It was a mixed day for U.S. equities as many fear higher inflation due to higher wages and falling unemployment rates. The S&P 500 Index gained a fraction of a percent, the Dow Jones Industrial Average lost 0.1% and the Nasdaq Composite gained 0.2%.
Several companies made headlines after the bell Monday and early Tuesday, including Ruby Tuesday, Inc. (NYSE:RT), Valeant Pharmaceuticals Intl Inc (NYSE:VRX) and Moneygram International Inc (NASDAQ:MGI).
Here’s how they did:
Ruby Tuesday, Inc. (RT)
Ruby Tuesday stock skyrocketed on a rumor of a potential sale.
The fast-casual chain restaurant has reportedly been considering selling itself to a larger restaurant operator willing to take over its operations. It is unclear if its business would be restructured, taken apart or kept the same.
Ruby Tuesday added that its comparable sales over the course of its third quarter will decline about 4%, and financial adviser UBS will assist the chain in the process of exploring a sale.
The potential of a sale is all part of a strategic merger and it comes in the heels of a financial period in which the company posted underwhelming results. There’s a pattern at the company of declining sales.
The company had 613 Ruby Tuesday restaurants as of Nov. 26. RT shares grew 19% in premarket trading Tuesday.
Valeant Pharmaceuticals Intl Inc (VRX)
Valeant Pharmaceuticals shares fell as the company lost a major investor.
Billionaire Bill Ackman has sold his entire position in the pharmaceutical giant, according to sources close to the matter in a statement to CNBC. More than 4.2 million shares traded hands during regular trading hours yesterday.
He had 27.2 million shares of VRX stock, which were valued at around $11 apiece, which is considerably less what Ackman and his firm Pershing Square Capital Management paid for the stock ($196 per share) in 2015.
“At its current market value, the Valeant position represented 1.5% to 3% of the various Pershing Square funds; however, the investment required a disproportionately large amount of time and resources,” the firm wrote.
The firm added that Valeant CEO Joe Papa and his team have done what they’ve needed to do to put the company in the right track. VRX stock lost 10% in early trading Tuesday.
Moneygram International Inc (MGI)
Euronet Worldwide, Inc. (NASDAQ:EEFT) revealed today its offer for MoneyGram, sending MGI stock up some 26% in premarket trading, while EEFT wafts 2.6% lower before the bell.
Euronet offered to buy MoneyGram for a price of $15.20 per share, a 15% premium to Alibaba Group Holding Ltd’s (NYSE:BABA) Ant Financial bid of $13.25 and a 20% premium to MGI’s earlier trading range. The bid by Euronet values MoneyGram at more than $1 billion, assuming $940 million of the company’s outstanding debt, while Ant Financial’s bid valued MGI at roughly $880 million.
Unlike the deal with BABA’s Ant Financial, Euronet’s offer is not subject to review by the Committee on Foreign Investment in the United States, which has stymied many Chinese-United States deals.
It’s not the first time Euronet has tried to swallow MoneyGram’s business, which boasts 2.4 billion bank and mobile accounts with as much as 10% of its transactions coming from and through Mexico. EEFT actually originally attempted to buy MGI when MoneyGram sought a sale back in 2013, and again previously in 2008.
The deal is being advised by Wells Fargo, with legal advice courtesy of Gibson Dunn & Crutcher LLP.
As of this writing, Karl Utermohlen did not hold a position in any of the aforementioned securities.
