Monday, October 17, 2011

Kinder Morgan, Roche Go Shopping — Monday’s IP Market Recap

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tdp2664 InvestorPlace Investors got an M&A treat Monday that offered two different views of the financial food chain — in the pharmaceutical sector, a big fish ate a little fish, and in the energy sector, a big fish ate … well, another pretty big fish. The big news of the day was the pairing of North America's largest natural gas pipeline operators through Kinder Morgan Energy Partners LP 's (NYSE: KMP ) $21 billion acquisition — announced Sunday — of El Paso Corp. (NYSE: EP ). While natural gas prices have been in retreat — from $4.40 per million Btu (MMBtu) at the end of July to just $3.54 per MMBtu last week — more energy companies are hitting the shale fields to capture what's expected to be a growing source of energy throughout the continent for the next few years. According to Reuters , Kinder Morgan will buy El Paso at a 37% premium to its Oct. 14 value. On the first trading day following the deal, EP stock took a roughly 25% booster shot, from 19.59 at Friday's close to $24.45 at Monday's end. However, El Paso Pipeline Partners, L.P. (NYSE: EPB ) fell 10.05% to $3.82. Everything Kinder shined, with KMP stock ending the day up 5.08% at $75.14, Kinder Morgan Management (NYSE: KMR ) up 5.28% to $65.76 and Kinder Morgan Inc. (NYSE: KMI ) up 4.83% to $28.19. More quietly heralded on Monday was European pharmaceutical giant Roche Holding AG's $230 million purchase of American small-cap Anadys Pharmaceuticals ( NASDAQ : ANDS ). The acquisition was made to bolster the Swiss company's presence in the Hepatitis C medicine market, as well as to help it move into treatment of more widespread diseases. While Roche already produces Pegasys, which totaled $1.5 billion in sales in 2010, Anadys' experimental drug Setrobuvir has shown promise and could be another way to treat the 180 million-plus people globally suffering from hepatitis. Roche, which trades primarily on the SIX Swiss Exchange, was down 0.77% Monday. The real winners were Anadys shareholders, who saw this particular investment gain 253% (to $3.67), just by waking up in the morning. In the run-up to Apple 's ( NASDAQ : AAPL ) earnings report, due out Tuesday after the bell, AAPL shares slid about half a percent to $419.99. This movement came despite a report out Monday that Apple had sold 4 million iPhone 4S units in just three days , crushing even the paces of previous blockbuster sales for the iPhone 3G, iPhone 3GS and iPhone 4. Three Up Walgreen (NYSE: WAG ) was up 2.7% (89 cents) to $33.89. China Unicom (NYSE: CHU ) was up 2.04% (39 cents) to $19.51. Family Dollar (NYSE: FDO ) was up 1.69% (92 cents) to $55.32. Three Down Green Mountain Coffee Roasters ( NASDAQ : GMCR ) was down 10.41% ($9.59) to $82.50. Alcoa (NYSE: AA ) was down 6.63% (68 cents) to $9.58. Research In Motion (NASDAQ: RIMM ) was down 6.55% ($1.57) to $22.40. One Down Late Crocs, Inc. (NASDAQ: CROX ) was down 35.06% ($9.34) to $17.30 in after-hours trading. As of this writing, Kyle Woodley did not own a position in any of the aforementioned stocks.



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