U.S. Retail Sales Fall, Par Pharmaceutical in $1.9 Billion Buyout

Arthi Gupta
16 Jul, 2012
New York City

U.S. indexes edged lower after retail sales fell unexpectedly in June. Par Pharmaceutical inked a merger agreement to be acquired by TPG for $1.9 billion. Thermo Fisher agreed to acquire One Lambda for $925 million in cash.

[R]10:50 AM New York – U.S. indexes edged lower after retail sales fell unexpectedly in June. Par Pharmaceutical inked a merger agreement to be acquired by TPG for $1.9 billion. Thermo Fisher agreed to acquire One Lambda for $925 million in cash.[/R]

U.S. indexes declined after retail sales fell unexpectedly in June and manufacturing activity in New York rose more than anticipated in July.

Citigroup reported better than expected earnings and GlaxoSmithKline agreed to acquire Human Genome for $14.25 a share.

On the U.S. economic calendar this week investors are looking ahead at weekly jobless claims, industrial output and some key housing reports.

Traders will also focus on comments of the Federal Reserve Chairman Ben Bernanke before the Senate Banking Committee on Tuesday and the Beige Book report.

European markets traded lower as leaders in the region await the approval of Spanish bank bailout later in the week.

On Thursday, German Constitutional Court is expected to approve the European plan to provide as much as €100 billion in aid to Spanish banks.

Italy plans to dispose public assets between €15 billion and €20 billion each year in order to reduce its public debt by 20% in five years, Finance Minister Vittorio Grilli said in an interview to the Italian daily newspaper Corriere della Sera.

Asian stocks traded mixed at closing after comments from the Chinese premier and the volatile situation in Europe.

The Chinese Premier Wen Jiabao said that the nation's economic recovery was not stable and that the government will step up efforts in the second half of the year to stabilize the economy and support growth, according to the official Xinhua news agency.

India's wholesale price inflation fell to 7.25% in June from 7.55% in May, the Ministry of Commerce and Industry said.

Food inflation rose to 10.81% in June from 10.74% in May. Prices of non-food articles climbed 6.85% in June compared to the 8.47% increase in May.

U.S. Retail Sales Fall

U.S. retail sales for June on a seasonally adjusted basis fell 0.5% to $401.5 billion from May levels, according to data released by the U.S. Commerce Department today.

Total sales for three months to June were up 4.7% from the same period a year ago.

New York Manufacturing Index Rises

Manufacturing activity index in New York rose to 7.4 in July from 2.3 in June, according to a report released by the Federal Reserve Bank of New York today.

GSK to Acquire Human Genome

GlaxoSmithKline plc will acquire Human Genome Sciences Inc. for $14.25 per share in cash. The transaction values HGS at approximately $3.6 billion on an equity basis or approximately $3 billion net of cash and debt, and represents a premium of 99% to the HGS closing price of $7.17 per share April 18.

Par Pharmaceutical to Be Acquired by TPG

Par Pharmaceutical Companies, Inc. agreed to be acquired by an affiliate of TPG in a transaction with an equity value of $1.9 billion.

Under the deal, Par shareholders will receive $50 in cash for each share of Par common stock, representing a premium of approximately 37% over the closing share price on July 13.

Thermo Fisher to Acquire One Lambda

Thermo Fisher Scientific Inc., the serving science company agreed to acquire One Lambda, the transplant diagnostics company for $925 million in cash.

The transaction, which is expected to be completed in the fourth quarter is estimated to be immediately accretive upon close and add 9 cents to 11 cents to Thermo Fisher’s 2013 adjusted earnings per share.

NBC, Microsoft JV Ends

NBCUniversal, the parent company of NBC News acquired 50% stake in MSNBC.com from Microsoft Corp. reportedly for $300 million. The Web site was formed in 1996 as a joint venture between NBC and Microsoft.

MSNBC.com is renamed as NBCNews.com.

Earnings Review

Citigroup Inc. ((C)), the global bank reported second quarter total revenues fell 10% to $18.64 billion from a year-ago quarter. Net income declined 12% to $2.95 billion or 95 cents per diluted share from $3.34 billion or $1.09, a year earlier.

Gannett Co., Inc. ((GCI)), the media company said second quarter total operating revenues declined 2.1% to $1.31 billion from the second quarter a year ago. Net income declined 20.9% to $119.89 million from $151.53 million a year ago and earnings per share fell to 51 cents from 62 cents in the previous year.

j2 Global Inc. ((JCOM)), the cloud services provider estimated second quarter earnings per share between 66 cents and 68 cents on revenues between $88.8 million and $89.5 million.

Woodward Inc. ((WWD)), the control solutions manufacturer in its preliminary results for the third quarter stated net sales are expected to be approximately $460 million and fully diluted earnings per share approximately 40 cents per share.