Movers: UBS, Lehman Brothers, Dell, CSK Auto
UBS AG (UBS) expects a first quarter net loss of about CHF 12 billion, after losses and writedowns of about US$19 billion on U.S. real estate and related structured credit positions. Also says Chairman Marcel Ospel will not seek re-election at Annual General Meeting on Apr. 23. Its board plans to propose ordinary capital increase with proceeds of about CHF 15 billion, to be effected by issuing rights to UBS shareholders. S&P Ratings Services cuts long-term rating by one notch to AA-. Deutsche Bank reportedly upgrades to buy.
Lehman Brothers (LEH) announces that it has priced a $4.0 billion offering of 4 million shares of 7.25% Non-Cumulative Perpetual Convertible Preferred Stock, Series P, with a par value of $1.00 per share and a liquidation preference of $1,000 per share. Each share of the Preferred Stock will be convertible at any time, at the option of the holder, into 20.0509 shares of LEH common, which represents an initial conversion price of approximately $49.87 per common share. Earlier, S&P maintained hold.
Dell (DELL) says actions it will take during fiscal year 2009 and beyond are expected to position it to further accelerate growth in its five focus areas: global consumer, enterprise, notebooks, small and medium enterprise and emerging countries, while improving profitability and cash returns. Part of assessment is to close its desktop mfg facility in Austin, Texas and to reduce total product costs across all areas. It says over next three years, it expects to achieve annualized savings of about $3 billion. The PC maker reaffirms plans to reduce global headcount by at least 8,800. Caris downgrades the stock to average from above average.
KKR Financial Holdings LLC (KFN) announces proposed public offering of 20 million shares. Net proceeds from the offering will be used for general corporate purposes. Bear Stearns downgrades to peer perform from outperform.
Deutsche Bank AG (DB) anticipates first quarter mark-downs of €2.5 billion, related to leveraged loans and loan commitments, commercial real estate, and residential mortgage-backed securities (principally Alt-A).
Thornburg Mortgage (TMA) shares were halted on the NYSE (last close was up 0.24 to 1.45). TMA announces that it has completed its previously announced offering to raise $1.35 billion from sale of senior subordinated secured notes, warrants to purchase stock and participation in certain mortgage-related assets. The company received $1.15 billion of proceeds from offering, remaining $200 million of offering proceeds is being held in escrow. S&P keeps hold.
National City (NCC) announces that its Board of Directors is reviewing a range of strategic alternatives for the company.
CSK Auto (CAO) agrees to be acquired by O'Reilly Automatic (ORLY) in a deal valued at about $1 billion, including. about $500 million of debt. Terms: CAO holders to get $11.00 of ORLY stock, subj. to collar, plus $1.00 in cash for each share held.
WSJ reports that Microsoft (MSFT) has no plans to raise its bid to acquire Yahoo (YHOO). Yahoo formally rejected Microsoft's unsolicited offer on Feb. 10, saying it "substantially undervalues" the Internet company. S&P keeps hold.
Church & Dwight (CHD) agrees to acquire Orajel and other OTC Brands from Del Pharmaceuticals Inc. for $380 million in cash.
Orbcomm (ORBC) says it has completed the acquisition of a 37% stake in ORBCOMM Japan Ltd., its representative in Japan and the owner of a gateway earth station (GES) in Japan, through unit of ORBCOMM LLC. Notes ORBCOMM LLAC plans to acquire additional shares, increasing its ownership in ORBCOMM Japan to 51%.
Plum Creek Timber Company (PCL) says it now expects first quarter real estate segment revenues to be about $50 million, vs. prior guidance of between $75-$85 million. Notes the sale of two properties with combines sales price of $35 million did not close as expected. As a result, now expects first quarter EPS to be between $0.18-$0.22. Expects 2008 EPS to be between $1.05-$1.30, or $0.10 lower than previous outlook, cites weak sawlog demand, weak residential construction activity.
TravelCenters of America LLC (TA) posts $4.86 fourth quarter loss per share, vs. $0.78 EPS (predecessor), despite 63% revenue rise.
China Direct (CDS) raises 2008 revenue, net income guidance to $320 million and $24 million, respectively, up from previous $270 million revenue and $20 million net income guidance.