More deal updates

The proposed buyout of Alberston's fell through. The stock is again attractive and I will be looking to add more.

Net2Phone got yet another bid from IDT, this one marginally higher, at $2.05/share, than the earlier hiked bid of $2/share. It now looks like the deal will go through at the new price, a 26% discount to my average cost. IDT shares themselves look extremely attractive now.

Affiliated Computer Services (ACS) is rumored to be going private. The shares saw a big jump today. I have a small number of shares bought at lower prices.

Hit #74

Tommy Hilfiger (TOM) is being taken private by Apax Partners for $1.6 billion. This cash offer, of $16.8/share, is a 23% premium over my average cost of 13.61$/share.

Tommy Hilfiger had put itself for sale earlier, and I had blogged about the prospective hit then.

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Previous hit - Placer Dome (#73)

Hit #73

Placer Dome (PDG), the gold producer, agreed to a higher bid of $10.4 billion from Barrick Gold.

I had bought a few shares after the earlier offer was rejected, hoping for a bidding war. Placer shares are trading as if the market is expecting an even higher bid.

Placer stockholders can opt for cash or stock. I will be going for cash. The cash offer, amounting to $22.5/share, is a tiny premium of 2.6% over my average cost of $21.93/share.

I am still a long-term believer in mining stocks. I own a few shares of Newmont (NEM), Bema Gold (BGO), Ivanhoe Mines (IVN) and a good number of silver stocks like Couer d'Alene (CDE), Apex Silver (SIL), Pan American Silver (PAAS).

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Previous hit - Pegasus (#72)

Hit #72

Travel reservation services provider, Pegasus Solutions (PEGS), is being taken private by Prides Capital and Tudor Investment, for $275 million.

This cash offer of $9.5/share, is a discount of 27% to my average cost of $12.9/share. The sizable debt is likely behind this lower valuation.

This comes not long after an European major, Amadeus, was acquired by private equity groups. The last man standing, Sabre Holdings (TSG), should also attract some interest soon.

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Previous hit - Foothill Bank (#71)

Defense targets revisited

In an earlier post, I had picked a few defense IT targets. One, Anteon, got acquired last week by General Dynamics, for around $2.2 billion in an all-cash deal with a significant premium. I did not own any shares, having decided to wait for it to become cheaper!

The other targets mentioned in my post and where they stand today - Mantech remains an attrative target (I own a few shares), Convera has quadrupled since I bought the shares (I am still holding), Acxiom has received buyout bids that have been rejected (I am still holding), Elbit and Insightful have not gone anywhere (I am still holding onto Insightful).

I am looking to add a few more defense IT players since I expect most of them to be acquired in a year or two. If you have any picks, you are most welcome to list them.

Corporate lovemaking or more ?

The latest Barron's has a piece that predicts the year ahead to be even bigger than 2005 for takeovers, with about 50% of Fortune 500 companies indicating that they intend to take part in M&A activity. Among the titles used by this article - An Urge to Merge! Hmmmm ... I have heard that somewhere.

The piece also makes a few picks that I can't go into here, but it is worth reading.

The punchline of that piece - the corporate lovemaking that started over 2 years ago is turning into an orgy! To which I say, the more the merrier - I am referring ofcourse to takeovers.

Hit #71

Foothill Independent Bank (FOOT) agreed to be bought by First Community Bancorp for $238 million in a stock-swap. The offer price, of about $26.14/share is a 23.9% premium over my average cost of $21.1/share. The net gain is a bit higher if I include dividends.

I had picked Foothill in this post early this year. This, along with Central Coast Bancorp (Hit #65), were picks that had their origins in road-trips! It is definitely time to make more of those.

All the major banks operating in and around Glendora remain targets for state and national banks. These include Vineyard National Bancorp (VNBC), PFF Bancorp (PFB), CVB Financial (CVBF) and the acquirer in today's deal, First Community Bancorp (FCBP). I do not own any of these, but will be looking closely at VNBC and CVBF.

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Previous hit - Abgenix (#70)

Hit #70

Abgenix (ABGX) is being acquired by Amgen for around $2.2 billion in an all-cash deal. This offer, of $22.5/share represents a premium of 53% over my average cost of $14.74/share.

In a post a few months ago, I had placed biotech as the best sector to bet on takeovers. Since then a number of the smaller biotechs have gotten expensive, since a takeover premium is now built into them following a string of deals. There are still attractive small biotech players, but you have to pick extremely carefully now.

An opportunity arising out of today's buyout is Imclone (IMCL). It has been rumored to be a target for a while and with this deal faces strong competition. The potential for takeover is probably what led to the stock to recover today after the initial slump. Imclone is attractive at its current price - I will be looking to open a position soon.

While on biotechs, I recently opened a small position in Allos Therapeutics (ALTH). I have also added Noven (NOVN), Enzon (ENZN) and Rigel (RIGL) to my watchlist. Most of these are speculative in nature.

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Previous hit - Visual Networks (#69)

Hit #69

Visual Networks (VNWK) is being acquired by Danaher's Fluke division, for $75 million in cash. The offer amounts to $1.83/share, which is a discount of 31% to my average cost of $2.64/share.

While this represents a loss, I had traded Visual for short-term profits earlier, with a much larger number of shares, more than compensating for this latest loss.

For a player that commands a large share of a niche segment, Visual is selling itself cheaply. I would have expected competing bids from Computer Associates, BMC, HP or even IBM, to add to their infrastructure management offerings. Visual Networks' tools would have made it possible to use a single console to monitor more of an enterprise's IT assets. With that it mind, I had mentioned Visual as a target in an earlier post.

Danaher, a manufacturer of control systems / industrial devices, never appeared on my list of prospective buyers! But I definitely would have settled for a stock-swap, since Danaher is a solid company that has a place in any long-term portfolio.

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Previous hit - Ecost (#68)