Tesoro shares dip on Tracinda rights plan concern; Inverness stock slips; Citigroup to make layoffs

By Sheri Kasprzak

New York, Nov. 26 - Tracinda Corp. is concerned over Tesoro Corp.'s intended rights plan of its stock, claiming the offer would restrict shareholders, including Tracinda, from freely voting or selling their Tesoro shares.

Tracinda is now considering its options under its planned tender offer for Tesoro's stock.

The news sent shares of Tesoro down by more than 7.5% on Monday.

"I would say they absolutely have the right to question TSO's plans, especially if those plans will affect them in a negative way," said one sellside trader.

Elsewhere, Inverness Medical Innovations, Inc. is buying yet another company. This time, Inverness will buy out ParadigmHealth, Inc. in a $230 million cash offering.

"It does seem like they're buying up a lot of smaller companies," said one sellside trader on Monday afternoon. "It looks pretty consistent with their strategy."

When asked why the stock was off on Monday, the sellside trader said he feels the broader market is off and that may be pushing shares of Inverness off as well.

Shares of Inverness slipped by $1.89, or 3.21%, to close at $57 (Amex: IMA). The stock gained 26 cents in after-hours trading.

In other news, Citigroup, Inc. watched its shares slip on Monday after announcing plans to lay off some workers in a belt-tightening effort.

Shares of Citi were off by $1.00, or 3.15%, to end at $30.70 (NYSE: C) and fell another 90 cents after the closing bell.

Actual numbers for the layoffs were not immediately known, but most of the nation's largest banks have announced planned layoffs in response to the current credit crisis.

In October, the Bear Stearns Cos. said it will be laying off 310 employees. Morgan Stanley and Lehman Brothers have also announced potential layoffs.

One sellside trader was hardly shocked by the news.

"They were laying off people even before this [the credit crisis]," he said. "It shouldn't really surprise anyone that they're laying people off now. You do what you have to do in a market like this."

Citi said earlier this year that it would be letting 17,000 employees go.

Finally, E*Trade Financial Corp.'s stock dropped on Monday after the company's potential buyers questioned the online broker's mortgage portfolio.

The drop comes after a Wall Street Journal report that TD Ameritrade Holding Corp. and Charles Schwab Corp. expressed concern that parts of the E*Trade business's markdowns do not reflect the current subprime mortgage problems.

Shares of E*Trade slid by 13.7%, or 37 cents, to end the session at $4.60 (Nasdaq: ETFC).

Tesoro rights plan

Tracinda said Monday that Tesoro's board of directors adopted a rights plan that would negatively impact it shareholders, preventing them from being able to vote or sell their Tesoro shares.

Shares of Tesoro fell by $4.23 on Monday to settle at $51.69 (NYSE: TSO). After the market closed, the stock gained $1.31.

"The change in Tesoro's capitalization resulting from the rights plan, including, without limitation, the potential dilutive effect thereof, negatively impacts all Tesoro stockholders, including Tracinda," said a statement released Monday morning by Tracinda.

In the statement, Tracinda said the rights plan would restrict the ability of its shareholders to vote on or sell their shares of Tesoro. Tracinda said it is weighing its options with regard to its planned tender offer of Tesoro's stock.

Tracinda currently has a planned tender offer for Tesoro's stock at $64 per share for up to 21.875 million Tesoro shares, or 16% of Tesoro's outstanding stock. The tender offer is set to expire on Dec. 6.

Inverness to buy ParadigmHealth

In other news Monday, Inverness Medical saw its shares fall by $1.89 to close at $57.00 after announcing plans to buy ParadigmHealth in a $230 million all-cash transaction.

ParadigmHealth, based in Upper Saddle River, N.J., integrates care and disease management services for acutely ill and clinically complex patients.

The merger is one of several from Inverness this year so far.

Most recently, Inverness bought Alere Medical, Inc. in a $302 million cash and stock deal. In early October, Inverness bought Bio-Stat Healthcare Group.

"The acquisition of ParadigmHealth is a significant step in our strategy to become a leader in disease and health management services," said Ron Zwanziger, chief executive officer of Inverness, in a statement.

"When combined with our prior acquisitions of QAS and Alere, ParadigmHealth will contribute to our goal of enabling individuals to manage their health effectively."

"We're very pleased to be joining the Inverness family of companies because our objectives are the same: to help patients, their families and their physicians make better health choices and to improve care by providing information, coaching support and advanced technologies," said John Penrose, CEO of ParadigmHealth, in a news release.

"Our focus on the high acuity complex patient and our decision to support technology will be a perfect complement to the products and services of Inverness and its new subsidiary Alere."

Waltham, Mass.-based Inverness develops medical devices used to monitor infertility and other problems.

M&T to buy Partners Trust

In other merger news, M&T Bank Corp. said Monday that its shareholders approved its planned acquisition of Partners Trust Financial Group, Inc.

M&T agreed to buy all of Partners Trust outstanding shares at $12.50 each, only a slight premium to Partners' $12.47 closing stock price on Friday. The news sent shares of Partners down by 6 cents to close at $12.41 (NYSE: PRTR).

Half of the purchase price will be made in cash and the rest in stock.

Shares of M&T Bank fell by $4.99, or 5.5%, to end at $84.98 (NYSE: MTB).

The merger is expected to close on Nov. 30.

"Partners Trust will soon become M&T, and we will bring our new customers a wider array of products and services and a wider network of branches and ATMs," said M&T president Mark Czarnecki in a statement.

"We will also be expanding our commitment to this region as we continue to grow in upstate New York, which we have been headquartered since we were established in 1856."

Buffalo, N.Y.-based M&T is a holding company for M&T Bank. Partners Trust is a bank holding company located in Utica, N.Y.

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