Dell’s Huge News and 4 Hot Stocks Moving Markets Now
Dell Inc. (NASDAQ:DELL): Current Price: $13.40
The company signed a definitive merger agreement under which Michael Dell, Dell’s founder and CEO, in partnership with investment firm Silver Lake, is acquire Dell. Under the terms of the agreement, Dell stockholders are to gain $13.65 in cash for each share of Dell common stock they hold, in a transaction worth nearly $24.4 billion. The buyers are to gain of the outstanding shares of Dell stock that is not held by Mr. Dell and certain other members of management.
This action is due to the recommendation of a special committee of independent directors that unanimously approved a merger agreement. The merger agreement provides for a so-called “go-shop” period, during which the Special Committee with the assistance of Evercore Partners are to actively solicit, receive, evaluate, and potentially enter into negotiations with parties offering alternative proposals.
The initial go-shop period is 45 days. A successful competing bidder making a qualifying proposal during the initial go-shop period is expected to bear a $180 million termination fee. For a competing bidder not qualifying during the initial go-shop period, the termination fee would be $450 million. After the transaction is complete, Mr. Dell, owner of 14 percent of Dell’s common shares, is to keep his role as CEO and will keep a significant equity investment in Dell by contributing his shares of Dell to the new company, along with making a substantial additional cash investment.
The transaction will be financed via a combination of cash and equity contributed by Mr. Dell, cash funded by investment funds affiliated with Silver Lake, cash invested by MSD Capital, a $2 billion loan from Microsoft, rollover of existing debt, and debt financing that was committed by Bank of America Merrill Lynch, Barclays, Credit Suisse, and RBC Capital Markets, and cash on hand. There is no financing condition. The transaction will likely close prior to the conclusion of Q2 of Dell’s FY14.
Yum! Brands, Inc. (NYSE:YUM): Current Price: $61.74
According to the company, there was a negative impact from the Chinese New Year on its January sales, but Yum believes that trend will reverse in January. Furthermore, it has plans to introduce an aggressive ad campaign in China following the Chinese New Year. The company predicts that it will see a mid-single digit EPS drop during 2013 compared to the previous year. Although the company is disappointed, it believes that 2013 is just an ‘aberration,’ not a trend. These comments were taken from Q4 earnings conference call.
Are these stocks a buy or sell? Let us help you decide. Check out our Stock Picker Newsletter now.
NII Holdings Inc. (NASDAQ:NIHD): Current Price: $5.79
The company believes that there is FY13 consolidated adjusted OIBDA in the range of $600 million to $650 million, and it sees a FY13 mid-single digit growth rate of its consolidated subscriber base. The company sees its FY13 CapEx at $1 billion.
Protalix BioTherapeutics, Inc. (AMEX:PLX): Current Price: $6.34
Protalix shares have seen a boost after Israeli website Calcalist reported that the company may be acquired for $1 billion. Pfizer has mentioned its interest in buying Protalix, but at a valuation lower than the amount that Protalix seeks, according to the website. Protalix’s board chose Citigroup (NYSE:C) to manage the selling process, Calcalist reports. During early trading, Protalix saw a 94c rise, or 18 percent, to $6.34.
HCA Holdings Inc (NYSE:HCA): Current Price: $37.48
The company sees its FY13 revenue reaching $33.5 billion to $34.50 billion, consensus $37.52 billion. Furthermore, the company sees FY13 adjusted EBITDA at $6.25 billion to $6.50 billion and capital expenditures totaling about $2 billion.