24/7 Wall St.

24/7 Wall St.

Alliance Data (ADS) Deal Falls Apart

Shares of Alliance Data (ADS) are trading off 42% before the open. The Blackstone Group (BX) and Aladdin Solutions have informed Alliance Data that they do not anticipate the condition to closing the merger relating to obtaining approvals from the Office of the Comptroller of the Currency (OCC) will be satisfied.

ADS looks ready to put up a fight. It said it "strongly disagrees with Blackstone's stated assertions that (i) the OCC's most recent written proposal to Blackstone's counsel embodied the OCC's "final position" with respect to the terms on which the required approvals would be granted and (ii) the OCC is "demanding that extraordinary measures be taken by ADS and various Blackstone entities in connection with the Change in Control Notice" that "represent operational and financial burdens on ADS, Blackstone and it affiliates that cannot be reasonably assumed." Moreover, the Company believes that Blackstone has the ability to cause the condition to closing cited in Blackstone's letter to be satisfied.

According to the company, Blackstone's notice did not assert any breach of the merger agreement by Alliance Data or the occurrence or anticipated occurrence of any material adverse effect.

It looks like a nice, big lawsuit.

Pre-Market Stock News (January 28, 2008)

Alliance Data Systems (ADS) was informed by Blackstone that conditions likely won't be satisfied to complete the merger; stock trading down close to 40%.
American Express (AXP) reports earnings today with estimates at $0.71 EPS.
Biogen Idec (BIIB) said that Carl Icahn has given notice that he wants to nominate 3 directors to the board.
Black & Decker (BDK) $1.06 EPS vs. $1.03 estimate; lowered guidance for 2008 to $5.40 to 5.90 vs. $6.10+ estimates.
Bluelinx (BXC) now sees wider losses than expected.
Corning (GLW) $0.40 EPS vs. $0.39 estimate; Revenue $1.58B vs. $1.55B est.
eBay (EBAY) announced that PayPal has agreed to acquire Fraud Sciences Ltd. in Israeli for roughly $169 million.
FPL Group (FPL) $0.71 EPS vs. $0.67 estimates.
Halliburton (HAL) $0.74 EPS vs. $0.69 estimates.
Matria Healthcare (MATR) is being acquired by Inverness Medical (IMA) for $39.00 per share, with a breakdown of $6.50 per share in cash and $32.50 per share in convertible preferred stock.
McDonalds (MCD) set to report earnings, estimate $0.71.
Napster (NAPS) announced the launch of the Napster Mobile music service with Ericsson phones at Telecom Italia through its mobile brand TIM.
Sallie Mae (SLM) received commitments for $31 Billion from a consortium of banks led by Bank of America, JPMorgan Chase, Barclays Capital, Deutsche Bank, Credit Suisse, and The Royal Bank of Scotland, and from UBS; new financing will replace the $30 billion interim financing put in place; will drop suit related to past failed merger.
Sears Holdings (SHLD) Aylwin Lewis is stepping down as CEO of Sears.
Stanley Works (SWK) $1.11 EPS vs. $1.10 estimate; reaffirmed 2008 EPS at $4.20 to $4.40 versus $4.37 estimate.
Superior Offshore (DEEP) announced E. Donald Terry will be Interim President/CEO effectively immediately.
Synta (SNTA) and GlaxoSmithKline (GSK) announced elesclomol for metastatic melanoma was granted orphan drug designation by FDA; SNTA trading up 17%.
Ultralife Batteries (ULBI) received $4.4 million in military battery orders from the U.S. Defense Department.
Verizon (VZ) $0.62 EPS vs $0.62 estimate; added 2 million total net wireless customers; now has over 1 million FiOS TV customers.