ArecelorMittal digs new steel deal; Eli Lilly sprouts new hormone division; Circuit City still searching

By Aaron Hochman-Zimmerman

New York, Aug. 20 - ArcelorMittal SA continued to steamroll through another acquisition, this time of London Mining plc's Brazilian holding London Mining South America Ltd.

ArcelorMittal's shares were up after the deal that did not come as a shock to those who follow the mining sector.

More surprising was the reappearance in deal-land of Circuit City Stores Inc. after a failed round of deal talks with Blockbuster Inc.

Circuit City, with its new vice president, was again on the hunt for buyers, but investors were not impressed as the big box's stock dropped.

Elsewhere, the pharmaceutical giant Eli Lilly & Co. added some hormones to its workout routine with the purchase of the Posilac division from Monsanto Co.

The sale of the bovine hormone lifted Monsanto's stock, but even on hormones, the share price fell short of jumping over the moon.

Also, Take-Two Interactive Software Inc. and Electronic Arts Inc. got a letter in the mail from the Federal Trade Commission as they sat down to discuss their as of yet abortive attempts at a merger.

Shares of both companies were better as the FTC pre-approved a deal the two may one day reach.

Meanwhile, in the larger market picture, the Dow Jones Industrial Average ended better by 68.88, or 0.61%, at 11,417.43, while the Nasdaq Composite Index added 4.72, or 0.20%, to finish at 2,389.08.

The S&P 500 also tacked on 7.85, or 0.62%, to close at 1,274.54.

Lilly grows with hormones

Eli Lilly's division Elanco entered into a $300 million deal to buy the controversial bovine hormone Prosilac from the Monsanto Co., according to a press release.

"Monsanto has a deep yearning to be a 100% biotech company," said Wall Street Access analyst Charlie Rentschler.

Monsanto did not disclose the value of its Prosilac division so it is impossible to know if $300 million is a fair price, Rentschler said, however, both sides agreed and there seems to be no major commotion on the part of the shareholders.

"We're pleased Elanco is acquiring this business and will continue to provide dairy farmers with this important production tool," said Carl Casale, Monsanto's executive vice president of strategy and operations in a statement.

"Elanco is fully focused on animal health and productivity and is committed to the importance of Posilac in both the domestic and the international marketplace," he added.

"From Monsanto's standpoint it's not a core business," Rentschler said, and the company will likely continue to sell off all of its non-biotechnology assets.

Also, Posilac presented a public relations problem for Monsanto, Rentschler told Prospect News.

Many in the general public believe that hormones given to boost milk production are harmful to cattle and are unsafe to drink.

Within a matter of time "they probably won't be producing Roundup anymore," he said about Monsanto's herbicide.

Shares of Eli Lilly (NYSE: LLY) slipped by $0.39, or 0.82%, to $47.41.

Shares of Monsanto (NYSE: MON) jumped by $5.22, or 4.63%, to $118.08.

Arcelor digs up new acquisition

Mining consolidation put another deal on the books on Wednesday as Luxembourg's ArcelorMittal signed a deal to acquire iron ore producer Brazil's London Mining South America Ltd. from London Mining for a total of $810 million, according to a press release.

Concerning regulatory constraints and other hurdles the deal was certified "kosher," by Michelle Applebaum of Michelle Applebaum Research.

The deal is also no surprise.

"They are going upstream," Applebaum said in terms of the company's plans for expansion.

"They are a heat-seeking missile when they want to be in a business," she said.

However, while Mittal's expansion is nearly assured, the direction is still a mystery.

"They're next move will be wherever everyone doesn't expect it," she said.

"Mittal is a very driven group and this is not surprising," she added.

Shares of ArcelorMittal (NYSE: MT) added on $2.17, or 2.87%, to end the day at $77.68.

Circuit City's Marcum, a spark of hope?

Circuit City hoped that a new spark in the person of James Marcum would jumpstart its efforts to pump new value into its shares.

Marcum was named vice president after serving on the board of directors as a result of a proxy fight started by Mark Wattles, president of Wattles Capital Management LLC and 6.5% Circuit City stakeholder.

"The board and I selected Jim for this role because he is a highly-experienced retail turnaround executive," said Philip Schoonover, Circuit City's chairman, president and chief executive officer, in a statement.

"Today's announcement shows that the management team remains fully committed to delivering value to shareholders in the near term through the successful execution of our turnaround plan. Meanwhile, the board continues to pursue strategic alternatives for the company that offer the best possible results for our shareholders in the long-term," the statement continued.

Shares of Circuit City (NYSE: CC) sank by $0.10, or 5.75%, to close the day at $1.64.

Take-Two, EA: You have been pre-approved

The pre-approval Take-Two and EA received on Wednesday from the FTC will not likely find its way to the pile with rest of the junk mail pre-approvals.

As the video game producers sat down to discuss their potential deal, the FTC announced it closed its investigation into the matter.

Neither side indicated if a new offer price from EA is forthcoming, but Take-Two's shareholders continually showed little interest in the recently expired tender offer of $25.74 per share.

Shares of Take-Two (Nasdaq: TTWO) were better by $1.27, or 5.50%, to finish the session at $24.34.

Shares of Electronic Arts (Nasdaq: ERTS) were also better by just $0.63, or 1.36%, to close the day at $47.06.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.