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Stocks To Watch: International Paper, Lennar, McAfee, Nucor, Wal-Mart


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Stocks to watch for Wednesday, January 3

  • Arthur J. Gallagher & Co. (AJG) agreed to pay $28 million to current and former clients to resolve all claims in a federal multi-district class action pending in the New Jersey Federal District Court related to contingent commissions. Gallagher will also pay $8.85 million in plaintiff's attorney fees. The Itasca, Ill.-based insurance broker admitted no wrongdoing, but said in a statement that "it chose to conclude its involvement, rather than prolong what could be a costly and burdensome lawsuit." The company said it will take a pretax charge of $5 million to $10 million in its fourth quarter to increase its reserve for the costs to be incurred to conclude the settlement and to "resolve other regulatory and civil litigation matters
  • The Federal Communications Commission finally approved AT&T's (T) $85 billion acquisition of BellSouth (BLS), creating the largest phone company in the United States.
  • CBOT Holdings (BOT) said volume for December reached 55.3 million contracts, an increase of 33% from the year-ago period. December average daily volume was 2.77 million contracts, up 40% over the same month in the prior year. Total annual volume for 2006 rose 19.5% to the record level of 805.9 million contracts. It's the fifth consecutive record breaking year for the parent company of the Chicago Board of Trade.
  • CheckFree (CKFR) agreed to acquire Carreker (CANI) for $8.05 a share, or $206 million total. CheckFree, Atlanta, said the acquisition will expand its software business and consulting expertise. Carreker, Dallas, provides payments technology and consulting services for the financial services industry.
  • CKE Restaurants (CKR) repurchased two million shares of its common stock from its largest shareholder, Pirate Capital LLC., for $37.1 million. The Carpinteria, Calif.-based restaurant operator said the purchase price of $18.53 per share reflects the company's closing stock price on Dec. 28. CKE said it used its revolving credit facility to fund the transaction. The buyback was completed under the company's previously announced stock repurchase program. Pirate Capital's ownership stake in the CKE is now about 7.2%.
  • Fairchild Semiconductor (FCS) Monday said it plans to launch a tender offer for Taiwan-based System General. Shareholders owning 30.88% of the outstanding shares of System General common stock have agreed to tender their shares to Fairchild. The total purchase price is expected to be about $200 million, depending on exchange rates and the number of shares tendered.
  • International Paper (IP) said its pension fund is now about 95% funded following voluntary contributions of about $1 billion late in 2006. The Memphis, Tenn., forest products company also said its debt stood at roughly $7.2 billion at the end of the year, down from $13.4 billion at the end of the second quarter. The stock closed Friday at $34.10, down a penny.
  • Lennar (LEN) has agreed to add a strategic partner, MW Housing Partners, to its LandSource joint venture, a move it says will result in a cash distribution to Lennar and current partner LNR Property Corp. of $660 million each. MW Housing Partners is co-managed by McFarlane Partners and it includes the California Public Employees' Retirement System. Lennar expects to post a loss of $400 million to $500 million and its CEO said he sees no signs of a home-building recovery.
  • MAIR Holdings (MAIR) may be in focus after Riley Investment Partners said in a regulatory filing it holds a 5.2% stake in the company, which is the parent of Mesaba Airlines. Riley also said it's concerned that MAIR isn't receiving fair value in talks with
  • Northwest Airlines (NWACQ). Northwest, currently in bankruptcy protection, is considering sponsoring Mesaba out of its Chapter 11 reorganization. Riley representatives said in the Dec. 29 filing they are asking that any transaction with Northwest be approved by a majority vote of disinterested shareholders. Riley said if its concerns were not addressed, it could intervene in either bankruptcy case or call a special meeting of shareholders.
  • McAfee (MFE) said it will amend certain stock options grants made to former executives and certain current directors. The Santa Clara, Calif.-based security software maker said the changes represent a small subset of the overall measurement date changes and strike price changes that it expects to make in the future as a result of its stock option review and pending restatement. As part of its actions, McAfee said it is amending grants made to former CEO George Samenuk and former President Kevin Weiss. Samenuk and Weiss were forced out of their posts in October after an internal probe found that the company improperly accounted for up to $150 million in stock-option costs. McAfee added that it is correcting "clerical errors" associated with stock options grants to directors Leslie Denend, Denis O'Leary and Liane Wilson. The company said none of the directors were aware of the errors.
  • Nucor (NUE) agreed to buy Harris Steel Group Inc. for about $1.07 billion. Nucor, based in Charlotte, N.C., said it will pay C$46.25 a share, or C$1.25 billion, for Harris, which is based in Canada. The boards of both companies have approved the sale. Harris Steel Chairman and Chief Executive John Harris and other members of the Harris family, along with Paul Kelly, the president and chief operating officer of the company, have signed an agreement to tender 13.7 million shares representing more than 50% of the shares of Harris Steel.
  • Sirva (SIR) posted a preliminary loss from continuing operations of $37.6 million, or 51 cents a share, for the six months ended June 30, as compared with a preliminary loss of $60.1 million, or 82 cents a share, for the same period a year ago. On a pro forma basis, the operating loss from continuing operations was $9.4 million vs. $17 million. The preliminary revenue was $1.78 billion compared with $1.68 billion a year ago. The Chicago-based provider of relocation services said it was required to post the results under certain covenants of its credit facility.
  • Titanium Metals (TIE) said it expects a fourth-quarter pre-tax gain of $39 million from the sale of its 44% stake in Valtimet SAS, a manufacturing joint venture. Titanium Metals, Dalls, also said it signed a long-term agreement to supply up to 2,500 metric tons of titanium strip each year to Valtimet. Valtimet was formed in 1997 as a venture with ValTubes SAS, Sumitomo Metals Industry and Sumitomo Corp. for making welded stainless steel and titanium tubing.
  • Wal-Mart Stores (WMT) said Saturday that its same-store sales for December were running ahead of prior expectations. The Dow component expects a 1.6% increase in comparable sales for the five weeks ended Dec. 29. WMT will start using a computerized scheduling system to move many of its workers from predictable shifts to a system based on the number of customers in stores at any given time.
  • Yahoo (YHOO) and Dash Navigation plan to announce a partnership that will put the Internet giant's local-search technology into Dash's new Internet-connected automotive-navigation system.

Market Summary

  • Asian trading closed with the Hang Seng +0.51%, Sensex +0.52% and Taiwan -0.04%.
  • A quick look across the pond finds the CAC -0.13%, DAX -0.09%, FTSE +0.04%, Swiss Mkt. +1.39% and Stockholm -0.70%.
  • Crude oil is trading -0.68 to 60.37 while gold is -2.7 to 635.3 this morning.
No positions in stocks mentioned.

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