Movers: UBS, Smithfield Foods, Fortune Brands
UBS AG (UBS) says board members Stephan Haeringer, Rolf Meyer, Peter Spuhler and Lawrence Weinbach plan to resign in October 2008. The companys an Extraordinary General Meeting for Oct. 2, to elect 4 new members. Also, UBS establishes new corporate governance, the main elements of which entail a clear separation of the roles and responsibilities between the board and the executive mgmt and a strengthening of the oversight role of the board through the operation of its committees. Merrill removes UBS from the Europe 1 List.
Smithfield Foods (SFD) says COFCO Ltd., China's largest national agricultural trading and processing company, has agreed to buy 7 million shares, or 4.95%, of SFD's common stock. The purchase price will be equal to the closing price of SFD common stock on the day that a planned offering of $350 million in convertible senior notes due 2013 is priced.
Fortune Brands (FO) expects second quarter EPS before items to decline at a high-teens-to-mid-20s percentage rate vs. the year ago's $1.51. FO's previously announced second quarter target had called for a decline at a high-single-digit-to-mid-teens percentage rate. Cites weakening consumer sentiment in U.S., ongoing correction in U.S. housing market, and a large and unexpected Australian tax increase on ready-to-drink spirits products. Wachovia reportedly downgrades to market perform from outperform.
CIT Group (CIT) plans to sell its Home Lending business, consisting of $9.3 billion in assets and related servicing operations, to Lone Star Funds for $1.5 billion in cash and the assumption of $4.4 billion of outstanding debt and other related liabilities. Separately, CIT sells its $470 million manufactured housing portfolio to Vanderbilt Mortgage and Finance for $300 million. Net cash proceeds from the two transactions are expected to be about $1.8 billion.
Legg Mason (LM) enters into capital support agreements (CSAs) to support 3 money market funds managed by a LM subsidiary. Under the CSAs, LM will make up to an aggregate of $240 million in capital contributions to the funds if any of the funds realize a loss on the sale of or certain other events relating to certain Asset Backed Commercial Paper (ABCP) securities in the portfolios. As result, LM expects to incur an estimated $146 million non-cash charge in the first quarter related to this action.
MGIC Investment (MTG) says that while it does not normally comment on market rumors, the company understands there have been reports in the media that it has plans to offer additional shares. However, MTG says its plans, as communicated in its April 29 press release and May 29 proxy statement, have not changed: company still has not plans to issue any additional shares, other than for awards under its stock incentive plan.
Isis Pharmaceuticals (ISIS) announces that Abbott Laboratories (ABT) has invested an additional $20 million in Isis' Ibis Biosciences unit, which will allow Ibis to further develop the Ibis T5000 Biosensor System. Notes the system offers a "unique solution" for rapid identification and characterization of infectious agents.
Taro Pharmaceutical Industries (TAROF) says it would have no formal comment on the unsolicited tender offer commenced today by a subsidiary of Sun Pharmaceutical Industries Ltd., for all shares of TAROF common stock at a price of $7.75 per share until its Board of Directors has an opportunity to review and evaluate the full details of the offer.
CBRL Group (CBRL) posts 1.2% lower June same-store restaurant sales, 0.2% higher same-store retail sales. Cuts fiscal year 2008 EPS from continuing operations forecast to $2.77-$2.87.
Dollar Thrifty Automotive Group (DTG) says it does not expect to achieve previously issued guidance for 2008 non-GAAP EPS of $1.00-$1.50, corporate EBITDA of $97-$115 million. Notes challenges in areas of revenue per day, vehicle depreciation costs. In addition, says the balance of the year looks less robust than it had forecasted, given overall economic trends.
VF Corp. (VFC) says second quarter EPS could exceed its prior guidance of approximately $0.80 by 10%-12% due to stronger earnings from operations and a net favorable benefit from the resolution of various tax matters.
TierOne (TONE) announces that it will close all of its nine loan production offices across the country in an effort to direct its lending activity to its primary market area of Nebraska, Iowa and Kansas.