U.S. Indexes Gain; VF Acquires Timberland for $2 Billion

Arthi Gupta
13 Jun, 2011
New York City

U.S. indexes gained after a string of merger news lifted sentiment. VF agreed to buy Timberland for $43 per share. Wendy''s/Arby''s agreed to sell Arby''s to Roark Capital for $430 million. Honeywell acquired EMS Technologies for $491 million.

[R]9:45 AM New York – U.S. indexes gained after a string of merger news lifted sentiment. VF agreed to buy Timberland for $43 per share. Wendy''s/Arby''s agreed to sell Arby''s to Roark Capital for $430 million. Honeywell acquired EMS Technologies for $491 million.[/R]

U.S. indexes rose after merger news dominated morning trading and the prospect of Greek bailout brightened. China is expected to announce monthly inflation to surge as much as 6% this month according to a think tank controlled by the government.

The U.S. investors are expected to digest this week retail sales report, industrial production and weekly jobless claims reports, and housing starts report for May.

Asian markets declined on weak domestic and global economic outlook. Machinery orders in Japan declined 3.3% in April from March when they rose 1% according to the Cabinet Office. The decline was largely driven by the supply chain disruptions and is expected to rebound on the strong demand in the second half.

European indexes gained after Italian industrial production rose in April and Spanish corporate insolvencies decreased 6% to 1,201 in April from the previous year.

VF Buys Timberland

VF Corporation, the apparel retailer agreed to acquire Timberland Company for $43 per share in cash to create a $10 billion global apparel and footwear retailer.

The deal represents a total enterprise value for Timberland of about $2 billion net of cash acquired.

Transatlantic Inks Deal with Allied World Assurance

Transatlantic Holdings Inc., the reinsurance company signed a merger agreement with Allied World Assurance Co. Holdings AG to create a leading, global specialty insurer and reinsurer.

The combined entity will have total invested assets of $21 billion, total shareholders'' equity of nearly $7 billion, and total capital of $8.5 billion.

Wendy''s/Arby''s Sells Arby''s

Wendy''s/Arby''s Group, Inc., the fast food chain agreed to sell most of Arby''s Restaurant Group, Inc. to a buyer formed by private equity firm Roark Capital Group, for an estimated value of $430 million. The company will retain an 18.5% ownership interest in the Arby''s business.

Honeywell Purchases EMS Technologies

Honeywell signed an agreement to acquire EMS Technologies, Inc., a provider of connectivity solutions for mobile networking, rugged mobile computers, and satellite communications, for $33 per share in cash, or an aggregate purchase price of approximately $491 million, net of cash acquired.

NVIDIA Completes Icera Acquisition

NVIDIA Corp. said it completed its $367 million cash acquisition of Icera.

NVIDIA stated that with the addition of Icera, it currently offers the two main processors used in smartphones - the applications processor, in the form of the NVIDIATegra super chip, and the baseband processor, based on Icera technology.

Regal Beloit Acquires Australian Fan and Motor Company

Regal Beloit Corporation acquired the Australian Fan and Motor Company headquartered in Melbourne, Australia.

AFMC manufactures and distributes a wide range of direct drive blowers, fan decks, axial fans and sub fractional motors for sales in Australia and New Zealand.

Horizon Acquires APR Energy

Horizon Acquisition Co. Plc acquired Jacksonville, Florida-based APR Energy, along with its service company Falconbridge Services LLC, for $855 million in a cash and stock deal. The company paid $359 million in cash and $495 million in its shares.

Ford Ordered To Pay Damages

Ford Motor Co. has been ordered to pay about $2 billion in damages to thousands of truck dealers for overcharging them, which includes an interest of about $1.2 billion, according to a ruling by a judge in Ohio State.

The company said it will appeal the ruling and said the trial court has committed significant legal errors.

Earnings Review

Alliance One International, Inc. ((AOI)), the independent leaf tobacco merchant reported sales and other operating revenues declined 9.5% to $2.09 billion, from $2.31 billion in the year ago quarter. Net loss in the quarter was $71.6 million, or 81 cents per diluted share compared to net income of $79.2 million or 78 cents per share for the prior fiscal year.

Chesapeake Energy Corporation ((CHK)), the producer of natural gas lifted its quarterly common share dividend 17% and also said it''s issuing a preferred share dividend.

Thoratec Corporation ((THOR)), the medical devices maker reiterated its full-year 2011 earnings guidance range of $1.02 to $1.12 per share, and adjusted earnings guidance range of $1.35 to $1.45 per share.

The company still estimates revenues from continuing operations in the range of $410 million to $425 million for the full year.