Tuesday, January 30, 2007

RBC Capital Rates IPSCO (IPS) a Top Pick; Ripe for a Takeover

In a note today from RBC Capital on IPSCO Inc. (NYSE: IPS), the firm initiated coverage on the stock with a Top Pick rating and $116 price target, calling the company a market leader and ripe for a takeover.

The report said IPSCO is a prime takeover candidate with upside to $168. Analyst Marie Millien said, "M&A activity has been red hot in the pipe and tube industry. IPSCO has (1) a dominant position in these markets; (2) exposure to the fast-growing seamless and premium connections segments of the OCTG market; (3) efficient operations; and (4) $600 to $700 million of discretionary free cash flow a year, making it an obvious target. Recent OCTG transactions closed at EV/EBITDA multiples between 7.15x and 8.9x. At 7.0x our 2007 EBITDA estimates, IPSCO would be valued at $168, or a considerable 75% upside, in the event of a takeover."

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Eagle Hospitality Properties Trust (EHP) Hires Morgan Stanley To Review Strategic Alternatives

Eagle Hospitality Properties Trust, Inc. (NYSE: EHP) has established a Special Committee of independent directors to explore strategic alternatives to enhance shareholder value, including a possible sale of the Company. The Special Committee has retained Morgan Stanley as its financial advisor.

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Monday, January 29, 2007

Rumors Sanofi-Aventis Could Buy Bristol-Myers Squibb (BMY)

Bristol-Myers Squibb Co. (NYSE: BMY) is higher today rumors the company is in talks to merge with Sanofi-Aventis (NYSE: SNY). The story originates from French newsletter, La Lettre de l' Expansion.

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Davenport Comments on Novelis (NVL) Takeover Rumors

Davenport comments on Novelis Inc. (NYSE: NVL) following reports on Friday that Aditya Birla Group could make an offer for the company. The firm said the reported price range of $5-$6 billion, including the assumption of $2.4 billion in debt, would put a potential offer at $35-$49 share. Analyst Lloyd O'Carroll said there is very little overlap between Hindalco and NVL's downstream business, and thus not a lot of synergies. O'Carroll said the lack of synergies may no dissuade Hindalco. He also notes that in January, Hindalco was rumored to be bidding for a division of Alcan, but quickly denied the report. They have yet to hear a response from Hindalco on NVL.

The firm also thinks there are multiple bidders for NVL. They think NVL could be valued up to $68 per share on a takeover basis, based on the NPV of free cash flows through 2010.

The firm maintains their Buy rating and raises their price target from $33 to $45.

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Takeover Rumors Surround SAP AG (SAP)

Takeover rumors are surrounding SAP AG (NYSE: SAP) today, boosting the shares slightly. One rumors has rival Oracle (Nasdaq: ORCL) bidding for the company, another rumors suggest IBM (NYSE: IBM) could be a suitor for SAP. Both rumors seem highly unlikely.

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Friday, January 26, 2007

Novelis (NVL) Buyout Talks

Novelis Inc. (NYSE: NVL) confirmed earlier takeover rumors. The company said it is in discussions with various parties that could lead to a potential sale of the Company.

The stock is still halted.

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Reports CA (CA) Could Be Buyout Target

TheDeal.com is running a story suggesting the possibility that CA, Inc. (NYSE: CA) could be a buyout target. Link $


Reports Novelis (NVL) Could Be Acquried

Aditya Vikram Birla group is exploring the possibility of acquiring Novelis (NYSE: NVL). According to the Hindustan Times citing highly placed sources, the group could offer $5-6 billion.

The article also says the group has already completed preliminary due diligence and now has management support to move forward with a bid.

The stock is currently halted.

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Could BP Could Buy Suncor (SU)?

CNBC's David Faber said a Morgan Stanley analyst in Canada noted that BP (NYSE: BP) is taking a hard look at buying Suncor Energy (NYSE: SU)

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More Takeover Chatter on Business Objects (BOBJ)

Business Objects (Nasdaq: BOBJ) is higher on more takeover speculation. Oracle (Nasdaq: ORCL) is the rumored suitor.

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Jefferies Sees Takeover of St. Jude Medical (STJ)

Jefferies & Co analyst, Mark Richter, comments on St. Jude Medical (NYSE: STJ), "We would be buyers at current levels. We believe that STJ's valuation is attractive and that business fundamentals are intact. Furthermore, we continue to expect ICD market recovery in 2007 and believe STJ is a viable acquisition target in the next 12 months."

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Thursday, January 25, 2007

Delafield Hambrecht Wants Cost-U-Less (CULS) Sold

Cost-U-Less Inc. (Nasdaq: CULS) holder Delafield Hambrecht is calling for an immediate sale. Delafield Hambrecht said they would participate as a potential buyer in the auction. More at 13DTracker

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Cramer Sees Buyout of Gap (GPS)

On Mad Money, Jim Cramer comments on Gap Inc. (NYSE: GPS). Cramer said despite the bad news the stock doesn't want to go lower. He also said despite views to the contrary, the company can turn around operations.

Cramer thinks the stock can go much, much higher. Cramer said multiple private equity firms want to buy the company. He specifically mentions private equity firm Thomas H Lee as a possibility. Cramer predicts that Thomas H Lee could take the company private at $25 in the next 6 months.

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Wednesday, January 24, 2007

Krispy Kreme Doughnuts (KKD) Higher on Talk of New Credit Agreement

Krispy Kreme Doughnuts Inc. (NYSE: KKD) is higher on talk Credit Suisse is arranging a new credit agreement that could save the company up to 550 basis points. Prudential's analyst mention this is a note to client.

Shares of Krispy Kreme are up 9.5% to $13.64 in mid-day action.

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DA Davidson Doesn't See iPhone Win for Synaptics; Says Boradcom (BRCM) Won Touch Contrl

DA Davidson comments on Synaptics Inc. (Nasdaq: SYNA) ahead of results due after the close on 01/25. The firm expects in-line results but said margins are a concern. Maintains its Underperform rating.

The firm also said they expect portable device markets to rebound, but said they don't expect Synaptics has won a socket in Apple's (Nasdaq: AAPL) iPhone. The firm believe the touch control has gone to Broadcom(Nasdaq: BRCM).

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Nexen (NXY) Mentioned As Takeover Target

Nexen (NYSE: NXY) : NXY, a Canadian based, global energy company, has been mentioned as a potential acquisitions target of TOT. NXY option volume has been heavy over the last two days. NXY February option implied volatility of 44 is above its 6-month average of 40 according to Track Data. Paul Foster

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Williams-Sonoma (WSM) Denies Sale Rumors

According to reports from Reuters, Williams-Sonoma Inc. (NYSE: WSM) denied rumors they hired Goldman Sachs to explore strategic options, calling the talk "absolutely incorrect".

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Williams-Sonoma (WSM) Denies Sale Rumors

According to reports from Reuters, Williams-Sonoma Inc. (NYSE: WSM) denied rumors they hired Goldman Sachs to explore strategic options, calling the talk "absolutely incorrect".

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Tuesday, January 23, 2007

BWS Financial Defends Sigma Designs (SIGM) After Rumor Related Weakness

BWS Financial notes that Monday's sharp decline in Sigma Designs (Nasdaq: SIGM) could have been related to unsubstantiated rumors that the Company was once again switching auditors and that there was more to the stock option situation than what is known.

Analyst Hamed Khorsand said, "We believe that the rumors have little basis for such a steep drop in the stock price given that SIGM has been forward with the ongoing option situation. The fundamentals at SIGM remain strong and we believe should allow SIGM to post an impressive year in amount of chipsets sold and revenue generated. We have previously noted that it seems as though the Company has won new carriers for set-top boxes with chipsets from SIGM. Our fiscal 2008 numbers continue to seem conservative as we have cited before, and would be raised with the official announcement of the design wins we have discussed. SIGM shares currently trade at 50 percent discount to our price target, or approximately 100 percent upside to $40. The upside currently outweighs the risks and we would be aggressive buyers at current levels." The firm maintains its Strong Buy rating.

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Cheesecake Factory (CAKE) Higher on LBO Rumor

Shares of Cheesecake Factory Inc. (Nasdaq: CAKE) are higher in early action on rumors the company is the target of an LBO. The stock is 6.8% higher this morning.

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Monday, January 22, 2007

Rumors Surface Vodafone (VOD) Could Buy Sprint Nextel (S)

Rumors making the rounds Vodafone Group plc (NYSE: VOD) could be interested in buying Sprint Nextel Corp. (NYSE: S).

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Thursday, January 18, 2007

FCC Said Rule Barring Satellite Radio Merger Could Be Changed

More noise on the potential hook-up of XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) and Sirius Satellite Radio (Nasdaq: SIRI).

Both stocks spiked higher today after FCC Chairman Martin said the rule banning a merger of the two satellite radio companies could be changed. He said he was not aware of a request to change the rule.

Yesterday, both stocks were down after the FCC mentioned the rule barring the merger of the two.

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Stifel Nicolaus Comments on Pearson plc (PSO) Takeover Speculation

Stifel Nicolaus comments on recent speculation, reported late yesterday by "The Business", that private equity firm Kohlberg Kravis Roberts (KKR) is looking at a potential LBO of Pearson plc (NYSE: PSO) for Ј7 billion or $13.7 billion (a 4% premium to yesterday's close).

The firm said, "Our SOTP analysis suggests the company can do better. Based on purchase price multiples involving comparable assets in recent transactions, we derive a fair value ranging from $17 at the low end to $23 at the high end. We would also note that according to the report, KKR has yet to make contact with Pearson, and thus Ј7 billion is merely a number at this point."

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Reports GE Could Buy Abbott's (ABT) Diagnostics Unit

According to reports from the Wall Street Journal, General Electric (NYSE: GE) is near a deal to buy the diagnostics division of Abbott Labs (NYSE: ABT). The report said GE may buy a large part of the unit instead of the whole thing. Link $

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Wednesday, January 17, 2007

FCC Rules Prohibit Satellite Radio Merger, FCC's Martin Says - Bloomberg

FCC Rules Prohibit Satellite Radio Merger, FCC's Martin Says - Bloomberg

NOTE - Sirius Satellite (Nasdaq: SIRI), XM Satellite Radio (Nasdaq: XMSR)

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Tuesday, January 16, 2007

Cramer Said BofA Could Buy NCC or CMA

On CNBC, Jim Cramer makes comments on Bank of America (NYSE: BAC), saying the company is still looking to expand and potential takeover targets are National City Corp. (NYSE: NCC) or Comerica Inc. (NYSE: CMA). NOTE: BofA is pushing the US to expand the deposit 10% deposit cap.

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Friday, January 12, 2007

Ultratech (UTEK) Holder Wants Company Sold

Large Ultratech Inc. (Nasdaq: UTEK) holder Thales Fund Management wants the company to put a for sale sign up. More at 13D Tracker

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Stifel Nicolaus Analyst Says XM (XMSR) Has Merger on Their Mind

In a note to clients yesterday afternoon, Stifel Nicolaus analysts Kit Spring commented on XM Satellite Radio (Nasdaq: XMSR) after meeting with the CEO, two IR officers and several marketing managers. The firm said they believe XM is "indeed contemplating a merger w/ Sirius (Nasdaq: SIRI), perhaps due to widespread speculation that, given the synergies (we estimate a present value of $7B), it makes too much sense for Sirius not to try it."

Spring also said, "We believe a 50/50 enterprise value split or perhaps a slight premium to XM shareholders may be warranted in a merger scenario." He said the company's main reservation would be the potential disruption in the retail marketplace if consumers perceive XM as a company that is about to be taken over.

The firm maintains its Buy rating and $18 price target on XM.

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Charles Schwab (SCHW) Higher on Resurfaced Takeover Chatter

Charles Schwab Corp. (Nasdaq: SCHW) is seeing a little interest today on heavier-than-normal volume on resurfaced takeover/merger rumors.

Thursday, January 11, 2007

Speculation on Possible Hook-Ups

TheStreet.com contributor Scott Rothbort has an interesting articles discussing 5 business hookup we might see. He gives reasons why the deals make sense and also reasons why they my not happen. Link

1. Sears Holdings (Nasdaq: SHLD) to buy BJ's Wholesale Club (NYSE: BJ)
2. Morgan Stanley (NYSE: MS) to acquire Legg Mason (NYSE: LM) orT Rowe Price (Nasdaq: TROW)
3. Hewlett-Packard (NYSE: HPQ) to acquire Palm (Nasdaq: PALM)
4. General Electric (NYSE: GE) to acquire Alcoa (NYSE: AA)
5. Boeing (NYSE: BA) to merger with Ford (NYSE: F)

Cerberus Capital Could Top Blackstone Group's Deal to Buy Equity Office Properties (EOP)

According to reports from the Financial Times, Cerberus Capital Management is considering topping The Blackstone Group's $36 billion bid for Equity Office Properties (NYSE: EOP). Real estate investors including Starwood Capital and Vornado Realty Trust (NYSE: VNO) could join Cerberus.

In November, Equity Office Properties agreed to be acquired by Blackstone Real Estate Partners, an affiliate of The Blackstone Group, for $48.50 per share in cash.

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CNBC Guest Mentions ACN and MEE as Possible Takeover Targets

Guest on CNBC from the Wall Street Journal mentions Accenture Ltd. (NYSE: ACN) and Massey Energy Co. (NYSE: MEE) as possible takeover targets based on his screen.

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Wednesday, January 10, 2007

Reports Essilor International Could Make a bid for Cooper Companies (COO)

According to reports from Bloomberg, citing French weekly magazine Challeges, Essilor International SA may make a bid for Cooper Companies Inc. (NYSE: COO), without citing sources. The bid could be as high as $2.7 billion.

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Bankrupt Airlines Northwest and Delta in Merger Talks?

Reports from the Wall Street Journal, Northwest Airlines (OTC: NWACQ) has had recurring talks with Delta Air Lines (OTC: DALRQ) about a potential link-up. The reports come after morning news US Airways Group, Inc. (NYSE: LCC) raised its offer for Delta.

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eBay to Buy StubHub?

Reports eBay (Nasdaq: EBAY) is close to a deal to buy sporting ticket service StubHub for $300 million.

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Marvell (MRVL) Up on Talk Chip Unsed in Apple's iPhone

Marvell Technology (Nasdaq: MRVL) is higher on talk its chips will be in Apple's (Nasdaq: AAPL) iPhone. It is being reported that Apple said it would use processors made by Intel (Nasdaq: INTC) for the new device, but Marvell bought that business from Intel in late 2006. Link to analyst note

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Tenaris SA (TS) Denies Takeover Rumors

Shares of steel pipe maker Tenaris SA (NYSE: TS) gained in overseas trading on speculation the company is the target of a takeover bid. Commenting on the speculation, a representative of the company said there is no extraordinary operations under way. TS is majority owned by Italy's Rocca family.

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Tuesday, January 09, 2007

Gap Could Sell Itself in Pieces - Analyst

Prudential upgrades Gap Inc. (NYSE: GPS) from Underweight to Neutral, says board is meeting today and company has engaged service of Goldman Sachs. Says company may be looking to sell the company in pieces to more than one buyer.

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More Rumors Wyndham Worldwide (WYN) is a Takeover Target

StreetInsider.com contributor thestockmasters.com has an interesting article on why Wyndham Worldwide Corporation (NYSE: WYN) may be a takeover target.

The article says: "Wyndham, which was spun off from previous owner Cendant Corporation in 2006, has all the trappings of a prime takeout candidate. While the idea that a firm that was literally just spun out could be subsumed so soon may alarm some, keep in mind that we just saw it happen with another old Cendant unit, Realogy, which was taken out for 12x 2007 EBITDA. And of course, who can forget Travelport: the first Cendant “orphan” was sold to The Blackstone Group for $4.3B."

Link to Full Article

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H&R Block (NYSE: HRB) said it is considering the acquisition of a retail tax company - Bloomberg

H&R Block (NYSE: HRB) said it is considering the acquisition of a retail tax company - Bloomberg. Doesn't identify possible acquisition target.

NOTE: Smaller rival Jackson Hewitt Tax Service (NYSE: JTX) has moved higher on the news

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Monday, January 08, 2007

CNBC Reports Gap (GPS) Hired Goldman Sachs To Review Strategic Options, Including Possible Sale

According to reports from CNBC's David Faber, Gap (NYSE: GPS) hired Goldman Sachs to review strategic options, which could include a possible sale.

Faber said the Fisher family, which controls a large percentage of the stock, could consider a going private transaction or could team with private equity firms to put together a leveraged buyout.

Faber said many firms have run the numbers on a Gap LBO recently and there has been no shortage of speculation on the name. Faber said the hiring of Goldman doesn't mean a sale is imminent as strategic options could simply involved a review of the brands.

Link To CNBC Video

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Reports Nice Systems (NICE) Could Be Raising Money to Acquire Witness Systems (WITS)

According to reports from Haaretz.com, Nice Systems (NASDAQ: NICE) is looking to raise $300 million and could use the money to acquire rival Witness Systems Inc. (NASDAQ: WITS). In the past media reports suggested Nice Systems could buy Witness Systems for $750 million but a transaction never took place. Link

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Xerox (XRX) Higher on Takeover Rumors

Xerox Corp. (NYSE: XRX) is 2.1% higher on resurfaced rumors the company could be the target of a takeover bid.

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Friday, January 05, 2007

Rumor Apple's Jobs to Take a Leave of Absense

This morning Doug Kass, a hedge fund manager and contributor to TheStreet.com, put out 10 rumors that could rock stocks. Link

The one we found most interesting was on Apple.

Apple (AAPL) will announce that Steve Jobs will be taking a leave of absence from the company.

COMMENT: There is a very small chance of this happening, but with the options thing still hanging over his head and recent disclosure that he was aware or recommended the selection of some favorable grant dates this will likely continue to come up until there is confirmation that he is in the clear.

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UBS Doesn't See Private Equity Buyout of SMI, Downgrades

UBS downgrades Semiconductor Manufacturing International (NYSE: SMI) from Neutral to Reduce, saying the company is an unlikely candidate a private equity buyout.

Shares of Semiconductor Manufacturing ramped 22% on Wednesday on rumors the company could be a takeover target.

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Thursday, January 04, 2007

McDonald’s (MCD) Could Sell Latin American Operations - Analyst

In a note today on McDonald’s (NYSE: MCD), Buckingham Research said their sources suggest that the company may make a decision regarding a divestiture of a sizable chunk of its Latin American operations. The firm said an announcement could be made this month and could fetch up to $1.8 billion for the company, which could be used for repurchase or perhaps a special one-time dividend. The firm said the Latin America operations involved represent less than 2% of worldwide profits. The firm maintains their Strong Buy rating and $50 price target.

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BEA Systems (BEAS) Higher on Renewed Takeover Speculation

BEA Systems Inc. (Nasdaq: BEAS) is higher today on renewed speculation the company is the target of a takeover. Today's move is being driven by a prediction by Suntrust that Hewlett-Packard Co. (NYSE: HPQ) could buy the company. BEA Systems has long been a rumored takeover target, with Oracle (Nasdaq: ORCL) mentioned as a another possible suitor.

Shares of BEA Systems 8% higher to $13.28 in mid-day action.

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Wednesday, January 03, 2007

Analyst Still Sees SIRI/XMSR Merger in 2007

Nothing like beating a dead horse.

Today in a note on Sirius Satellite Radio (Nasdaq: SIRI), Stifel Nicolaus analyst Kit Spring they continue to believe Sirius and XM Satellite Radio (Nasdaq: XMSR) will attempt a merger in 2007 and see $7B of merger synergies.

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Semiconductor Manufacturing Intl (SMI) Soars on Takeover Speculation

China's largest chipmaker, Semiconductor Manufacturing International (NYSE: SMI) is higher today on rumors the company is the target of a private equity buyout. The speculation follows November's buyout of Tiwan's Advanced Semiconductor Engineering Inc. (NYSE: ASX) by private equity firm The Carlyle Group.

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