Barron's give Hercules an optimistic future - potential acquisition by Nalco fades

Some interesting comments from Barron's Magazine as they upgrade Hercules from 'peer' to 'outperform'.

Their positive view is based on:

• Recovery of Aqualon margins by the first quarter of 2008 as the new methyl cellulose (MC) and sodium carboxymethyl cellulose (CMC) plants in China become fully operational.

• The company's pension-plan immunization effort, which will save $25 million or 15 cents per share per year, and be effective in the first quarter of 2008.
  

• Aggressive share re-purchases at current low stock-price levels.

• The company's improved debt profile which would allow the company to change debt covenants and remove the restriction on share repurchases.
  
  
• The potential buyout of Hercules by Nalco Holdings now being very unlikely, given antitrust issues along with retirement of the once Hercules and now Nalco's CEO, William Joyce, further reduced the likelihood; however, the option of a JV of the paper operations with a large European supplier is seen as a future option, although an imminent transaction was not being considered by Hercules' management.