Wall Street Breakfast: Must-Know News 19 comments
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- Northrop unloads TASC. Northrop Grumman (NOC) agreed to sell its TASC consulting unit to a pair of private-equity firms - KKR and General Atlantic - for $1.65B. TASC unit provides engineering and consulting services to the U.S. military and state governments. Northrop said it expects the sale to generate net cash proceeds of $1.1B, which it will use to repurchase shares. The deal is the latest in a recent uptick in LBO acquisitions which have returned after a two-year dry stretch. Still, with four banks - Barclays (BCS), Royal Bank Of Canada (RY), Deutsche Bank (DB) and a lending unit of the CPP - combining to put up senior debt of well under $1B, today's deals are still a far cry from the mega-mergers of the credit boom.
- G-20 keeps drip open. G-20 leaders said it's too early to withdraw global stimulus efforts despite signs that a global economic recovery is underway. "Economic and financial conditions have improved following our coordinated response to the crisis," officials said in a communique (.pdf) following a two-day gathering in St. Andrews. "However, the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern. To restore the global economic and financial system to health, we agree to maintain support for the recovery until it is assured." Stocks, commodities and futures rallied Monday: "Markets don't need to be worried that these governments and central banks are suddenly going to take away all the stimulus measures," one strategist said. "Risk appetite should remain supported into the end of the year."
- Put up or shut up day for Kraft. Kraft (KFT) could raise the cash portion of its bid for Cadbury (CBY) to 400p ahead of today's deadline, and is expected to take the bid directly to Cadbury's shareholders. Kraft has enlisted Royal Bank of Scotland (RBS), Credit Suisse (CS), Barclays (BCS) and BNP Paribas to help provide a £5.5B bridge loan. Kraft's initial bid of 300p and 0.2589 KFT shares per CBY share was valued at 745p/share, but is now worth about 720p with the decline in Kraft's stock. According to U.K. takeover rules, by launching an offer today Kraft would set in motion a 28-day deadline to publish a prospectus on the offer for Cadbury shareholders, and would have 60 days to collect enough shares to clinch a deal.
- Healthcare bill: next stop Senate. The Obama healthcare overhaul passed a House vote by a narrow margin Saturday (220-215), setting up a fractious debate in the Senate - where Democrats don't enjoy the same broad majority - this week. The bill would cost $1.05T over a decade to provide health insurance to another 36M Americans. It requires most Americans to carry insurance, creates a new exchange where they can shop for it, and gives low income earners tax credits to help them pay for it. In an appearance Sunday, Obama said he is "absolutely confident" a healthcare bill will also pass through the Senate.
- Sprint group to pour another $1.5B into Clearwire. Sources say Sprint Nextel (S) and a number of its Clearwire JV (CLWR) partners are preparing to pump another $1.5B or more into the wireless broadband provider. The Sprint group first invested $3.2B in Clearwire 18 months ago, taking a majority stake in a bet on Clearwire's version of 4G wireless broadband, WiMax. Some rivals have favored a comparable technology knows as LTE. $1B of a new infusion would come from Sprint, with Comcast (CMCSA), Intel (INTC), Time Warner Cable (TWC) and Bright House Networks kicking in another $500M. Google, a key JV partner, isn't thought to be involved in this round.
- Comcast, GE agree on CNBU valuation. After weeks of wrangling, GE (GE) and Comcast (CMCSA) reportedly agreed to value NBC Universal at about $30B, and a deal to give Comcast a 51% stake in GE's media and entertainment arm could come as early as this week, though it's still unclear whether 20% NCBU stakeholder Vivendi has signed off on the proposal. Sources say the pair met last week with debt-raters to ascertain the impact of $9B in debt a new NBCU would assume as part of the combination, and hope this week to be told it would be considered investment grade.
- Murdoch paper cleared of spy charges. The U.K. Press Complaints Commission said Monday it has found no proof journalists at Rupert Murdoch's The News of the World regularly hacked the phones of public figures to secure sensational stories. The probe was prompted after reports in The Guardian said the practice at the tabloid was widespread. In response, the Guardian described the PCC's report as complacent, saying the PCC did not have the "ability, the budget or the procedures to conduct its own investigations."
- Axa Asia Pacific shuns $10B bid from parent. Axa Asia Pacific (AXAPY.PK), the Australian unit of France’s biggest insurer (AXA -1.1% premarket), rejected an unsolicited $10B bid from its parent and AMP Ltd. (AMLTF.PK). CEO Rick Allert said Axa Asia Pacific would consider a higher offer, but called today's offer too low. Axa said today it will raise £2B through a rights offer to finance acquisitions.
- Brown backs down on transactions tax. World leaders publicly snubbed U.K. PM Gordon Brown's bold pitch for a global tax on financial transactions which would be used to fund future bailouts. Brown surprised ministers by pitching the initiative during a speech to the G-20 assembly Saturday to the dismay of his peers, who unanimously agreed with U.S. Treasury chief Tim Geithner in saying economic leaders don't think taxpayers should have to pay for future financial sector foibles. Brown backed down Sunday, though he continues to believe tighter bank regulation may not suffice to protect against future risk.
- Reynolds eyes stake in smokeless tomorrow. Cigarette giant Reynolds American (RAI) is in advanced talks to buy closely held Niconovum AB, a Swedish maker of nicotine-replacement therapies such as Zonnic pouch and Zonnic gum. A deal would be the largest move by Reynolds into nicotine products, as sales of cigarettes continue to decline. Reynolds controls about 28% of the U.S. cigarette market, second to Altria (MO) which has about 50%. Sources say the deal could be valued at €30M.
Earnings: Mon. Before Open
- DISH Network (DISH): Q3 EPS of $0.18 misses by $0.26. Revenue of $2.89B (-1.5%) vs. $2.93B. Net customers +241K to 13.85M. (PR)
- Energy Conversion Devices (ENER): FQ1 EPS of -$0.34 misses by $0.03. Revenue of $42.9M (-55.2%) vs. $56.4M. Shares -0.1% premarket. (PR)
- GTx (GTXI): Q3 EPS of -$0.35 in-line. Revenue of $3.6M (+20%) vs. $4M. (PR)
- Hospitality Properites Trust (HPT): Q3 FFO of $0.77 misses by $0.01. Revenue of $264M (-15.4%) vs. $272M. (PR)
- Nationwide Health Properties (NHP): Q3 FFO of $0.56 in-line. Revenue of $97.8M (+3.4%) vs. $94.4M. Sees full-year EPS of $2.22-2.23 vs. $2.28. (PR)
- Quicksilver Resources (KWK): Q3 EPS of $0.25 beats by $0.03. Revenue of $207M (-12.5%) in-line. (PR)
- Rockwell Automation (ROK): FQ4 EPS of $0.37 beats by $0.10. Revenue of $1.07B (-27.6%) in-line. (PR)
- Tesoro (TSO): Q3 EPS of $0.24 beats by $0.23. Revenue of $4.74B in-line. Expects to spend less than its stated capex budget of $600M. Shares +3.7% premarket. (PR)
- Warner Chilcott (WCRX): Q3 EPS of $0041 misses by $0.01. Revenue of $253M (+9%) in-line. (PR)
- Western Refining (WNR): Q3 EPS of -$0.05 beats by $0.01. Revenue of $1.83B (-40.6%) vs. $1.75B. Shares +0.5% premarket. (PR)
- Windstream (WIN): Q3 EPS of $0.24 beats by $0.03. Revenue of $734M (-7.5%) vs. $747M. (PR)
Today's Markets
Overseas markets and commodities surged Monday, and U.S. futures have gained overnight. The dollar is getting pounded in early trading.
- Asia: Nikkei +0.2% to 9809. Hang Seng +1.7% to 22208. Shanghai +0.4% to 3176. BSE +2.1% to 16499.
- Europe at midday: FTSE +1.8% to 5219. CAC +1.6% to 3766. DAX +1.7% to 5579.
- Futures: Dow +0.85% at 10063. S&P +0.9% to 1076. Nasdaq +0.9%. Crude +1.5% to $78.60. Gold +1.1% at $1,108. 30-year Tsy -0.18% to 118-07. 10-year -0.07%. Euro +0.9% vs. dollar. Yen -0.2%. Pound +1.1%.
Monday's Calendar
- 10:00 Employment Trends Index
1:00 PM Results of $40B, 3-Year Note Auction
6:30 PM Fed's Tarullo: Financial Regulation - Notable premarket earnings: DISH, ENER, GTXI, HPT, KWK, NHP, ROK, SRE, TSO, WCRX, WIN, WNR
- Notable postmarket earnings: ARNA, CCO, ERTS, FLR, HOLX, LGF, LYV, MBI, MDR, PCLN, QGEN, RAX, SLW, SQNM
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This article has 19 comments:
Yea right. No snake oil for me please.
Now that I've stoked up on stomach medicines, I have carefully reviewed the situation, and yes, it IS a logical reaction.
Should we all go long the antacid companies?
On Nov 09 08:11 AM doubleguns wrote:
> "The bill would cost $1.05T over a decade to provide health insurance
> to another 36M Americans."
>
> Yea right. No snake oil for me please.
> "The bill would cost $1.05T over a decade to provide health insurance to another 36M Americans."
>
> Yea right. No snake oil for me please.
["It requires most Americans to carry insurance, creates a new exchange where they can shop for it, and gives low income earners tax credits to help them pay for it."]
Wait until the Grey Panthers fully realize their Medicare and Medicaid entitilements will be pared back in order to afford this new program. This is going to be interesting. The senior citizens routinely vote.
That's cheap!!!
We just spent 1.5 trillion in Iraq & will probably spend another trillion making sure every Iraqi has health insurance.
I am for spending the money here in the US.
So, Main Street pays the stake money and takes the loss if utopia does not come good. Nothing's changed.
The news this morning, the same as it was a year ago, "Futures rise on talk of G-20 stimulus."
It's not working, but they are going to play this one to the end of the "government bubble," then the hard fall is really going to hit all of us.
This reminds me of the last days of the tech bubble when all of these start-ups went back to their venture capitalist sources and said, "We need more money." They were told, go make some of your own and stand on your own two feet. Well, we all now the end of that story.
We are witnessing the same thing with government stimulus... It's not working, it's not sustainably and it has serious consequences.
The rumor on the street is a hostile takeover is in play for Target. And if Walmart wins, could you imagine the Bullseye logo in front of the word WALMART?
Could be a good move for Wally, Target is not international yet, and it would be a good play to either bring that brand to China, or incorporate the upscale demographic into Walmart culture.
Should be an interesting ride....so buy or sell Wally and TGT?
does anyone here 15 percent?
BLS is reporting 9 percent unemployment for Architects!!!! That is BELOW the average for unemployment....now, what are they smoking at the BLS.....the real rate is well into the double digits for Architects.
Architecture firms have been having massive layoffs for over a year. Does the BLS think that we can believe 9 percent?
On Nov 09 09:16 AM bbowen7 wrote:
> So, we'll add a trillion dollars because American health care is
> too expensive? What happened to cost reduction - tort reform; buying
> insurance across state lines; aligning the spending decision with
> the person paying the bill; getting away from an employer-based system?
The logical way to expand health care to the uninsured would be to greatly expand the National Health Service Corps program and its nonprofits which successfully operate in all states. Don't look for that to happen anytime soon, though, since the for-profit health insurance and care lobbies have been buying congresscritters as fast as Buffet buys stock.
If you think universal health CARE (not universal health INSURANCE) is essential, you are living in the wrong country. It will NEVER happen here as long as the Republicrats and the folks who bought them are in charge.
Calling the bastardized bill(s) currently in CON gress "health care reform" is just plain wrong. Tinkering with the nonessentials, adjusting reimbursement rates, etc, is not reform. It is what CON gress is good at - futility. The net result will leave the American "health care system" unchanged in any significant way.
Now, I must go and read the hundreds of pages of the Medicare 2010 book my government sent me to inform me of the hundreds of changes they've made for this year. THAT is what our "health care" dollars are being spent on - I get thousands of pages of printed crap from hundreds of insurance companies and the government every year, most of which I can't understand anyway because it's all written by thousands of attorneys.
Bottom line - LESS THAN HALF of all the money Americans spend for "health care" actually pays for health care. "Reform" would change that. Reform is NOT going to happen. Only the details will be adjusted. The golden rule applies - those with the gold make the rules.
Yes, I am in America and a citizen, but my housekeeper is an illegal but gets her healthcare for free in the emergency room. She says hello and thinks Iraq deserves free healthcare too.
On Nov 09 08:23 AM yolosetodo wrote:
> 1 trillion over next 10 years?
> That's cheap!!!
> We just spent 1.5 trillion in Iraq & will probably spend another
> trillion making sure every Iraqi has health insurance.
> I am for spending the money here in the US.
As well they should. It's the Labour Party's financial version of Neville Chamberlain's, "Peace in our time", but promising, "Prosperity in our time". Liberals, of both parties in the US, like to play this same foolish game of; If we can think it up, it must therefore be so".
Like Democrats on health care.