U.S. stocks traded mixed Monday as the Dow Jones Industrial Average rose 4.7 points to 11957 but the Standard & Poor's 500 slid 1 point to 1270 and the Nasdaq Composite lost 6.7 points to 2637. Among the companies whose shares are actively trading in the session are Timberland Co. (TBL), Transatlantic Holdings Inc. (TRH) and Graham Packaging Co. (GRM).
Branded-apparel company VF Corp. (VFC, $101.93, +$10.13, +11.04%) agreed to buy Timberland ($42.79, +$12.80, +42.66%) for about $2 billion, taking advantage of the footwear company's beaten-down stock price to boost its outdoor and action-sports businesses. VF's offer of $43 a share represents a premium of 43% to Friday's close. Other footwear companies including Wolverine World Wide Inc. (WWW, $38.82, +$1.65, +4.44%) and Brown Shoe Co. (BWS, $9.49, +$0.41, +4.52%) also gained.
Transatlantic Holdings ($48.36, +$4.35, +9.88%) and Allied World Assurance Company Holdings AG (AWH, $55.58, -$2.49, -4.29%) Sunday said they had agreed to a merger of equals to create a global reinsurer with equity of nearly $7 billion.
Graham Packaging ($25.88, +$3.93, +17.90%) said it received a competing takeover offer valued at about $1.64 billion from a third party, which its board determined could lead to a superior proposal to its pending $1.45 billion takeover by Silgan Holdings Inc. (SLGN, $41.13, -$2.02, -4.68%).
Wendy's/Arby's Group Inc. (WEN, $4.63, +$0.11, +2.43%) agreed to sell most of its struggling Arby's chain for $130 million in cash to a group led by private-equity firm Roark Capital Group in a deal that leaves it with an 18.5% ownership stake in the fast-food restaurant.
Quanex Building Product Corp. (NX, $16.49, -$1.61, -8.88%) swung to a loss in its fiscal second quarter on weak sales in its engineered-products unit, and the company warned growth in the economy and pace of recovery in residential-housing activity have slowed.
Other Stocks In Focus: Morgan Stanley upgraded its stock-investment rating on lithium-ion battery maker A123 Systems Inc. (AONE, $5.04, +$0.52, +11.48%) to overweight, saying, "Near-term catalysts and revenue visibility offer favorable risk-reward." Despite rising Monday, the stock is down 47% this year, including 18% in June. But through year's end, Morgan Stanley sees A123 benefiting from things including several auto makers moving from prototypes to volume production and margins rising on increased capacity utilization.
Aetna Inc. (AET, $42.90, +$0.04, +0.09%) agreed to buy Genworth Financial Inc.'s (GNW, $10.26, +$0.16, +1.53%) medicare-supplement business for about $290 million, as Genworth continues to narrow its focus to retirement and protection products.
Alaska Air Group Inc.'s (ALK, $62.62, +$1.07, +1.74%) board has authorized the airline to buy back up to $50 million of its common stock.
Alliance One International Inc. (AOI, $3.01, -$0.51, -14.49%) shares hit a two-year low after the company said it swung to a loss in its fiscal year ended March, as sales and other operating revenue fell 9.3%. The leaf-tobacco seller noted it continues to work through global oversupply and modified manufacturer sourcing strategies that have affected its results.
In a surprise move, home-building company Beazer Homes USA Inc. (BZH, $3.00, -$0.15, -4.76%) said Chief Executive Ian J. McCarthy will step down and be replaced by Allan Merrill, the current chief financial officer.
Shares of flu-vaccine developer BioCryst Pharmaceuticals Inc. (BCRX, $4.08, +$0.53, +14.93%) rallied Monday in the wake of a report that researchers have identified a newly mutated strain of the swine flu, or H1N1, virus that appears to be resistant to the two leading treatments for the disease, Roche Holding AG's (RHHBY, $41.89, +$0.23, +0.55%) and Gilead Sciences Inc.'s (GILD, $39.89, -$0.34, -0.85%) Tamiflu and GlaxoSmithKline PLC's (GSK, $41.89, +$0.32, +0.77%) Relenza. The new strain, however, didn't appear to be as resistant to BioCryst's experimental flu-treatment peramivir. The data were published by researchers associated with the World Health Organization in the current issue of the medical journal Eurosurveillance. Peramivir is currently in Phase III testing.
Carnival Corp. (CCL, $35.14, -$0.66, -1.84%) said it underestimated the impact of itinerary changes and higher fuel prices for the second half of the year, with impacts from crises in the Middle East, North Africa and Japan now expected to cut an additional 15 cents a share from earnings.
J.P. Morgan upgraded its stock-investment rating on Chico's FAS Inc. (CHS, $13.92, +$0.53, +3.96%) to overweight from neutral, saying that, within a backdrop of a rationalizing competitive landscape, Chico's also has a number of company-specific margin-enhancing opportunities.
Citigroup Inc. (C, $38.60, +$0.68, +1.79%) will cut its stake in India's Housing Development Finance Corp. Ltd. (500010.BY) to below 10%, two people familiar with the matter told Dow Jones Newswires Monday.
CytRx Corp. (CYTR, $0.81, +$0.02, +1.91%) said a study shows its cancer-inhibitor candidate, bafetinib, was clinically active in a group of leukemia patients for whom several other treatments failed.
Honeywell International Inc. (HON, $55.68, +$0.15, +0.27%) agreed to buy mobile-computer maker EMS Technologies Inc. (ELMG, $32.87, +$8.07, +32.54%) for about $491 million, a move that expands Honeywell's mobile-computing business into the warehousing and port segments. Honeywell's $33-a-share cash tender offer is a 33% premium to EMS's Friday close of $24.80.
Beaten-down shares of eResearch Technology Inc. (ERT, $5.88, +$0.39, +7.10%) got a boost after Benchmark upgraded the clinical-research firm to buy while increasing EPS targets amid the company's "continued modest pace of hiring." Benchmark--which had eResearch at sell five weeks ago--went on to say: "Our recent meeting with ERT's new management supported the view that the results in Q1 were depressed by higher than usual cancellations that appear to be periodic and not suggestive of a broader trend. Lacking unusual cancellations and with slower investment spending, we now believe ERT could reach the upper end of its earnings guidance."
Baird said its "field research points to a sharp deceleration in semiconductor order trends in 2Q," leading to downgrades on Fairchild Semiconductor International Inc. (FCS, $15.35, -$1.34, -8.03%) and Diodes Inc. (DIOD, $22.21, -$1.40, -5.93%) to neutral from outperform, along with cuts in estimates and price targets to a handful of others. The firm noted "lead times have come down significantly," with inventories stacking up and demand waning. And if the back-to-school season turns out weaker than expected, "we could see a further slowdown in orders in 3Q," Baird says.
Ford Motor Co. (F, $12.89, -$0.46, -3.45%) must pay almost $2 billion in damages to thousands of dealers after a judge upheld a jury verdict against the auto maker earlier this year, The Wall Street Journal reported.
Forest Laboratories Inc. (FRX, $38.71, +$0.76, +2.00%) said it received notice that one of billionaire activist investor Carl C. Icahn's affiliates intends to nominate four candidates for Forest's nine-member board.
Gerber Scientific Inc. (GRB, $11.02, +$2.90, +35.65%) agreed to be acquired by technology investment firm Vector Capital Corp. for about $281.8 million, which follows Gerber's efforts to restructure. The deal, worth $11 a share in cash, represents a 35% premium over Friday's close.
Greenhill & Co. (GHL, $50.78, +$0.86, +1.72%) sold all of its interests in the U.S. buyout fund Greenhill Capital Partners II L.P. for about $45 million to certain investors advised by J.P. Morgan Asset Management.
Harvest Natural Resources Inc. (HNR, $12.18, +$1.67, +15.89%) disclosed Monday it has discovered oil in a West African offshore well. The well was spudded April 28 and is being drilled to test the potential of the pre-salt Gamba and Dentale Formations. It has reached a vertical depth of 9,953 feet.
Blood-test product maker Immucor Inc. (BLUD, $20.06, +$0.48, +2.45%) gained following Sunday night's disclosure that CEO Gioacchino De Chirico has stepped down and will be succeeded by Joshua Levine, whose last job was running breast-implant maker Mentor until its 2009 acquisition by Johnson & Johnson (JNJ, $66.91, +$0.82, +1.24%). WJB Capital expected a gain, though hesitated in saying so as it "didn't want to imply that Nino did anything wrong or that we don't like the guy. The unfortunate reality is that Nino took over a company that immediately fell under multiple investigations and made a transformational acquisition that hasn't panned out yet." It added, "Given Immucor bulls' mantra that BLUD is cheap and potentially a good takeover target, this hire will likely be well received."
Iron Mountain Inc.'s (IRM, $32.31, +$0.40, +1.25%) board authorized a 33% increase to its quarterly dividend, marking another leg in the data-management company's plan to return $2.2 billion of capital to shareholders by 2013.
Kodiak Oil & Gas Corp. (KOG, $5.60, -$0.37, -6.20%) reduced its production outlook for the year due to the impact of damaging weather during the first half of the year at its Williston Basin operations in North Dakota and Montana.
Privately held diversified company MacAndrews & Forbes Holdings Inc. said it has offered to acquire all the shares of M&F Worldwide Corp. (MFW, $24.01, +$7.05, +41.57%) it doesn't already own in a deal that values the company at $464 million. The deal, worth $24 a share, represents a 42% premium over Friday's closing price.
Magellan Health Services Inc. (MGLN, $53.01, +$2.23, +4.39%) said Arizona has extended its Maricopa County Medicaid contract to provide behavioral health services for 15 months, through September 2013.
Sidoti raised its stock-investment rating on Maidenform Brands Inc. (MFB, $26.95, +$0.68, +2.59%) to buy from neutral, citing valuation and saying the recent pullback in the stock largely reflected the weak overall market and an earnings miss by a competitor.
Information-technology company Ness Technologies Inc. (NSTC, $7.61, +$0.93, +13.92%) (NSTC.TV) said Friday it has agreed to be acquired by a Citigroup Inc. (C, $38.61, +$0.69, +1.82%) private-equity fund for $307 million. Under the deal, an affiliate of Citi Venture Capital International will pay $7.75 a share in cash, a 16% premium to the stock's Friday close.
Petroleum Development Corp., or PDC Energy, (PETD, $29.11, -$3.64, -11.11%) shares slumped after a surprise disclosure Saturday that director James Trimble is replacing Richard McCullough as CEO, effective immediately. The company attributed the management change during a conference call to determining it needs a leader with deeper operational background and with a more sophisticated sense of exploration and production industry and operations. C.K. Cooper analyst Joel Musante noted it was more of an abrupt announcement than a smooth change, with investors likely reacting to uncertainty on the future direction of the company.
The board of Regions Financial Corp. (RF, $6.01, -$0.14, -2.20%) is investigating whether executives delayed public disclosure of loans that were going sour during the financial crisis, The Wall Street Journal reported, citing court documents and people familiar with the matter.
Tower Semiconductor Ltd. (TSEM, $1.08, +$0.04, +3.85%) forecast a second-quarter revenue range above analysts' estimate, noting the mid-range is a record high.
Needham Research upgraded its stock-investment rating on TTM Technologies Inc. (TTMI, $13.96, +$0.59, +4.41%) to strong buy from buy, saying the company boasts an impressive customer list with some of the leading players in technology, while operating at the vanguard of a highly consolidated space. The firm added that any opportunity to pick up such a "high-quality company at such a discount should be seized upon."
Under Armour Inc. (UA, $67.52, +$3.40, +5.30%) rallied as Sterne Agee upgraded the athletic-apparel retailer to buy and boosted its price target by one-third to $80 amid continued 30% growth in its apparel sales and increased direct-to-consumer purchases as UA opens more stores.
Xerox Corp. (XRX, $9.60, +$0.20, +2.13%) got a Barron's bounce after OSS Capital Management's Oscar Schafer touted the stock, saying Xerox's $6.4 billion acquisition of Affiliated Computer Services last year accelerated its transformation into a higher-growth technology services provider. He added that Xerox is the "industry leader" in the document business, noted its formidable cash-flow prospects and said "there are a lot of cheap large-cap technology stocks out there, but Xerox seems to have fewer issues."
Sidoti upgraded its stock-investment rating on Zoll Medical Corp. (ZOLL, $57.19, +$1.05, +1.87%) to buy from neutral, saying the company's LifeVest wearable external defibrillator product will likely boost sales growth and margins while the core defibrillator business will likely reach a normal run rate by 2013 on less-constrained hospital capital budgets and solid international growth.
Branded-apparel company VF Corp. (VFC, $101.93, +$10.13, +11.04%) agreed to buy Timberland ($42.79, +$12.80, +42.66%) for about $2 billion, taking advantage of the footwear company's beaten-down stock price to boost its outdoor and action-sports businesses. VF's offer of $43 a share represents a premium of 43% to Friday's close. Other footwear companies including Wolverine World Wide Inc. (WWW, $38.82, +$1.65, +4.44%) and Brown Shoe Co. (BWS, $9.49, +$0.41, +4.52%) also gained.
Transatlantic Holdings ($48.36, +$4.35, +9.88%) and Allied World Assurance Company Holdings AG (AWH, $55.58, -$2.49, -4.29%) Sunday said they had agreed to a merger of equals to create a global reinsurer with equity of nearly $7 billion.
Graham Packaging ($25.88, +$3.93, +17.90%) said it received a competing takeover offer valued at about $1.64 billion from a third party, which its board determined could lead to a superior proposal to its pending $1.45 billion takeover by Silgan Holdings Inc. (SLGN, $41.13, -$2.02, -4.68%).
Wendy's/Arby's Group Inc. (WEN, $4.63, +$0.11, +2.43%) agreed to sell most of its struggling Arby's chain for $130 million in cash to a group led by private-equity firm Roark Capital Group in a deal that leaves it with an 18.5% ownership stake in the fast-food restaurant.
Quanex Building Product Corp. (NX, $16.49, -$1.61, -8.88%) swung to a loss in its fiscal second quarter on weak sales in its engineered-products unit, and the company warned growth in the economy and pace of recovery in residential-housing activity have slowed.
Other Stocks In Focus: Morgan Stanley upgraded its stock-investment rating on lithium-ion battery maker A123 Systems Inc. (AONE, $5.04, +$0.52, +11.48%) to overweight, saying, "Near-term catalysts and revenue visibility offer favorable risk-reward." Despite rising Monday, the stock is down 47% this year, including 18% in June. But through year's end, Morgan Stanley sees A123 benefiting from things including several auto makers moving from prototypes to volume production and margins rising on increased capacity utilization.
Aetna Inc. (AET, $42.90, +$0.04, +0.09%) agreed to buy Genworth Financial Inc.'s (GNW, $10.26, +$0.16, +1.53%) medicare-supplement business for about $290 million, as Genworth continues to narrow its focus to retirement and protection products.
Alaska Air Group Inc.'s (ALK, $62.62, +$1.07, +1.74%) board has authorized the airline to buy back up to $50 million of its common stock.
Alliance One International Inc. (AOI, $3.01, -$0.51, -14.49%) shares hit a two-year low after the company said it swung to a loss in its fiscal year ended March, as sales and other operating revenue fell 9.3%. The leaf-tobacco seller noted it continues to work through global oversupply and modified manufacturer sourcing strategies that have affected its results.
In a surprise move, home-building company Beazer Homes USA Inc. (BZH, $3.00, -$0.15, -4.76%) said Chief Executive Ian J. McCarthy will step down and be replaced by Allan Merrill, the current chief financial officer.
Shares of flu-vaccine developer BioCryst Pharmaceuticals Inc. (BCRX, $4.08, +$0.53, +14.93%) rallied Monday in the wake of a report that researchers have identified a newly mutated strain of the swine flu, or H1N1, virus that appears to be resistant to the two leading treatments for the disease, Roche Holding AG's (RHHBY, $41.89, +$0.23, +0.55%) and Gilead Sciences Inc.'s (GILD, $39.89, -$0.34, -0.85%) Tamiflu and GlaxoSmithKline PLC's (GSK, $41.89, +$0.32, +0.77%) Relenza. The new strain, however, didn't appear to be as resistant to BioCryst's experimental flu-treatment peramivir. The data were published by researchers associated with the World Health Organization in the current issue of the medical journal Eurosurveillance. Peramivir is currently in Phase III testing.
Carnival Corp. (CCL, $35.14, -$0.66, -1.84%) said it underestimated the impact of itinerary changes and higher fuel prices for the second half of the year, with impacts from crises in the Middle East, North Africa and Japan now expected to cut an additional 15 cents a share from earnings.
J.P. Morgan upgraded its stock-investment rating on Chico's FAS Inc. (CHS, $13.92, +$0.53, +3.96%) to overweight from neutral, saying that, within a backdrop of a rationalizing competitive landscape, Chico's also has a number of company-specific margin-enhancing opportunities.
Citigroup Inc. (C, $38.60, +$0.68, +1.79%) will cut its stake in India's Housing Development Finance Corp. Ltd. (500010.BY) to below 10%, two people familiar with the matter told Dow Jones Newswires Monday.
CytRx Corp. (CYTR, $0.81, +$0.02, +1.91%) said a study shows its cancer-inhibitor candidate, bafetinib, was clinically active in a group of leukemia patients for whom several other treatments failed.
Honeywell International Inc. (HON, $55.68, +$0.15, +0.27%) agreed to buy mobile-computer maker EMS Technologies Inc. (ELMG, $32.87, +$8.07, +32.54%) for about $491 million, a move that expands Honeywell's mobile-computing business into the warehousing and port segments. Honeywell's $33-a-share cash tender offer is a 33% premium to EMS's Friday close of $24.80.
Baird said its "field research points to a sharp deceleration in semiconductor order trends in 2Q," leading to downgrades on Fairchild Semiconductor International Inc. (FCS, $15.35, -$1.34, -8.03%) and Diodes Inc. (DIOD, $22.21, -$1.40, -5.93%) to neutral from outperform, along with cuts in estimates and price targets to a handful of others. The firm noted "lead times have come down significantly," with inventories stacking up and demand waning. And if the back-to-school season turns out weaker than expected, "we could see a further slowdown in orders in 3Q," Baird says.
Ford Motor Co. (F, $12.89, -$0.46, -3.45%) must pay almost $2 billion in damages to thousands of dealers after a judge upheld a jury verdict against the auto maker earlier this year, The Wall Street Journal reported.
Forest Laboratories Inc. (FRX, $38.71, +$0.76, +2.00%) said it received notice that one of billionaire activist investor Carl C. Icahn's affiliates intends to nominate four candidates for Forest's nine-member board.
Gerber Scientific Inc. (GRB, $11.02, +$2.90, +35.65%) agreed to be acquired by technology investment firm Vector Capital Corp. for about $281.8 million, which follows Gerber's efforts to restructure. The deal, worth $11 a share in cash, represents a 35% premium over Friday's close.
Greenhill & Co. (GHL, $50.78, +$0.86, +1.72%) sold all of its interests in the U.S. buyout fund Greenhill Capital Partners II L.P. for about $45 million to certain investors advised by J.P. Morgan Asset Management.
Harvest Natural Resources Inc. (HNR, $12.18, +$1.67, +15.89%) disclosed Monday it has discovered oil in a West African offshore well. The well was spudded April 28 and is being drilled to test the potential of the pre-salt Gamba and Dentale Formations. It has reached a vertical depth of 9,953 feet.
Blood-test product maker Immucor Inc. (BLUD, $20.06, +$0.48, +2.45%) gained following Sunday night's disclosure that CEO Gioacchino De Chirico has stepped down and will be succeeded by Joshua Levine, whose last job was running breast-implant maker Mentor until its 2009 acquisition by Johnson & Johnson (JNJ, $66.91, +$0.82, +1.24%). WJB Capital expected a gain, though hesitated in saying so as it "didn't want to imply that Nino did anything wrong or that we don't like the guy. The unfortunate reality is that Nino took over a company that immediately fell under multiple investigations and made a transformational acquisition that hasn't panned out yet." It added, "Given Immucor bulls' mantra that BLUD is cheap and potentially a good takeover target, this hire will likely be well received."
Iron Mountain Inc.'s (IRM, $32.31, +$0.40, +1.25%) board authorized a 33% increase to its quarterly dividend, marking another leg in the data-management company's plan to return $2.2 billion of capital to shareholders by 2013.
Kodiak Oil & Gas Corp. (KOG, $5.60, -$0.37, -6.20%) reduced its production outlook for the year due to the impact of damaging weather during the first half of the year at its Williston Basin operations in North Dakota and Montana.
Privately held diversified company MacAndrews & Forbes Holdings Inc. said it has offered to acquire all the shares of M&F Worldwide Corp. (MFW, $24.01, +$7.05, +41.57%) it doesn't already own in a deal that values the company at $464 million. The deal, worth $24 a share, represents a 42% premium over Friday's closing price.
Magellan Health Services Inc. (MGLN, $53.01, +$2.23, +4.39%) said Arizona has extended its Maricopa County Medicaid contract to provide behavioral health services for 15 months, through September 2013.
Sidoti raised its stock-investment rating on Maidenform Brands Inc. (MFB, $26.95, +$0.68, +2.59%) to buy from neutral, citing valuation and saying the recent pullback in the stock largely reflected the weak overall market and an earnings miss by a competitor.
Information-technology company Ness Technologies Inc. (NSTC, $7.61, +$0.93, +13.92%) (NSTC.TV) said Friday it has agreed to be acquired by a Citigroup Inc. (C, $38.61, +$0.69, +1.82%) private-equity fund for $307 million. Under the deal, an affiliate of Citi Venture Capital International will pay $7.75 a share in cash, a 16% premium to the stock's Friday close.
Petroleum Development Corp., or PDC Energy, (PETD, $29.11, -$3.64, -11.11%) shares slumped after a surprise disclosure Saturday that director James Trimble is replacing Richard McCullough as CEO, effective immediately. The company attributed the management change during a conference call to determining it needs a leader with deeper operational background and with a more sophisticated sense of exploration and production industry and operations. C.K. Cooper analyst Joel Musante noted it was more of an abrupt announcement than a smooth change, with investors likely reacting to uncertainty on the future direction of the company.
The board of Regions Financial Corp. (RF, $6.01, -$0.14, -2.20%) is investigating whether executives delayed public disclosure of loans that were going sour during the financial crisis, The Wall Street Journal reported, citing court documents and people familiar with the matter.
Tower Semiconductor Ltd. (TSEM, $1.08, +$0.04, +3.85%) forecast a second-quarter revenue range above analysts' estimate, noting the mid-range is a record high.
Needham Research upgraded its stock-investment rating on TTM Technologies Inc. (TTMI, $13.96, +$0.59, +4.41%) to strong buy from buy, saying the company boasts an impressive customer list with some of the leading players in technology, while operating at the vanguard of a highly consolidated space. The firm added that any opportunity to pick up such a "high-quality company at such a discount should be seized upon."
Under Armour Inc. (UA, $67.52, +$3.40, +5.30%) rallied as Sterne Agee upgraded the athletic-apparel retailer to buy and boosted its price target by one-third to $80 amid continued 30% growth in its apparel sales and increased direct-to-consumer purchases as UA opens more stores.
Xerox Corp. (XRX, $9.60, +$0.20, +2.13%) got a Barron's bounce after OSS Capital Management's Oscar Schafer touted the stock, saying Xerox's $6.4 billion acquisition of Affiliated Computer Services last year accelerated its transformation into a higher-growth technology services provider. He added that Xerox is the "industry leader" in the document business, noted its formidable cash-flow prospects and said "there are a lot of cheap large-cap technology stocks out there, but Xerox seems to have fewer issues."
Sidoti upgraded its stock-investment rating on Zoll Medical Corp. (ZOLL, $57.19, +$1.05, +1.87%) to buy from neutral, saying the company's LifeVest wearable external defibrillator product will likely boost sales growth and margins while the core defibrillator business will likely reach a normal run rate by 2013 on less-constrained hospital capital budgets and solid international growth.