Calpine is in-play below $16

CalpineThe Wall Street Journal reported yesterday that #Calpine $CPN , the largest power producer, is exploring a sale.
#Deutsche Bank sees few strategic acquirers for Calpine (CPN), making going private or remaining public the most likely outcomes in the analyst’s view.
Market power issues in #Texas make a combination with Vistra Energy $VST or NRG Energy $NRG unlikely, and while #PSEG $PEG and #Exelon $EXC could afford buying Calpine, such a deal would be a shift in strategy for both.
The analyst finds it unlikely that a go-private deal gets done much north of $16 per share.
The analyst believes, however, that a mid-teens per share takeout is possible “with some creative structuring.”
Even without a deal, Calpine offers value based on its cash flow profile, Deutsche contends. The analyst reiterates a Buy rating on Calpine with a $14 price target.
The 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.

Softbank to push T-Mobile and Sprint into a deal

sprint#SoftBank  $SFTBF is prepared to enter talks on potential mergers and acquisitions for wireless unit #Sprint $S , particularly keen on a potential deal with #T-Mobile $TMUS , Reuters reports, citing comments made by CEO Masayoshi Son at a news conference.

The company previously tried to acquire T-Mobile for Sprint but dropped talks following opposition from U.S. antitrust regulators. “Of all potential partners, T-Mobile is the one that would yield the most synergies, the most orthodox choice and we’d sincerely love to begin talks,” Son said, adding that the current U.S. adtmobileministration is more open to the possibility of a deal.

The company is also open to other possible deals if there were better offers.

Visit Stockwinners to read more.

The 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.

Pentair to split into two companies!

#Penairpnr-logo $PNR announced that its Board of Directors has unanimously approved a plan to separate into two independent, publicly-traded companies.
The proposed transaction will create a global water company that designs, manufactures and delivers solutions to residential, commercial and industrial customers. Strategic business groups include Filtration & Process, Flow Technologies and Aquatic & Environmental Systems. The company will retain the Pentair name and ticker symbol. Water generated approximately $2.8B in sales in 2016; and an electrical company focused on improving utilization, lowering costs and maximizing customer uptime.
Strategic business groups include Enclosures, Thermal Management and Electrical & Fastening Solutions. The company will be named at a later date. Electrical generated approximately $2.1B in sales in 2016.
The separation is expected to occur through a tax-free spin-off of Electrical by Pentair to its shareholders.
Both Water and Electrical are expected to be well-capitalized and have investment-grade credit ratings.
Until the planned separation is completed, Pentair expects to continue to pay its quarterly dividend and will set appropriate dividend policies for each business following completion.
Upon separation, John L. Stauch, Senior Vice President and Chief Financial Officer of Pentair, will become Water’s CEO and Karl R. Frykman, the current President of Pentair’s Water segment, will become Water’s COO. Pentair expects to complete the separation in the second quarter of 2018, subject to satisfaction of customary conditions, including obtaining final approval from the Pentair Board of Directors, receipt of tax opinions and rulings and effectiveness of appropriate filings with the U.S. SEC.
$PNE is up 3% to $68.02 in morning trading following the announcement.
The 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 shares get a boost from KKR

pandora_logo_blue-796x174Noting that #Pandora $P announced it had raised $150M by selling a 5-year, 8% convertible preferred security to KKR $KKR , #Needham analyst Laura Martin calculates that adding KKR to the Pandora story adds $5 per share to the latter’s value, implying that it should trade up to $15 per share on the news over time.

The analyst believes #KKR provides a financial safety net, and expects KKR’s exit time frame to be 5 years, giving public shareholders a clearer exit path.

She reiterates a Buy rating and $16 price target on Pandora’s shares.

Visit Stockwinners to read more.

Investor Encourages Sale of Gigamon

id-gigamon#Elliott Associates said in its SEC filing regarding its new activist stake in #Gigamon, “The Reporting Persons intend to communicate with the Issuer’s management and Board about a broad range of operational and strategic matters, and intend to encourage the issuer to undertake a strategic review process including, without limitation, a potential sale of the Issuer or certain of its businesses or assets, in which the Reporting Persons may participate, as a means of enhancing shareholder value.
The Reporting Persons intend to review their investment in the Issuer on a continuing basis and may from time to time in the future express their views to and/or meet with management, the Board, other shareholders or third parties, including, potential acquirers, service providers and financing sources, and/or formulate plans or proposals regarding the Issuer, its assets or its securities.”
Shares of #Gigamon $GIMO are up 15% to $40.30 following news of the activist stake.

Straight Path jumps after unnamed suitor raises bid again to $3.1B

resize_StraightPathShares of Straight Path Communications $STRP re rallying again after the company announced earlier that its board of directors determined that a revised offer from an unnamed “multi-national telecommunications company” to acquire 100% of the issued and outstanding shares of Straight Path for $184.00 per share, reflecting an enterprise value of approximately $3.1B, which will be paid in bidder stock in an all-stock transaction constitutes a “superior proposal” as defined in Straight Path’s previously announced definitive agreement and plan of merger with #AT&T $T , dated as of April 9.

The unnamed bidder previously submitted an unsolicited offer on May 1 to acquire 100% of the issued and outstanding shares of Straight Path for $135.96 per share, reflecting an enterprise value of $2.3B, which has been superseded by the revised offer announced today, the company noted.

Prior reports from The Wall Street Journal and Reuters have indicated that #Verizon $VZ has submitted an offer to acquire Straight Path, thought the companies have not confirmed that. Straight Path has notified AT&T of the Straight Path board’s determination and, pursuant to the AT&T Merger Agreement, AT&T has the option for the next three business days to negotiate a possible amendment of that agreement to match or exceed the bidder’s offer, the company noted.

In pre-market trading, Straight Path shares have jumped $42.71, or 26.5%, to trade near $204 per share, well above the all-stock sweetened bid made by its unnamed suitor.

Belden Walks Out on Digi!

logo_digi#Belden $BDC announced that it has rescinded its proposal to acquire 100% of #Digi International $DGII in light of the fiscal second quarter 2017 results and full-year 2017 outlook reported by Digi on May 4, 2017.

Belden’s offer of $13.82 per share in cash, initially disclosed on November 11, 2016, was based on a 10x EBITDA multiple on #EBITDA of $24M implied by the high end of guidance provided by Digi to its shareholders on October 27, 2016.

Earnings before interest, tax, depreciation and amortization (EBITDA).

$DIGI tumbled 13% on the news to close at $10.70. Shares were trading around $10 when the buyout was announced.

Visit Stockwinners to learn more.

Problem of Too Much Cash!

With over 90% of #Apple’s $AAPL nearly $250B of cash sitting overseas, a one-time 10% repatriation tax would give the company $220B for apple-cashacquisitions or buybacks, Citi analyst Jim Suva tells investors in a research note titled “Addressing the Problem of Too Much Cash.”

The analyst identified seven potential takeover targets for the iPhone market using five filters: strategic fit, global scale, transaction size, few non-strategic assets and the likely impact on Apple’s share price.

The analyst’s potential targets for Apple are #Netflix $NFLX , #Disney $DIS , #Hulu, #Activision Blizzard $ATVI , #Electronic Arts $EA , #Take-Two Interactive $TTWO and #Tesla $TSLA .Nextflixlogo

Each of these names bring some strategic benefit to Apple, Suva argues. The analyst gave Netflix the highest likelihood of being acquired with a 40% probability.

Disney is next at 25%, with the rest at 10% or below. Suva believes a hybrid approach to the large cash position may be Apple’s best path. The iPhone maker, for example, coulddisney acquire Netflix with one-third of the cash and use the remaining two-thirds for buybacks, Suva contends.

Visit Stockwinners to learn more.

 

Straight Path Receives Superior Offer

#StraightPath Communications $STRP announced that its board of directorsresize_StraightPath determined that a revised offer from an unnamed “multi-national telecommunications company” to acquire 100% of the issued and outstanding shares of Straight Path for $135.96 per share, reflecting an enterprise value of approximately $2.3B, which will be paid in bidder stock in an all-stock transaction constitutes a “Superior Proposal” as defined in Straight Path’s previously announced definitive agreement and plan of merger with #AT&T $T and Switchback Merger Sub Inc., dated as of April 9.
The bidder previously submitted an unsolicited offer on April 24 to acquire 100% of the issued and outstanding shares of Straight Path for $104.64 per share, reflecting an enterprise value of $1.8B, which has been superseded by the revised offer announced today.
Under the terms of the AT&T Merger Agreement, AT&T agreed to acquire Straight Path in an all-stock transaction in which Straight Path stockholders would receive $95.63 per share, reflecting an enterprise value of $1.6B, which would be paid using AT&T stock.
Under the AT&T Merger Agreement, Straight Path is required to pay a $38M termination fee to AT&T if the Straight Path Board terminates the AT&T Merger Agreement in order to enter into an agreement with the Bidder. The bidder has agreed to pay the termination fee to AT&T on Straight Path’s behalf in such event. Straight Path would be required to repay the bidder for the AT&T termination fee under certain circumstances in connection with a termination of the Bidder’s merger agreement.
At this time, Straight Path remains subject to the AT&T Merger Agreement and the Straight Path board has not changed its recommendation in support of the AT&T transaction, the existing AT&T merger agreement, or its recommendation that Straight Path’s stockholders adopt the AT&T merger agreement.

Wireless Charging Coming to iPhone!

#JPMorgan tell investors #Apple $AAPL will integrate #Broadcom’s $BRCM wireless charging chip into its upcoming iPhone launch in the second half of 2017.

In February, the bank was unclear whether or not Apple would be integrating wireless broadcom_chipcharging into this year’s iPhone launch. The February report sent shares of #Energous $WATT lower.

Since that report, Broadcom is getting set to commence manufacturing production of the wireless charging chip with its foundry partners in May.

The broker believes Apple will also use Broadcom’s next generation WiFi/Bluetooth combo chip and maybe two ASIC chips instead of one. There is at least a $2-$3 step-up in dollar content per phone from the new wireless charging chip, new touch controller chips and upgraded wireless connectivity content in the upcoming iPhones, which is “significantly” higher than what the market is anticipating.

#JPMorgan reiterates an Overweight rating on Broadcom with a $260 price target.


STOCKWINNERS

To read timely stories similar to this, along with money making trade ideas, sign up for a membership to StockwinnersStockwinners offers stock picks, option picks, daily stock upgrades, stock downgrades, and earnings reports that are delivered to your email.

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.

Visit Stockwinner to read more.

Dunkin is next now that Panera is gone!

Following #Panera Bread’s $PNRA recent announcement that Europe’s panera-bread-300x300#JAB Holding has agreed to acquire the company in a transaction valued at approximately $7.5B, market chatter has it that #Dunkin’ Brands $DNKN could be next. Maxim says “one of the strongest candidates” for a potential acquisition in the Quick Service restaurant space.

This comes a few days after #Longbow told investors the do not expect the company to be acquired anytime soon. Meanwhile, #RBC Capital upgraded Dunkin’ Donuts’ parent to Outperform, as the bank anticipates a “more profitable system.”

STRONG BUYOUT CANDIDATE: In a research note to investors this morning, Maxim’s Anderson said he still views Dunkin’ Brands as “one of the strongest candidates” for a potential acquisition in the Quick Service restaurant space, even after JAB Holdings’ deal for Panera takes it out of the running for now. Moreover, the analyst argued that he sees comp growth and geographic expansion opportunities for Dunkin’ Donuts and Baskin-Robbins in both the U.S. and overseas and sees a potentially lucrative licensing business for the company as an “increasingly important attribute.” Dunkin’ Brands’ best likelihood for M&A will come from a multinational, multi-concept franchise operator, such as #Yum! Brands $YUM , Anderson contended, adding that he believes the latter isdunkin seeking franchise-driven growth concepts to complement its existing brand portfolio. The analyst estimates a range of $70-$75 for a potential takeout, and assigns a 25% likelihood of a possible acquisition in the next 12 months. Anderson acknowledged that #McDonald’s $MCD has recently gained market share through beverage discounting, but noted that Dunkin’ Brands held its own during the quarter with limited menu price increases. He reiterated a Buy rating on the stock ahead of quarterly results and raised his price target on Dunkin’ to $64 from $61.

ACQUISITION ‘HIGHLY UNLIKELY’: Conversely, Longbow analyst Alton Stump told investors in a research on his own on Friday that he believes a takeout of Dunkin’ Brands is “highly unlikely” to happen anytime soon. While an acquisition of the company by either JAB or Restaurant Brands $QSR may make sense on the surface, Dunkin’ Brands’ all-franchised operating model is “not a good fit” for JAB and its leveraged balance sheet would likely steer Restaurant Brands away, the analyst argued. Furthermore, he noted that Dunkin’ Brands’ decelerating same-store sales and net unit growth fundamentals are likely hard for any potential acquirer, including private equity players, to ignore. In the absence of a takeout, the analyst believes the shares of Dunkin’ Brands contain substantial downside risk based on the company’s weakening core fundamentals and, therefore, reiterates an Underperform rating and $35 price target on the shares.

WHAT’S NOTABLE: This morning, RBC Capital’s Palmer upgraded Dunkin’ Brands to Outperform from Neutral and increased his price target on the shares to $64 from $54 based on his outlook for improving franchisee profitability and improved long-term unit and earnings per share growth. Additionally, the analyst told investors that he sees upside from potential cash back to shareholders, either through accelerated buybacks or a higher dividend payout. A “dramatic reduction” in menu items and heightened focus on core coffee could bolster franchisee profitability by as much as hundreds of basis points over the next year, he argued, adding that improving margins could enable a better commitment to national value platforms and deter menu price inflation.

See Stockwinners for additional reading.

Dish Could be a winner, says Barcaly

Shares of #Dish $DISH are higher today after Barclays upgraded the stock to Overweight from Equal Weight, saying that the company “could emerge as a preferred partner” for “most” of the wireless carriers.Dish_network

DEAL POSSIBILITIES: #Sprint $S could combine with #T-Mobile $TMUS , and the combined entity could be forced to make a mobile virtual network available to a competitor, said Barclays.

Given the spectrum owned by Dish, the company could obtain a network from Sprint/T-Mobile and enter the wireless business, either on a wholesale or retail basis, Venkateshwar. believes. Dish could also combine with AT&T’s $T #DirecTV, the analyst stated. Such a transaction has been blocked by regulators in the past, but the competitive environment for video distribution has been altered significantly since then, according to the broker. #AT&T could use synergies to completely fund the deal, and the transaction would give the telecom giant “unprecedented scale in video,” wrote Venkateshwar. The analyst believes that #Verizon $VZ already faces tough competition and the pressure on it could intensify if Dish pursues one of the alternatives outlined above. Consequently, it may decide to try to buy Dish, according to Barclay.

VALUE HIGHLIGHTED: As carriers pursue Dish, the “strategic value” of its satellite business, which is under-appreciated by investors, will be “highlighted,” according to the analyst. The analyst raised his price target on Dish to $74 from $62.

WHAT’S NOTABLE: On April 25, The Wall Street Journal reported that Verizon had submitted a $104.64 per share offer for spectrum owner Straight Path $STRP , which has previously agreed to be acquired by AT&T for $95.63 per share. Straight Path has confirmed that its board determined that an “unsolicited offer from a multi-national telecommunications company” of $104.64 per share, reflecting an enterprise value of $1.8B, constitutes a “Superior Proposal” to the one accepted from AT&T, but did not name the rival bidder.

Visit Stockwinners to read more…