September 11, 2000
MAINE STOCK TRENDS
Larger international foods section at Maine supermarkets?
Copyright © 2000 Blethen Maine Newspapers Inc.
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There are two fewer publicly traded Maine companies (September 4, 2000)
New York investment group acquires 5.85% of Bangor Hydro (August 28, 2000) Portland dot-com earns more green, but is still in the red (August 21, 2000)
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Parent, Delhaize Group, announced last week, that it will buy all of the outstanding shares of Delhaize America.
Delhaize America was created during the summer of 1999. It represented the merger of Food Lion and Kash n' Karry supermarkets' stock, and now includes Hannaford Bros. Delhaize America stock began trading just one year ago on September 9, 1999. The stock's all time high, $26.875, was reached on its first day of trading. The stock then reached its all time low, $14.50, just about two weeks after the merger with Hannaford was completed.
The deal calls for all Delhaize America shareholders to receive 0.35 shares of Delhaize Group stock. Delhaize Group, based in Belgium, already owns about 37 percent of the Delhaize America Class A (DZA) (non-voting) stock and about 56 percent of the Delhaize America Class B (DZB-$18.125) (voting) shares.
That represents about 45 percent of the total Delhaize America shares outstanding. The merger would have a value of about $20 per share for Delhaize America shareholders.
The proposed acquisition price gives a value of about $4.4 billion to Delhaize America. Given the price that Delhaize America paid for Hannaford Bros., that leaves a value of less than $ 1 billion for the larger Food Lion and Kash n Karry portions of the company. Analysts say that is a clear sign that Delhaize overpaid for Hannaford Bros. stock last year.
Delhaize expects that the merger will close early next year and that it will add to its earnings beginning in 2001. Delhaize Group's stock is expected to continue to trade on the Brussels Bourse as well as on the New York Stock Exchange as American Depository Receipts (ADRs).
Delhaize operates Hannaford and Shop 'n Save supermarkets in Maine and New England. Maine's other large supermarket chain, Shaw's Supermarkets, is already owned by another European parent, J Sainsbury PLC, of London.
Maine Market Wrap
Well, it's down to the last thirty-seven and a half cents of share price at Auburn's Acadia Group (ANHS-$.375). That represents a further, one-week loss of 40 percent in the company's market capitalization, just in a single week. Last week, the company re-filed its quarterly (10-Q) report with the Securities and Exchange Commission.
Unfortunately, it didn't get any better. The good news is that the lower the share price goes, the bigger the tax write-off for investors who decide to cash in their shares. The recent highflying company traded as high as $9.113 earlier this year.
Bangor Hydro-Electric Company (BGR-$24.19), which is a high-wire company, not a high-flier, filed an 8-K with the Securities and Exchange Commission this week. The special report, which is filed when there is a significant change to a company's business environment, was in reference to losing its largest customer, HoltraChem Manufacturing.
HoltraChem has battled with the Maine DEP over potentially dangerous chemicals that it discharges into Maine waters. Unless a suitable buyer is found, HoltraChem will cease production at its Orrington, Maine facility effective September 15, and will close the facility by mid-October.
HoltraChem accounted for $1.6 million in (transmission and distribution) pre-tax income to Bangor Hydro last year. That represents about 7 percent of Bangor's entire 1999 pre-tax income.
On June 30, 2000, Bangor Hydro announced plans to merge with Emera, Inc, a Nova Scotia utility holding company that was formerly known as NS Power Holdings, Inc. The merger, which is not expected to be affected by the loss of the HoltraChem business, is expected to be completed next year.
When the merger is completed, Bangor Hydro shareholders should receive $26.50 in cash for each of the shares that they own.
UnumProvident (UNM-$22) stock continued to edge up a bit following its late-August announcement to sell an inactive life insurance operation and reinsure some of its business as part of a plan to strengthen its balance sheet and focus on its core disability insurance business. The stock was up 6 percent for the week ended September 8.
Banknorth Group (BKNG-$17.32) stock price is also firming up. For the week ending September 8, Banknorth stock was up 5.31 percent. The stock appears ready to challenge the recent high of $18 that was reached on June 20. That was a result of Standard & Poors announcement to add the company to its Midcap Index.
A Banknorth stock price move above 18 would be bullish and would suggest that the stock price is preparing to challenge its 52-week high of $19.56, which was reached by the former Peoples Heritage Financial Group prior to its acquisition of the former Banknorth Group of Vermont.
Coincidentally, the stock's 52-week low was reached in March 2000, just before Federal examiners wrapped up their pre-merger examination of both banks.
Effective with the merger of the two financial institutions in May 2000, Peoples Heritage Financial Group changed the name of its holding company to that of the company that it acquired, Banknorth Group. In the process it also assumed the Banknorth Group trading symbol.
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