Category Archives: oud

Priceline CEO Resigns After Inappropriate Employee Relationship

Priceline ( PCLN ) CEO Darren Huston resigned Thursday after an internal investigation into an inappropriate relationship with an employee, but shares were down just a fraction in morning trading. The sudden resignation is effective immediately. Huston resigned without severance and forfeited his unvested stock options, Cowen analyst Kevin Kopelman noted in a research report. Kopelman still rates Priceline stock outperform. Chairman Jeffery Boyd was tapped to lead Priceline as the board searches for Huston’s successor. Boyd served as Priceline CEO from 2002 to 2013 and was succeeded by Huston in January 2014 after a lengthy, planned transition. Booking.com President and COO Gillian Tans was named CEO of that key Amsterdam-based Priceline subsidiary. Boyd initially joined Priceline in September 2011, leaving Microsoft ( MSFT ) to take the Booking.com CEO position. Huston’s resignation stemmed from an independent board investigation into a personal relationship with an employee not under his direct supervision, Priceline said in a statement. “The investigation determined that Mr. Huston had acted contrary to the company’s code of conduct and had engaged in activities inconsistent with the board’s expectations for executive conduct,” Priceline said. Huston acknowledged the conduct and expressed regret, the company said. Priceline stock has risen 14% since January 2014, when Huston took the helm. On the stock market today , Priceline stock was trading up fractionally near 1,348. Shares of rival Expedia ( EXPE ) were up 2.5% Thursday morning, ahead of the company’s Q1 earnings report, due out after the close. Priceline is slated to report Q1 earnings before the open on Wednesday and is expected to post $2.12 billion in sales and $9.65 earnings per share minus items, up 15% and 19%, respectively, vs. the year-earlier quarter. Kopelman foresees minimal disruption stemming from Huston’s exit, but he notes that Priceline could have opened itself up to potential litigation. “It is difficult to gauge this risk, given details of Huston’s misconduct were not disclosed,” Kopelman wrote. “However, Priceline has commented to media outlets that the misconduct did not involve the company’s financial reporting or controls.” Indeed, Priceline spokeswoman Leslie Cafferty told IBD via email: “This did not involve issues about the company’s financial statements, accounting or internal controls over financial reporting. This resignation was not related in any way to the company’s operational performance or financial condition.” RBC analyst Mark Mahaney reiterated his outperform rating on Priceline stock. Boyd’s return will provide “continuity, experience and leadership,” he wrote in a report. Tans’ role as Booking.com CEO is also a key positive, he said. Priceline’s fundamentals remain strong, Mahaney said. “These trends constitute one of the most robust growth and profitability profiles across the Internet sector,” he wrote.

Abbott Boosts Cardio Device Business With $25 Billion St. Jude Buy

Two giants in cardiac devices agreed to merge Thursday, as Abbott Laboratories ( ABT ) announced an agreement to acquire St. Jude Medical ( STJ ) in a deal worth $25 billion. Abbott agreed to pay $46.75 plus 0.8708 Abbott share for every St. Jude share. Based on Abbott’s five-day average share price, the deal valued St. Jude shares at $85 apiece. St. Jude stock was up more than 25% in morning trading on the stock market today , near 78, while Abbott stock was down more than 7%, below 41. Abbott said that the deal will add 21 cents to its EPS next year and 28 cents the following year. It expects to save $500 million in costs from the combination by 2020. Abbott will also assume or refinance St. Jude’s $5.7 billion in debt. The move will greatly enlarge Abbott’s cardiovascular device business, which now represents 19% of its revenue. “St. Jude Medical’s strong positions in heart failure devices, atrial fibrillation and cardiac rhythm management complement Abbott’s leading positions in coronary intervention and transcatheter mitral repair,” said Abbott’s press release. “Together, the company will compete in nearly every area of the cardiovascular market and hold the No. 1 or 2 positions across large and high-growth cardiovascular device markets.” Leerink analyst Danielle Antalffy agreed. St. Jude’s flat-to-negative sales growth over the last few years picked up to 8% in Q1, and she wrote in a research note that it’s set up to continue, while Abbott looked to be growing only in the low single digits. Antalffy also wrote that a competing bid is unlikely. “The most logical buyer beyond Abbott in our view would be Johnson & Johnson ( JNJ ),” Antalffy wrote. “In our meetings with J&J in mid-2015, management emphasized that the company is not interested in what they deemed ‘value’ markets within MedTech, specifically calling out cardiac rhythm management (nearly 30% of St. Jude’s total sales) and drug-eluting stents.” The deal announcement came on a busy day for M&A in medical field. Biotech Medivation ( MDVN ) confirmed that it had received an unsolicited $9.3 billion bid from big pharma Sanofi ( SNY ), while AbbVie ( ABBV ), which used to be Abbott’s biopharma division before it was spun out, agreed to buy another cancer-focused biotech, Stemcentrx, for $5.8 billion.

Comcast Buys DreamWorks, Content Provider To Netflix, Amazon

Comcast ( CMCSA ) on Thursday agreed to buy movie studio DreamWorks Animation ( DWA ) for $3.8 billion in cash, or $41 per share, adding to its NBCU Universal media and entertainment properties. DreamWorks Animation stockholders will receive $41 in cash per share. DreamWorks stock spiked on Wednesday after multiple reports of Comcast’s interest surfaced. The deal will boost Comcast-NBCU’s presence in China. Comcast will also retain control of DreamWorks’ AwesomenessTV, which develops short-form video for millennials, those ages 18 to 34. Verizon Communications and Hearst in early April acquired a 24.5% stake in AwesomenessTV for $159 million. DreamWorks CEO and co-founder Jeffrey Katzenberg will become chairman of DreamWorks New Media, which will include Awesomeness TV and Nova, a 3D visualization technology startup. The acquisition is expected to close by year-end, said Comcast. Comcast stock was up a fraction in the stock market today , near 61.50. DreamWorks stock was up 24%, near 40. “The biggest reason (for Comcast) to buy DreanWorks is to secure content supply,” said Evan Wingren, an analyst at Pacific Crest Securities, in a research report. “Comcast has a dominant position in live video distribution, but has fallen behind Netflix ( NFLX ) and Amazon ( AMZN ) in on-demand. By securing a pipeline of children’s television content and library films, it could bolsters its on-demand catalog in an effort to compete with Netflix.” DreamWorks has developed TV shows for Netflix and Amazon.com’s Prime streaming service. Comcast acquired NBCU from General Electric ( GE ) in 2011. Aside from Universal Films, Comcast owns Focus Features and Illumination Entertainment, the latter of which developed the “Minions” movies. DreamWorks’ most popular movie franchises include “Shrek,” “Madagascar,” “Kung Fu Panda ” and “ How to Train Your Dragon.” There’s optimism, analysts say, for the upcoming “Despicable Me 3” and “The Secret Life of Pets.” Theme parks have become a key part of Comcast’s overall growth. In a research note, Bryan Kraft, an analyst at Deutsche Bank, said the Dreamworks acquisition “expands NBCU into animation in a more meaningful way, increases the intellectual property pipeline for theme parks and consumer products, and increases Universal Studios’ exposure to tent pole global film franchises. It also diversifies Comcast away from a more mature U.S. media/television industry.” Comcast-NBCU is building a $3.3 billion theme park in Beijing with local investors. It’s slated to open in 2019. The Oriental DreamWorks movie studio, meanwhile, is building a headquarters and entertainment center in Shanghai with local partners.