Security giant ADT (ADT) topped the S&P 500 Tuesday after announcing private equity firm Apollo Global Management (APO) will be scooping up shares for $42 in cash as part of its roughly $7 billion leveraged buyout offer.
The takeover, approved unanimously by the Boca Raton, Fla.-based company's board of directors, is expected to be the latest of a flurry of leveraged buyout transactions backed by billions in sub-investment-grade debt, as Real Money reported. (ADT shares were up 47.5% on the day.)
Meanwhile, Freeport-McMoRan (FCX) gained 14% after the Phoenix-based natural-resources company announced it had struck a deal to sell roughly $1 billion of an Arizona mining interest to Japanese trading corporation Sumitomo, which helped buoy the confidence of Freeport shareholders who've grown wary over a mounting debt load.
Newfound liquidity from the sale is likely to extend Freeport's debt runway and ability to repay some of its outstanding obligations. (The miner booked more than $20 billion in total debt in its fourth quarter, against $139 million in net losses, which follows $266 million in the previous quarter.)
Freeport is a member of Real Money's index of 20 companies investors should keep on their distressed watch list, and was hit with a Standard & Poor's credit downgrade on Friday evening, which comes as no surprise given the company's steep debt and equity decline over the past 12 months, Real Money's Carleton English wrote Tuesday.
"One has to wonder what took Standard & Poor's so long to come to its conclusion, as commodity prices have been on the decline for the last year," English said. "Freeport's stock price has also declined 71% over the last year and several of its bonds have been trading well below par -- many well below 60 cents on the dollar -- which suggests creditors have been less certain of Freeport's former investment grade rating."
Sunnyvale, Calif-based Web giant Yahoo! (YHOO) jumped more than 8% Tuesday, largely off news that its more-than $20 billion stake in Chinese e-commerce firm Alibaba (BABA) rocketed 9% after taking a 5% stake in deal website Groupon (GRPN), which soared 41% on the day.
Yahoo! was also lifted on news it will be exclusively streaming the first-ever webcast of Warren Buffett's Berkshire Hathaway (BRK.A, BRK. B) annual shareholder's meeting, an opportunity to spotlight the relevance and insight of its business-news service.
All in all, the broader S&P index climbed nearly 2%, despite oil fluctuating and closing down more than 1% to $29.1 a barrel, based on U.S. benchmark West Texas Intermediate.