U.S. Personal Income, Durable Orders Rise; Jo-Ann Stores in $1.6 Billion Deal

Arthi Gupta
23 Dec, 2010
New York City

U.S. indexes fell after jobless claims edged lower and durable goods declined more than expected and personal income rose. Jo-Ann Stores agreed to be acquired by Leonard Green for $1.6 billion. Zimmer agreed to acquire Geneva-based Sodem Diffusion.

[R]9:35 AM New York – U.S. indexes fell after jobless claims edged lower and durable goods declined more than expected and personal income rose. Jo-Ann Stores agreed to be acquired by Leonard Green for $1.6 billion. Zimmer agreed to acquire Geneva-based Sodem Diffusion.[/R]

AIG resolved to pay $100 million in fines to settle multi-state probe and Asian markets closed mixed and European markets traded with a downward bias after Korea conducted second live-fire drill.

Merger deals dominated the trading news around the world after Rio Tinto lifted its offer for Australia based Riversdale for $3.9 billion.

U.S. Durable Goods Orders, Jobless Claims Fall

Durable goods orders fell 1.3% in November following a revised 3.1% decrease in October, according to a report released by the U.S. Commerce Department on Thursday, on the steep drop in orders for transportation equipment.

Excluding an 11.9% drop in orders for transportation equipment, however, orders for durable goods rose 2.4% in November compared to a 1.9% decrease in October.

Initial jobless claims fell 3,000 to 420,000 in the week ending December 18. The previous week's figure was revised slightly higher to 423,000 from the 420,000 initially reported.

Continuing claims, or those currently receiving benefits, was 4,064,000 for the week ending December 11, a decrease of 103,000 from the revised previous week’s claims of 4,167,000.

U.S. personal income rose 0.3% in November following a downwardly revised 0.4% increase in October. However, personal spending increased 0.4% in November after an upwardly revised 0.7% increase in October.

Rovi Acquires Sonic Solutions

Rovi Corporation agreed to acquire Sonic Solutions in a stock and cash transaction valuing the company at $720 million.

The acquisition is structured as an exchange offer for all of the outstanding shares of Sonic common stock, to be followed by a merger.

Rio Tinto Bids for Riversdale Mining

Rio Tinto, the Anglo-Australian miner offered to acquire Australian coking coal miner Riversdale Mining Ltd. for A$16 per share in cash, valuing the company at $3.9 billion. The coal mining company operates several coal mines in Mozambique.

Airgas Rejects Offer from Air Products

Airgas, Inc. announced that its Board of Directors, after careful consideration with its independent financial and legal advisors, unanimously rejected the revised unsolicited tender offer from Air Products & Chemicals, Inc at a price of $70.00 per share in cash.

Zimmer Buys Sodem Diffusion

Zimmer Holdings, Inc., a musculoskeletal care maker provider acquired Sodem Diffusion S.A., the manufacturer of SoPlus Orthopaedic Surgical Power Tools based in Geneva, Switzerland.

The acquisition will broaden Zimmer's portfolio of surgical power tools and strengthen the company's position in the over $1 billion surgical power tool market.

AIG Pays Fine under Multi-State Settlement

American International Group Inc. and its workers compensation insurance affiliates have agreed to pay $100 million in fines to insurance regulators in all 50 states and the District of Columbia for alleged premium under-reporting. The company will also pay approximately $46.5 million in additional taxes and assessments.

Verigy Rebuffs Revised Bid From Advantest

Verigy Ltd., the Singapore-based semiconductor testing company said today that it received a revised takeover proposal of $15.00 per share in cash from Japanese rival Advantest Corp. Verigy, which is already in merger agreement with LTX-Credence Corp., said its Board continues to recommend deal with LTX-Credence to its shareholders, and is not recommending the revised Advantest proposal at this time.

Leonard Green Buys Jo-Ann Stores

Jo-Ann Stores, Inc., the fabrics and crafts retailer said it would be acquired by an affiliate of Leonard Green & Partners, L.P., for a total price of approximately $1.6 billion, or $61.00 per share in cash.

Earnings Review

Bed Bath & Beyond Inc. ((BBBY)), the retail store chain reported third quarter net sales increased 11.1% to $2.19 billion from $1.97 billion last year. Comparable store sales for the quarter increased about 7.0%, compared with an increase of approximately 7.3% in last year's fiscal third quarter. Net earnings in the quarter climbed 24.6% to $188.57 million or 74 cents per diluted share, compared to net earnings of $151.29 million or 58 cents per share in the previous year.

Christopher & Banks Corporation ((CBK)), the women's apparel retailer said third quarter net sales edged lower 8.4% to $120.9 million from $132.0 million last year. On a same-store-basis, sales dropped 7% for the quarter. Net loss in the quarter was $9.2 million or 26 cents per diluted share, compared with net income of $7 million or 19 cents per share a year earlier.

comScore, Inc. ((SCOR)), a digital marketing intelligence platform, reported its holiday season retail e-commerce spending for the first 49 days of November to December and said holiday season-to-date online spending increased 12% from the same period last year.

For the most recent week ending December 19, online spending reached $5.5 billion, up 14% from the year-ago period.

Micron Technology, Inc. ((MU)), the memory chip maker said first quarter net sales rose 29% to $2.25 billion from $1.74 billion in the same quarter last year. Net income in the quarter fell 24% to $155 million or 15 cents per diluted share, compared to net income of $204 million or 23 cents per share for the year-ago quarter, hurt by lower average selling prices of its DRAM chips.