Merger Activities, China Rate Decision Lift U.S., World Stocks

Arthi Gupta
13 Dec, 2010
New York City

U.S. stocks climbed after a flurry of merger activities around the world lifted trading sentiment. China also held its interest rates and reported a rising inflation. GE proposed to buy UK-based Wellstream for $1.3 billion and Sanofi-Aventis extended Genzyme tender offer.

[R]9:35 AM New York – U.S. stocks climbed after a flurry of merger activities around the world lifted trading sentiment. China also held its interest rates and reported a rising inflation. GE proposed to buy UK-based Wellstream for $1.3 billion and Sanofi-Aventis extended Genzyme tender offer.[/R]

U.S. stock futures traded higher, and Asian and European markets climbed after China left interest rates unchanged and reported economic data that showed vigorous economic expansion.

Economic data for the week include retail sales, producer price index, housing starts and FOMC meeting tomorrow. Traders will also be focusing on the ECB meeting of the EU leaders scheduled for December 16 and 17 at Brussels.

A flurry of merger activities around the world also lifted trading sentiment in New York and Europe.

Global Forex Daily Turnover Surges

Average daily turnover in global foreign exchange markets crossed $4 trillion in April, with turnover in emerging markets rising at a significant pace, the Bank for International Settlements said in its quarterly review.

The 20% rise in the daily turnover in FX markets since 2007 was driven by rising trading activities by high frequency traders, banks trading through the biggest dealers, and online trading by retail investors.

GE Proposes to Buy Wellstream

General Electric Co., the diversified technology, media, and financial services company said it plans to offer for UK-based oil and gas services group Wellstream Holdings Plc at 780 pence per share and a special dividend of 6 pence per share. The offer values Wellstream''s share capital at £0.8 billion or $1.3 billion.

Reckitt Benckiser Acquires Paras Pharmaceuticals

Reckitt Benckiser Group plc, the U.K.-based consumer goods company agreed to buy privately-held India-based personal care company Paras Pharmaceuticals Ltd. for about $726 million.

Sanofi-Aventis Extends Genzyme Offer

Sanofi-Aventis said it extended its tender offer for all outstanding shares of common stock of Genzyme Corp. at $69.00 per share, net to the seller in cash, without interest and less any required withholding taxes.

GlaxoSmithKline Acquires Maxinutrition

GlaxoSmithKline Plc agreed to buy sports nutrition company Maxinutrition Group Holdings Limited, a UK company that manufactures protein-enhanced functional nutrition products, from Darwin Private Equity for a cash consideration of about £162 million.

Dell Acquires Compellent

Dell Inc. and Compellent Technologies Inc. reached an agreement for Dell to acquire Compellent, a provider of highly-virtualized storage solutions with automated data management features.

Under terms of the agreement, Dell will pay $27.75 per share in cash for each share of Compellent for a total equity value of approximately $960 million, and aggregate purchase price of approximately $820 million, net of Compellent’s cash.

Thermo Fisher Buys Dionex

Thermo Fisher Scientific, the analytical instruments and services provider said it will acquire all of the outstanding shares of Dionex Corp. for $118.50 per share in cash, or a total purchase price of approximately $2.1 billion.

Lone Pine Resources Files for IPO

Lone Pine Resources Inc., the Canadian oil and gas exploration company and a wholly-owned subsidiary of Forest Oil Corp. stated in a regulatory filing on Monday that it intends to launch an up to $375 million initial public offering of its shares of common stock.

Lone Pine plans to apply for listing its shares of common stock on the New York Stock Exchange under the ticker symbol ""LPR.""

TJX Slashes 4,400 Jobs

The TJX Companies, Inc., the off-price retailer said it would consolidate the A.J. Wright division by converting 91 A.J. Wright stores into new banners and closing the remaining 71 stores, A.J. Wright''s two distribution centers and its home office.

The company also plans to cut about 4,400 jobs across the country and will take a charge of about $150 million to $170 million for the closure and conversion of its stores.

Earnings Review

BCE Inc. ((BCE, BCE.TO)), the Canada-based communications services provider announced its annual common share dividend will increase 7.7% to C$1.97 per share, effective with the dividend for the first quarter of fiscal year 2011.

Biglari Holdings Inc. ((BH)), the restaurant operator reported fourth quarter revenues increased 2.5% to $164.38 million from $160.4 million in the same quarter last year. Net earnings in the quarter surged 147% to $8.4 million or $6.26 per share, compared to net earnings of $3.4 million or $2.35 per share last year.

For the full year of 2010, revenues rose 7% to $673.7 million compared with $628.7 million and net earnings soared 367% to $28 million or $19.99 per share from $5.99 million or $4.20 per share the prior year.

Olin Corporation ((OLN)), the manufacturer of ammunition and chlorine and sodium hydroxide noted that its fourth quarter 2010 results would contain around $30 million of pretax restructuring charges. The company said these charges are associated with implementation of plans to exit the use of mercury cell technology.

W.W. Grainger, Inc. ((GWW)), the business-to-business distributor reported that November daily sales increased 14% from a year ago month. The company stated that the results for the month included a 2 percentage point contribution from acquisitions and a 1 percentage point contribution from foreign exchange.