Image: Macy's.
Monday continued the stock market's recent volatility, with initial gains giving way to a substantial decline in the early afternoon before stocks roared back to post modest advances. The S&P gained less than two points and the Dow was up about a third of a percent, but the Nasdaq Composite was down slightly on the day. For Affymetrix (AFFX +0.00%), Macy's (M +2.90%), and Sotheby's (BID +0.00%), Monday brought some much-needed relief in the form of much higher share prices for investors.
Affymetrix soared more than 50% on news after the market closed on Friday that Thermo Fisher Scientific (TMO +2.39%) would acquire the maker of cellular and genetic analysis products. Thermo Fisher's deal involves paying Affymetrix shareholders $14 per share in cash, and Affymetrix stock immediately responded by climbing to just a few cents below the $14 mark by the close of trading. Thermo Fisher sees the deal strengthening its position in the biosciences arena and will also help expand its scope to cover genetic analysis as well. For Affymetrix, the offer potentially ends a tough period on a high note, although those who bought the shares at much higher levels in the mid-2000s prior to the financial crisis will see the takeover as bittersweet. The parties expect the deal to close in the second quarter, assuming that Affymetrix shareholders approve the deal and that regulators sign off.
Macy's gained 8%. Activist investor and major shareholder Starboard Value outlined its proposed strategy to help the retailer unlock what it called "the enormous value intrinsic" of Macy's real-estate portfolio, having sent a letter to Macy's top executives and board of directors. Starboard believes that Macy's should use joint-venture structures for its mall-based and other real-estate properties, with the belief that the proposed structure will unlock about $10 billion in shareholder value while also reducing risk and improving the company's capital structure. By its estimate, Macy's stock could climb to $70 per share, or roughly double where it started the day. Shareholders aren't necessarily that optimistic about Macy's prospects, but the potential for ongoing activist participation has inspired some shareholders to expect further discussions to boost the stock price.
Finally, Sotheby's climbed 7% after announcing this morning that it had acquired art-advisory firm Art Agency Partners. Sotheby's CEO Tad Smith argued that the acquisition should help Sotheby's "improve our leadership position at the high end of the fine art market, bolstering our private sales capability, giving us new growth opportunities in advisory services, and reinforcing the client-first culture in all we do." With AAP's contacts, Sotheby's expects to enhance its relationship with important collectors worldwide, and it also hopes to branch into offering collectors advice on how best to manage their art holdings. Some market commentators view the move from Sotheby's as a gamble in its shift from the traditional auction business, but as financial institutions in the investment-banking world can attest, expanding Sotheby's scope to offer impartial advice as well as auction services is a natural move to broaden the business and open up new opportunities to profit.
