Chattem, Bucyrus, TreeHouse Surge

Mayank Mehta
21 Dec, 2009
New York City

Stocks in New York traded higher as the U.S. Senate nears a historic healthcare system overhaul. Healthcare insurers led the gainers. Three separate deals worth $4 billion drove stocks higher. TreeHouse, Bucyrus International and Chattem surged on merger deals.

[R]1:00 PM New York – Stocks in New York traded higher as the U.S. Senate nears a historic healthcare system overhaul. Healthcare insurers led the gainers. Three separate deals worth $4 billion drove stocks higher. TreeHouse, Bucyrus International and Chattem surged on merger deals.[/R]

Stocks in early afternoon traded higher as the U.S. Senate nears a healthcare reform bill passage.

Of the stocks in the S&P 500 index, 448 increased, 48 decreased and 4 were unchanged.

Newmont Mining led the decliners in the index with a loss of 3% followed by losses in E*Trade Financial of 2.5%, in SLM Corp of 2.4% and in Visa Inc of 2.2%.

Alcoa Inc with a rise of 8.5% led the gainers in the S&P 500 index followed by gains in Invesco Ltd of 6.3%, in Titanium Metals of 5.7%, in US Steel Corp of 5.6%, in Micron Technology of 5.4% and in AK Steel Holding of 4.8%.

Health insurers increased after the U.S. Senates nears the healthcare industry overhaul. The healthcare proposal cleared the first test vote with 60-to-40 and has a provision that delays the tax collection from insurers by one year.

Aetna Inc ((AET)) increased 4% to $33.83, WellPoint, Inc ((WLP)) added 2.7% to $59.92, Cigna Corp ((CI)) gained 4.3% to $37.38 and Coventry Healthcare ((CVH)) advanced 2% to $25.06.

Other Movers

Bucyrus International, Inc ((BUCY)) increased 9.3% or $4.73 to $55.57 after it agreed to acquire the mining equipment business from Terex Corp for $1.3 billion in cash. The boards of directors of both companies have approved the transaction and do not require shareholders approval. Terex Corp ((TEX)) increased 5.8% to $20.34.

Chattem Inc ((CHTT)) increased 32.8% or $22.95 to $92.93 after the company agreed to be acquired by Sanofi-Aventis SA for $1.9 billion in cash. The toiletries and healthcare company was valued at $93.50 a share.

CTC Media, Inc ((CTCM)) increased 12.4% or $1.52 to $14.10 after the U.S. listed Russian television network settled a lawsuit with its former chief executive and a board member Alexander E. Rodnyansky. The company will pay $25.9 million in cash and issue 2.07 million shares before the end of 2009 and Rodnyansky will forego one third of stock appreciations rights granted in 2003 and one third of vested stock options granted in 2006.

City National Corp ((CYN)) increased 11.85% or $4.87 to $45.96 after it agreed to acquire Imperial Capital on Friday from FDIC. The failed bank had $2.2 billion liabilities and $3.4 billion in assets.

TreeHouse Foods Inc ((THS)) surged 16.7% or $5.61 to $39.17 after it agreed to acquire private label maker of hot cereal and powered drink mixes Sturm Foods for $660 million.

In the latest year ending in September 2009, Sturm had $300 million revenues and TreeHouse estimates annual revenues to increase to $1.9 billion after the purchase. The company also anticipates earnings to be accretive by 16% or add between 38 cents and 40 cents in earnings per share.

TreeHouse plans to fund the purchase with $100 million in new stock offering and $400 million in new debt offering and the balance from the current credit lines.