Some companies from various sectors that could be viewed as potential buyout candidates. Keep an eye on these developing stories ...
SIRI: The SiriusXM Radio (SIRI) stock opened the new trading week on a high note as the market dove around it, in part due to swirling rumors that Liberty Media Corporation (LCAPA), (LCAPB), (LSTZA), (LSTZB) could be tuning up for a full takeover of the satellite radio company.
A move by Liberty earlier this month to streamline its stock structure raised eyebrows when Liberty President and CEO Greg Maffei stated the following in announcing the move:
“The board of directors determined this was the right move to increase the value for both Liberty Capital and Liberty Starz shareholders by eliminating the ‘tracker discount’, increasing liquidity in the stock and creating a stronger acquisition currency."
Key emphasis on "acquisition currency."
Improving numbers for SiriusXM have renewed the enthusiasm from the long investors, while positive coverage of the company has started to flow again as a recent upgrade to "Buy" by a Lazard analyst demonstrates. Along with the Lazard upgrade came a $2.25 price target, which combined with the buyout rumors to push SIRI higher in a down market.
Liberty saved SiriusXM from the brink of bankruptcy a couple of years ago and is already heavily invested in the company, so an all-out buyout makes a certain amount of sense. That said, buyout rumors only sometimes materialize into reality, so keep an open mind when moving forward with this one.
It seems as if this is being set up as a 'too good to be true' scenario if Liberty tipped its hand in last week's press release, which should lead investors to view this rumor with an honest amount of skepticism.
That said, enjoy the SIRI rebound as the ineptness of the US Congress pushes the broad market lower.
HGSI: In a prime example of buyout rumors not bearing fruition, shares of Human Genome Sciences (HGSI) are trading for nearly half of what they were at the height of the GlaxoSmithKline (GSK) rumors of last month.
After touching a tad over fifteen dollars, HGSI is now trading in the seven dollar range as a slower than expected commercial launch of the lupus drug Benlysta hammered investor expectations while additional downward pressure was added when the GSK buyout rumor did not pan out.
With that said, if Glaxo was taking a look at a potential buyout of Human Genome for prices in the teens, then the company has got to look a whole lot more attractive now while trading for half the market cap. Glaxo is already set to gain substantially from sales of Benlysta through a licensing deal, so it's debatable whether a buyout really makes sense here, but HGSI is not a 'one trick pony' and has a developing pipeline that could be icing on the cake, should Glaxo actually go through with a deal.
As long as GSK and HGSI are married through Benlysta, expect the buyout rumors to pop up every now and then; and you never know, one time they might be for real.
CCLR: Chanticleer Holdings (OTC:CCLR) acquired rights to Hooters of America earlier this year, with a group of investors, through a first right of refusal that had been granted the company's CEO Mike Pruitt by the late Robert Brooks. In the process, however, Chanticleer had to endure a lawsuit filed by Wellspring Capital Management LLC, who challenged the first refusal right.
Since acquiring the Hooters name, Chanticleer has been set on capitalizing on international growth, as other major American brands have also been doing lately, which could add significant value to not only Chanticleer Holdings, but the Hooters name as well.
Given the history already documented by Wellspring and Chanticleer, it's not out of the question to believe that a buyout offer for the Hooters name may spring up at some point in the future, given that Wellspring fought hard once for the name and may come back for what it wanted in the first place.
Since the foundation of Chanticleer is based on value investing, the right offer that makes financial sense to CCLR and its investor partners could spark the buyout of Hooters that Wellspring, and other competitors, originally coveted.
A growth story worth watching, with a twist of buyout potential.
DNDN: Dendreon (DNDN) as a buyout candidate? Really?
The bloodbath that ensued this summer after it became apparent that sales of Provenge would not even come close to previous expectations by both the company and investors hinted that Dendreon may have been better off by selling out to a major pharmaceutical player early in the game, rather than try to 'go it alone', as the company decided to do.
DNDN shares are trading at less than a quarter of their fifty two week highs, and although the company's best days might still be ahead, a drastic round of restructuring has decimated any short term hopes of a rebound.
Although the timing might be a day late and a dollar short, a major player could come in and attempt to sweep up Dendreon, its pipeline and Provenge, now that the share price is barely a fraction of what it was.
Common sense would indicate that Dendreon has come this far on its own, so it might as well finish out the ballgame on its own. The same common sense, however, might also say that a valiant effort at a commercial launch did not meet expectations, and with an increasing amount of competition on the markets, Provenge might best be left in the hands of a major international player.
Another Provenge trial is expected to take place in patients with less advanced prostate cancer, beginning in 2013, which could prove once and for all that these cancer immunotherapy treatments are best utilized in patients who still have a strong immune system. However, while Dendreon waits to have the fund to cover the trial, a big player could possibly get that started now.
CPST: Capstone Turbine (CPST) has been registering impressive revenue growth to go along with increasing orders for its low-emission microturbine units, and with the holy grail of profitability on the horizon, a larger player in the sector such as General Electric (GE), Cummings (CMI) or Caterpillar (CAT) may find it an opportune time to jump in and make a play.
The company has keyed in on international growth over the past year, and the many potential applications of its popular microturbines give every reason to believe that this company could and will play a major role in fueling the future as governments around the globe look to switch to greener energy sources than the status quo.
A money-raising event this week has shares trading down with the market, but as retail investors might consider the drop a good time to add, it also might draw the attention of a potential acquiring company.
LPTN: Lpath (LPTN) already has the attention of a powerhouse pharmaceutical giant, and that relationship only fuels the speculation that Pfizer (PFE) might make the ultimate jump and buy out its small time partner now, while the company is still considered cheap.
Lpath has developed a technology, through its proprietary ImmuneY2 platform, that generates antibodies that target bioactive lipids and inhibit the growth and spreading of various diseases and inflammatory/auto-immune disorders.
Advancements in the field of bioactive lipids have been gaining traction in the medical community over recent years, and Lpath is the only company to take it as far as it has. That success is what undoubtedly brought Pfizer to the bargaining table and landed Lpath a very significant deal for a Phase II company from a global behemoth.
Pfizer is already partnered for Lpath's iSONEP, a potential treatment for retinal pigment epithelium detachment ("RPE detachment" or "PED") and Wet AMD, but the licensing agreement also grants Pfizer the first right of refusal for ASONEP, a potential treatment for various cancer types.
Big players don't jump on still-developing companies without having a great deal of confidence in the technology behind the pipeline, which is sure to fuel takeover speculation regarding Pfizer and Lpath.
TTNP: Buyout talk has surrounded Titan Pharmaceuticals (OTC:TTNP) since positive results from the most recent Probuphine trial were announced earlier this year, and the recent move to sell its royalties from Vanda (VNDA) and Novartis' (NVS) Fanapt revenue has done little to silence the rumors.
The deal brings in just enough cash to keep the company afloat for a little while longer as Probuphine is geared up for an NDA submission and an eventual commercial launch for the treatment of opioid addiction.
With Titan also developing Probuphine for the treatment of chronic pain, and with the potential commercial markets for the ProNeura drug delivery technology as well, a market cap of much higher than TTNP's current seventy million (give or take) could easily be justified in conversations regarding a buyout price.
It's doubtful that Titan is going to take its pipeline to market on its own, so a partnership or outright acquisition is likely, in my opinion, although the terms of the deal may not be as high as some would expect.
At some point - probably sooner, rather than later - we're bound to hear some more buyout speculation involving Titan.
ACTC: Advanced Cell Technology (ACTCOB) takes a huge leap higher in the pecking order of companies developing embryonic stem cell technologies after Geron (GERN) decided to discontinue the development of its own stem cell lines. Trials are still in their early stages, but any success in ACT's stem cell line in the treatment of severe vision loss should propel the company to near the top of any buyout candidate list.
CELH: Having seen its revenue stabilize after a horrendous 2010, Celsius Holdings (OTC:CELH) may be on the verge of breaking out and restoring a market foothold to its calorie burning beverage of the same name, Celsius. A blow-out offer for the Celsius beverage shouldn't be expected, but a larger food and beverage company may be able to do with the product what CELH and celebrity spokesman Mario Lopez has not - bring the product to the mainstream. With revenue now stabilized, growth is the logical next step, and a bigger player might be able to make that happen a lot quicker.
SIGA: Siga's antiviral ST-246 is a highly valuable commodity in the treatment of smallpox alone, having landed a huge government contract to stock the U.S. biodefense stockpiles, but ongoing legal battles and a loss of investor confidence has SIGA trading in the two dollar range - after having traded at over fifteen dollars within the past year. Any potential buyer may be salivating at the possibility of gaining access to the Siga pipeline on the cheap, when speaking comparatively to previously-traded prices.