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Omar Venerio
Omar Venerio
Articles (1417) 

3 Stocks Move Monday

L Brands, General Electric rise on ratings, while Xerox falls after ending Fujifilm deal

May 14, 2018 | About:

L Brands Inc. (NYSE:LB) rose after analysts at Citigroup upgraded the company to buy from neutral and gave it a price target of $45, a 36% upside from current market price.

Shares of General Electric Co. (NYSE:GE) jumped today to a two-month high after a bullish call from Gabelli & Co. analyst Justin Bergner, who started coverage with a buy rating and a price target of $21, representing more than 40% of its current level.

Shares of Xerox Corp. (NYSE:XRX) lost 8% after ending its merger deal with Fujifilm Holdings Corp. (TSE:4901and reaching an agreement with investors Carl Icahn (Trades, Portfolio) and Darwin DeasonBoth investors disagreed with the joint venture, arguing it undervalued Xerox, and had planned to run their own slate of directors for Xerox’s board. Now, the new board will begin examining strategic alternatives. Further, CEO Jeff Jacobson resigned, being replaced by John Visentin.

The board said in a statement: 

“Over the past several weeks, the Xerox Board has repeatedly requested that Fujifilm immediately enter into negotiations on improved terms for a proposed transaction. Despite our insistence, Fujifilm provided no assurance that it will do so within an acceptable timeframe. The Xerox Board believes that the transaction cannot reasonably be expected to be completed under these circumstances, particularly given the court’s injunction of the transaction and the lack of shareholder support for the transaction on current terms, as well as the unresolved accounting issues at Fuji Xerox.The Board also considered the potential instability and business disruption during a proxy contest. Absent a viable, timely transaction with Fujifilm, the Xerox Board believes it is in the best interests of the company and all of its shareholders to terminate the proposed transaction and enter a new settlement agreement with Icahn and Deason. Under the agreement, the Xerox Board will be reconstituted to determine the best path forward to maximize value for Xerox shareholders.”

Disclosure: The author holds no positions in any stocks mentioned.

About the author:

Omar Venerio
Omar Venerio is a capital markets, derivatives, corporate finance and financial management professor. He is passionate about the stock market and providing independent fundamental research and hedge fund and insider trading-focused investigation.

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