Pep Boys Goes Private, ABB to Acquire Thomas & Betts

Arthi Gupta
30 Jan, 2012
New York City

The U.S. indexes fell as leaders in Europe gather to discuss the debt crisis. Exxon decided to sell its stake in a Japanese refinery for $3.9 billion. Switzerland-based ABB agreed to buy Thomas & Betts for $3.9 billion and Pep Boys agreed to be acquired by The Gores Group for $1 billion.

[R]9:45 AM New York – The U.S. indexes fell as leaders in Europe gather to discuss the debt crisis. Exxon decided to sell its stake in a Japanese refinery for $3.9 billion. Switzerland-based ABB agreed to buy Thomas & Betts for $3.9 billion and Pep Boys agreed to be acquired by The Gores Group for $1 billion.[/R]

U.S. indexes and global markets edged lower ahead of the meeting of European Union leaders in Brussels later today to discuss measures to spur growth.

The meeting is scheduled to finalize a fiscal pact and the endorsement of the European Financial Stabilization Mechanism that may have a capital of as much as €500 billion.

Greek leaders appear to agree on broad terms of the debt structuring with international lenders. However, Greek Prime Minister Lucas Papademos urged three party leaders to finalize the accor with lenders but leaders are resisting the calls to cut private sector pay and calls from Germany to audit government budgets.

Separately, Fitch Ratings downgraded the long-term issuer default ratings of Spain, Italy, Belgium, Cyprus and Slovenia. The ratings agency also affirmed Ireland''s rating.

The Italian government successfully sold €7.48 billion of long-term debt at lower yields today, out of an €8 billion target.

Exxon Mobil to Sell Japanese Unit

Exxon Mobil Corp. decided to sell back a major portion of its refinery and sales operations in Japan to TonenGeneral Sekiyu KK in a $3.9 billion deal, as part of restructuring the company''s holdings in Japan.

ABB to Acquire Thomas & Betts

ABB Ltd., the Swiss-based power and automation technology group, agreed to buy Thomas & Betts Corp. for $72 per share in cash or around $3.9 billion to expand its presence in the North American low-voltage products market.

The offer price represents a 24% premium to Thomas & Betts'' closing stock price on January 27.

Pep Boys to be Acquired by The Gores Group

The Pep Boys – Manny, Moe & Jack agreed to be acquired by The Gores Group, one of the nation’s leading investment firms at an enterprise value of approximately $1 billion.

The Gores Group will acquire all the outstanding common shares of Pep Boys for $15 a share in cash, which represents a premium of 24% over Pep Boys'' closing price of $12.08 on January 27, 2012.

Centrica Increases Stake in Statfjord Field

Centrica plc reached an agreement with ConocoPhillips to acquire its non-operated interests in the gas and oil producing Statfjord field and associated satellites for a total cash consideration of $223 million or £142 million, including $103 million or £66 million attributable to historic tax allowances.

Earnings Review

Canon Inc. ((CAJ)), the Japan-based manufacturing company said fourth quarter net sales decreased 9.7% to 964.76 billion yen from 1.07 trillion yen in the year earlier period. Net income in the quarter climbed 13.9% to 61.44 billion yen compared with net income of 53.96 billion yen last year.

Koninklijke Philips Electronics NV ((PHIA)), the electronics company stated fourth quarter total revenues rose 3.2% to €6.7 billion from €6.49 billion reported for the same period last year.

The company reported a net loss of €162 million or 17 cents loss per diluted share for the fourth quarter compared to a profit of €463 million or 49 cents per diluted share for the corresponding quarter last year.

For fiscal year 2011 net loss was €1.30 billion or €1.36 per share compared to prior year''s profit of €1.45 billion or €1.52 per share. Annual sales grew to €22.58 billion, a 4% increase on comparable basis.

Thomas & Betts Corporation ((TNB)), the designer and manufacturer of essential components stated fourth quarter net sales advanced 13.4% to $603.63 million from $532.52 million in the prior year. Net earnings in the quarter surged 42% to $56.84 million or $1.08 per diluted share compared to net earnings of $39.98 million or 76 cents per share a year-ago quarter.

Full year 2011 net sales increased 15% to $2.3 billion from $2 billion in 2010. Net earnings for the year increased 38% to $190.2 million compared to net earnings of $137.7 million a year ago.

Wolverine World Wide, Inc. ((WWW)), a manufacturer of work-related footwear and apparel reported fourth quarter revenues rose 5.6% to $406.47 million from $385.03 million in the prior-year. Net earnings in the quarter fell 10.3% to $23.01 million or 47 cents per diluted share compared to net earnings of $25.65 million or 52 cents per share in the prior year.