ACQUISITIONS MARKET SEES NEAR-RECORD DAY.Byline: Dylan Ratigan Dylan Ratigan is an American financial journalist for the business TV channel CNBC, where he co-anchors the 3-4pm ET hour of the Closing Bell from a set overlooking the New York Stock Exchange (the same set used for Squawk on the Street Bloomberg News Monday was the busiest day for mergers and acquisitions since Aug. 11, as rising stocks and falling interest rates brought chief executives back to the bargaining table after a two-month lull. A handful of mergers worth more than $31 billion were announced in 24 hours. Three were valued at more than $1 billion each, including McKesson Corp.'s $14 billion purchase of HBO Hyperbaric oxygen therapy (HBO) A form of oxygen therapy in which the patient breathes oxygen in a pressurized chamber. Mentioned in: Ozone Therapy & Co. and Kroger Co.'s $13 billion acquisition of Fred Meyer Inc. The day's total value was the most since British Petroleum Co. agreed to buy Amoco Corp. on Aug. 11 for $53 billion. Advisers said a rising stock market gave companies confidence to proceed with mergers and more valuable shares with which to make them. ``The deal business has been a function of psychology more than strategy the past couple of months, and the market gyrations spooked people,'' said Morton Pierce, who runs the merger practice at Dewey Ballantine Dewey Ballantine LLP was a white shoe corporate law firm headquartered in New York City. Formed in 1913 by the merger of two firms founded in 1909, Root, Clark & Bird and Buckner & Howland, the firm of Root, Clark, Buckner & Howland weathered many name changes from 1913 to 1955 as in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of . ``The fact that the market was relatively calm and up gave people the psychological confidence to announce.'' The Federal Reserve cut interest rates unexpectedly Thursday, sending the Dow Jones industrial average Dow Jones Industrial Average The best known U.S. index of stocks. A price-weighted average of 30 actively traded blue-chip stocks, primarily industrials including stocks that trade on the New York Stock Exchange. soaring 4.2 percent to its highest in seven weeks. It rose a half-percent Monday and is up almost 7 percent in six days. In late August and early September, however, the Dow tumbled as much as 20 percent on concern recession in Asia and instability in Latin America Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. and Russia would hurt profits. The Dow also changed in value an average of 1.72 percent each day between Aug. 20 and Sept. 30. That's almost three times the average daily change of the past 10 years of 0.62 percent. The drop and accompanying volatility put many merger announcements on hold as CEOs questioned whether the stock they were considering as currency in mergers would have the same value in the days to come. Worldwide merger activity fell 64 percent in September from the pace in the preceding eight months to $85 billion, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Securities Data Corp. It was the slowest month since December 1995, at $66 billion. Monday's largest transaction was also the most poorly received. McKesson and HBO shares each fell more than 14 percent as analysts questioned the strategic fit of a drug wholesaler and HBO, the largest U.S. software maker for the health-care industry. In other mergers, Clorox Co. announced plans to buy First Brands Corp. for about $2 billion in stock and debt. Laidlaw Inc., North America's largest ambulance and passenger-bus company, agreed to buy Greyhound Lines Greyhound Lines is the largest inter-city common carrier of passengers by bus in North America , serving 2,200 destinations in the United States. It was founded in Hibbing, Minnesota, USA, in 1914 and incorporated as "The Greyhound Corporation" in 1926. Inc. for $650 million in cash, stock and assumed debt. The resurgence re·sur·gence n. 1. A continuing after interruption; a renewal. 2. A restoration to use, acceptance, activity, or vigor; a revival. comes in what is already the best year ever for merger announcements, with more than $1.75 trillion One thousand times one billion, which is 1, followed by 12 zeros, or 10 to the 12th power. See space/time. (mathematics) trillion - In Britain, France, and Germany, 10^18 or a million cubed. In the USA and Canada, 10^12. in agreements announced through August, or an average of $51 billion a week. CAUTION, MERGING Four major mergers worth nearly $31 billion were announced in 24 hours ending Monday afternoon. They were: BUYER SELLER PRICE Significance of merger McKesson Corp. HBO & Co. $14 billion Shares of both tumbled as investors questioned the wisdom of merging a drug wholesaler with a health-care software provider. Kroger Co. Fred Meyer Inc. $13 billion Nation's largest grocer gets larger. Clorox Co. First Brands Corp. $2 billion The maker of household cleaners buys GLAD wrap. Laidlaw Inc. Greyhound Lines Inc. $650 million North America's largest ambulance and passenger bus company unites with Greyhound's U.S. and Canadian lines. SOURCE: Daily News research, Bloomberg News, The Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. CAPTION(S): Box Box: CAUTION, MERGING (See Text) |
|
||||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion