Monthly Archives: July 2013

Law firms plan HMA sale investigation

That didn’t take long.
A day after hospital operator Health Management Associates announced a plan to sell itself to Tennessee-based Community Health Systems at least seven law firms announced they have launched “investigations” on behalf of HMA shareholders.
Naples, Fla.-based HMA is the parent company of Tennova Healthcare, which operates six hospitals in the Knoxville area.

CHS said it would buy HMA for for $7.6 billion, including assumption of $3.7 billion in debt.

The law firm announcements all use similar language — “possible breaches of fiduciary duty,” “acting in the Company’s shareholders’ best interests,” and “maximize shareholder value.”

Here’s how the New York law firm Levi & Korsinsky describes it’s investigation:
“The investigation concerns whether the Health Management Board of Directors breached their fiduciary duties to stockholders by failing to adequately shop the Company before agreeing to enter into the transaction, and whether Community Health is underpaying for Health Management, thus unlawfully harming Health Management shareholders. In particular, at least one analyst set a price target for Health Management stock at $20.00 per share, and shares of Health Management closed above the consideration price the day before the announced merger.”

The sale has been approved by the HMA and CHS boards, but still must be approved by regulators and HMA stockholders.

Meanwhile, it will be interesting to see how many legal battle plays out. More announcements of law firm investigations can be expected.

Click here for a Motley Fool take on the proposed sale.

Miller Energy posts $13.1M 4Q loss

Miller Energy Resources platform in Cook Inlet, Alaska.

Miller Energy Resources platform in Cook Inlet, Alaska.

Miller Energy Resources reported today a fourth-quarter loss of $13.1 million, more than half its loss for the full 2013 fiscal year.

The net loss attributable to common stockholders equaled 31 cents diluted share, up from a loss of $8.4 million, or 20 cents per share, in the 2012 fourth-quarter, the Knoxville-based oil and natural gas company said.

Revenues for the quarter ended April 30 tumbled 13 percent to $7.7 million, compared to $8.9 million in the same period the prior year.

The company attributed the 4Q loss to a pump failure knocking one of its wells offline, fluctuating shipping schedules and other reasons.

For fiscal 2013, revenues dropped 2 percent to $34.8 million and the net loss was $25.5 million, or 60 cents per share.

Despite rising loses, CEO Scott Boruff put a positive spin on the Knoxville company’s outlook for the coming months.

“While our revenues remained relatively constant in fiscal 2013 as compared to the prior year, we achieved several operational milestones late in the fiscal year and subsequent to year end,” Boruff said in a news release.” In fiscal 2014, we expect to see a substantial increase in revenues with significant contributions from our newest oil well, RU-2A, and our newest gas wells, RU-3 and RU-4. … Based on current production levels we expect that RU-2A will increase revenue by more than $10 million per quarter and add $8 million per quarter to free cash flow.”

As revenues have declined in recent months, the company has tapped investors for increased funding. Miller has raised more than $32 million in three preferred stock sales this calendar year alone.

Miller has exploration and production operations in Alaska and East Tennessee.

 

World’s largest building opens in China

China_World_Largest_Building.JPEG-0ae97

China already has the the Great Wall and now it lays claim to the world’s largest building.

Floor space in the New Century Global Center totals 19 million square feet, or the equivalent of 329 football fields, the Associated Press reports.

When the building is finished it will even house a fake beach big enough to accommodate 6,000 sunbathers at a time.

That’s a big building.

Click here for more info.

 

Health Management takeover talk heats up

Update:Glenview Capital says it is not engaged in a hostile takeover. The company issued the following statement in response to this post:

“Glenview Capital Management has filed a consent solicitation in which they have nominated a new independent, slate of directors for the board at HMA. But they have in no way initiated steps for a hostile takeover”

Shares of Health Management Associates, parent company of Knoxville-based Tennova Healthcare, hit a 52-week high today on continued takeover talk.

By late afternoon, shares were up more than 9 percent to $16.89 with 11.3 million shares traded.

The Naples, Fla.-based company is the subject of a hostile takeover by Glenview Capital Management, which has been increasing its stake in the company.

Glenview could soon have some competition. Reuters reported today that Franklin, Tenn.-based Community Health Systems Inc. and other companies also have target HMA.

HMA officials aren’t commenting on the takeover buzz.

Click here for more from Reuters.

2Q looks much better for Regal Entertainment

EARNS+REGAL+ENTERTAINMENT

After a disappointing first-quarter, Regal Entertainment Group’s second-quarter is looking much improved thanks to a string of blockbusters like “Iron Man 3,” “Star Trek: Into Darkness,” “The Great Gatsby” and others.

Summer ticket sales are up sharply from a year ago — about 14 percent, according to a report by The Wall Street Journal’s Marketwatch web site.

And when admissions are up that means the Knoxville-based theater operator is selling more popcorn, soda, candy and other high-margin concessions.

Regal reported a first-quarter profit of $22.5 million, a 51 percent drop from the 2012 1Q.
The 2013 second-quarter should be much improved.

“As measured from the first weekend of May through July 1, the 2013 year-to-date summer movie season has generated more than $2.4 billion in gross box-office receipts according to data compiled by Boxofficemojo.com. That’s up nearly 14% from 2012’s result and is the first double-digit year-over-year gain since 2002. And the season isn’t out of steam yet, with upcoming titles like “The Wolverine,” “Elysium” and “Pacific Rim,” Marketwatch reported.

Click here for the Marketwatch report comparing Regal and competitor Cinemark.

Miller Energy Resources raises $7.2M from preferred stock sale

Miller Energy Resources platform in Cook Inlet, Alaska.

Miller Energy Resources platform in Cook Inlet, Alaska.

For the third time this year, Knoxville oil and and gas company Miller Energy Resources has issued preferred stock to raise money for general corporate purposes.

Miller said Wednesday it raised $7.2 million from the sale of preferred stock that was completed Tuesday. Proceeds will be used for general corporate purposes.

MLV & Co. LLC acted as sole book-running manager for the offering. Aegis Capital Corp., Maxim Group LLC, National Securities Corp., a wholly owned subsidiary of National Holdings Inc. and Northland Capital Markets acted as co-managers.

Miller raised $11.1 million in May and $14.3 million in February with follow on sales of preferred stock.

Miller has exploration and production operations in Alaska’s Cook Inlet and East Tennessee.

 

 

Xinergy completes coal prep facility

Stockpiled coal

Stockpiled coal

Knoxville-based coal producer Xinergy Ltd has reached a milestone with the completion of a coal preparation and rail loading facility at its South Fork mine in Greenbrier County, West Virginia.
The new facility is expected to help boost production substantially in the coming months.
The South Fork operation is expected to produce at “an average rate of 50,000 tons per month during the second half of 2013, representing approximately half of the complex’s anticipated productive capacity,” according to a news release.
The company previously said it expected to invest $20 million in the coal preparation and rail loading facility.
“Notwithstanding the challenging market conditions, we are extremely excited to report that we have completed construction of our South Fork infrastructure project on time, and within budget. We will continue to focus on driving shareholder value by executing upon our strategic vision of building out our premium quality mid-vol coking coal footprint in West Virginia,” Xinergy President Bernie Mason said in a news release.
In its most recent financial report, Xinergy said it had a net loss of $1.9 million, or 3 cents per diluted share, for the quarter ended March 31, 2013, compared to net income of $1.7 million in the same period the year prior.
Xinergy operates coal mines in West Virginia and Virginia. It sells thermal and metallurgical coal to electric utilities, steelmakers, energy trading firms and industrial companies.