It was a quiet start to the week for stocks as investors appeared pensive about what could come of the Federal Reserve’s meeting in Jackson Hole, Wyoming, later this month. Oil declined while Treasuries rose.
The S&P 500 lost 0.06% while the Dow Jones Industrial Average shed 0.12%. The Nasdaq Composite was a bright spot with a gain of 0.12%.
On a subdued day for stocks, Intersil Corp (NASDAQ:ISIL), Medivation Inc (NASDAQ:MDVN) and United States Steel Corporation (NYSE:X) offered excitement and big gains.
Intersil Corp (ISIL)
Shares of semiconductor maker Intersil Corp surged 19.8% on more than 10 times the average daily volume following news that Japan’s Renesas Electronics is nearing a deal to acquire ISIL for $3 billion.
“Renesas chief financial officer Hidetoshi Shibata said the company began allocating billions of dollars last year to defending its industry lead against growing competition,” according to CNBC.
The Renesas deal for ISIL is expected to be finalized by the end of August. ISIL customers include automotive and aerospace firms, indicating that Renesas is looking to firm up its automotive business via the deal for Intersil.
Medivation Inc (MDVN)
Medivation Inc shares spiked 19.7% on more than 20 times the normal turnover on news that Pfizer Inc. (NYSE:PFE) is acquiring MDVN for $14 billion. Pfizer, a member of the Dow Jones Industrial Average, is using the acquisition of MDVN to bolster its lineup of cancer treatments.
Pfizer is offering $81.50 per share for MDVN, a premium of 21% to where the stock closed last Friday. If the deal is not completed, Pfizer would be obligated to pay Medivation a breakup fee of $510 million.
“Pfizer said the deal would add 5 cents to earnings in the first full year after closing and isn’t expected to affect its 2016 financial guidance. Pfizer said it plans to finance the transaction with its cash holdings,” according to the Wall Street Journal.
The deal is expected to close in the current quarter or next quarter. Medivation was a sought-after takeover target because its Xtandi treatment is already on the market and generating significant revenue.
United States Steel Corporation (X)
United States Steel gained 2.8% after Citigroup initiated coverage of the stock with a “buy” rating. Citi said X is its top pick in the steel group.
“Steel equities have rallied 35% YTD but we believe there is more room to run with US steel producers entering a period of extended profitability supported by flat steel prices…,” said Citi in a note posted by Barron’s.
Citi also initiated coverage of X rival Steel Dynamics, Inc. (NASDAQ:STLD) with a “buy” rating.
At the time of this writing, Todd Shriber did not own any of the aforementioned securities.
