Mergers, Earnings Dominate NY Trading, SXC, Catalyst Health in $4.4 B Deal

Arthi Gupta
18 Apr, 2012
New York City

U.S. indexes traded lower and a flood of earnings and merger deals dominated market focus. SXC agreed to buy Catalyst Health for $4.4 billion and WOW! agreed to acquire Knology in $1.5 billion deal. Westfield plans to divest interests in eight shopping malls in the U.S. for more than $1.1 billion.

[R]10:15 AM New York – U.S. indexes traded lower and a flood of earnings and merger deals dominated market focus. SXC agreed to buy Catalyst Health for $4.4 billion and WOW! agreed to acquire Knology in $1.5 billion deal. Westfield plans to divest interests in eight shopping malls in the U.S. for more than $1.1 billion.[/R]

U.S. indexes pared gains. In early trading, investors were cautious after corporate earnings dampened sentiment.

The European indexes edged lower a day after Spain successfully completed bond auction and yields trended lower. Investors also took a note of larger financing available from the International Monetary Fund to bolster the euro zone bailout plan.

Asian markets closed higher on the expectations of higher exports after the IMF lifted its global economic growth outlook to 3.5% yesterday.

Berkshire Hathaway may also be in focus after CEO Warren Buffett said he has been diagnosed with stage I prostate cancer. However, Buffett told shareholders that his condition is ""not remotely life threatening or even debilitating in any meaningful way.""

SXC to Buy Catalyst Health

SXC Health Solutions Corp. and Catalyst Health Solutions, Inc. will combine in a cash and stock transaction valued at approximately $4.4 billion that will offer discounted drugs to large groups. The combined company will have annual revenues of $13 billion.

Statoil Accepts Alimentation Bid

Alimentation Couche-Tard Inc., the Canada-based convenience store operator agreed to acquire Statoil Fuel & Retail ASA for a cash consideration of NOK 53 per share, valuing the total share capital of the company at NOK 15.9 billion or $2.8 billion. The offer is at a premium of 53 % to the current trading price.

In addition, Statoil ASA has committed to tender its 54% interest in Statoil Fuel & Retail to the offer.

WOW! to Acquire Knology

WOW! Internet, Cable & Phone announced a merger agreement under which a subsidiary of WOW! will buy all of the outstanding shares of Knology for $19.75 a share and valuing the company for $1.5 billion.

Westfield to Divest Malls

Westfield Group, the Australian mall owner agreed to divest majority interests in seven non-core shopping centres in the U.S. with a value of about $1 billion to private equity firm Starwood Capital Group.

The company also agreed to sell Eastland, a power center for $147 million.

The total price for the transaction is $1.154 billion.

Earnings Review

BlackRock, Inc. ((BLK)), the asset manager reported first quarter total revenues declined 1.3% to $2.25 billion from $2.28 billion in the same quarter last year. Net income in the quarter increased 0.7% to $572 million or $3.14 per share compared to net income of $568 million or $2.89 per share in the previous year.

Assets under management rose 1% to $3.68 trillion from last year.

Dover Corporation ((DOV)), a manufacturer of industrial products and components reported first quarter revenue increased 13.8% to $2.06 billion from $1.81 billion a year ago. Net earnings in the quarter grew 0.6% to $196.06 million or $1.05 per diluted share compared to net earnings of $194.91 million or $1.03 per share last year.

Halliburton Company ((HAL)), the oilfield services firm reported first quarter revenues increased 30% to $6.87 billion from $5.28 billion in the first quarter of 2011. Net income in the quarter grew 24% to $635 million or 69 cents per diluted share compared to net income of $512 million or 56 cents per share a year ago.