BEA soars on Oracle's planned buyout; Carmeuse merger lifts Oglebay; Gold Fields sells Venezuela assets

By Sheri Kasprzak

New York, Oct. 12 - Shares of BEA Systems, Inc. zoomed on Friday after Oracle Corp. said it hopes to buy the software company in a $6.7 billion transaction.

At 11 a.m. ET, BEA's stock had already gained 32.89%, or $4.48. The stock went on to gain 38.18%, or $5.20, to close at $18.82 (Nasdaq: BEAS). The stock was of 55 cents in after-hours trading.

At the same time, shares of Oracle were up 5 cents. The stock ended the down 2 cents at $22.44 (Nasdaq: ORCL). The stock regained the 2 cents after hours.

One sell-side trader put it very succinctly.

"Great price, great opportunity," he said of the Oracle offer. "When Oracle comes knocking with an offer like this, you take it."

Elsewhere in mergers news, Carmeuse North America agreed to buy Oglebay Norton Co. for $36.00 per share.

The news sent shares of Oglebay Norton up on Friday by 3.94%.

In other news Friday, Gold Fields Ltd. sold off its Venezuelan assets to Rusoro Mining Ltd. in a $532 million deal.

The news sent shares of Gold Fields up on Friday but shares of Rusoro remained unaffected.

Finally, after months of wrangling, Accredited Home Lenders Holding Co. sealed its merger with Lone Star Fund V LP.

The news was anticlimactic as far as Accredited Home Lenders' stock went Friday. The stock remained unmoved at $11.76 (Nasdaq: LEND).

Lone Star, which had originally offered to pay $15.10 per share, bought Accredited's stock at $11.75 per share.

The merger plan hit a snag earlier this year when Lone Star tried to back out of the deal because troubles in the home mortgage sector would likely hurt Accredited's earnings.

Oracle's bid for BEA

In Oracle's plan to procure BEA Systems, the software giant has offered to pay $17.00 per share, a 25% premium to the company's $13.62 closing stock price on Thursday.

The move sent tongues in motion, even though it may have been a long time coming, an analyst said.

An analyst familiar with BEA said in a Friday morning interview, "They're [BEA] a struggling name so an offer like this is really too good to pass up. This really isn't a new plan for Oracle. They've been eyeing BEA for some time now so it just seemed like the circumstances had to be right for them [BEA]. I think now is that time. I feel pretty confident that their shareholders will jump on the opportunity."

A sell-side trader on Friday said the stock was moving up because it's a "great price" and a "great opportunity."

BEA is a troubled name, those familiar with the software company said Friday. The company has already been threatened with delisting by Nasdaq Stock Market.

On Wednesday, Banc of America Securities downgraded BEA to neutral from buy and last week, UBS also downgraded the company to neutral from buy.

The company's woes apparently all started over alleged mishandling of stock options which led the company to miss the filing of its quarterly reports.

"We have made a serious proposal including a substantial premium for BEA," said Oracle's president Charles Phillips, in a news release.

"We believe our all-cash offer provides the best value for BEA's shareholders and the best home for BEA's employees and customers. This proposal is the culmination of repeated conversations with BEA's management over the last several years. We look forward to completing a friendly transaction as soon as possible."

However BEA rejected the offer as not high enough.

Carmeuse makes deal with Oglebay Norton

In other merger news, Carmeuse North America, a subsidiary of Carmeuse Group, plans to buy Oglebay Norton for $36.00 per share.

The deal is expected to close by the end of the year.

Shares of Oglebay Norton were up on Friday, gaining $1.40 by 3 p.m. ET. The stock went on to finish up $1.35 on the day at $35.60 (Pink Sheets: OGBY).

"Oglebay Norton is a strong company with world-class assets and outstanding employees who we are proud to welcome to the Carmeuse family," said Thomas Buck, Carmeuse North America's CEO, in a statement.

"By combining the resources of our well-establishes companies, we will be better equipped to serve the needs of today's increasingly competitive and dynamic marketplace. This acquisition provides a high level of market diversity for Carmeuse. In particular, Oglebay Norton's considerable limestone business provides us with added resources to serve the rapidly growing flue gas desulfurization market, in which Carmeuse has a high level of technical expertise."

"This transaction with Carmeuse provides meaningful and immediate cash value to all of our shareholders," said Michael Lundin, Oglebay Norton's CEO, in a news release.

"It is the culmination of the comprehensive strategic alternatives review process that was conducted by the special committee of our board, together with the company's financial and legal advisors, and validates our disciplined and deliberate approach to this process."

Oglebay Norton, headquartered in Cleveland, provides essential minerals and aggregates to a range of markets from building materials and environmental remediation to energy and industrial applications.

Carmeuse North America produces lime and limestone products. The company had headquarters in Louvain-la-Neuve, Belgium.

Gold Fields will sell off assets

In other news, Gold Fields struck a deal with Rusoro Mining to sell off its Venezuelan assets for $532 million.

Rusoro will pay $150 million cash, $30 million in convertible debt and will issue 140 million of its shares for the assets.

The assets include Gold Fields' stake in the Choco 10 gold mine and its contiguous mineral rights.

"Additional capital investment is required to realize the full potential of the Choco 10 gold mine," said Gold Fields' CEO Ian Cockerill, in a statement.

"However, after careful consideration, we have concluded that, given the current environment, this investment is better made by others, with Gold Fields retaining exposure to the upside inherent in the assets."

The Rusoro offer will give Gold Fields a 25% return on its $425 million investment, Cockerill said in the statement.

Johannesburg-based Gold Fields plans to use the proceeds from the asset sale to reduce debt and fund its capital investment portfolio.

By noontime ET, Gold Fields' stock was up 31 cents. The stock went on to gain 25 cents to end at $18.80 (NYSE: GFI).

Shares of Rusoro were down 20 cents, or 8.33%, at C$2.20 Friday (TSX Venture: RML).

© 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.