B of A, Countrywide still seen on track; Roche to buy Ventana; Quebecor files; Ambac hunts for cash

By Aaron Hochman-Zimmerman

New York, Jan. 22 - Much of the investment world spent the day planning and pondering after Monday's severe losses in the global markets.

The emergency 75 basis point rate cut from the Federal Open Market Committee helped remove the look of horror from investor's faces and also kept the Dow Jones Industrial Average from ending any lower than 11,971.19, a 128.11 or a 1.06% loss.

"The day was very positive, given the outcome," an investor said about the modest losses in the stock markets.

The Nasdaq and S&P 500 lost approximately 2% and 1% respectively, "I'll take that," he said.

Still, the market turmoil did manage to weaken the hunger pangs for new deals.

"I'm just trying to digest all the macro stuff," the investor said.

"It only makes it better for future loans," a trader said about the Fed's rate reduction, adding that any deal which was held up for the lack of financing will likely have more success with lower borrowing rates.

Where lenders are concerned, the terms of the deal between Countrywide Financial Corp. and Bank of America Corp. have not changed despite concerns that their merger may be delayed past the second half of 2008.

The now double-A Ambac Financial Group, Inc. is considering "a number of potential parties" as sources for financing.

Bank of America, Countrywide deal stands

Bank of America's deal to acquire Countrywide in the second half of 2008 will go on as planned, for now, a trader said.

"There have been some pretty decent comments," he said. "Currently that's still the way it's supposed to be ... most likely the second half."

Shares of Countrywide (NYSE: CFC) have dropped to $5.32 since the deal was announced, but the losses were dismissed as just "typical market noise," said Countrywide's chief financial officer Joe Price during Tuesday's earnings call, a market source said.

Bank of America's shares (NYSE: BAC) closed the hectic day of trading at $37.39, lower by $0.07 or just 0.19%.

Alliance speculation continues

Last week's whispers that Blackstone Group or lead bank Credit Suisse would give up on or attempt to renegotiate the $7.8 billion, $81.75 per share LBO of Alliance Data Systems Corp., left its stock price damaged to the tune of 16%.

According to Alliance's most recent press release, the terms of the deal have not changed, but "that one is so hairy, you hear something every other day," a trader said about the deal.

The stock (NYSE: ADS) hit a low of $54.43 during the day, but came back in the afternoon to finish at $60.29.

Roche reaches deal with Ventana

Switzerland's Roche Holdings struck a deal with Ventana Medical Systems Inc. to buy the Arizona-based pharmaceutical firm for $89.50 per share, according to a Roche press release.

The $3.4 billion price tag comes at a 4.9% premium to Ventana's Jan. 18 closing price.

"Our combined company will be uniquely positioned to further expand Ventana's business globally and together develop more cost-efficient, differentiated and targeted medicines," said Franz Humer, Roche's chairman and chief executive officer in the press release.

Under Roche, Ventana will remain in Arizona and chief executive officer Christopher Gleeson will not be replaced.

"They've been bidding since last summer," a trader said about the deal which was originally proposed at $75 per share in June of 2007.

"There really wasn't much to it," he said.

"If they're going to get that ... why not take it?" he asked, considering the broader market picture.

Ventana's stock (Nasdaq: VMSI) finished up $3.71 at $89.04.

Quebecor World files for bankruptcy protection

Canadian printer Quebecor World Inc. filed for protection from its creditors under the Canadian Companies Creditors Arrangement Act and Chapter 11 in the United States, according to a company press release.

Quebecor has also arranged for $1 billion in financing from Credit Suisse and Merrill Lynch.

"These steps allow the company to continue operating as a going concern for the benefit of all those affected including our many loyal employees, customers and suppliers," said chief executive officer, Jacques Mallette in a press release.

Industry pressure, largely from Europe, along with the company's inability to raise money contributed to the filing, Mallette added.

Ernst & Young Inc. will serve as a court-appointed monitor, a market source said.

Quebecor World's stock (NYSE: IQW) lost more than half its value, dropping $0.1881, or 58.22%, to end at $0.1350.

Ambac looks for cash after loss

Ambac's $3.26 billion loss equivalent to $31.85 per share left it in need of funding.

Rumors held that the help may come from New York State.

A market source said that New York's Insurance Superintendent Eric Dinallo suggested the state is monitoring the suffering bond insurers and is consider a cash injection to keep them upright.

"It's not surprising ... that makes sense," an investor said.

"The money could potentially come from investment banks," a market source said.

"Those are the ones who stand to lose the most," he said.

Ambac said it is evaluating a number of different financing possibilities, he added.

The embattled insurer's shares (NYSE: ABK) were up $1.77, or 28.55%, in trading Tuesday to close at $7.97.

Getty Images for sale

Getty Images Inc. put itself in the window marked 'for sale' with a price tag of $1.5 billion, according to a press release.

The Seattle-based stock photography firm did not offer a schedule for the release of further information about the sale, but the company will announce its fourth quarter earnings on Jan. 31.

Goldman Sachs will act as Getty's financial advisor.

The stock (NYSE: GYI) jumped $2.81, or 12.81%, to finish the session at $24.75.

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