Northern, WI 1/7/2013 (BasicsMedia) – Buyouts are quite often the cause for large gains and large drops in share prices. One such company experiencing a loss today is Illumina (ILMN) which is down some 9% in early trading. This came after news from Roche‘s (RHHBY) chairman declaring the company was “off the table” as a buyout target. Meanwhile, Illumina made another buyout of its own.
Over the weekend, SonntagsZeitung “which is a Swiss newspaper” published an interview with Franz Humer in which the chairman said merger negotiations had broken down because of price. Illumina turned down Roche’s $6.8 billion bid last April, but last month it went up on rumors that a new deal had been made. But Humer said Illumina’s leaders came in with a fairly unrealistic price. In an email to clients, ISI Group analyst Ross Muken said this wasn’t a big surprise, as Roche isn’t normally willing to put down big money for market leaders. “That being said, we do not believes this precludes Roche from returning to Illumina as a targeted asset in the future”
Down some 17% this morning is ITT Educational Services Inc. (ESI). The downward move has come on the news that ITT Educational will pay some $46 million to settle a loan dispute with Sallie Mae.
Sallie Mae filed a lawsuit in July 2011 alleging that ITT breached the terms by failing to pay some due amounts under the agreement signed in July 2007. The payment will be made by Jan. 29.
Last week we reported that SunPower Corporation (NASDAQ: SPWR) stock took off on news that MidAmerican Solar which is a Berkshire Hathaway (NYSE: BRK-B) subsidiary, purchased the 579-megawatt Antelope Valley Solar Projects. That news certainly helped the stock of the struggling solar module market as it went up some 40% Last Thursday. But what goes up must come down, or so they say. The big question here is whether this will help or hinder the company, or is it just name recognition becoming the driving force behind the movement? If you are an investor you can take a look at what the group owned by famed investor Warren Buffett did with FirstSolar (NASDAQ: FSLR) at the end of 2011, then make up your own mind, but for the day SunPower is down about 10%.
Disclaimer: We have no position in any stock mentioned here.