Shares of i2 Technologies climb; Leap Wireless shares down; trader says dump Doral

By Sheri Kasprzak

New York, Nov. 1 - i2 Technologies, Inc. said it is seeking out strategic options, which may include a sale of the company or some of its assets. The company also announced its third-quarter earnings Thursday.

"I think a lot of companies right now are looking at their options," said one sellside trader Thursday morning. "This has been a tough time for a lot of companies and you just have to look at what's best for your shareholders and focus on businesses that will be successful for you."

The trader noted that he was not particularly familiar with the i2 strategic review.

In other news, shares of Leap Wireless International Inc. settled the day off after MetroPCS Communications Inc. withdrew its merger plan.

"It's really baffling," said one analyst. "It might not be over just yet, but a lot of people were really positive about this combination and I'm among them. I think it's a great opportunity for Leap and it's a great opportunity for MetroPCS. I think we'll probably see the deal back on the table, maybe next year."

A sellside trader said Thursday that the timing of the deal may just be wrong.

"There is a lot of uncertainty in this market," he said. "Deals like this require some level of security, and that's a very hard sell in this environment. It may work out next year, it may work out next month. It's hard to tell."

After the deal was announced back in July, Leap's stock hit a 52-week high of $99.04. On Thursday, Leap's stock dipped by 5.77% to $67.19.

Shares of MetroPCS were also down on Thursday, diving by almost 10.5%.

Elsewhere, one trader said Thursday it is time to dump Doral Financial Corp.

"With 90 days having passed since [the recapitalization] by [the Bear Stearns Cos.] group with new equity - and new folks getting set to sell shares after diluting old holders 90% - the company will be forced finally to release pro forma info," said the trader.

"[The] company has refused to give out any indication of post-deal figures since June."

The "company is/will still be losing money [because of the] poor economic environment in Puerto Rico," the trader said. "Sell it now if you own and short it if you can borrow it."

In July, Bear Stearns and the investor group that owns Doral recapitalized the financial services company, which is focused on Puerto Rico, for $610 million, selling its stock at $0.63 per share.

i2 shares climb

In addition to announcing plans for a strategic review, i2 released a rather positive earnings report.

The company reported a net income of $4.5 million, up from $3.8 million for the corresponding quarter of 2006. Revenues decline to $66.5 million from $71.4 million for the third quarter of 2006.

News of both the earnings and the strategic review sent share of i2 up 6.6%, or $1.12, on Thursday to end at $18.08 (Nasdaq: ITWO).

i2 said it is reviewing its options through financial adviser J.P. Morgan Securities Inc. The possible options, a statement from i2 said Thursday, include changes to the company's operations, actions or transaction to enhance value or use of the company's existing assets, joint ventures and possible mergers, sales or other business transactions.

"We remain committed to serving our customers while simultaneously working to enhance shareholder value," said Sanjiv Sidhu, the company's chairman, in a statement.

"We are very proud of what our employees have accomplished. They are critical to the success of the company as we move forward."

The company said it expects the review to be completed at the end of January.

i2 also said Thursday that it has identified candidates for the currently vacant chief executive officer position. The company said it will name a permanent CEO once the strategic review is completed. The interim CEO, Pallab Chatterjee, will continue to serve as interim CEO.

Dallas-based i2 is a software supply chain company.

MetroPCS takes Leap deal off table

In other merger news Thursday, an analyst was left baffled after MetroPCS Communications took away its offer to buy Leap Wireless International in a $4.7 billion deal.

Leap and MetroPCS both offer discount wireless services.

In September, Leap rejected the unsolicited offer, claiming the proposal would "unfairly dilute the ability of our shareholders to recognize these benefits," a letter from Leap CEO S. Douglas Hutcheson said.

The offering would entail the issuance of 2.75 shares of MetroPCS for every share of Leap.

Leap's stock fell by 5.77%, or $4.11, on Thursday to close at $67.19 (Nasdaq: LEAP).

Shares of MetroPCS dropped $2.36, or 10.49%, to end at $20.14 (NYSE: PCS).

PNC agrees to buy Albridge

The PNC Financial Services Group, Inc. said Thursday it plans to buy Albridge Solutions Inc., a Lawrenceville, N.J.-based portfolio accounting and enterprise wealth management service provider.

The terms of the merger were not disclosed, but the transaction is set to wrap up in the first quarter of 2008.

"The Albridge acquisition enhances PFPC's leadership position and continues the transformation of PFPC's business model," said James Rohr, CEO of PNC, in a news release.

"In addition to its processing capabilities, PFPC is increasingly a provider of information services."

"Albridge extends PFPC's capabilities into the delivery of knowledge-based information services and our reach into the financial advisor market," said Timothy Shack, CEO of PFPC Worldwide, PNC's investment services provider.

"This acquisition creates synergies with many PFPC businesses, including our industry-leading sub-accounting services, our transfer agency services and related AdvisorCentral portal and our Advisorport managed account platform. It creates a combined client base of financial advisors, many in the rapidly growing independent channel, that represents an important distribution avenue for PFPC's asset manager and broker/dealer clients."

Shares of PNC were down $2.37, or 3.28%, to end at $69.79 Thursday (NYSE: PNC). The stock gained 52 cents in after-hours trading.

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