The Bitter End Might Have Just Arrived For Valeant Pharmaceuticals; Cocoa: Get it While You Still Can; It Seems Japan Is Not As Far As It Seems

Has their time finally come to an end?

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Could it be that the Valeant/Allergan saga has finally come to an anti-climactic end? Just when things seemed to be getting juicy, in walks generic drug-maker Actavis with an offer of $219 per share, making Valeant’s impending hostile takeover nothing more than a bad memory for Allergan. If you recall, everyone’s favorite (and only) Botox-maker had been fighting off Valeant’s fiscal hostilities for months. And in one fell money-minded swoop, Actavis put in an offer for Allergan that not only values it at about $66 billion, but also makes it so that it doesn’t have to deal with Bill Ackman and his Pershing Square Capital Management, which by the way, has almost a 9.7% stake in Allergan. Neither Pershing Square nor Valeant had any comment on the new offer and why would they. Besides, they win either way. This new deal adds quite a few billion dollars to Pershing Square’s already plump portfolio. As for Valeant, well it has already begun to set its fiscal sights on animal care company Zoetis.

Start hoarding the Hersheys…

Image Courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

Image Courtesy of Danilo Rizzuti/FreeDigitalPhotos.net

It just might be that the world really is coming to an end. If a recent report by Bloomberg is correct (and seriously, it’s Bloomberg so I am sure it is), then the world will be in the throes of a chocolate shortage, with demand outpacing supply in the year 2020 by one million metric tons. If that’s not considered armageddon, then I don’t what is. Some of the factors to blame: Ebola. Yes that obnoxious, noxious deadly virus has given us ample reasons to hate it and here’s yet one more. West Africa supplies us with almost 75% of the world’s cocoa. The fact that the countries afflicted with Ebola are so close to the countries that supply cocoa are basically freaking people out on so many levels. Of course drought always manages to play a menacing role in crops and cocoa is no different. In fact the price of cocoa, whether you realized it or not (or simply just tried to feign ignorance) has gone up 60% since 2012. Combine that with pests and other plant diseases and that Hershey bar with almonds is becoming but a distant memory. So start stockpiling those candy bars. In a few years you might just be able to pay your mortgage with them.

So what’s the big deal?

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Image courtesy of ddpavumba/FreeDigitalPhotos.net

Japan is staring into the wrong end of a recession after reporting its second straight quarter of growth contraction. Never a good thing especially when we’re talking about the world’s second largest economy. So why should we, on this side of the planet, care? Well for one, its toying with our financial markets. Our markets don’t particularly like it when other markets in other parts of the world have fiscal issues and Japan’s are quite large. Then we must take into account that our European friends across the pond aren’t too thrilled, as are we,  with state of their financial markets, which have seem to have come to a slowdown/standstill. When that happens, the United States ends up having to support more than its fair share of the global economy which, naturally extends on over to us, the taxpayers. See how that all works out so unpleasantly?

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Brazil Companies Bananas for Chiquita: Another Valeant Effort for Allergan?; Cruisin for an iBruisin’

Top banana…

Image courtesy of Aduldej/FreeDigitalPhotos.net

Image courtesy of Aduldej/FreeDigitalPhotos.net

As you were sitting at the edge of your seat waiting for weeks now to find out who would be victorious in the corporate battle to acquire Chiquita (yes – the banana people), you can now relax as a winner has emerged. Actually two of them. Brazilian companies, The Safra Group and Cutrale Group, both of which happened to be owned by two of the wealthiest men in Brazil, scooped up the fresh fruit seller to the ripe number of $681 million. But, alas, what became of Irish company Fyffes, who was also bidding on Chiquita, and which many thought would get the fresh fruit company? Well, it wasn’t the luck of the Irish but rather the votes of the shareholders who preferred the Brazilians’ offer. You see Fyffes was offering up stock in exchange for Chiquita. But with Safra/Cutrale’s offer, shareholders get to see more cash up front. And who doesn’t like a little cash up front? Besides, the inversion appeal of Fyffes wasn’t going to net Chiquita all that much to make the transaction worthwhile for Chiquita. But don’t feel too bad for Fyffes. The Irish firm stands to gain a break up fee worth as much as $23 million.

Ironing out the wrinkles…

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Image courtesy of artemisphoto/FreeDigitalPhotos.net

Canadian company Valeant Pharmaceuticals still so very badly wants to takeover Irvine, California-based Allergan. And why not? Allergan makes everybody’s favorite wrinkle-smasher Botox. Allergan also happens to make Latisse, another invaluable, behind the counter, yet highly-essential beauty cosmetic, in my opinion. It also helps that Allergan reported net income of $312.5 million on $1.8 billion in revenue. The stock nearly doubled over the past year. In fact, Valeant wants Allergan so so so badly, that it is once again upping its offer from $179 per share to around $200 per share. And if it has to happen hostilely, then so be it. Which it probably will, mind you. A  “special” shareholder’s meeting is taking place on December 18 where replacing board members will be the theme of the day (in particular, the ones opposing Valeant’s offer). Besides Valeant, Bill Ackman, of Pershing Square Capital Management LP would also like to see a “few” changes made to Allergan’s board as he has a hefty stake in the Botox-making company and would be tickled pink to see Allergan gobbled up by Valeant.

Maybe it’s not you after all…

Image courtesy of sattva/FreeDigitalPhotos.net

Image courtesy of sattva/FreeDigitalPhotos.net

Technology is grand. But maybe not so much in your new car. At least according to Consumer Reports 2014 Annual Auto Reliability Survey. Turns out all those really cool super awesome electronic features that you absolutely have to have are putting a damper on the overall quality of your ride. There are 23 million of us out there who have internet “savvy” cars. By 2020, that number will hit 152 million users. But the problem now, in 2014, is that in-car electronics defects logged the most complaints in 17 categories of the survey. In fact, the problem was called, ahem, “a growing first year reliability plague.” Ouch. Drivers start to question the overall quality of their vehicles when electronic issues begin to arise. Want the most reliable car? Lexus took the number one spot. The Infiniti Q50 sedan, however, took a big hit plunking down to the number 20 spot.

 

 

Oracle Goes Shopping, More Drug Drama and BNP Paribas Has a Tres Big Fine to Pay

What a bargain…

Image courtesy of KROMKRATHOG/FreeDigitalPhotos.net

Image courtesy of KROMKRATHOG/FreeDigitalPhotos.net

Oracle spent a few bucks today. Actually a billion bucks today. The company that is now making a big push towards cloud services just picked up Micros Systems for $5.3 billion or about $68 per share. It was Oracle’s biggest shopping day since 2010 when it scooped up Sun Microsystems. Micros Systems makes technology for the hospitality and retail industries, two sectors in which I don’t spend nearly enough money. The move caused shares of both companies to go up a teeny bit. But every little bit helps. Especially for Oracle who just released earnings on Thursday and disappointed Wall Street analysts by earning just $.80 per share instead of a much hoped for $.83 per share. Oh well.

Reject!

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

As we return to the Valeant/Allergan pharmaceutical saga, Allergan has been urging shareholders to reject Canadian based Valeant’s insulting $53 billion bid. Really, if you’re going to try and buy the company that makes Botox you better bring it. Allergan is eager to point out that a hostile takeover like that is simply not in the best interest of the company, especially for the board members who will no doubt be booted from their positions if this takeover does indeed transpire. Partnering with Valeant on this bid is activist investor Bill Ackman of Pershing Square Capital Management who already made an offer for the company back in April. According to Allergan’s board members that $53 billion figure seriously undervalues the company – and not just any company but the company responsible for freezing many celebrity faces.

And that’s what you get…

Image courtesy of suphakit73/FreeDigitalPhotos.net

Image courtesy of suphakit73/FreeDigitalPhotos.net

Looks like French bank BNP Paribas is about to get slapped with a nasty little fine to the tune of almost $10 billion. But don’t feel so bad for them considering they were helping out Iran, Sudan and other countries led by people who have no sense of humanity. It’s rumored the bank will plead guilty for having violated US sanctions by hiding about $30 billion in transactions. The bank allegedly violated the International Emergency Economic Powers Act. That basically means they very nicely assisted very evil people to do very bad business. BNP Paribas is the second major European bank to plead guilty this year. Credit Suisse pled their guilt a few months ago and coughed up a $2.6 billion fine for hiding US assets from the IRS.

Not Paying Dues at the IRS, Wrinkle Free Buyout? and No Home Run This Month

Taxing behavior…

Image courtesy of sdmania/FreeDigitalPhotos.net

Image courtesy of sdmania/FreeDigitalPhotos.net

If you don’t feel like complying with Federal tax policies then be prepared to face the penalties. Except if you work for the IRS, in which case, expect a bonus and some time off. A just released report from the Treasury Inspector General for Tax Administration (TIGTA) is going to shatter all those boring, monotonous ideas you had about the IRS nor give you any comfort as you just sent in your tax forms. From Oct. 1, 2010 to Dec. 31, 2012 IRS employees – about 2,800 of them –  were getting big bonuses and other nifty perks even though they were written up for tax and misconduct issues. Apparently their bad behavior was no impediment to $2.8m in cash compensation and 27,000 hours in extra time off. I guess the tax code isn’t the only thing in need of a major overhaul at the IRS.

Botox this!

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Image courtesy of patpitchaya/FreeDigitalPhotos.net

Activist investor Bill Ackman, CEO of Pershing Square Capital,  just teamed up with J. Michael Pearson, CEO of Valeant Pharmaceuticals and what went down is the stuff that HBO original movies are made of. Sort of. Following his partnership with Pearson, Ackman goes and buys a 9.7 % stake in another pharmaceutical company. But not just any pharmaceutical company. Why buy into just any pharmaceutical company when you can buy into Allergan, the pharmaceutical company that makes everybody’s favorite wrinkle remedy, Botox! That’s what I’m talking about. Then Mr. Ackman and Mr. Pearson decided they wanted to purchase Allergan for  $46 billion. Of course, not everybody on Wall Street agrees that this does not violate securities law. But what’re you going to do? Anyways, Allergan doesn’t necessarily want a new boss, even if it is for $46 billion. So they adopted a “poison pill” aka a shareholder rights plan because they don’t want Ackman buying any more Allergan stock and with this “poison pill” they can buy themselves some time to decide how they’d like to proceed  A little convoluted, but that’s what makes a Wall Street drama so riveting.

Home not so sweet home…

Image courtesy of cooldesign/FreeDigitalPhotos.net

Image courtesy of cooldesign/FreeDigitalPhotos.net

What do high mortgage rates, home shortages and bad weather have in common? If you guessed a 14.5% sales plunge (which, no offense, but I’m guessing you didn’t) then you are 100% correct. New single family home sales haven’t been this low in eight months. Experts originally predicted (and hoped) for an estimate of 440,000 home sales. But alas, that number only reached 384,000. Spring was supposed to bring with it tulips, daffodils and higher sales, but so far, just the flowers are the only things that have given us growth. The notable exception was in the Northeast where sales were up by 12.6%. Go figure. With that, median home prices rose to $290,000 from March of last year. Good news for the seller, I suspect.

Get Your Candy Game On, You Bet Icahn and Cisco Wants Some Cloud Cover

Sweet sweet news…

Image courtesy of lamnee/FreeDigitalPhotos.net

Image courtesy of lamnee/FreeDigitalPhotos.net

As you’re waiting to get some new lives on Candy Crush know that the New Stock Exchange is about to get a whole lot sweeter this week. King Digital, the maker behind the insanely popular game, Candy Crush Saga, is set to make its Wall Street debut on Wednesday. A single share – of the 15.5 million being offered – could fetch as much as $24. The company is expecting to net about $326 million off the IPO. King Digital made about $1.88 billion in 2013 – ten times more than it did the previous year. After you’re done reading today’s post, assuming you’re still waiting for those lives to kick in, check out King Digital’s new, equally addictive and very similar new game Cookie Jam. Sorry Android users, but you’ll have to wait a bit longer for that one to hit your marketplace.

In this week’s episode of the Herbalife saga…

Image courtesy of bplanet/FreeDigitalPhotos.net

Image courtesy of bplanet/FreeDigitalPhotos.net

The smackdown continues between billionaire Carl Icahn and hedge fund manager Bill Ackman. Icahn nominated three new board members who “are made of a much harder metal and mettle than those being replaced,” according to Robert Chapman, Herbalife investor at Chapman Capital LLC. Ackman is convinced Herbalife is nothing short of a pyramid scheme and bet against it in 2012. Icahn disagrees. Vehemently.  And now Mr. Icahn is toying with the idea of suing Mr. Ackman and his Pershing Square Capital Management for spreading not nice things that simply aren’t true, according to Mr. Icahn. The mood at the company has been described as a war zone. The FTC is involved. But today shares of the stock shot up anyway almost 7%. Go figure. To be continued…

Do computer clouds have silver linings too?

Image courtesy of fotographic1980/FreeDigitalPhotos.net

Image courtesy of fotographic1980/FreeDigitalPhotos.net

Make way for Cisco who is plunking down a hefty sum to enter the constantly evolving cloud computing arena. The tech giant already offers cloud related services so developing Cisco Cloud Services is just a mere hop skip and $1 billion jump away. How convenient. Amazon is already one of the biggest players. “We’re absolutely not competing with AWS (Amazon Web Services),” said Mike Riegel, Cisco Cloud’s vice president of marketing. That’s because Cisco plans on being the biggest player in this field – so take that Amazon! Hey, go big or go home.