Posts for Ticker ‘ACXM’

H-P Confirms EDS Talks, Who’s Next? (EDS, HPQ, ACN, CSC, ACS, PER, UIS, ACXM, BE)

As traders look to the news covering whether or not Electronic Data Systems Corporation (NYSE: EDS), there was a release from Hewlett-Packard Co. (NYSE: HPQ) that confirmed the two companies were engaged in merger talks but there were no assurances that a deal could be reached. As a result, there are many other tech and IT-sourcing companies to look at that other players may take an interest in.  Keep in mind that many of these large tech companies do not want to be involved in being acquired and some of the companies will have stronger takeover provisions.  Everyone of these companies are different, yet all are in overlapping areas.  Here is a handful of names that could fall under that sort of tie-up if the deal comes to pass:

  • Accenture Ltd. (NYSE: ACN), although maybe too large;
  • CA, Inc. (NYSE: CA);
  • Computer Sciences Corp. (NYSE: CSC);
  • Affiliated Computer Services, (NYSE: ACS);
  • Perot Systems Corp. (NYSE: PER);
  • Unisys Corp. (NYSE: UIS);
  • Acxiom Corp. (NASDAQ: ACXM);
  • Bearingpoint, Inc. (NYSE: BE)…..

If we took the mid-point of the pricing at $12.5 Billion we would have a rough share price of $25.00 per share on EDS.  At that rough price, you would have a company that analysts expect to be priced at 18.2 times DEC-2008 earnings and 0.55-times revenue estimates.

Any such deal for EDS would likely have to come in the form of a friendly buyout.  This company doesn’t protect itself as hard as other companies, but Capital IQ does note the following tools the company has:

  • Removal of directors only for cause;
  • Board can change size of members;
  • Advanced Notice for director nominations;
  • Move by 50% of shareholders to remove directors;
  • Board Indemnification;
  • Blank Check Preferred Stock.

EDS is seemingly involved in more aspects of IT outsourcing and consulting than it isn’t.  Because of the rate that IT-workers come and go inside the Indian IT-outsourcing companies and because of laws restricting total foreign ownership in India, we did not include the public Indian-IT operations in this report 

You can join our open email distribution list to hear about other mergers, IPO’s, spin-offs, secondary offerings, and other special situations.

Jon C. Ogg
May 12, 2008

Posted on: May 12, 2008 – 3:17 pm in Mergers and Buy Outs, Rumors, Technology Companies, , , , , , , , ,

The Week In Stock Buybacks (DELL, CROX, XOM, UNH, HNT, IMMR, ACXM, HAR, ATI, AYI, EPIC)

This might not be that unusual for a volatile week during earnings season, but this was a fairly active week for share buyback news announcements.  Some are new and some are continuations or expansions.  There is no way to cover all the share buybacks during earnings season, and we screened out the micro-cap stocks.

Dell (NASDAQ:DELL) is perhaps the biggest buyback coming down the pipe after this month.  It will now be clear to resume its major stock buyback now that it has become compliant again with having its restatement complete and SEC filings current. Dell even said it expects to resume its share repurchase program shortly after it reports its results for the third quarter (so after 11/29).  Goldman Sachs added Dell to its Conviction Buy List at the expense of H-P (NYSE:HPQ).

ExxonMobil (NYSE:XOM) missed earnings expectations but noted that during the quarter, the company repurchased roughly 90 million shares of its own stock for about $7.8 billion.

CROCS Inc. (NASDAQ:CROX) authorized a 1 million share buyback planafter Thursday’s major stock drop.  The board must have said, "Evenwith ugly shoes, these buyback things that companies have announcedseem to be well received by traders."  After traders sent CROX to the Everglades, the company might as well just save its cash.

Allegheny Technologies Inc. (NYSE:ATI) Board of Directors approved a share repurchase program of $500 million, and it increased ATI’s quarterly dividend by nearly 40% to $0.18 per share.  This is after a dismal earnings number.

Immersion Corp. (NASDAQ:IMMR) board of directors authorized the repurchase of up to $50 million of the company’s common stock (nearly 3 million shares at current prices, with 30.1 million shares outstanding as of 10/31).  If the company lives up to it, that is an impressive buyback plan.  Unfortunately its earnings are quite spotty and expected to be that way ahead.

Epicor Software Corp. (NASDAQ:EPIC) Board of Directors has authorized up to $50 million for a buyback plan of its Common Stock that can be repurchased from time to time.

Acuity Brands, Inc. (NYSE:AYI) completed the spin-off of Zep Inc. (NYSE: ZEP) to the stockholders of Acuity Brands. Effective October 31, 2007, the Board of Directors of Acuity Brands authorized the repurchase of an additional 2,000,000 shares, or almost 5%, of its common stock. Also, Acuity has authorization to buy back a remaining 811,400 shares of outstanding common stock under the repurchase program announced in August of this year.  Baird just upgraded the company.

UnitedHealth Group (NYSE:UNH) at the Board of Directors’ regular quarterly meeting, held on October 30, 2007 renewed and increased its Stock Repurchase Program up to 210 million shares of the company’s common stock. This includes approximately 50 million shares remaining under the previous buyback plan; at September 30, 2007 the Company had approximately 1.3 billion common shares of stock outstanding.

Health Net, Inc. (NYSE:HNT) board of directors approved a $250 million increase to the company’s share repurchase program. The company launched its share repurchase program in May 2002 with an initial authorization of $250 million.  On October 16, 2006, Health Net announced that its board of directors increased the size of the stock repurchase program to $450 million and now Health Net has approximately $346 million in remaining repurchase authority.

PACCAR’s (NASDAQ:PCAR) Board of Directors approved the repurchase of $300 million of its outstanding common stock. PACCAR has invested $978 million to repurchase 27.4 million shares and paid $1.73 billion in dividends during the last three years.

Harman International (NYSE:HAR) announced that it has repurchased4,775,549 shares of its common stock under separate accelerated sharerepurchase programs for a total purchase price of approximately $400million.  After a failed merger, what choices are there?

Acxiom Corp. (NASDAQ:ACXM) board of directors has authorized the repurchase of up to $75 million of the company’s common stock over the next 12 months.  After a failed merger, what choices are there?

Jon C. Ogg
November 2, 2007

Posted on: November 2, 2007 – 11:16 am in Stock Buybacks, The Week, , , , , , , , , , ,

The 52-Week Low Club, Toyota (TM)

Toyota (TM) Hard to believe. Must be the UAW settlement. Drops $107.70 from 52-week high of $138.

Nautilus (NLS) Fitness company cuts jobs. Down to $6.74 from 52-week high of $18.63.

Standard Pacific (SPF) Home builder Drops to $4.50 from 52-week high of $30.52.

Nordstrom (JWN) Close retail continues to smart from falling same-store sales. Down to $41.75 from 52-week high of $59.70.

Rite Aid (RAD) Chain of retail drugstores still smarting from weak earnings. Drops to $4.18 to 52-week $6.74.

Memory Pharmaceuticals (MEMY) Key drug in development fails trial. Drops to $1.05 from 52-week high $4.94.

Sharper Image (SHRP) Niche retailer loses chance to close out litigation over product. Fall to $1.74 from 52-week high of $14.16.

Acxiom (ACXM) Jilted in private equity buy-out, shares keep dropping. Down to $13.89 from $28.25.

McClatchy Newspapers (MNI) Newspaper chain faces falling revenue and big debt load. Down to $18.90 from 52-week $44.95.

Douglas A. McIntyre

Posted on: October 15, 2007 – 3:16 pm in HI/LOW, , , , , , , , ,

Sallie Mae (SLM): A Hint Of Lawsuits In The Autumn Air

It did not take Sallie Mae (SLM) long to sue the private equity firms that planned to buy it, and the banks that were to fund the deal. The lead investor was JC Flowers and the major banks were JP Morgan (JPM) and Bank of America (BAC). When it appeared to the buyers that SLM’s financial returns might not be as robust as forecast and the federal government cut funding for student loans, the private equity interests hit the doors.

Sallie Mae contends that its business is fine, and that there is no reason for Flowers and its friends to ask for a price reduction on the $25 billion deal  The head of SLM was quoted by The Wall Street Journal as saying "Sallie Mae has honored its obligations under the merger agreement. We ask only that the buyer group do the same." Well said.

SLM want the break-up fee of $900 million if Flowers plans to back out.

The whole thing could be settled soon, or both sides could harden their positions and head to court. If they do, it may put pressure on the boards of other public companies where private equity interests have walked away from buy-out deals. The list of potential lawsuits could begin with Acxiom (ACXM), where private-equity firms Silver Lake Partners and ValueAct Capital Partners walked away, and widen to encompass other broken deals.

An irony, perhaps, that lawsuits could do more to slow private equity than the credit markets. But, at public companies, boards may feel a deal is a deal. They don’t want their shareholders to sue them. That would be two suits too many.

Douglas A. McIntyre

Posted on: October 9, 2007 – 5:07 am in Mergers and Buy Outs, , , ,

The 52-Week Low Club

Harte-Hanks Communications, (HHS) Direct marketing company. Internet is no friend. Falls to $19.11 from 52-week high of $28.78.

Acxiom (ACXM) Private equity buyers walk out the door. Down to $14.75 from 52-week high of $28.25.

Kirklands (KIRK) Steady fall since bad earnings over a month ago. Down to $1.00 from 52-week high of $6.15

Radvision (RVSN) Warns on revenue. Falls to $13.65 from 52-week high of $24.97.

Douglas A. McIntyre

Posted on: October 1, 2007 – 3:35 pm in HI/LOW, , , ,

Acxiom’s Hopes Of Another Offer Seem Dim (ACXM)

It is of little surprise that shares of Acxiom Corp. (NASDAQ:ACXM) are hitting new 52-week lows today.  That isn’t a first, but this after the fears have come true and the private equity acquisition is terminated.  Shares are down 24% at $15.05 on the day, well under the $18.75 to $28.25 trading range over the last 52-weeks.  ValueAct and Silver Lake were even able to negotiate a lower $65 million termination pact (under the $110 million stated at the merger announcement).  Both of these firms are astute in technology and turnaround growth plays.

Based upon current and forward P/E ratio’s this one still isn’t cheap yet.  That may keep a lid on any hopes of a rival bid or white knight coming in.  The truth is that Acxiom has been crushed as a stock now but it doesn’t really need a white knight.  Shareholders won’t agree with this at all because now shares are at a two-year low.  Charles Morgan, its chairman and corporate leader has also announced that he will retire and search for a successor.  Shareholders might not be happy now, but they probably think a new leadership team may be in order.

If you look at the company, the first thing that comes to mind is the ability for unit separations down the road.  Acxiom’s own description is as follows: integrates data, services and technology to create and deliver customer and information management solutions for many of the largest, most respected companies in the world. The core components of Acxiom’s innovative solutions are Customer Data Integration (CDI) technology, data, database services, IT outsourcing, consulting and analytics, and privacy leadership.  Acxiom could quite easily end up being two or even more separate entities.  Just don’t expect it any time in the immdeiate future until new leadership can come in.

You know that the market isn’t able to adequately factor in events on a permanent basis when you see this. If you have been a reader of our work or of others covering M&A, you would wonder why the market wasn’t able to price this in.

Jon C. Ogg
October 1, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he produces the 24/7 Wall St. Special Situation Investing Newsletter and he does not own securities in the companies he covers.

Posted on: October 1, 2007 – 10:10 am in Mergers and Buy Outs, Private Equity, , , ,

Private Equity Walks Out On Acxiom (ACXM): Class Action Lawyers March In?

The trail of broken shareholder hearts does not seem to be coming to an end. Data management company Acxiom (ACXM) is in talks with ValueAct Capital and Silver Lake about breaking off their plans to take the company private. The price was to be $27.10 in cash. The stock is trading at under $20, so that markets had doubts about the deal already.

All Acxiom may end up with is a break-up fee.

But, the private equity interests may have to argue that there was an important change in the company’s fortunes–material adverse-effect. The company did lose money in the last quarter, but that may not be enough to prove a major change.

Acxiom’s board may not sue the two private equity firms. But, the company’s shareholders may. The side-effect of all of these buy-out walk-offs could well be a series of class action lawsuits brought by company shareholders. This certainly went on when a number of internet companies lost their value and investors blamed management and Wall St. research firms. Suing when the share price drops is a time-honored tradition among public company stock holders.

No, private equity does not have to fear the rational and conservative members of America’s public company boards. Their risk is from rabid and unreasonable individual shareholders and institutions. The ones who lost their money.

Douglas A. McIntyre

Posted on: October 1, 2007 – 5:54 am in Mergers and Buy Outs,

The 52-Week Low Club

Pier 1 Imports (PIR) Analyst lowers estimate. Stock falls to $4.41 from 52-week high of $9.06.

Standard Pacific (SPF) Homebuilder taken down by more bad sector news. Falls to $6.12 from 52-week high of $30.52.

Vonage (VG) Loses patent suit by Sprint (S). Drops to $1.20 from 52-week high of $7.89.

Borders (BGP) Selling books in stores no longer much of a business. Down to $12.40 from 52-week high of $24.19.

Panacos Pharmaceuticals (PANC) Company downgraded and CFO leaves. Falls to $1.86 from 52-week high of $7.23.

The Finish Line (FINL) Involved in dispute about buying Genesco (GCO). Drops to $4.54 from 52-week high of $14.97.

Acxiom (ACXM) Concern over financing for private equity buy-out. Down to $18.81 from 52-week high of $28.25.

Douglas A. McIntyre

Posted on: September 25, 2007 – 5:29 pm in HI/LOW, , , , , , , , ,

Which Private Equity Deal Fails Next: Tribune, Acxiom, Penn Gaming?

Now that Goldman Sachs (GS) and KKR have walked away from Harman (HAR), the question is which private equity deal will fail next.

Here is a short list of the deals that 24/7 Wall St. still think could be in trouble. These deals could be killed or, at least, be renegotiated to a lower price.

Sallie Mae (SLM), which originates and holds student loans is an obvious candidate. Against an offer price of $60, the shares now trade at $48. The New York Times has written that private equity firm J.C. Flowers & Co. plans to seek a lower price. Congress has sent the President a bill which could cut about $20 billion in government subsidies to banks that make student loans, according to the AP. Flowers and its banks could cansider that a "material adverse effect."

Acxiom (ACXM) The database management company has an offer from Silver Lake and ValueAct Capital in which the firms would pay Acxiom shareholders $27.10 a share to take the company private. The shares trade at $22. The company announced an 88% decrease in income from operations last quarter. Earlier this month, the company cut 265 people.

PHH (PHH) Blackstone (BX) said it is working with investment banks in an effort to seek more debt funding for the buyout. But, the deal is in trouble since banks sent revised terms for the takeover. The stock is trading at under $25. When the deal was announced, it hit $31.52.

The Tribune Company (TRB) Sam Zell, the leader of this buy-out, keeps insisting that the deal will close. But, the company’s revenue keeps falling and was off over 5% in August. The buyout, for $8.2 billion, will leave the company awash in debt, even though it is selling non-core assets like the Chicago Cubs to improve the balance sheet. The shares trade at $28, after hitting $34.28 when the purchase plan was announced.

Myers (MYE)  The rubber and plastic manufacturer recently said its $1.1 billion acquisition by a private equity arm of investment bank Goldman Sachs will likely be delayed until the fourth quarter. Income from operations dropped in the June quarter from $7.1 million last year to $2.5 million in 2007. Shares trade at $19.75 against a post-deal announcement high of $22.73.

Reddy Ice (FRZ) Shares now trading at $26.50 after hitting $32.31 on buyout news. The AP wrote that Reddy Ice planned $1.1 billion buyout by GSO Capital Partners LP encountered turbulence, when Morgan Stanley objected to amendments to the deal saying they violated conditions of the bank’s loans.The Fool wrote that the company’s recent weak results, coupled with the tightening credit markets, led GSO to renegotiate parts of the transaction already.

Penn National Gaming (PENN) The racetrack and casino operator agreed in June to a $67-a-share buyout by Fortress. The Wall Street Journal recently pointed out that shares of several buyout targets are also reflecting an increased degree of caution, including Penn. Net income and EPS at the company both fell in the June quarter. With the stock at $59, investors are not indicating much confidence in an offer that is $8 higher.

United Rental (URI) The equipment rental company agreed to to sell itself to affiliates of private equity firm Cerberus Capital Management for $4 billion. But, the SEC is investigating the company over accounting issues. Operating income rose 12% in the June quarter, but the SEC issue could allow Cerberus a way out. Shares trade at $31.45 against a post buy-out high of $35.56.

Douglas A. McIntyre can be reached at douglasamcintyre@247wallst.com. He does not own securities in companies that he writes about.

Posted on: September 23, 2007 – 2:26 pm in Mergers and Buy Outs, , , , , , , , , ,

More on Pending Merger Arb Spreads (FRK, LEND, ACXM, DJ, NWS, VMC, APPB, IHP)

Earlier today, we sent out a couple pieces discussing some of the pending mergers and spreads still having wide ranges.  This can be indicative of a deal at risk, but some will close and will offer significant opportunities for those willing to tread where others fear. Our first list included some of the larger names out there (ACS, URI, FDC, CCU) and then we covered a second batch (TXU, TRB,SLM, CEN).  We’ll be sending out some specific calls to subscribers of our Special Situation Investing Newsletter ahead of Labor Day.

The Dow Jones (NYSE:DJ) buyout by Rupert Murdoch’s News Corp (NYSE:NWS) isn’t aprivate equity transaction, but it might as well be.  With a $60.00buyout, the current $58.70 price does not signal much perceived risk inthis deal closing.  Rupert wants it and he has won the deal.  There isa reason Murdoch made the list of entrenched leaders, and the fact that he gets his way is the largest part of it.

Florida Rock (NYSE:FRK) shareholders have already agreed to the buyoutby Vulcan Materials (NYSE:VMC), but at $61.00 this is well under the $68.03cash and stock deal.  This was at a large 40+% premium, so the VMCshare price being lower not act as a hurdle and that old price and thisone should be expected to close.

Acxiom’s (NASDAQ:ACXM) $27.10 buyout offer from SilverLake and Value Actcurrently has only a $23.25 price, giving it a 14% discount to thebuyout price, or actually a 16.5% return from the current price for themerger-arbs.

Accredited Home Lenders Holding Co. (NASDAQ:LEND) is still a deal completelyat risk as the Lone Star buyout has been extended and no one expectsthat $15.10 price to be done. LEND is suing Lone Star to close thedeal, but if this one gets done at all it would be only logical that itwould close at a far lower price.

We still view the old Applebee’s (NASDAQ:APPB) acquisition by IHOP (NYSE:IHP) being a takeunder, and we didn’t see much premium value when that had spiked up earlier this year in hopes of a deal.

This is a mere sample of pending mergers we are covering to look for opportunities in the Special Situation Investing Newsletter our paid subscribers access.  We will be covering some of these and others with exact plays ahead of the Labor Day holiday.

Jon C. Ogg
August 20, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.

Posted on: August 20, 2007 – 1:25 pm in Mergers and Buy Outs, , , , , , , ,