Safe Harbor Marinas sold for $2.1B

Sun Communities to acquire Safe Harbor Marinas for $2.1B

Sun Communities (SUI) announced that it has entered into a definitive merger agreement to acquire Safe Harbor Marinas. Safe Harbor’s full operating team, led by Baxter Underwood, will run Safe Harbor as a subsidiary of the Company independently from Sun’s manufactured home and recreational vehicle community business.

Safe Harbor is the largest and most diversified marina owner and operator in the United States.

It owns and operates 101 marinas, manages five marinas on behalf of third parties and has an approximate 40,000-member network of boat owners across 22 states.

Safe Harbor’s portfolio of high quality, prime coastal market marinas generates recurring rental income from annual and seasonal leases and further diversifies Sun’s geographic and demographic footprint.

Safe Harbor has a proven ability to generate organic and external growth. The acquisition, which is expected to be accretive to 2021 Core FFO per share, will comprise approximately 15% of the Company’s pro forma total annual rental revenue.

Safe Harbor marinas located throughout the Nation

Subject to closing adjustments, the aggregate purchase price for Safe Harbor is approximately $2.11B.

At the closing, the Company will assume debt in the estimated amount of approximately $808M, issue the sellers REIT operating partnership common and preferred OP units in the estimated amount of approximately $130M, and pay the balance of the purchase price in cash.

The mix of consideration will depend on the amount of common and preferred OP units the sellers elect to receive and other factors. The actual amounts of each component of the merger consideration may be materially higher or lower than the foregoing estimates.

The transaction is subject to customary closing conditions and is expected to close in the fourth quarter 2020.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Norwegian Cruise Line shores up its balance sheet, raises $2B

NCL Corporation announces $400M investment by L Catterton

Norwegian Cruise proposes $650M note sale

Norwegian Cruise Line Holdings (NCLH) announced a private placement of up to $400 million in aggregate principal amount of exchangeable senior notes due 2026 to an affiliate of L Catterton.

Norwegian raises $2 billion to shore up its balance sheet

The Private Exchangeable Notes will be general senior unsecured obligations of NCLC, guaranteed by NCLH, and will be exchangeable at the holder’s option at any time prior to the close of business on the business day immediately preceding the maturity date into Series A Preference Shares of NCLC, which shall be automatically exchangeable into a number of ordinary shares of NCLH.

Material Terms: The Private Exchangeable Notes will accrue payment-in-kind interest at a rate of 7.0% per annum for the first year post-issuance, 4.5% per annum payment-in-kind interest plus 3.0% per annum cash interest for the following four years post issuance and 7.5% in cash for the final year prior to maturity; L Catterton will be entitled to nominate one member to the Company’s board of directors so long as a minimum ownership threshold is met, as well as one observer to the Company’s board of directors; The closing of the Private Exchangeable Notes is expected to occur upon the satisfaction of certain customary closing conditions, including a condition that the Company raises at least $1.0 billion in proceeds in the aggregate from other offerings; L Catterton will have certain registration rights in respect of the ordinary shares underlying the Private Exchangeable Notes and will be subject to certain customary transfer, voting and standstill restrictions, including a one-year lock-up agreement.

Share Offerings

Norwegian Cruise Line Holdings announced an underwritten public offering of $350 million of ordinary shares of the company.

The company intends to grant the underwriters an option to purchase up to $52.5 million of additional ordinary shares.

The company expects to use the net proceeds from the Offering for general corporate purposes. Goldman Sachs & Co. LLC, Barclays Capital Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC and Mizuho Securities USA LLC are acting as joint book-running managers for the Offering.

Goldman Sachs

Goldman Sachs analyst Stephen Grambling lowered the firm’s price target on Norwegian Cruise Line to $15 from $34 as he updated his estimates to reflect canceled itineraries through July, a sluggish recovery in 2020-2021 and capital markets activity over the past few weeks, but not the cruise operator’s just announced and pending transactions.

After the company announced plans to raise $600M of senior secured debt, $650M of exchangeable notes, and $350M in equity, and placed $400mn of exchangeable notes with Catterton Partners, Grambling said the added $2B in liquidity provides the company with runway of over 14 months at company estimated cash burn rates. He keeps a Neutral rating on Norwegian shares.

NCLH is down $2.80 to $11.65. We believe shares have found support at these levels.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Changyou.com sold for $579M

Changyou.com enters into definitive agreement for going private transaction

Changyou.com (CYOU) announced that it has entered into a definitive Agreement and Plan of Merger with Sohu Game, an indirectly wholly-owned subsidiary of Sohu.com (SOHU), and Changyou Merger, a wholly-owned subsidiary of Sohu Game, pursuant to which the company will be acquired by the Sohu Group in an all-cash transaction implying an equity value of the company of approximately $579M.

Changeyou.com sold to Sohu, Stockwinners.com

Pursuant to the terms of the Merger Agreement, at the effective time of the Merger, each Class A ordinary share of the company issued and outstanding immediately prior to the Effective Time, other than the Excluded Shares, will be cancelled and cease to exist, in exchange for the right to receive $5.40 in cash without interest, and each outstanding American depositary share of the company, other than the ADSs representing the Excluded Shares, will be cancelled in exchange for the right to receive $10.80 in cash without interest.

Sohu buys Changeyou.com, Stockwinners

The Merger Consideration represents a premium of 82.4% to the closing price of the company’s ADSs on September 6, 2019, the last trading day prior to the company’s announcement of its receipt of the “going-private” proposal, and a premium of 70.1% to the average closing price of the company’s ADSs during the 30 trading days prior to its receipt of the “going-private” proposal.

The Sohu Group intends to fund the Merger primarily with debt financing.

The Sohu Group has delivered a copy of an executed debt commitment letter to the company pursuant to which Industrial and Commercial Bank of China Limited, Tokyo Branch will provide, subject to the terms and conditions set forth therein, an amount sufficient to fund in full the consummation of Merger and the other transactions related thereto.

The company’s board, acting upon the unanimous recommendation of a committee of independent and disinterested directors established by the board, approved the Merger Agreement and the Merger.

The Special Committee negotiated the terms of the Merger Agreement with the assistance of its financial and legal advisors.

Because the Sohu Group owns over 90% of the voting power represented by all issued and outstanding shares of the company, the Merger will be in the form of a short-form merger of Merger Co. with and into Changyou in accordance with section 233(7) of the Companies Law of the Cayman Islands, with Changyou being the company surviving the Merger.

Shareholder approval of the Merger Agreement and the Merger is not required.

The Merger is currently expected to close in Q2 of 2020. If completed, the Merger will result in the company becoming a privately-owned company wholly owned directly and indirectly by Sohu, its ADSs will no longer be listed on the Nasdaq Global Select Market, and the ADS program will be terminated.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Liberty Property Trust sold for about $61 per share

Prologis to acquire Liberty Property for $12.6B

Prologis (PLD) and Liberty Property Trust (LPT) announced that the two companies have entered into a definitive merger agreement by which Prologis will acquire Liberty in an all-stock transaction, valued at approximately $12.6B, including the assumption of debt.

Prologis buys Liberty Property Trust, Stockwinners

The board of Prologis and the board of trustees of Liberty have each unanimously approved the transaction.

Warehouses and logistics facilities — Liberty’s specialty — have become a hot part of the real estate market as more shopping moves online and demand for the space increases. 

The acquisition gives Prologis a portfolio of 107 million square feet of logistics properties that’s owned or managed, as well as buildings under construction and land for future development. It also includes 4.9 million square feet of office space.

Prologis plans to dispose of approximately $3.5B of assets on a pro rata share basis. This includes $2.8B of non-strategic logistics properties and $700M of office properties.

This transaction is anticipated to create immediate cost synergies of approximately $120M from corporate general and administrative cost savings, operating leverage, lower interest expense and lease adjustments.

Initially, this transaction is expected to increase annual core funds from operations per share by 10c-12c. Upon stabilization of the acquired development assets, completion of the planned non-strategic asset sales and redeployment of the related proceeds, annual stabilized core FFO per share is forecasted to increase by an additional 4c per share for a total of 14c-16c.

Liberty holds mostly class A properties, Stockwinners

Further, there are future synergies with the potential to generate approximately $60M in annual savings, including $10M from revenue synergies and $50M from incremental development value creation.

“Liberty’s logistics assets are highly complementary to our U.S. portfolio, and this acquisition increases our holdings and growth potential in several key markets,” Prologis Chairman and Chief Executive Hamid R. Moghadam said in the statement.

Under the terms of the agreement, Liberty shareholders will receive 0.675x of a Prologis share for each Liberty share they own.

The transaction, which is currently expected to close in Q1 of 2020, is subject to the approval of Liberty shareholders and other customary closing conditions.

Liberty shares have risen 21% this year, compared with the 55% jump in Prologis shares. 

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility

Vail Resorts buys Peak Resorts for $11.00 per share

The deal is valued about $170 million

Peak Resorts (SKIS) announced that it has entered into a definitive merger agreement with Vail Resorts, Inc. (MTN) pursuant to which Vail Resorts will acquire all outstanding shares of common stock of Peak Resorts for $11.00 per share in cash.

Vail Resorts to buy Peak Resorts, Stockwinners

The transaction represents a 116% premium to Peak Resorts’ closing stock price on July 19, 2019.

The transaction is expected to close in fall 2019 and is subject to certain conditions, including a vote of Peak Resorts shareholders and antitrust clearance.

Vail Resorts buys Peak Resorts, shares jump. Stockwinners

The transaction was approved by the Boards of Directors of both companies. Peak Resorts’ Board of Directors also recommends that the Company’s shareholders approve the transaction.

Moelis & Company LLC is serving as financial advisor to Peak Resorts. Perkins Coie LLP, Sandberg Phoenix & von Gontard P.C. and Armstrong Teasdale LLP are serving as legal counsel to Peak Resorts.

About the Companies

Peak Resorts, Inc. owns, operates, and leases day and overnight drive ski resorts in the United States. Its resorts activities and amenities include skiing, snowboarding, terrain parks, tubing, dining, lodging, equipment rentals and sales, ski and snowboard instruction, golf, zip lines, mountain coasters, mountain biking, hiking, paint ball, and other summer activities. It operates 17 ski resorts primarily located in the Northeast, Mid-Atlantic, and Midwest.

Vail Resorts has been on a shopping spree, Stockwinners

Vail Resorts, Inc. operates mountain resorts and urban ski areas in the United States. The company operates through three segments: Mountain, Lodging, and Real Estate. The Mountain segment operates 11 mountain resorts, including Vail Mountain, Breckenridge Ski, Keystone, and Beaver Creek resorts in Colorado; Park City resort in Utah; Heavenly Mountain, Northstar, and Kirkwood Mountain resorts in the Lake Tahoe area of California and Nevada; Whistler Blackcomb in Canada; Stowe Mountain resort in Vermont; and Perisher in Australia, as well as 3 urban ski areas, such as Wilmot Mountain in Wisconsin, Afton Alps in Minnesota, and Mount Brighton in Michigan.

Vail Resorts expands its footprint by purchasing Peak Resorts, Stockwinners

Its resorts offer various winter and summer recreational activities. The Lodging segment owns and/or manages various luxury hotels and condominiums under the RockResorts brand, and other lodging properties; various condominiums located in proximity to the company’s mountain resorts; destination resorts; and golf courses, as well as offers resort ground transportation services. This segment operates approximately 5,400 owned and managed hotel and condominium units.

The Real Estate segment owns, develops, and sells real estate properties in and around the company’s resort communities. 

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Chesapeake Lodging sold for $2.7 billion

Park Hotels & Resorts announces $2.7B acquisition of Chesapeake Lodging

Park Hotels buys Chesapeake Lodging, Stockwinners

Park Hotels & Resorts (PK) and Chesapeake Lodging Trust (CHSP) announced that they have entered into a definitive merger agreement under which Park will acquire all the outstanding shares of Chesapeake in a cash and stock transaction valued at approximately $2.7B.

Upon completion of the merger, the combined company will have an estimated enterprise value of $12B, firmly solidifying Park’s position as the second largest lodging REIT while also advancing the company’s strategic goals of portfolio enhancement and diversification.

The transaction has been approved by the board of directors and board of trustees of Park and Chesapeake, respectively.

Under the terms of the merger agreement, Chesapeake shareholders will receive $11.00 in cash and 0.628 of a share of Park common stock for each Chesapeake share.

The fixed exchange ratio represents an agreed upon price of $31.00 per share of Chesapeake shares of beneficial interest based on Park’s trailing 10-day volume weighted average price as of May 3.

Based on Park’s closing stock price on May 3, this represents $31.71 per share of aggregate value to Chesapeake shareholders and represents a premium of approximately 11% to Chesapeake’s trailing 10-day VWAP and approximately 8% to Chesapeake’s closing stock price on May 3.

Upon closing, Park stockholders and Chesapeake shareholders will own approximately 84% and 16% of the combined company, respectively.

The transaction is subject to customary closing conditions, including receipt of the approval of Chesapeake shareholders.

The companies currently expect the transaction to close in late third quarter or early fourth quarter.

Chesapeake Lodging Trust is a self-advised lodging real estate investment trust (REIT) focused on investments primarily in upper-upscale hotels in major business and convention markets and, on a selective basis, premium select-service hotels in urban settings or unique locations in the United States.

The Trust owns 20 hotels with an aggregate of 6,279 rooms in eight states and the District of Columbia.

STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Pandora sold for $3.5 billion

Sirius XM to acquire Pandora in all-stock deal valued at about $3.5B

Pandora sold for $3.5 billion, Stockwinners
Pandora sold for $3.5 billion, Stockwinners

Sirius XM Holdings (SIRI) and Pandora Media (P) announced a definitive agreement under which SiriusXM will acquire Pandora in an all-stock transaction valued at approximately $3.5B.

The combination creates the world’s largest audio entertainment company, with more than $7B in expected pro-forma revenue in 2018 and strong, long-term growth opportunities.

Pursuant to the agreement, the owners of the outstanding shares in Pandora that SiriusXM does not currently own will receive a fixed exchange ratio of 1.44 newly issued SiriusXM shares for each share of Pandora they hold.

Based on the 30-day volume-weighted average price of $7.04 per share of SiriusXM common stock, the implied price of Pandora common stock is $10.14 per share, representing a premium of 13.8% over a 30-day volume-weighted average price.

The transaction is expected to be tax-free to Pandora stockholders. SiriusXM currently owns convertible preferred stock in Pandora that represents a stake of approximately 15% on an as-converted basis.

The merger agreement provides for a “go-shop” provision under which Pandora and its Board of Directors may actively solicit, receive, evaluate and potentially enter negotiations with parties that offer alternative proposals following the execution date of the definitive agreement.

There can be no assurance this process will result in a superior proposal. Pandora does not intend to disclose developments about this process unless and until its Board of Directors has made a decision with respect to any potential superior proposal.

The transaction has been unanimously approved by both the independent directors of Pandora and by the board of directors of SiriusXM.

The transaction is expected to close in the first quarter of 2019.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Under Armour to cut global workforce by 3%

Under Armour rises after announcing 3% cut to global workforce

Stockwinners gives Stocks to Watch, Stocks to Buy, Stocks to Invest In, Stocks to buy on margin
Under Armour to cut global workforce by 3%

Shares of Under Armour (UA, UAA) are rising after the company provided an update on its restructuring plan and announced a roughly 3% cut to its workforce.

RESTRUCTURING PLAN

On Thursday, Under Armour announced an update to its 2018 restructuring plan and an approximately 3% cut to its global workforce.

Previously, the company expected to incur total estimated pre-tax restructuring and related charges of roughly $190M-$210M in connection with the plan but, following further evaluation, the company identified about $10M of cash severance charges related to the workforce reduction.

Accordingly, the company now expects approximately $200M-$220M of pre-tax restructuring and related charges to be incurred in 2018.

The reduction in workforce is expected to be completed by March 31, 2019 and represents the final component to the 2018 restructuring plan.

MANAGEMENT COMMENTS

“In our relentless pursuit of running a more operationally excellent company, we continue to make difficult decisions to ensure we are best positioned to succeed,” said Under Armour Chief Financial Officer David Bergman.

“This redesign will help simplify the organization for smarter, faster execution, capture additional cost efficiencies, and shift resources to drive greater operating leverage as we move into 2019 and beyond.”

GUIDANCE

Based on the operational efficiencies driven by the plan, the company now expects operating loss is to be approximately $60M versus the previous range of $50M-$60M. Excluding the impact of the restructuring plan, adjusted operating income is now expected to be $140M-$160M versus the prior expectation of $130M-$160M.

Excluding the impact of the restructuring efforts, adjusted earnings per share is now expected to be in the range of 16c-19c versus the previously expected range of 14c-19c. This compares to analyst estimates of 12c.

WHAT’S NOTABLE

Last year, Under Armour approved a restructuring plan to better align its financial resources to support the company’s efforts as the consumer landscape shifts.

As part of the plan, Under Armour said it was cutting about 2% of its global workforce of 15,000 and streamlining “all aspects” of the organization to improve business operations.

On Tuesday, Matt Powell, Senior Industry Advisor, Sports at The NPD Group, stated in a LinkedIn post that “As expected, August was a disappointing month for sport footwear. Sales were down low singles in dollars and in units, yielding a flat performance in average selling price.”

Powell noted that Nike (NKE) brand sales grew in the very low singles on strong lifestyle results, Adidas (ADDYY) sales grew “only in the low singles digits,” Skechers (SKX) athletic improved “in the low singles” and Under Armour footwear “declined more than 25%” last month.

PRICE ACTION

Class A Under Armour shares rose 4.4% to $19.58 in morning trading.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Cannabis stocks rise amid interest by Coca-Cola

Cannabis stocks rise amid interest by Coca-Cola, opportunities for Shopify

Cannabis stocks rise amid interest by Coca-Cola, Stockwinners
Cannabis stocks rise amid interest by Coca-Cola, Stockwinners

Shares of cannabis stocks are in focus following a report that Coca-Cola (KO) is in talks with Aurora Cannabis (ACBFF) as it eyes the cannabis industry and an analyst note from Keybanc which said Shopify (SHOP) has cannabis potential.

COCA-COLA EYES CANNABIS

Coca-Cola is monitoring the nascent cannabis drinks industry and is in talks with Canadian marijuana producer Aurora Cannabis to develop the drinks, Bloomberg reported Monday.

“We are closely watching the growth of non-psychoactive CBD as an ingredient in functional wellness beverages around the world,” Coca-Cola spokesman Kent Landers said. “The space is evolving quickly. No decisions have been made at this time” Landers added.

The move comes as beverage makers are looking towards cannabis as soda consumption and traditional business slows.

Constellation Brands (STZ, STZ.B) previously announced it will spend $3.8B to increase its stake in Canadian marijuana producer Canopy Growth (CGC) and Molson Coors Brewing (TAP) is starting a joint venture with Quebec’s Hydropothecary to develop cannabis drinks.

In addition, Diageo (DEO) has been holding talks with at least three Canadian cannabis producers regarding a potential deal and Heineken’s (HEINY) Lagunitas label has launched a brand focused on non-alcoholic drinks infused with THC.

SHOPIFY MAY BENEFIT FROM CANNABIS SALES

KeyBanc analyst Monika Garb told investors in a research note on Monday that she is a buyer of Shopify, as the company has “ample” growth opportunities ahead.

She sees potential upside to her above-consensus estimates and expects that recreational sales of cannabis in Canada could be a general merchandise volume and revenue driver further benefiting Shopify’s business momentum.

The analyst said the company has been selected by several Canadian provinces to run their e-commerce sites and in-store point of sale solutions and has also signed deals with private cannabis producers and distributors, including Canopy Growth and Aurora.

Additionally, Garb says Shopify is the best positioned to benefit from growth in emerging brands, citing brands like Rebecca Minkoff and Kyle Cosmetics that already use Shopify. Garb maintained an Overweight rating and $182 price target on shares.

CANNABIS STOCKS

Publicly-traded companies in the space include Cronos Group (CRON), Canopy Growth, Tilray (TLRY), Cannabis Science (CBIS), Innovative Industrial Properties (IIPR) and Aurora Cannabis.

PRICE ACTION:

Aurora Cannabis gained over 16% in Monday’s trading, while Tilray gained 7.3%.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

SodaStream sold for $3.2 billion

PepsiCo agrees to acquire SodaStream for $144 per share in cash

SodaStream sold for $3.2 billion, Stockwinners
SodaStream sold for $3.2 billion, Stockwinners

PepsiCo (PEP) and SodaStream (SODA) announced that they have entered into an agreement under which PepsiCo has agreed to acquire all outstanding shares of SodaStream for $144.00 per share in cash, which represents a 32% premium to the 30-day volume weighted average price.

PepsiCo’s strong distribution capabilities, global reach, R&D, design and marketing expertise, combined with SodaStream’s differentiated and unique product range will position SodaStream for further expansion and breakthrough innovation.

Under the terms of the agreement between PepsiCo and SodaStream, PepsiCo has agreed to acquire all of the outstanding shares of SodaStream International for $144.00 per share, in a transaction valued at $3.2B.

The transaction will be funded with PepsiCo’s cash on hand.

The acquisition has been unanimously approved by the boards of both companies.

The transaction is subject to a SodaStream shareholder vote, certain regulatory approvals and other customary conditions, and closing is expected by January 2019.

“SodaStream is highly complementary and incremental to our business, adding to our growing water portfolio, while catalyzing our ability to offer personalized in-home beverage solutions around the world,” said Ramon Laguarta, CEO-Elect and President, PepsiCo.

“From breakthrough innovations like Drinkfinity to beverage dispensing technologies like Spire for foodservice and Aquafina water stations for workplaces and colleges, PepsiCo is finding new ways to reach consumers beyond the bottle, and today’s announcement is fully in line with that strategy.”


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Zoe’s Kitchen sold for $300 million

Zoe’s Kitchen to be acquired by CAVA Group for $12.75 per share

Zoe's Kitchen sold for $300 million, Stockwinners
Zoe’s Kitchen sold for $300 million, Stockwinners

Zoe’s Kitchen (ZOES) announced that it has entered into a definitive agreement to be acquired in a transaction by privately held Cava Group, fast-growing Mediterranean culinary brand with 66 restaurants.

The combined companies will have 327 restaurants in 24 states throughout the U.S. Under the terms of the agreement, Zoes Kitchen shareholders will receive $12.75 in cash for each share of common stock they hold.

This represents a premium of approximately 33% to Zoes Kitchen’s closing share price on August 16, 2018 and a premium of approximately 33% to Zoes Kitchen 30-day volume weighted average price ended on August 16, 2018, and an enterprise value of approximately $300M.

The acquisition of Zoes Kitchen will be financed through a significant equity investment in CAVA led by Act III Holdings, the investment vehicle created by Ron Shaich, founder, chairman, and former CEO of Panera Bread, and funds advised by The Invus Group, with participation from existing investors SWaN & Legend Venture Partners and Revolution Growth.

After closing, Brett Schulman, current CEO of CAVA, will serve as CEO of the combined company and will work closely with the existing leadership teams at Zoes Kitchen and CAVA to oversee their growth and evolution.

Ron Shaich will serve as Chairman of the combined company.

Consummation of the merger is subject to certain closing conditions, including the adoption of the merger agreement by the holders of a majority of the Company’s outstanding common stock, and the expiration or early termination of all applicable waiting periods under the HSR Act.

CAVA has agreed to pay to the Company a $17M termination fee if the merger agreement is terminated under certain circumstances and the merger does not occur.

The parties expect the merger to close in the fourth quarter of 2018.

Under the terms of the merger agreement, the Company is permitted to actively solicit, for a 35-day period, alternative acquisition proposals from potential buyer and business combination candidates.

There can be no assurance that any superior proposals will be received during this solicitation process or that any alternative transaction providing for a superior proposal will be consummated.

Except as may be required by law, the Company does not intend to disclose any developments with respect to such a solicitation process unless and until the Company’s board of directors determines that it has received a superior proposal. The Company would be required to pay to CAVA an $8.5M termination fee if the Company terminates the merger agreement to accept a superior proposal under certain circumstances. T

he Company’s Board of Directors has determined that the merger agreement with CAVA is fair to and in the best interests of the Company and the holders of the Company’s common stock.

Zoes Kitchen also announced that it will not hold its previously scheduled second quarter 2018 earnings conference call and web simulcast on the morning of Friday, August 17 and will not issue a press release with second quarter 2018 financial results.

The Company expects to file its quarterly report with second quarter 2018 financial results on or before August 20, 2018.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Starbucks receives $7.15 billion from Nestle

Nestle pays $7.15B to Starbucks for rights to sell packaged coffee, tea

Nestle pays $7.15B to Starbucks for rights to sell packaged coffee, Stockwinners
Nestle pays $7.15B to Starbucks for rights to sell packaged coffee,

Starbucks (SBUX) announced it will form a global coffee alliance with Nestle (NSRGY) to “accelerate and grow the global reach of Starbucks brands in Consumer Packaged Goods and Foodservice.”

It added, “With a shared commitment to ethical and sustainable sourcing of coffee, this alliance will transform, expand and elevate both the at-home and away-from-home coffee and related categories around the world.” As part of the alliance, Nestle will obtain the rights to market, sell, and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks VIA and Torrefazione Italia packaged coffee and tea in all global at-home and away-from-home channels.

Nestle will pay Starbucks $7.15B in closing consideration, and Starbucks “will retain a significant stake as licensor and supplier of roast and ground and other products going forward.”

Additionally, the Starbucks brand portfolio will be represented on Nestle’s single-serve capsule systems.

The agreement is subject to customary regulatory approval and is expected to close this summer or early fall.

The agreement excludes ready-to-drink coffee, tea and juice products. Starbucks intends to use the after-tax proceeds from the up-front payment primarily to accelerate share buybacks and now expects to return approximately $20B in cash to shareholders in the form of share buybacks and dividends through fiscal year 2020.

Additionally, the transaction is expected to be earnings per share accretive by the end of fiscal year 2021 or sooner, with no change to the company’s currently stated long-term financial targets.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners.

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

21st Century Fox Says Thanks but Not Interested

 21st Century Fox rejected rival bid of $34.41 per share for assets

21st Century Fox Says Thanks but Not Interested, Stockwinners
21st Century Fox Says Thanks but Not Interested, Stockwinners

Disney (DIS) disclosed on Wednesday in a regulatory filing that on November 14, 2017, representatives of 21st Century Fox (FOXA) and “Party B” held discussions via conference call regarding a potential strategic transaction between the parties.

Party B, which Reuters reported last night to be Comcast (CMCSA), provided Fox a non-binding proposal to acquire the remaining company at a price of $34.41 per share payable in stock of Party B, subject to further discussions on the allocation of regulatory risk.

Disney’s filing further explained, “Representatives of Goldman Sachs and Centerview then discussed with the 21CF board the potential financial profiles of the surviving entities from potential strategic transactions with each of Party B and Disney.

In addition, representatives of Goldman Sachs discussed with the 21CF board illustrative financial implications of the potential strategic transactions as proposed by each of Disney and Party B, including illustrative future trading ranges for each of Disney and Party B on a pro forma basis, giving effect to the potential strategic transactions.

Goldman Sachs noted that the probability of Disney stock trading toward the higher ends of the range on a pro forma basis could be viewed as higher than such a likelihood for Party B.

Goldman Sachs also noted the higher likelihood for revenue synergies in a Disney transaction over and above the cost synergies assumed in the Goldman Sachs valuation analyses.

At the end of the meeting, the 21CF board directed management to cease discussions with Party B and focus on finalizing negotiations with Disney.”

On December 7, 2017, Fox’s Rupert Murdoch informed the Chairman and CEO of Party B that Fox would not enter into an exclusivity arrangement with Party B at this time and that Fox would suspend discussions while it pursued other opportunities, Disney’s filing states.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Tropicana Entertainment sold for $1.85B

Eldorado Resorts to acquire Tropicana Entertainment in $1.85B transaction 

Tropicana Entertainment sold for $1.85B, Stockwinners
Tropicana Entertainment sold for $1.85B, 

Eldorado Resorts (ERI) announced that it entered into a definitive agreement to acquire Tropicana Entertainment (TPCA) in a cash transaction that is valued at $1.85B.

The definitive agreement provides that Gaming and Leisure Properties (GLPI) will pay $1.21B, excluding taxes and expenses, for substantially all of Tropicana’s real estate and enter into a master lease with Eldorado for the acquired real estate and that Eldorado will fund the remaining $640M of cash consideration payable in the acquisition.

Tropicana Entertainment sold for $1.85B, Stockwinners.com
Tropicana Entertainment sold for $1.85B, 

 

The transaction is expected to be immediately accretive to Eldorado’s free cash flow and diluted earnings per share, inclusive of identified expected cost synergies of approximately $40M in the first year following its completion and when giving effect to the lease transaction described below.

Pursuant to the transaction, GLPI is expected to acquire the real estate associated with the Tropicana property portfolio, except the MontBleu Casino Resort & Spa in South Lake Tahoe and the Tropicana Aruba Resort and Casino.

Following the acquisition of the real estate portfolio by GLPI, Eldorado will enter into a triple net master lease for the acquired properties with an initial term of 15 years, with renewals of up to 20 years at the Eldorado’s option.

The initial annual rent under the terms of the lease is expected to be approximately $110M.

Tropicana intends to dispose of Tropicana Aruba Resort and Casino prior to closing.

Eldorado’s net purchase price after the application of Tropicana’s expected net cash on hand and cash flow generated from operations through closing represents an estimated trailing twelve months EBITDA multiple of approximately 6.6x at closing.

Including the $40M of identified cost synergies, the purchase price multiple is expected to be below 5.0x.

The board of directors of each of Eldorado, GLPI and Tropicana approved the transaction, which is expected to close by the end of 2018, subject to receipt of required regulatory approvals and satisfaction of other customary closing conditions.

Eldorado intends to fund the transaction consideration of approximately $640M payable by Eldorado and repay debt outstanding under Tropicana’s credit facility with cash generated from its current operations, proceeds from pending asset sales, Tropicana’s cash on hand, cash flow generated from Tropicana operations through closing and $600M of committed debt financing from J.P. Morgan.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Barron’s is bullish on Facebook, La-Z-Boy

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

Stockwinners offers Barron's review of Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin
Stockwinners offers Barron’s review of stocks to buy

BULLISH   MENTIONS:

Barron’s lists potential takeover targets in cloud software – Shares of young cloud software companies like MongoDB (MDB) and SendGrid (SEND) have soared since the Nasdaq’s bottom on February 8, in part on speculation of a takeover, Barron’s Tiernan Ray contends. Takeover targets form a long list in addition to the aforementioned, and include Friday’s initial public offering Dropbox (DBX), Appian (APPN), Veeva Systems (VEEV), Atlassian (TEAM) and ServiceNow (NOW), Ray writes.

La-Z-Boy shares could rally 20% within a year or two – La-Z-Boy (LZB) shares currently trade at 13.8 times forecast earnings for the next 12 months, which is well below the small-cap Russell 2000 Index’s price/earnings ratio of 25, the Standard & Poor’s 500 index’s 17, and its own five-year average of 16.3 times forward earnings, writes Barron’s Brett Arend. He believes the stock, which closed Friday at $28.75, could merit a valuation of $36 per share, or roughly 20% higher, within a year or two “by simply getting back to its average five-year multiple.” Higher consumer spending, a new relationship to sell on Amazon.com (AMZN), and successful efforts to reach millennials could propel the shares even higher, Arend contends.

Time Warner shares look appealing with antitrust trial under way – Time Warner (TWX) investors face a “win-win” scenario with the antitrust trial for AT&T’s (T) proposed takeover now under way in Washington, Andrew Bary of Barron’s writes. Time Warner shares “look appealing, based on their underlying value and AT&T’s strong chances of winning,” Bary contends. He notes the stock closed Friday roughly $11 below the current value of AT&T’s cash and stock bid, worth $103.60 per share. The 12% deal spread is appealing with “many observers” believing AT&T and Time Warner will prevail over the U.S. government, according to Bary. He adds that while Time Warner shares could fall $5 if the government wins, some analysts think the stock will quickly recover to its current price of $92.57.

Interactive Brokers tops Barron’s list of best online brokers – Interactive Brokers (IBKR) sits atop Barron’s 23rd annual ranking of The Best Online Brokers. Interactive scored highly in trading experience, range of offerings, and portfolio analysis, Theresa Carey writes in a feature story for this weekend’s magazine. Interactive Brokers is followed by Fidelity, TD Ameritrade (AMTD), Charles Schwab (SCHW), TradeStation, Merrill Edge (BAC), E-Trade (ETFC) and tastyworks in Barron’s annual ranking.

Facebook may now be more tempting to investors – In its cover story titled “Facebook Comes Under Siege,” Barron’s says Facebook  (FB) shares may be more tempting to investors following last week’s 14% decline. With more than 2B users, however, Facebook is “almost certain” to not walk away unscathed as the top target for privacy concerns, Jon Swartz writes. Nonetheless, with nearly $42B in cash and investments, Facebook has the flexibility to diversify into other business lines, as it did with Instagram and WhatsApp, Swartz adds.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to Stockwinners

This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

Translate »