Why Raptor Pharmaceuticals, OpenText, and Freeport-McMoRan Jumped Today

By Markets Fool.com


Image source: Freeport-McMoRan.

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The stock market bounced back from its Friday panic last week, posting major advances on Monday that clawed back a big part of last week's declines. After investors worried about the potential for an interest rate increase from the Federal Reserve as early as this month, high-profile comments from a number of leaders associated with the central bank suggest a rate hike for the September meeting was far from a sure thing. In the end, the Dow managed to climb 240 points, and the S&P 500 and other major market benchmarks posted gains of around 1.5%. But having even better days were Raptor Pharmaceuticals (NASDAQ: RPTP), OpenText (NASDAQ: OTEX), and Freeport-McMoRan (NYSE: FCX), which were among the best performers on Monday.

Raptor gets M&A interest

Raptor Pharmaceuticals jumped more than 20% after the developer of treatments for rare diseases received a buyout bid from Horizon Pharma (NASDAQ: HZNP). Under the proposed deal, Horizon will pay about $800 million for Raptor, with Raptor shareholders receiving $9 per share in cash from Horizon. The two companies expect the deal to close at some point before the year is out, and for Horizon, picking up Raptor will allow it to strengthen its efforts in treating rare diseases as well as offering geographical diversification through exposure to Europe and other international markets. Raptor CEO Julie Anne Smith noted not only that shareholders would get an immediate return but also that the deal would "provide ongoing value to our patients, their families, and the physicians who treat them." With the stock having traded above $16 per share just over a year ago, not every Raptor shareholder will be happy with the deal, but it is more than triple where Raptor stock was as recently as January.

OpenText, you're getting a Dell!

OpenText rose 9% on news that the enterprise information management specialist had agreed to buy the enterprise content division of privately held Dell EMC. The deal will include product lines including LEAP, InfoArchive, and the Documentum, and OpenText believes the acquisition will strengthen the breadth of its service offerings as well as its customer base. In the words of OpenText CEO Mark Barrenechea, "This acquisition further strengthens Open Text as a leader in Enterprise Information Management, enabling customers to capture their digital future and transform into information-based businesses." The $1.6 billion deal represents the first move Dell EMC is making after the massive merger, but OpenText was smart to get involved in a way that can help both it and Dell moving forward.

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Freeport-McMoRan makes some moves of its own

Finally, Freeport-McMoRan picked up 8%. News that the Federal Reserve might not raise interest rates as quickly as feared helped the commodity markets recover, and that boosted prospects for the mining and oil and gas sectors broadly. Yet after the bell, Freeport also made a major announcement, making a decision to sell its deep-water assets in the Gulf of Mexico to Anadarko Petroleum (NYSE: APC). The $2 billion sale will raise money as part of Freeport's ongoing effort to cut debt and raise capital, but some will argue that the move only emphasizes the wasted effort that came from Freeport's 2013 decision to buy the energy-related assets in the first place. Nevertheless, if Freeport is successful in concentrating on high-value prospects, it has a better chance of rebounding fully from its swoon in recent years.

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Dan Caplinger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Open Text. The Motley Fool owns shares of Freeport-McMoRan Copper and Gold. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.