Special Reports

Notable Mergers and Acquisitions of the Day 12/2: DDRX/GMCR/PEET, AGU/CF, ZINC Dec 2, 2009 11:17AM

• Diedrich Coffee, Inc. (NASDAQ: DDRX) today announced that, on Tuesday, December 1, 2009, Green Mountain Coffee Roasters, Inc. (NASDAQ: GMCR) enhanced its offer to enter into a merger transaction pursuant to which GMCR would acquire all of the outstanding shares of common stock of Diedrich Coffee for $35.00 per share in cash. In addition, GMCR proposed a form of merger agreement that is more favorable to Diedrich Coffee's stockholders than the current merger agreement between Diedrich Coffee and Peet's Coffee & Tea, Inc. (NASDAQ: PEET). In light of this enhanced proposal from GMCR, Diedrich Coffee today also announced that its Board of Directors determined that the proposal from GMCR, as revised, continues to be a "Superior Proposal" (as defined in the Peet's merger agreement) to the terms of the merger agreement with Peet's and the exchange offer contemplated thereby, as amended by the revised proposal received from Peet's on November 30, 2009.
  
  GMCR included with its enhanced proposal a revised merger agreement signed by GMCR that reflects the $35.00 per share cash consideration and contains other terms that are more favorable to Diedrich Coffee's stockholders as compared to the existing merger agreement with Peet's, as revised by Peet's recent proposal. More specifically, in addition to the superior consideration, the revised GMCR merger agreement provides for a reduction in the limitations and restrictions on Diedrich Coffee's ability to operate its business during the period prior to the completion of the transaction, as compared to the Peet's merger agreement, as well as an increase in the time period during which Diedrich Coffee may remedy deficiencies relating to the satisfaction of certain conditions to the tender offer.
  
  In addition, the revised GMCR merger agreement includes a graduated reverse termination fee such that, if the agreement is terminated by GMCR or Diedrich Coffee under certain circumstances, a termination fee in an amount between $8,517,000 and $11,517,000 (depending on the date of termination) would be payable to Diedrich Coffee.
  
  GMCR submitted its enhanced proposal in response to Peet's revised proposal received by Diedrich Coffee on the evening of Monday, November 30, 2009, which offered to pay to Diedrich Coffee's stockholders, for each share of Diedrich common stock tendered and accepted in its exchange offer, a combination of 0.321 of a share of Peet's common stock and an amount between $21.265 and $22.870 such that the value of the total consideration paid per Diedrich share would be equal to $32.50, provided that Peet's common stock has a value between $30.00 and $35.00 per share. If Peet's volume-weighted average stock price over a designated five trading day period prior to the completion of the exchange offer were less than $30.00, the value per share received by Diedrich's stockholders would be less than $32.50, and if Peet's volume-weighted average stock price over that same period were higher than $35.00, the value per share received by Diedrich's stockholders would be greater than $32.50. As required under the terms of the existing merger agreement with Peet's, on Tuesday, December 1, 2009, Diedrich Coffee transmitted notice of GMCR's enhanced proposal to Peet's.
  
  The Board of Directors of Diedrich Coffee considered the latest proposals of GMCR and Peet's and determined that GMCR's $35.00 all-cash offer continued to be a Superior Proposal (as defined in the Peet's merger agreement) to Peet's recent proposal, as outlined above. Peet's most recent proposal enhanced the original offer consideration, which consisted of a combination of $17.33 in cash and a fraction of a share of Peet's common stock, having a value equal to $8.67 based on a formula as provided in the Peet's merger agreement, provided that in no event would such fraction have exceeded 0.315 of a share of Peet's common stock, representing total consideration of $26.00 per share. Peet's most recent proposal expired at 5:00 p.m. Pacific Time on Tuesday, December 1, 2009, and thus, the consideration payable by Peet's reverted to the original offer of $26.00 per share in cash and Peet's stock.
  
  Peet's has until 5:00 p.m. Pacific Time on Monday, December 7, 2009, to negotiate with Diedrich Coffee to amend the current merger agreement and the exchange offer contemplated thereby in a manner that the Board of Directors of Diedrich Coffee determines is at least as favorable to Diedrich Coffee's stockholders as the enhanced proposal from GMCR. If Peet's fails to submit to Diedrich Coffee a new proposal that leads to such a determination, then, at or after such time, Diedrich Coffee intends concurrently to terminate the Peet's merger agreement, pay to Peet's the termination fee required thereby and enter into the new merger agreement described above with GMCR.
  
  Gibson, Dunn & Crutcher LLP is serving as the legal advisor to Diedrich Coffee and Houlihan, Lokey, Howard & Zukin Capital, Inc. is acting as financial advisor.
  
  
• Agrium Inc. (NYSE: AGU) today has announced that it intends to nominate a slate of directors to stand for election at CF Industries Holdings, Inc. (NYSE: CF) 2010 annual stockholder meeting. As per the letter to CF's Board attached below, Agrium has also challenged CF to remove their poison pill to allow CF stockholders to decide whether to accept Agrium's offer.
  
  To: CF Board Members
  
  Messrs. Wilson, Arzbaecher, Creek, Davisson, Furbacher, Harvey, Johnson and Schmitt
  
  Re: Agrium to Nominate Directors to CF Board; Challenges CF to Drop Poison Pill
  
  Agrium has repeatedly sought the engagement of CF. Most recently, on November 30, 2009, our efforts to open discussion involved a call by me to Steve Wilson, a call by Agrium's Board Chairman, Mr. Proto, to CF's lead independent director, and a letter from me to each of you. Unfortunately, to date, CF has declined all opportunities to engage directly with Agrium or its advisors.
  
  In statements to the general public, you have claimed "overwhelming support" for your Terra bid even though holders of only 38% of Terra's outstanding shares (excluding CF) supported your nominees to Terra's board. At the same time, you have stated publicly that you do "not believe that the tender results reflect stockholder support for the terms of Agrium's offer." Your statement simply is not credible given that holders of 60% of your stock (excluding Agrium) supported our unambiguous offer of $45.00 and 1.0 Agrium common share per CF share (a combination valued at $100.54 on November 17th, the last trading day before CF stockholders tendered in support of the Agrium offer).
  
  Given the repeatedly strong support from your stockholders for the Agrium offer, and the amount of time and opportunity you have had to put forward your opposition and maximize shareholder value, your continued reliance on a poison pill and Section 203 of the Delaware General Corporation Law to block a transaction desired by your stockholders is unreasonable. The time is overdue for you to remove these preclusive barriers and let your stockholders decide for themselves whether to accept Agrium's offer.
  
  Agrium remains open to discussing with you how best to proceed with this transaction, including possible modifications to the structure of our offer. By talking, we might each learn something that would help us proceed in a positive manner.
  
  We continue to have confidence in the compelling nature of a combination of our two companies, and intend to continue our efforts to achieve that combination which would benefit the stockholders of both our companies. To advance that outcome, Agrium will be nominating a slate of directors to stand for election at your 2010 annual stockholder meeting.
  
  Sincerely,
  
  Michael M. Wilson, President and Chief Executive Officer
  
  Agrium Inc.
  
  
• Horsehead Holding Corp. (NASDAQ: ZINC) today announced its plans to acquire INMETCO, a leading recycler of metals-bearing wastes in North America. Based in Ellwood City, PA, INMETCO employs 108 people and operates the only secondary smelter in North America dedicated to recycling nickel, chromium and other metals from hazardous and non-hazardous wastes generated mostly by stainless steel and specialty metals producers. INMETCO is also a leading processer of nickel-cadmium (NiCd) batteries, and its process has been recognized by the U.S. EPA as the Best Demonstrated Available Technology for the recycling of NiCd batteries. In 2008, INMETCO generated earnings before interest, taxes, depreciation, and amortization of $12.8 million on revenue of $61.1 million on total remelt alloy shipments of approximately 27,000 tons.
  
  The combination of Horsehead and INMETCO will enhance Horsehead's hazardous waste services platform and diversify its range of capabilities and products including the recycling of electric arc furnace dust and stainless steel flue dust for the recovery and reuse of a wide range of valuable metals. Jim Hensler, Chairman, President and CEO of Horsehead, commented: "The acquisition of INMETCO expands Horsehead's industrial metals portfolio while leveraging our key strengths in hazardous waste management and high temperature metals recovery."
  
  Under the terms of the Stock Purchase Agreement, Horsehead is expected to pay a purchase price of $34.0 million in cash, subject to adjustment, and the assumption of certain financial assurance obligations associated with environmental regulatory requirements that are currently in the form of a $8.55 million letter of credit.
  
  The acquisition is expected to close on December 31, 2009, subject to the satisfaction or waiver of customary closing conditions. Stifel, Nicolaus & Company, Incorporated acted as Horsehead's exclusive financial advisor for this transaction.

To see all the Mergers & Acquisitions for today in real-time go to http://www.streetinsider.com/Mergers+and+Acquisitions

Morning Movers 12/02: ABCW, SNTS, BIOF, DYAX, SYMX Higher; HEB, PEIX Lower Dec 2, 2009 10:32AM

Anchor BanCorp Wisconsin Inc. (Nasdaq: ABCW) 41% HIGHER; today announced that it has entered into agreements with Badger Anchor Holdings, LLC, pursuant to which Badger Holdings will make up to a $400 million investment in Anchor. Click here to see the full report.

Hemispherx BioPharma (AMEX: HEB) 40.8% LOWER; smashed as FDA recommends another Ampligen study. Says can't approve application in its present form. Click here for the full report.

Santarus Inc. (Nasdaq: SNTS) 26.1% HIGHER; trading higher ahead of a presentation tomorrow by CEO Gerald Proehl at the Piper Jaffray 21st Annual Health Care Conference at 12:30 p.m. ET. Also announced that the U.S. FDA has approved Schering-Plough HealthCare Products NDA for ZEGERID OTC(TM) Capsules (omeprazole/sodium bicarbonate) with a dosage strength of 20 mg of omeprazole for OTC treatment of frequent heartburn.

BioFuel Energy (Nasdaq: BIOF) 24.8% HIGHER; the stock jumped nearly 38% yesterday amid reports that the EPA said that a recent test showed that cars can handle increased ethanol fuel content.

Dyax Corp. (NASDAQ: DYAX) 23.4% HIGHER; announced today that the U.S. FDA has granted approval for KALBITOR(R) (ecallantide) for the treatment of acute attacks of hereditary angioedema in patients 16 years of age and older. Click here for the full report.

Pacific Ethanol (Nasdaq: PEIX) 18.8% LOWER; correcting today following a 120% run-up in the stock over the last three trading sessions. See BIOF.

Synthesis Energy Systems Inc. (Nasdaq: SYMX) 15.7% HIGHER; SYMX and Coalworks Limited today announced that they intend to develop, through a strategic alliance, Coalworks' first coal gasification and liquefaction plant at Oaklands in New South Wales, Australia utilizing SES' proprietary U-GAS® gasification technology, which SES licenses from the Gas Technology Institute.

TerreStar Corporation (Nasdaq: TSTR) 12.5% HIGHER; Elektrobit Inc and Terrestar have expanded their relationship to include EB's provision of turnkey product delivery services to TerreStar for the TerreStar(TM) GENUS(TM) Smartphone, an EB design.

Culp Inc. (NYSE: CFI) 11.8% HIGHER; reports Q2 EPS of $0.22, versus the analyst estimate of $0.16. Revenue for the quarter was $49.7 million, which compares to the estimate of $49.50 million.

Keryx Biopharmaceuticals, Inc. (Nasdaq: KERX) 11.7% HIGHER; said the FDA has granted Fast Track designation for KRX-0401 (perifosine), the Company's novel, potentially first-in-class, oral anti-cancer agent that inhibits the phosphoinositide 3-kinase (PI3K)/Akt pathway, for the treatment of relapsed/refractory multiple myeloma.

G-III Apparel Group (NASDAQ: GIII) 8.5% HIGHER; reports Q3 EPS of $1.87, versus the analyst estimate of $1.64. Revenue for the quarter was $363.50 million, which compares to the estimate of $352.39 million. Raises FY10 EPS to $1.31 - $1.35, versus $0.95 - $1.05 prior.

To get this report daily, visit http://www.streetinsider.com/entities/Morning+Movers.

After-Hours Movers 12/01: SNTS, ABCW, RAME, GAME Higher; HEB, SWS, RGNC, LTXC Lower Dec 1, 2009 05:41PM

Hemispherx BioPharma (AMEX: HEB) 45% LOWER; smashed as FDA recommends another Ampligen study. Says can't approve application in its present form. Click here for the full report.

Santarus Inc. (Nasdaq: SNTS) 26.5% HIGHER; trading higher ahead of a presentation tomorrow by CEO Gerald Proehl at the Piper Jaffray 21st Annual Health Care Conference at 12:30 p.m. ET. Also announced that the U.S. FDA has approved Schering-Plough HealthCare Products NDA for ZEGERID OTC(TM) Capsules (omeprazole/sodium bicarbonate) with a dosage strength of 20 mg of omeprazole for OTC treatment of frequent heartburn.

Anchor BanCorp Wisconsin Inc. (Nasdaq: ABCW) 26% HIGHER; today announced that it has entered into agreements with Badger Anchor Holdings, LLC, pursuant to which Badger Holdings will make up to a $400 million investment in Anchor. Click here to see the full report.

RAM Energy Resources, Inc. (NASDAQ: RAME) 8% HIGHER; announced that it will be filing an amendment to the company's annual report on Form 10-K for the year ended December 31, 2008 and simultaneously will be filing amendments to its quarterly reports on Form 10-Q for the periods ended March 31, June 30 and September 30, 2009, primarily to restate impairment expense, depreciation and amortization expense, and related provision for income tax benefit, all as reflected in the financial statements for those periods as originally issued. Click here for the full report.

SWS Group, Inc. (NYSE: SWS) 6.2% LOWER; announced today that it has commenced an underwritten public offering of 4,100,000 shares of its common stock. The underwriters will be granted a 30-day option to purchase up to an additional 615,000 shares of common stock from the Company to cover over-allotments, if any. The Company intends to use the net proceeds for general corporate purposes and to support continued growth or selective opportunistic acquisitions. The offering is being made pursuant to an effective shelf registration statement previously filed with the Securities and Exchange Commission.

Regency Energy Partners LP (Nasdaq: RGNC) 5.6% LOWER; announced today the commencement of an underwritten public offering of up to 10,000,000 common units representing limited partner interests in Regency pursuant to an effective shelf registration statement on Form S-3. In connection with the offering, Regency has granted the underwriters a 30-day option to purchase up to an additional 1,500,000 common units. Regency intends to use the net proceeds from this offering to repay outstanding indebtedness under its revolving credit facility. The common units are listed on the NASDAQ Global Select Market under the symbol "RGNC."

Shanda Games (Nasdaq: GAME) 4.8% HIGHER; reports Q3 EPS of $0.24. Revenue for the quarter was $186.3 million.

American Technology Corporation (NASDAQ: ATCO) 4.1% HIGHER; reports Q3 loss of $0.03, versus the analyst estimate of $0.00. Revenue for the quarter was $15.8 million, which compares to $11.19 million reported for Q308. Reports 2009 revenues of $15.8 million vs. consensus of $16.87 million.

PDL BioPharma, Inc. (Nasdaq: PDLI) 3% HIGHER; announced revenue guidance for the fourth quarter ended December 31, 2009 of approximately $57 million, as compared with $69 million for the fourth quarter of 2008. (Current consensus is $60.61M)

LTX-Credence Corporation (NASDAQ: LTXC) 3% LOWER; reports Q1 non-GAAP loss of $0.01, 2 cents better than the analyst estimate of ($0.03). Revenue for the quarter was $41.9 million, which compares to the estimate of $43.50 million. Sees Q210 revs of $45 - $48 million, versus $49.20 million consensus. Also sees non-GAAP EPS of $0.00 - $0.02, versus ($0.01) consensus.

Culp Inc. (NYSE: CFI) 2% HIGHER; reports Q2 EPS of $0.22, versus the analyst estimate of $0.16. Revenue for the quarter was $49.7 million, which compares to the estimate of $49.50 million.

TeleCommunication Systems, Inc. (NASDAQ: TSYS) 1.6% LOWER; has entered into a definitive merger agreement to acquire Networks In Motion, Inc., a privately held provider of wireless navigation solutions for GPS-enabled mobile phones headquartered in Aliso Viejo, California, for an aggregate of $170 million. The merger consideration will be paid in a combination of cash, TCS common stock and promissory notes. Networks In Motion's Board of Directors has unanimously adopted the merger agreement and recommended its approval by Networks In Motion's stockholders.

To get this report daily, visit http://www.streetinsider.com/entities/After-Hours+Movers.

Trading Radar for 12/2: Aeropostale (ARO), Synopsys (SNPS), Shanda Interactive (SNDA), Jo-Ann Stores (JAS) Report Dec 1, 2009 03:27PM

The Trading Radar highlights key earnings and economic announcements for tomorrow's trading session:

Before Market Opens:
Economics:
7:30am EST

• Challenger Job Cuts - no Street consensus

8:15am EST

• ADP Employment Report - Street sees (150K)

Earnings:

Synovis Life Technologies, Inc. (NASDAQ: SYNO) – consensus EPS $0.05
The Descartes Systems Group (NASDAQ: DSGX) – consensus EPS $0.09
The Pantry Inc. (NASDAQ: PTRY) – consensus EPS $0.39

Intraday or Not Specified:
Economics:
10:30am EST

• Crude Inventories - no Street consensus

2:00pm ESTFed Beige Book - no Street consensusEarnings:

Charming Shoppes (NASDAQ: CHRS) – consensus loss $0.13
Shanda Interactive Entertainment Ltd. (NYSE: SNDA) – consensus EPS $0.88

After Market Closes:
Earnings:

Aeropostale, Inc. (NYSE: ARO) – consensus EPS $0.91
Casella Waste Systems, Inc. (NASDAQ: CWST) – consensus loss $0.12
Collective Brands Inc (NYSE: PSS) – consensus EPS $0.49
Jo-Ann Stores, Inc. (NYSE: JAS) – consensus EPS $0.89
SeaChange International (NASDAQ: SEAC) – consensus EPS $0.06
Synopsys (NASDAQ: SNPS) – consensus EPS $0.32

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Unusual 11 Mid-Day Movers 12/01: BIOF, ZN, GSIT, CAGC, RDN Higher; STAA, LTON, ZOOM, OVTI Lower Dec 1, 2009 02:12PM

BioFuel Energy (Nasdaq: BIOF) 33.7% HIGHER; has jumped on headlines the EPA said it will decide on raising ethanol levels in gasoline in Mid-2010.

STAAR Surgical (Nasdaq: STAA) 23% LOWER; the stock is tumbling on heavy volume today as it could be breaking below some technical barriers. Shares haven't traded below the $3 level since early September.

Zion Oil & Gas (NYSE: ZN) 17.8% HIGHER; may be trading higher today as its rights offering to stockholders was significantly oversubscribed: preliminary results suggest subscriptions for over $37 million, which was much higher than the $18 million available.

Linktone (NASDAQ: LTON) 17.8% LOWER; reports Q3 adj-EPS of $0.01, compared to $0.02 in the same quarter last year. Revenue for the quarter was $17.6 million, versus $16.59 million in Q308.

GSI Technology Inc. (Nasdaq: GSIT) 17.3% HIGHER; continuing higher today. The stock surged nearly 40% yesterday amid news about the availability of SigmaQuad-IIIe and SigmaDDR-IIIe, two new SRAM products whose revolutionary architecture provides the ultimate in system performance, reliability, and flexibility for applications that require a high random address rate.

China Agritech (Nasdaq: CAGC) 17.2% HIGHER; not hearing any company-specific news but agriculture-related stocks may be rising today amid the ethanol news.

ZOOM Technologies (Nasdaq: ZOOM) 16.4% LOWER; not seeing any news that would justify today's decline.

Radian (NYSE: RDN) 14.3% HIGHER; shares are trading sharply higher today following some bullish comments from the company's CFO, Bob Quint, earlier. Among other comments, the exec said November delinquencies were less than expected. Click here to see some more highlights from the exec's presentation.

Euro Tech Holdings (Nasdaq: CLWT) 14% HIGHER; the stock is continuing higher today following yesterday's technical breakout. Volume remains very heavy.

Omnivision Technologies (NASDAQ: OVTI) 10.5% LOWER; reports Q2 EPS of $0.27, ex-items, 11 cents better than the analyst estimate of $0.16. Revenue for the quarter was $183.3 million, which compares to the estimate of $163.74 million. Sees Q3 sales of $145-$160 million and adj-EPS of $0.14-$0.24.

Protalix BioTherapeutics (NYSE: PLX) 10.2% LOWER; following a commercialization deal with Pfizer (NYSE: PFE) this morning, traders are saying that they are disappointed that there was no merger deal. Fast money was speculating that Protalix would be acquired by Teva (Nasdaq: TEVA) or Pfizer. With no merger, we are seeing a "sell the news" reaction.

To get this report daily visit http://www.streetinsider.com/entities/Unusual+11+Mid-Day+Movers.