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Market Update

Neiman Marcus in $6 Billion Deal, Molex Accepts $7.2 Billion Bid


Author: Nichole Harper
ticker.com
Last Update: 3:24 PM ET September 09 2013

3:20 PM New York – Market indexes in New York traded higher after three large deals were announced today. Neiman Marcus agreed to be sold for $6 billion. Billionaire Koch Brothers controlled holding company agreed to buy Molex for $7.2 billion. Glaxo sold its nutrition drinks business to Japan based Suntory for £1.35 billion in cash.

Stocks in New York traded higher on the first day of the week after several large deals were announced.

S&P 500 index gained 16 or 0.97% to 1,671.16 and the Nasdaq Composite Index added 44.51 or 1.2% to 3,704.44.

Koch to Buy Molex for $7.2 Billion

Koch Industries agreed to acquire electronic components maker Molex for $7.2 billion, the second largest acquisition by the holding company controlled by billionaire Koch brothers.

Koch agreed to pay $38.50 a share, 31% premium to the Friday closing price for Molex common stock and a 56% for its Class A shares.

Molex employs 35,983 people as of June 30 and the company is expected to operate as an independent subsidiary of Koch Industries.

Neman Marcus in $6 Billion Deal

The luxury U.S. retailer Neiman Marcus agreed to be acquired by Ares Management based in the U.S. and the Canada Plan Investment Board for $6 billion.

The luxury retailer was acquired by TPG and Warburg Pincus for $5.1 billion in 2005 and the company was likely to go public if owners had not found buyers.

Neiman Marcus, the luxury retailer reported revenues of $4.3 billion in 2012 and the entire luxury sector is enjoying a rebound in sales in the last three years as the financial crisis of 2008 eases and general economy rebounds.

Ares, based in Los Angeles manages $66 billion and the company has invested in the past in General Nutrition Centers and the mattress companies Serta and Simmons.

U.S. Stocks in Review

Apple Inc (AAPL) gained 2% ahead of its widely anticipated company announcement and possible release of new phones and tablets.

GlaxoSmithKline Plc slid 0.8% to 1,638.50 pence after the UK based healthcare group sold its nutritional drinks brands Lucozade and Ribena to Japan based Suntory Beverage & Food Ltd. for £1.35 billion in cash. The transaction is expected to complete by the end of the year.

In fiscal 2012, annual sales of Glaxo’s these two brands were about £0.5 billion and consolidated sales in fiscal 2012 of Japanese firm Suntory Beverage were more than £12 billion with total number of 29,000 employees across Japan, Europe, Asia Pacific and the Americas.

Crown Castle International Corp (CCI) gained 1% as the wireless infrastructure operator said it will look to prepare to qualify as a real estate investment trust for tax purposes.

Delta (DAL) gained 7% after the airline was selected to be added to broadly followed S&P 500 index after the close of tomorrow, according to a statement from S&P Dow Jones Indices. Delta will replace BMC which is being acquired by Bain Capital LLC.

Expedia Inc (EXPE) increased 3% after the operator of travel review sites received favorable comments from Lazard Capital Markets LLC

Hovnanian Enterprises Inc (HOV) gained 2% after the home builder reported a profit in the fiscal third quarter on rising sales and home prices.

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Sources: Data collected by 123jump.com and Ticker.com from company press releases, filings and corporate websites. Market data: BATS Exchange. Inc