The Deal – Double dose of good news sends Standard Pacific soaring
By Michael Rudnick, May 27, 2008
Struggling homebuilder Standard Pacific Corp.’s stock skyrocketed on Tuesday on news of a capital injection as well as optimistic macroeconomic data that also sent the markets up. The Dow Jones Industrial Average climbed 68.72 points to close at 12,548.35.
Shares of Standard Pacific soared 48.20% to close at $3.29 following an announcement that the homebuilder will receive a $530 million equity infusion from private equity firm MatlinPatterson Global Advisers LLC. The stock was further bolstered by a Commerce Department report that sales of new homes increased by 3.3% in April following a dismal 11% decline in March. The housing news in combination with a crude oil drop of $3.34 to $128.85 per barrel helped to lift the broader market.
The positive fuel price news helped lift airline stocks with Northwest Airlines Corp. logging some of the biggest gains in the sector at 13.62% to close at $6.84 per share. Northwest’s pending merger partner Delta Air Lines Inc. rose 7.64% on the day to close at $5.92.
Talk of a possible private equity buyout sent chemical company Chemtura Corp. soaring 8.85% to close at $8.49. Blackstone Group LP and Apollo Management LP are reportedly in talks to acquire the company.