Exam TImE

Hi gUYs...I am sorry...wont be able to update the blog till 22nd because of my semester exams..

Candover, Goldman to buy Expro for $3.16 billion

Funds managed by private equity firm Candover (CDI.L: Quote, Profile, Research) and investment bank Goldman Sachs (GS.N: Quote, Profile, Research) have agreed to buy British oil services company Expro International (EXR.L: Quote, Profile, Research) for 1.605 billion pounds ($3.16 billion).

Expro management said in a statement on Thursday it would recommend the 1,435 pence per share bid from the funds' bidding vehicle Umbrellastream, which also includes Dutch private equity house Alpinvest, to shareholders.

Expro shares, which registered a near 40 percent boost in February when the company announced a bid approach, traded up 10.59 percent at 1,462 pence at 5:25 a.m. EDT, suggesting some investors thought a higher bid may be made.

Analysts said this was unlikely, given the high price being offered -- the bid equates to around 30 times earnings for the year to the end of March -- and the fact other parties were invited to bid.

"In the event of a third party entering the arena, we would not expect a significantly higher offer," said Keith Morris, oil analyst at Evolution Securities.

Peter Hitchens, oil analyst at Seymour Pierce, said the bid, which follows the takeovers of UK oil services firms Abbot Group and Sondex in the past half-year, would lead to higher valuations in the sector and speculation about further deals.

"Amongst our universe of stocks we believe the most vulnerable are Hunting and Lamprell," he said in a research note.

Hunting (HTG.L: Quote, Profile, Research) shares traded up 1.88 percent at 839-1/2 pence, Lamprell (LAM.L: Quote, Profile, Research) was up 2.45 percent at 452-3/4 pence, while Wood Group (WG.L: Quote, Profile, Research), was up 4.62 percent at 458-1/4 pence.
A spokeswoman for Candover denied it was overpaying for Expro, saying the bid was just below the 34 times earnings multiple U.S. private equity firm First Reserve agreed to pay for Abbot in December.

Nonetheless, the bidders had to stump up over 40 percent of the purchase price in cash, with banks offering less than 1 billion pounds in debt.

The spokeswoman blamed the deterioration in credit markets for the low debt level relative to traditional private equity buyouts.

KKR and TPG Capital borrowed $35.75 billion to buy U.S. power generator TXU last year for $32 billion plus debt.

Oil and gas industry services providers such as Expro have benefited as record oil prices prompt energy companies to boost spending on exploration and development of reserves.

Candover has previously invested in the oil services sector, with investments in pipemaker Wellstream (WSML.L: Quote, Profile, Research) and in Expro itself when it backed a management buy-out in 1992.

Chris Fay, Chairman of Expro, said the bid was a good deal for investors.

"Umbrellastream's cash offer provides Expro shareholders with certain value today and fairly reflects both the value that has been created during this period and the future potential of the group," he said.

"Certainly looking at the forward P/E and EV/EBITDA this looks the case," he said.

New White House stance on emissions lifts alternative energy

Alternative energy companies and natural gas producers stand to profit from President Bush's decision to embrace a greenhouse gas emission cap, a Friedman, Billings, Ramsey analyst said Wednesday.

In a Rose Garden speech Wednesday afternoon, the president is expected to propose stopping the growth of the nation's greenhouse gas emissions by 2025 and call for electricity generators to slow those emissions within 10 to 15 years.

Friedman, Billings, Ramsey analyst Kevin Book in a client note said the White House move "could lead to a positive market response for names levered to clean power generation (wind, solar, geothermal, etc.), hybrid vehicles components, and U.S. natural gas extraction."

Shares of solar energy companies surged in late morning trading: First Solar Inc. rose $10.07, or 3.5 percent, to $297.30, Evergreen Solar Inc. rose 24 cents, or 2.3 percent, to $10.68 and SunPower Corp. gained $3.13, or 3.3 percent, to $97.54.

Zoltek Cos., which makes carbon fibers used in wind turbine blades, rose 28 cents to $23.07.

Earlier this week, Book also mentioned natural gas producers Anadarko Petroleum Corp. and Chesapeake Energy Corp. as potential benefiting from Bush's new position. Shares of both natural gas companies rose more than 2 percent.

The analyst also said methane producer CNX Gas Corp. "might benefit from demand at the same time that they potentially monetize 'offsets' at zero monitoring costs."

The White House call for a greenhouse gas cap, could result in short-term "selling pressure on coal mining, refining, coal-levered utilities, and heavy oil extraction names," Book said.

Longer term, the administration's position could be a windfall for engineering and construction companies that build new energy facilities or retrofit existing ones, he said.

"The scale of the retrofit and new energy infrastructure investment that is required to enable fossil fuel combustion under global climate controls could run into the multi-trillion dollar range, far outstripping clean tech investment," Book wrote.

The head of geothermal energy provider Ormat Technologies Inc. welcomed Bush's remarks but said more was needed.

"It is a good sign for every geothermal company," Dita Bronicki, chief executive, said of Bush policy change. "But we need a little more than good intentions. The uncertainty about the extension of the production tax credit doesn't make life for the industry very easy because it is very hard to plan in a situation of uncertainty. What we are really wishing for is to have more specificity and more certainty."

JPMorgan Chase's profit drops 50 pct in 1Q on reserves boost

JPMorgan Chase & Co.'s profit fell 50 percent in the first quarter after the bank took a provision of $5.1 billion to strengthen its reserves by $2.5 billion and account for $2.6 billion in losses in its loan portfolio.

The New York-based bank, which recently bought the collapsing investment bank Bear Stearns, on Wednesday reported earnings of $2.37 billion, or 68 cents per share, and $16.9 billion in net revenue.

The profit was down from $4.79 billion, or $1.34 per share, in the first quarter of 2007. But it is above the average analyst forecast of 64 cents a share, according to Thomson Financial.

Investors appeared pleased about JPMorgan's results, with stock futures turning sharply higher after the report was released.

Shares of JPMorgan closed Tuesday up 62 cents at $42.12, but are down about 3 percent since the beginning of the year.

JPMorgan's CEO Jamie Dimon said in a statement that the bank expects the economy to stay weak and for the credit markets to remain under stress.

'These factors have affected, and are likely to continue to negatively impact, our firm's credit losses, overall business volumes and earnings _ possibly through the remainder of the year, or longer,' Dimon said. 'However, we are prepared to manage through this down part of the economic cycle, given the strength of our liquidity, credit reserves, capital and operating margins, and to successfully position our company well for the future.'

Since the collapse of the mortgage market began slamming the banking industry last summer, JPMorgan has not been completely shielded from losses, given its large warehouse of various types of mortgages, home-equity loans, and loans used to finance leveraged buyouts. But compared to its peers, the bank has remained healthy.

JPMorgan agreed to buy Bear Stearns last month with the backing of the U.S. government for $10 a share. As of Monday, JPMorgan had built its stake in the Wall Street firm to 49.8 percent, according to a regulatory filing Tuesday _ practically guaranteeing the deal will happen