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Bank mergers and acquisitions: Many deals to come, but most will be small - Boenning & Scattergood
Boenning & Scattergood notes investment bankers and lawyers appear excited about a busier 2014 as more banks consider the potential sale of their institution. Because banks are sold and not bought, the pace of bank consolidation is largely determined by potential sellers' commitment to accept acquisition prices relative to trading values. They opine that the number of deals will increase from 2013's moderate pace but transactions will be smaller in size given fewer banks with the capacity or desire to buy larger institutions. Banks that appear to be near term acquirers: BMTC, WSBC, NYCB, PBCT... Cos with strong franchise values in our universe would readily attract buyers: AF, FCF.
Gapping down
In reaction to disappointing earnings/guidance: JBL -17.6% (to divest aftermarket services for $725 million; downgraded to Sell from Neutral at Citigroup, downgraded at Needham), PAY -4%, GIS -2%, FDX -1.7%, ALB -0.4%, CFX -0.1%.
Other news: ONTX -17% (announces discontinuation of the Phase 3 ONTRAC study of intravenous rigosertib plus gemcitabine in front-line metastatic pancreatic cancer), TWGP -11.5% (announces sale of its 10.7% equity stake in Canopius Group ), OPXA -9.6% (prices 4.12 mln shares of common stock at $1.70 ), GOGO -5.6% (announces Ripplewood distribution and director resignations), WPCS -4.2% (announces acquisition of BTX Trader LLC, an early stage tech company engaged in developing a proprietary trading platform for bitcoins ), QCOR -3.9% (attributed to RTRX news), MWE -2.9% (has agreed to sell approximately 4,750,000 common units pursuant to a terms agreement under its equity distribution agreement with Citigroup), LNKD -1.8% (still checking), AAPL -1.3% (JBL related implications), GSK -1.1% (still checking), MU -1% (still checking), UPS -0.9% (following FDX results), SDRL -0.7% (still checking), OCRX -0.6% (Ocera Therapeutics and the Roche Group enter into technology transfer and license agreement), K -0.6% (following GIS results), TWO -0.4% (announces Q4 dividend of $0.26/share, down from prior $0.28/share), ETFC -0.3% (reports DARTs for November were 163,411, a 2% increase from October ).
Analyst comments: LSI -0.6% (downgraded to Equal-Weight from Overweight at Morgan Stanley), KGC -0.4% (ticking lower; downgraded to Neutral from Overweight at JP Morgan)
Other news: ONTX -17% (announces discontinuation of the Phase 3 ONTRAC study of intravenous rigosertib plus gemcitabine in front-line metastatic pancreatic cancer), TWGP -11.5% (announces sale of its 10.7% equity stake in Canopius Group ), OPXA -9.6% (prices 4.12 mln shares of common stock at $1.70 ), GOGO -5.6% (announces Ripplewood distribution and director resignations), WPCS -4.2% (announces acquisition of BTX Trader LLC, an early stage tech company engaged in developing a proprietary trading platform for bitcoins ), QCOR -3.9% (attributed to RTRX news), MWE -2.9% (has agreed to sell approximately 4,750,000 common units pursuant to a terms agreement under its equity distribution agreement with Citigroup), LNKD -1.8% (still checking), AAPL -1.3% (JBL related implications), GSK -1.1% (still checking), MU -1% (still checking), UPS -0.9% (following FDX results), SDRL -0.7% (still checking), OCRX -0.6% (Ocera Therapeutics and the Roche Group enter into technology transfer and license agreement), K -0.6% (following GIS results), TWO -0.4% (announces Q4 dividend of $0.26/share, down from prior $0.28/share), ETFC -0.3% (reports DARTs for November were 163,411, a 2% increase from October ).
Analyst comments: LSI -0.6% (downgraded to Equal-Weight from Overweight at Morgan Stanley), KGC -0.4% (ticking lower; downgraded to Neutral from Overweight at JP Morgan)
Gapping up
In reaction to strong earnings/guidance: HEI +5.7%, LEN +4.7%.
M&A news: SYNM +50.4%/ REGI +4.2% (Renewable Energy Group agrees to acquire Syntroleum; SYNM to receive 3,796,000 shares of REGI common stock). VCI +18.7% (Harland Clarke Holdings Corp. to acquire Valassis for $34.04 per share in cash).
A few European financial names showing strength: BCS +1.5%, RBS +1.3%, PUK +1.3% (light volume).
Select oil/gas related names showing strength: STO +1.3%, TOT +0.7%, PBR +0.7%, BP +0.4% (announces significant oil discovery at its Gila prospect in the deepwater US Gulf of Mexico).
A few solar names are trading higher: SPWR +2.2%, YGE +1.7%, JKS +1.5%, TSL +1.4%
Other news: ADEP +13% (announces preferred primary and secondary food packaging partnership with Harpak-ULMA), ARIA +12% (still checking), ADHD +8.9% (Alcobra Pharma: Metadoxine for the treatment of Fragile X Syndrome granted FDA orphan designation status), BCRX +8% (announced that it has selected two optimized plasma kallikrein inhibitors to advance into preclinical development as potential once-daily, oral treatments for the prevention of hereditary angioedema attacks), DAN +8% (continued strength; Dana Holding also lifts on Gabelli's reccomendation on CNBC), DHX +5% (announces new $50 mln stock repurchase program), OMER +4.8% (Omeros: Antibody inhibitor for the prevention of complement-mediated thrombotic microangiopathy receives FDA orphan designation status), CMO +4.2% (declares a $0.31 per share fourth quarter 2013 common dividend, unchanged from prior qtr), STXS +3.9% (continued strength), TWER +3.7% (continued momentum), BAK +3.2% (disclosed yesterday share sales agreement ), UBA +3% ( announces appointment of Stephan A. Rapaglia, Chief Opearting Officer), AMRS +2.7% (announces number of Sao Paulo city buses using Amyris Renewable Diesel has increased to 400 from 300; plans to produce its fragrance oil molecule from its own manufacturing facility in Brazil), NOK +2.7% (still checking; was mentioned positively on MadMoney), LPSN +2.7% (still checking), ARMH +1.9%/ ASML +1.6% (still checking), DEPO +1.4% (Nautilus Neurosciences announces the sale of CAMBIA to Depomed for up to $53.7 mln), RYAAY +1% (still checking), CNC +0.7% ( signs definitive agreement to purchase a majority stake in Fidelis SecureCare of Michigan), BBRY +0.6% (names John Sims President, Global Enterprise Services; Simms joins Blackberry in January from SAP (SAP), where he served as President of the Mobile Services business), PACD +0.4% (announces ultra-deepwater drillship Pacific Khamsin Begins Contract in Nigeria), BA +0.4% (following positive mention in Barrons), CHL +0.4% (China Mobile Chairman says company still in discussions with Apple (AAPL) regarding iPhone deal, according to reports),ABX +0.3% (announces resignation of Donald Carty and Robert Franklin from the Board of Directors, effective immediately).
Analyst comments: RRTS +2.4% (Roadrunner upgraded to Buy from Hold at Stifel), PAAS +1.4% (upgraded to Neutral from Underweight at JPMorgan), GRPN +1.2% (initiated with a Outperform at Northland Capital), SCCO +0.8% (upgraded to Buy from Neutral at Citigroup), URI +0.5% (United Rentals initiated with a Buy at Jefferies), INTC +0.2% (Intel added to the short-term buy list at Deutsche Bank)
M&A news: SYNM +50.4%/ REGI +4.2% (Renewable Energy Group agrees to acquire Syntroleum; SYNM to receive 3,796,000 shares of REGI common stock). VCI +18.7% (Harland Clarke Holdings Corp. to acquire Valassis for $34.04 per share in cash).
A few European financial names showing strength: BCS +1.5%, RBS +1.3%, PUK +1.3% (light volume).
Select oil/gas related names showing strength: STO +1.3%, TOT +0.7%, PBR +0.7%, BP +0.4% (announces significant oil discovery at its Gila prospect in the deepwater US Gulf of Mexico).
A few solar names are trading higher: SPWR +2.2%, YGE +1.7%, JKS +1.5%, TSL +1.4%
Other news: ADEP +13% (announces preferred primary and secondary food packaging partnership with Harpak-ULMA), ARIA +12% (still checking), ADHD +8.9% (Alcobra Pharma: Metadoxine for the treatment of Fragile X Syndrome granted FDA orphan designation status), BCRX +8% (announced that it has selected two optimized plasma kallikrein inhibitors to advance into preclinical development as potential once-daily, oral treatments for the prevention of hereditary angioedema attacks), DAN +8% (continued strength; Dana Holding also lifts on Gabelli's reccomendation on CNBC), DHX +5% (announces new $50 mln stock repurchase program), OMER +4.8% (Omeros: Antibody inhibitor for the prevention of complement-mediated thrombotic microangiopathy receives FDA orphan designation status), CMO +4.2% (declares a $0.31 per share fourth quarter 2013 common dividend, unchanged from prior qtr), STXS +3.9% (continued strength), TWER +3.7% (continued momentum), BAK +3.2% (disclosed yesterday share sales agreement ), UBA +3% ( announces appointment of Stephan A. Rapaglia, Chief Opearting Officer), AMRS +2.7% (announces number of Sao Paulo city buses using Amyris Renewable Diesel has increased to 400 from 300; plans to produce its fragrance oil molecule from its own manufacturing facility in Brazil), NOK +2.7% (still checking; was mentioned positively on MadMoney), LPSN +2.7% (still checking), ARMH +1.9%/ ASML +1.6% (still checking), DEPO +1.4% (Nautilus Neurosciences announces the sale of CAMBIA to Depomed for up to $53.7 mln), RYAAY +1% (still checking), CNC +0.7% ( signs definitive agreement to purchase a majority stake in Fidelis SecureCare of Michigan), BBRY +0.6% (names John Sims President, Global Enterprise Services; Simms joins Blackberry in January from SAP (SAP), where he served as President of the Mobile Services business), PACD +0.4% (announces ultra-deepwater drillship Pacific Khamsin Begins Contract in Nigeria), BA +0.4% (following positive mention in Barrons), CHL +0.4% (China Mobile Chairman says company still in discussions with Apple (AAPL) regarding iPhone deal, according to reports),ABX +0.3% (announces resignation of Donald Carty and Robert Franklin from the Board of Directors, effective immediately).
Analyst comments: RRTS +2.4% (Roadrunner upgraded to Buy from Hold at Stifel), PAAS +1.4% (upgraded to Neutral from Underweight at JPMorgan), GRPN +1.2% (initiated with a Outperform at Northland Capital), SCCO +0.8% (upgraded to Buy from Neutral at Citigroup), URI +0.5% (United Rentals initiated with a Buy at Jefferies), INTC +0.2% (Intel added to the short-term buy list at Deutsche Bank)
Top investor: Cannot approve bank's rights issue in Jan - press
- Note: BMPS.IT: Chairman Profumo warned that a delay in the capital raise could force the firm to be nationalized - financial press
- The company is due to discuss the €3B capital raise at a board meeting on Dec 27th.
- The company is due to discuss the €3B capital raise at a board meeting on Dec 27th.
--> No premarket yet 67.35 bid vs 66.81 @ yest close
Co at Analyst Day in NYC issued in-line guidance for FY14 (Dec), sees EPS of $4.36-4.50, excluding non-recurring items, vs. $4.46 Capital IQ Consensus, assuming completion of $4 billion in share repurchases during 2014; the interest associated with the company's recent $2 billion, non-deal- related debt issuance, which is expected to decrease annual EPS by approximately three cents; the second-half launch of the recently-announced generic sourcing venture with Cardinal Health, which is expected to increase annual EPS by two cents in 2014; and the impact of the pending acquisition of Coram's infusion business.
The co also announced that its board of directors has approved an increase in its quarterly dividend of ~22%, to $0.275 per share on the common stock of the co, payable February 3, 2014, to holders of record on January 23, 2014.
In addition, the co announced that its Board of Directors has approved a new share repurchase program for up to $6.0 billion of the co's outstanding common stock.
--> -1.5% pre-market on 33k shares
Reports Q2 (Nov) earnings of $1.57 per share, $0.08 worse than the Capital IQ Consensus Estimate of $1.65; revenues rose 2.6% year/year to $11.4 bln vs the $11.46 bln consensus. Co raises FY14 EPS growth guidance to 8-14% from 7-13%; remains in line (Approx $6.73-7.10 vs. $7.05 Capital IQ Consensus Estimate).
•Operating income of $827 million, up 15% from $718 million last year
•Operating margin of 7.3%, up from 6.5% the previous year
•Net income of $500 million, up 14% from last year's $438 million.
FedEx Express Segment
•Revenue of $6.84 billion, down slightly from last year's $6.86 billion
•Operating income of $326 million, up 42% from $230 million a year ago
•Operating margin of 4.8%, up from 3.4% the previous year
•Revenue decreased slightly due to lower express freight revenue and lower fuel surcharges, mostly offset by increased base package yields.
FedEx Ground Segment
•Revenue of $2.85 billion, up 10% from last year's $2.59 billion
•Operating income of $424 million, up 3% from $412 million a year ago
•Operating margin of 14.9%, down from 15.9% the previous year
•FedEx Ground average daily volume grew 8% in the second quarter, as growth in both business-to-business and FedEx Home Delivery services was driven by market share gains.
FedEx Freight Segment
•Revenue of $1.43 billion, up 4% from last year's $1.38 billion
•Operating income of $77 million, up 1% from $76 million a year ago
•Operating margin of 5.4%, down from 5.5% the previous year
•Less-than-truckload (LTL) average daily shipments and weight per shipment increased 4% and 2%, respectively.
FY 2014 Outlook
•FedEx is increasing its forecast of full-year earnings per share growth to 8% to 14% above last year's adjusted results, compared to its previous growth range of 7% to 13%. This outlook reflects share repurchases made to date but does not include any benefit from additional share repurchases. Share repurchases are expected to continue, but the timing will be at the company's discretion. The outlook also assumes the market outlook for fuel prices and continued moderate economic growth. The capital spending forecast for fiscal 2014 remains $4 billion.
Early premarket gappers
Gapping up: SYNM +52.8%, ARIA +12%, ADHD +8.9%, BCRX +8%, DAN +8%, HEI +5.7%, DHX +5%, OMER +4.8%, ADEP +4.7%, LEN +4.7%, REGI +4.2%, BAK +3.2%, UBA +3%, AMRS +2.7%, NOK +2.7%, LPSN +2.7%, ARMH +1.9%, ASML +1.6%, BCS +1.5%, JKS +1.5%, DEPO +1.4%, RBS +1.3%, STO +1.3%, RYAAY +1%, TOT +0.7%, BBRY +0.6%, PACD +0.4%, BA +0.4%
Gapping down: ONTX -20.6%, JBL -15.3%, TWGP -11.5%, OPXA -9.6%, WPCS -4.2%, PAY -4%, QCOR -3.9%, MWE -2.9%, AAPL -1.3%, GSK -1.1%, OCRX -0.6%, TWO -0.4%, ALB -0.4%, CFX -0.1%
Gapping down: ONTX -20.6%, JBL -15.3%, TWGP -11.5%, OPXA -9.6%, WPCS -4.2%, PAY -4%, QCOR -3.9%, MWE -2.9%, AAPL -1.3%, GSK -1.1%, OCRX -0.6%, TWO -0.4%, ALB -0.4%, CFX -0.1%
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BN 12/18 12:26 *ALITALIA SAID TO GAIN ABOUT EU300M IN CAPITAL FROM ETIHAD BN 12/18 12:26 *ALITALIA SAID TO BE CLOSE TO CAPITAL INJECTION BY ETIHAD AIR
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*ALITALIA SAID TO GAIN ABOUT EU300M IN CAPITAL FROM ETIHAD 2013-12-18 12:27:23.300 GMT
--BENJAMIN DOW
-0- Dec/18/2013 12:27 GMT