With Wall Street confidence rising and credit markets loosening up, the 2011 outlook for mergers and acquisitions is good.Morningstar released a list of companies that are most likely to be targets of takeovers (via Dian Chu).
Most are mid-cap companies in the energy and biopharma sector, but retailer American Eagle Corp and large-cap Georgia lender SunTrust Bank make the list too.
Market cap: $7.1 billion
1-year performance: +0.57%
Short interest: N/A
A Swiss biopharmaceutical company, Actelion's stock fell in 2010 after the company's clinical trials didn't make much headway. Amgen Inc. a California based bio-tech company made a bid for Actelion last year and it was reported that Bristol-Myers Squibb Co., Roche Holding AG, and GlaxoSmithKline PLC were also interested in acquiring the company.
Market cap: $2.8 billion
1-year performance: -1.30%
Short interest: 7.73%
The American retailer with an attractive valuation and no bank debt has been a target of takeover rumours for a while. It was reported that private-equity firms like Blackstone Group were interested in acquiring the brand.
Market cap: $5.2 billion
1-year performance: +2.82%
Short interest: 18.54%
The American wireless internet service provider has received multiple offers for a takeover but isn't expected to announce a deal till 2Q. The company reported a 4Q loss and is looking to boost its capital. BTIG research analysts think Sprint, which owns 54% of CLWR, will make a $15 a share offer in the next 6 months.
Market cap: $2 billion
1-year performance: -5.69%
Short interest: 5.55%
A healthcare and bio-pharmaceutical company with low valuation and high-profit margins is an attractive purchase for potential buyers. Roche, Sanofi-Aventis and AstraZenec have been names as potential bidders for the company.
Market cap: $5.5 billion
1-year performance: -0.22%
Short interest: 6.02%
The Texas-based energy company recently announced a 23% increase in natural gas reserves and insider purchases have led people to speculate the company is ready for a buyout. In December Exxon Mobil Corp., paid $650 million for Petrohawk's natural-gas wells and pipelines in the Fayetteville Shale. With global energy companies looking to acquire companies that operate in natural gas, Petrohawk is likely to get an acquisition bid.
Market cap: $7.5 billion
1-year performance: +3.47%
Short interest: 8.59%
The independent natural gas company divested $330 million of its properties in Ohio last year and announced that it would sell its shale properties in Texas as well. After reporting 3Q losses and with a current glut in natural gas demand the company may be prime for the taking.
Market cap: $14.6 billion
1-year performance: -1.12%
Short interest: 3.62%
Georgia based lender SunTrust bank could see a potential bid by JPMorgan analysts predict because of its presence in southern states. While the bank reported a 4Q profit, it still owes $4.85 billion in bailout money which could offset bids for the moment.
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