March 26, 2001
MAINE STOCK TRENDS
American Skiing stock rises on news of merger failure
Copyright © 2001 Blethen Maine Newspapers Inc.
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American Skiing stockholders are on the losing end of this deal (March 19, 2001)
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Management on both sides of the aisle thought it was a great deal. But many of the shareholders, bondholders and bankers disagreed and so the merger between American Skiing Company (SKI-$1.50) and MeriStar Resorts (MMH-$1.80) was called off late last week.
As proposed, the combined company, dubbed Doral International, would have realized several million dollars in cost savings, consolidated debt, significant purchasing power, and the ability to cross sell to one another's customers. Over at MeriStar, a surprise $21.7 million "asset impairment charge" on top of a Q4 loss of $4.1 million loss didn't help the deal along very much. So, as of Friday, the biggest benefit turned out to be that American Skiing's shareholders only got stuck with half of the costs of the merger. Both sides agreed to go home and split the check.
That botched merger translates into a dollar loss of about $38 million in stock market value for the shareholders. Admittedly that's pale in comparison to the half billion dollars or so in stock market value that has been lost in the stock since the 1997 initial public offering. Still, you could buy a lot of lift tickets with that.
After word got around last Friday that the deal was off, the stock managed a rebound of 25 percent for the week. That was hardly comforting for the "common" shareholders, whose stock is still down 45 percent from where it was before management derailed the best rally of the millennium.
I-Many (IMNY-$12.38) might be a good case study for American Skiing management. The Portland company bills itself as the leader in trade relationship management software solutions. The I-Many management team has made several acquisitions that have enhanced the stock price since last summer's $8 I.P.O. One of those was last week. I-Many announced the acquisition of Intersoft International, Inc., a company that it calls, "the leading supplier of sales and marketing automation solutions for the food service broker industry."
For the week, I-Many stock was up 23 percent.
Fairchild Semiconductor (FCS-$15.13) completed the acquisition of Intersil Corporation's discrete power business for approximately $338 million in cash last week. The acquisition moved Fairchild to a position as the second largest power MOSFET supplier in the world, according to the company. That represents a 20 percent share of s $3 billion market — one that grew 40 percent last year.
Fairchild's stock price increased 8.07 percent last week.
Banknorth Group (BKNG-$19.75) finally rolled out its Internet banking product. The product is available to the 1 million-plus households that bank with any of the subsidiary banks. Banknorth stock closed down 1.89 percent for the week.
ImmuCell (ICCC-$2.56) was down 6.82 percent last week. There wasn't any news last week, but there does seem to be selling pressure on the stock as it approaches the $3 per share mark.
IDEXX Labs (IDXX-$21.25) closed down 2.8 percent for the week. But, the real price action took place on Thursday when the stock traded nearly 1.2 million shares and touched a 52-week low of $17.13. No news from the company, but the rumor was that IDEXX would "only" meet its anticipated earnings projections — what's wrong with that in a market like this?
Bangor Hydro Electric Company (BGR-$26.07) declared what will likely be its final common stock dividend. The company intends to pay a cash dividend of $0.20 per share. The dividend is payable April 20, 2001 to stockholders of record at the close of business on March 30, 2001.
Bangor Hydro has all of its approvals except for one to merge with Emera, a Nova Scotia electric utility holding company. The company is awaiting final approval from the Securities and Exchange Commission.
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