Factory Card zooms on AAH merger; Telanetix up on AccessLine buy; PNC wraps conversion of branches

By Sheri Kasprzak

New York, Sept. 18 - Shares of Factory Card & Party Outlet Corp. skyrocketed by 100% on Tuesday after AAH Holdings Corp. agreed to buy the party supply company in a $72 million transaction.

A sellside trader said Tuesday that the fact that Factory Card will be able to operate as a separate entity is likely what is pushing the stock up so much.

Elsewhere, Telanetix, Inc. closed its acquisition of AccessLine Communications in a $34.9 million deal. The news sent shares of Telanetix up by more than 12%.

In other news, the PNC Financial Services Group, Inc. wrapped up its assimilation of Mercantile Bank by officially converting the last Mercantile Bank branch into a PNC branch.

Along with broad gains in the stock market Tuesday on news that Lehman Brothers posted better-than-expected third-quarter earnings, PNC's shares were up as well.

The Dow Jones Industrial Average climbed by 335.97 to end the session at 13,739.39. The Nasdaq index closed up 70.00 to end at 2,156.66, and the Standard & Poor's 500 composite index settled up 43.13 at 1,519.78.

AAH to buy Factory Card

AAH said Tuesday it plans to buy Factory Card & Party Outlet, an Elmsford, N.Y., party supply company, and will operate the company as a separate entity. AAH, based in Naperville, Ill., manufactures and distributes party goods.

By 10:30 a.m. ET, Factory Card's stock gain $8.11, or 100.75%. The stock ended the day up 101.24%, or $8.15, to close at $16.20 (Nasdaq: FCPO). The stock fell by 4 cents after hours.

The fact that the Factory Card will not be completely swallowed up in the AAH organization and will operate as a separate entity may be the icing on the party cake for investors, one sellside trader said.

"It does make a difference to their investors that they're not going to be eaten up by this merger," said the trader. "They're still going to have their name recognition, so that's a good thing. It also helps that they're also in the same business line."

Under the merger terms, AAH will begin a tender offer for Factory Card's outstanding shares at $16.50 per share.

"This offer creates outstanding value for our shareholders and enables our management and talented associates to continue our successful retailing strategy," said Gary Rada, Factory Card's chief executive officer, in a statement.

"The addition of Factory Card & Party Outlet to the AAH family offers a unique opportunity to add another retail brand to our portfolio," said AAH CEO Gerry Rittenberg in a news release. "FCPO provides a distinctive assortment of social expressions products to a segment of the consumer market not generally served by our existing retail base."

Telanetix wraps AccessLine acquisition

In other merger news, Telanetix sealed its $34.9 million acquisition of AccessLine Communications.

The news sent shares of Telanetix up by more than 17% in early afternoon trading. The stock ended the day up 12.37%, or 37 cents, at $3.36 (OTCBB: TNXI).

"Telanetix and AccessLine both deliver best-of-breed software-based communications solutions via internet protocol, and together will offer an impressive portfolio of products and services on a common technology platform," said Tom Szabo, Telanetix's CEO, in a statement.

"We have a unique opportunity to efficiently and economically provide comprehensive communication solutions for small- and medium-sized companies and departments within large organizations, and immediately gain access to early adopter customers that have already taken the first step of utilizing their IP connections for applications other than internet access."

AccessLine hosts voice-over-internet protocol services aimed at the business sector.

"This transaction creates product diversification and infuses capital into our VoIP business," AccessLine's former CEO, Doug Johnson, said in a statement.

Johnson remains on at Telanetix as president of the AccessLine Division.

San Diego-based Telanetix develops technologies to integrate audio, video and data from multiple locations.

PNC integrates Mercantile

Elsewhere, PNC completed the conversion of all Mercantile Bank branches into PNC branches Tuesday, sending shares of PNC up slightly.

PNC's stock ended the day up 4.24%, or $2.93, to close at $72.08 (NYSE: PNC). In after-hours trading, PNC's stock slipped by $1.22.

"The integration of Mercantile into PNC extends our valuable Mid-Atlantic banking franchise, adding to our strength and expanding our ability to deliver products and services to this rapidly growing and affluent region," said James Rohr, PNC's CEO, in a news release.

PNC converted a total of 231 Mercantile branches and 500,000 consumer accounts to PNC.

Siemens gets U.S. approval for merger

Siemens Corp. said Tuesday that the waiting period under the Hart-Scott-Rodino Antitrust Act was terminated and the company received antitrust approval for its planned $7 billion acquisition of Dade Behring Holdings, Inc.

Siemens began a tender offer on Aug. 8 for the shares of Dade Behring at $77 each. The tender offer was extended to Sept. 26.

Shares of Siemens closed up 5.15%, or $6.16, at $125.76 (NYSE: SI) but lost $2.31 after hours. Dade's stock was up 17 cents to close at $76.20 (Nasdaq: DADE).

"Siemens has submitted a draft of the required merger control filing with the European Commission and has since been in discussions with the authority," said a statement released Tuesday afternoon by Siemens. "Siemens believes that it is possible that it might obtain competition law clearance and therefore be able to close the transaction during calendar 2007."

Once the tender offer is done, the remaining shares of Dade Behring will be acquired in a merger at the same price, said the statement from the New York-based electrical engineering giant.

Dade Behring develops diagnostic instruments for clinical laboratories.

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