According to the WSJ, citing ppl familiar with the matter, Euronet Worldwide (EEFT) has made an unsolicited offer to buy MoneyGram Intl. (MGI) for $1.65 bn in stock. Euronet in a Dec. 4 letter offered MoneyGram $20 a share, a 43% premium over that day's closing share price. The co also indicated it would be willing to raise the offer "if the results of our due-diligence review would warrant it."
“Heard on the Street” column discusses Motorola (MOT), saying that signs are growing that the co may be contemplating a breakup in the wake of the collapse in popularity of its Razr cellphone. Such a move would satisfy activist investor Carl Icahn, who this year ran an unsuccessful proxy fight to gain a board seat. He says carving up Motorola could produce almost $20bn of additional shareholder value. That translates to nearly $8 more a share and would make the stock worth roughly 50% more than its current price. Analysts agree in principle with Mr. Icahn's math, although many caution that Motorola needs to fix underlying problems in the handset division to maximize the value of a breakup. Breaking Motorola into stand-alone units would highlight uncertainties facing its lesser-known businesses and would go against the trend of consolidation in the telecom-equipment business. And any effort to sell one or more of the businesses could fail b/c of the frozen credit mkts. Speculation could lift Motorola's stock more than an actual split-up.
Barron’s Online discusses Hercules Offshore (HERO), whose shares are down 29% YTD. The shallow waters of the Gulf make up more than half of Hercules' business. But the mkt is treating Hercules as a pure play on the region's natural gas. The rest of its business comes from increasing exposure to inland US waters and intl mkts. As such, Hercules shares atrophied this summer when the commodity fell to around $5 per mln BTU by late Aug, about half of what gas was selling at following the ‘05 hurricane season. The stock is down 29% this yr. Hercules shares are trading 8.5x earnings ests for the next 4 qtrs, a deep discount to offshore drilling peers at a time when the co's prospects appear to be bottoming out and improving in ‘08. With the largest fleet of rigs and barges in the Gulf of Mexico's shallow waters, Hercules shares are poised for great upside as rig day rates are stabilizing and demand picks up with natural-gas prices treading north of $7. Gas prices are recovering as cooler weather increases demand and starts to slowly deplete high inventories. Thanks to this year's acquisition of competitor Todco, Hercules has gained control over more rigs in the Gulf of Mexico and some exposure to intl offshore rigs. "The mkt isn't rewarding [Hercules shares] with the multiple or valuation that the combination of the Todco assets and the Hercules assets (deserves)," says Joshua Schachter, of Snow Capital Mgmt.
“Inside Scoop” section reports that last week 3 insiders at Digital Realty (DLR) sold $5.4m in stock. Scott Peterson, senior VP of acquisitions, sold 67K shares for $2.7m. CIO and CFO A. William Stein sold 50K shares for $2m. Dir and CEO Michael Foust sold 20K shares for $756K. Jonathan Moreland, of Ladenburg Thalmann Asset Mgmt, feels the sales are more ominous than normal profit-taking. "It's disturbing to see execs so unwilling to hold shares for long, as these sales are basically removing most if not all of their direct holdings," says Moreland. "It's never a positive sign if execs are not willing to keep shares open to the vagaries of trading, which is too bad b/c this looks like one of the few REITs out there that have held up well, whose financials seem not to have been hurt…by the credit crunch."
“Heard on the Street” column discusses Motorola (MOT), saying that signs are growing that the co may be contemplating a breakup in the wake of the collapse in popularity of its Razr cellphone. Such a move would satisfy activist investor Carl Icahn, who this year ran an unsuccessful proxy fight to gain a board seat. He says carving up Motorola could produce almost $20bn of additional shareholder value. That translates to nearly $8 more a share and would make the stock worth roughly 50% more than its current price. Analysts agree in principle with Mr. Icahn's math, although many caution that Motorola needs to fix underlying problems in the handset division to maximize the value of a breakup. Breaking Motorola into stand-alone units would highlight uncertainties facing its lesser-known businesses and would go against the trend of consolidation in the telecom-equipment business. And any effort to sell one or more of the businesses could fail b/c of the frozen credit mkts. Speculation could lift Motorola's stock more than an actual split-up.
Barron’s Online discusses Hercules Offshore (HERO), whose shares are down 29% YTD. The shallow waters of the Gulf make up more than half of Hercules' business. But the mkt is treating Hercules as a pure play on the region's natural gas. The rest of its business comes from increasing exposure to inland US waters and intl mkts. As such, Hercules shares atrophied this summer when the commodity fell to around $5 per mln BTU by late Aug, about half of what gas was selling at following the ‘05 hurricane season. The stock is down 29% this yr. Hercules shares are trading 8.5x earnings ests for the next 4 qtrs, a deep discount to offshore drilling peers at a time when the co's prospects appear to be bottoming out and improving in ‘08. With the largest fleet of rigs and barges in the Gulf of Mexico's shallow waters, Hercules shares are poised for great upside as rig day rates are stabilizing and demand picks up with natural-gas prices treading north of $7. Gas prices are recovering as cooler weather increases demand and starts to slowly deplete high inventories. Thanks to this year's acquisition of competitor Todco, Hercules has gained control over more rigs in the Gulf of Mexico and some exposure to intl offshore rigs. "The mkt isn't rewarding [Hercules shares] with the multiple or valuation that the combination of the Todco assets and the Hercules assets (deserves)," says Joshua Schachter, of Snow Capital Mgmt.
“Inside Scoop” section reports that last week 3 insiders at Digital Realty (DLR) sold $5.4m in stock. Scott Peterson, senior VP of acquisitions, sold 67K shares for $2.7m. CIO and CFO A. William Stein sold 50K shares for $2m. Dir and CEO Michael Foust sold 20K shares for $756K. Jonathan Moreland, of Ladenburg Thalmann Asset Mgmt, feels the sales are more ominous than normal profit-taking. "It's disturbing to see execs so unwilling to hold shares for long, as these sales are basically removing most if not all of their direct holdings," says Moreland. "It's never a positive sign if execs are not willing to keep shares open to the vagaries of trading, which is too bad b/c this looks like one of the few REITs out there that have held up well, whose financials seem not to have been hurt…by the credit crunch."
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