Jupitermedia retreats, Getty off; Acorda seesaws; Trico rises; Iconix up; Nevada Gold gains

By Ronda Fears

Memphis, Feb. 22 - Getty Images Inc. had a volatile session but ended in negative territory following its $200 million purchase of closely held MediaVast Inc. to get its library of celebrity photos and entertainment images, while Jupitermedia Inc. acknowledged that it is in takeover talks with Getty Images at a price tag in the neighborhood of $342 million.

Jupitermedia shares were retracing gains the day before when the rumors of a sale to Getty Images began circulating with price guesses at $11 to as much as $12.62, or roughly $400 million to $450 million. Jupitermedia said Thursday, however, that the discussions were at $9.60 per share; the company has 35.65 million shares outstanding. A source had told Prospect News on Wednesday that an $11 price tag was "way off" without elaboration.

Junipermedia (Nasdaq: JUPM) retraced gains from the day before when the rumor began circulating, dropping back by 83 cents, or 8.24%, to $9.24.

Getty shares (NYSE: GYI) traded up to $57.28 before falling back to close the session at $55.45, a loss for the day of 61 cents, or 1.09%.

One trader said Thursday that there was some speculation that Corbis Corp., a Seattle-based video content company privately held by Microsoft Corp. chief Bill Gates, might make a rival bid for Jupitermedia but he did not think there was a lot of substance to that argument. He said that while Corbis holds the rights to 70 million images and, thus, is a "neck-and-neck" competitor to Getty Images, Corbis is dwarfed by Getty Images' revenue stream, by his firm's estimation.

Elsewhere, the prospect of the sale of biotech concern Acorda Therapeutics Inc., suggested in a letter to the company dated Thursday by activist shareholder Third Point LLC with a 10% stake, sent the stock shooting up by 4% but it came off the session high on heavy profit taking, according to one trader. It closed out the day with slight loss, then was seen regaining some ground in after-hours action.

Shares of oil tankers and oilfield shipping companies moved sharply higher Thursday in reaction to news that General Maritime Corp. would pay a special cash dividend of $15 and comments from an analyst that the leverage ratios in the sector would make many of the maritime shippers prime takeover targets, according to another trader. At the top of that list, he said, is Trico Marine Services Inc.

This trader also remarked that with all the stock buyback plans getting launched by companies, private equity takeovers may see lots more opportunities as those measures in some cases could shift a balance sheet in terms of leverage to create more appealing targets.

Outside of deals, Friedman Billings Ramsey Group Inc. was recovering from short selling on Wednesday with short covering Thursday as the company posted fourth-quarter and 2006 results that showed an improvement. More importantly, subprime mortgage exposure was less than feared. The company said in 2006 it incurred charges of $17.2 million, or $0.10 per share diluted, related to subprime mortgages. The stock (NYSE: FBR) advanced 68 cents, or 9.84%, to $7.59.

Nevada Gold rises on auction

In a potential asset sale transaction, Nevada Gold & Casinos Inc. got a nice bounce Thursday after saying it has retained an auctioneer to assist in divesting 260-acre parcel of land near its casino properties in Black Hawk, Colo.

Nevada Gold (Amex: UWN) shot up 69 cents, or 27.38$ on the day to $3.21.

One distressed trader said the property should bring "a premium price" with it being just about 40 miles west of Denver.

On the gaming side of its business, the Houston-based company owns a 43% interest in the Isle of Capri-Black Hawk LLC, which owns and operates two commercial casino properties in Black Hawk, Colo., and owns and operates the Colorado Grande Casino in Cripple Creek, Colo. In addition, it owns a 40% interest in American Racing and Entertainment LLC, which owns the harness racing track Tioga Downs in Nichols, N.Y. It also funds and manages Native American gaming projects.

On the gold side, the company holds mining claims on 9,000 acres in Nevada through its Goldfield Resources, Inc. subsidiary and a 50% interest in Sunrise Land and Mineral Corp., which also owns various mining leases in Nevada.

The company said it has engaged auctioneer Sheldon Good to develop a real estate auction strategy for the Colorado land and expects a recommended course of action within the next 60 days.

Acorda wobbly on sale talk

Acorda Therapeutics shot up by over 4% on Thursday before falling back to close out the day with a slight loss, only to see a bounce in after-hours trade as profit takers and buyers batted the stock to and fro.

Early in the afternoon, traders were telling Prospect News the stock was finding buyers on the Third Point filing. But the after the close, one trader said there was heavy profit taking in the last few minutes of the session; then, he added, when the Third Point news was more widely distributed there was another buying surge.

Acorda shares (Nasdaq: ACOR) traded up to $24.29 before drifting back to close lower by 6 cents at $22.55 but in after-hours action the stock traded up to $23 but was last seen at $22.92, a gain of 37 cents, or 1.64%, from the close.

"It's pretty self-explanatory," one trader said.

"You recall the stock made that meteoric rise back last fall on the MS drug trial. Dan Loeb [Third Point chief executive] is worried, basically, that the company can't handle a marketing show for the drug properly. He wants the company to sell out to a major drug company that can do it justice."

The stock has been on a tear over the last year since it went public, largely due to takeover speculation following positive phase 3 results last fall on its prospective drug Fampridine-SR to improve walking ability in multiple sclerosis sufferers.

The trader said Third Point's move seemed to him to be as much of a philanthropic gesture as anything "because considering where they bought the stock at, they could sell out everything right now and make a killing."

Acorda's advance

Last September, when Hawthorne, N.Y.-based Acorda reported phase 3 trial results for its drug Acorda shares nearly tripled in one session to $8.50, and has basically been advancing ever since. It hit a new 52-week high earlier this week after reporting fourth-quarter and 2006 results on Tuesday, which showed narrower losses.

Last year, however, the stock was pummeled to a low of $2.20 just days before the Fampridine-SR news, suffering for months in a downswing that plagued the biotech sector during most of 2006.

Acorda went public on Feb. 10, 2006, selling 5.5 million shares in its initial public offering at $6 each - the low end of revised price talk of $6 to $7, which had been lowered from $11 to $13 per share. Of the $33 million in gross proceeds from the IPO, Acorda had earmarked $20 million to $25 million to complete the phase 3 Fampridine-SR clinical trials.

In early October, following the spike from the Fampridine-SR trial news, the company raised $31.5 million in a PIPE transaction in which it sold 3,230,769 shares at $9.75 each - a discount from the then price of $10.50. Buyers of that deal included Third Point and another dozen or so hedge funds, including well known Highbridge and Baker Brothers.

Loeb's remarks

As for the trader's reference to a humanitarian gesture in Third Point's call for Acorda to sell out to a major drug company, he pointed to the firm's letter to management.

In the letter, Loeb recounted the Fampridine-SR news and its affect of Acorda's stock price. Then, he said, "More importantly, the company's success brought an important new MS agent closer to market for patients who, upon successful completion of the second [phase 3] trial and subsequent FDA approval, will benefit from the drug.

"To that end, for the next stage of the drug's development, we strongly believe that Fampridine-SR would have the greatest value in the hands of a seasoned worldwide multiple sclerosis drug developer and marketer," Loeb continued. "A larger, more experienced company would be able to expedite Fampridine SR through the FDA and into the hands of patients more quickly and efficiently."

Hence, Loeb said Acorda's board should immediately retain an investment bank and undergo a process to sell the company in its entirety, abandoning recent plans to partner the drug only in Europe.

GMR trips new Trico talk

General Maritime led the gainers in the oil tanker and oilfield shipping companies but one trader said there was renewed takeover talk targeting Trico Marine that pushed the whole sector higher.

Also sharply higher on the session in the group were Teekay Shipping Corp., Overseas Shipholding Group Inc. and Hornbeck Offshore Services Inc. - all of which have been sinking in recent months because of warnings about weaker-than-expected results for 2006.

As for General Maritime, after reporting results in line with estimates late Wednesday, the company announced a $15 special dividend that was well liked by the Street. The stock (NYSE: GMR) gained $3.14 on Thursday, or 7.91%, to $42.86.

But a trader said remarks in a Banc of America Securities research note to the effect that General Maritime's dividend would likely draw investor attention to the "low leverage and attractive financing options for public shipping companies" rekindled takeover buzz in the sector.

Trico is one of the best buyout candidates, the trader asserted, because among its ownership ranks is Kistefos AS, a Norwegian private equity firm that invests heavily in oil shipping, among other interests. He also said that Kistefos has been subtly boosting its interest in Trico, to 20.29% from 19.36%, according to filings at the SEC earlier this month.

"It would not surprise me if they [Kistefos] launched a takeover," the trader said. "Trico stock is acting like one is imminent."

Trico shares (Nasdaq: TRMA) advanced 92 cents, or 2.58%, to $36.53 with 449,466 shares traded versus the norm of 327,459 shares.

The trader said he has heard "a wide range" of takeover estimates spanning $43 to $52, adding, "I don't know that there is a rhyme or reason to those figures; it's just what I have heard"

Iconix, Danskin up on sale

Iconix Brand Group announced Thursday it will purchase the Danskin women's activewear brand from Danskin Inc. for $70 million plus a potential $15 million more on certain milestones, funded from internal cash sources. It boosted Iconix shares nicely, but also the severely distressed shares of Danskin.

Iconix shares (Nasdaq: ICON) gained 99 cents on the day, or 4.58%, to $22.59 with 1.16 shares changing hands versus the norm of 862,880.

Danskin (Pink Sheets: DANS) advanced to 27 cents from 2 cents with 1.84 million shares traded on Thursday versus the norm of 4,137.

"Danskin lacked capital to get its brand out to the masses," said a distressed stock trader. "The story will change now and revenues will explode."

As part of the transaction, Danskin will enter into a license agreement with Iconix to continue to operate the Danskin wholesale business, including its freestanding retail stores and its internet merchant site Danskin.com.

"The transaction will provide capital for growth of the Danskin wholesale business and, at the same time, monetize its intellectual properties, enhancing opportunities to increase shareholder value," said Danskin chairman Donald Schupak.

"In addition to providing working capital, Iconix marketing support will help complete the company's vision for the brand."

© 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.