Stocks To Watch: Citigroup, Dollar General, IBM, Intel, Pfizer
Today's big stories and some stocks with potential to move...
Stocks to watch for Monday, March 26:
- Blackstone is counting on stock investors to snap up its IPO, but less-forgiving credit markets could mean tougher times for private-equity deals.
- Citigroup (C) is setting up a restructuring plan that could involve 15,000 job cuts and a charge of more than $1 billion. As the financial-services group's expenses climb faster than revenue, CEO Prince is under rising pressure to trim costs.
- Dollar General's (DG) acquisition by KKR was spurred in part by a lingering challenge for the dollar-store operator: It lags behind in infiltrating lucrative urban markets.
- Hansen Natural (HANS) said its special board committee has substantially completed its investigation into the company's stock option practices, and found "no willful or intentional misconduct," and no evidence "raising concerns with the integrity of management." However, the natural drink company said its investigation determined there were inadequate internal accounting controls related to the stock option grant process, deficiencies in the process of documenting the approval of grants, and some errors related to the accounting for certain grants. The company has not yet determined whether any adjustments are necessary or whether a restatement will be required.
- HealthExtras (HLEX) said Michael Donovan will resume his role as chief financial officer, effective immediately. The pharmacy management company said currently Richard Hunt, who was previously appointed CFO, will "pursue a financial position in a venture capital oriented company" but will remain with HealthExtras in a transitional role. Donovan was HealthExtras CFO from 1998 until 2006.
- IBM is to unveil a prototype chip using optical connections to increase the speed of moving data among chips to eight times that of previous technologies.
- Intel (INTC) plans to build a $2.5 billion chip-fabrication plant in China, betting that a bigger profile in the fast-growing market is worth the risk.
- Credit-card company Discover Financial Services filed with the Securities and Exchange Commission to spin off from its parent, Morgan Stanley (MS). The long-expected spinoff will include a "generally tax-free" distribution of its common shares to Morgan Stanley stockholders, according to the filing. Discover said it plans to apply to list its shares on the New York Stock Exchange under the ticker symbol "DFS." Earlier this week, Morgan Stanley said its credit-card unit was on track for the spinoff in the third quarter.
- O.I. Corp.'s (OICO) President and Chief Executive William Botts resigned following a company investigation that found he directly benefited from options backdating. Botts also exercised stock options without fully disclosing to the board's compensation committee, backdating his options on at least one occasion with the assistance of the company's corporate secretary, Jane Smith, who also resigned. The company said it will have to restate its financials to reduce net income by $371,000 for 1985 to 2006.
- Pfizer (PFE) said it plans to offer a generic version of Norvasc, its widely prescribed hypertension treatment. The generic amlodipine besylate products will be available immediately through Pfizer's Greenstone subsidiary, the New York-based pharmaceutical company said. Brand-name Norvasc also will remain available to patients. Pfizer said the launch was in response to the announcement by Mylan Laboratories (MYL) that it has started marketing a generic version of the drug. Pfizer also said it will continue to pursue all available legal remedies to protect the market for Norvasc through a six-month pediatric exclusivity period that expires in September.
- Realogy (H) said it plans to offer $3.15 billion of 7-year senior notes, senior floating rate notes and senior pik toggle notes, and 8-year senior subordinated notes, in a private placement. The real estate franchisor said it plans to use proceeds from the offering to fund a portion of its pending merger with affiliates of Apollo Management L.P. The company also said it will use the proceeds to refinance certain credit facility indebtedness and pay related fees and expenses. In December, private-equity group Apollo agreed to acquire Realogy for $6.6 billion.
- Sara Lee (SLE) and Kraft (KFT) are using their existing brands to enter an entirely new product category for each: prepared salads.
- SpatiaLight (HDTV) said its 2006 Form 10-K 2006 contains a going concern qualification from its independent accounting firm. Shares of SpatiaLight, a maker of microdisplays and systems, fell a penny to close at 42 cents on Friday.
- WCI Communities (WCI) said it will review and consider a $22-a-share unsolicited takeover bid from billionaire investor Carl Icahn. Icahn has a 14.5% stake in the developer of retirement and leisure communities. WCI plans to make a formal recommendation to shareholders on or before April 5.
- Asian trading closed with the Hang Seng +0.37%, Nikkei +0.24%, Sensex -1.22%, Taiwan +0.24% and Shanghai +1.58%.
- Looking over at Europe, we find the CAC -0.10%, DAX -0.15%, FTSE +0.16%, ATX +1.06%, Swiss Mkt. -0.07% and Stockholm -0.47%.
- Gold is trading +2.70 to 660.0 and crude oil is +0.61 to 62.89 this morning.
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