Omniture shares edge past bid; legal OKs likely for Pilgrim buy; Hi-Shear's stock soars on bid

By Cristal Cody

Tupelo, Miss., Sept. 16 - Shares of Omniture, Inc. on Wednesday edged past Adobe Systems Inc.'s buyout offer of $21.50 a share in cash, though no counter bids are immediately expected, an analyst told Prospect News.

In other situations, Pilgrim's Pride Corp.'s plan to sell a 64% stake in the reorganized company after it emerges from Chapter 11 bankruptcy for $800 million to Brazilian beef and pork producer JBS SA should pass U.S. antitrust concerns, a company source told Prospect News on Wednesday.

Also on Wednesday, shares of space and defense company Hi-Shear Technology Corp. jumped 58.33% after the company announced a proposed takeover by U.K.-based Chemring Group plc for $132 million in cash.

Meanwhile, stocks made a comeback on Wednesday.

"Equity markets remained strong into the close, with most of the indices closing at daily highs," a market observer said. "Although we are worried this market has gotten much ahead of itself, market action has been impressive as every dip seems to find new buyers."

The Dow Jones Industrial Average gained 108.30 points, or 1.12%, to close at 9,791.71.

The Standard & Poor's 500 index closed up 16.13 points, or 1.53%, at 1,068.76, while the Nasdaq Composite index added 30.51 points, or 1.45%, to finish at 2,133.15.

Adobe pays premium

Omniture shares closed up $4.55, or 26.29%, on Wednesday at $21.88, near the stock's 52-week high of $22.45 a share.

Adobe's offer of $21.50 a share in cash represents a premium of 24% over Omniture's closing stock price on Tuesday.

"It's a significant premium to where the stock has been, and it's a healthy valuation," Steven Frankel, an analyst with Brigantine Advisors LLC, told Prospect News on Wednesday. "Adobe's bid is the only bid on the table right now, so we'll have to wait to see if there's another one."

Even with the premium, Adobe's combination with Orem, Utah-based Omniture, which produces online business platforms, makes strategic sense, Frankel said.

"The deal will be accretive, and that's one of the key tests," he said.

San Jose, Calif.-based Adobe said after the markets closed on Tuesday that the $1.8 billion cash acquisition will be accretive to its fiscal 2010 non-GAAP earnings. Adobe expects the transaction to transform e-commerce and broaden the Photoshop software maker's reach and market.

Adobe on Tuesday also reported that fiscal third-quarter earnings fell to $136 million, or 26 cents a share, from $191.6 million, or 35 cents a share, in the same period a year ago. Revenue fell to $697.5 million from $887.3 million.

Adobe expects the acquisition of Omniture to close in the fourth quarter.

The deal is subject to regulatory approvals. Company representatives did not return calls for additional information.

Adobe shares lost $2.27, or 6.37%, to close at $33.35.

Brazil gets cut of U.S. chicken

Under Pilgrim's Pride reorganization plan, shareholders will be left with a 36% ownership. Existing stock will be canceled and shareholders will receive an equal number of new shares, Pilgrim's said in a statement Wednesday.

Pilgrim's Pride filed for bankruptcy in December 2008 in the U.S. Bankruptcy Court for the Northern District of Texas.

"We believe our reorganization plan will pave the way for Pilgrim's Pride to emerge from bankruptcy before the end of the year and mark a new beginning for this proud company, one that I fully support and endorse," Lonnie "Bo" Pilgrim, senior chairman, said in a statement.

Pittsburg, Texas-based Pilgrim's Pride operates chicken-processing plants and prepared-foods facilities in 12 states, Puerto Rico and Mexico.

JBS, the world's largest beef producer and exporter, has plants in Brazil, Argentina, the United States, Australia and Italy.

"As a U.S. beef and pork company, we are proud to now enter into the U.S. poultry industry with the acquisition of Pilgrim's Pride," Wesley M. Batista, president and chief executive officer of JBS USA Holdings, said in a statement. "As we have accomplished with our beef and pork platforms, we will utilize our existing assets and strong management to grow Pilgrim's poultry business."

JBS acquired U.S. beef and pork producer Swift & Co. in 2007 and bought Smithfield Food Inc.'s beef operations in 2008.

Earlier this year, JBS abandoned a proposal to acquire U.S. National Beef Packing Co. after federal and state antitrust challenges.

The acquisition of Pilgrim's stock also requires antitrust reviews, but no regulatory problems are expected, a company source told Prospect News.

Since JBS doesn't "have poultry, we don't expect it to be an issue," a Pilgrim's representative said.

JBS did not return a call for additional comment.

Pilgrim's Pride shares jumped 58 cents, or 11.55%, to close at $5.60.

Defense companies to merge

Shares of Hi-Shear gained $6.93, or 58.33%, to close Wednesday at $18.81, still slightly shy of the buyout terms.

Under the proposal, Chemring will pay $19.18 a share in cash, which represents a premium of 61.4% over Hi-Shear's closing stock price of $11.88 on Tuesday.

Hi-Shear's board said it approved the offer in part because of the recommendation from the special committee, which was established to consider strategic alternatives for the Torrance, Calif.-based company.

The deal must be approved by Hi-Shear shareholders and receive clearance under the Hart-Scott-Rodino Antitrust Improvement Act of 1976.

Chemring provides products and decoy countermeasures to the defense, security and safety markets.

The deal is expected to close in the fourth quarter.

According to a form 8-K regulatory filing with the U.S. Securities and Exchange Commission on Wednesday, the transaction includes a $4 million termination fee.

Shares of Chemring fell 0.71% to 2,305.42p.

Mentioned in this article:

Adobe Systems Inc. Nasdaq: ADBE

Chemring Group plc London: CHG

Hi-Shear Technology Corp. NYSE Amex: HSR

Omniture, Inc. Nasdaq: OMTR

Pilgrim's Pride Corp. Pink Sheets: PGPDQ

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