After a solid first nine months of 2016, the stock market began the fourth quarter on a downward note. Major market benchmarks fell around a third of a percent as investors responded to signs of economic sluggishness in the auto and manufacturing industries. Given rising levels of uncertainty about the health of the global economy, especially in the financial sector, most market participants weren't all that surprised to see declines that sent the SPDR S&P 500 (SPY 1.29%) down a quarter percent. Yet many stocks managed to post sizable gains on Monday, and some of the best performers included Winnebago Industries (WGO 0.96%), Janus Capital Group (JNS), and Dynavax Technologies (DVAX 1.08%).
Winnebago makes a big buy
Winnebago Industries soared 24% after the recreational vehicle manufacturer announced that it would buy competitor Grand Design Recreational Vehicle for $500 million. The deal will involve a combination of cash and stock, and investors were happy with the move, in part because of the added exposure that Grand Design will give Winnebago in the towable RV segment, which has been a popular area in the industry recently.
Winnebago hopes to close the acquisition by the end of the current fiscal quarter, and CEO Michael Happe noted that the buy will leave Winnebago "well-positioned to capitalize on the opportunities across the RV market and to drive improved profitability and long-term value for stakeholders." Given the recent move from Winnebago competitor Thor Industries to make an acquisition of its own, Winnebago's response makes sense and should help it retain its leadership position in the RV market.
Janus Capital gets an offer it can't refuse
Janus Capital Group gained 12% in the wake of its announcement that it would merge with U.K. based Henderson Group in an all-stock deal that it termed a "merger of equals." Janus shareholders will receive 471.9 shares of Henderson for every 100 shares of Janus they own, and in total, Janus will represent about 43% of the post-merger company's equity.
Janus and Henderson believe the deal will close by the middle of 2017, and the two companies hope to build a global powerhouse as a result of the combination. In Janus CEO Dick Weil's words, given Janus's exposure in the U.S. and Japan and Henderson's in the U.K. and Europe, the merger will be "a transformational combination for both organizations" and bring benefits to investors, clients, and workers alike.
Dynavax answers some questions
Finally, Dynavax Technologies rose 19%. The biotech company announced in an SEC filing that it had received requests for information from the U.S. Food and Drug Administration concerning its proposed hepatitis B vaccine Heplisav-B. Dynavax said that the questions were "in line with the company's expectations" and that it is working with the FDA to resolve remaining issues in the hopes of completing its review by the normal scheduled action date of Dec. 15.
Given the number of surprises in the biotech industry lately, the idea that everything at Dynavax is going according to plan was welcome news. Investors hope that the FDA will make a favorable decision on its biologics license application toward the end of the year.