WaMu waits longer; Transmeta leads with Intel deal, possible sale; loose M&As cleaned up

By Aaron Hochman-Zimmerman

New York, Sept. 25 - Wall Street caught the contagious optimism coming from Capitol Hill after lawmakers negotiated a bailout plan they believed would pass both houses.

Still, what appears to be the next victim of the 2008 banking massacre, Washington Mutual, Inc., made no announcements for another day regarding its own bailout.

Buyers from the banking world began to draw less speculation as private equity stepped in to take some of the spotlight as the likely buyer of WaMu.

Elsewhere, the biggest gainer in deal-land was Transmeta Corp., which put itself up for sale after announcing a $91.5 million licensing deal with Intel Corp.

Also in technology, Medtronic Inc. reached a C$400 million agreement to buy Canada's CryoCath Technologies, Inc.

In the energy sector, suffering Plains Exploration & Production Co. sold off $1.25 billion worth of oil field holdings to Occidental Petroleum Corp.

Meanwhile, the Dow Jones Industrial Average ended better by 196.89, or 1.82%, at 11,022.06, while the Nasdaq Composite Index added 30.89, or 1.43%, to finish at 2,186.57.

The S&P 500 tacked on 23.31, or 1.97%, to close at 1,209.18.

WaMu any day now

The protracted wait for the buyer of WaMu to emerge continued throughout the session on Thursday.

The conventional wisdom saw the odds for the race change drastically as many in the market began to favor a private equity buyer rather than a traditional bank.

The former leaders in the chase for WaMu, JPMorgan Chase & Co., Wells Fargo & Co. and newcomer Toronto-Dominion Bank, were given steeper odds in favor of Carlyle Group and Blackstone Group.

Still, "I don't see Blackstone having the ability to take advantage of the cost savings," a trader said.

"I still feel it will be JPMorgan," he said, adding, "the Fed will want that."

"They can't buy it for that much," an analyst said about JPMorgan, although it may be just as likely that "somebody buys certain assets" as WaMu could be parceled up and sold off in sections.

Shares of WaMu (NYSE: WM) sank by $0.57, or 25.22%, to $1.69.

Shares of JPMorgan (NYSE: JPM) took on $2.96, or 7.31%, to close at $43.46.

Shares of Blackstone (NYSE: BX) gave back $0.22, or 1.31%, to end the day at $16.60.

Transmeta soars on deal, possible sale

Shares of Transmeta were flying after a late Wednesday announcement that the chipmaker will put itself up for sale.

"After actively exploring a full range of strategic alternatives over the past few months and after strengthening its balance sheet, Transmeta will now explore a possible sale of the company as a way to enhance value for all its stockholders," Transmeta said in a press release.

The company separately announced two licensing agreements with Intel for use of its technology and intellectual property. The licensing will bring Transmeta a one-time payment of $91.5 million.

"We are very pleased to have achieved the two agreements with Intel," Les Crudele, president and chief executive officer of Transmeta, said in a statement.

"Receiving these one-time payments strengthens our balance sheet and allows potential buyers to more accurately evaluate our company," Crudele added.

Transmeta remains committed to pursuing further licensing agreements in addition to the outright sale of the company.

Shares of Transmeta (Nasdaq: TMTA) improved by $2.58, or 19.11%, to end the day at $16.08.

Medtronic flat on cardiac acquisition

Medtronic shares were almost lifeless as it announced an agreement to take out CryoCath Technologies, which specializes in atrial fibrillation technology, for C$400 million, or C$8.75 per share, according to a press release.

The price represents a 97% premium to CryoCath's Wednesday closing price and a 93% premium to its average trading price for the previous 20 days on the Toronto Stock Exchange.

The offer is contingent upon the tender of 66 2/3% of CryoCath's shares and any applicable regulatory barriers, although CryoCath has already recommended that its shareholders accept the offer.

"This offer delivers significant value. Joining forces with Medtronic at this stage in our development will dramatically expand our reach and accelerate innovation to the benefit of patients today and tomorrow," Jan Keltjens, president and CEO of CryoCath, said in a statement.

Shares of Medtronic (NYSE: MDT) slipped $0.26, or 0.50%, to $51.88.

The deal is expected to close in the fourth quarter of 2008.

Occidental strikes oil deal

Occidental Petroleum struck oil in the Permian and Piceance Basins for the price of $1.25 billion paid to Plains Exploration & Production.

Occidental Petroleum estimates the 50% remainder of the oil fields it purchased last year will yield 4,300 barrels of liquids and 52 million cubic feet of gas per day, for a total of 13,000 barrels of oil equivalent per day.

"This transaction reduces our corporate debt by at least $1 billion and enables us to lower our projected 2009 capital expenditures to $1.35 billion," said James Flores, chairman, president and CEO of Plains Exploration & Production.

"The refocusing of our asset base will increase our high margin, oil weighting and will target a strong organic production growth rate while remaining fiscally disciplined and preserving commodity price upside for our stakeholders," Flores said.

Shares of Occidental Petroleum (NYSE: OXY) added $1.23, or 1.60%, to close at $77.88.

Shares of Plains Exploration & Production (NYSE: PXP) were better by $1.63, or 4.46%, to finish at $38.17.

The deal is expected to close in the fourth quarter of 2008.

Deals approved

Shareholders of a number of companies involved in long-standing deals finally pulled the trigger and approved their respective mergers on Thursday.

Delta Air Lines, Inc. and Northwest Airlines Corp. approved their stock merger for 1.25 Delta shares per every Northwest share in a $2.8 billion deal.

"Delta should probably get done sometime in November," an analyst said.

Holders of DRS Technologies Inc. and Italy's Finmeccanica SpA approved their $81.00-per-share, or $5.2 billion, pairing, although the union is still waiting for approval from the Committee for Foreign Investment in the United States.

The committee's approval and the deal's close are expected before the end of 2008.

Also, Wm. Wrigley Jr. Co. shareholders approved the $80.00-per-share, or $23 billion, privatization of the company by Mars, Inc.

That deal is expected to close in the first week of October.

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