Cleveland-Cliffs spends $10 billion on Alpha; Asyst assesses Aquest bid; AOL dials into the rumble

By Aaron Hochman-Zimmerman

New York, July 16 - Shares were rising all over the market on Wednesday, but Alpha Natural Resources Inc. could boast a 10.55% jump as mining industry consolidation won Alpha a $10 billion buyout by Cleveland-Cliffs Inc.

Asyst Technologies Inc. also saw big gains as it acknowledged a $6.50 per share unsolicited bid from Aquest Systems Corp.

Also, Intervoice Inc. finished talking with Convergys Corp. as it announced it will accept $335 million for its company.

Elsewhere, Time Warner Inc. unit AOL was back in the ring where the Microsoft Corp. and Yahoo! Inc. royal rumble continues.

AOL's name had been mentioned as a Microsoft target in the past, but the bulk of Microsoft's effort and ire has been saved for Yahoo!

Meanwhile, the Dow Jones Industrial Average rallied by 276.74, or 2.52%, to end at 11,239.28, while the Nasdaq Composite Index added 69.14, or 3.12%, to finish at 2,284.85.

The S&P 500 improved by 30.45, or 2.51%, to close at 1,245.36.

Cliffs forges deal with Alpha

Cleveland-Cliffs announced it will hand over $10 billion for fellow mining company Alpha Natural Resources, according to a press release.

The price of 0.95 Cleveland-Cliffs' common shares and $22.23 per share in cash represents a 35% premium to Alpha's closing price on Tuesday, before the deal was made public.

The new entity "Cliffs Natural Resources will be positioned as a diversified natural resources company with significant holdings in a variety of important minerals," Joseph Carrabba, Cleveland-Cliffs' chairman, president and chief executive officer said in a statement.

"By combining our companies' complementary operations and management capabilities, we will be well positioned to meet the world's increasing demand for raw materials," he said.

"Together, Alpha and Cleveland-Cliffs will have the size, the management depth and the mining expertise to compete on the global stage as demand for raw materials continues to increase around the world," Michael Quillen, Alpha's chairman and chief executive officer, said in the statement.

The deal may be seen as "a surprise for Cliffs," said Longbow Research analyst David MacGregor, but "there's a lot to like about this deal."

Industry consolidation "is a good thing," he said and did not force the merger, but the deal does allow Cleveland-Cliffs "more bandwidth in the business" as well as better access to export markets and a little more diversification.

"The valuation is reasonable," he added.

Shares of Cleveland-Cliffs (NYSE: CLF) slipped $7.44, or 6.68%, to close at $104.02.

Shares of Alpha Natural Resources (NYSE: ANR) tacked on $10.01, or 10.55%, to end the session at $104.93.

The deal is expected to close by the end of the fourth quarter.

A quest to buy Asyst

In technology, Asyst Technologies announced the receipt of an unsolicited bid from Aquest Systems to buy the company for $6.50 per share, according to a press release.

In addition to the standard review of the proposal, Asyst had a series of questions for Aquest regarding the nature of Aquest's relationship with the Gores Group as well as Riley Investment Management.

The Gores Group had earlier expressed an interest in Asyst at $6 per share, but later lowered the offer to between $5 and $6 per share.

Neither was accepted, but Aquest was known to be part of the failed transaction.

Also, Aquest's associates at Riley have made attempts to gain control of Asyst's board and sell the company at auction with Aquest's chief executive officer as a potential participant in Riley's solicitation of proxies.

Shares of Asyst (Nasdaq: ASYT) launched up $1.12, or 28.64%, to $5.03.

Convergys sweet talks Intervoice

Convergys and Intervoice announced that the human resources firm Convergys will wrap up communications provider Intervoice at a price tag of $335 million or $8.15 per share, according to a press release.

The price represents a premium of 24% over Intervoice's close on Tuesday, the last day of trading before the announcement of the agreement.

Convergys cash tender deal is likely to begin before Aug. 1.

"Separately, these companies have been strong strategic partners delivering products that have created opportunities for customers like us," Robert Strickland, senior vice president and chief information officer at T-Mobile USA said in a statement.

"If they come together, we look forward to seeing them continue to build on their ability to bring solutions to the market that place customer relationships at the center," Strickland added.

"Clients are demanding high-quality, integrated, relationship management solutions, combining both automated and live agent services, to drive more value from their relationships with their customers and employees," said Dave Dougherty, Convergys president and chief executive officer.

"We believe acquiring Intervoice allows us to compete more effectively as a single-source provider and enables us to grow our revenues and our earnings," Dougherty added.

Shares of Convergys (NYSE: CVG) slipped by $0.08, or 0.57%, to $13.92.

Shares of Intervoice (NASDAQ: INTV) jumped up by $1.47, or 22.04%, to $8.14.

The deal is expected to close in the third quarter.

... and AOL too

Reports of Time Warner's AOL joining the fracas with Microsoft and Yahoo! provided water cooler fodder, but no details accompanied the Wall Street Journal story.

Microsoft has long been after a target to prove and provide for its internet prowess and AOL's name has come up before.

Still, regarding what has been Microsoft's most serious potential acquisition, Yahoo! is only two weeks away from the Carl Icahn-brokered proxy vote which may deliver them the deal friendly board Microsoft needs.

Shares of Microsoft (Nasdaq: MSFT) were better by $1.11, or 4.24%, to finish at $27.26.

Shares of Time Warner (NYSE: TWX) took on $0.73, or 5.24%, to close at $14.65.

Shares of Yahoo! (Nasdaq: YHOO) added $0.94, or 4.36%, to end the day at $22.48.

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