Pressure on Dow to close merger; Ticketmaster, Live Nation combo faces battle; Whole Foods' stock up

By Cristal Cody

Tupelo, Miss., Feb. 5 - Dow Chemical Co. was hit on two fronts Thursday by a judge and a shareholder regarding the acquisition of Rohm & Haas Co.

Also on Thursday, strong opposition formed against a possible combination of Ticketmaster Entertainment, Inc. and Live Nation, Inc., and any deal would face stiff regulatory hurdles, an analyst told Prospect News.

Moving on, shares of Whole Foods Market, Inc. rose 21 cents, or 2.06%, to $10.41 in trading Thursday after the Federal Trade Commission extended settlement negotiations over the company's acquisition of Wild Oats Markets Inc.

On Wall Street, investors sent stocks up Thursday and pushed the Dow Jones Industrial Average up 106.41 points, or 1.34%, to close at 8,063.07.

The broader indexes also made gains. The Standard & Poor's 500 index rose 13.62 points, or 1.64%, to 845.85, and the Nasdaq Composite index added 31.19 points, or 2.06%, to 1,546.24.

Legal, shareholder pressure on Dow

Rohm & Haas shareholder Paulson & Co. Inc. on Thursday released a letter sent to Dow chief executive officer Andrew Liveris that outlined ways the company could close the deal.

Also Thursday, the Delaware chancellor presiding over Rohm & Haas' lawsuit to force the acquisition denied Dow's request to delay the start date.

Rohm & Haas filed the lawsuit to force Dow to close the merger after the deal did not close on Jan. 27. The trial is scheduled for March 9.

Paulson, the second-largest institutional shareholder of Rohm & Haas, said that Dow could utilize the committed $13 billion bridge loan and $4 billion convertible preferred stock financing to close the transaction.

The investment management firm also suggested Dow cut its dividend to a penny per share for about $1.6 billion in annual savings, sell $4 billion of new common equity and sell $5 billion in bonds to pay off the bridge financing.

"While we understand that this is a difficult environment for the chemical industry, current conditions do not have any effect on your obligation to purchase Rohm & Haas," Paulson said in the letter. "Dow currently has financing in place to complete the acquisition and the combined Dow Rohm & Haas will have numerous alternatives to refinance the bridge loan."

Rohm & Haas shares jumped $1.02, or 1.90%, to close at $54.77 on Thursday.

Dow's stock rose 14 cents, or 1.30%, to $10.91.

Springsteen against Ticketmaster, Live Nation combo

Shares of Ticketmaster Entertainment and Live Nation settled down Thursday after Wednesday's rise as Bruce Springsteen started campaigning against a possible merger.

The two stocks had rallied by as much as 18% in trading Wednesday.

Ticketmaster shares fell 13 cents, or 1.87%, to close at $6.83 on Thursday, while Live Nation's stock rose a penny, or 0.19%, to $5.23.

A merger would create a stranglehold on ticket sales, Springsteen said on his web site.

Representatives of Ticketmaster and Live Nation did not return calls for comment.

A combination would face stiff regulatory hurdles because of the concentration of music clout in ticket sales and artist management, analysts said.

"They have a difficult regulatory road ahead," said David Joyce, an analyst with Miller Tabak & Co. "It won't be easy."

Whole Foods settlement talks

The Federal Trade Commission late Wednesday extended the negotiations with Whole Foods through March 6 to attempt to resolve the antitrust challenge against the 2007 merger with Wild Oats.

Whole Foods could be forced to rebrand some of the Wild Oats stores it acquired with their former name.

The trade commission has an administrative trial over the merger set for April 6.

Mentioned in this article:

Dow Chemical Co. NYSE: DOW

Live Nation, Inc. NYSE: LYV

Rohm & Haas Co. NYSE: ROH

Ticketmaster Entertainment, Inc. Nasdaq: TKTM

Whole Foods Market, Inc. Nasdaq: WFMI

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