RC2 Corp. shares fall as acquisition terminated
RC2 shares decline after company terminates acquisition due to weak capital market conditions
NEW YORK (Associated Press) - Shares of RC2 Corp. fell on Tuesday, after the maker of toys and infant products ended its bid for Publication's International's children's publishing unit amid a difficult credit-market environment.
Shares fell $3.53, or 14.9 percent, to $20.16 during midday trading. The stock has traded between $16.03 and $31.21 during the past 52 weeks.
The company agreed in June to buy the division for $163 million in cash. At the time, the company said it planned to finance the deal with a new syndicated senior secured credit facility. But since that time, amid turmoil in the financial sector, credit markets have tightened.
Wachovia Capital Markets analyst Timothy Conder, who rates the company "Market Perform," said he expects the company to record termination fees and deal-related expenses of about 2 cents per share in the third quarter.
"We believe management could reconstitute the deal once capital markets improve," he wrote. 