Market Overview

Merger Monday in Full Effect: Tech, Healthcare in Spotlight

The Bangles were famous for their "Manic Monday" song, and it looks as if we can take that and apply it to this morning, as "Merger Monday" appears to be in full effect again.

After a period of quiet in capital markets activity, there were a few mergers this morning, which could be a sign that opportunistic managers are seeing the low valuations in the stock market as an opportunity to add great businesses at cheap prices. Call it the "Warren Buffett" line of thinking.

We saw news out of the ever acquisitive Oracle (NASDAQ: ORCL), as the company, led by Larry Ellison, purchased RightNow Technologies (NASDAQ: RNOW) for $43 per share, or $1.5 billion. This is a 20% premium over Friday's closing price.

The company said, "RightNow's Customer Service Cloud helps organizations deliver exceptional customer experiences across call centers, the web and social networks. Together, Oracle and RightNow can enable a superior customer experience at every contact and across every channel."

The California-based Oracle expects the deal to close late this year or early next year.

Shares of RNOW are trading over 19% higher in pre-market, gaining $6.90 to $42.86‎.

Then came an announcement out of Cigna Corporation (NYSE: CI) that it was acquiring HealthSpring, Inc. (NYSE: HS) for $55 per share in cash, a 37% premium over Friday's close. That makes the deal worth approximately $3.8 billion.

“HealthSpring is a great fit with Cigna's growth plans to expand into the Seniors and Medicare segment through a premier business and trusted brand name,” said David M. Cordani, President and Chief Executive Officer. “Our two companies share a common strategic vision and philosophy that we create customer value by partnering with health care professionals, and use information and incentives to deliver high-quality, differentiated programs.”

Shares of HS are soaring in pre-market trading, gaining $13.36 to $53.52‎, a gain of 33.27%‎.

Shares of Adolor Corporation (NASDAQ: ADLR) are soaring this morning, after Cubist Pharmaceuticals Inc (NASDAQ: CBST) said it would be buying all of the outstanding shares of Adolor for $4.25 per share in cash.

ADLR shares are up $2.58 to $4.50, a gain of 132.18%, suggesting that traders think an additional bid comes in for Adolor, as it is trading above the offer price.

There is also news of some mergers that have not quite consummated yet.

Mac-Gray Corporation (NYSE: TUC) announced that its Board of Directors have rejected an offer from KP Capital, LLC to acquire the company for $17.50 in cash per share.

In the press release, it said, "Based on its evaluation, the Board has unanimously determined that pursuing the transaction proposed by KP Capital, or a sale process, would not be in the best interests of the Company's shareholders at this time. The Board believes that the Company can best maximize long-term shareholder value by continuing to aggressively implement the strategic, operational and financial initiatives currently under way as well as those specific initiatives contemplated in the updated business plan."

Shares of TUC are up $2.37 in pre-market trading to $15.52‎, a gain of 18.02%‎.

Then we also got a press release from InterDigital (NASDAQ: IDCC), announcing that it would be suspending regular quarterly conference calls until further notice as the company is currently contemplating strategic alternatives. InterDigital has been mentioned before as a patent play for companies like Intel (NASDAQ: INTC), Qualcomm (NASDAQ: QCOM), Samsung, and potentially, even Apple (NASDAQ: AAPL).

Just another manic, merger Monday indeed.

Posted-In: Larry Ellison Warren BuffettLong Ideas News M&A Tech Trading Ideas Best of Benzinga

 

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