Wall Street was mixed on Monday, with major market benchmarks little changed as investors looked ahead to a busy week of earnings reports.
LifePoint Health finds a buyer
Shares of LifePoint Health soared 35.5% after the healthcare facilities operator announced it will merge with Apollo Global Management's RCCH Healthcare Partners.
LifePoint investors will receive $65 per share in cash. That's good for a 36% premium from Friday's close, and puts an enterprise value on the company of $5.6 billion including debt. The merger is expected to be completed over the "next several months" and is still subject to shareholder and regulatory approval. Assume all goes as planned to those ends, the combined company will be privately held and operate under the LifePoint Health name.
Hi-Crush's eye-popping distribution, capacity expansions
Hi-Crush Partners stock jumped 27.7% following a bevy of exciting announcements from the company. First -- and likely the largest driver of today's move -- the fracking sand supplier announced it has approved a distribution of $0.75 per share this quarter, equating to an incredible 21.7% annualized yield even as measured by today's closing price.
In addition, Hi-Crush announced its acquisition of silo-based fracking sand management company FB Industries for $60 million, including $45 million in cash and $15 million of new common shares. The purchase effectively expands Hi-Crush's last-mile sand logistics capabilities.
Finally, Hi-Crush announced a new supply agreement with a "supermajor E&P customer" in the Permian basin. To support the supply agreement, the company also unveiled an 850,000-ton-per-year expansion for its Wyeville mine in Wisconsin, increasing the facility's annual capacity to 2.7 million tons, as well as a new 3.0 million-ton-per-year facility in Kermit, Texas. The former expansion should be complete in the first quarter of 2019, while the the latter mine should be in service by the end of this year.
Cleveland-Cliffs mines multiple upgrades
Finally, shares of Cleveland-Cliffs gained 9.2% thanks to two Wall Street analysts upgrading the iron ore miner.
J.P. Morgan analyst Michael Gambardella increased his rating on Cleveland-Cliffs to overweight from neutral, assigning a $15-per-share price target on the stock. In addition, Citi analyst Daniel Knauff reiterated his buy rating and increased his per-share target by $1 to $12. Shares closed today at just $10.88.
To justify his bullishness, Gambardella pointed to "robust activity" for both U.S. manufacturing and the domestic steel market -- both key drivers of Cleveland-Cliff's stellar quarterly report last week. Meanwhile, Knauff noted that the stock should be able to move even higher as it "delivers on deleveraging, begins capital returns, and de-risks" its $700 million Hot Briquetted Iron (HBI) project in Toledo, Ohio.