Re: Culligan - I found this on the AOL-Motley Fool boards:
Subject: More merger speculation
Date: 16 Sep 1997 17:20:09 EDT
From: AURORIUM
Message-id: <19970916212000.RAA02656@ladder02.news.aol.com>
I'd be surprised if this one happens after the lawsuits. Comments
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Shares of Culligan Water Technologies Inc. rose to a 52-week high Tuesday on takeover speculation and after Credit Suisse First Boston Corp. repeated its "buy" rating on the stock and raised its price target to $60 from $50.
Market observers said there is mounting speculation that Culligan may be acquired now that it is free to do pooling-of-interest transactions. As a spinoff, Culligan was prohibited for two years from either buying other companies or being bought through a pooling deal. The restriction expired Friday, the second anniversary of Culligan's spinoff from Astrum International Corp.
Culligan, which makes water-purification and treatment systems, reported fiscal 1997 operating earnings of $1.45 per share.
Talk of who may be interested in Culligan naturally flowed toward U.S. Filter Corp. (USF), the most acquisitive player in the water sector. Market sources, however, said they didn't know for sure whether U.S. Filter is interested in Culligan.
Officials of U.S. Filter weren't immediately available for comment.
However, Culligan is a pretty acquisitive player in its own right, and the lifting of the restriction may free up management to do even more acquisitions. "Culligan now has even greater flexibility to make acquisitions and grow its business," said Douglas Augenthaler, of Oppenheimer & Co. "This puts them on a level playing field."
Augenthaler added, "My guess is that Culligan doesn't have any great interest in being acquired."
After an opening delay due to an order imbalance, Culligan shares (CUL) were up $2.438, or 5.1%, at $50 in mid-afternoon New York Stock exchange trading on volume of about 170,000 shares, compared with average daily volume of 92,100.
Credit Suisse analyst Michael Hoffman cut his fiscal 1998 earnings for Culligan, based in Northbrook, Ill., to $1.66 a share from $1.70, compared with earnings of $1.41 a share for the year ended Jan. 31. Hoffman, however, raised his fiscal 1999 view to $2.20 a share from $2.05.
Edward Christensen, Culligan's general counsel and secretary, cited the analyst's comments for the stock jump. Christensen said he isn't aware of any contacts between U.S. Filter or any other company and Culligan regarding a merger. |
