Countrywide shares up on talk of HUD venture; Mirant shares slip; Fidelity National stock climbs

By Sheri Kasprzak

New York, Nov. 9 - Unsubstantiated talk of a possible joint financial venture between the U.S. Department of Housing and Urban Development and mortgage lender Countrywide Financial Corp. sent shares of Countrywide up 2.67% on Friday.

A trader said early Friday afternoon that Countrywide's option premiums are "rich" on the whispers of the possible HUD deal.

"CFC call option volume of 29,774 contracts compares to put volume of 14,059 contracts," said the trader early Friday afternoon. "CFC Nov. 15 straddle is priced at $1.95. CFC December option implied volatility of 107 is above its 26-week average of 64 ... suggesting larger risk."

The joint venture talk came just a couple of weeks after former HUD chief Henry Cisneros resigned from Countrywide's board of directors.

Shares of Countrywide were up on Friday, gaining 36 cents to close at $13.83 (NYSE: CFC). The stock gained another 4 cents after the market closed.

The mortgage lender has suffered substantial drops in its stock over the past year on subprime mortgage troubles.

Meanwhlie, Mirant Corp. watched its stock slip on Friday ahead of the Veterans Day holiday as activity elsewhere remained fairly quiet.

Mirant said Friday it will return $4.6 billion in excess cash to its shareholders after concluding its strategic review. The company also released its third-quarter earnings report Friday, reporting net income of $775 million for the quarter, compared with a net loss of $26 million for the corresponding quarter of 2006.

Shares of Mirant closed the day off 11.53%.

In other news, Fidelity National Financial Inc. inked its $5.3 billion acquisition of Ceridian Corp.

Fidelity's stock ended up on Friday on news of the closing of the deal.

Mirant to return cash to shareholders

Mirant's stock ended down $4.89, or 11.53%, on Friday to end at $37.51 (NYSE: MIR).

On Friday, Mirant said after completing its strategic review, the company decided to return $4.6 billion in excess cash to its shareholders.

The process will be completed in stages with the first consisting of an accelerated share repurchase program for $1 billion, combined with open-market purchases for another $1 billion.

In an accelerated repurchase agreement with JPMorgan, Mirant plans to repurchase 24 million shares.

Also on Friday, Mirant said it has reinitiated its adjusted EBITDA guidance for 2007 and 2008 of $1 billion and $907 million, respectively. The company reportedly suspended its guidance in April connected with the announcement of the strategic review.

Elsewhere, Mirant reported an adjusted net income from continuing operations of $323 million for the third quarter, or $1.14 per diluted share, compared with a net income of $131 million for the same period of 2006.

Atlanta-based Mirant is an electricity provider.

Fidelity closes Ceridian acquisition

Elsewhere Friday, Fidelity National Financial sealed its deal with Ceridian in a $5.3 billion cash and stock transaction.

Shares of Fidelity were boosted by the news, gaining 4.91%, or 67 cents, to close at $14.31 (NYSE: FNF). In after-hours trading, the stock fell by 11 cents. Ceridian ceased to trade Friday on the New York Stock Exchange under the "CEN" symbol.

The majority of the purchase price, a statement from Fidelity said, was funded through a borrowing under the company's existing credit facility.

Ceridian is an information services company focused on the human resources, retail and transportation markets, as well as the payroll process, tax filing, benefits administration, work-life and employee advisory programs and other human resources related services.

Jacksonville, Fla.-based Fidelity is a title insurance, specialty insurance and claims management services company.

Cap Rock closes Semco merger

In other news, Cap Rock Holding Corp. finished its tender offer of all of Semco Energy, Inc.'s outstanding stock.

In the $352 million transaction, Cap Rock acquired all of Semco's outstanding common stock and all of its 5% series B preferred stock with Semco shareholders receiving $8.15 per share in cash for every common share and $213.07 per share plus a make-whole premium at $19.972 for every share of preferred stock.

Connected with the offering, Semco accepted for purchase $145.075 million in principal of 2008 notes tendered, or 96.7% of the total outstanding principal on the notes, as well as $199.867 million in principal of its 2013 notes tendered, or 99.9% of the outstanding notes.

Shares of Semco ceased trading on the New York Stock Exchange under the symbol "SEN."

An analyst familiar with the energy sector said recently that the deal was most likely better for Cap Rock than for Semco, saying that the energy holding company is getting an "established utility at a bargain."

In October, the deal was given the go-ahead by the Regulatory Commission of Alaska.

All-Market shares slip

Shares of All-Market Advantage Fund, Inc. were off on Friday after its shareholders approved its acquisition by AllianceBernstein Large Cap Growth Fund, Inc.

The stock closed down 4 cents to end at $13.16 (NYSE: AMO).

The acquisition is expected to close in the first quarter of 2008.

All-Market Advantage shareholders, in the transaction, will receive shares of Large Cape Growth equivalent in total net asset value to the shares they held in AMO as of the close of business on the acquisition date.

New York-based All-Market is a closed-end investment company.

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