Merger Monday Kicks Off The Week A number of deals are moving from the rumor phase into the announcement phase and this is good news. Although we do not speculate on M activity directly, we do like to purchase stock in really good companies that could be attractive takeover targets. With deal demand rising, many of the companies which activist investors are putting into play are finding bidders; sometimes multiple bidders are emerging and creating bidding wars. This is a great environment to see developing and further fuel for the market.
We have seen a lack of deals in the banking sector as new regulations have essentially frozen the M space. Obviously the largest institutions will be unable to partake in any buying, but 2015 could be the year where we see deal flow pick up among the regionals and community banks.
Chart of the Day:Volatility is picking up as tensions continue to rise in hot spots around the world. Headlines play a role in this, but in our experience ongoing stories can have an even larger impact upon investor sentiment. The ongoing events in Ukraine and Israel/Gaza fit the category of an ongoing story, and the news is troublesome in both areas as the world pushes for ceasefires. EST): Est: 0.8% Act: 1.1%The Asian markets are mostly higher today:
All http://www.vougers.com/valentino-c-127/ Ordinaries down 0.11%Shanghai Composite up 2.41%Nikkei 225 up 0.46%NZSE 50 down 0.14%Seoul Composite up 0.74%In Europe, the markets are mixed this morning:
CAC 40 up 0.23%DAX down 0.15%FTSE 100 up 0.05%OSE down 0.21%Icahn Wins AgainThere are a lot of winners in the latest retail merger as investors cheer the $8.5 billion deal between Dollar Tree (NASDAQ:DLTR) and Family Dollar (NYSE:FDO). Right now it is hard to pick a clear cut winner, but with his 9.4% stake in Family Dollar, Carl Icahn is near the top of the list. The big loser has to be Dollar General (NYSE:DG), the company that Mr. valentino shoes sale Icahn hoped would buy Family Dollar when he initially took his stake.
Many are commenting that the price Dollar Tree is paying for Family Dollar is too low, as the share prices for both companies are rising since the deal was announced. With the issues that Family Dollar is facing, along with the uncertainties that would be attached to any offer from Dollar General, one has to believe that the Dollar Tree offer is indeed fair. The only question now is whether Dollar General feels that they can launch a bid that can pass regulatory scrutiny while also not rocking the boat as they transition in a new CEO.
There are in fact greater cost savings in a Family Dollar/Dollar General tie up than the Dollar Tree/Family Dollar combination, but there are far too many questions concerning a move where the largest dollar retailer gobbles up Family Dollar. One also has to be aware that just because Family Dollar is trading above the offer price does not mean that the market is expecting another company to enter the bidding or for a raised bid; the current offer has increased in value because shares of Dollar Tree have risen on news of the deal and equity makes up a portion of their bid.