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Benzinga's M&A Chatter for Monday May 7, 2012

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The following are the M&A deals, rumors and chatter circulating on Wall Street for Monday May 7, 2012:

Allscripts Adopts Stockholder Rights Plan

The Plan:
Allscripts Healthcare Solutions (NASDAQ: MDRX) announced Monday that its Board of Directors has approved the adoption of a Stockholder Rights Plan under which stockholders will receive rights to purchase shares of a new series of preferred stock in certain circumstances. The Rights Plan is intended to enable all stockholders to realize the long-term value of their investment in the Company and protect them from unfair or coercive takeover attempts. The Rights Plan was not adopted in response to any current hostile takeover attempt.

Dennis Chookaszian, Chairman of the Board, said, "As the Board believes that our current share price does not adequately reflect the Company's long-term potential, we recently expanded our share repurchase program and have now adopted this Rights Plan to ensure that shareholder value is protected. We see the Rights Plan as a temporary measure that is consistent with our fiduciary duties."

Under the terms of the Rights Plan, the rights will be exercisable if a person or group, without Board approval, acquires 10% or more of Allscripts' common stock (including in the form of synthetic ownership through derivative positions) or announces a tender offer which would result in the ownership of 10% or more of Allscripts' common stock. The rights will trade with Allscripts' common stock, unless and until they are separated upon the occurrence of certain future events. Under certain circumstances (including the acquisition by a person or group of 10% or more of Allscripts' common stock), the rights will entitle the holders to buy shares of Allscripts' common stock at a 50% discount.

Allscripts' Board generally may redeem the rights prior to the tenth day following the first public announcement of the acquisition by a person or group of 10% or more of the common stock.

Allscripts closed at $10.71 Monday, a gain of 1.32% on slightly more than the average daily volume.

Penn National Gaming May Be Near Deal to Acquire Caesar's St. Louis Casino

The Rumor:
Penn National Gaming (NASDAQ: PENN) announced Monday that it has entered into a definitive agreement to acquire the stock of the Harrah's St. Louis gaming and lodging facility from Caesars Entertainment (NASDAQ: CZR) for total consideration of approximately $610 million. The transaction price represents a multiple of approximately 7.75 times the property's trailing twelve month EBITDA (earnings before interest, taxes and depreciation) and will be funded through an add-on to Penn National's existing Senior Secured Credit Facility. While the acquisition is a stock transaction, for tax purposes, it will be treated as an asset transaction which Penn National expects will provide tax benefits that will effectively reduce the purchase multiple to 6.75 times the property's trailing twelve month EBITDA. Pro forma for the completion of the transaction, Penn National Gaming's total debt to EBITDA leverage ratio will increase to 3.25 times from 2.75 times (at March 31, 2012). The transaction, expected to close in the second half of 2012, is subject to customary closing conditions and regulatory approvals and upon closing, Penn National will re-brand Harrah's St. Louis with the Company's Hollywood-themed brand.

Caesars Entertainment closed at $13.60 Monday, a 0.89% gain on one-third the average daily volume.

Chesapeake Energy's Largest Shareholder Urges Board to Consider a Sale

The Letter:
Southeastern Asset Management, owner of a 13.6% stake in Chesapeake Energy, sent a letter to the board urging them to consider a sale of the company. The letter was addressed to Chairman Aubrey K. McClendon and the Board of Directors.

Chesapeake Energy closed at 17.13 on Monday, a loss of 1.50% on 1.40 times the average daily volume.

Carl Icahn Wins Right to Buy CVR Energy

The Letter:
Billionaire investor Carl Icahn won the right to buy CVR Energy (NYSE: CVI) for $30 per share. Shareholders could receive up to an additional $7 per share, if Icahn is able to sell the company.

CVR Energy closed at 30.35 on Monday, a gain of 1.00% on 82% of the average daily volume.

Posted-In: Long Ideas News Short Ideas Rumors M&A After-Hours Center Movers Trading Ideas

 

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