BlackRock CEO hints at deals; regulatory reviews to stay on track during leadership confirmation process

By Cristal Cody

New York, Jan. 21 - BlackRock Inc. chief executive officer Laurence Fink hinted at future deals in a statement on earnings Wednesday, though at least one market observer considers the company already well positioned.

In other deal activity, Blackberry maker Research In Motion Ltd. withdrew its C$1.50-a-share hostile takeover offer for Certicom Corp.

Moving to regulatory news, new leaders of the Justice Department and the Federal Trade Commission's antitrust division must be chosen and then confirmed by the Senate. The process will not impact reviews of current deal proposals, a Justice Department spokesman told Prospect News on Wednesday.

Meanwhile Wednesday, the blue chips and broader indexes made a comeback on a strong gain in banking stocks.

The Dow Jones Industrial Average rose 279.01 points, or 3.51%, to close at 8,228.10.

The S&P 500 added 35.02 points, or 4.35%, to finish at 840.24, and the Nasdaq Composite index rose 66.21 points, or 4.6%, to 1,507.07.

BlackRock to invest for future

In a statement about earnings on Wednesday, BlackRock CEO Fink hinted at future deals.

"I believe that industry consolidation will accelerate and that BlackRock will have meaningful strategic opportunities," he said. "I know that BlackRock's management team will exercise sound judgment in adapting to the current environment, while continuing to invest for the future."

BlackRock said that fourth-quarter net income fell 84% to $53 million, or 40 cents a share, from the same period in 2007 and revenue slid 26% to $1.06 billion.

Roger Smith, an analyst who follows the company for Fox-Pitt Kelton, said the industry is expected to consolidate as smaller players find it more difficult to compete.

BlackRock probably will not undertake many acquisitions in the near future, he said.

"It would have to be the right thing at the right time," Smith told Prospect News. "Right now, I think they're pretty well positioned in dealing with their clients."

Shares of BlackRock gained $5.06, or 4.89%, to close at $108.50 Wednesday.

Blackberry maker cancels Certicom bid

Research In Motion said it withdrew its C$1.50-a-share hostile takeover offer for Certicom because conditions could not be met after a decision on Monday by the Ontario Superior Court of Justice.

Research In Motion made the unsolicited C$66 million bid for Certicom on Dec. 3.

Certicom asked for an injunction to stop the deal on the grounds Research In Motion violated a 2007 nondisclosure agreement and used proprietary information to make the offer.

U.S.-listed shares of Research In Motion rose $2.98, or 5.97%, to close Wednesday at $52.91.

Certicom's stock, traded on the Toronto exchange, closed unchanged at C$1.70.

A market analyst said Wednesday that the deal really is a non-issue.

"It was a very minor acquisition that they would just bring in for cash. It was not very important in our analysis," he said. "Some acquisitions destroy value and some acquisitions create value. This was neither."

Regulatory reviews to stay on track

The assistant attorney general for antitrust issues for the Justice Department and the chairman of the Federal Trade Commission must be confirmed by the Senate.

"We would hope that process can take place as quickly as possible," Justice Department spokesman Gina Talamona said. "We have matters that are ongoing."

In the meantime, "We have an acting assistant attorney general for the antitrust division in place, Scott Hammond, who is going to continue to enforce the antitrust laws," she said.

Federal Trade Commission representatives did not immediately return a message for comment.

Current deals under review by the Justice Department and the Federal Trade Commission include Exelon Corp.'s hostile takeover bid for NRG Energy Inc. The exchange offer of 0.485 of a share of Exelon stock for each share of NRG stock expires on Feb. 25.

Exelon shares rose 50 cents, or 0.95%, to $53.13, while NRG's stock rose 26 cents, or 1.16%, to $22.66 in trading Wednesday.

The Federal Trade Commission has opposed Whole Foods Market Inc.'s 2007 acquisition of Wild Oats Markets Inc. A process currently is under way by the commission to determine whether the $565 million deal violated antitrust law. Shares of Whole Foods gained 36 cents, or 3.21%, to close Wednesday at $11.58.

Also under Justice Department review is AT&T Inc.'s acquisition of Centennial Communications Corp.

Centennial said in a regulatory filing earlier this month that the Justice Department made a second request in December for information on Centennial's wireless operations in Louisiana, Mississippi, Puerto Rico and the U.S. Virgin Islands.

Centennial Communications shareholders will vote Feb. 24 on whether to accept the $8.50-a-share cash buyout by AT&T.

AT&T's stock rose 77 cents, or 3.08%, to $25.79 Wednesday, while shares of Centennial Communications rose 3 cents, or 0.37%, to $8.16.

Mentioned in this article:

AT&T Inc. NYSE: T

BlackRock Inc. NYSE: BLK

Centennial Communications Corp. Nasdaq: CYCL

Certicom Corp. Toronto: CIC

Exelon Corp. NYSE: EXC

NRG Energy Inc. NYSE: NRG

Research In Motion Ltd. Nasdaq: RIMM

Whole Foods Market Inc. Nasdaq: WFMI

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