Posts for Ticker ‘URI’

Top 10 Analyst Upgrades, Downgrades, Initiations (CADX, COH, DELL, HTE, JWN, RIMM, S, STP, URI, VRSK)

These are the top ten analyst upgrades, downgrades, and initiations we have seen from Wall Street research calls early this Monday:

Cadence Pharmaceuticals (NASDAQ: CADX) Cut to Perform at Oppenheimer.
Coach Inc. (NYSE: COH) Raised to Buy at Goldman Sachs.
Dell Inc. (NASDAQ: DELL) Started as Buy with $19 target at Goldman Sachs.
Harvest Energy (NYSE: HTE) Cut to Neutral at UBS.
Nordstrom (NYSE: JWN) Raised to Buy at Goldman Sachs.
Research In Motion (NASDAQ: RIMM) Started as Hold, $66 target, at Auriga.
Sprint Nextel (NYSE: S) Raised to Outperform at Credit Suisse.
Suntech Power Holdings Co. Ltd. (NYSE: STP) Raised to Neutral (from Underweight) at HSBC.
United Rentals (NYSE: URI) Raised to Outperform at Oppenheimer.
Verisk Analytics (NASDAQ: VRSK) Started as In-Line at Fox-Pitt; Started as Market Perform at KBW.

You can join our open email distribution list which goes out several times per week to be notified of key analyst calls, top early morning day trader alerts, along with news of IPO’s, key offerings, guru investor data on Buffett and others, mergers, and more.

JON C. OGG

Posted on: November 16, 2009 – 8:13 am in Analyst Calls, Technology Companies, Trading Alert, , , , , , , , , ,

Major Buybacks This Week (CCOI, FOSL, HIG, KALU, OSG, URI, UTX)

As we have pointed out over and over, it appears that buyback announcements are on the decline in a serious way as far as "new buyback plans" being announced.  Ultimately we believe that the buyback paces coming to a crawl is for several factors, with the main issues being the need of cash and the embedded insurance policy this gives companies who want to shore up their capital during a weak economy.  We did not count the smaller buyback announcements, but these are the larger ones we saw  this week (alphabetically rather than chronologically):

Cogent Communication (NASDAQ: CCOI) completed its prior plan and added another $50 million to its buyback machine.  The market cap is about $682 million.

Fossil Inc. (NASDAQ: FOSL) announced that it would repurchase some 2 million shares, or roughly 3% of its shares outstanding.

Hartford Financial Services (NYSE: HIG) added $1 Billion to its prior plan, and its market cap is nearly $23 Billion.

Kaiser Aluminum Corp. (NASDAQ: KALU) is one of the old ones that would be easy to overlook or forget about.  But the company raised its dividend and announced a $75 million share repurchase program.  This is only about 1.1 to 1.2 million shares, but when you compare it to the $1.3 Billion market cap and the 390,000 share average daily volume it large on a percentage basis. 

Overseas Shipholding (NYSE: OSG) replaced its prior buyback plan with a $250 million stock buyback announcement, and it raised its dividend too.  This represents more than 3 million shares at current prices and compares to about a $2.4 Billion market cap.

The big kahuna buyback came from United Rentals, Inc. (NYSE: URI) announced it was doing a swap and buyback of some 27.16 million shares.  This represents close to 31% of its entire outstanding share count.

United Technologies (NYSE: UTX) was perhaps the largest buyback from the largest company this week.  The company announced it would buy back up to 60 million shares as a replacement to its prior plan.  Based on a near-$70 price, this implies a sum of up to $4.2 Billion if prices remained static.  This has roughly 973 million shares outstanding.

Jon C. Ogg
June 13, 2008

Posted on: June 13, 2008 – 12:02 pm in Stock Buybacks, The Week, , , , , , ,

United Rentals Major Share Tender (URI)

United Rentals Inc. (NYSE: URI) is seeing shares surge in pre-market trading.  It seems it is doing what the old private equity acquisition couldn’t do.  It isn’t going private, but it is cleaning up its books and retiring a large portion of its common stock and preferred shares.

The company is tendering to repurchase up to 27,160,000 shares of common stock through a modified dutch auction at a price not less than $22.00 and not greater than $25.00.  Shares closed at $19.50 yesterday and its 52-week trading range is $14.83 to $34.98.

The number of shares to be repurchased in the tender offer represents approximately 31.4% of the total outstanding number of shares.  If fully subscribed, the total purchase price for the common stock would be roughly $679 million.

The company plans to commence the tender offer within the next week and will keep the offer open for at least 20 business days.

It has also repurchased all of its outstanding Series C preferred stock and Series D preferred stock, in which a substantial majority was held by Apollo Investment Fund.  The total purchase price for the preferred stock is approximately $679 million.

As part of this financing United Rentals entered into a new $1.25 Billion asset-based loan facility yesterday and it repaid approximately $464 million outstanding under its former revolving credit facility and term loan.

Shares are up over 15% at $22.61 right after the open.

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

Jon Ogg
June 10, 2008

Posted on: June 10, 2008 – 8:35 am in Stock Buybacks,

Top 10 Pre-Market Analyst Calls (ADBE, ATI, CAT, HOTT, MOT, NWAC, UAUA, URI, VRSN, VMED)

These are ten of the analyst calls we are focusing on this Thursday morning:

  • Adobe Systems (NASDAQ: ADBE) cut to Neutral at Cowen & Co.
  • Allegheny Tech (NYSE: ATI) Cut to Neutral from Overweight at JPMorgan.
  • Caterpillar (NYSE: CAT) cut to Sell at UBS.
  • Hot Topic (NASDAQ: HOTT) Raised to Outperform from Market Perform at FBR.
  • Motorola (NYSE: MOT) Cut to Underperform from Perform at Oppenheimer.
  • Northwest Airlines (NASDAQ: NWAC) Raised to Overweight from Equalweight at Lehman.
  • UAL Corp. (NASDAQ: UAUA) raised to Overweight at Lehman Brothers
  • United Rentals (NYSE: URI) cut to Neutral at UBS.
  • VeriSign (NASDAQ: VRSN) Cut to Neutral from Overweight at JPMorgan.
  • Virgin Media (NASDAQ: VMED) Raised to Overweight at Morgan Stanley.

Jon C. Ogg
June 5, 2008

Posted on: June 5, 2008 – 6:47 am in Analyst Calls, , , , , , , , , ,

Early Recovery Laggards (AMGN, ARII, IP, MCD, SRZ, URI)

It almost seems that no matter what happens, there are always some major companies whose shares just won’t recover when the broad market recovers.  Sometimes it’s on news, and sometimes it is just because that sector won’t be the real beneficiary of a market move or a change in the economy.  A 200 point-plus gain in the DJIA and a 43 point gain in the NASDAQ doesn’t mean some aren’t struggling.

American Railcar Industries (NASDAQ: ARII) is one of the worst ones today with shares down over 10% at $19.45, now down more than 50% from 52-week highs.  UBS is the culprit this morning after it downgraded the stock from an already cautious Neutral rating down to a new SELL rating.

Amgen (NASDAQ: AMGN) just can’t catch a break.  Its shares are at a new 52-week low under that $43.02 level down at $42.45 today.  When your core anemia products are under fire from Congress and from the FDA, this is what happens.

International paper (NYSE: IP) is feeling the wrath of a downgrade after JP Morgan cut its rating to Neutral from Overweight, and shares are down almost 2% at $28.94 today.

McDonalds (NYSE: MCD) is so far the only DJIA component trading lower this morning after gapping up.  Maybe this defensive name is going to have a hard time duplicating its massive same-store performance that has been seen over the last two years or more.  Shares are down marginally at $54.21, and its 52-week trading range is $43.65 to $63.69.

Sunrise Senior Living (NYSE: SRZ) shares are down almost 10% at $20.85 this morning, which is another 52-week low.  Two weeks ago it gave preliminary results and noted it would have a 4140 million adjustment.  This morning it noted that it missed the deadline for filing its annual report, a real no-no for investors.

United Rentals Inc. (NYSE: URI) ar also down over 1% today at $17.50 after JPMorgan cuts its rating from an already cautious Neutral down to an "underweight" rating.

Jon C. Ogg
March 18, 2008

Posted on: March 18, 2008 – 9:06 am in HI/LOW, , , , , ,

Top 10 Pre-Market Analyst Calls (MO, AMZN, GS, IP, NCC, NOVL, RMG, SAP, URI, GMR, OSG, TK)

Below are the top analyst upgrades and downgrades we are looking at this Tuesday morning:

  • Altria Group (NYSE: MO) Started as Buy at UBS.
  • Amazon.com (NASDAQ: AMZN) started as Buy at Canaccord Adams.
  • Goldman Sachs (NYSE: GS) raised to Outperform at Wachovia.
  • International Paper (NYSE: IP) downgraded to Neutral at JP Morgan.
  • National City (NYSE: NCC) raised to Market Perform at KBW.
  • Novell (NASDAQ: NOVL) started as Buy at Broadpoint Capital.
  • RiskMetrics (NYSE: RMG) raised to Buy at Banc of America.
  • SAP AG (NYSE: SAP) raised to Outperform at Bernstein.
  • United Rentals (NYSE: URI) downgraded to Underweight at JP Morgan.

Citigroup raised overseas ship tankers to Buy from Hold: General Maritime (NYSE: GMR), Overseas Shipholding (NYSE: OSG), and Teekay Shipping (NYSE: TK).

Jon C. Ogg
March 18, 2008

Posted on: March 18, 2008 – 6:24 am in Analyst Calls, , , , , , , , , , , ,

Failed Private Equity Deal Blow-Ups, Major Share Erosions Remain (COMS, ADS, BX, SLM, URI, CCU)

There is a menagerie of companies with stocks that look like the boulevard of broken dreams because of the woes in the stock market and economy in January.  But no group looks as bad as the group of the recently failed private equity buyouts.  Some of the losses here may seem excessive compared to what would have been the buyout price, but that is the new private equity M&A world for you. 

You can see how wide these spreads would be if they magically reappeared.  And NO, these prices won’t come back any time soon.

The freshly failed acquisition of 3Com Corp. (NASDAQ: COMS) by Bain Capital Partners LLC & Huawei was originally $5.30 cash, although the last ditch effort to please CIFIUS via a unit sale would have resulted in a lower price. If that magically came back, you’d be looking at an 82% gain.

The deal for Alliance Data Systems Corp. (NYSE: ADS) from The Blackstone Group, LP (NYSE: BX) may or may not happen, but the original price of the buyout offer was $81.75.  It is nearly impossible to think that price would ever be a buyout price in today’s environment, but that would represent a 54% premium to current prices.

SLM Corp. (NYSE: SLM), or Sallie Mae, was being J.C. Flowers & Co. before that merger was called off.  The company was originally being offered $60 per share and then it was briefly revised lower to $50 per share before being ditched altogether.  If that $50 number magically came back, that would represent a whopping 127% premium.  If that $60 pipe dream ever came back, the gains compared to today would be a whopping 172% gain.

United Rentals (NYSE: URI) buyout from Cerberus was $34.50, but it at least looks like it got its $100 million deal termination fee.  If that premium magically came back, that would be more than an 80% premium compared to today.

Clear Channel Communications Inc. (CCU), Thomas H. Lee Partners LP/Bain Capital Group is not yet a busted deal, although this $39.20 cash price is roughly 25% above today’s share prices.  This one has taken long enough that it seems Methuselah is in charge of this approval and decision process.

For whatever this is worth, investors looking at any of these companies better be looking at each company individually.  It isn’t like there weren’t some problems that either kept these mergers from happening, even if the buyout firms have had to gear down their efforts to more of true private equity firms instead of LBO firms.

Jon C. Ogg
February 21, 2008

On our open email distribution list you can see more detailed merger-arb spreads and other key issues in private equity, M&A, IPO’s, spin-offs and more.

Posted on: February 21, 2008 – 12:53 pm in Mergers and Buy Outs, Private Equity, , , , , ,

Top 10 Pre-Market Analyst Calls (DRIV, ISIL, MUR, NAPS, BTU, RNWK, SINA, URI, VVUS, YRCW)

These are not the only impacting analyst calls this morning, but these are most of the initial calls being focused on by 247WallSt.com:

  • Digital River (DRIV) raised to Outperform from Neutral at Credit Suisse.
  • Intersil (ISIL) raised to Buy from Neutral at UBS.
  • Murphy Oil (MUR) downgraded to Peer Perform from Outperform at Bear Stearns.
  • Napster (NAPS) started as an "Underperform" at Bear Stearns.
  • Peabody Energy (BTU) downgraded to Neutral from Buy at Merrill Lynch.
  • Real Networks (RNWK) started as Outperform at Bear Stearns.
  • Sina (SINA) raised to Buy from Neutral at Piper Jaffray.
  • United Rentals (URI)  raised to Buy from Neutral at UBS.
  • Vivus (VVUS) started as Overweight at J.P.Morgan.
  • YRC Worldwide (YRCW) downgraded to Underperform from Market Perform at Wachovia.

Jon C. Ogg
January 3, 2008

Posted on: January 3, 2008 – 7:45 am in Analyst Calls, , , , , , , , , ,

Business News: What You Missed Thanksgiving & Pre-Black Friday (AKH, GS, GLW, AMZN, NWS, MT, UAUA, URI, GOOG, CDTI)

Air France KLM SA (NYSE:AKH/ADR) shares traded up roughly 7% Thursday after beating earnings from price hikes and fuel hedging.

After United Rentals (NYSE:URI) said it was suing Cerberus on the broken merger, Cerberus is taking its own defensive actions to cap the damages to $100 million.

The O.E.C.D. puts total U.S. write-offs and write-downs at roughly $300 Billion from major U.S. banks, while so far only $50 Billion has been estimated out of major banks as to what may be written down…..Source, New York Times.

UAL Corp. (NASDAQ:UAUA) may be closer to a merger than they led on… source, Business Week.   Business Week also wonders if Google (NASDAQ:GOOG) is winded……and it talks up Clean Diesel Technologies (NASDAQ:CDTI)….

Bond insurer CIFG is being acquired for some $1.5 Billion by Groupe Banque Populaire and Groupe Caisse d’Epargne to take ownership from Natixis….. New York Times ran a story.

ArcelorMittal (NYSE:MT/ADR) confirmed media reports that it is in talks with controlling holders in China Oriental Group Limited on increasing its stake from 28%.

CNET and TechCrunch reported that News Corp. (NYSE:NWS) may acquire social networking site LinkedIn in early 2008.

Amazon.com’s (NASDAQ:AMZN) Kindle e-book reader priced at $399.00 is actually sold out already, with a new December 5, 2007 ‘in-stock’ date.

Financial Times reported that Goldman Sachs (NYSE:GS) is trying to raise $4 to $6 Billion for a new stock picking hedge fund… not quant, not computerized… old fashioned stock picking.

Corning (NYSE:GLW) may be one to watch as SAMSUNG is reportedly investing $2.2 Billion to increase its LCD production.

WSJ ASIA: China Railway raised 22.44 billion yuan from its Shanghai initial public offering, after pricing its shares at the top of the indicated price range.

Jon C. Ogg
November 23, 2007

Posted on: November 23, 2007 – 4:30 am in ADR, Pre-Market Activity, , , , , , , , , ,

If United Rentals Buyout Is Dead, Even More Will Follow (URI, BRE)

Shares of United Rentals, Inc. (NYSE:URI) are being crushed with a 25% hit today.  The company announced early this morning an "Extension of Expiration Date for Current Tender Offers and Consent Solicitations" for its debt offerings. Unfortunately, there are reports out of Reuters noting the Cerberus Capital Management is considering the withdrawal of its private equity buyout for the equipment rental company. 

Cerberus is supposedly worried about the company’s economic outlook, and investment banks funding the deal are struggling with selling the associated debt offering. But the report also says that Cerberus is working with the board to come to terms on repricing the deal or reworking the debt offering  For those who watch M&A and for those who follow private equity, that is not exactly mother’s milk.

Cerberus would be obligated to pay a break-up fee if it backs out of the deal.  Frankly, these leveraged "OPM" private equity buyouts are rolling further and further down the market cap food chain.  It seems the billionaires aren’t quite as powerful nor quite as omniscient as they’d have you believe.  When a private equity firm goes out and makes a buyout offer that locks a company’s hands like this, these target companies need to be more aggressive about noting that a "slight change in the economic climate" isn’t a material change in the business.  They should also start forcing the private equity buyers to only be able to announce a "definitive merger agreement approved by both boards of directors" when the private equity firms actually have the financing in hand rather than as "tentative."

Obviously the credit markets have changed.  But even in summer when these deals were becoming more and more crowded, the writing was on the wall.  If private equity firms can’t sell a deal in the low mid-cap range, maybe their salespeople need to be evaluated.

The company posted earnings on October 31: operations diluted earnings per share of $0.97, an increase of 23% compared with $0.79 for the third quarter 2006. Income from continuing operations for the third quarter 2007 increased 26% to $111 million, compared with $88 million for the third quarter 2006. Its EBITDA was even a record for the quarter.  With its earnings, United Rentals included the following statement:

  • Completion of the transaction is subject to customary closing conditions, but is not subject to a financing condition. The acquiring Cerberus affiliate has obtained debt and equity financing commitments for the transactions contemplated by the merger agreement, the aggregate proceeds of which will be sufficient to pay the aggregate merger consideration, related fees and expenses and any required refinancings or repayments of existing company indebtedness.

United Rentals stock is down over 25% today alone at $25.10, and the 52-week trading range is $23.60 to $35.56.  This isn’t the first time the chances of this merger falling apart has come into play.  The agreed price at the time was $34.50.  This traded over $35.00 all on its own back in 2006 before private equity firms went on a drunken buying binge, so accepting too much lower of a buyout might not be a great fiduciary job by management.  Even if the deal is off entirely this much lower price today would be the entire value of the company back to before the deal even came up, barring any huge hidden issues in the company.

24/7 Wall St. sends its own list out to its open email distribution list showing a list of other mergers and acquisitions where the merger-arb spread shows which other deals are indicated to be at-risk.

If this acquisition falls apart, it also impacts BRE Properties Inc.(NYSE:BRE) because it is supposed to replace United Rentals on theS&P Mid Cap 400 Index on a date T.B.A.  There have been some $200 Billion worth of deal implosions, and it seems there are still more to come…. Here is our summary of others we calculated at-risk recently.

Jon C. Ogg
November 14, 2007

Jon Ogg produces the more detailed 24/7 Wall St. subscriber-based Special Situation Investing Newsletter which covers buyouts, reorganizations, spin-offs and more; he does not own securities in the companies he covers.

Posted on: November 14, 2007 – 11:53 am in Mergers and Buy Outs, Private Equity, ,

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, , , , , , , , , ,

Pending Merger Arb Spreads Remain (Part 1) (ACS, URI, FDC, CCU)

There are still over 150 pending mergers out there that have not yet closed.  After the Fed’s recent actions, there are still some deals out there that are perceived to be at risk as far as the deals closing or if the deals can close at the announced buyout price. Some of these spreads have tightened in merger-arb scenarios, but there are quite wide spreads on many pending deals.  We have included most of the proposed closing prices or what discount the pending deals are to the actual price. 

We’ll be sending out a few selected deals we expect to go through without issue before Labor Day to our Special Situation Investing Newsletter subscribers.  Here is a partial list of some of the larger mergers out there that are still pending, and the total consideration pending here out of all the names we are covering today is more than $175 Billion:

The MBO of Affiliated Computer Services (NYSE:ACS) for some $8.2 Billion is also though of at risk or at least at the original terms because of the debt involved.  Chairman & founder Darwin Deason partnered with Cerberus Capital Management to offer $59.25 per share back in March, and shares at $49.90 are only 10% above 52-week lows and are roughly at a 16% discount to the acquisition price.

The buyout of United Rentals (NYSE:URI) by Cerberus at $34.50/share is seeing shares trade at $30.60 mid-morning, has a merger-arb spread of roughly 11%.  United Rentals is a municipal infrastructure player that is viewed to still have value on its own, and shares traded close to $40.00 on their own back in early 2006.

This $26 Billion buyout of First Data (NYSE:FDC) from KKR has been one of the cornerstone mergers that the skeptics are watching to see how strong deals can remain. The huge size of the deal makes it an esy one to target for being at risk, even though shareholders have already approved the buyout.  The $34.00 buyout price was looking at risk last week when shares dipped to under $30.50, but now shares are at $31.85.  That is still north of a 6% premium today.

Clear Channel (CCU) is one of those long-term at risk mergers that hasbeen ongoing.  The buyout price led by Bain Capital and Thomas H. Lee Partners LP for $39.20 is still well above today’s $35.40price.  Its shareholder vote is scheduled for September 25.

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 – 1:05 pm in Mergers and Buy Outs, , , ,