U.S. Stocks Struggle; 99 Cents in LBO; Dollar Thrifty to Stay Independent

Devan Biswas
11 Oct, 2011
New York City

Stocks in New York traded sideways as European leaders set the deadline of October 23 to announce bank recapitalization plan. 99 Cents Only agreed to be taken private and Dollar Thrifty declined 2% after it decided to remain independent after eighteen months of searching for a buyer.

[R]12:10 PM New York – Stocks in New York traded sideways as European leaders set the deadline of October 23 to announce bank recapitalization plan. 99 Cents Only agreed to be taken private and Dollar Thrifty declined 2% after it decided to remain independent after eighteen months of searching for a buyer. America Airlines plans to cut its capacity by 3% in the current quarter.[/R]

U.S. stocks edged lower in a cautious trading after European leaders offered more vocal support for the bank recapitalization plan.

Herman Van Rompuy, president of the council of European Union leaders delayed the meeting of European leaders by a week to October 23 and set that as the deadline to announce a plan to recapitalize banks and expand the power the European rescue fund.

Separately, Greece also indicated that it may take larger than expected write down of its 350 billion of sovereign debt as early as October summit.

German Chancellor Angela Merkel is targeting to write down Greek debt by 50% from the current agreed upon 21% debt reduction.

Slovakia opened the discussion on the vote in the early afternoon local time and is expected to struggle to approve the expansion of the European rescue fund.

The largest opposition party said it will not support the motion today but will approve the measure in the second vote later in the week.

The ruling coalition of four parties headed by Prime Minister Iveta Radicova is expected fall today as the largest opposition party try to bring down the government.

Malta approved the expansion of the EFSF and Slovakia is the only member of the 17-nations Euro zone to ratify the measure.

Stock Movers

99Cents Only Stores ((NDN)) increased 4.3% or 89 cents to $21.38 after the specialty retailer agreed to be acquired by Ares Management LLC and Canada Pension Plan Investment Board for $22 per share in cash. Total equity value of approximately $1.6 billion. Per share price represents premium of 32% to 99 Cents Only Stores.

Dollar Thrifty Automotive Group, Inc ((DTG)) decreased 2.2% or $1.38 to $59.03 after the rental of vehicles operator has formally concluded its process to solicit definitive proposals regarding potential business combination. Hertz Global Holdings, Inc. ((HTZ)) not made proposal that addresses the board''s requirements of an offer cleared of antitrust risk

Earlier in September, Hertz has offered to exchange each issued and outstanding share of common stock of Dollar Thrifty for $57.60 in cash and 0.8546 shares of Hertz common stock.

Shares of Hertz Global Holdings, Inc. ((HTZ)) rose 2.1% or 22 cents to $10.30.

Mechel OAO ((MTL)) slipped 6.4% or 72 cents to $10.43 after the Russia based mining and steel company reported second quarter revenues increased 18.3% to $3.47 billion compared to $2.93 billion in first quarter. Net income in the quarter declined 37.9% to $191.9 million compared to $309.1 million in first quarter.

Mistras Group, Inc. ((MG)) rose 1.7% or 34 cents to $19.80 after the asset protection solution provider said first quarter revenues soared 34% to $91.4 million compared to $68.4 million in the same period last year. Net income in the quarter surged 103% to $3.2 million or 11 cents per diluted share compared to $1.6 million or 6 cents per share a year ago.