Major market benchmarks fell in Tuesday's shortened session ahead of the July 4 holiday, giving back earlier gains as investors weighed the effects of a potential trade war, with new tariffs to be imposed on Chinese products later this week.
This investor wants Campbell Soup to sell
Shares of Campbell Soup climbed 1.9% after The New York Post reported that activist investor Dan Loeb is planning a "major shakeup" at the company with the help of large stakeholders.
Arguing that Campbell Soup stock is undervalued, Loeb's Third Point hedge fund is conversing with family members, who control roughly 41% of Campbell's total shares, as well as other independent investors to encourage Campbell Soup to hire a bank to explore a possible sale of the company. For perspective, last month Campbell announced a broader strategic review of its plans and product portfolio. Now, however, The Post says Loeb is requesting that Campbell Soup abandon all other alternatives to focus exclusively on a sale.
Veon strikes two big deals
Veon stock soared 13.8% after the Netherlands-based communications provider announced it will sell its 50% equity stake in Wind Tre for 2.45 billion euros (or roughly $2.87 billion) to partner CK Hutchison. Veon says it will book a profit on the transaction of roughly $1.1 billion -- a massive windfall considering Veon's entire market capitalization as of this writing stands at just over $5.1 billion. Veon intends to primarily use the proceeds to pay down debt.
At the same time, Veon says a fraction of the sale proceeds -- around $400 million -- will be used to acquire the Pakistan and Bangladesh assets of Global Telecom Holding for a consideration of $2.6 billion (including debt of approximately $1.6 billion). The acquisition will result in only a "minor impact" to Veon's net leverage ratio, and should serve to "further the group's ambitions of simplifying its corporate structure and increasing focus on emerging markets."
AZZ's strong quarter
Shares of AZZ popped as much as 18.5% early in the session, then settled to close up 11.2% after the metal coatings and welding solutions company announced significantly stronger-than-expected fiscal first-quarter 2019 results. AZZ's quarterly revenue climbed 27.7% year over year to $262.2 million, which translated to more than 30% growth in net income to $15.7 million, or $0.60 per diluted share. Analysts, on average, were only looking for earnings of $0.49 per share on revenue of $228.9 million.
CEO Tom Ferguson credited the strength of both AZZ's energy and metal coatings segments, noting that bookings jumped more than 65% year over year to $320.5 million.
"We booked some larger electrical projects in China, executed on meaningful refinery projects both domestically and internationally, and saw renewed demand in our metal coating segment," Ferguson said. "The increase in bookings establishes a solid base of backlog to support our plan for the balance of the year."