Posts for Ticker ‘PENN’

Top Pre-Market Analyst Downgrades (ADBE, AGU, CMI, INTU, MOS, NST, PENN, CRM, SCG, SGP, SYMC, TEX, XRTX)

These are the top analyst downgrade calls we are seeing this Friday morning with two hours to the open:

  • Adobe Systems (ADBE) Cut to Sell at UBS.
  • Agrium (AGU) Cut to Hold at Canaccord.
  • Cummins Inc. (CMI) Cut to Market Perform at Wachovia.
  • Intuit (INTU) Cut to Sell at UBS.
  • Mosaic (MOS) Cut to Hold at Canaccord.
  • Nstar (NST) Cut to Neutral at Merrill Lynch.
  • Penn National Gaming (PENN) Cut to Hold at Deutsche Bank.
  • Salesforce.com (CRM) Cut to Sell at UBS.
  • Scana (SCG) Cut to Underperform at Merrill Lynch.
  • Schering-Plough (SGP) Cut to Underperform at Merrill Lynch.
  • Symantec (SYMC) Cut to Neutral at UBS.
  • Terex Corp. (TEX) Cut to Market Perform at Wachovia.
  • Trimble Navigation (TRMB) Cut to Perform at Oppenheimer.
  • Xyratex (XRTX) Cut to Market Perform at FBR.

Jon C. Ogg
October 3, 2008

Posted on: October 3, 2008 – 6:38 am in Analyst Calls, , , , , , , , , , , , ,

Top Pre-Market Analyst Upgrades (ALK, AMR, AAPL, CAL, DAL, DELL, JPM, LDK, PENN, SCR, SNSS, LCC)

These are some of the top analyst upgrades and positive calls we are seeing this Tuesday morning:

  • Alaska Air (ALK) Raised to Overweight at JPMorgan.
  • AMR Corp. (AMR) Raised to Overweight at JPMorgan.
  • Apple (AAPL) Started as Outperform at Credit Suisse; reiterated Overweight at Lehman.
  • Continental Air (CAL) Raised to Overweight at JPMorgan.
  • Delta Air (DAL) Raised to Overweight at JPMorgan.
  • Dell (DELL) Started as Outperform at Credit Suisse.
  • JPMorgan Chase (JPM) Started as Outperform at Bernstein.
  • LDK Solar (LDK) Raised to Neutral at Piper Jaffray.
  • Penn National Gaming (PENN) Raised to Overweight at JPMorgan.
  • Simcere Pharmaceutical Group. (SCR) Started as Buy at Goldman Sachs.
  • Sunesis Pharmaceuticals Inc. (SNSS) Started as Buy at Piper Jaffray.
  • US Airways (LCC) Raised to Overweight at JPMorgan.

Jon C. Ogg
August 12, 2008

Posted on: August 12, 2008 – 6:23 am in Analyst Calls, , , , , , , , , , , ,

Penn Actually Wins In Merger Implosion (PENN, FIG)

Penn National Gaming Inc. (NASDAQ: PENN) has been considered a dead merger for quite some time, yet it only officially became a dead merger this morning.  This was the last of the big multi-billion deals still officially on the books that was put together back before we had a full blown credit crunch.

PNG Acquisition Company Inc. was the entity that was going to do the acquisition, and that was an entity indirectly owned by certain funds managed by affiliates of Fortress Investment Group LLC (NYSE: FIG) and Centerbridge Partners, L.P.

The buyout price of $67.00 per share was older than Methuselah.  Since January, this stock slid steadily from over $60.00 down to under $30.00.  The deal was a known to be dead by everyone.  But there is actually a silver lining here for the company.  Penn National will get $1.475 Billion in cash out of this.  The breakdown is a $225 million deal termination fee, and the rest will be a $1.25 Billion redeemable preferred equity due 2015.  Affiliates of Fortress, affiliates of Centerbridge, affiliates of Wachovia, and affiliates of Deutsche Bank will all be holders of those notes.  To top it off, Fortress Investment Group’s  Chairman & CEO, Wesley Edens, will join the Penn National Gaming Board of Directors.

Penn National has also issued preliminary 2008 guidance of $2.5388 Billion in revenues, with $682.3 million in EBITDA, and $487.2 million in income from operations.  It will also repurchase $200 million in shares.

Wall Street is actually applauding this somewhat.  Shares are up 1.4% at $28.97 shortly after the open.  Penn National Gaming has a $2.5 Billion market cap as of today.  Penn isn’t a pure casino play as it also hold raceways.  But that sector has also seen a 50% drop (or worse) in many of the key names from last year’s highs, so the share price drop here is actually in-line performance. 

Penn had $2.9+ Billion in long-term debt and total liabilities stood at $3.85+ Billion in total liabilities.  This looks like it is going to bolster the company’s books more than any hurt an already-known dead merger was going to do. It is always possible you’ll see a selling response, but after looking it over the company is going to have a better operating structure with far less leverage than it would have been under that merger.

Jon C. Ogg
July 3, 2008

Posted on: July 3, 2008 – 8:48 am in Casinos, Mergers and Buy Outs, Private Equity, ,

Pre-Market Analyst Calls (October 26, 2007)

ABK cut to Mkt Perform at FBR.
ADVNA cut to Mkt Perform at FBR.
BBY started as Mkt Perform at Wachovia.
BEN cut to Mkt PErform at FBR.
BG cut to Neutral at HSBC.
CC started as Mkt Perform at Wachovia.
CPS cut to Equal Weight at Lehman.
ELX cut to Mkt Perform at FBR.
ETEL cut to Mkt Perform at JMP Securities.
EXBD raised to Buy at Deutsche Bank.
FADV cut to Equal Weight at Lehman.
FVE raised to Buy at Jefferies.
GIS raised to Buy at Deutsche Bank.
HES raised to Buy at B of A.
KND raised to Buy at Jefferies.
LVLT cut to Neutral at JPMorgan.
LTM cut to Mkt Perform at Piper Jaffray.
MBI cut to Mkt Perform at FBR.
NILE raised to Hold at Citigroup.
ORCC cut to Sector Perform at CIBC.
PENN cut to Hold at Jefferies.
POWI cut to Hold at Citigroup.
RRI started as outperform at Wachovia.
SE started as Mkt Perform at Wachovia.
STD raised to Buy at Citigroup.
STLD cut to Neutral at UBS.
TRID too 3 downgrades: Jefferies, Deutsche Bank, and Oppenheimer.
TSM raised to Overweight at HSBC.
USU started as Mkt Perform at Wachovia.
WCG raised to Neutral at Goldman Sachs.

Jon C. Ogg
October 26, 2007

Posted on: October 26, 2007 – 7:09 am in Analyst Calls, , , , , , , , , , , , , , , , , , , , , , ,

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, , , , , , , , , ,