ConAgra Foods to buy Ralcorp in $6.8B deal. ConAgra Foods (CAG) has agreed to acquire Ralcorp Holdings (RAH) in a deal worth $6.8B, including debt. The offer of $90 a share represents a 28.2% premium to Ralcorp's closing price yesterday. The transaction will create the largest packaged-food company in North America.
EU shares rise after Troika reaches deal to save Greece - again. The Troika has finally agreed to a deal to cut Greece's debt burden and enable the country to receive the next tranche of its bailout. Measures include allowing Greece's debt-GDP ratio to fall to 124% by 2020 rather than 120%, buybacks of the country's loans, and the deferral of some interest payments. EU shares rose in celebration, although U.S. stock futures appear to be less convinced (see below).
AvalonBay, Equity Residential to buy Archstone for $6.5B. AvalonBay (AVB) and Equity Residential (EQR) have joined together to acquire apartment owner Archstone Enterprise from Lehman Brothers (OTC:LEHMQ) for $6.5B, plus $9.5B in debt. AvalonBay will get about 40% of the assets and liabilities, and Equity Residential - which tried to gain control of Archstone earlier this year - the rest. Both companies are commencing stock offerings to fund the deal.
Top Stock News
Bombardier receives order of up to $7.8B. Bombardier (OTCPK:BDRAF) has received what could turn out to be its largest-ever booking after luxury air-charter specialist VistaJet ordered 56 of the Canadian company's Global-series business jets and took options for 86 more. The initial value of the deal is $3.1B, a figure that could rise to $7.8B. The agreement highlights how orders for corporate jets are recovering following a four-year slump.
H-P sued over Autonomy fiasco. H-P (HPQ) has received one of the first lawsuits over its purchase of Autonomy, with a shareholder accusing the company of making misleading statements and hiding that it bought the U.K. firm based on unreliable financial data. The shareholder also alleges that H-P tried to back out of the deal before it closed. Meg Whitman, Leo Apotheker and CFO Catherine Lesjak are among those named as defendants.
Amazon joins bond rush. Amazon (AMZN) has followed many of its peers in seeking to exploit rock-bottom interest rates by raising $3B in a bond offering that comprised notes maturing in three, five and 10 years. The company will use the money to help it buy its Seattle headquarters in a $1.16B deal, as well as for general corporate purposes. Moody's rated the debt - the first that Amazon has issued since 1999 - at Baa1, although S&P rated it four levels higher at AA-.
Dish mobile prospects look increasingly grim. Dish's (DISH) request to build a cellular network on spectrum it owns without power restrictions would interfere with nearby frequencies that the FCC plans to auction for potentially billions of dollars, the agency has said. The Dish network would therefore destroy the value of the assets. The company has denied the claims, but its hopes that the FCC will approve its request are looking increasingly grim.
Focus of patent wars moves to San Diego front. The latest trial in the global patent wars is due to get underway today in San Diego, where Alcatel-Lucent (ALU) is suing Apple (AAPL) and LG Electronics for allegedly infringing IP related to video-compression technology. Alcatel-Lucent is seeking a "reasonable royalty" based on what it would have been paid had Apple and LG agreed to a licensing deal before supposedly breaching the patents.
Dollar General to join S&P 500. Dollar General (DG) will be added to the S&P 500 on Friday, replacing Cooper Industries (CBE), which is being acquired by Eaton Corp. (ETN). Citigroup reckons the move will be good enough to spur a rapid-fire 6% rally in Dollar General's shares.
Top Economic & Other News
OECD takes axe to world growth forecasts. The OECD has cut its prediction for global growth to 2.9% this year from a previous forecast of 3.4%. In its twice-yearly report, the organization also said growth in 2013 will be 3.4% rather than 4.2%. The OECD cut its estimates for the U.S. as well - predictably warning about the fiscal cliff - and said the eurozone will contract in 2012 and 2013 before recovering in 2014.
EU to follow U.S. in delaying Basel III rules. The EU is reportedly set to postpone the introduction of Basel III bank capital rules by about six months from the original date of Jan 1. The delay could be even longer if the EU fails to resolve differences over how to implement the regulation. At the same time, the bloc is pushing the U.S. to say when it will introduce Basel III after the latter indefinitely postponed the rules.
Profits at Chinese firms provide more evidence of GDP recovery. Profits at Chinese industrial companies jumped 20.5% on year in October to 500B yuan ($80.4B), with growth accelerating from a 7.8% rise in September and providing further evidence that the economy is rebounding. "The profit number, together with other economic indicators, shows there is no need for the government to launch new easing policies," says Citigroup economist Ding Shuang.
Shadow finance poses further risk to Chinese banks. Chinese banks are increasingly at risk from their links to the "shadow-finance" industry, which encompasses credit outside of formal lending. The sector has grown to 20T yuan ($3.2T), or a third of bank lending, up from 5% in 2008. "Many activities in the two systems feed into each other, and could influence each other if things start to deteriorate," says Bank of China Chairman Xiao Gang.
Outlook for Indian gold demand jumps. Demand for gold in India, one of the world's largest markets for the metal, is forecast to rise to 800 metric tons in 2012, well above a prior prediction of 650-750 tons. The increase in the outlook follows a pick-up in purchases during the festive season and comes despite government efforts to restrict gold sales amid concerns about India's current account deficit.
Cyber Monday sales soar 26%. Online retail sales jumped 26% from last year on Cyber Monday, IBM said late yesterday, adding that purchases from mobile devices, including tablets, rose 10.2%. The rise follows a strong increase in Internet shopping over the Thanksgiving weekend.
In Asia, Japan +0.4% to 9423.3. Hong Kong -0.1% to 21844. China -1.3% to 1991. India +1.6% to 18842.
In Europe, at midday, London +0.4%. Paris +0.4%. Frankfurt +0.5%.
Futures at 7:00: Dow -0.1%. S&P -0.1%. Nasdaq +0.1%. Crude +0.2% to $87.93. Gold -0.15% to $1747.00.
Today's economic calendar:
6:00 Fed's Fisher: 'Financial Instability'
6:30 Fed's Lockhart: 'Financial Instability'
7:45 ICSC Retail Store Sales
8:30 Chicago Midwest Mfg. Index
8:30 Durable Goods
8:55 Redbook Chain Store Sales
9:00 S&P Case-Shiller Home Price Index
10:00 Consumer Confidence
10:00 State Street Investor Confidence Index
10:00 Richmond Fed Mfg.
10:00 FHFA House Price Index
1:00 PM Results of $29B, 7-Year Note Auction
8:00 PM Fed's Evans: Economic Outlook
Notable earnings before today's open: ADT
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