Financial stocks got a boost from mild economic data this morning. Midday highfliers included
Goldman Sachs (GS Quote) up 9 7/16, or 12.2%, to 85 11/16 and
Lehman Brothers (LEH Quote) was lifting 7 11/6, or 9.4%, to 89 5/16. The
American Stock Exchange Broker/Dealer Index was moving up 7.9%.
Mergers, acquisitions and joint ventures
Crestline Capital(CLJ Quote) climbed 3/16 to 18 5/8 after it said it will form a joint venture with Bedrock Partners II. The companies plan to spend $250 million to acquire and renovate 15 to 20 hotels over the next two to three years. Crestline will provide about 10% of the equity for the joint venture, while the Citadel Group will raise an additional $75 million of third party equity for the fund. Crestline said in a release the joint venture plans to acquire mid-priced properties with "significant turnaround potential," renovate the properties and then reposition the hotels as upscale properties. Crestline Capital's management division, Crestline Hotels & Resorts, will manage most or all of the hotels. CarrAmerica Realty(CRE Quote) rose 9/16 to 25 1/2 after it announced it signed a non-binding letter of intent for a development joint venture valued at about $422 million. CarrAmerica is expected to have a 35% stake in the joint venture. Unilever(UL Quote) is refuting a report by The Wall Street Journal that says the company quietly upped its bid for Bestfoods(BFO Quote) to $70 a share from $66. Unilever was off 3/8 to 26 3/8, while Bestfoods was falling 1 7/16 to 64 7/16. A Unilever spokesman told Reuters the companies haven't engaged in formal talks since the original bid was placed in early May, but he said that didn't rule out informal "conversations." Bestfoods rejected Unilever's first offer as inadequate. AMR's(AMR Quote) lost 1 1/8 to 28 5/16 after reports that its American Airlines unit is said to be in talks about making a possible bid for Northwest Airlines(NWAC Quote), according to St. Paul, Minn.-based television station KSTP-TV, citing "well-placed sources." Northwest was lately rising 5 3/4, or 19.8%, to 24 13/16. The station, which listed its report on its Web site www.kstp.com, said that American Airlines chief executive Don Carty and Northwest president and chief executive John Dasburg have discussed a possible merger and that one or more merger announcements could be made public in the coming days. American Airlines, the world's second-largest airline, is a unit of Fort Worth, Texas-based AMR Corp. Northwest is based in St. Paul. The Federal Communications Commission is set to approve AT&T's(T Quote) proposed acquisition of MediaOne (UMG Quote), reported in The Wall Street Journal AT&T was rising 1 to 35 15/16 and MediaOne popped 1 1/4 to 68 5/8. According to the Journal, AT&T will have to sell either its stake in Liberty Media(LMGA Quote), MediaOne's 25% interest in Time Warner Entertainment(TWX Quote) or individual cable systems. Liberty Media was lately rising 1 129/264 to 46 while Time Warner tacked on 4 1/4, or 5.5% to 82 1/4. iVillage(IVIL Quote) edged up 13/64 to 8 1/8 after it said it negotiating the sale of its e-commerce division, iBaby, to compete with Web retailer BabyGear.com. For more, take a look at the coverage out of TheStreet.com/NYTimes.com's joint newsroom. GE Medical Systems, a unit of General Electric(GE Quote), agreed to buy Lunar(LUNR Quote) in a stock swap worth about $150 million. GE was up 3/8 while Lunar was lifting 5 1/4, or 47.2%, to 16 3/8. GE will determine the actual number of shares it will swap based on trading prices prior to closing the transaction, which the companies expect to occur by the third quarter. GE Medical Systems agreed to pay $17 a share in stock. Madison, Wis.-based Lunar, which makes technology for assessing osteoporosis and metabolic bone diseases, had 8.6 million shares outstanding as of April 26, so the total value of the transaction amounts to $146.2 million. The transaction is subject to Lunar shareholder and government approval. Lunar chairman and CEO Richard Mazess agreed to vote his shares, representing about 30% of Lunar's outstanding shares, in favor of the transaction. The boards of both GE and Lunar approved the merger. Jacobs Engineering(JEC Quote) rose 1 3/16 to 34 11/16 after it signed a definitive sale agreement with Stone & Webster in which Jacobs will acquire substantially all of Stone & Webster's assets in exchange for $150 million in cash and stock and the assumption of nearly all Stone & Webster's liabilities shown on its March balance sheet, standby letters of credit, and its liabilities under a new credit facility from Jacobs entered into on May 9, pursuant to which up to $50 million of credit is being made available to enable Stone & Webster to operate its businesses until the asset sale is completed. As a condition of the proposed transaction, Stone & Webster, which expects to continue operating its businesses in the normal course during the reorganization process, will be seeking bankruptcy court approval of the asset sale and credit agreement. Back to top Analyst actions
Upgrades GPU(GPU Quote)gre 1/16 to 29 5/16: UP to outperform from hold at ABN Amro. Samina (SANM Quote) jumped 4 11/16, or 6.8%, to 73 5/8 : fiscal 2000 EPS UP to $1.36 from $1.38 a share at Merrill Lynch. Downgrades Dana(DCN Quote) slipped 3/16 to 25 5/16: second-quarter EPS DOWN to $1.04 a share from $1.14 at Lehman Brothers. Gadzooks(GADZ Quote) tumbled 5/8, or 6.1%, to 9 11/16: DOWN to market performer from buy at Banc of America. Kmart (KM Quote) lost 1/8 to 8 1/2: second-quarter earnings estimates DOWN to 23 cents from 26 cents at Merrill Lynch; fiscal 2000 earnings estimates DOWN to $1.19 a share from $1.20; fiscal 2001 earnings estimates DOWN to $1.40 from $1.43. Progressive (PGR Quote) was off 4 11/16 to 93: DOWN to buy from strong buy at Credit Suisse First Boston Initiations chinadot.com (CHINA Quote) shot up 4 5/8, or 19%, to 28 7/16: NEW intermediates accumulate, long-term buy rating. Dianon(DIAN Quote) grew 3 9/16, or 15%, to 27 1/8: NEW buy at UBS Warburg; price target of 32. Homestore.com (HOMS Quote) gained 2 9/64, or 7.7%, to 29 57/64: NEW strong buy at Thomas Weisel by analyst Jim Fowler. Group Moves Deutsche Banc Alex. Brown initiated coverage of eight staffing companies: AHL Services(AHLS Quote) as a buy; price target: 15. AHL Services shares were up 13 /32, or 5.5%, to 7 3/4. Charles River Associates(CRAI Quote) as a buy; price target: 30. Charles River shares grew 1/2 to 18 7/16. Corporate Executive Board(EXBD Quote) as a strong buy; price target: 70. The company's shares hopped 1 1/4 to 57 1/4. Interim Services(IS Quote) as a strong buy; price target: 30. Shares were up 1 1/4, or 6.0%, to 22 1/4. Manpower(MAN Quote) as a strong buy; price target: 42. Manpower grew 3/4 to 36 1/4. NCO Group(NCOG Quote) as a strong buy; price target: 60. NCO Groups shares gained 1 13/16, or 7.9%, to 24 7/8. On Assignment(ASGN Quote) as a market perform; price target: 28. The stock blimbed 1 11/16, or 6.3%, to 28 11/16. Robert Half(RHI Quote) as a strong buy; price target: 75. Robert Half shares popped 1 7/8 to 63 1/2.
ABN Amro analyst Eugene Nowak raised 2000 and 2001 EPS estimates for leading energy firms to reflect strong commodity prices. Companies mentioned in the report include: ExxonMobil (XOM Quote) : 2000 EPS UP to $4.00 from $3.85 and 2001 EPS up to $4.10 from $3.95. ExxonMobil was off 2 3/16 to 80 3/4. Chevron (CHV Quote): 2000 EPS UP to $6.50 from $6.10 and 2001 EPS up to $5.75 from $5.55. Shares lost 1 5/8 to 89 3/8. Kerr-McGee (KMG Quote): 2000 EPS UP to $6.50 from $5.95 and 2001 EPS up to $5.00 from $4.80. Shares fell 1 3/8 to 58 3/8. Phillips Petroleum (P Quote): 2000 EPS up to $5.75 from $5.20 and 2001 EPS up to $5.10 from $4.60. It was off 2 to 55. Texaco (TX Quote): 2000 EPS up to $4.40 from $4.05 and 2001 EPS up to $4.10 from $3.80. The stock gained 1 1/16 to 54 15/16. Amerada Hess (AHC Quote): 2000 EPS up to $7.75 from $7.50 and 2001 EPS up to $5.70 from $5.30. Amerada Hess was down 2 7/8 to 63 7/16. Unocal (UCL Quote): 2000 EPS up to $2.50 from $2.00 and 2001 EPS up to $2.40 from $1.95. Unocal lost 1 5/16 to 36 7/16.
UBS Warburg upgraded three oil and gas companies: Louis Dreyfus(LD Quote): UP to buy from hold at UBS Warburg. Shares were off 9/16 to 31 7/8. Newfield(NFX Quote) slipped 5/8 to 39 5/8: UP to buy from hold at UBS Warburg. Forest Oil(FST Quote) edged off 1/16 to 15 5/8: UP to buy from hold. Back to top Offerings and stock actions
Interwoven(IWOV Quote) hopped 13 3/4, or 20.2%, to 81 13/16 after it set a 2-for-1 stock split. King Pharmaceuticals(KG Quote) climbed 13/16 to 55 3/4 after it announced a three-for-two stock split for shareholders of record as of June 12, to be distributed June 21. The company makes generic and brand-name drugs and sells its branded products through subsidiary Monarch Pharmaceuticals. SkyStream Networks(SSNW Quote), which sells networking products that connect the Internet to cable, satellite and digital television networks, withdrew its proposed $93.15 million IPO, citing market conditions. The offering was supposed to be managed by Goldman Sachs, Robertson Stephens and Dain Rauscher Wessels. Back to top Miscellany
Virgin Group (VIRGY Quote) was rising 5/16, or 8.8%, to 3 7/8 after it's Virgin Express unit agreed to lease eight Boeing (BA Quote) aircraft for a period of eight years from GE Capital Aviation Services, a unit of General Electric. The aircraft are scheduled for delivery between July 2001 and April 2003. Boeing was lately off 1/4 to 39 15/16. The airline said it placed a total of 11 lease orders for Boeing 737-700 planes valued at about $440 million. Another three 737-700s will be leased for a period of eight years from International Lease Finance, a subsidiary of American International Group(AIG Quote). Two of these aircraft are scheduled for delivery in 2002 and one in 2003. American International Group rose 1 3/4 to 119. Genomics company Gene Logic(GLGC Quote) gained 1 3/4, or 6.9%, to 27 1/4 after it said Mark Gessler, its president and COO since January 1999, will succeed Michael Brennan as its CEO, effective June 8. Brennan, a founder of the company and CEO since it began in 1995, will continue to serve as chairman and will still play a role in the company's development. Back to top
