Barnes & Noble sold for $683M

Barnes & Noble to be acquired by Elliott for $6.50 per share in all cash deal

Barnes & Noble sold for $683M, Stockwinners

Barnes & Noble (BKS) announces that it has entered into a definitive agreement to be acquired by funds advised by Elliott Advisors for $6.50 per share in an all-cash transaction valued at approximately $683M, including the assumption of debt.

Barnes & Noble has faced continued pressure from Amazon and independent booksellers. Its shares had fallen roughly 25% year to date before the news leak. Within the past five years, Barnes & Noble has lost more than $1 billion in market value.

Elliott’s acquisition of Barnes & Noble, the largest retail bookseller in the United States, follows its June 2018 acquisition of Waterstones, the largest retail bookseller in the United Kingdom.

James Daunt, CEO of Waterstones, will assume also the role of CEO of Barnes & Noble following the completion of the transaction and will be based in New York.

The $6.50 per share purchase price represents a 43% premium to the 10-day volume weighted average closing share price of Barnes & Noble’s common stock ended June 5, the day before rumors of a potential transaction were reported in the media.

As a private company, Barnes & Noble will likely be more free to make the changes and investment that can be unwieldy under a public spotlight. Part of the bookseller’s turnaround plan has included closing some of its more than 600 stores across the U.S. and relocating to smaller spaces that receive a fresh and modern look. The company has said its prototype stores encourage shoppers to buy books online or from a tablet.

The retailer has shown small signs of upturn. In March, it reported that over the holidays, sales at locations open for at least a year during the quarter rose 1.1 percent — its best quarterly performance in three years. As of January, it had $15 million in cash and cash equivalents.

The announced transaction with Elliott is the culmination of an extensive Strategic Alternative Review conducted by the Special Committee of the Barnes & Noble board, which was announced on October 3, 2018.

The board of Barnes & Noble unanimously approved the transaction and recommend the transaction to Barnes & Noble shareholders.

Leonard #Riggio, the Founder and Chairman of Barnes & Noble, has also entered into a voting agreement in support of the transaction.

The transaction is subject to customary closing conditions, including the receipt of regulatory and stockholder approval, and is expected to close in Q3.

The merger agreement provides for the acquisition to be consummated through a merger structure. However, the parties expect to amend the agreement to utilize a tender offer structure, which is expected to reduce the time to closing by a number of weeks.

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Fiat Chrysler propose to merge with Renault

Fiat Chrysler proposes to 50/50 merger agreement with Renault

Chinese automakers weigh bids for FCA. See Stockwinners.com Market Radar for details
Fiat Chrysler propose to merge with Renault, Stockwinners

Fiat Chrysler Automobiles N.V. (FCAU) announced that it has delivered a non-binding letter to the board of Renault (RNLSY) proposing a combination of their respective businesses as a 50/50 merger.

The FCA proposal follows initial operational discussions between the two companies to identify products and geographies where they could collaborate.

Fiat Chrysler propose to merge with Renault, Stockwinners

Fiat said, “These discussions made clear that broader collaboration through a combination would substantially improve capital efficiency and the speed of product development. The case for combination is also strengthened by the need to take bold decisions to capture at scale the opportunities created by the transformation of the auto industry in areas like connectivity, electrification and autonomous driving…The combined business would sell approximately 8.7 million vehicles annually, would be a world leader in EV technologies, premium brands, SUVs, pickup trucks and light commercial vehicles and would have a broader and more balanced global presence than either company on a standalone basis.”

Under the terms of the proposal, shareholders in each company would receive an equivalent equity stake in the combined company.

The combination would be carried out as a merger transaction under a Dutch parent company.

The board of the combined entity would initially be composed of 11 members, with the majority being independent and with equal representation of four members each for both FCA and Groupe Renault, as well as one nominee from Nissan.

Further, there would be no carryover of existing double voting rights.

However, all shareholders would have the opportunity to earn loyalty voting rights from the completion of the transaction under a loyalty voting program.

The parent company would be listed on the Borsa Italiana, Euronext and the New York Stock Exchange. Before the transaction is closed, to mitigate the disparity in equity market values, Fiat said its shareholders would also receive a dividend of EUR $2.5B.

In addition, prior to closing, there would be a distribution of Comau’s shares to Fiat’s shareholders or an incremental EUR $250M dividend if the Comau spin-off does not occur.

The combination is expected to deliver in excess of EUR $5B of annual run rate synergies, incremental to existing Alliance synergies.

Renault’s Response

Renault announced that its board met today to examine the proposal received from Fiat Chrysler Automobiles (FCAU) regarding a potential 50/50 merger between Renault S.A. and Fiat.

Renault said, “After careful review of the terms of FCA’s friendly proposal, the Board of Directors decided to study with interest the opportunity of such a business combination, comforting Groupe Renault’s manufacturing footprint and creating additional value for the Alliance.

A further communication will be issued in due course to inform the market of the results of these discussions, in accordance with applicable laws and regulations.”

FCAU closed at $12.85. RNLSY closed at $11.18.

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Circor receives $1.7B takeover offer

Crane proposes to acquire Circor for $45.00 per share in cash

Crane proposes to acquire Circor for $45.00 per share in cash, Stockwinners

Crane Co. (CR) announced that it has submitted a proposal to the Board of Directors of CIRCOR International (CIR) to acquire CIRCOR for $45 per share in cash.

CIRCOR International, Inc. designs, manufactures, and markets engineered products and sub-systems worldwide. It operates through three segments: Energy, Aerospace and Defense, and Industrial. 

The proposal represents a 47% premium over yesterday’s closing price and a 37% and 51% premium over a three- and six-month volume weighted average share price, respectively.

This reflects an enterprise value of approximately $1.7B at a multiple of approximately 13.5x the last 12-month adjusted EBITDA. Crane Co. proposed the all-cash transaction to CIRCOR’s President and CEO Scott Buckhout on April 30, the terms of which were confirmed by a letter to the CIRCOR Board of Directors.

On May 13, the CIRCOR Board summarily rejected Crane Co.’s proposal with no offer of discussions or due diligence.

“While we had hoped to complete a transaction privately, the Board’s rejection of our proposal without comment or discussion led to our decision to make our proposal known to CIRCOR shareholders so they can express their views directly to the CIRCOR Board,” said Max Mitchell, Crane Co. President and CEO.

“Our proposal provides CIRCOR shareholders with attractive value and certainty compared to the continued uncertainty surrounding CIRCOR’s plans to improve operating performance.

Based on CIRCOR’s history of underperformance and inability to meet its own financial targets, we believe CIRCOR’s standalone plan is unlikely to generate value comparable to what we are proposing.”

Mitchell continued, “We believe that this business, which has great brands and products, has been meaningfully undermanaged for years.

This has resulted in a persistent decline in CIRCOR’s share price, making it the worst performer of the peers in the S&P Midcap Capital Goods Index since the end of 2013.

Based upon the strength of our disciplined operating approach, Crane Co. is well positioned to integrate CIRCOR’s businesses into our focused portfolio, realize operational synergies, and deliver long-term value to Crane shareholders.

Combining CIRCOR’s Fluid Handling, Aerospace and Defense assets with Crane’s portfolio of leading brands would create a stronger competitor with additional scale and growth potential.”

CIR +13.49 to $44.15.

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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.

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Barron’s is bullish on Allergan and Gaps

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

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Barron’s is bullish on Gaps

BULLISH   MENTIONS:

Allergan shares could rise 20% or more– New competition to Allergan’s top product, Botox, and the loss of patent exclusivity for its second biggest, the dry-eye treatment Restasis, have left investors with “worry lines,” Vito Racanelli writes in this week’s edition of Barron’s.

However, Racanelli says concerns are way overdone as the company’s pipeline of new drugs should eventually replace the lost revenue from products going off patent. The shares could rise 20% or more, to $200-$225 by the end of 2019, Barron’s adds.

Old Navy may lift Gap (GPS) by 25% – Old Navy is enjoying fast sales growth and plump profit margins but is trapped inside a Gap, a name that has been an investor turnoff, Jack Hough writes in this week’s edition of Barron’s.

Old Navy contributes close to half of company sales and within two years could generate three-quarters of profits, and yet Gap shares trade at just 12 times projected earnings for the next four quarters, which is one sign Gap could have plenty of upside left – perhaps 25% or more over the coming year, he adds. GPS closed at $31.74.

CAUTIOUS MENTIONS:

Broadcom Plan B looks complicated – After Broadcom’s (AVGO) bid for Qualcomm (QCOM) ended last week after President Trump blocked it on grounds of national security, the Wall Street now wants to know what the former will try to buy as plan B, Tiernan Ray writes in this week’s edition of Barron’s. The two most heavily speculated-about targets are Xilinx (XLNX) and Micron Technology (MU), he notes, adding that several others are conceivable, including Microchip Technology (MCHP), Marvell Technology Group (MRVL), Maxim Integrated Products (MXIM), and Analog Devices (ADI). However, with nearly $18B in 2017 revenue, Broadcom is big enough to make finding targets that matter challenging, he contends.

Goldman Sachs’ next CEO will have to fix trading– In a follow-up story, Barron’s notes that Goldman Sachs (GS) was once known for its trading prowess but has recently humbled by a trading slump. The bank has created something of a hedge with its apparent choice of successor, David Solomon, a lender and investment banker but not a trader, the report says. If a long-awaited trading rebound materializes in the quarters ahead, CEO Lloyd Blankfein can hand over the keys with a grin, but if not, the Solomon era could see Goldman reduce exposure to trading, Barron’s points out.


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Corcept sinks after Teva submits application to sell Korlym

Corcept sinks after Teva submits application to sell Korlym in U.S. 

Corcept sinks after Teva submits application to sell Korlym. Stockwinners.com
Corcept sinks after Teva submits application to sell Korlym

Corcept Therapeutics (CORT) announced in a regulatory filing that it received a Paragraph IV Notice Letter advising that Teva Pharmaceuticals (TEVA) submitted an Abbreviated New Drug Application to the FDA seeking authorization to manufacture, use or sell a generic version of Korlym in the United States.

KORLYM is a prescription medicine used to treat high blood sugar (hyperglycemia) caused by high cortisol levels in the blood (hypercortisolism) in adults with endogenous Cushing’s syndrome who have type 2 diabetes mellitus or glucose intolerance and have failed surgery or cannot have surgery.

Korlym is a glucocorticoid receptor antagonist that is indicated to control hyperglycemia associated with Cushing’s syndrome, a rare, debilitating endocrine disorder. Cushing’s syndrome is caused by prolonged exposure to elevated levels of glucocorticoids (hypercortisolism). The potent metabolic effects of excess cortisol influence many tissues and body systems, and patients often have many problems, including diabetes, obesity, muscle wasting, depression, cognitive difficulties, and psychosis.

The Notice Letter contains Paragraph IV certifications against certain of Corcept’s patents related to Korlym, the company points out. The Notice Letter also alleges that the Korlym patents, the ‘348 patent with an expiration date in August 2028 and the ‘495 patent with an expiration date in August 2036, will not be infringed by Teva’s proposed product, are invalid and/or are unenforceable.

“The Company intends to vigorously defend its extensive intellectual property rights related to Korlym,” Corcept stated.


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Barron’s is bullish on Netflix and Boeing

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

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Stockwinners offers Barron’s review of stocks to buy

BULLISH MENTIONS:

Boeing not a sell just yet – Boeing  (BA) stock has come quite far, quite fast and the pace has only accelerated in 2018, but such a rapid rise could reflect an overly optimistic outlook for the airplane manufacturer that could be difficult to meet, Ben Levisohn writes in this week’s edition of Barron’s. Nonetheless, Boeing is not a sell just yet, he argues. While at first glance, betting on Boeing now seems like a risk, the stock can remain extended for a long time, Levisohn adds.

Netflix among likely candidates for an Apple purchase – Especially for tech companies, tax cuts will boost dividends, buybacks, and mergers and acquisitions, but tech usually has a hard time putting vast amounts of cash to work as it requires little R&D to produce huge amounts of revenue, Tiernan Ray writes in this week’s edition of Barron’s. For example, Apple (AAPL) does not have many places to invest that will demonstrably boost financial results. Without the excuse that the cash is stuck overseas, pressure may grow for Apple to do something big, with Netflix (NFLX) as the most likely candidate for a purchase, he contends.

Still time to shop Walmart shares as company makes changes – In a follow-up story, Barron’s notes that some Walmart’s experiments, like curbside pickup for groceries, are getting solid results, and points out that late-year shopping was robust and corporate tax cuts have warmed investors to retailers. While high-income taxpayers will get larger cuts amid the new tax reform than low- and middle-income ones, those are more likely to spend the extra money, which bodes wells for Walmart, publication said, adding that Walmart continues making changes, such as paying one-time bonuses and closing 63 underperforming Sam’s Club locations.


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Barron’s is Bullish on Volkswagen, Bearish on Netflix

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

Stockwinners offers stocks to buy, stocks to watch, upgrades, downgrades, earnings, Stocks to Buy On Margin

BULLISH MENTIONS

Dick’s Sporting seen as ‘bargain in retail’s wreckage’ – Value investors should warm up to Dick’s Sporting (DKS), Jack Hough writes in this week’s edition of Barron’s. While it could be a potential victim of Amazon.com (AMZN) in the long term, weaker sports chains will throw in the towel in the near term, creating cut-rate competition for Dick’s, he notes. Investors who get the timing right on Dick’s stock can profit, Barron’s says.

General Dynamics can still go higher – In a follow-up story, Barron’s writes that General Dynamics (GD) has returned more than 35%, to $198, and it is still valued below its peers. Nonetheless, the stock can go higher as it stands to benefit from new planes, military contracts, and more defense spending, the publication says.

Microsoft could rise 20% in a year – Microsoft (MSFT) has been shifting its decades-old products to the cloud and has shown it can transform itself without injuring its profit margins, Bill Alpert writes in this week’s edition of Barron’s. Additionally, the company has a “vibrant” computer-game franchise, he notes, adding that the company’s shares could rise 20% or more in a year.

Volkswagen could jump 50% – Volkswagen (VLKAY) looks inexpensive, thanks to improving operating performance, the high value of its luxury brands, a lucrative Chinese joint venture, and an attractive truck business, Andrew Bary writes in this week’s edition of Barron’s. Bulls argue that the company’s shares are worth over 50% more of their current price, he notes, adding that one tantalizing idea is a breakup of the company.

BEARISH MENTIONS

Netflix could drop more than 50% – Netflix’s (NFLX) shares could drop more than 50% as Disney (DIS) goes its own way and Amazon (AMZN) looms, Jack Hough writes in this week’s edition of Barron’s. Meanwhile, Facebook (FB) has launched a video service with niche shows covering sports, cooking and more, he points out.

Investors trapped in Teva can use options to get back some money – Teva Pharmaceuticals (TEVA) has recently reported weak earnings, offered dour financial guidance, and cut its dividend by 75%, which are reason to dump the stock, Steven Sears writes in this week’s edition of Barron’s. However, some investors are trapped in the rubble, he notes, adding that investors trapped in the stock can use options to get back some of their money.

United Technologies’ $140/share for Rockwell Collins not a bargain – In a follow-up story, Barron’s writes that reports have surfaced that United Technologies (UTX) is considering buying Rockwell Collins (COL), a move that would strengthen the conglomerate’s portfolio as a supplier to aircraft manufacturers in areas like seats, galleys, and cockpit systems. Some analysts think the price would be $140 a share for Rockwell’s stock, which would be no bargain, the publication says.


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