caveat -Listen to what everybody has to say, but do what you think is right yourself.

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From: Glenn Petersen5/25/2015 12:38:09 PM
   of 7055
Charter Near Deal for Time Warner Cable at $195 a Share

by Alex Sherman Ed Hammond
10:03 AM CDT, May 25, 2015

Charter Communications Inc. is near an agreement to buy Time Warner Cable Inc. for about $55.1 billion in cash and stock, according to people familiar with the matter.

Charter will pay about $195 a share, with $100 in cash and the rest in its own stock, said the people, who asked not to be identified because the talks are confidential. The deal could be announced as soon as tomorrow, they said. Bright House Networks, a smaller cable company that Charter is trying to buy, will also be merged into the combined entity, they said.

Charter, the fourth-biggest U.S. cable company, is making its second move on No. 2 Time Warner Cable after its early 2014 bid was rejected and Comcast Corp. swooped in with a competing offer. Charter, whose largest shareholder is billionaire John Malone, got another shot when the Comcast deal fell apart in April because of regulatory scrutiny.

Spokespeople for Charter and Time Warner Cable declined to comment.

The price is 14 percent above Time Warner Cable’s closing price on May 22. Shareholders will have the option to accept as much as $115 a share in cash and less Charter stock, the people said. The deal value of $55.1 billion is for Time Warner’s equity. Charter also will assume debt in the transaction.

Surprise Entry

Dealmaking is heating up in an industry facing waning demand for traditional pay-TV packages and competition from Netflix, Amazon and other online services. While many analysts predicted a tie-up between Charter and Time Warner Cable, French cable billionaire Patrick Drahi made a surprise entry in the U.S. market on May 20 by agreeing to buy a smaller rival. While in the country, he also met with Time Warner Cable Chief Executive Officer Rob Marcus, according to a person with knowledge of the matter.

Liberty Broadband Corp., the Malone entity that holds the stake in Charter as well as shares of Time Warner Cable, will buy $5 billion of new Charter stock at the current price to help fund the deal, said the people. The transaction also has a breakup fee of $2 billion, which anticipates a possible bid by Drahi’s Altice SA and antitrust concerns, they said.

The Time Warner Cable deal enables Charter to almost quadruple the number of its cable subscribers, gaining 12 million customers in cities including New York, Los Angeles and Dallas.

Bright House Deal

Charter has also been renegotiating its offer to buy billionaire Si Newhouse Jr.’s Bright House Networks for $10.4 billion. That agreement had been in jeopardy because it depended on Comcast closing its merger with Time Warner Cable, which has the right to match or block the deal because of a longstanding arrangement to negotiate programming and other deals for Bright House.

Cable providers have been expanding their Internet offerings to help offset the loss of cable subscribers. By opposing the Comcast merger, regulators have showed they are taking a hard look at deals that give companies too much power over broadband Internet, which is increasingly becoming the way that people watch TV.

Federal Communications Commission Chairman Tom Wheeler called Time Warner Cable’s Marcus and Charter CEO Tom Rutledge recently to dispel notions that industry mergers won’t be approved by regulators, a person with knowledge of the calls has said. Wheeler told the CEOs that any transaction would be judged on merit, and there was no flat ban on cable combinations, the person said.

Mergers may give cable companies more leverage when negotiating contracts with television networks, which could keep cable TV prices down for consumers.

Investors have been anticipating more deals. Cablevision Systems Corp., the No. 5 in the industry, rose 17 percent on May 20, the day Altice agreed to buy a controlling stake in Suddenlink Communications, the No. 7.

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To: richardred who wrote (3936)5/27/2015 8:34:24 AM
From: richardred
   of 7055
Hormel goes organic with latest big food acquisition

Hormel Foods is paying $775 million to buy organic processed meats maker Applegate Farms, the latest deal by a food giant for a smaller rival in the grocery aisle.

“A growing number of consumers are choosing natural and organic products,” said Hormel Foods Chief Executive Jeffrey Ettinger.

The deal will add Applegate’s deli meats, frozen burgers and dinner sausages to Hormel’s [fortune-stock symbol=”HRL”] portfolio of brands, which already includes Spam, Skippy peanut butter and the company’s namesake meats. The acquisition, which is expected to lift future profits, won’t add too much to Hormel’s sales. Applegate’s annual sales are expected to reach $340 million in 2015, a sliver of the roughly $9.3 billion Hormel records annually.

But the acquisition of Applegate is important for two key reasons. It is the latest deal by a “Big Food” maker for a smaller player. Smaller food makers have reported sharp sales growth as grocery shoppers at times turn away from legacy, established brands. Recent deals have included Hershey’s [fortune-stock symbol=”HSY”] acquisition of beef jerky maker Krave, Post Holdings’ [fortune-stock symbol=”POST”] deal for MOM brands, and Hormel’s own $450 million deal last year for Muscle Milk maker CytoSports.

Food companies are spending big on newer brands to lure consumers that want food they consider to be healthier. Applegate plays into the feel-good attitude that has been pervasive in the category. For example, Applegate says it produces meats that are “raised humanely without antibiotics and hormones.” The company’s webpage features an interview with CEO Stephen McDonnell talking about how he and other consumers want meats that don’t contain bad ingredients.

And like the Hershey deal for Krave, Hormel’s acquisition of Applegate is another big bet on protein. Industry analysts like NPD Group have flagged rising interest in protein, with studies showing nearly half of primary grocery shoppers have purchased protein-enriched foods and many are willing to pay more for those products.

Applegate will operate as a standalone subsidiary after the transaction is completed. The company has 100 employees, located primarily in Bridgewater, N.J.

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From: richardred5/29/2015 9:34:16 AM
   of 7055
Some biggie mergers. The deals keep flowing.

Is Intel about to make its biggest-ever acquisition?

by Chris Matthews


May 29, 2015, 7:55 AM EDT

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Chip giant Intel is about to get a little bit bigger.

According to a report Thursday in The New York Post, Intel INTC 1.31% is set to acquire fellow chip maker Altera Corp ALTR 3.11% for $15 billion, or $54 per share.

That’s a 15% premium over Altera’s closing price on Thursday, which came in at $46.97 per share. That’s far higher than the roughly $35 per share Altera was trading at back in March, when rumors of the deal first started to leak.

The news comes soon after Intel competitor Avago AVGO 1.99% announced a $37 billion takeover of rival chipmaker Broadcom BRCM -0.97% , a deal which was finalized on Thursday.

The main attraction of Altera for Intel, observers say, would likely be its ‘field programmable gate arrays’–integrated circuits that are designed so as to let customers or designers configure them after manufacturing. FPGAs are particularly in demand from companies who need them for data centers to run Cloud-based services.

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To: richardred who wrote (3915)5/29/2015 2:35:32 PM
From: richardred
   of 7055
Added to CTG in quantity today.

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From: Glenn Petersen5/30/2015 8:27:03 AM
   of 7055
Behind the Wave of Semiconductor Deals: Margin Pressures

Investors seeking fatter profit have driven the latest wave of consolidation

By Don Clark
The Wall Street Journal
May 29, 2015 7:00 p.m. ET

Chip makers are facing many pressures pushing them to combine. The biggest, though, comes from Wall Street.

The stock market lately has penalized semiconductor companies that don’t show they can improve profit margins, a tough task in a mature industry subject to fierce price pressure. Some chief executives of publicly held silicon companies also are concluding that the only way to boost share prices is to sell out. A savvy tie-up can bring cost savings or other benefits that yield fatter margins that investors love. Meanwhile, some potential buyers are flush with cash or are finding it easy to raise debt for deals that could boost their earnings.

The pressure has led to a wave of consolidation in the industry that reached a peak—perhaps momentary—with Wednesday’s announcement that Avago Technologies Ltd. AVGO 4.00 % offered a rich $37 billion for rival wireless-chip maker Broadcom Corp. BRCM 1.07 %

The pressures facing chip makers are paradoxical. Microprocessors are the engines of the digital transformation that is remaking business and cultural life world-wide. Small squares of silicon are at the center of trends that are expected to generate major growth well into the future, especially mobile computing but also the Internet of Things, which promises to put processors in everyday items from refrigerators to luggage to clothing.

Some companies that haven’t found a buyer are feeling the heat. Intel Corp. INTC 1.32 % and Altera Corp. ALTR 4.00 % recently renewed buyout talks that had stalled in April, people familiar with the matter said, after Altera shareholders such as TIG Advisors LLC protested its earlier rejection of an Intel offer at a valuation that was seen as higher than the company could reach on its own.

Intel and Altera are in advanced talks and could strike a deal as soon as Monday, people familiar with the matter said. Altera shares soared nearly 29% in March when The Wall Street Journal first reported the companies were in talks. Intel’s share price rose more than 6% then on the news.

On Thursday, Broadcom said rewarding its shareholders was the prime motivation for accepting the cash-and-stock offer from Avago, a company that has pursued acquisitions and whose shares have outpaced its peers.

The two companies predicted they could cut $750 million in annual expenses from the combined entity within 18 months of the deal closing, leading to operating profit margins of 40% versus 24% for Broadcom alone.

The push to consolidate isn’t a positive trend for employees. Avago and Broadcom said it was too early to spell out plans for head count reduction, but they pointed to duplication in support functions like sales, administration, marketing and customer support.

“To reduce costs, you have to get rid of people,” said Handel Jones, a consultant to semiconductor companies who heads International Business Strategies Inc. “This is a job-destruction activity.”

Besides cutting jobs, chip makers find they can cut costs by pushing more products using a sales force that remains roughly the same size. That tactic is expected to drive much of the $500 million in cost savings predicted by NXP Semiconductor Inc. after its $11.8 billion purchase of Freescale Semiconductor Inc. has closed.

Cypress Semiconductor Corp. CY -1.58 % has benefited in the same way from its purchase of Spansion Inc., which it acquired recently in an all-stock transaction valued at $1.6 billion when it was announced in December. The companies estimated they could deliver $135 million in cost savings in three years, in part by offering additional products without hiring more sales staff.

Cypress CEO T.J. Rodgers, who leads the combined companies, estimated that more than 1,000 employees would be laid off and 50 offices around the world would close as the operations were combined.

Beyond the cost savings, Mr. Rodgers said, the deal filled in the product line. Cypress, for example, gained access to Spansion chips that allowed it to become a supplier of electronics for cars.

“We are in the middle of a wave right now,” he said in a March interview. “The new theme is, you have to integrate to get scale to survive.”

The semiconductor industry’s consolidation coincides with declines in some chip businesses, notably for PCs, said Jon Erensen, a Gartner Inc. IT -0.84 % analyst. Meanwhile sales of tablets, which helped draw consumer dollars from PCs, have been slowing since 2013; Gartner predicts sales to grow just 4% this year. Smartphone sales outside of China are also softer than in recent years, he added.

After total chip sales grew 7.9% in 2014, Gartner recently estimated 2015 sales would grow 4% to $354 billion—and Mr. Erensen expected that forecast to be trimmed. He believed the Avago-Broadcom combination and others were inspired by what’s called the Internet of Things, the use of sensors, processors and other chips to an array of items in homes and businesses.

Investors also view chip makers less favorably than they once did. Over the past 20 years, semiconductor companies enjoyed an average price premium of 32.5% over other companies in the S&P 500 stock-index, as measured by their ratio of stock price to earnings, according to analysts at Sanford C. Bernstein. They are currently trading at a 15% discount to that index.

Tech investors more recently have preferred to put their money into companies like Facebook Inc. FB -1.19 % that have much wider profit margins and prospects of much faster revenue growth. Semiconductor margins are held down by factors like price competition from Taiwan and China, and chip makers must cut their prices accordingly.

“Pricing is collapsing,” says Stacy Rasgon, a Bernstein analyst. “The profit pool is going away.

Qualcomm Inc., QCOM -1.30 % the biggest maker of chips for smartphone, faces concerns about lower prices due to competition from rivals such as Taiwan-based MediaTek Inc. 2454 1.34 % Activist investor Jana Partners is pushing the company to consider options such as breaking up to boost its share price, which is off about 12% over the past year.

Other barriers to fat margins are technological. Miniaturization techniques that squeeze more transistors on a chip raise the cost of designing them. At the same time, device makers demand that more functions once found on separate chips—sometimes from separate companies—are integrated onto single pieces of silicon.

Companies should respond by combining with others that sell different chips, and by integrating disparate engineering disciplines, said Levy Gerzberg, the former chief executive of Zoran Corp., which was sold to British chip maker CSR CSRE -0.04 % PLC in 2011 for $679 million. “It’s not just a matter of being bigger,” he said. “By combining the two companies, we could provide a more complete solution to our customers.”

—Dana Mattioli contributed to this article.

Write to Don Clark at

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