Carl Icahn bids $2.6 Billion for CVR
Icahn bids $2.6 billion for CVR, an oil refinery corporation, only two days after publically stating that the company should sell itself. The current offer would pay $30 a share wich is an 8.7 percent of the prior day’s closing. Icahn’s attempt to takeover the company may turn hostile. Icahn wants to avoid another failed acquisition as he was unsuccessful after making many attempts to buy Clorox last year.
Kellogg to Buy Procter & Gamble’s Pringles Group
Kellogg announced on Wednesday that it will buy Procter & Gamble’s Pringles. The recent deal is valued at $2.695 billion after a recent transaction with Diamond Foods failed to take place. Kellogg looks to gain an edge with the snack brand that had $1.5 billion in annual sales. Kellogg will also be adding $2 billion in debt through the deal which already has $5 billion in long-term debt.
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Editorial Staff
Tuesday, February 28, 2012
Friday, February 24, 2012
Market Recap (Feb. 24)
In a holiday-shortened trading week, the Dow Jones Industrial Average (DJIA) ended up 0.26% for the week at 12982.95. The index constantly flirted with the symbolically significant 13000 mark, even going over it a few times in day trading, but did not close once above it. The NASDAQ Composite and the S&P 500 both continued to rise as well, finishing up 0.41% and 0.33% respectively for the week.
On February 21st, Eurogroup officials delivered a long term refinancing option for Greece that included a large haircut of 53.5% for private bondholders and the option for creditors to swap into new bonds with a maturity of 30 years. Investors responded positively towards this new LTRO which, pending bondholder cooperation, should reduce Greece's debt by 107 billion euros and avoid a massive default when 14.4 billion euros worth of Greek bonds come due on March 20th.
Crude oil futures finished the week at $109.87 per barrel, indicating that gas prices will soon eclipse the dangerous $4 per gallon benchmark. Several commodities analysts reported on the possibility of crude reaching $130 per barrel by this August, near the record highs of Summer 2008.
Investors were heartened by the Labor Departments latest report that initial jobless benefit claims for the week were unchanged at 351,000 (the lowest since March 2008) and the four week average fell to 359,000, the lowest in four years.
In terms of fourth quarter earnings reports, Hewlett-Packards woes continued as they announced a 44% year over year drop in profits to $1.5 billion. Retail stocks performed relatively well this week with Target leading the pack on the back of better than expected 4Q earnings. AIG reported earnings of 82 cents per share that far outpaced analyst estimates of 62 cents per share, sending its stock price up. The company enjoyed a $17.7 billion gain due to the release of the allowance of deferred tax asset valuation.
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Editorial Staff
On February 21st, Eurogroup officials delivered a long term refinancing option for Greece that included a large haircut of 53.5% for private bondholders and the option for creditors to swap into new bonds with a maturity of 30 years. Investors responded positively towards this new LTRO which, pending bondholder cooperation, should reduce Greece's debt by 107 billion euros and avoid a massive default when 14.4 billion euros worth of Greek bonds come due on March 20th.
Crude oil futures finished the week at $109.87 per barrel, indicating that gas prices will soon eclipse the dangerous $4 per gallon benchmark. Several commodities analysts reported on the possibility of crude reaching $130 per barrel by this August, near the record highs of Summer 2008.
Investors were heartened by the Labor Departments latest report that initial jobless benefit claims for the week were unchanged at 351,000 (the lowest since March 2008) and the four week average fell to 359,000, the lowest in four years.
In terms of fourth quarter earnings reports, Hewlett-Packards woes continued as they announced a 44% year over year drop in profits to $1.5 billion. Retail stocks performed relatively well this week with Target leading the pack on the back of better than expected 4Q earnings. AIG reported earnings of 82 cents per share that far outpaced analyst estimates of 62 cents per share, sending its stock price up. The company enjoyed a $17.7 billion gain due to the release of the allowance of deferred tax asset valuation.
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Editorial Staff
Friday, February 17, 2012
M&A Activity Review
TNT Express Rejects Bid by U.P.S.
TNT announced on Friday that the company turned down a bid from UPS that valued the company at $6.4 billion. However, U.P.S., United Parcel Service, is continuing talks with TNT. The U.P.S. offer valued TNT at 9 euros a share which is about a 46 percent premium to the closing price. This potential deal would represent the largest merger in U.P.S. history. As a result of the talks about a deal, shares of TNT rose 2.6 percent on Friday.
Advent and Goldman Agree to Buy TransUnion for $3 Billion
Transunion accepted an offer to sell the company to Advent International and GS Capital Partners, two private equity firms. GS Capital Partners, a branch of Goldman Sachs, and Advent bought the company from Madison Dearborn Partners and the Pritzker family. The buyout is the largest private equity deal of the year.
Mitsubishi Buys 40% Stake in Encana Shale Gas Assets
Mitsubishi invested $2.9 billion in Encana’s holdings in British Columbia. Encana, a Canadian natural gas producer, owns about 409,000 acres in British Columbia. The $2.9 billion investment was made in exchange for 40% of the company. This deal represents another investment made for shale gas assets. Shale formations and fracking, a method of extracting natural gas and oil from sedimentary rock, have prompted new and increased investments.
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Editorial Staff
TNT announced on Friday that the company turned down a bid from UPS that valued the company at $6.4 billion. However, U.P.S., United Parcel Service, is continuing talks with TNT. The U.P.S. offer valued TNT at 9 euros a share which is about a 46 percent premium to the closing price. This potential deal would represent the largest merger in U.P.S. history. As a result of the talks about a deal, shares of TNT rose 2.6 percent on Friday.
Advent and Goldman Agree to Buy TransUnion for $3 Billion
Transunion accepted an offer to sell the company to Advent International and GS Capital Partners, two private equity firms. GS Capital Partners, a branch of Goldman Sachs, and Advent bought the company from Madison Dearborn Partners and the Pritzker family. The buyout is the largest private equity deal of the year.
Mitsubishi Buys 40% Stake in Encana Shale Gas Assets
Mitsubishi invested $2.9 billion in Encana’s holdings in British Columbia. Encana, a Canadian natural gas producer, owns about 409,000 acres in British Columbia. The $2.9 billion investment was made in exchange for 40% of the company. This deal represents another investment made for shale gas assets. Shale formations and fracking, a method of extracting natural gas and oil from sedimentary rock, have prompted new and increased investments.
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Editorial Staff
Wednesday, February 15, 2012
Market Recap (Feb. 15)
The Dow Jones Industrial Average (DJIA) continued its remarkably strong rally this week to finish just shy of 13,000 at 12,949.87. The S&P 500 market index ended the week up 1.38% at 1,361.23 thanks in part to large gains in the energy sector. The CBOE volatility index finished the week just below 18, indicating that investors are starting to regain confidence in the stability of global markets.
Hedge fund managers across the globe have been turning significantly more bullish on bets in equities and the international credit market. Many of these investors are basing their strategies on the belief that the European Central Banks long-term refinancing operations which commenced in December and are continuing this month will be successful in propping up struggling European banks.
Oil and gas, chemicals, and basic resources were the biggest gainers this week in terms of market sectors. Gigantic deals such as the recently announced merger between Xstrata (XTA) and Glencore (GLEN), two of the worlds leaders in natural resources, have been steadily driving stock prices skyward. Gasoline prices are now approaching record levels for the season as crude oil futures for March delivery climbed to finish the week at over $104.
European shares ended the week on a good note on the back of speculation that Greeces leaders would reach an agreement on a second bailout by today in order to avoid a disorderly default. Unfortunately, Angela Merkel sustained an embarrassing blow a midst the forced resignation of German president Christian Wulff over a political favors scandal. Merkel, along with French president Nicholas Sarkozy, are widely perceived by investors to be the most important political players in keeping the euro zone solvent. The markets ultimately ended up in part because of the traditional investor optimism that accompanies three-day holiday weekends. Stock markets were closed today in the US in observance of Presidents Day.
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Editorial Staff
Hedge fund managers across the globe have been turning significantly more bullish on bets in equities and the international credit market. Many of these investors are basing their strategies on the belief that the European Central Banks long-term refinancing operations which commenced in December and are continuing this month will be successful in propping up struggling European banks.
Oil and gas, chemicals, and basic resources were the biggest gainers this week in terms of market sectors. Gigantic deals such as the recently announced merger between Xstrata (XTA) and Glencore (GLEN), two of the worlds leaders in natural resources, have been steadily driving stock prices skyward. Gasoline prices are now approaching record levels for the season as crude oil futures for March delivery climbed to finish the week at over $104.
European shares ended the week on a good note on the back of speculation that Greeces leaders would reach an agreement on a second bailout by today in order to avoid a disorderly default. Unfortunately, Angela Merkel sustained an embarrassing blow a midst the forced resignation of German president Christian Wulff over a political favors scandal. Merkel, along with French president Nicholas Sarkozy, are widely perceived by investors to be the most important political players in keeping the euro zone solvent. The markets ultimately ended up in part because of the traditional investor optimism that accompanies three-day holiday weekends. Stock markets were closed today in the US in observance of Presidents Day.
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Editorial Staff
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