Friday, November 09, 2007

Paperstand (MRK, S, CLWR, WHR, NVR, XMSR, SIRI)

The WSJ reports that Merck (MRK) is expected to announce that it agreed to pay about $4.85bn to settle a significant portion of the claims over injuries allegedly linked to its Vioxx painkiller, after insisting for years that it would fight all 27K cases filed rather than compromise. An agreement is expected to be announced Fri morning in New Orleans, where a federal judge is overseeing the litigation. "We've been asked by the judge to talk to the plaintiffs," a Merck defense spokesman said.

According to the WSJ, Sprint Nextel (S) and Clearwire (CLWR) are scrapping their agreement to jointly build a nationwide high-speed wireless network based on WiMax technology. The 2 co’s signed a letter of intent in July to pursue the partnership, which they hoped to finalize within 60 days. But the complexities of the transaction and the departure last month of Gary Forsee as Sprint's CEO made it too difficult to reach a final pact. The unraveling of the preliminary agreement is a blow to Clearwire. The agreement called for the co’s to share costs on a network that would reach 100m ppl by the end of next year, with each side providing roaming rights to the other's customers. Sprint said it planned to spend about $5bn on the network through 2010.

Barron’s Online highlights Whirlpool (WHR), whose shares are down 37% since summer highs. The co is a global leader able to surmount the US housing contagion in a strong position. The stock should benefit from the recent acquisition of Maytag as well as a growing intl demand that drives 40% of sales. According to Longbow Research analyst David MacGregor, shares of the co have suffered from the misperception that Whirlpool is tied solely to US housing fortunes. But just 18% of Whirlpool's US shipments are linked to new residential construction. More than 2/3 of shipments are for replacement purposes. MacGregor believes a looming deadline for year-end portfolio reports is partially to blame for the Whirlpool selloff. "I think a lot of portfolio managers want to get rid of stocks that may be perceived as having a residential-construction flavor," he says. "And, as a result, the stock's on sale." The bargain-basement prices could offer buyers of Whirlpool stock over 70% upside in the next 12mo’s, based on the avg analyst tgt price.

“Inside Scoop” section reports that despite the continuing deterioration in the housing mkt, one insider has homed in on NVR (NVR), buying more than $50m in shares of the home builder. With shares of NVR hovering near lows, its founder and chmn made the largest dollar-value insider purchase on record for the co, 6 mo’s after selling more than $200m in stock. From Mon through Wed, Chmn Dwight Schar bought 118K shares for $52.4m. He now holds 403K shares or 7.9% of the NVR's shares outstanding. "It is very rare to see insider buying and selling to this extent, even in the course of one year," says Ben Silverman, of "In one sense it could be a very expensive public-relations move, but it's a positive sign that he's putting a quarter of his profits back into the company." reports that DoJ is expected to clear XM-Sirius (XMSR, SIRI) deal. Approval looks likely despite antitrust staff leaning toward blocking the satellite radio deal.

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