(Reuters) - Yahoo Inc said it is acquiring blogging service Tumblr for $1.1 billion cash, a bold bet by Chief Executive Marissa Mayer to revitalize the struggling Internet pioneer by co-opting a Web property with strong visitor traffic but little revenue.
The deal, which will use about a fifth of Yahoo's $5.4 billion in cash and marketable securities, is the largest by far since Mayer took the reins in July seeking to reverse a multi-year decline in Yahoo's business and Web traffic.
"Per the agreement and our promise not to screw it up, Tumblr will be independently operated as a separate business," Yahoo said in a statement on Monday.
David Karp, who founded Tumblr in 2007, will remain CEO.
Tumblr is one of the Web's most popular hubs of so-called user-generated content. The deal will provide Yahoo with a much-needed platform in social media to reach a younger generation of users less tied to Yahoo's traditional Web portal and email services.
Yahoo said the acquisition is expected to increase its audience by 50 percent to more than a billion monthly visitors.
(Reporting By Alexei Oreskovic; Writing by Ben Berkowitz; Editing by Gerald E. McCormick and John Wallace)
NEW YORK (Reuters) - Stock index futures dipped in light volume on Monday as investors search for catalysts after major U.S. equity indexes closed a fourth consecutive week of gains Friday.
Deals including Yahoo's $1.1 billion bid for Tumblr indicate that companies continue to search for growth through acquisitions despite record highs, a bullish sign for stocks.
The S&P 500 and Dow industrials finished Friday at fresh record highs and the Nasdaq Composite is at its highest since late 2000. A light economic and earnings calendar could leave the market vulnerable for a pullback, but those have been shallow and short-lived as investors take any weakness as a new chance to increase long positions.
"I'm not looking for a major down movement, but cautious sideways is probably what we are headed for," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Cardillo pointed to Federal Reserve chairman Ben Bernanke's testimony before Congress on Wednesday as the highlight of the week. The beginning of the end of the Fed's massive bond-buying program, which has given strong support to stock gains, might come sooner than many investors think if recent gains in the U.S. labor market hold.
S&P 500 futures dipped 1 point and were below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures fell 7 points, and Nasdaq 100 futures shed 4.75 points.
Yahoo shares dipped 0.8 percent in premarket trading after its board has approved a deal to buy blogging and social networking site Tumblr for $1.1 billion in cash.
Actavis confirmed it will acquire Warner Chilcott Plc in a stock-for-stock transaction valued at $5 billion. Actavis shares rose 2.8 percent in premarket trading and Warner Chilcott added 3.2 percent.
Pactera Technology International said it received a proposal from a Blackstone affiliate, its non-executive chairman and its chief executive to take the company private. Pactera shares rose 29 percent in light premarket trading.
Websense Inc shares jumped 30 percent premarket after it agreed to be acquired by Vista Equity Partners.
Solar products maker JA Solar Holdings reported another quarterly loss on lower prices for panels that convert sunlight into electricity, but its operating loss nearly halved from the first quarter of 2012. Its shares jumped 12.8 percent higher in light premarket trading.
China's housing inflation accelerated to its fastest pace in two years in April, a hurdle for policymakers trying to cool the property sector while supporting economic expansion.
(Reporting by Rodrigo Campos; Editing by Chizu Nomiyama and Nick Zieminski)
(Reuters) - Generic drugmaker Actavis Inc, which has been the subject of takeover speculation, plans to buy specialty pharmaceutical company Warner Chilcott Plc for $5 billion in stock.
The companies said the deal had an enterprise value, including debt, of $8.5 billion.
The move comes as Actavis has spurned approaches from Canadian pharmaceutical company Valeant Pharmaceuticals International Inc and Mylan Inc. Analysts have said that if Actavis were to buy Warner Chilcott, it would kill the chances of its being taken over.
Warner Chilcott shareholders will receive 0.16 share of the combined company. The companies said that would equate to $20.08 per share, based on Actavis' closing share price of $125.50 on Friday.
The purchase price is a 34 percent premium to Warner Chilcott's closing share price of $15.01 on May 9, the day before the companies disclosed that they were in talks. Warner Chilcott shares have since risen and closed on Friday at $19.19, narrowing the premium to less than 5 percent.
Shares of Warner Chilcott were up 2.8 percent at $19.75 in trading before the market opened, while Actavis rose 2.5 percent to $128.70.
Warner Chilcott brings a portfolio of branded women's health pharmaceuticals such as the contraceptive patch to Actavis, which makes and sells generic version of drugs that are no longer protected by patents. Because Warner Chilcott is based in Ireland, the deal creates a money-saving lower tax rate for Actavis, analysts have said. The combined company would have $11 billion in annual sales.
(Reporting by Caroline Humer in New York and Esha Dey in Bangalore; Editing by Sriraj Kalluvila and Lisa Von Ahn)
