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Morning Commentary: Marriott Vacations active on ILG acquisition; Molina Healthcare up on earnings
By Abigail W. Adams
Portland, Me., April 30 – The convertibles space was quiet early in Monday’s session with the typical volume movers and recently priced paper slow to trade.
However, Marriott Vacations WorldWide Corp.’s 1.5% convertible notes due 2022 and Molina Healthcare Inc.’s 1.125% convertible notes due 2020 and 1.625% convertible notes due 2044 were active.
Marriott’s 1.5% notes dropped about 5 points outright to trade at 105.875 as stock tanked early in Monday’s session. Marriott stock was down 8% to 10% early Monday with stock wavering between $120 and $123 in high-volume trading.
Marriott Vacations announced Monday morning it would acquire ILG Inc. in a cash and stock transaction valued at $4.7 billion, according to a company news release.
ILG shareholders will receive $14.75 in cash and 0.165 of a share in Marriott for each ILG share. Activist investor FrontFour Capital has urged the Miami-based timeshare operator to merge with Marriott since last year, Bloomberg reported.
Molina Healthcare’s convertible notes were making gains alongside stock after the Long Beach, Calif.-based managed care company reported first-quarter earnings prior to the market open Monday, which beat analyst expectations by a wide margin.
Molina’s 1.625% convertible notes rose about 10 points outright to trade at 155.625. Molina’s 1.125% convertible notes due 2020 rose about 12 points to trade just south of 123, according to Trace data. Molina stock was up to $90.50, an increase of 6.58%.
Molina reported earnings per share of $1.64, which beat analyst expectations of 77 cents per share. Molina also increased its 2018 guidance by $1 to $4.24 to $4.74.
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