Image source: Monsanto.
The stock market started off the new week on a quiet note, giving up gains from earlier in the day to close Monday with modest losses. Major market benchmarks were narrowly lower, with the Dow falling just 8 points and percentage losses for the Nasdaq and S&P 500 in the 0.1% to 0.2% range. Discussion about the potential future moves from the Federal Reserve's monetary policy committee dominated the chatter among market participants Monday, but with three weeks to go before the June 14 and 15 meeting, investors will have to look more deeply at individual stocks to try to discern what's moving the market as a whole. Even though popular stock market indexes were little changed, several stocks posted solid gains, and Monsanto (MON), XenoPort (NASDAQ: XNPT), and LendingClub (LC 3.81%) were among the best performers on the day.
Monsanto led all S&P 500 components higher with a gain of nearly 4.5% after the maker of agricultural chemicals and seeds received a buyout offer from German conglomerate Bayer worth $62 billion. The bid, which works out to $122 per share, would be the largest ever made by a German company. Bayer believes that Monsanto would make a strong fit for Bayer's overall business, even though it would take away from the conglomerate's focus on healthcare. Yet skeptical investors believe that the initial bid won't be enough to persuade Monsanto shareholders to sell, and a sweetened subsequent bid could push the price so high that the economics won't work well for Bayer. Even with the gains, Monsanto shares still rest more than 13% below the buyout offer, suggesting that shareholders are far from certain that the ag giant will accept the deal.
XenoPort soared 56% after the tiny biopharmaceutical company accepted a takeover bid from Arbor Pharmaceuticals for $467 million. The move will pay XenoPort shareholders $7.03 per share for their stock, or a 60% premium to where the shares closed on Friday. For its part, XenoPort is excited about the transaction, with CEO Vincent Angotti saying that the deal "provides immediate and substantial value to our shareholders, and we believe that Arbor is well positioned to provide the proper resources for a more expanded commercialization effort of Horizant," the company's treatment for restless leg syndrome. In addition, the potential for Horizant to treat patients with alcohol-use disorder could further expand its use beyond its current approved indication. The move in the share price indicates that XenoPort investors are favorable to the deal as proposed, although some will be disappointed that the buyout price is below where shares traded as recently as last fall.
Finally, LendingClub climbed 8%. The online lender got a boost of confidence when news emerged that Singapore-based investment company Shanda Group had taken a nearly 12% stake in LendingClub. The news was based on a filing with the SEC that actually came before the latest investigation of the company by the Justice Department, but the disclosure shows a large position in shares and options to acquire more stock of the company. The move indicates Shanda Group's belief that the bad news that has pummeled LendingClub stock has been overblown and that the company's fundamentals remain solid. The stock will likely remain volatile while the investigation continues, but buying at the height of uncertainty has been a winning strategy for many investors in the past.
