Kellwood shares up on plan to sell Smart Shirts unit; Siemens' stock climbs; Plains Exploration shares up

By Sheri Kasprzak

New York, Nov. 6 - As market conditions continue to pummel some companies, Kellwood Co. agreed Tuesday to sell its Smart Shirts manufacturing operations to Youngor Group Co., Ltd. in a $120 million cash transaction.

After spending the morning down, shares of Kellwood were up on Tuesday. The stock gained more than 1.7% on the day.

Kellwood also plans to sell Hong Kong-based real estate assets related to the Smart Shirts operations for another $41 million to Bright Treasure Development Ltd.

"Companies are looking at their earnings right now and they're figuring out what's working and what's not, and if something's not working you get rid of it and try to make a profit from it," said one sellside trader. "It seems like this is a good deal for them. Why not sell what you don't need to benefit the company and the shareholders?"

A statement from Kellwood said it will receive a pre-tax gain on the sale of the business and the Hong Kong real estate of $10 million.

That profit, according to a statement released Tuesday by Kellwood, will be used to repurchase shares and reduce debt.

The sales are expected to close by the end of this year.

Meanwhile, in the broader stock market, oil prices hit record highs even as stocks made a major comeback.

Late in the day, a trader said it was impressive that the stock market made a comeback after sinking on news of the skyrocketing oil prices. Oil prices jumped by $2.72 to close the day at $96.70 per barrel after climbing above $97 per barrel.

The Dow Jones Industrial Average climbed by 117.54 to close at 13,660.94, and the Nasdaq gained 30 points to end the day at 2,825.18. The Standard & Poor's 500 composite index closed the day up 18.10 at 1,520.27.

"People are out looking for bargains today," noted one sellside trader late in the day. "I feel it's a temporary gain."

The trader explained that investors are still wary of the troubled credit market and this may still negatively impact stocks in the long run.

Elsewhere, Siemens AG saw its shares climb on Tuesday after sealing its acquisition of Dade Behring Holdings, Inc.

Shares of Siemens were up by more than 2% on Tuesday.

Siemens agreed in July to buy Dade Behring in a deal valued at $7 billion.

In other news, Plains Exploration & Production Co. settled its merger with Pogo Production Co.

Kellwood to sell Smart Shirts

Looking back at the Kellwood sale of its Smart Shirts line to Youngor Group, the company said the sale comes after Kellwood reviewed its strategy and decided the line was no longer a good fit for the company's strategy.

"As part of our strategy to increase shareholder value, we continually assess our portfolio of businesses to ensure that we are focused on our strongest opportunities for sales and earnings growth," said Robert Skinner, Kellwood's chief executive officer, in a news release.

"Following a careful review of the company's strategy and operations, the board and management have concluded that Smart Shirts is not consistent with our long-term strategic plan, which includes developing better and above price point brands and reinvigorating our legacy businesses. Eliminating capital-intensive manufacturing from our operations and enhancing the company's focus on the development of our lifestyle brands will enable us to elevate Kellwood's position in the apparel industry.

"Consistent with our strategy to transform Kellwood into a brand-focused marketing enterprise, this move allows us to significantly reduce our concentration in private brand sales from 28% to 12% today."

Smart Shirts makes and distributes woven and knit garments like men's shirts. Kellwood is a St. Louis-based apparel manufacturer.

Shares of Kellwood climbed by 26 cents to end at $15.48 (NYSE: KWD).

Siemens buys Dade Behring

In other news, Siemens settled its acquisition of Dade Behring, a laboratory diagnostics company. Dade Behring will become part of Siemens' Medical Solutions Diagnostics business.

Siemens bought all of Dade Behring's stock at $77 per share.

"The acquisition of Dade Behring, which holds a strong position in clinical chemistry, ideally complements our acquisitions of Diagnostic Products Corp. and Bayer Diagnostics," said Erich Reinhardt, a member of the managing board at Siemens AG and the CEO of Siemens Medical Solutions, in a news release.

Siemens' stock gained $2.88 to end the day at $139.52 (NYSE: SI).

Plains Exploration settles merger

Elsewhere in completed mergers, Plains Exploration & Production sealed its acquisition of Pogo Producing in a $1.5 billion cash and stock transaction.

Shareholders of Pogo received cash, shares of Plains Exploration or a combination of the two with each share valued at $58.48. Pogo shareholders received about 40 million shares of Plains Exploration.

Plains Exploration's stock gained 97 cents, or 1.93%, to end at $51.20 (NYSE: PXP). Shares of Pogo were up by $1.00 to end at $60.00 Tuesday (NYSE: PPP), and the stock gained another 8 cents after hours.

Plains Exploration is an oil and gas company.

James River shareholders OK merger

Shareholders of James River Group, Inc. approved the acquisition of the company by a Bermuda-based holding company and a member of investment management firm D.E. Shaw Group. The transaction is valued at $575 million.

In the deal, James River Group shareholders will receive $34.50 per share. The merger is expected to close in early December.

James River is a Chapel Hill, N.C.-based insurance holding company.

Shares of James River were down 7 cents on Tuesday to close at $34.17 (Nasdaq: JRVR).

Velcro completes tender offer

Velcro Industries NV said Tuesday that it completed its cash tender offer to purchase outstanding shares of its stock.

Shares of Velcro were off by 45 cents to end at $20.49. The stock lost another 28 cents after the market closed (Nasdaq: VELC).

Velcro tendered 2,572,437 shares on Monday.

Based in Curacao, the Netherlands, Velcro manufactures hook-and-loop fasteners.

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