Kerkorian Offers $4.5 billion Cash for Chrysler

123jump.com Staff
05 Apr, 2007
New York City

Kerkorian controlled company offers $4.5 billion cash for Chrysler Group. Daimler Chrysler rose 4% lifting broader averages. Semiconductor stocks were in focus after mixed outlook on Micron Technology from brokers. Rackable Systems declined 17%, WebMethods rose 26%, and Fuwei Films Holdings leapt 20%. Cox Radio jumped 8% on upgrades.

[R]2:30PM NY, U.S. Market Movers[/R]

Atari Inc. ((ATAR)) said that Bruno Bonnell, the founder, chairman and chief executive of its France-based parent company Infogrames Entertainment SA, has resigned from Infogrames and all of its subsidiaries. Bonnell served Atari as chairman, director, acting chief financial officer and chief creative officer. Bonnell''s resignation is effective immediately. Infogrames, which Bonnell is leaving after 24 years, named a director, Patrick Leleu, chairman and CEO to replace Bonnell. Shares of the company climbed 9.2%.

Biosite Inc. ((BSTE)) said it received an unsolicited cash offer from Inverness Medical Innovations Inc. of $90 per share, rivaling an offer made by hospital lab equipment maker Beckman Coulter Inc. Inverness, which already owns 4.9% of Biosite''s outstanding shares, wants to buy the rest of Biosite''s stock. Shares climbed 9.5%.

Cox Radio ((CXR)) shares jumped 7.9% after a couple of analysts upgraded the radio broadcaster, saying it may be taken private. John Klim of Credit Suisse thinks that the potential for a full takeover by privately owned media conglomerate Cox Enterprises Inc. may have increased with the company''s sale of its 25% stake in Discovery Communications. Discovery, which operates the Discovery Channel and other networks, said last month it is buying the stake from Cox in exchange for The Travel Channel, Antenna Audio and $1.28 billion in cash.

Encorium Group ((ENCO)), which designs and manages clinical trials for pharmaceutical companies, forecast 2007 revenue at the high end of a previously announced range of $30 million to $34 million. The company said the company is also maintaining its guidance for the first quarter of 2007 for revenue of $7.9 million to $8.3 million. the company said that its European division has signed $4.7 million in new contracts. More than 20 clients are covered by the contracts, Encorium said, in fields such as oncology, cardiovascular, and vaccines. Shares climbed 9.5%.

Epoch Holding Corp. ((EPHC)) unit Epoch Investment Partners Inc., an investment manger and adviser, on Wednesday said its assets under management grew 22% during the first three months of the year. Assets stood at $5.38 billion as of March 31, from assets of $4.41 billion as of Dec. 31. Shares jumped 19%.

Fuwei Films Holdings Co. ((FFHL)), maker of plastic films, shares surged 18% after reporting 2006 earnings jumped 16%, thanks to increased sales of special films and also stronger export revenue. Net income for calendar 2006 grew to RMB 67.7 million ($8.7 million, or $7.88 per share), from RMB 57.1 million a year ago. Sales increased 26% to RMB 436.8 million (or $56 million), from RMB 346.2 million in the prior year.

Immucor Inc. ((BLUD)), blood-testing equipment maker, said its third-quarter profit jumped 28% on higher revenue from product price increases. For the quarter the company earned $15 million, or 21 cents per share, compared with a profit of $11.7 million, or 17 cents per share, during the same period a year prior. Revenue rose to $57.1 million versus $47.1 million last year. Shares climbed 9.5%.

Jarden ((JAH)), consumer products maker, shares climbed 6.2%, hitting a 52-week high, after an analyst said the company has strong cash flows and upgraded the stock. Goldman Sachs believes the company''s strong cash flows in the fourth quarter could extend into the first quarter.

Matrix Service Co. ((MTRX)), industrial services provider, said that its third-quarter earnings increased to $6.2 million, or 24 cents per share, compared with a year-ago profit of $1.8 million, or 8 cents per share. The latest results include a charge of $500,000, or a penny per share, related to accounting for stock-based compensation. Revenue jumped 41.1% to $168.7 million versus $119.6 million in the same period a year earlier. The company lifted its revenue outlook for fiscal 2007 to a range of $630 million to $640 million from a prior projection of $560 million to $580 million. Shares climbed 11.4%.

NeuStar Inc. ((NSR)) shares rose 6.8% after the communications technology company affirmed its outlook for the year, reassuring investors who thought it might miss expectations. NeuStar late Wednesday backed projections for 2007 profit of $1.04 to $1.09 per share on revenue of $428 million to $438 million.

ScanSource ((SCSC)), which makes bar code scanners and electronic security products, projected a first-quarter sales increase of 19% to 21%. The company estimated sales between $484 million and $492 million for the first quarter ended March 31, compared with sales of $405.6 million in the same period a year ago. Shares climbed 5.5%.

United Retail Group Inc. ((URGI)), specialty retailer, said that its fourth-quarter net income declined 78% to $4.6 million, or 32 cents per share, compared with $21.3 million, or $1.54 per share. Revenue for the period, which included an extra week compared to the fourth quarter of 2005, climbed 6.8% to $127.6 million pounds. Same-store sales rose 0.5%. The drop in profit was largely due to a $16.9 million tax gain a year earlier, compared to a gain of $1.3 million in the 2006 final quarter. Adjusted net income fell to 14 cents per share from 20 cents per share as the company increased its spending on growth. United Retail said it hopes to open at least 30 new stores in 2007. Shares climbed 8%.

Webmethods ((WEBM)) agreed to be acquired by Germany''s Software AG for $9.15 a share, or roughly $546 million. Shares climbed 25.8%.

Cutera ((CUTR)) share fell 29.6% after the company said it now expects revenue of about $23 million for the first quarter, below its prior projection of $26 million.

Hayes Lemmerz International ((HAYZ)) shares dropped 31.6% after the company said its loss in 2006 narrowed to $166.9 million, or $4.36 share, from $457.5 million, or $12.07 a share, a year ago, due in part to higher sales in the Asian market. The company''s loss from continuing operations was $3.16 for the year. The supplier of automotive and commercial highway wheels, brakes and powertrain components said net sales climbed to $2.06 billion from $1.96 billion a year ago.

Restoration Hardware Inc. ((RSTO)) shares fell 6.9% after the company said that it swung to fourth-quarter net income of $13.6 million, or 34 cents a share, from a year-earlier loss of $19.5 million, or 52 cents a share. The home-furnishings retailer''s revenue increased 27% to $243 million in the period ended Feb. 3, from $191 million a year ago, while same-store sales rose 9.1%.

[R]1:00PM NY European markets closed in the positive.[/R]
European stocks closed in the positive territory Thursday, supported by U.K. banking stocks after Bank of England kept interest rates steady at 5.25%. Investors refrained from significant moves on cautiousness ahead of key U.S. jobs data and the Easter holiday break. The U.K. stocks were boosted by shares of mortgage bank Alliance & Leicester, which rose 1.6% after the central bank''s decision. On the side of the losers, DaimlerChrysler dropped 1.5% and truckmaker Volvo slipped 2.7%, as both companies traded without rights to the next dividend payment. Telecom stocks were in focus. Nokia rose 1.2% after the mobile-phone maker settled its patent dispute with Qualcomm by paying $20 million for patent licenses over UMTS licenses. Airline stocks were driven by analyst comments on Thursday. Deutsche Bank upgraded British Airways, pushing it up 0.3%, Air France-KLM, up 3.6% and Ryanair up 1.2%. Alitalia''s shares lost 1.7%, following a downgrade. In other brokerage news, shares of Old Mutual rose 2.4% in London after the insurer was upgraded to buy from hold at Citigroup. French information-technology services group Atos Origin rose 5.6% after it was upgraded at Credit Suisse. The U.K.''s FTSE 100 rose 0.5%, the French CAC-40 index rose 0.04% at 5,741.38 and the German DAX Xetra 30 index climbed 0.4% at 7,099.91.


[R]11:30AM U.S. markets traded in a lackluster fashion.[/R]
Wall Street traded in a light pre-holiday mood Thursday as investors, awaiting the release of March employment figures, keeping a cautious tone ahead of a three-day weekend. In corporate news, Constellation Brands ((STZ)) rose 2.7% after it reported 26% profit increase in Q4, helped by strong wine sales. On the side of the losers, mattress maker Sealy ((ZZ)) dropped 4.7% after it reported 7% profit rise in Q1 after it charged lower prices to maintain sales growth. Nokia ((NOK)) added 1.3%, while Qualcomm ((QCOM)) slipped 2.6% after Nokia agreed to pay Qualcomm $20 million in Q2 for using its UMTS license. Shares of Dow component DuPont ((DD)) slipped 1.4%, helping to keep the blue chip index lower.

Despite the lack of direction shown by the broader markets, airline stocks posted some strength. Among the most notable advancers, Mesa Air Group ((MESA)) rose 1.9%, Continental ((CAL)) climbed 2.3%, ExpressJet ((XJT)) jumped 2.7%, Alaska Air ((ALK)) added 1.4%. Among companies driven by analyst comments, American Home Mortgage Investment Corp. ((AHM)), mortgage lender, fell 2.7% after Bear Stearns downgraded its rating on the company''s stock. On the other hand, shares of Heelys ((HLYS)) surged 8.9% after Wachovia upgraded its rating on the footwear maker, expecting the company to exceed the consensus Q1 earnings estimate. In late morning trading, The Dow Jones industrial average fell 6.42, or 0.05%, to 12,523.63. The Standard & Poor''s 500 index was up 0.09, or 0.01%, at 1,439.46, and the Nasdaq composite index rose 3.54, or 0.14%, to 2,462.23. Bonds showed little movement, with the yield on the benchmark 10-year Treasury note unchanged at 4.65% from late Wednesday.


[R]9:45AM U.S. stocks opened mixed ahead of Easter holiday.[/R]
Wall Street started trading narrowly mixed on Thursday after a three-day winning streak and ahead Friday''s release of key employment data. There was little reaction to the latest initial jobless claims figures, which rose to their highest weekly level. Investors cautiousness was also attributed to the fact that the stock market is closed on Friday for the Easter holiday. In corporate news, Micron Technology ((MU)) fell 1.2% due to disappointing quarterly results, followed by a brokerage downgrade. The chipmaker reported $52 million in Q2 and was cut to sell at Goldman Sachs. On the positive side, semiconductor stocks Marvel Technology and National Semiconductor showed some strength, contributing to the modest gain of the tech-heavy Nasdaq. Marvell Technology ((MRVL)) rose 2.3% and National Semiconductor ((NSM)) climbed 1.6%.

Tech giant Dell ((DELL)) was little moved after it said it wouldn''t file its annual report on time because the internal investigation into its past accounting practices hasn''t finished yet. Nokia ((NOK)) and Qualcomm ((QCOM)) settled a patent dispute as Nokia agreed to pay Qualcomm $20 million in Q2 for using its UMTS license. Shares of Nokia added 0.6%, while Qualcomm slipped 1.2%. The Dow Jones industrial average fell 20.73, or 0.17%, to 12,509.32. The Standard & Poor''s 500 index was down 1.37, or 0.10%, at 1,438.00, and the Nasdaq composite index rose 0.14, or 0.01%, to 2,458.83. Bonds showed little movement, with the yield on the benchmark 10-year Treasury note unchanged at 4.65% from late Wednesday.


[R]9:30AM The FTSE advanced buoyed by BoE decision not to raise the rates.[/R]
The UK market was higher on Thursday. The FTSE 100 was up 10 points to 6,374.7 by mid-afternoon trade.

Economic news

The cost of borrowing stayed at 5.25% on Thursday but a large majority of investors expect the Bank of England to deliver another increase in May, as industrial growth is slowing and the housing market is weakening.

Advancers

Old Mutual led the gainers, up 2.2%, as Citigroup increased their rating on the life assurer from hold to buy.

Takeover talk lifted InterContinental Hotels, up 1.2%, as speculation continued that the Barclays brothers would team up with a private equity group and bid for the company.

Royal Dutch Shell rose 0.5 % and BP gained 0.6% as the oil price rose and ABN Amro talked up the long-term possibility of consolidation.

Decliners

Scottish & Newcastle dipped, losing 0.9% as expectations for a potential bid for the company from European rivals died away.

Vodafone lost 0.5% after the telecommunications group admitted that Indian laws would prevent it from owning all of the 67% shareholding in Hutchison Essar that it said in February it was planning to acquire for 5.6 billion pounds.

Electronic cable firm Volex was down 6.9%, announcing it is pleased with progress since interims last November, although the weak dollar and high copper prices mean full year figures will be slightly below expectations.


[R]9:15AM Asian markets finished mostly lower with Japan leading the region lower.[/R]
Asian markets ended lower on Thursday. Japanese Nikkei 225 average closed 0.3% lower at 17,491.42. Oil company Inpex Holdings dipped along with other energy-related shares as crude-oil prices declined below $65 a barrel in the wake of the resolution of the U.K.-Iran crisis. Shares of Inpex shed 2.8% in Tokyo. Among export-related shares, Honda fell 1.4%, while Toyota Motor eased 1.1% in Tokyo.

Hitachi Construction Machinery advanced 1.6% as the company is on track to pay a higher year-end dividend for the business year beginning April 1 than its planned dividend for the just-completed fiscal year.

Chinaese benchmark Shanghai Composite Index gained 0.8% to 3,319.14. Singaporean shares hit a second straight record high on buying in select market large-cap on strong earnings expectations. The benchmark Straits Times Index ended up 12.94 points, or 0.4%, at a record 3345.86 points.

Australian S&P/ASX 200 lost 0.3% to settle at 6,077.10 and South Korean Kospi index closed 0.1% lower at 1,482.04. In Australia, shares of Coles Group advanced 1%, extending sharp gains from the previous session, on speculation it could become the target of bidding war after Wesfarmers came forward with a $16 billion takeover offer.


[R]9:00AM U.S. stock futures pointed a slightly weak opening. Jobs data weighed.[/R]
U.S. stock futures indicated a flat to lower market opening after five straight sessions of gains and ahead of three-day weekend. Economic data weighed on the sentiment after the Labor Department reported the number of jobless claims increased last week, indicating continued pressure on the economy. The new applications filed for jobless benefits rose by a seasonally adjusted 11,000, to 321,000, for the work week ending March 31. Investors were also digesting overseas monetary policy moves and a downgrade of Micron Technology stock. The company is expected to drag tech stocks down due to disappointing quarterly results, followed by brokerage downgrade. S&P 500 futures slipped 0.50 of a point at 1,448.00 and Nasdaq 100 futures eased 0.25 of a point at 1,819.00. Dow industrial futures declined 2 points to 12,593.

Shares of Micron Technology shares ((MU)) rose 1.1% in pre-open trading, although it reported a Q2 net income loss, due to falling prices of memory chips. The company reported a wider-than-expected loss of 7 cents a share vs. estimates for a loss equal to a penny a share. Goldman Sachs downgraded Micron to sell from neutral, saying the company''s losses were likely to get worse. At the same time, Citigroup reiterated its buy rating and raised its price target to $17 from $15.50. Again in the sector, SanDisk ((SNDK)) rose 1.4% after the company said it was forming a joint venture with South Korea''s Hynix Semiconductor to make NAND flash memory chips. Tech giant Yahoo ((YHOO)) gained 1.2% ahead of the open, as Goldman Sachs raised its price target on the Internet services giant to $35 from $31.50, citing benefits from better-than-expected search growth and greater click-through rates. Rackable Systems ((RACK)) dropped 7.6% ahead of the open after warning of a quarterly loss. Nokia ((NOK)) and Qualcomm (QCOM)) settled a patent dispute as Nokia agreed to pay Qualcomm $20 million in Q2 for using its UMTS license.


[R]8:15AM Constellation Brands posted 26% net income rise in Q4.[/R]
Constellation Brands Inc. ((STZ)), wine and spirits producer and marketer, posted 26% net income increase in Q4, as strong wine sales helped offset a drop in sales of imported beer and competition in the British market. Earnings for the fiscal quarter rose to $70.2 million, or 29 cents a share, from $58.2 million, or 24 cents a share. On a comparable basis, it earned 35 cents a share, above expectations of 34 cents a share. Sales rose to $1.42 billion from $1.3 billion. For the year the company expects to earn $1.21 to $1.31 a share.

Micron Technologies ((MU)) swung to a loss in Q2, pressured by falling prices of memory chips and weak demand from cell phone makers. The chipmaker said it lost $52 million, or 7 cents a share, compared to $115 million, or 15 cents a share a year ago, missing analyst estimates for loss equal to one penny a share. Sales totaled $1.43 billion, up 16.5% from the same time a year ago, but came in below expectations of sales of $1.46 billion a year earlier. The stock rose 2.15% in pre-market trading.


[R]8:00AM NY-7:00PM Mumbai Sensex ends with a slight gain Thursday, inflation tame.[/R]
The Sensex on BSE finished 69.31 points, or 0.54%, higher at 12,856.08. The market-breadth was strong as there were two gainers for each decliner. For 1,658 stocks that advanced, 853 declined and 67 remained unchanged. Of the 30 stocks in the Sensex 18 advanced, while the rest declined. The turnover on BSE was Rs 3,169 crore, compared with Rs 3,230.85 on Wednesday. On NSE, the turnover was Rs 6,946.16 crore, compared with Rs 6,971.64 crore on Wednesday.

Economic news

The wholesale price index in India advanced 6.39% in the 12 months to 24 March, down from the increase in the previous week of 6.46 but slightly above a forecast of 6.29%.

The group of ministers on special economic zones, which met today, decided to end compulsory land acquisition by state governments for special economic zones and limited their size to 5,000 hectares. The ministers also cleared 83 special economic zones with no disputes and increased their processing area to 50% of the land size.

The largest commercial bank in India, State Bank of India, intends to raise its interest rates next week tracking the RBI move to lift the cash reserve ratio and a key rate last Friday.

Telecom regulator TRAI ruled out mandatory sharing of infrastructure among mobile operators, proposing instead allowing active networks like antennae, feeder, cables and transmission equipments to be shared among them.

Trading highlights

Indiabulls Real Estate was the most-active stock with a turnover of Rs 176 crore followed by MindTree and IFCI.

Advancers

Tata Steel led the advancers, soaring over 6% to Rs 465 as steel companies have hiked product prices. Tata Steel crude steel production for the year 2006-07, crossed 5 million tons. The production of hot metal touched 5.55 million tons, crude steel at 5.05 million tons and saleable steel at 4.93 million tons. Reliance Energy surged 2.7% to Rs 501.

The cement sector advanced after dropping on Wednesday, as buying was intense at lower levels. The fall came after the government announced a reduction in import duties. Today Grasim rallied 2.4% to Rs 2,113. Gujarat Ambuja Cements was up 1.10% to Rs 106.10, ACC added 1.06% to Rs 722, and UltraTech Cement Company ended up 2.26% to Rs 693.

ICICI Bank and HDFC advanced over 2% each to Rs 839 and Rs 1,530, respectively, while HDFC Bank gained almost 2% at Rs 943. Cipla advanced nearly 1.5% at Rs 233. Maruti, Hindalco and SBI added 1.3% each to Rs 756, Rs 132 and Rs 948, respectively.

Decliners

Dr.Reddy''s led the decliners, down 2% to Rs 729. Hero Honda shed 1.8% to Rs 632, and NTPC dropped 1.4% to Rs 159. NTPC posted a net profit of Rs 6,726.4 crore in 2006-07 as against Rs 5,820.2 crore in the previous fiscal, an increase of 15.57%. Index heavy Reliance Industries was down 0.4% to Rs 1,257.55 on 3.50 lakh shares. It moved in a range of Rs 1,368.90 –1,353.10.


[R]6:30AM European stocks were lower despite merger and acquisition speculation.[/R]
European markets were lower on Thursday. By mid-morning, Frankfurt Xetra Dax was flat at 7,076.62, the CAC 40 in Paris lost 0.2% to 5,730.12 and London FTSE 100 was flat at 6,363.4. National benchmarks fell in 13 of the 15 markets in western Europe that were open.

Advancers

Safran SA curbed declines today after it was reported the company and Thales SA, Europe largest defense-electronics company, may revive plans to merge. Safran gained 4%, while Thales was 0.3% higher.

Takeover talk lifted French construction group Eiffage 0.8% after Spanish rival Sacyr Vallehermoso, recently linked to an Eiffage bid, announced it was increasing its stake closer to the one-third level that would trigger a mandatory takeover bid.

Air France-KLM Group advanced 3.7%. Europe biggest airline may join Aeroflot and UniCredit in bidding for a stake in Alitalia, even though the deadline for new bidders has passed, as stated by Italian Industry Minister Periluigi Bersani.

Decliners

Volvo fell 3.2 % after chief executive Leif Johansson stated acquisitions would continue to make up half of the targeted 10 % annual growth of the company.

BHP Billiton, the world largest mining company, decreased 0.6%. China is the second-biggest market after Europe for the company. Anglo American, the second-largest, shed 0.6%. Antofagasta, which owns three copper mines in Chile, fell 1.5%.

Scottish & Newcastle lost 1.2% and shares of the largest brewer in theU.K were cut to sell from hold at ING Groep NV and downgraded to reduce from hold at Dresdner Kleinwort.

Oil and gold

Crude oil was little changed near a one-week low in New York after Iran released 15 British navy personnel, easing concern that supply from the Middle East may be disrupted. Crude oil for May delivery was at $64.35 a barrel, down 3 cents, in after-hours electronic trading on the New York Mercantile Exchange. In London, Brent crude for May settlement was at $68.55 a barrel, up 15 cents, in electronic trading on the ICE Futures exchange.

Gold was unchanged in London and traded at $672.60 per troy ounce, unchanged from late Wednesday. Silver opened in London at $13.56 per troy ounce, up from $13.52.

Currencies

The dollar was mostly higher against other major currencies in European trading Thursday morning. The euro traded at $1.3360, down from $1.3367 late Wednesday. The British pound traded at $1.9736, down from $1.9753. The dollar bought 118.74 Japanese yen, up from 118.67.