Archive for the ‘Mergers & Acquisition’ Category

Novell Up After Hours On Takeover News

Mar 2, 2010 Mergers & Acquisition, Stock to watch, Stocks On The Move

Shares of embattled network software maker Novell (NOVL) are rising in after hours trading, on news that hedge fund, Elliot Associates, has made an offer of $5.75 a share or roughly $2 billion, for the company.

The stock is trading slightly above that, up $1.23 to $5.98, as traders place bets that better offers might emerge from other networking-related concerns such as Microsoft (MSFT) and Cisco (CSCO) or maybe even IBM (IBM).

Novell’s stock, which was once a very hot commodity back in the nineties, have severely lagged the broader market in the past ten years, dropping 88.88% from the ten year high of $42.44 that was reached on January 4, 1999.

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Hot Stocks Of The Day – 03/02/10

Mar 2, 2010 Mergers & Acquisition, Stocks On The Move

Green Mountain Coffee (GMCR) – $87.88 +$4.27 – Late yesterday, Peet’s Coffee & Tea (PEET) extended an offer to acquire Diedrich Coffee (DDRX), which Green Mountain Coffee is also looking to buy. To the extent that the stock of a company proposing to acquire another, usually drops when a merger/takeover is announced, traders are probably bidding up GMCR shares on the possibility that it may not be acquiring Diedrich Coffee. Green Mountain Coffee’s offer of $36 per share however, is still better that Peet’s $26 per share offer.

MSCI Inc., (MXB) – $32.61 +$4.02 – The shares rallied 14.06% after the company announced that it was acquiring RiskMetrics Group (RISK) for approximately $1.5 billion. MSCI Inc., provides investment decision support tools to investment institutions.

Terra Industries (TRA) -$45.67 +$4.47 – CF Industries (CF) announced an offer to acquire the fertilizer producer for $37.15 in cash and 0.0953 of a share of CF Industries common stock for each Terra Industries share, for a total of $47.40 per share or $4.74 billion. This trumps a $4.1 billion offer by Norwegian company Yara, that was made last month, which Terra agreed to.

This is a long running saga, with Terra Industries having rejected several offers from CF over the past year, apparently not wanting to sell out to a competitor. CF had withdrawn its last offer as it had come to the conclusion that Terra was absolutely not for sale. They made this recent offer, since Terra is now obviously amendable to a sale.

In its letter to Terra’s board, CF stated the following: As you are aware, we were advised that no information would be provided to us because “Terra is not for sale.” Following this response, we withdrew our offer, and we have not had any further communication with you. We do not understand how Terra could have entered into an agreement with Yara without giving CF Industries an opportunity to bid on a level playing field. We also do not understand how Terra could have accepted an offer from Yara with a risk adjusted present value that we believe was not higher than the offer CF Industries had made in December 2009.”

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47% One Day Gain On Smith International Options

Feb 22, 2010 Mergers & Acquisition, Trading Idea

On Friday, we issued a recommendation to subscribers of our Options Capitalist trading advisory service, that they buy the Smith International (SII) March 2010 37 calls, as there was a possibility a bid could be made for the company this week, by Schlumberger (SLB). We also actually posted that trade on the Navivest blog for our readers.

On Sunday, Schlumberger did announce a $45.84 per share bid for the company and the March 37 calls, which we purchased at $2.10, are now bidding $3.10, a nice 47% gain in just one trading day!

We offer compelling options trading ideas such as these twice a week via The Options Capitalist. For more info on the service, visit our site at http://www.navivest.com

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Schlumberger and Smith International Announce Merger

Feb 21, 2010 Mergers & Acquisition

Oilfield services companies Schlumberger (SLB) and Smith International (SII), on Sunday February 21, announced that the boards of both companies have “unanimously approved a definitive merger agreement in which the companies would combine in a stock-for-stock transaction.”

Shareholders of Smith International will receive 0.6966 shares of Schlumberger in exchange for each Smith share. Based on the closing stock prices of Schlumberger on Friday, February 18, 2010, this values the deal at $45.84 for each Smith International. Smith International has 247.4 million shares outstanding, putting the total value of the deal at $11.1 billion.

Upon completion of the deal, Smith International’s shareholders will own 12.8% of Schlumberger’s outstanding shares of common stock.

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Trade Advisory – 02/19/20

Feb 19, 2010 Mergers & Acquisition, Options, Stocks, Trading Idea

The following is from the latest issue of The Options Capitalist, our subscription based trading advisory service for options traders.

The Options Capitalist

Smith International

02/19/2010

Shares of oilfield services company Smith International (SII), are up $4.53 on a report in the Wall Street Journal, that the company is in advanced talks with Schlumberger (SLB)on being acquired, with an announcement possibly coming next week.

The move in the stock today represents a better than 13% move, but we are hoping that if a deal is announced, Schlumberger’s offer will be higher than the current $37.88 price of the stock.

On December 14, 2009, Exxon Mobil (XOM) announced a $41 billion offer for XTO Energy (XTO). Although this was a slightly different field, XTO is an energy producer, the premium was 25% and hopefully an offer from SLB would be at least similar.

Buy the Smith International (SII) March 37 calls. The current price is $1.95 by $2.10, indicating a $0.15 spread, which will cost us a whopping $15 for each contract plus commission. However, if an offer for the company comes in higher than the current price of the stock, that would put us in a very nice position profit wise.

The Options Capitalist
http://www.navivest.com

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