Preopen Trading: SDL Explodes Higher on JDS Deal
(Updated from 7:10 a.m. EDT)
SDL
(SDLI)
was burning bright and hot in preopen action on news of its acquisition in the biggest nonphone tech deal ever.
Fiber optics manufacturer
JDS Uniphase
(JDSU)
agreed to buy rival SDL in a stock deal worth $41 billion, or $441.51 per SDL share.
SDL soared 79 11/16 to 375 in premarket trading, according to
Instinet
. It had traded as high as 396 on
Island
but last traded at 332 1/4. JDS Uniphase, meanwhile, was lately trading at 105 on Instinet, down 10 5/16 from last week's close. It last traded at 101.625 on Island, which uses decimal pricing.
In other company news,
Invitrogen
(IVGN)
TheStreet Recommends
will acquire
Dexter
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and its 75%-owned biotech subsidiary,
Life Technologies
, for $1.9 billion in stock and cash.
The
S&P 500 futures on
Globex
lately were up to 1494.9, about a point above
fair value and indicating a flat opening. The thinly traded
Nasdaq 100
futures were off 6.5 to 3871.
After midsession, Europe's major indices were mixed, with France's
CAC 40
down 0.2% and the U.K.'s
FTSE 100
up 0.1% (see today's
European Midday Update for more). Japan's
Nikkei 225
gained 1% overnight, while Hong Kong's
Hang Seng
rose 2.4%.
Earlier: SDL Gains Strongly in Europe
LONDON -- Giving investors more to think about than the bevy of corporate earnings due out this week,
JDS Uniphase
(JDSU)
, the fiber-optic company, said Monday that it would buy
SDL
(SDLI)
for $41 billion in stock.
The deal, the largest ever in the technology sector outside of telephony, values SDL at nearly a 50% premium over Friday's closing price of 295 5/16.
Monday SDL shares traded in Germany jumped 100 euros, or 32.3%, to 410 euros ($390), on the news, while shares of JDS dipped 13.50, or 11%, to 109. (Like those of many U.S. companies, shares of SDL and JDS are also listed on some foreign exchanges.)
The companies will be holding a conference call at 8 a.m. EDT to discuss the deal, which will allow the duo to speed up the delivery of certain fiber-optic products.
Outside of the vortex created by this deal, other U.S. stocks traded in Europe were quiet.
"I would've thought we would've had a good start to the day," said David Smith, managing director of
Cantor Fitzgerald
in London, given the way the U.S. market closed on Friday. "And suddenly the sun's gone in again."
At 6:30 a.m. EDT, the September
S&P 500 futures were down 0.3 points, or 1.24 points below
fair value and not much of an indication for the open. The
Nasdaq 100
futures were 8 points lower to 3869.5, also little indication for large-cap tech stocks in the early going. Fair value helps determine the tone of futures trading, often a good indication for how the securities market will open.
"We've got a lot of corporate results coming out this week and people are waiting what happens with them," Smith said.
Earnings season will kick off today when
Alcoa
(AA) - Get Alcoa Corporation Report
reports its second-quarter results. Analysts surveyed by
First Call/Thomson Financial
expect the aluminum company to earn 46 cents a share, compared with 32 cents a year earlier. Alcoa shares were not traded in Germany Monday morning.
Also in the hopper are
Gannett
(GCI) - Get Gannett Co., Inc. Report
,
Great Atlantic & Pacific
(GAP)
and
New York Times
(NYT) - Get New York Times Company Class A Report
report results. The full week's
earnings calendar is published separately.
