MGT Capital Higher on Funding

Cryptocurrency firm MGT Capital jumps after completing funding for mining expansion

Cryptocurrency firm MGT jumps after completing funding for mining expansion. See Stockwinners.com Market Radar for details

Shares of Bitcoin miner and cybersecurity developer MGT Capital (MGTI) are higher after the firm announced that it completed its $2.4M financing to expand its Bitcoin mining operations.

McAFEE CONNECTION

In November of 2016, the company announced that John McAfee, the colorful founder of software company McAfee Associates was appointed CEO.

McAfee, who had previously served as the company’s executive chairman, said, “The advancements in personal and enterprise technologies have exposed us to a greater number of cybersecurity threats than ever before.”

According to a statement from the firm, MGT with the help of McAfee has made several key acquisitions of exciting new technologies and has created one of the largest Bitcoin mining operations in the U.S.

This past March, MGT completed the development of its Bitcoin mining pool.

McAfee commented, “Our mining pool is a natural outgrowth of our investment in Blockchain technology as a foundation for future cybersecurity products. Large and respected Bitcoin mining operators will rapidly take over the enormous transaction processing requirements necessary for all companies to secure themselves in the near future.

In late June, the company announced an agreement with Bit5ive to aid in a pilot program to mine the latest cryptocurrency fad Ethereum.

“We are more convinced each day of the growth and value of digital currencies, and our company is uniquely positioned to be a leading provider of processing power to relevant blockchains. The addition of Ethereum and Ethereum Classic to our crypto mining strategies is expected to be very profitable for us,” said McAfee.

Last week MGT announced that McAfee had been appointed Chief Cybersecurity Visionary of MGT, with Robert Ladd, who had been serving as president, will reassume the role of Chief Executive Officer, and that H. Robert Holmes, a long time independent director, will reassume the position of chairman of the board.

PRICE ACTION

Shares of MGT Capital (MGTI) are off earlier highs, up 3.64% to $2.28 per share in late Wednesday’s morning trading.


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Intra-Cellular Higher on Data

Intra-Cellular says to move forward with lumateperone long-term safety study

 

Intra-Cellular to move forward with lumateperone long-term safety study. See Stockwinners.com Market Radar for details

Intra-Cellular Therapies (ITCI) announced that the U.S. FDA has informed the Company that the FDA (i) has completed its review of the Company’s responses to requests from the FDA for additional information relating to certain findings observed in nonclinical toxicology studies of lumateperone in an animal species and (ii) agrees that the Company has presented adequate data to support its position that the metabolic pathway in the animal species is distinctive from humans, which indicates that the toxicity observed in the animal species is not relevant to humans.

Lumateperone  (developmental code names ITI-007ITI-722) is an investigational atypical antipsychotic which is currently under development by Intra-Cellular Therapies, licensed from Bristol-Myers Squibb (BMY), for the treatment of schizophrenia. It is also being developed by Intra-Cellular Therapies for the treatment of bipolar disorder, depression, and sleep and behavioral disturbance in dementia, autism, and other neuropsychiatric disorders

Accordingly, the Company is moving forward with its long-term safety study of lumateperone and intends to submit a new drug application for the treatment of schizophrenia by mid-2018.

The Company previously announced that the FDA had raised questions relating to certain findings observed in nonclinical toxicology studies of lumateperone in an animal species and requested additional information to confirm that the nonclinical findings are not indicative of a safety risk associated with long term exposure in humans.

The data presented by the Company supports the position that there are significant species differences in the metabolism of lumateperone.

Based on the FDA’s agreement that the Company presented adequate data indicating that the toxicity seen in the animal species is not relevant to humans, the Company is proceeding with its long-term safety study of lumateperone in patients with #schizophrenia.

Further, based on feedback from the FDA, the Company will incorporate additional monitoring in its long-term safety study for metabolites seen in animal species but not seen to date in humans, and also will continue to monitor for toxicities in its nonclinical studies.

With over 1,500 people exposed to date, lumateperone has been well-tolerated with a safety profile similar to placebo.


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Stryker Recalls Oral Care Products

Stryker informs FDA of voluntary product recall involving Oral Care products

Stryker recalls involving Oral Care products. See Stockwinners.com Market Radar

Stryker Corporation (SYK) said that the company has informed the U.S. FDA of a voluntary product recall involving specific lots of Oral Care products sold through the company’s Sage Products business unit.

The recalled products contain Oral Care solutions manufactured for Sage by a third-party supplier and were distributed between July 2015 and August 2017.

The recall is being initiated due to a potential for cross-contamination of Oral Care solutions manufactured by the third party on equipment shared with non-pharmaceutical products, as stated in a Warning Letter from FDA dated July 17, 2017.

To date, Stryker has not been made aware of any serious adverse events associated with the Oral Care products recall.

However, there have been some reports of minor irritation and allergic reaction. Stryker has discontinued business with the third-party supplier and all Oral Care solutions are being manufactured in-house by Sage.

Stryker expects to resume shipping Oral Care products in September and anticipates a return to full supply capacity by year end. Additionally, the FDA Warning Letter sets forth concerns regarding microbiological testing methods used for all products containing solutions sold by Sage.

These include Oral Care solutions in the recalled products and solutions contained in cloth-based products manufactured by Sage.

FDA indicated that products must now be tested using a verified compendial microbiological method, a growth-based method that requires more time to complete than the one previously used at Sage.

Both methods can detect the presence of microorganisms, while the compendial method provides additional information about the type and number of microorganisms. As a result, in August, Stryker placed cloth-based products, which represents approximately 50% of Sage’s revenue, on a temporary ship hold until they are tested using this method.

Stryker anticipates it will resume shipping products manufactured by Sage and tested under the compendial method in September, and anticipates a return to full supply capacity by year end.

SYK closed at $145.51, last traded at $143 in pre-market trading.


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Sears Higher on Kenmore, DieHard Deals

Sears jumps after announcing latest licensing deals for Kenmore, DieHard brands

Sears jumps after announcing latest licensing deals for Kenmore, DieHard brands. See Stockwinners.com Market Radar for details

Shares of Sears Holdings (SHLD) rose in Tuesday trading after the troubled retailer announced it signed two licensing agreements intended to expand the reach of its Kenmore and DieHard brands internationally.

NEW LICENSING DEALS

Sears said in a statement this morning that Kenmore and Kenmore Elite vacuums will be manufactured by Cleva North America for distribution at retailers worldwide. Additionally, Sears said DieHard Alkaline batteries and flashlights will be manufactured by Dorcy, International for distribution in the U.S., Puerto Rico and the Caribbean plus Latin America and some locations in the South Pacific. “We will have direct and active involvement in building the business with our licensing partners,” said Tom Park, president of Kenmore, Craftsman and DieHard brands at Sears.

WHAT’S NOTABLE

The licensing deals come after Sears’ recent decision to launch a Kenmore dedicated brand presence on Amazon.com (AMZN).

The Kenmore appliance brand page went live on Amazon last week, marking Amazon’s first and only dedicated brand page for home appliances. The company also announced the integration of the full line of Kenmore Smart appliances with Amazon Alexa.

“The launch of Kenmore products on Amazon.com will significantly expand the distribution and availability of the Kenmore brand in the U.S.,” Sears CEO Eddie Lampert said at the time.

Sears, which is seeking a turnaround, announced last month plans to close eight more locations and 35 unprofitable Kmart stores as it continues to focus on returning to profitability.

Lampert said at the time that “This is part of a strategy both to address losses from unprofitable stores and to reduce the square footage of other stores because many of them are simply too big for our current need.” Lampert noted that Sears is “well on track” to meet its cost savings goals.

RECENT ANALYST COMMENTARY

Baird analyst Peter Benedict said last month that that the Sears, Amazon pact introduces “improved competition” from a brand Lowe’s (LOW) and Home Depot (HD) do not carry. While Amazon shouldn’t be underestimated, appliance transactions are complex and Kenmore brand equity has declined, Jefferies analyst Daniel Binder said in July that the Sears deal may not be an indicator that more appliance manufacturers will sell direct via Amazon.

PRICE ACTION

Sears is up over 3% to $8.83 in Tuesday’s trading.

OTHERS TO WATCH

Other brick and mortar home appliance retailers include Lowe’s, Home Depot and Best Buy (BBY), which are all trading higher this morning.


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Bear State Financial Sold for $391 Million

Arvest Bank to acquire Bear State Financial for $10.28 per share

Bear State Financial Sold for $391 Million. See Stockwinners.com Market Radar for details.

Bear State Financial, parent company of Bear State Bank (BSF), and Arvest Bank jointly announced the signing of a definitive agreement for Arvest Bank to acquire Bear State in an all-cash transaction valued at approximately $391M, or $10.28 per share of Bear State common stock.

The agreement and plan of reorganization was unanimously approved by the boards of directors of each company.

The transaction is expected to close in Q4 or 1Q18 and is subject to customary conditions, including both regulatory approval and approval by Bear State’s shareholders.

Clients of Bear State Bank and Arvest Bank will not notice any immediate changes, and both banks will continue to conduct business as usual.

At a later date, Bear State Bank’s branding will change to Arvest Bank, with the full conversion of systems expected to occur in 2018.


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Maersk Oil Sold for $7.45 Billion

Total acquires Maersk Oil for $7.45B in share and debt transaction

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Total (TOT) is pleased to announce that the Boards of Total and A.P. Moller – Maersk have both approved the acquisition of 100% of the equity of the E&P company Maersk Oil & Gas A/S, a wholly owned subsidiary of A.P. Moller – Maersk A/S, by Total in a share and debt transaction.

Total acquires Maersk Oil for $7.45B in share and debt transaction. See Stockwinners.com for details

Under the agreed terms, A.P. Moller – Maersk will receive a consideration of $4.95B in Total shares and Total will assume $2.5B of Maersk Oil’s debt.

Total will issue to A.P. Moller – Maersk A/S, 97.5M of shares, based on the average Total share price on the 20 business days prior to August, 21 (signing date) which will represent 3.75% of the enlarged share capital of Total.

Underpinning this share based partnership, subject to Total shareholders’ approval, Total has also offered the possibility of a seat on its Board of Directors to A.P. Moller Holding A/S, main shareholder of A.P. Moller – Maersk.

The proposed transaction is subject to the applicable legally required consultation and notification processes for employee representatives and to approvals by the relevant regulatory authorities.

The transaction is expected to close in first quarter 2018 and has an effective date of 1st July 2017.


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Sacramento Container Sold for $265 Million

Packaging Corp. to acquire Sacramento Container Corporation

Packaging Corp. to acquire Sacramento Container Corp. See Stockwinners.com Market Radar to read the details.

Packaging Corporation of America (PKG) announced that it has entered into a definitive agreement to acquire substantially all of the assets of Sacramento Container Corporation, and 100% of the membership interests of Northern Sheets and Central California Sheets in a cash-free, debt-free transaction for a cash purchase price of $265M.

The acquisition transaction is structured as a purchase of assets resulting in a full step-up of the assets to fair market value.

Under the terms of the agreement, PCA will acquire full-line corrugated products and sheet feeder operations in McClellan, California and Kingsburg, California.

The value of the expected synergies, the tax benefit of the step-up of assets and the operations’ EBITDA result in a purchase price multiple of approximately five times EBITDA.

The acquisition will be accretive to earnings immediately. Closing is subject to certain customary conditions and regulatory approval and is expected early in the fourth quarter of 2017. The company plans to finance the transaction with available cash on hand.

WALLULA  MILL   PLANT

Separately, Packaging Corporation of America (PKG) announced that it will discontinue production of uncoated freesheet and coated one-side grades at its Wallula, Washington mill in the second quarter of 2018 to begin the conversion of its 200,000 ton-per-year No. 3 paper machine to a 400,000 ton-per-year high-performance 100% virgin kraft linerboard machine.

The conversion of the No. 3 paper machine at the Wallula Mill is planned for the second quarter of 2018 with an initial production rate of approximately 60 percent of capacity.

Ultimately, production will increase to 1,150 tons per day once a new headbox, forming section, and shoe press are added in the fourth quarter of 2018. The capital cost of the conversion is expected to be approximately $150M.

Discontinuing paper operations at the Wallula Mill will result in pre-tax cash severance and other shutdown charges of approximately $20M-$25M and approximately $45M-$55M of pre-tax noncash asset impairment and accelerated depreciation charges. Charges of $25M-$35M are expected to be recorded in the third quarter of 2017.

The Mill’s No. 2 paper machine will continue to produce 150,000 tons-per-year of semi-chemical medium.

PCA Chairman and CEO Mark Kowlzan said, “Our strategy is to improve the overall profitability of the paper business for PCA by focusing our people and investments on increasing our competitiveness and ensuring a sustainable future in the office and printing & converting markets with our mills in International Falls, MN and Jackson, AL.

In addition, at our current containerboard integration rate of 95%, the low-cost conversion of the No. 3 paper machine at our Wallula Mill provides us with much needed linerboard capacity, allows us to integrate over 200,000 tons of containerboard to our Sacramento Container acquisition, and enables further optimization and enhancement of our current mill capacity and box plant operations. The conversion will significantly enhance the mill’s profitability and viability.”


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Ironwood Receives FDA Approval of Duzallo

Ironwood receives FDA approval of DUZALLO

Ironwood Receives FDA Approval of Duzallo. See Stockwinners.com Market Radar for more

Ironwood Pharmaceuticals (IRWD) announced DUZALLO was approved by the U.S. Food and Drug Administration as a once-daily oral treatment for hyperuricemia associated with gout in patients who have not achieved target serum uric acid levels with a medically appropriate daily dose of allopurinol alone.

DUZALLO is not recommended for the treatment of asymptomatic hyperuricemia.

Ironwood expects DUZALLO to be commercially available early in Q4.

DUZALLO is the first drug that combines the current standard of care for the treatment of hyperuricemia associated with gout, allopurinol, with the most recent FDA-approved treatment for this condition, lesinurad.

This fixed-dose combination provides a dual mechanism of action in a single tablet that can address both underlying causes of hyperuricemia – overproduction and underexcretion of serum uric acid.

The FDA approval of DUZALLO was based on the clinical program supporting the ZURAMPIC new drug application and a pharmacokinetic study that evaluated the bioequivalence of the fixed-dose combination of lesinurad and allopurinol compared to co-administration of separate lesinurad and allopurinol tablets.

The efficacy and safety of lesinurad plus allopurinol were demonstrated in two pivotal Phase III clinical trials, CLEAR 1 and CLEAR 2, which supported the ZURAMPIC NDA. In clinical trials of adult patients with gout who failed to achieve target sUA levels on allopurinol alone, lesinurad in combination with allopurinol nearly doubled the number of patients who achieved sUA target of less than6 mg/dL at month 6, reduced the mean sUA level to less than6 mg/dL by month 1 and maintained that level through month 12.

The most common adverse reactions in clinical trials were headache, influenza, higher levels of blood creatinine, and heartburn. DUZALLO has a boxed warning regarding the risk of acute renal failure.


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Oncor Electric Sold for $9.45 Billion

Sempra Energy to acquire interest in Oncor Electric for about $9.45B in cash

Sempra Energy to acquire interest in Oncor Electric for about $9.45B in cash. See Stockwinners.com Market Radar for details

Sempra Energy (SRE) announced an agreement to acquire Energy Future Holdings Corp., the indirect owner of 80% of Oncor Electric Delivery Company, operator of the largest electric transmission and distribution system in Texas.

Under the agreement, Sempra Energy will pay approximately $9.45B in cash to acquire Energy Future and its ownership in Oncor, while taking a major step forward in resolving Energy Future’s long-running bankruptcy case.

The enterprise value of the transaction is approximately $18.8B, including the assumption of Oncor’s debt.

The transaction is expected to be accretive to Sempra Energy’s earnings beginning in 2018.

Sempra Energy expects to fund the $9.45B transaction using a combination of its own debt and equity, third-party equity, and $3B of expected investment-grade debt at the reorganized holding company.

Sempra Energy has received financing commitments from RBC Capital Markets and Morgan Stanley.

Sempra Energy expects its equity ownership after the transaction to be approximately 60% of the reorganized holding company.

At the completion of the transaction, Bob Shapard, Oncor’s CEO, will become executive chairman of the Oncor board of directors and Allen Nye, currently Oncor’s general counsel, will succeed Shapard as Oncor’s CEO.

Both are slated to serve on the Oncor board, which will consist of 13 directors, including seven independent directors from Texas, two from existing equity holders and two from the new Sempra Energy-led holding company.

Sempra Energy expects the transaction to be completed in the first half of 2018.


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Back to Nature Foods Sold for $162.5 Million

B&G Foods to acquire Back to Nature Foods

B&G Foods to acquire Back to Nature Foods. See Stockwinners.com Market Radar for details

B&G Foods (BGS) has announced that it has entered into a definitive agreement to acquire Back to Nature Foods Company from Brynwood Partners, Mondelez (MDLZ) and certain other entities and individuals for approximately $162.5M in cash, subject to customary closing and post-closing working capital adjustments.

Back to Nature Foods Company produces cookies, crackers, granolas, juices, and nuts. Its cookies include apple cinnamon oat grahams, California lemons, chocolate chunks, cranberry pecan granolas, crispy oatmeal, dark chocolate and oats granolas, fudge mints, honey graham sticks, honey nut granolas, Madagascar vanillas, mini vanilla wafers, and peanut butter creams.

B&G Foods expects the acquisition to close during Q3 of 2017, subject to customary closing conditions, including the receipt of regulatory approvals.

B&G Foods expects the acquisition to be immediately accretive to its EPS and free cash flow and projects that following the completion of a six-month integration period, the acquired business will generate on an annualized basis net sales of approximately $80M and adjusted EBITDA of approximately $17M.

B&G Foods intends to fund the acquisition and related fees and expenses with additional revolving loans under its existing credit facility.


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Barron’s is Bullish on Starbucks, Bearish on Motorola Solutions

Barron’s, the weekly publication owned by the Wall Street Journal, in its latest issue mentions several names:

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BULLISH MENTIONS

Advance Auto Parts hit wall on Q2 results, but turnaround intact – In a follow up story, Barron’s says Advance Auto Parts (AAP) ran into a brick wall when it reported Q2 adjusted EPS of $1.58, below analyst expectations of $1.66, with revenue flat at $2.26B. Nonetheless, Advance Auto remains an “attractive self-help story,” with the turnaround expected to become clearer in Q4 and beyond, the publication noted

Gardner Denver integrated strategy beginning to pay off – Under KKR (KKR), who bought the company for $3.9B in 2013, Gardner Denver (GDI) has retooled its compressor and pump business, Jack Willoughby writes in this week’s edition of Barron’s. Based on Gardner Denver’s first quarterly report as a born-again public company, the integrated strategy is beginning to pay off, the publication noted, saying that upside is 40%.

Lockheed Martin should benefit from boost in military outlays – Large-cap defense stocks have had 20%-plus total returns over the past year, and more gains could be ahead for shares of the No. 1 U.S. defense contractor, Lockheed Martin (LMT), Lawrence Strauss writes in this week’s edition of Barron’s. An expected boost in U.S. military spending amid global tensions is driving the defense sector, the publication noted, adding that President Trump’s initial budget proposal for fiscal 2018 calls for a 9% increase.

Retail stocks swings could provide opportunity – This earnings season, retail companies are “either hitting a home run or striking out,” with misses from Foot Locker (FL),  and L Brands (LB), while Urban Outfitters (URBN) and Ross Stores (ROST) were massive winners, Ben Levisohn writes in this week’s edition of Barron’s. While this could be a new normal for retail stocks, the market’s sudden swings could provide opportunity, the publication noted.

Starbucks could jump 20% – There were plenty of reasons for skepticism when Starbucks (SBUX) rolled out its digital ordering system nationally in September 2015, but the company’s mobile order-and-pay feature has become a major hit, Alex Eule writes in this week’s edition of Barron’s. In the last quarter, 9% of Starbucks’ U.S. orders were placed in advance, and nearly a third of all its orders were paid for via the company’s phone app, the publication noted. Eule believes that the stock could jump 20% or more over the next 12 months

BEARISH MENTIONS

Public-safety broadband network may supplant Motorola systems – FirstNet has tapped AT&T (T) to build a public-safety network that could link every police, fire, and emergency medical officer in the U.S., Bill Alpert writes in this week’s edition of Barron’s. Alpert says it is a “nice opportunity” not only for AT&T, but also for cellular infrastructure providers like Crown Castle International (CCI), SBA Communications (SBAC), American Tower REIT (AMT), and CommScope Holding (COMM). However, it could produce “terrible static” for Motorola Solutions (MSI), the supplier of most traditional two-way radios, the publication noted, adding that eventually FirstNet may supplant the old systems.


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Turmoil at Tenet

Simpson, Ripperger resign from board due to ‘irreconcilable differences’

This article was updated and new stakeholder and coverage added

Turmoil in Tenet. See Stockwinners.com Market Radar for details

In a regulatory filing, Tenet Healthcare (THC) said that on August 17, Randy Simpson and Matt Ripperger jointly submitted a letter to Tenet’s board notifying the board that Simpson and Ripperger were resigning from the board, effective immediately.

At the time of their resignations, Simpson served on the Nominating and Corporate Governance Committee and the Quality, Compliance & Ethics Committee of the board and Ripperger served on the Human Resources Committee of the Board.

As further described in the Letter, Simpson and Ripperger stated that their resignations are “due to irreconcilable differences regarding significant matters impacting Tenet and its stakeholders”.

In the letter, the two said:

“Prior to joining the Board, and in an even deeper manner today, we developed great respect for the core mission of Tenet in improving health outcomes and for so many of the 130,000 employees of Tenet who are directly engaged daily serving patients and communities in need. We joined the Board nineteen months ago as nominees of our employer, #Glenview Capital Management, in the interests of serving all of Tenet’s stakeholders and with a view towards building value for all shareholders. Both we as individuals, and Glenview as an owner, have determined that the most effective way forward to promote strong patient satisfaction and long-term value creation for Tenet is to step off this Board, which also triggers the expiration of Glenview’s restrictive ‘standstill’ agreement in 15 days, after which Glenview may evaluate other avenues to be a constructive owner of Tenet. Glenview remains fully committed to its ownership stake in Tenet and its desire to drive improved performance, culture and value. On a personal note, we both hope that you as individuals have come to respect and appreciate our methodical approach and our genuine desire to work constructively and cooperatively to find mutually agreeable solutions and strategies to enhance Tenet. While our resignation does confirm that this path has been fully exhausted as co-Directors, we all share a continued responsibility to move Tenet forward with urgency and veracity.”

BAD HISTORY

Tenet has a spotty history as far as its board goes. Back in 2002, there was a board shake up along with management change after the company disclosed of mis-reported results along with massive insider trading. The event caused shares of THC to collapse from $200 to $50 that led shares to settle in single digits before shares started to head higher.

Turmoil at Tenet Healthcare. See Stockwinners.com Market Radar to read details.

PRICE  ACTION

THC closed at $12.65 on Friday. THC has a 52-week trading range of $12.54 – $24.96. On Monday’s trading, THC rose 14.4% to $16.53.

NEW ACTIVIST INVOLVED

Earlier Mony, it was announced in a 13G filing that hedge fund Camber Capital had purchased 5.7M shares, or a 5.7% stake, in the hospital chain.

WHAT’S NOTABLE

In a research note to investors, Leerink analyst Ana #Gupte raised her price target for Tenet to $30 from $23 in anticipation of activist restructuring and said she sees further upside to as much as $50 as the process works itself through.

The analyst noted that she believes the announcement by Glenview, in combination with the company’s 8-K filing, is an indication that Glenview is moving to an aggressive activist role to unlock value. Gupte reiterated an Outperform rating on the shares.


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Calpine Sold for $5.6 Billion

Calpine to be acquired by ECP, consortium for $15.25 per share

 Calpine to be acquired by ECP, consortium for $15.25 per share. See Stockwinners.com Market Radar for details

Calpine Corporation (CPN) announced that it has entered into a definitive agreement under which Energy Capital Partners along with a consortium of investors led by Access Industries and Canada Pension Plan Investment Board will acquire Calpine for $15.25 per share in cash, or $5.6B.

The purchase price represents an approximately 51% premium to Calpine’s unaffected share price of $10.07 on May 9, 2017, the day prior to initial media speculation of a transaction.

The transaction follows a competitive strategic review process and was unanimously approved by Calpine’s Board of Directors. Calpine will maintain its corporate headquarters in Houston, Texas with the current management team expected to remain in place.

The agreement includes a 45-day “go-shop” period, during which Calpine, with the assistance of its legal and financial advisors, can actively solicit, evaluate and potentially enter into negotiations with parties that offer superior alternative proposals.

The agreement provides for the payment of a termination fee by Calpine of $142 million to the investor consortium in the event that the agreement is terminated for a superior proposal; except that the termination fee will be $65 million if Calpine terminates the agreement for a superior proposal from certain exempted persons prior to 12:01 a.m., Eastern time, on the 106th day after the date of the agreement. There can be no assurance that this process will result in a superior proposal.

Calpine does not intend to disclose developments during this process unless and until its Board has made a decision with respect to any potential superior proposal.

The proposed transaction is subject to approval by stockholders representing a majority of outstanding shares of common stock of Calpine.

In addition, the transaction is subject to expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Other necessary regulatory filings include Federal Energy Regulatory Commission, New York Public Service Commission, the Public Utility Commission of Texas and other states, as necessary.

The parties currently expect the transaction to close in the first quarter of 2018.

#Lazard is serving as financial advisor and White & Case LLP as legal advisor to Calpine. Barclays Capital Inc. is serving as financial advisor and Latham & Watkins LLP as legal advisor to Energy Capital Partners.


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Is Buffett Buying Southwest?

Berkshire taking Southwest private seen as one of many potential airline deals

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Upcoming mergers in the airline sector will probably be carried out by smaller regional carriers, including JetBlue (JBLU), Spirit Airlines (SAVE), Alaska Air (ALK), and Hawaiian Airlines (HA), Imperial Capital argued this morning in a research note.

DEALMAKERS

Three regional airlines – Alaska Air, Hawaiian Airlines, and JetBlue – could make deals with each other, according to analyst Michael Derchin wrote to investors. Spirit, Allegiant Travel (ALGT) and privately held Frontier Airlines, identified by Derchin as “ultra-low cost carriers,” may also look to consolidation opportunities, the analyst stated.

RATIONALE

Deals among the smaller carriers would make them more competitive and increase their defensiveness ahead of the next downturn, the analyst stated. Additionally, consolidation would enhance their growth opportunities during the sector’s next expansion cycle, the analyst added.

POTENTIAL DEALS

Alaska Air could merge with JetBlue, Frontier could acquire Spirit, the combination of Frontier and Spirit could merge with Allegiant, and American Airlines Group (AAL) could bid for Hawaiian, which could lead to a bidding war, the analyst wrote.

Another possibility, according to #Derchin, is Berkshire Hathaway (BRK.A, BRK.B) taking Southwest Airlines (LUV) private.

After taking major stakes in the four largest airlines, and with $100B in cash available for additional investments, it is plausible that Warren Buffett’s conglomerate could opt to take one of its holdings private, the analyst contends.

Derchin views Southwest, with its low-cost domestic operation, “unique” culture, and consistent track record as the best fit for being taken private by Berkshire.

LARGE AIRLINES

American (AAL), Delta Air Lines (DAL), United Continental Holdings (UAL), and Southwest Airlines may “largely” remain on the sidelines when it comes to consolidation deals, however, Derchin believes.

Those airlines will probably “focus on enhancing joint ventures” in an effort “to strengthen their international route networks,” the analyst wrote.


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GE to Build Wind Farm in Australia

GE, AGL to develop Australian wind farm in Coopers Gap, Queensland

GE gets $15B contract from Saudi Arabia

GE announced an agreement with the Powering Australian Renewables Fund to supply and install 123 wind turbines for the Coopers Gap wind farm project at Cooranga North, 250 kilometres north-west of Brisbane.

PARF is a partnership between AGL Energy Limited and Queensland Investment Corporation. Upon completion in 2019, the 453 MW wind farm will produce approximately 1,510,000 MWh of renewable energy annually – enough to power the equivalent of more than 260,000 average Australian homes and reduce CO2 emissions by 1,180,000 tonnes each year. Coopers Gap Wind Farm is a landmark project for GE.

It will be the largest wind farm in the country on completion, and GE’s first wind project in Queensland. It is the second major renewables project that GE and AGL have announced this year, following the Silverton Wind Farm in western New South Wales.

GE will deliver 91 of its 3.6 MW turbines with 137m rotors, and 32 of its 3.8 MW turbines with 130m rotors.

GE will also undertake a 25-year full service agreement to maintain the windfarm over its lifetime.

The project is expected to create up to 200 jobs during the peak of construction, and an additional 20 ongoing operational jobs. The construction firm CATCON will be responsible for the wind farm’s construction.

The Coopers Gap development is GE’s fifth wind farm project to begin construction in Australia in 2017. On completion in 2019, GE will be responsible for a fleet of wind turbines with a capacity of almost 1.4 GW.

Watch shares of TPI Composite (TPIC) as it is a provider of wind blades to GE.


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