There were a few stocks making notable moves on Tuesday after the market posed big gains in light of big losses recently.
PharMerica (PMC) jumped 27% after it received a takeover offer. Omnicare (OCR) announced that it has sent a letter to PharMerica proposing to purchase all of the outstanding shares of PharMerica common stock for $15.00 per share in cash. The transaction is valued at approximately $716 million, which includes PharMerica`s net debt. Omnicare`s all-cash proposal represents a 37.2% premium over PharMerica`s closing stock price on August 22, 2011, and a 25.9% premium over the average closing price for the one-month period ended August 22, 2011.
The PharMerica Board of Directors, after consultation with its financial and legal advisors, unanimously determined that the Omnicare proposal, which was first made on July 19, 2011, undervalues PharMerica and is not in the best interest of PharMerica or its stockholders. The Board noted that the Omnicare proposal is subject to significant regulatory uncertainty, and, despite Omnicare’s non-specific assurances to the contrary, antitrust clearance to combine the #1 and #2 players in institutional pharmacy is likely to be difficult to achieve and involve lengthy administrative and court proceedings. Even if the antitrust issues could eventually be resolved in a satisfactory manner, the Omnicare proposal introduces unacceptably high risk to PharMerica stockholders and could be highly disruptive to PharMerica’s customers and employees without any assurances of Omnicare's ability to complete a transaction on a timely basis or at all.
Gleacher (GLCH) rose 17% after it announced a new strategic plan. The company will continue to service clients through its high performing fixed income business, and will realign and invest in its core investment banking practice. These changes resulted from the company’s previously announced strategic review of its business operations.
Gleacher & Company will exit the Equities business, effective immediately. The company determined that the Equities Division was an underperforming, non-core asset, and that its closure will allow the Company to improve focus and invest in its core competencies. Exiting the Equities business will impact 62 employees. The plan also includes the termination of a number of investment banking employees, as well as certain administrative positions.
Following these actions, Gleacher & Company will carry a headcount of approximately 400 employees. The company estimates that annual run rate operating expenses will be reduced by approximately $40 million, which includes savings related to compensation and benefits, anticipated settlement of leases and other contractual obligations.
Universal Display (PANL) climbed 17% after partnering with a Samsung JV. Samsung Mobile Display (SMD) and Universal Display announced that the companies have entered into agreements under which Universal Display will license its technologies and sell its proprietary materials to SMD for use in its line of state-of-the-art OLED display products. Building on their eleven-year relationship, SMD and Universal Display will continue to work closely to accelerate growth of the OLED display industry through the development of state-of-the-art, energy-efficient OLED products.
The agreements announced are an OLED Patent License Agreement and a Supplemental OLED Material Purchase Agreement. Under the license agreement, Universal Display has granted SMD license rights under various patents owned or controlled by Universal Display to manufacture and sell certain phosphorescent OLED display products. In consideration of the license grant, SMD has agreed to pay Universal Display a license fee over the term of the license agreement.
Under the supplemental agreement, SMD has agreed to purchase and Universal Display has agreed to supply a minimum amount of phosphorescent OLED material for SMD’s use in the manufacture of licensed products, subject to Universal Display being able to supply sufficient quantities to meet SMD’s requirements. The agreements run through December 31, 2017.
Metropolitan Health Networks (MDF) rose 7% after it announced update on its acquisition of Continuecare. The company announced that it had been informed by Continucare (CNU) that its shareholders voted for and approved Metropolitan’s proposed acquisition of Continucare. Metropolitan expects to close the Continucare acquisition on or about the end of September.
RealPage (RP) tumbled 11% after the company announced an acquisition viewed unfavorably by investors. The company announced it entered into a definitive agreement to acquire Multifamily Technology Solutions ("MTS") which offers an Internet listing service for rental properties marketed under the trade name MyNewPlace and a suite of syndication and organic lead generation tools marketed under the trade name Rent Engine. The company will acquire MTS for approximately $74.4 million, net of cash expected to be acquired. The purchase price will consist of approximately $63.6 million in cash and approximately $10.8 million paid with shares of RealPage common stock. The company expects to close the transaction after closing conditions are met, which should be on or prior to Aug. 24, 2011.
The company believes that the acquisition of SeniorLiving.Net, and now MyNewPlace, vastly expands its lead origination and syndication capabilities, increasing the total addressable market for all RealPage software-as-a-service (SaaS) products and services to at least $9.0 billion. MyNewPlace has approximately 7,500 property listings with 1.8 million rental units. Approximately 500,000 of these units do not presently use any RealPage products and services. These unique units will increase the total number of units using one or more RealPage products and services to 6.9 million units.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.