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These 4 Companies May Be Possible Takeover Candidates
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This week has already seen some blockbuster deals announced, and some news that other deals may be falling apart. The gigantic Royal Dutch Shell $70 billion acquisition of natural gas behemoth BG Group got the ball rolling. Soon to follow, Mylan announced a huge $29 billion purchase of Perrigo. These monster deals have investors asking who may be next.
A research note from Credit Suisse cites other chatter that may foreshadow more hot deals to come. With many Wall Street stocks trading near all-time highs, and cash coffers stuffed with retained earnings, many companies have the ability now to make accretive deals.
Here are some possible takeover targets.
ARM Holdings PLC (NASDAQ: ARMH) got a big boost as chatter for a deal with Apple has started making the rounds. Arm totally dominates in mobile devices. In the fourth quarter alone, shipments of mobile processors with ARM-based technology increased 47% from the year-ago quarter. For the full year, mobile units shipped were up more than 20% from the year before. With energy conservation huge in devices, this is the clear leader. Shares closed trading on Thursday at $51.07.
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Hilton Worldwide Holding Inc. (NYSE: HLT) has started to come up in this week’s takeover chatter. There are reports that Chinese investors may be looking to purchase hotel assets and could be interested in a stake in Hilton. The company is expected to have 2014 to 2016 earnings growth of a very solid 21.5%, and it is the world’s largest hotel operator. Hilton recently announced plans to buy San Francisco’s Parc 55 and four other properties for $1.76 billion to help defer capital gains taxes from its sale of New York’s Waldorf Astoria. Shares closed Thursday at $31.10.
Lumber Liquidators Holdings Inc. (NYSE: LL) has been in a swirl of controversy recently, and it is also being swept up in the takeover chatter. Sales at the chain plummeted in the wake of a “60 Minutes” report questioning the health risks associated with its flooring products. The stock caught an upgrade this week from Raymond James that helped to stabilize it some. The thought is a major home improvement company may have eyes on the company. Shares closed most recently at $34.18.
Joy Global Inc. (NYSE: JOY) is the world’s largest maker of underground mining equipment, and it has long been rumored to be a takeover target. Those rumors started to resurface again this week. Last month the company reported adjusted earnings of $0.25 per share in the first quarter of fiscal 2015, down 48.9% from $0.49 per share a year ago. Like many companies in the mining industry, plummeting commodity prices have weighed hard on earnings and revenue. Over the years, everybody from General Electric to Japanese giant Komatsu has been mentioned as possible acquirers. The stock closed Thursday at $39.19.
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Rumors are just that, and there is no guarantee any of these stocks get bought. However, with many companies trying to take advantage of stock price increases to use as currency, do not be surprised to see many big deals continue to hit the tape as 2015 rolls on.
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