Fifth Third gives up on NatCity; airlines ready for detractors; Nymex holders demand more from CME

By Aaron Hochman-Zimmerman

New York, April 16 - Stocks put up a rally day as the opponents of Delta Air Lines Inc. and Northwest Airlines Corp. began sharpening their knives for the deal. Shares of the two airlines continued to slump amidst the lukewarm reception for the long-awaited transaction.

Meanwhile Fifth Third Bancorp and First Charter Corp. both saw their shares rise on the day after their merger was approved by the Federal Reserve, but National City Corp. sank after former potential buyer Fifth Third left it standing in the corner.

Also in finance, Nymex Holdings Inc. stock improved even as a number of its shareholders threatened to torpedo the deal with CME Group Inc. if CME does not raise its share price.

In entertainment, Penn National Gaming Inc. was down despite receiving the approval of the New Mexico Gaming Control Board for its buyout by Fortress Investment Group LLC and Centerbridge Partners LP.

Elsewhere, Take-Two Interactive Software Inc. shares were slightly lower as no shareholder proposals were submitted ahead of the company's annual meeting on Thursday.

The Dow Jones Industrial Average launched up by 256.80, or 2.08%, to 12,619.27, while the Nasdaq Composite Index added on 64.07, or 2.80%, to finish at 2,350.11.

The S&P 500 was better by 30.28, or 2.27%, to close at 1,364.71.

First Charter, Fifth Third look to closing

Shares of First Charter (Nasdaq: FCTR) tacked on $1.43, or 5.04%, to finish at $29.80 as the Charlotte Observer reported that the deal with Fifth Third (Nasdaq: FITB) is expected to close in late May or June.

Shares of Fifth Third improved by $0.84, or 4.36%, to $20.10.

Fifth Third backs off National City

Meanwhile, shares of National City (NYSE: NCC) lost $0.22, or 2.73% to close at $7.85 as Fifth Third is now backing out of a deal to take over the Cleveland-based bank, according to the Wall Street Journal.

Private equity firm Warburg Pincus LLC has backed away from a deal with National City as well, the report said.

Airlines await attacks

Shares of Northwest (NYSE: NWA) continued to sink by $0.73, or 7.10%, to $9.55 while shares of Delta (NYSE: DAL) gave up $0.54, or 5.90% to end the day at $8.62.

Investors again held the deal to create the nation's largest airline under the microscope on Wednesday.

"I think that seems to be route that we're going down now," Paul Martin of Martin Capital Advisors said about an eventual consolidation, despite a mob of detractors who will try to separate the two.

"And that's the problem with consolidation ... There are various parties that may not like it," he said.

"Just from a business standpoint it makes sense, the main point of any business is pricing power," he said, adding: "The airlines really have not had pricing power for many, many years ... and the price of oil continues to go up.

"Now obviously the regulators are not going to be happy about it for the very reason I just mentioned," he said, but "you can't fault the airlines for trying."

Nymex holders threaten deal

Elsewhere, Nymex Holdings (NYSE: NMX) stock was up $1.38, or 1.46%, to $95.60 as a group of shareholders threatened to stop the takeover by the Chicago Mercantile Exchange (NYSE: CME) if its share price continues to drop, the New York Post reported.

CME shares took on $12.41, or 2.56%, to close the session at $496.60.

The group representing about 10% of the equity in Nymex feels the original offer of $11 billion was a fair price, but since the March 17 agreement a decline in CME stock has reduced the value of the offer to closer to $9 billion.

The Post reported that there may be a plan in the works for CME to calm the rabble by launching a share buyback in order to push its stock back to the area of $560.

No shareholder proposals for Take-Two

In technology, shares of Take-Two (Nasdaq: TTWO) dipped $0.15, or 0.57%, to $26.09 as it announced that no proposals were submitted for consideration ahead of its annual shareholder meeting on Thursday.

The software developer is in the sights of fellow gamer Electronic Arts (Nasdaq: ERTS), but has said it will not accept bids until after the release of its hot property, Grand Theft Auto 4, on April 29.

Shares of Electronic Arts were better by $1.14, or 2.24%, to end at $52.02.

Penn wins another approval

In more traditional gaming, shares of Penn National Gaming (Nasdaq: PENN) slid by $1.34, or 3.24%, to $40.05. Its $67 per share takeover by Fortress Investment Group LLC (NYSE: FIG) and Centerbridge Partners LP was approved by the New Mexico Gaming Control Board.

The Ohio Racing Commission, New Jersey Racing Commission and West Virginia Lottery Commission have already approved the merger as well as Penn's shareholders.

The West Virginia Racing Commission is still reviewing the deal.

Shares of Fortress tacked on $0.82, or 6.92%, to close the day at $12.67.

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