August 14, 2000
MAINE STOCK TRENDS
Texas investment group takes majority position in American Skiing
Copyright © 2000 Blethen Maine Newspapers Inc.
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It's decision time for Hannaford investors (August 7, 2000)
Some Maine investors smile, despite down week for the overall market (July 31, 2000) Maine companies begin to report Q2 results (July 24, 2000)
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Oak Hill agreed to purchase the third portion of a piece of debt financing for American Skiing’s real estate subsidiary, American Skiing Company Resort Properties Inc. The terms of the financing required that the Newry, Maine resort owner syndicate the Fleet financing with other investors in order to reduce the Bank’s risk to American Skiing.
Oak Hill also announced that it would make an additional payment of $ 2 million to American Skiing Company. In return, Oak Hill will receive warrants in American Ski. The warrants give Oak Hill the option to purchase 6 million additional shares of SKI common stock for $2.50 per share.
Combined with its existing holdings, the warrant deal effectively gives the Texas investment group a majority ownership in SKI. In addition, it was given the right to name a majority of the board of directors of American Skiing Company. Previously, founder Les Otten named one third of the board, Oak Hill named one third, and a third was named through the mutual agreement of both parties.
The warrants that Oak Hill will receive will be newly issued and will further dilute existing SKI shareholders. Even so, the stock moved up 8.57% for the week as investors took comfort in Oak Hill’s continued commitment to the Company.
That was good enough to make American Skiing the top performing Maine stock for the week ended August 11. That just goes to show that little things can mean a lot for a $2.00 stock.
Speaking of lower priced stocks, on the downside, Acadia Group (ANHS-.8125) fell 35% for the week, on top of a 37.5% drop in the prior week. The Auburn-based company has been operating without a CEO since John Holt, who joined the company earlier in 2000, tendered his resignation on August 2. Acadia provides accounts receivable and billing assistance for doctors’ offices and hospital-based medical practices in New England. The stock traded as high as $9.125 earlier this year.
UNUMProvident (UNM-22.0625) released its second quarter results Wednesday afternoon. Although the $.59 per share earnings were pretty much in line with analysts’ estimates, there was concern as the group disability product line’s revenues continued to fall from last year. The Company’s long term care line experienced higher than expected claims losses.
In addition, during the analysts’ conference call Thursday, the Company warned that heavy competition in its employee benefits business could present challenges in the future. On the day that Q2 results were released, the disability insurer’s stock moved up to trade as high as $24.6825.
The earnings results were not released until after the market closed. When the stock opened the next day, the price fell as much as 20% to a low of $20.6875, before closing down 6.12% for the week.
Maine’s newest IPO, I-MANY (IMNY-12.5), fell 13% for the week as tech stocks continued their yearlong weakness.
Among Maine banks, Bar Harbor Bankshares (BHB-15.625) had a good week. The stock moved up 7.76% and was the week’s second-best performing Maine stock behind American Skiing. There wasn’t any news behind the move in BHB stock other than that the board declared a $.12 quarterly dividend.
On August 3, Northeast Bank (NBN-8.3125) reported that its fiscal year (ending June 30) earnings increased 36% on diluted shares. “Diluted shares” or “diluted earnings per share” are earnings on the fully diluted amount of shares (i.e. after all stock options and other securities that can be converted into common stock have been exercised). When Northeast’s stock traded this week for the first time since the year-end results were released, the price moved up less than 1% for the week.
On the other hand, First Coastal Corporation (FCME-8.375), the parent company of Coastal Bank, moved up 4.69% last week as it reported lower second quarter earnings. Net interest income, which a good measure of a bank’s core earnings, actually moved up for the quarter and six-month periods. Holding company assets at First Coastal moved above $200 million as of June 30. Coastal Bank also announced plans to open a new branch in Falmouth later this year.
Union Bankshares and Mid-Coast Bancorp (MCBN-15.563) moved a step closer to their proposed merger. Shareholders at both bank holding companies met on August 3 and approved the merger. Later this quarter, Mid-Coast is expected to be merged into Union Trust Company of Ellsworth. Mid-Coast shareholders will receive $15.875 in cash for each share that they own.
Here’s one final note on the subject of merging companies. Now that Hannaford Bros. Co. has been merged into Delhaize America (DZA-15.625), the allocations were announced for Hannaford shareholders this past week. Those Hannaford shareholders that opted to receive “all cash” will receive 88% cash and 12% stock in Delhaize.
Brad McCurtain is president of Maine Securities Corporation. Maine Securities Corporation is an investment firm specializing in Maine's securities. From time to time, the corporation, its employees, and its clients may buy, hold, and/or sell positions in companies mentioned herein. As a regulated securities broker/dealer, the company and its employees are required to abide by all securities regulations at all times when communicating with the public. Brad McCurtain may be reached at info@MaineSec.com. Web site: http://www.MaineSec.com