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Stocks To Watch: Archstone-Smith, Avaya, Flextronics, Palm, Tribune


Today's big stories and some stocks with potential to move...


Stocks to watch for Monday, June 4:

  • Archstone-Smith's (ASN) deal to be acquired by Tishman Speyer and Lehman Brothers (LEH) for $15.2 billion includes a modest $235 million breakup fee that could open the door for other bidders.
  • TPG and Silver Lake were in the lead to acquire Avaya (AV) for about $17 a share, reflecting private equity's continued power.
  • Bridgford Foods (BRID) reported a fiscal second-quarter net loss of $273,000, or 3 cents per basic share, compared with a year-ago net profit of $72,000, or a penny per basic share. The company said revenue in the 12 weeks ended April 20 fell 1.5% to $27.9 million from $28.3 million in the comparable period last year.
  • Continental Airlines (CAL) said that traffic in May rose 6.4%, while capacity increased 5.8%. Load factor, or the percentage of the plane filled with passengers, rose 0.5 percentage points to 81.5%, the Houston-based carrier said.
  • Cell Therapeutics (CTIC) said it has filed a universal shelf registration statement with the Securities and Exchange Commission, registering $150 million worth of securities to be offered. The number and price of the securities will be determined at the time they are sold, the biopharmaceutical company said.
  • Centene (CNC) said it has named Eric Slusser as chief financial officer, effective July 9. Centene is a health-care company.
  • Flextronics (FLEX) entered a definitive agreement to acquire Solectron (SLR) for about $3.6 billion in a deal that will create an electronics-manufacturing company with $30 billion in annual revenue.
  • Hertz Global Holdings (HTZ) expects to eliminate or alter 480 positions during the second quarter, incurring a charge of $8 million to $10 million for severance packages and other costs. The car rental brand said the restructuring is part of a plan to create $24 million in annualized savings. Hertz expects first-quarter initiatives, which affected 1,550 positions, to result in $140 million in annualized savings. Hertz shares were trading down after hours at $21.95, after closing the regular session trading at $22.49.
  • Palm (PALM) is bringing in a private-equity partner and tapping former Apple (AAPL) executives in a $940 million deal to change its capital structure, as it faces mounting competition in smart phones
  • SanDisk (SNDK) said a court ruled that STMicroelectronics NV (STM) did not violate trade law because the SanDisk patent's claims are invalid. The flash memory company said it was disappointed with the ruling, which was handed down from an administrative law judge at the U.S. International Trade Commission. The company said it is still reviewing its options in responding to the ruling.
  • Scholastic (SCHL) said it has entered into a $200 million accelerated share buyback agreement with Deutsche Bank. In connection with this agreement, the New York-based publishing company said it expects to repurchase an estimated 14% of its currently outstanding common stock.
  • Tribune (TRB) said it has received a settlement offer in its appeal of the 2005 tax court decision disallowing the tax free reorganization of Matthew Bender, a former subsidiary of the Times Mirror Co. Tribune acquired Times Mirror in 2000 and inherited the tax dispute. Under the proposed settlement, Tribune would receive refunds of roughly $350 million in federal and state income taxes and interest resulting from payments previously made for both the Matthew Bender transaction and a similar transaction completed by Times Mirror. The 7th Circuit U.S. Court of Appeals has agreed to defer a June 5 oral argument in the case for 90 days to allow for governmental review and approval of the offer.

Market Update:

  • Asian trading closed with the Hang Seng +0.62%, Nikkei +0.08%, Sensex -0.51%, Taiwan +0.54% and Shanghai -8.26%.
  • A quick look across the pond finds the CAC +0.35%, DAX +0.76%, FTSE +0.17%, ATX +0.56%, Swiss Mkt. +0.45% and Stockholm +0.57%.
  • Crude oil is trading -0.11 to 63.90 while gold is +3.8 to 670.5 this morning.
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No positions in stocks mentioned.

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