Debt Issues Snag PHH Takeout

Shares sink after doubts arise about its merger with GE.
By Stockpickr Staff ,

Editor's Note: In this feature from Stockpickr, we highlight lists of stocks that have been upgraded by analysts or are experiencing activist situations or some other market moving events.

Rumors of the Day

: Shares of

PHH

(PHH)

-- a company that provides mortgage and vehicle fleet management services -- sunk on news its merger with

General Electric

(GE) - Get Report

hit a snag. One of the conditions of the merger calls for

Blackstone Group

(BX) - Get Report

affiliate Pearl Acquisition to buy the attendant mortgage business from GE, but due to debt financing issues Pearl is "not optimistic" that it will ultimately succeed in obtaining the necessary funding. PHH shares plunged $4.57 or 16% at $23.93.

Business Objects

( BOBJ) surged after

Le Figaro

reported over the weekend that the business-software company hired Goldman Sachs to explore a sale. The French newspaper report said there are five potential bidders for Business Objects, with

SAP

(SAP) - Get Report

seen as the most likely acquirer. Business Objects increased $2.62, or 6%, to $45 in recent trading.

Today's Hot List

:

ITT

(ITT) - Get Report

has inked a deal to acquire

EDO

( EDO) by purchasing all outstanding shares for $56 each in cash. The deal, including about $120 million of net debt and the anticipated conversion of convertible notes, values EDO at $1.7 billion. ITT shares were down 76 cents, or 1.2%, at $63.53 while EDO surged $3.39, or 6.6%, to $54.90.

Monsanto

(MON)

raised its full-year earnings outlook to $2 a share before one-time items. The company's most recent earnings-per-share projection called for $1.75 to $1.80. Shares gained 2.8% to $75.54.

Analyst Downgrades

: Morgan Stanley downgraded

Marsh & McLennan

(MMC) - Get Report

from equal weight to underweight and lowered its 2008 EPS estimates. The stock dropped $1.49, or 5.7%, to $24.69.

Analyst Upgrades

: JPMorgan upgraded

Advanced Micro Devices

(AMD) - Get Report

to neutral from underweight based on the release of a new server chip, and valuation. The firm said improved performance should help AMD gain back market share. AMD shares added 22 cents, or 1.7%, to $12.91.

Latest Activist Situations

: According to StreetInsider.com's 13D Tracker page, Carl Icahn and affiliated funds disclosed an 8.5% stake in

BEA Systems

( BEAS). The 33.4 million shares include underlying call options. StreetInsider reports that in the regulatory filing, "Icahn said he believes a sale of the company to a strategic acquirer will maximize the price of the shares. Icahn seeks talks with management to discuss possibilities of a deal. Icahn also said he may seek to nominate members for election to the board of directors. BEA Systems has long been a rumored buyout target." The company's stock is hugging the flatline at $13.25.

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