Tag Archives: Institutional Shareholder Services

Business, Finance, Occupation & Industry

T-Mobile Throws MetroPCS Shareholders a Bone

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By Rich Duprey, The Motley Fool

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With a vote on its acquisition of MetroPCS imminent, T-Mobile parent Deutsche Telekom  is trying to mollify angry shareholders by throwing them a bone. It’s offered to reduce the debt the new company will carry, reduce the interest rate on the debt, and triple the amount of time it must hold onto the new stock before it can sell it. 

Despite having passed all the necessary regulatory hurdles, the merger is in danger of falling apart as major shareholders and institutional services alike say the deal is not favorable to MetroPCS stockholders.

While there’s been a war of words going on between the major participants, T-Mobile’s CEO certainly won himself no fans after calling hedge fund operator John Paulson “greedy.” Particularly after Institutional Shareholder Services came out blasting the deal as well, backing the contention of Paulson and P. Schoenfeld Asset Management that because T-Mobile has so underwhelmed the markets, MetroPCS shareholders need to be better compensated for the risk of turning control over to Deutsche Telekom.

Under the original proposal, MetroPCS shareholders would be paid about $4.09 a share and receive a 26% stake in the new company.

With the merger unraveling, DT decided it needed to salve the wounds it created. It offered to reduce the debt burden of the combined company by $3.8 billion and said it would cut the interest rate it charged by half a percentage point. Additionally, it would increase from six months to 18 months the amount of time it would have to hang onto the new company’s stock, but the rest of the terms apparently will remain unchanged.

While the original deal was scheduled to be voted on by MetroPCS shareholders tomorrow, that has now been pushed back to April 24 to give more time to review the deal. And while not giving any indication of which way it would fall on the new offer, at least the asset management firm has said it appreciated the olive branch.

Yet Deutsche Telekom needs this deal to go through if it ever wants to get out of the U.S. market. It previously tried by selling T-Mobile to AT&T for $39 billion, but regulators quashed it over anti-competitive concerns. Now with the proposed combined company being publicly traded, DT will finally get its exit strategy, even if it takes a year and a half to leave instead of the six months it previously envisioned.

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The article T-Mobile Throws MetroPCS Shareholders a Bone originally appeared on Fool.com.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool has no position in any

From: http://www.dailyfinance.com/2013/04/11/t-mobile-to-sweeten-the-pot-for-metropcs/

Business, Finance, Occupation & Industry

MetroPCS Defends the T-Mobile Buyout

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By Anders Bylund, The Motley Fool

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The combination of MetroPCS and T-Mobile USA has passed every regulatory hurdle, leaving a shareholder vote as the last remaining roadblock. But that’s not quite a slam dunk: Shareholder-interests defender Institutional Shareholder Services has teamed up with two major owners to scuttle the agreement at the last possible moment.

MetroPCS is very much in favor of the current T-Mobile deal. In a public letter to shareholders on Monday, the company defended the proposed agreement in no uncertain terms (emphasis theirs):

  • If the proposed combination is not approved, MetroPCS’ stockholders will not enjoy its compelling benefits — many of which are only available by combining MetroPCS and T-Mobile.  
  • Do not reject this proposed combination — do not take the risk of a loss of value for MetroPCS’ stockholders.

The company argues that ISS based its critique on assumptions that are wildly different from MetroPCS’ own. For example, MetroPCS has set $1.5 billion aside for spectrum license acquisitions. ISS believes that this reserve should add $1.5 billion to the value of MetroPCS, but T-Mobile and MetroPCS itself don’t agree. “Wireless companies are valued as going concerns based upon EBITDA and cash flow, not asset value,” the companies stated. “MetroPCS believes that, should it spend the $1.5 billion on spectrum, its equity valuation will not benefit from the value when adjusting from Enterprise to Equity Value (or value per share).”

In other words, MetroPCS shareholders should count themselves lucky to own 26% of the combined company. Some of the alternative deals proposed by activist shareholders might reduce the MetroPCS stake to as little as 12%.

In the end, it all comes down to financial hand-waving and a bit of “he said, she said.” But both companies need this deal to happen, unless they enjoy eating Verizon ‘s and AT&T ‘s dust. The two giants dominate the American wireless landscape with roughly 100 million subscribers each. Even together, T-Mobile and MetroPCS only add up to 42 million customers. But their combined spectrum holdings will make T-Metro stronger than the sum of its parts.

This market could use another serious contender, and MetroPCS shareholders would still be silly to vote the deal down.

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The article MetroPCS Defends the T-Mobile Buyout originally appeared on Fool.com.

Fool contributor Anders Bylund holds no position in any company mentioned. Check out Anders’ bio and holdings or follow him on Twitter and Google+. 
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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

MetroPCS Merger in Further Danger

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By Dan Radovsky, The Motley Fool

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It looks like opponents of the proposed merger of MetroPCS with Deutsche Telekom subsidiary T-Mobile USA got strong support on Wednesday, according to The New York Times.

Institutional Shareholder Services has agreed with Paulson & Co. and P. Schoenfeld Asset Management that voting for approval of the transaction would not be in the interest of MetroPCS shareholders.

Paulson has a 9.9% stake in MetroPCS, Schoenfeld 2%, and both funds believe the deal would incur too much debt for the newly formed company and would not give MetroPCS shareholders enough of a slice of the enterprise.

What may prove influential in the outcome of the voting is this from ISS: “The ultimate question for PCS holders, therefore, is whether this offer is sufficient compensation for putting control of their investment in the hands of another strategic, DT [Deutsche Telekom], under whose control T-Mobile has appeared to have so vastly underperformed.”

P. Schoenfeld, which has been constantly filing proxies over the last several weeks urging shareholders to vote against the proposal, was thrilled with the ISS recommendation to turn down the deal.

“We are extremely pleased that ISS recognizes the Proposed Transaction between MetroPCS and T-Mobile (the “Combined Company”) is not in the best interests of PCS shareholders …” the fund said today in a statement.

P. Schoenfeld also quoted ISS as agreeing with merger opponents that MetroPCS would be better served staying as a stand-alone company, or possibly able to attract a better merger deal in the future: “Absent merging with T-Mobile, PCS will have enough cash on its balance sheet to dedicate to new spectrum and could continue operating as a stand-alone company. It may well, as many commentators have suggested, have additional M&A opportunities in the offing, given its attractive assets.”

The ISS appraisal may take some of the swagger out of T-Mobile CEO John Legere’s remark Tuesday that the merger would be “approved despite the greedy hedge funds that are trying to take a double-dip out of that process.”

Paulson, in a statement released last night, took umbrage to Legere’s characterization. The hedge fund “strenuously objects” to shareholders being called “greedy because they believe the current terms of the merger are poor for MetroPCS shareholders.”

“If anyone is being greedy here, it is Deutsche Telekom … It is not surprising that Deutsche Telekom is so eager to close this deal, as they get the lion’s share of the benefits,” Paulson continued.

Will the ISS analysis be the tipping point that ultimately undermines the deal — at least as it is currently structured? That will be determined at the special MetroPCS shareholders’ meeting on April 12.

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Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

The 2 Companies That Led Today's Rally

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By John Maxfield, The Motley Fool

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On an otherwise quiet day in terms of economic news, stocks are nevertheless up considerably thanks to better-than-expected earnings reports from consumer darlings Nike and Tiffany . With roughly an hour left in the trading session, the Dow Jones Industrial Average is higher by 83 points, or 0.58%.

Shares of Nike are surging 11.6% after the company reported that its fiscal third-quarter earnings beat expectations. Analysts were particularly impressed by its performance in China. According to Bloomberg News, orders for the Nike brand in the world’s second-largest economy increased last quarter after contracting during the two preceding time periods.

In addition, the sporting-goods company’s gross margin increased 30 basis points to 44.2%. “Nike is firing on all cylinders,” an analyst quoted by Bloomberg said. “They’ve been talking about, for several years now, expecting gross margins to eventually turn. And now it looks like that has played out.”

Shares of Tiffany & Co. are similarly up following the company’s fourth-quarter earnings release. While its bottom-line figure rose by only 0.7% on a year-over-year basis, it was weighed down by “headquarters relocation costs,” noted The Wall Street Journal. The market nevertheless responded favorably after the company reiterated its full-year guidance, even though it’s forecasting an underwhelming first quarter. According to Michael J. Kowalski, Tiffany’s chairman and chief executive officer:

These quarterly sales results were consistent with the holiday trends we had issued in early January. While financial results in fiscal 2012 were disappointing due to lower-than-expected sales growth and pressures on gross margin, we continued to maintain a longer-term focus on strengthening global awareness of the Tiffany & Co. brand and on further developing compelling product offerings.

Best- and worst-performing Dow stocks
In terms of Dow stocks, the index’s best-performing component today is Hewlett-Packard , which is up 2.9% in afternoon trading. As my colleague Dan Dzombak noted this morning, the ailing technology company held its annual shareholders meeting earlier this week. Among other issues on the agenda was a highly contested vote on whether three of the company’s directors would be re-elected to the board after proxy firm Institutional Shareholder Services recommended they be removed. While all three “squeaked by” with favorable votes of 54% to 58%, as Dan observed, “Typically, votes with less than a 70% majority are looked upon unfavorably.”

Alternatively, the worst-performing stock on the Dow this afternoon is UnitedHealth Group , down by 1.1% at the time of writing. Scanning the news, there doesn’t appear to be a specific catalyst to explain the weakness. Despite this, according to fellow Fool Matt Thalman, a “massive amount of uncertainty” continues to plague health care stocks as the industry adapts to Obamacare and changes to proposed payments under Medicare. It’s for this reason that Matt implores new investors to “stay away from the company until its future is clearer.”

Want to learn more about UnitedHealth Group?
When President Obama was re-elected, shares of UnitedHealth and …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Hewlett-Packard Leads the Dow to New Highs

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By Dan Dzombak, The Motley Fool

US Initial Claims for Unemployment Insurance Chart

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The Dow Jones Industrial Average is up after for the 10th day in a row following multiple positive reports on the state of the economy. As of 1:15 p.m. EDT the Dow was up 59 points, or 0.41%, to 14,515. The S&P 500 was up 0.4% to 1,561.

There were three U.S. economic releases today.

Report

Period

Result

Previous

Weekly new unemployment claims

March 2 to March 9

332,000

342,000

Producer price index

February

0.7%

0.2%

Core PPI

February

0.2%

0.2%

Current account deficit

Q4

($110 billion)

($112 billion)

Source: MarketWatch U.S. Economic Calendar.

While the PPI was up 0.7%, which was expected as higher energy costs impacted producers. Absent energy costs, the PPI was just up 0.2%.

The one to pay attention is the unemployment claims report. Weekly new unemployment claims fell to a seasonally adjusted 332,000. That’s down from last week’s 342,000 and below analyst expectations of 350,000. Last year, new unemployment claims averaged between 360,000 and 370,000 and never really broke out of that range. The declining level of new unemployment claims is a good sign for the economy, indicating that the jobs market is strengthening. It remains to be seen whether this is a trend or just a blip.

US Initial Claims for Unemployment Insurance data by YCharts.

New unemployment claims can be volatile, so it is generally better to watch the four-week moving average, which dropped by 2,750 to 346,750. That’s the lowest level since 2008.

While the jobs market is strengthening, the economy is still not adding jobs fast enough to significantly reduce the unemployment rate anytime soon. The Federal Reserve Open Market Committee has said it plans to continue QE3 until the unemployment rate hits 6.5% or inflation picks up. Until then, the Fed will continue buying up $85 billion worth of long-term assets every month to prop up the economy.

Today’s Dow leaders
Today’s Dow leader is Hewlett-Packard , up 1.8% to $21.71 on no real news. Earlier this week the British Serious Fraud Office opened an investigation into HP‘s accusations of fraud against former executives of Autonomy. If you recall, HP acquired Autonomy for $10 billion in 2011, only to write the acquisition down for $8.8 billion last year. HP accused former executives — including Autonomy’s founder and former CEO, Mike Lynch — of fabricating sales to boost Autonomy’s financials. While American authorities commenced investigations soon after HP‘s accusations, this is the first notice that British authorities are also investigating.

While the stock was hit hard last year, dropping 47% in 2012, there have been no repercussions for the board members who approved the deal. Institutional proxy advisor Institutional Shareholder Services is recommending that investors vote against HP chairman Ray Lane, audit committee head G. Kennedy Thompson, and finance and investments committee head John Hammergren.

HP is rapidly shifting its strategy under the new leadership of CEO …read more
Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Abraham, Fruchter & Twersky, LLP Announces Investigation of Impax Laboratories, Inc.

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By Business Wirevia The Motley Fool

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Abraham, Fruchter & Twersky, LLP Announces Investigation of Impax Laboratories, Inc.

NEW YORK–(BUSINESS WIRE)– Abraham, Fruchter & Twersky, LLP has commenced an investigation concerning possible violations of federal securities laws by Impax Laboratories, Inc. (“Impax” or the “Company”) (NAS: IPXL) .

Impax, based in Hayward, California, is a specialty pharmaceutical company engaged in the development and manufacture of generic pharmaceutical drugs. On March 4, 2013 after the close of trading, Impax announced that it had received a second Form 483 inspectional observation notice by the U.S. Food and Drug Administration (the “FDA“) regarding the results of a re-inspection of the Company’s Hayward manufacturing facility. The FDA identified 12 different problems at the Hayward plant that need to be fixed, some of which related to the testing and evaluation processes for the Company’s Parkinson’s disease treatment drug Rytary, which was scheduled to launch in the first half of 2014.

The recent FDA inspection, which spanned from January until the end of February 2013, was also not disclosed by the Company during its fourth-quarter conference call on February 25, 2013. On March 5, 2013, the day following the Company’s announcement, Impax shares closed at $14.80, down 26% from the prior day’s closing price.

If you purchased Impax common stock and you would like to discuss this investigation or if you have any questions concerning this notice or your rights as a potential class member or lead plaintiff, you may contact: Christopher Matthews or Jack Fruchter of Abraham, Fruchter & Twersky, LLP toll free at (800) 440-8986, or via e-mail at, respectively, jfruchter@aftlaw.com or cmatthews@aftlaw.com. You may also visit the firm’s website at http://www.aftlaw.com.

Abraham, Fruchter & Twersky, LLP has extensive experience in securities class action cases, and the firm has been ranked among the leading class action law firms in terms of recoveries achieved by a survey of class action law firms conducted by Institutional Shareholder Services.

Attorney Advertising. Prior Results Do Not Guarantee A Similar Outcome.

Abraham, Fruchter & Twersky, LLP
Jack Fruchter / Christopher Matthews, 800-440-8986

KEYWORDS:   United States  North America  New York

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The article Abraham, Fruchter & Twersky, LLP Announces Investigation of Impax Laboratories, Inc. originally appeared on Fool.com.

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Source: FULL ARTICLE at DailyFinance