Boston, MA 07/01/2014 (wallstreetpr) – Tower Group International, Ltd. (NASDAQ:TWGP) plunged during trading yesterday amid doubts over its deal with ACP Re Ltd. The stock declined more than 11 percent by closing bell as traders doubted whether the merger agreement with ACP Re will be completed as deadline looms. The deal is considered a lifeline for the insurer as it is soaked in debts.
Tower Group (NASDAQ:TWGP) has lost nearly half of its market value in 2014 following the higher claims costs that the company suffered in 2013. The company announced last week that ACP Re affirmed commitment to purchase it for $2.50 a share.
Stakes are high for Tower Group International, Ltd. (NASDAQ:TWGP) given that regulators in Massachusetts have asked it to provide a repayment plan for its debt in the event that the takeover fails to consummate. The company hired Greenhill & Co under pressure from Massachusetts watchdog to advice on debt repayment.
Nonetheless, the whole issue of takeover remains soaked in speculations. Initially the price of $3 per share was quoted in the deal with ACP Re, that price was later reduced to $2.50 per share.
There appears to be more concern than hope about the future of North American Palladium Ltd (USA) (NYSEMKT:PAL). In that past few weeks, the consensus earnings estimates for the current year have dropped, which is a discouraging development. In addition to the decline in earnings estimates for the year, the stock price action is also discouraging in that the stock has plunged, which calls for investors to watch the ticker closely following the recent declines in price and earnings estimates.
Hovnanian Enterprises, Inc. (NYSE:HOV) refused to stay calm even as most homebuilders experienced a positive day yesterday. The stock suffered from the concerns over the high rates, but analysts believe that there is no cause for alarm, and the dip should come as a welcome buy opportunity for investors with a long-term outlook.