Heard Off the Street: Excitement ebbs for Michael Baker
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Michael Baker's stock has calmed down in recent weeks as excitement over a possible bidding war for the Moon engineering services company has subsided.
Baker shares finished Friday at $24.24, a penny below the unsolicited $24.25 per share all-cash offer an Alexandria, Va., private-equity firm submitted to Baker in mid-December.
DC Capital Partner's bid -- and speculation by another shareholder agitator who suggested that it was a "strong possibility" that Baker could be sold for more than $30 per share -- sent the stock to a Jan. 29 closing high of $25.77.
A week after that, DC Capital announced it had signed a confidentiality agreement that will allow it to examine Baker's books as part of discussions with Baker about strategic alternatives. The private equity firm has a 5.2 percent stake in Baker.
Meanwhile, the engineering company continues looking for a replacement for former president and CEO Bradley L. Mallory, who resigned Dec. 13 at the request of the board. Longtime chairman Richard L. Shaw retired at the end of January after 60 years with the company.
The retreat doesn't change the view of many analysts that, given its clean balance sheet and global infrastructure needs, Baker shares are undervalued. Longtime shareholder George Walsh of Gilford Securities in New York said DC Capital's offer "doesn't reflect what I think the value of the company is."
Neither does Crescendo Partner, the New York investor who believes a Baker buyer would pay more than $30 per share. In a Dec. 26 letter to the company, senior managing director Arnaud Ajdler pushed for the immediate sale of the company. "We believe that [Baker] will remain significantly undervalued as long as it remains a stand-alone public company," he wrote.
In an interview Friday, Mr. Ajdler declined to disclose how many Baker shares Crescendo owns. The firm would have had to disclose its holdings if they were 5 percent or greater.
Mr. Ajdler said the firm has had discussions with Baker, but declined to comment on them.
Baker is scheduled to report fourth-quarter and 2012 results Tuesday. Analysts expect the company to report quarterly profits of 6 cents per share -- or 11 cents per share excluding one-time items -- on sales of $144 million.
A new study identifies some of the attitudes and behaviors behind the sad state of financial affairs among college students and recent graduates.
The study analyzes the attitudes first-year students at U.S. colleges have toward debt and spending as indicators of whether they will have money problems in the future.
What they found was not pretty.
As for their behavior, 28 percent of the approximately 40,000 students surveyed had credit cards and nearly 25 percent had more than one. Among those who had a card, nearly 24 percent had more than $1,000 in credit card debt and 5 percent had account balances greater than $5,000.
As for paying off the debt, 35 percent said they typically pay only the minimum amount monthly and 7.5 percent said they were late in making a monthly payment at least once within the last year.
There were some good behaviors. Researchers said 86 percent of the students had a checking account, 65 percent visited their bank's website a couple of times monthly, and 55 percent visited a branch at least once a month. Researchers said having a bank account increases the likelihood that students will behave more responsibly when it comes to finances, such as buying only things they need and paying their student loans on time.
Although 79 percent of the students said they frequently worry about debt, their anxiety may not be as great as it sounds based on their responses to other questions.
About 40 percent at least moderately agreed that students have to go into debt. Six out of 10 said it was OK to incur an overdraft fee if you know you can pay it off. A comparable percent at least moderately agreed that they like to own things to impress people. And nearly 31 percent at least moderately agreed that it is better to have something now and pay for it later than saving for it.
The results "suggest that not only are students expressing some alarming attitudes toward finance-related behaviors, but they may also be engaging in some of these behaviors," the report stated.
The numbers were compiled from a series of questions students were asked in order to gauge whether they had cautious attitudes about finances.
Those who were cautious were more likely to follow a budget, stay in school, stay away from high-risk debt and pay off students loans on time and in full.
Students who consider debt a necessity or who spend compulsively are more likely to run into financial problems later, researchers concluded.
The study was conducted by EverFi, which uses social networking, gaming and other tools to teach personal finance and other life skills. It was funded by Higher One, which provides tuition payment plans, banking and other services on more than 1,300 campuses.
Researchers said the findings indicate the need for more effective financial literacy education.
First Published March 3, 2013 12:00 am