BREAKFAST WITH THE FOOL
Wednesday, August 11, 1999
"If I'd tried for them dinky singles I could've batted around .600."
-- Babe Ruth
Alcan Looks To Contain Alcoa
Dave Marino-Nachison (TMF Braden)
Yesterday's rumblings were confirmed this morning, as Canadian aluminum products producer Alcan (NYSE: AL) announced that it agreed to merger terms with France's Pechiney (NYSE: PY) and algroup of Switzerland.
The deal, when completed, will create the world's largest aluminum company, toppling Alcoa (NYSE: AA).
The company, temporarily to be known as Alcan-Pechiney-algroup (APA), will be a Canadian corporation with legal headquarters in Montreal. On a combined basis, APA -- not counting American National Can (NYSE: CAN), recently divested by Pechiney, and algroup's chemicals business, to be demerged -- had 1998 sales of approximately $21.6 billion.
Alcoa reported full-year 1998 revenues of $15.3 billion.
The deal, said Alcan CEO Jacques Bougie, "will establish the new world leader in aluminum, with complementary operations and technologies, a sustainable superior low-cost position in primary aluminum, superior aluminum fabricating positions globally, and superior positioning for future low-cost growth and expansion. It will also create the world's leading flexible and specialty packaging business."
Bougie -- who will be CEO of the new company and will be based in New York -- said the combination could create as much as $600 million in annual cost savings, "over and above existing profit improvement programs already underway at all three companies."
The approximately $9.2 billion stock swap has the following terms: Pechiney shareholders will get 1.7816 Alcan shares for each Pechiney A share (or 0.8908 for each American Depository Receipt), while algroup shareholders will get 20.6291 Alcan shares for each of their company's stubs.
Click here for the full press release.
News to Go
Millimeter wave digital radio systems maker P-Com Inc. (Nasdaq: PCMS) said second-quarter losses were $0.35 per share before charges, missing Wall Street's $0.20 consensus loss estimate. Revenues fell 39% for the period to $74 million. The company is evaluating various alternatives, including the possible sale of its Control Resources Corp. and Technosystem SpA business units. "Streamlining the company and concentrating on our core businesses will allow us to focus our management and engineering resources on new product development and improved financial performance," said Chairman and CEO George Roberts.
Facilities-based broadband wireless communications provider WinStar Communications (Nasdaq: WCII) said Q2 losses were $3.53 per share, ahead of First Call's projected $3.71 loss. Total revenue for the quarter increased to $97 million, up 72% from last year and ahead of Q1's $88 million as well.
Shares of movie and video game rental company Blockbuster (NYSE: BBI) will trade for the first time today. The Viacom (NYSE: VIA) subsidiary yesterday sold 31 million shares to the public for $15 each. Proceeds from the offering are expected to be used to pay down debt.
Restaurant franchiser and operator Quizno's (Nasdaq: QUIZ) said an offer from its two largest shareholders -- CEO Rick Schaden and Vice President Dick Schaden -- to take the company private was withdrawn. "An agreement regarding all the terms of the transaction could not be reached," said the company's release.
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