Nabi up after selling unit to Biotest; United Retail Group soars after Redcats acquisition news

By Sheri Kasprzak

New York, Sept. 11 - Even though merger activity remained light, two transactions moved shares on Tuesday.

Nabi Biopharmaceuticals saw its stock up after it agreed to sell its Nabi Biologics strategic business unit to Biotest AG, a German diagnostic products and pharmaceutical company focused on immunology and hematology.

In other merger news, shares of United Retail Group, Inc. skyrocketed after Redcats USA, Inc. agreed to buy United Retail Group in a $198.9 million deal.

Even though the Nabi and United Retail transaction were prominent in the headlines Tuesday, activity in general was rather light.

"There is activity out there, it's just lighter than usual," said one sell-side trader. "We still are in the middle of the summer season so that has something to do with it."

In other news, mortgage lender Countrywide Financial Corp. watched its shares slide again on continuing reaction to the layoffs announced Friday. Countrywide said late last week that it plans to cut 60,000 jobs.

Mortgage lender Thornburg Mortgage, Inc., however, saw its stock jump on Tuesday after the company was upgraded to buy by UBS.

Nabi's stock climbs

Moving back to Nabi's sale, Biotest AG agreed to buy the Nabi Biologics strategic business unit in a $185 million deal.

The products in that unit include Nabi-HB for hepatitis B, as well as other plasma business assets.

"This agreement definitively puts us on the final path to a successful outcome of our strategic alternatives process," said Leslie Hudson, Nabi's interim president and chief executive officer. "We feel this transaction not only will realize value for Nabi shareholders but also will allow us to build on the promise of our Pharmaceutical SBU pipeline. I am delighted that after the transaction closes our Nabi Biologics and Corporate Shares Services employees will have the prospect of a promising future with Biotest."

By 12:15 p.m. ET, shares of Nabi were up 20.64%, or 71 cents. By the end of the day, the stock had climbed 79 cents, or 22.97%, to finish at $4.23 (Nasdaq: NABI).

Volume was also up with 3,856,078 shares traded compared with the average 464,279 shares.

Shares of Biotest ended the day up €0.22 to close at €34.50.

"With the acquisition of Nabi Biologics, we have found the ideal complement for our European plasma protein business and have become a global player in the industry," said Gregor Schulz, said Biotest's chairman, in a statement.

"We have an immediate share in the highly attractive and growing U.S. plasma protein market and are substantially expanding our capacities, extending our product range and consolidating our clinical development portfolio."

The Pharmaceuticals SBU will now be operated from Nabi's existing Rockville, Md. facility, which will become the new corporate headquarters.

The transaction is expected to wrap up in the fourth quarter.

Boca Raton, Fla.-based Nabi develops drugs to treat immune system diseases, as well as hepatitis, gram-positive bacterial infections and nicotine addiction.

United Retail's stock jumps

In other retail news, Redcats USA agreed to buy United Retail Group in a $198.9 million transaction.

"It seems like a complementary deal," said one sell-side trader. "URGI benefits for certain because this is a huge premium to their stock price and it provides them with a good fit for their business type."

Redcats, a New York-based company that markets apparel and home products through a home shopping network, agreed to pay $13.70 per share, a 23% premium to the 90-day average of United Retail's stock ending Sept. 7. The price is an 82% premium to the company's Sept. 10 closing stock price. United Retail is a retailer of women's fashion apparel based out of Rochelle Park, N.J.

By 12:23 p.m. ET, URG's stock was up 77.35%, or $5.84. The stock went on to gain 78.41%, or $5.92, to end at $13.47 (Nasdaq: URGI).

Volume of United Retail's stock was also up with 6,713,078 shares traded compared with the average 121,557 shares.

Redcats USA is expected to launch a tender offer soon and expects the merger to close by the end of the year.

"We are very pleased to have entered into this merger agreement with Redcats USA," said Raphael Benaroya, United Retail's chief executive officer, in a news release.

"We believe that the combination of our two businesses will create a formidable entity in specialty retail. Our board of directors and management team fully support the transaction and believe that it delivers a high level of shareholder return that is commensurate with our solid business concept and growth strategy. Moreover, the transaction provides a great growth opportunity for our associates."

"This acquisition will strengthen Redcats USA's position in the growing women's plus-size apparel market," said Thierry Falque-Pierrotin, Redcats Group's CEO, in a statement.

"United Retail is complementary to Redcats USA in terms of target customer, and its national retail store base will be additive to our leading positions in the catalog and e-commerce channels."

Countrywide shares slip

In other news, Countrywide Financial's stock continued to fall on Tuesday after Friday's announcement that the nation's largest mortgage lender will lay off about 20% of its workforce.

On Friday, Countrywide said it will cut about 20% of its 60,000 employees in "areas most impacted by lower mortgage market origination volumes.

Countrywide said it plans to lay off between 10,000 and 12,000 employees in the next three months.

In a letter to employees, Countrywide's chairman and CEO Angelo Mozilo and chief operating officer Dave Sambol said the mortgage origination portion of its business would be down 25% in 2008, compared to 2007 levels.

Shares of Countrywide fell by 33 cents, or 1.92%, to end the day at $16.88 (NYSE: CFC). After-hours, the stock climbed by 26 cents.

Another mortgage lender, Thornburg Mortgage actually saw its shares climb on Tuesday after UBS upgraded Thornburg to buy from neutral. Even so, UBS reduced its target price on the mortgage lender to $18 from $27.

UBS said in its report that Thornburg's chances of filing for bankruptcy are slim.

"That's a pretty good vote of confidence in this market when mortgage lenders are filing for bankruptcy every other day," said one sell-side trader. "No wonder their shares are up. It adds some value to the stock."

The sell-side trader also noted that even though volume hasn't been enormously high today, people are buying in.

"It seems like a bargain right now," said the trader of the stock price.

On Tuesday, Thornburg's stock gained $1.08 to end at $13.37 (NYSE: TMA).

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