Health & Fitness
Health and Fitness
Health and Fitness
Tue, October 12, 2010
Mon, October 11, 2010
CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Sanofi Aventis (NYSE: [ SNY ]), Genzyme Corp. (Nasdaq: [ GENZ ]), Laboratory Corporation of America Holdings (NYSE: [ LH ]), AvalonBay Communities Inc. (NYSE: [ AVB ]) and Micron Technology Inc. (NYSE: [ MU ]).
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Here are highlights from Fridaya™s Analyst Blog:
Genzyme Rejects Sanofi Again
In response to the hostile takeover bid launched by Sanofi Aventis (NYSE: [ SNY ]), Genzyme Corp.a™s (Nasdaq: [ GENZ ]) Board of Directors once again rejected Sanofia™s proposal and urged shareholders to refrain from tendering their shares to Sanofi.
On Oct 4, Sanofi had launched a tender offer for all outstanding shares of Genzyme a" the offer is scheduled to expire on Dec 10. Sanofia™s offer price stands at $69 per share with the entire deal being valued at $18.5 billion.
Offer Deemed Inadequate and Opportunistic
Genzyme called Sanofia™s offer inadequate and opportunistic. The company said that the offer significantly undervalues Genzyme and is not in the best interests of the company or its shareholders.
In a filing with the US Securities and Exchange Commission (SEC), Genzyme also said that at a meeting conducted on Sep 20, Sanofi had proposed a price range of $69 - $80 per share as the acquisition price. However, Genzyme did not commit itself to any price range.
The Board has also asked Genzymea™s management and advisors to explore and study alternative options for the company and its assets in order to understand the full value of the company. While this includes approaching third parties, the company specified that these evaluations do not mean that the company is up for sale.
We note that Genzyme is currently evaluating strategic alternatives for its diagnostic products and pharmaceutical intermediates businesses and intends to focus on its core business. In fact, Genzyme recently entered into an agreement with Laboratory Corporation of America Holdings (NYSE: [ LH ]) for the sale of its genetic testing business for $925 million. The deal is scheduled to close by year-end.
AvalonBay on Acquisition Spree
AvalonBay Communities Inc. (NYSE: [ AVB ]), a real estate investment trust (REIT) primarily focusing on developing multi-family apartment communities, has recently acquired two apartment homes in Maryland for $146 million. The acquisition is part of the long-term strategy of the company to own assets in high barrier-to-entry markets of the Northeast, Mid-Atlantic, Midwest and West Coast regions of the U.S., where there is very limited new apartment construction.
AvalonBay acquired Grove Park apartment, a 684-unit garden-style residential community in Gaithersburg, Maryland, for $101 million. Grove Park apartment is located within close proximity of premier shopping and dining destinations, and provides easy access to public transport. The apartment homes feature eat-in kitchens, washer/dryer, oversized closets and private patio/balcony, besides other amenities such as a swimming pool, fitness center, resident clubhouse and childrena™s play area.
AvalonBay has also acquired Briarwood apartment, a 348-unit residential community in Owings Mills, Maryland, for $45 million. The property is located in the submarket area of metropolitan Baltimore and offers premier quality suburban living facilities convenient to both employment and transportation. The property also includes several townhome-style apartment homes and detached garages.
The housing meltdown will continue to help apartment REITs like AvalonBay and we expect this sector to remain comparatively stable in the coming quarters. Furthermore, AvalonBay has Class-A assets located in premium markets, such as Washington DC, New York City, and San Francisco, where the spread between renting and owning is still high despite home price declines. This provides an upside potential for the company. Consequently, we maintain our long-term Outperform rating on the company.
Micron Misses Expectations
Micron Technology Inc. (NYSE: [ MU ]) reported adjusted fourth quarter earnings per share of 30 cents, which missed the Zacks Consensus Estimate of 40 cents. Subsequently, shares fell 8 cents after the market closed, representing a decline of 1.13%.
Revenue
Total revenues were $2.49 billion, up 91.5% year over year and 9.0% sequentially. However, the reported revenues were below the Zacks Consensus Estimate of $2.68 billion. The quartera™s revenues include significant contribution from the Numonyx acquisition, which was completed in May.
Revenues from the DRAM memory segment decreased 14% sequentially due to a 12% decline in unit sales volume and a slight decrease in average selling prices (ASPs). Revenues from the NAND segment were down 9% from the previous quarter due to a 7% decline in the volume of units sold, coupled with a slight dip in ASPs.
Our Take
Although the quartera™s results missed our estimates, we remain positive on Micron due to the 10-year patent cross-license agreement with Samsung Electronics Co. Under the terms of the agreement, Samsung will pay $275 million to Micron. Of the total sum, $200.0 million will be paid by October 12, $40 million by January 31, 2011, and the rest $35 million by March 31, 2011.
However, ASP declines and slowing demand in notebook, desktop and DRAM businesses, noticed during the quarter remain concerns.
We currently have a short-term Strong Sell rating (Zacks #5 Rank) on Micron shares.
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