U.S. AVERAGES
Maytag has agreed to be acquired by Whirlpool for $21 in cash and stock.
Maytag shareholders will receive, for each share held, $10.50 in cash and between 0.1144 and 0.1398 of a share of Whirlpool stock. The amount of Whirlpool stock to be issued in exchange for each Maytag share will depend upon the volume-weighted average trading price of Whirlpool's stock during a 20 trading-day period ending shortly before the merger.
Whirlpool has sufficient resources to finance the acquisition and has received strong support from the banking sector. The company currently has a $1.2 billion, five-year committed credit facility, scheduled to mature in 2009. There have been no borrowings under this agreement. The acquisition and upcoming debt maturities of the combined company are expected to be financed through current bank agreements and with new committed bank facilities.
In addition to reimbursing the $40 million termination fee paid by Maytag to Triton, Whirlpool has agreed to pay up to $15 million to assist Maytag in retaining key employees. Whirlpool also has agreed to pay Maytag a ""reverse break-up fee"" of $120 million under certain circumstances in the unlikely event of failure to obtain regulatory clearance.
Climbing oil prices has dragged the market averages from its intra-day highs. Light, sweet crude recently advanced 36 cents to $66.15 a barrel on the NYMEX on reports of possible supply disruptions from Iraq.
CP Ships (
TEU: chart),
PetroKazakhstan (
PKZ: chart) and
SBS Broadcasting (
SBTV: chart) have each climbed to new 52-week peaks on merger and acquisitions news.
Emmis Communications (
EMMS: chart) reached a fresh high after the news that it has agreed to sell 9 TV stations.
OSI Pharmaceuticals (
OSIP: chart) hit a 52-week low, losing 20% after announcement of its deal to buy
Eyetech Pharmaceuticals (
EYET: chart).
Northwest shares added about 4.5% as reports said the nation's No. 4 airline has suffered little damage from a strike by its mechanics that started Saturday.
Merck shares lost another 2% Monday after Friday's 8% decline on the $253 million verdict against the Vioxx maker.
Panacos Pharmaceuticals (
PANC: chart) surged more than 60% after the company announced that its experimental HIV drug cuts the level of the virus in the blood by 90%.
INTERNATIONAL MARKET NEWS
Asian markets closed higher Monday as Japanese shares reached their highest level since July 2001, led by gains in banking and oil companies. The Nikkei 225 index rose 160.78 points, or 1.3%, to 12,452. Among advancers, Hong Kong's Hang Seng index closed 1.2% higher, Sydney's All-Ordinaries index rose 0.7% to 4,462, Singapore's Straits Times index closed 0.6% higher to 2,300 and the Shanghai Composite index added 0.7% to 1,158.
Japanese stocks climbed to a new 4-year high Monday as continued confidence in the nation's economic recovery encouraged traders to buy issues sensitive to domestic demand. On the Tokyo Stock Exchange the Nikkei 225 index gained 160.78 points, or 1.30% to 12,452.51 points, its highest level since July 5, 2001 when it reached 12,607.30 points.
European stocks advanced at mid-day Monday, as oil and mining stocks gained strength, while drug makers were under pressure. The German DAX 30 added 0.24% to 4941, the French CAC 40 gained 0.09% to 4491 and the British FTSE 100 index advanced 0.15% to 5320.
ENERGY, METALS AND CURRENCIES MARKETS
The
dollar weakened vs. the euro and the yen Monday, after the greenback had rallied last week on positive U.S. economic reports and expectations of higher interest rates. The greenback traded at 109.55 yen, off from 110.40 yen late Friday, while the euro advanced to $1.2232 vs. $1.2164.
Gold futures were higher in morning trade, reviving from Friday's drop. December gold gained $2.60 to $444.80 an ounce, while September
copper added 1.8 cents, or 1.1%, to $1.677 a pound.
Gold closed at $437.55 an ounce on Monday in Hong Kong, down $1.2 an ounce versus Friday's close of $438.75.
