U.S. Stocks Advance; Allscripts, Eclipsys Merger

Arthi Gupta, Mayank Mehta and Sanjay Barot
09 Jun, 2010
New York City

U.S. stocks gain as exports in China boom, European markets advanced ahead of the Agricultural Bank''''s IPO, and mixed trading was seen in the Asian markets. IMF Deputy Managing Director Naoyuki Shinohara said the global outlook remains unusually uncertain and downside risks have risen significantly.

[R]9:45 AM New York – U.S. stocks rise after reports from Reuters that exports in China grew 50% in May from a year earlier. Microsoft prices $1.15 billion private offering of convertible notes. Allscripts, Eclipsys to merge in an all-stock deal valued at $1.3 billion.[/R]

U.S. stocks gain as exports in China boom, European markets advanced ahead of the Agricultural Bank''s initial public offering, and mixed trading was seen in the Asian markets. International Monetary Fund Deputy Managing Director Naoyuki Shinohara said the global outlook remains unusually uncertain and downside risks have risen significantly.

The global outlook is unusually uncertain and recovery remains subdued in advanced nations, according to International Monetary Fund Deputy Managing Director Naoyuki Shinohara.

According to Shinohara, beyond global risks, major two issues of particular interest for Asia are potential spillovers from a Euro area crisis and rising uncertainty in the outlook for capital flows. """"Should the recovery continue as expected, Asia''s bright growth prospects—together with low interest rates in major economies—would likely attract more capital,"""" said Shinohara.

Although Asia is not immune from global developments, the region remains strong to tackle these risks, he added. The key will be for policymakers to keep an eye on the bigger picture and be ready to act swiftly as developments unfold.

Adverse developments in Europe could disrupt global trade, with implications for Asia given the still important role of external demand. In the event of spillovers from Europe, Shinohara sees ample room in most Asian economies to pause the withdrawal of fiscal stimulus.

Microsoft Corp., the computer technology corporation announced on Monday the pricing for the proposed offering of $1.15 billion aggregate principal amount of its zero coupon convertible senior notes due 2013. Microsoft intends to use the net proceeds to repay short-term debt. The sale of the convertible notes is expected to close on June 14, 2010.

Microsoft noted that the initial conversion rate for the notes is 29.9434 shares of common stock per $1,000 principal amount of convertible notes, implying an initial conversion price of about $33.40 per share, representing a conversion premium of 33% to closing price of $25.11 of Microsoft common stock on Monday.

Microsoft revealed that the convertible notes will not bear interest and the principal amount will not accrete, and said that prior to March 15, 2013, the notes will be convertible only in certain circumstances into cash and, if applicable, cash, shares of its common stock or a combination thereof at its election.

Microsoft Corp. ((MSFT)) declined 18 cents or 0.71% and closed Monday''s regular trading session at $25.11 on a volume of 87.35 million shares.

Allscripts-Misys Healthcare Solutions, Inc. said today it has signed a deal with healthcare IT company Eclipsys Corp. to merge in an all-stock transaction valued at around $1.3 billion. The merger, which is expected to add to Allscripts'' earnings beginning in calendar 2011, is scheduled to close in nearly four to six months.

According to the terms of deal, stockholders of Eclipsys will receive 1.2 shares of Allscripts for each share of Eclipsys, a premium of 19% based on the June 8 closing price.

The transaction is subject to stockholder approvals from both Allscripts and Eclipsys, and other customary closing conditions and regulatory approvals, including expiration or termination of any applicable waiting period under Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

The merger is also subject to the closing of a secondary offering of Allscripts shares owned by software products developer Misys Plc.

Misys will be selling a minimum of nearly 36 million of its Allscripts shares in the secondary offering to the public. Additionally, Allscripts will buy back from Misys, concurrent with the closing of the secondary offering, about 24.4 million of its Allscripts shares at a price of $18.82 per share or $460 million in total, plus a payment of a premium of $117.4 million with regard to the sale by Misys of its controlling interest for a total of $577.4 million.

After the buyback and secondary offering, Misys is expected to hold a total of approximately 15.5 million shares.

Eclipsys Corp. ((ECLP)) closed Tuesday''s regular trading session at $18.51 per share on the Nasdaq. In the past 52-week period, the stock traded in a range of $15.72 to $21.50.

Misys Plc ((MSY)) rose 42.90 pence or 19.19% and is currently trading on the London Stock Exchange at 266.40 pence per share on a volume of 5.29 million shares. In the past 52-week period, the stock traded in a range of 157.25 pence to 281.70 pence.

Commodities, Currencies and Yields

Dollar edged lower against euro to $1.1976 and decreased against the Japanese yen to 91.40.

Crude oil increased $0.67 to $72.66 a barrel for a front month contract, natural gas edged lower $0.05 cent to $4.76 per mBtu and gasoline increased 0.320 cents to 199.23 cents.

Gold decreased $8.10 in New York trading to close at $1,237.50 per ounce, silver closed lower $0.207 to $18.27 per ounce and copper for the front month delivery increased 4.350 cents to $2.82 per pound.

Yields on 10-year U.S. bonds increased to 3.20% and on 30-year U.S. bonds traded at 4.12%.

Stock Movers

Amazon.com, Inc., the online retailer fell 2.6%.

Texas Instruments Incorporated, the producer of analog chips rose 0.8%.

United Technologies Corporation, the maker of Pratt & Whitney jet engines and Otis elevators rose 1.5%.

Earnings Review

Pall Corporation ((PLL)), the supplier of filtration, separation and purification technologies said third quarter sales rose 11% to $616.0 million from $555.9 million a year ago. Net income in the quarter rose 57.7% to $69.7 million or 58 cents per diluted share compared to net income of $44.2 million or 37 cents per share a year ago.

Piedmont Natural Gas Company, Inc. ((PNY)), the energy services company said second quarter revenues rose 4% to $472.8 million from $455.4 million a year ago. Net income in the quarter fell 12.5% to $46.8 million or 65 cents per diluted share compared to net income of $53.5 million or 73 cents per share a year ago.

Take-Two Interactive Software, Inc. ((TTWO)), the video game publisher said second quarter revenues rose 53.8% to $268.0 million from $174.3 million a year ago. Net income in the quarter was $16.8 million or 20 cents per diluted share compared to net loss of $10.1 million or 13 cents per share a year ago.

Asian Markets Review

The Nikkei 225 Index in Tokyo closed lower 98.81 or 1.04% to 9,439.13, Hang Seng index in Hong Kong increased 133.76 or 0.69% to 19,621.24 and CSI 300 index in China higher 82.80 or 3.07% to 2,782.13. ASX 200 index in Australia increased 4.10 or 0.09% to 4,385.30. The FTSE Bursa KL Composite index in Malaysia closed higher 1.90 or 0.15% to 1,290.08.

The Kospi Index in South Korea decreased 4.26 or 0.26% to close at 1,647.22. SET index in Thailand closed higher 6.80 or 0.90% to 764.21 and JSE Index in Indonesia increased 5.81 or 0.21% to 2,785.79. The Sensex index in India increased 40.79 or 0.25% to 16,657.89.

Europe Markets Review

In London FTSE 100 Index closed lower 9.38 or 0.19% to 5,018.77, in Paris CAC 40 Index increased 2.38 or 0.07% to 3,382.74 and in Frankfurt DAX index traded lower 3.82 or 0.07% to 5,864.73. In Zurich trading SMI increased 7.17 or 0.11% to 6,253.39.