(AP) - Shares of Nextest Systems Corp. jumped in premarket trading Wednesday
after Teradyne Inc. said it will buy the San Jose, Calif., company, which makes
testing equipment for semiconductor industry.
The $379 million deal comes amid a spate of end-of-the-year buyouts
announced this week. The M&A market has lagged with the credit crunch and market
uncertainty the last few months, and private equity remains on the sidelines,
but companies, especially in the technology and biotech sectors, appear to be
returning to the market for strategic deals.
Teradyne will pay $20 per share for Nextest, a premium of about 67 percent
over Tuesday's closing price of $11.99. Shares jumped $7.66, or 64 percent, to
$19.65 premarket.
Teradyne shares, which closed at $10.98 Tuesday, were not trading in the
early session.
Futures trading and the Nasdaq-100 Premarket Indicator pointed to the U.S.
markets opening higher after taking a tumble Tuesday following a smaller
interest rate cut than investors were hoping for.
Also gaining were shares of Rio Tinto PLC, after BHP Billiton Ltd. again
offered to buy the British miner for $156 billion. U.S.-traded shares of Rio
gained $7.03, to $462 premarket, from their close at $454.97. BHP's U.S. shares
added 92 cents to $76.79, from their Tuesday close at $75.87.
And shares of FuelCell Energy Inc. gained on positive comments from RBC
Capital Markets analyst Stuart Bush following a strong fourth-quarter report and
a new deal with a South Korean company, both announced Tuesday. Bush raised his
price target on the stock to $14, from $12. He praised the Korea deal, and
suggested the Danbury, Conn., company is likely to win "significant contracts"
in the first half of 2008 in its home state as a long-delayed project moves
forward.
"We also view any new taxes on CO2 emissions in Europe or U.S. as
significant upside to the commercial attractiveness of industrial-size fuel
cells," Bush wrote in a note to clients.
Shares gained 25 cents, or 2.2 percent, to $12.10 premarket, from their
close at $11.85 Tuesday.
Banking stocks started the premarket session with more struggles but
regained losses as the regular session neared.
Wachovia Corp. said early Wednesday it would double its expected loan-loss
provision for the fourth quarter, and said the value of its investments backed
by loans fell another $240 million in November. Shares lost nearly 3 percent
from their $41.95 close in early trading before recovering, adding 84 cents, or
2 percent, to $42.79 premarket.
And Bank of America Corp., the nation's largest bank by market
capitalization, said writedowns of its debt-backed investments will exceed the
$3 billion it estimated last month. In remarks prepared for an investor
conference Wednesday, Chief Executive Ken Lewis said, "While we do not make a
practice of forecasting quarterly earnings, I think you certainly can assume
results will again be quite disappointing."
Separately, Merrill Lynch also downgraded the Charlotte, N.C.-based bank to
"Neutral," from "Buy."
Bank of America shares slipped as much as 2.4 percent in early trading, then
turned to add 30 cents to their closing price of $44.65.
Merrill also cut its rating on JPMorgan Chase & Co. to "Neutral," from
"Buy," but shares gained in early trading, adding $1.13, or 2.5 percent, to
$47.07 premarket, from their close at $45.94.
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