Category: Stock Market News

Shares of Starz and Lions Gate Entertainment Corp. soared in premarket trade Thursday, after Lions Gate announced an agreement to buy the subscription video service in a cash and stock deal valued at $4.4 billion. Under terms of the agreement, Lionsgate will exchange $18 a share and 0.6784 of its shares for each Starz Series A share outstanding, and $7.26 in cash and 0.6321 of its shares for each Starz Series B share outstanding. Based on Wednesday’s closing prices, the bid represents a 14% premium to Starz Series A shares. The deal is expected to close by year end. Lions Gate said it plans to fund the cash portion of the deal with a combination of newly issued bank and bond financing. “We expect the acquisition to be highly accretive, generate significant synergies and create a whole that is greater than the sum of its parts,” Lions Gate Chief Executive Jon Feltheimer and Vice Chairman Michael Burns said in a statement. Starz Series A shares ran up 15% ahead of the open, while Lions Gate’s stock soared 9.1%. Bloomberg reported late Wednesday that the companies were in advanced talks to merge.

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ConAgra Foods Inc. shares fell 3.4% in premarket trading Thursday after it reported fiscal fourth-quarter revenue that missed expectations. The food company had net income of $117.6 million, or 27 cents per share, down from $209.2 million, or 49 cents per share, for the same period last year. Adjusted earnings totaled 52 cents per share, meeting the FactSet estimate. Sales for the quarter totaled $2.83 billion, down from $3.13 billion for the same period last year, and missing the FactSet estimate of $2.90 billion. ConAgra reported a loss per share of 7 cents from continuing operations, which the company largely attributed to a charge for year-end re-measurement of pension amounts. The company expects fiscal first quarter 2017 EPS to show double-digit year-over-year growth. The FactSet consensus of 49 cents per share reflects 8.9% EPS growth. ConAgra stock is up 12.9% for the year to date while the S&P 500 is up 1.3% for the same period.

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Hertz Global Holdings Inc.’s stock surged 7.9% in premarket trade Thursday, after the car rental company announced an agreement to supply Lyft’s U.S. drivers with cars, under certain rental agreements. This expands on the deal reached for the Las Vegas and Denver markets in November. Rental rates will be set for Lyft drivers, who can use the cars for both business and personal use. “Utilizing cars that are rotating out of our consumer rental fleet creates a model that works for Hertz and for Lyft drivers by providing them with well-maintained, good condition cars,” said Hertz Chief Executive John Tague. “We consider this agreement to be largely complementary to our car rental business, and it enables us to leverage our fleet and distribution infrastructure to participate in the dramatic growth in the ride sharing, or e–hailing, segment.” Hertz’s stock has tumbled 24% year to date through Wednesday, while the S&P 500 had gained 1.3%.

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Constellation Brands Inc. reported Thursday fiscal first-quarter earnings that rose 33% from a year ago to $318 million, and earnings per share growth of 31% to $1.55. The spirits seller said ‘comparable’ EPS increased 22% to $1.54. The FactSet EPS consensus was $1.52. Sales grew 15% to $1.87 billion, above the FactSet consensus of $1.83 billion, with beer sales rising 19% and and wine a spirits sales increasing 8%. For fiscal 2017, the company expects ‘comparable’ EPS of $6.05 to $6.35, surrounding the FactSet consensus of $6.26. The stock, which was still inactive in premarket trade, has run up 12% year to date, while the S&P 500 has gained 1.3%.

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Boris Johnson, the former mayor of London who supported the “leave” campaign in the U.K.’s referendum on whether to cut ties with the European Union, said Thursday he won’t seek to become the new leader of the ruling Conservative Party. “I have concluded that person cannot be me,” said Johnson during a press conference. Johnson had widely been expected to join the leadership race that would have put him in contention to become Britain’s next prime minister. Britain’s Prime Minister David Cameron, who campaigned to keep the U.K. in the EU, said after his side’s defeat last week that he will resign.

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Wal-Mart Stores Inc. said Thursday that it is introducing Walmart Pay, its mobile pay service, in 11 more states including New York, Pennsylvania, Maryland, and Delaware, and across New England making the service available in more than 500 new stores. Wal-Mart recently added Walmart Pay in stores across Georgia and Alabama. Walmart Pay operates on both Android and iOS, in all checkout lanes, through the retailer’s app. Wal-Mart says more than 20 million people actively use the company’s app each month. Wal-Mart shares are inactive in premarket trading, but up 18.2% for the year so far. The S&P 500 is up 1.3% for the year to date.

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Darden Restaurants Inc. reported fiscal fourth-quarter earnings that rose to $139.6 million, or $1.09 a share, from $105.3 million, or 82 cents a share, in the same period a year ago. Excluding discontinued operations, earnings per share came to $1.10. The FactSet EPS consensus was $1.09. Sales fell to $1.79 billion from $1.88 billion, below the FactSet consensus of $1.82 billion. The restaurant chain operator said the previous year’s sales included an extra week. Same-store sales increased 1.7%, missing the FactSet consensus for a 2.7% rise, with less-than-expected growth at Olive Garden, LongHorn Steakhouse and The Capital Grille restaurants offset better-than-expected growth at Bahama Breeze. For fiscal 2017, Darden expects EPS of $3.80 to $3.90 and same-store sales growth of 1% to 2%, compared with the FactSet consensus for EPS of $3.99 and for same-store sales growth of 2.4%. Separately, Darden said it increased its quarterly dividend by 12% to 56 cents a share, payable Aug. 1 to shareholders of record on July 11. The stock, which was still inactive in premarket trade, has gained 3.7% year to date, while the S&P 500 has tacked on 1.3%.

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KKR & Co. said in its mid-year update on global macro trends, that while it doesn’t expect a recession or a bear market, the investment firm expects “limited upside” and “higher volatility” for financial assets, which would include stocks, than in prior years. Henry McVey, head of KKR’s global macro and asset allocation team, said he longer expects any interest rate increases in 2016. He continues to favor real assets with yield and growth, but also said he believes certain commodities prices are bottoming. “Markets have cut a wide swath so far this year, enticing investors to buy and/or sell often at what was – in hindsight – likely the time to do the exact opposite of what one’s emotional core was suggesting,” McVey said. “We stick to our base case that we remain in an ‘Adult Swim Only’ investment environment, as we see more asynchronous growth ahead.”

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Britain’s Justice Secretary Michael Gove will stand as a candidate to replace David Cameron as leader of the Conservative Party and so become the U.K.’s next prime minister, media reports said Thursday. Gove was previously seen as a potential running mate for fellow Brexit supporter Boris Johnson, the former London mayor seen as a strong candidate to succeed Cameron. “I wanted to help build a team behind Boris Johnson so that a politician who argued for leaving the European Union could lead us to a better future. But I have come, reluctantly, to the conclusion that Boris cannot provide the leadership or build the team for the task ahead,” Gove said in a statement declaring his candidacy, media reports said. Cameron announced he will step down after the U.K. voted to leave the European Union in a referendum last week. The move by Gove is seen as potentially splitting the backing that otherwise would have gone to Johnson. Other Conservative Party politicians to declare they are standing to replace Cameron so far are Home Secretary Theresa May, Welsh Secretary Stephen Crabb and Defence Secretary Liam Fox.

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The People’s Bank of China is willing to allow the yuan to fall to 6.8 per U.S dollar in 2016, Reuters reported Thursday, citing policy sources. The Chinese currency is already at its lowest against the dollar in more than five years, and a further decline to the 6.8 level would represent a drop of 4.5%. With the policy stance, China’s central bank is aiming to help the country’s economy, which has been hit by weak exports and economic growth, the report said.

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