PNC, NatCity await Fed blessing; tender for Mentor opens; Rodman & Renshaw sticks to takeover target

By Cristal Cody

New York, Dec. 12 - Clearance from the Federal Reserve Board is the only remaining regulatory hurdle standing in the way of PNC Financial Services Group Inc.'s acquisition of National City Corp., a company spokesman told Prospect News on Friday.

Also on Friday, Johnson & Johnson started its $31 a share cash tender offer for the outstanding shares of Mentor Corp.

Looking ahead to Monday, Rodman & Renshaw Capital Group Inc. plans to keep up the pressure for its $7 a share offer for Cowen Group Inc. with an investor presentation.

Meanwhile Friday, the markets headed into the weekend on a positive note. Investors sent the Dow Jones Industrial Average up 64.59, or 0.75%, to 8,629.68.

The Nasdaq Composite Index rose 32.84, or 2.18%, to end the day at 1,540.72, while the Standard & Poor's 500 Index closed up 6.14, or 0.7%, to 879.73.

PNC closing just steps away

The Federal Reserve's approval is the only remaining regulatory hurdle now that the companies won approval from the Justice Department, PNC spokesman Fred Solomon said.

Pittsburgh-based PNC, which is the first U.S. bank to use money from the government's $700 billion bailout program to make an acquisition, said in October it would buy National City for about $5.6 billion in stock, which values the bank at $2.23 a share.

The Justice Department cleared the acquisition of Cleveland-based National City late Thursday with some conditions, including the sale of 61 National City branch offices in western Pennsylvania.

Solomon said no timetable has been given on the final regulatory decision, but the company expects to close the deal by Dec. 31.

A Federal Reserve spokeswoman said Friday the decision is "pending" but there's no deadline to make a ruling. The board is open through the remainder of the year except for Christmas Day.

PNC shareholders are expected to vote on the deal Dec. 23.

PNC shares rose $2.51, or 5.38%, to close at $49.16 in trading Friday.

National City's stock jumped 14 cents, or 8.14%, to close at $1.86.

J&J tender starts for Mentor

Regulatory or shareholder issues are unlikely to stand in the way of Johnson & Johnson's acquisitions of Mentor Corp. and Omrix Biopharmaceuticals Inc., an analyst said Friday.

Johnson & Johnson opened its $31 a share cash tender offer for Mentor's shares on Friday.

The offer expires Jan. 12.

The $1.07 billion deal is expected to close in the first quarter of 2009.

Closing conditions include clearance from the U.S. Department of Justice.

Mentor shares closed up a penny to $30.65 Friday. The offer is a 92% premium over the breast implant maker's closing stock price on Nov. 28, the last day of trading before the acquisition was announced.

"Mentor's shareholders got a very nice premium, so did Omrix," said Jan Wald, an analyst with the Stanford Group Co. "I don't think they have to worry about shareholder issues. The tenders are going to get made and it'll get done."

Johnson & Johnson expects its $438 million, or $25 a share, acquisition of Omrix Biopharmaceuticals to close this year.

The Israeli General Director of the Antitrust Authority approved the acquisition of Omrix this week, Johnson & Johnson said Thursday.

The approval is one of the conditions of the tender offer, which expires Dec. 23. The bid is an 18% premium over Omrix' $21.16 a share price before the deal was announced Nov. 24.

New York-based Omrix, which has its research and manufacturing operations in Tel Aviv, also must gain approval for the merger by the Investment Center of Israel.

Investors showed their confidence in both deals closing as Mentor and Omrix shares hover near the offer price.

Mentor shares rose a penny Friday to close at $30.65.

Omrix shares closed up 5 cents, or 0.2%, to $24.90.

J&J shares, though, fell $1, or 1.72%, to close Friday at $57.25.

Rodman & Renshaw goes after Cowen

Rodman & Renshaw Capital Group is taking the offer for Cowen Group live on Monday with an investor presentation.

The firm said in a statement Friday that it will offer additional details of the half-cash, half-stock deal valued at about $99.7 million.

Cowen Group already has rejected the offer made public on Dec. 8.

Analysts, though, like the combination under the idea that a much stronger company would emerge.

Rodman & Renshaw's bid is a 20% premium over Cowen's stock closing price of $5.60 on Dec. 1, the day before the firm made the offer directly to Cowen Group's executives.

Cowen shares fell 8 cents, or 1.14%, to close at $6.92 Friday.

Shares of Rodman & Renshaw dropped 3 cents, or 2.68%, to close at $1.09.

Mentioned in this article:

Cowen Group Inc. Nasdaq: COWN

Johnson & Johnson NYSE: JNJ

Mentor Corp. NYSE: MNT

National City Corp. NYSE: NCC

Omrix Biopharmaceuticals Inc. Nasdaq: OMRI

PNC Financial Services Group Inc. NYSE: PNC

Rodman & Renshaw Capital Group Inc. Nasdaq: RODM

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