Wachovia Agrees to Buy SouthTrust

Valero says Street EPS estimates are too low; Advanta, BofA settle litigation; plus more of today's stocks in the news

SouthTrust (SOTR ) agreed to be acquired by Wachovia (WB ) in a $14.3 billion deal. Terms of the transaction call for SouthTrust shareholders to receive 0.89 Wachovia share for each SouthTrust share. S&P upgraded SouthTrust to buy from accumulate. S&P reiterated its buy rating on Wachovia, while Morgan Stanley reiterated its overweight recommendaion. SouthTrust shares ended solidly higher, while Wachovia shares dipped.

Inamed (IMDC ) shares finished higher after the company settled a patent infringement lawsuit with Ethicon Endo-Surgery Inc. regarding various patents related to gastric banding. Inamed will pay $17.25 million plus royalties to Ethicon on future sales. S&P keeps hold.

Oxford Industries (OXM ) shares ended solidly higher after the company agreed to acquire Ben Sherman Ltd., a designer, distributor, and maker of branded sportswear, for about $146 million, plus expenses.

Chelsea Property (CPG ) shares finished significantly higher after the company agreed to be acquired by Simon Property Group (SPG ) in a deal valued at $3.5 billion, or $66 per Chelsea share. Terms: $36 cash and $15 Simon stock per Chelsea share. S&P maintains its hold ratings on Chelsea and Simon. Shares of Simon ended lower.

BostonFed Bancorp (BFD ) shares ended with strong gains after the company agreed to be acquired by Banknorth Group (BKG ) in a $195 million deal. Terms: 1.241 Banknorth shares for each BostonFed share. Hanger Orthopedic (HGR ) shares ended lower after the company received a subpoena from the U.S. Attorney's Office requesting it produce documents relating to allegations concerning possible billing improprieties, and information concerning 14 of Hanger's patient care centers in New York.

Millipore (MIL ) shares finished higher after publication of an article in Barron's saying that it should benefit nicely as labs around world scramble to find new products to replace those whose patents are expiring. UBS analyst Derik De Bruin notes Millipore deserves a premium valuation and has a $68 target on the stock.

Advanta (ADVNB ) shares finished higher after the company agreed with Bank Of America (BAC ) to resolve all outstanding litigation, including partnership tax disputes, between Advanta and FleetBoston Financial Corp., which was recently acquired by Bank of America.

Magnum Hunter (MHR ) shares finished down after the company agreed to acquire $243 million of oil and gas properties in New Mexico from ENCANA's Tom Brown unit. Magnum will offer 15 million shares to the public to fund a portion of the acquisition.

Duane Reade (DRD ) shares ended higher after the company amended its merger agreement with Oak Hill Capital Partners to lower the buyout price to $16.50 per share.

As result of continued strong refining margins, wide sour crude discounts, and higher throughput rates, Valero Energy (VLO ) expects second-quarter earnings per share of over $4.00. The company thinks the 2004 consensus EPS estimate remains too low. Valero filed for a $3.5 billion shelf offering. Shares ended higher.

NVE Corp. (NVEC ) received a U.S. patent for an innovative type of Magnetic Random Access Memory (MRAM). The company notes that MRAM is a revolutionary type of memory fabricated using nanotechnology which uses electron spins to encode data. Shares ended higher.

Taser International (TASR ) says that after reviewing continuing levels of new business in the first half of 2004, it raised its 100% 2004 revenue guidance to 150%. Shares closed higher.

CIBC World initiated coverage of Isolagen (ILE ) with a sector outperform rating and $17 price target. Shares finished higher.

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