Intel, Infineon; 3M, Cogent Deals

Arthi Gupta
30 Aug, 2010
New York City

U.S. stocks fell after personal spending rose 0.4% in July. Intel agreed to acquire Infineon''s Wireless Solutions Business for $1.4 billion. Genzyme rejected Sanofi-Aventis'' $69 a share offer. 3M agreed to buy Cogent for $943 million. HP raised 3PAR bid to $30 per share.

[R]9:35 AM New York – U.S. stocks fell after personal spending rose 0.4% in July. Intel agreed to acquire Infineon''s Wireless Solutions Business for $1.4 billion. Genzyme rejected Sanofi-Aventis'' $69 a share offer. 3M agreed to buy Cogent for $943 million. HP raised 3PAR bid to $30 per share.[/R]

Asian and European markets advanced.

The Bank of Japan announced an expansion to its low-interest lending program after an extraordinary policy board meeting on Monday, as it bids to stem the rise in the yen. At the same time, the bank also maintained its key interest rate at near-zero.

In a 8-1 split vote, the policy board of the central bank, led by Governor Masaaki Shirakawa, decided to introduce a new 10 trillion yen six-month fund supplying measure, in addition to the 20 trillion yen three-month loan measure it already has in place. Board member Miyako Suda voted against the move.

The U.S. Commerce Department released a report stating personal spending increased by a little more than expected in the month of July. The report showed that personal spending increased 0.4% in July after remaining unchanged in June. Further, the Commerce Department said that personal income rose 0.2% in July.

Disposable personal income or personal income less personal current taxes also increased 0.2% in July after being unchanged in June.

Intel Corp. agreed to acquire Infineon Technologies AG''s Wireless Solutions Busines for $1.4 billion in cash. Intel expects to close the deal in the first quarter of 2011.

The acquisition expands Intel''s current Wi-Fi and 4G WiMAX offerings to include Infineon''s 3G capabilities and supports Intel''s plans to accelerate wireless connectivity. The acquired technology will be used in Intel Core processor-based laptops, and Intel Atom processor-based devices, including smartphones, netbooks, tablets and embedded computers.

Genzyme Corp., the biopharmaceutical firm confirmed the receipt of an unsolicited, non-binding proposal from French drug giant Sanofi-Aventis SA acquire all the outstanding shares of Genzyme for $69 a share in cash. The company stated that its board of directors met last night and unanimously affirmed its previous rejection of Sanofi''s proposal.

Genzyme said that Sanofi''s letter is identical to last month''s offer. The letter provides no new information and no improvement in price, and therefore fails to establish a basis for engagement by the Genzyme board.

Earlier, France-based Sanofi-Aventis SA announced on Sunday a public offer to acquire biopharmaceutical firm Genzyme Corp. for $69 per share in an all-cash transaction valued at about $18.5 billion.

Sanofi-Aventis made this non-binding offer in a letter sent to Genzyme''s Chairman, President and Chief Executive Officer Henri Termeer.

3M Co., the diversified technology company agreed today to acquire Cogent, Inc. for $10.50 per share in a deal worth $943 million.

The transaction, which will expand 3M''s ability to provide biometric security solutions, is expected to close in the fourth quarter.

3M expects the transaction to be $0.09 to $0.10 dilutive to its earnings, on a reported basis, in the first year of operations after the closure of the deal.

The acquisition will expand 3M into the $4 billion global biometric market, which is expected to grow at more than 20% annually.

For the deal, J.P. Morgan acted as exclusive financial adviser to 3M, while Credit Suisse and Goldman, Sachs & Co. acted as financial advisers to Cogent Systems.

Hewlett-Packard Co. further sweetened its offer to $30 per share in cash, for an enterprise value of $2.0 billion after Dell Inc. raised its offer for data storage firm 3PAR Inc. Dell boosted its offer to $27 per share in cash for a value of about $1.8 billion. HP said that its proposal represents an 11% premium above the most recent price offered by Dell.

3PAR said that Hewlett-Packard''s $2 billion or $30 per share offer was a ""superior proposal.""

Earnings Review

AMEN Properties, Inc. ((AMEN.PK)), the company which focuses to own energy related assets and businesses said second quarter revenues decreased 4.8% to $2.0 million from $2.1 million in the prior-year quarter. Net loss in the quarter widened 410% to $1.3 million or $31.23 per share, compared to a net loss of $255 thousand or $6.09 per share in the year-ago quarter.

Benihana Inc. ((BNHNA)), the Japanese theme and sushi restaurants operator stated first quarter total revenues increased 5% to $100.77 million from $95.97 million in the comparable quarter a year ago on comparable restaurant sales rise of 2.4%. Net income in the quarter surged 68% to $1.28 million or 8 cents per diluted share compared to net income of $0.76 million or 5 cents per share last year.

Frontline Ltd. ((FRO)), the oil tanker operator reported second quarter revenues increased 27% to $356.1 million from $281.5 million in the same quarter last year. Net income in the quarter soared 194% to $81.3 million or $1.04 per basic share compared to net income of $27.7 million or 36 cents per basic share in the year-ago quarter.

K-Fed Bancorp ((KFED)), the parent company of Kaiser Federal Bank reported net income for the fiscal year 2010 declined 30% to $3.3 million or 26 cents per diluted share, compared to net income of $4.7 million or 36 cents per share for the fiscal year 2009.

Net interest income for the fiscal year 2010 increased 21% to $26.9 million from $22.3 million last year. Provision for loan losses rose 281% to $9.9 million in fiscal 2010 from $2.6 million in the prior fiscal.

NorCal Community Bancorp ((NCLC.OB)), the parent company for Bank of Alameda reported second quarter net loss widened 91% to $721,000 or 23 cents per diluted share, compared to a net loss of $377,000 or 12 cents per share for the year-ago quarter.

Net interest income for the second quarter fell 20% to $2.4 million from $3.1 million a year ago. Provision for loan losses for the same period declined 34% to $1.0 million from $1.6 million last year.