Regency Centers closing merger with Equity One this week

(Courtesy of Financial News and Daily Record)

Shareholders of Regency Centers Corp. on Friday approved the company’s $4.6 billion merger with Equity One Inc., clearing the way to close the deal this week.

Regency will be the surviving company of the merger between the two companies that specialize in developing and operating shopping centers anchored by supermarkets. The company will remain headquartered in Jacksonville with Regency’s senior management continuing to run it.

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The merger is expected to be completed Wednesday.

Meanwhile, in light of the merger, S&P Dow Jones Indices is adding Regency to the Standard & Poor’s 500 index this week.

Inclusion in the bellwether stock index will increase the company’s visibility on Wall Street.

Regency is swapping places with pharmaceutical company Endo International, which will take Regency’s spot in the S&P MidCap 400.

“Post acquisition, Regency Centers is expected to have a market capitalization more representative of the large cap market space. Endo International is ranked near the bottom of the S&P 500 and has a market capitalization more representative of the mid-cap market space,” S&P Dow Jones said in a news release.

Regency will become part of the S&P 500 at the opening of trading Thursday.

‘Opposite day’ at CSX, Bloomberg columnist says

A Bloomberg News columnist had an interesting take on the ongoing effort of Hunter Harrison to become CEO of Jacksonville-based CSX Corp.

“It’s opposite day at CSX Corp., where an activist investor is fighting for — rather than against — a jumbo-sized executive pay package,” Brooke Sutherland wrote in her Bloomberg column last week.

Harrison, former CEO of Canadian Pacific Railway Ltd., is working with hedge fund Mantle Ridge to try to get the CSX job.

Current CEO Michael Ward announced last week he will retire May 31.

According to CSX, Harrison is demanding a compensation package that exceeds $300 million over four years. Mantle Ridge disputed that in a letter to CSX’s board but still described a package that exceeds $200 million.

“Even if you strip away all the extras and focus on the base salary, the $2.2 million a year that CSX says Mantle Ridge is seeking for Harrison is almost double what Ward received in 2015. It’s also more money than other CEOs of public U.S. railroads get, according to data compiled by Bloomberg,” Sutherland wrote.

“So essentially the argument is that CSX needs to be more aggressive about improving its profitability, but to do that it needs to balloon its CEO compensation expense,” she wrote.

All this comes as CSX says it will reduce costs by cutting 1,000 management jobs, with most coming from Jacksonville.

CSX is planning a special meeting to allow shareholders to vote on whether they want the company to pay Harrison. You have to wonder how many CSX managers are stockholders and how many votes they have.

Advanced Disposal earnings rise

After completing its initial public offering in October, Advanced Disposal Services Inc. last week reported fourth-quarter adjusted earnings of $17.2 million, up from $5.5 million the previous year.

For all of 2016, the Ponte Vedra-based waste management services company reported adjusted earnings doubled to $33.5 million. Revenue of $1.405 billion was slightly higher than 2015 revenue of $1.396 billion.

The company is projecting 2017 revenue of $1.45 billion to $1.475 billion.

“Advanced Disposal has undergone transformational changes during 2016,” CEO Richard Burke said in a news release.

“I am pleased we were able to improve our capital structure and begin the next chapter of our company’s history as a public company, while at the same time producing strong results for both fourth quarter and the full year 2016,” he said.

Creative Learning proxy fight ends

A proxy fight launched by the former CEO of St. Augustine-based Creative Learning Corp. has apparently failed.

Brian Pappas was terminated in October 2015 as CEO of the company, which offers educational and enrichment programs for children through franchisees.

Pappas, who still controls 19.5 percent of the stock, was seeking to remove the four current board members of Creative Learning and replace them with three of his own.

However, Creative Learning said in a Securities and Exchange Commission filing that Pappas did not deliver enough consent forms from other stockholders by a Feb. 7 deadline.

So, there will be no changes to the board, the company said.

“With the disruption of the proxy contest behind us, we are happy now to be able to concentrate all our energy upon several important initiatives to increase franchise sales, grow franchisee success and enhancing our wonderful brand and educational methods,” Chairman Chuck Grant said in a news release.

Duos Technologies plans reverse split

Duos Technologies Group Inc. shareholders last week approved a plan to lift the company’s stock price with a reverse split.

The measure allows Duos to enact the reverse split at a ratio of at least 1-for-5, meaning stockholders would get one share for every five they currently own. The ratio could go as high as 1-for-500, at the discretion of the board of directors.

Jacksonville-based Duos, which provides intelligent analytical technology solutions, is traded in the OTCQB market and is hoping a higher stock price will help it get a Nasdaq listing.

The stock was trading at just 3 cents a share when the company filed its proxy statement for the reverse split.

Convergys drops on earnings miss

Convergys Corp. dropped to a 52-week low Thursday after reporting revenue and earnings below expectations.

The outsourced customer service company’s adjusted fourth-quarter earnings of 47 cents a share were 6 cents lower than the previous year and a penny below the average analyst’s forecast, according to Yahoo Finance.

Revenue rose 1 percent to $758 million, but that was lower than the average forecast of $766 million.

Convergys forecast 2017 earnings per share will range anywhere from 3 percent lower than 2016 to 3 percent higher.

The company said in a news release it expects “seasonal sequential” drops in revenue in the first quarter and lower earnings in the second quarter, with results beginning to improve in the third quarter this year.

“Future actions to streamline the business and align costs to match anticipated revenue will likely require discrete actions in the first quarter of 2017, the costs of which are not included in this guidance,” it said.

Cincinnati-based Convergys has 1,350 employees in its Jacksonville office, where the workforce has fluctuated over the years along with contract wins and losses.

Its stock fell to a 52-week low of $22.22 Thursday before closing at $22.63, down $2.42 on the day.

Medtronic grows third-quarter revenue

Medtronic plc said revenue in its Jacksonville division — which produces surgical instruments for ear, nose and throat doctors — rose in the “low single digits” in its third quarter ended Jan. 27. However, it did not provide numbers.

The global medical device company said revenue in its entire specialty therapies group, which includes the ENT division, rose 4 percent to $370 million.

Total third-quarter revenue rose 5 percent to $7.28 billion and adjusted earnings grew by 6 cents a share to $1.12. That was a penny higher than the average analyst’s forecast, according to Zacks Investment Research.

Medtronic’s stock rose $1.68 to $80.56 Tuesday after the earnings report.

Renasant eyes local mortgage market

Renasant Corp. is a Mississippi-based banking company that appears to be the latest financial institution to have its sights on the Jacksonville market.

Renasant doesn’t have a bank branch in Jacksonville but it is looking to expand mortgage banking efforts in Northeast Florida.

During the company’s year-end conference call, Executive Vice President James Gray said Renasant is looking for mortgage growth in North Florida this year after an overall slowdown in mortgage activity at the end of 2016.

“We utilized this slowdown during the fourth quarter as an opportunity to amplify our recruiting efforts, which are already in effect, and we were able to bring on a producing manager, not just a nonproducing manager but actual producing manager in Jacksonville,” Gray said, according to a transcript of the call in a Renasant SEC filing.

“He is onboard and actively recruiting down in the Jacksonville/Gainesville and possibly over into the Orlando area. We anticipate dramatically increasing our production in the northern Florida market,” he said.

Renasant entered the Florida market in 2015 by acquiring HeritageBank of the South, which had bank branches in Ocala and Gainesville. A year before that deal, HeritageBank had acquired Ocala-based Alarion Bank, which had a mortgage office in Jacksonville.

Renasant, headquartered in Elvis Presley’s hometown of Tupelo, had assets of $8.7 billion at the end of 2016. The bank reported earnings rose 34 percent last year to $90.9 million, or $2.17 a share.

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