Movers: Washington Mutual, MBIA, Celgene, UBS, Bankrate, Adams Respiratory Therapeutics
Washington Mutual (WM) announced it will cut over 3,100 jobs, set aside between $1.5 billion and $1.6 billion for loan losses in its fourth quarter (far more than expected), and slash its dividend by 73%. The shares were down 8% in after-hours trading Monday.
MBIA Inc. (MBI) shares jumped after being halted in the morning pending news. The company enters into agreement with Warburg Pincus under which Warburg Pincus will commit to invest up to $1 billion in MBI through a direct purchase of MBI stock and a backstop for a shareholder rights offering.
Celgene (CELG) dropes after Baird reportedly makes negative comments after the company reports results from two trials using its Revlimid in multiple myeloma patients.
Adams Respiratory Therapeutics (ARXT) agrees to be acquired by Reckitt Benckiser Group plc for $2.3 billion. Terms: $60 per share in cash for each ARXT share held.
UBS AG (UBS) says in response to continued deterioration in the U.S. subprime mortgage securities market, it revises assumptions and inputs used to value U.S. subprime mortgage related positions, resulting in further writedowns of around $10 billion. It now sees a fourth quarter loss vs. earlier forecast for overall profit. The bank says it is now possible it will record a net loss for 2007.
Bankrate (RATE) announces it has acquired Nationwide Card Services and Savingforcollege.com LLC in separate transactions. Expects both acquisitions to be accretive in 2008. Including acquisitions, it sees 2008 revenue of $140-$145 million, and EBITDA of between $60-$65 million.
MGI Pharma (MOGN) agrees to be acquired by Eisai Co. in a $3.9 billion deal. Terms: $41.00 cash per MOGN share.
Overstock.com (OSTK) says fourth quarter gross margins will be lower than they have been in recent quarters due to aggressive sales promotions, discounting. It expects fourth quarter GAAP net income to be between -1% and +1% of revenue, EBITDA to be between $5-$10 million. It sees $50-$60 million in fourth quarter operating cash flow.
Rio Tinto PLC (RTP) may move after London's Telegraph newspaper reports that Blackstone is in process of assembling a consortium to launch a takeover bid for RTP, to rival the proposed offer from BHP Billiton.
Autodesk (ADSK) sets 20 million share buyback.
LDK Solar ADS (LDK) inks 10-year "Take or Pay" contract to supply multicrystalline wafers and polysilicon to Germany-based Q-Cells AG. Q-Cells shall make prepayments in the order of 10% of the silicon value to assist LDK with financing expansion required to supply these volumes. Also, Q-Cells has the option to purchase further silicon wafers if LDK expands its production capacity. Needham reiterates strong buy.
Citigroup (C) has its board meeting today and tomorrow and may decide to name Vikram Pandit as its new CEO, according to news reports.
American Mortgage Acceptance (AMC) says it received margin calls on some of the company's repurchase facilities and interest rate derivative contracts. To meet these margin calls and increase liquidity for future cash needs, the company sells the remainder of the company's Fannie Mae and Ginnie Mae debt securities and two commercial mortgage-backed securities. RBC Capital downgrades to underperform from sector perform.
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