McKesson in talks to buy Germany's Celesio for €3.74B+. U.S. drug distributor McKesson (MCK) is reportedly in advanced negotiations to acquire German peer Celesio for over €3.74B ($5.08B), or €5.38B when including debt. McKesson is holding negotiations with Celesio's majority shareholder, the Franz Haniel & Cie holding company, which would tender its stake. A deal would increase McKesson's leverage with global pharmaceutical companies, and would follow Walgreen's (WAG) purchase last year of a 45% stake in U.K.-based Alliance Boots for $6.7B.
Alcatel-Lucent to axe 10,000 jobs. Alcatel-Lucent (ALU) has confirmed reports that it intends to slash 10,000 staff, or 14% of its global workforce, by 2015 as part of its previously announced Shift Plan in which it's looking to save €1B+. "This is something Alcatel needed to do," says analyst Eric Beaudet. "The magnitude of the plan is big and shows the management's resolve in rapidly executing its turnaround." Alcatel-Lucent's shares were +3.4% premarket.
Top Stock News
Revenues at Yum Brands and Alcoa seen falling. Yum Brands (YUM) and Alcoa (AA) are due to kick off Q3 earnings season today. Analysts expect that Yum's EPS slipped to $0.93 from $0.99 as revenue declined 1% to $3.53B, hurt by continued safety concerns in China. While Alcoa is no longer in the DJIA, its results still retain broader interest for what they say about the global economy. EPS is seen doubling to $0.06 even though revenue is thought to have dipped 3.4% to $5.63B.
JPMorgan set to fight CFTC charges in court. JPMorgan (JPM) has reportedly denied CFTC charges that the bank manipulated certain credit markets as part of its London Whale trades, indicating it is prepping to fight the case in court. The approach is in contrast to the one JPMorgan has taken over numerous other allegations, with the bank looking to come to a massive deal with multiple regulators to settle them in one fell swoop.
Talisman soars after Icahn discloses stake. Shares in Talisman Energy (TLM) surged 8.9% in post-market trading after Carl Icahn disclosed a 61M-share, 5.97% stake in the oil and gas producer, which has a market cap of $13.19B. As is his wont, Icahn took to twitter to say that he "may have conversations" with Talisman's management regarding strategic alternatives and board seats.
$1B Zulily poised to reveal IPO details. E-commerce site Zulily reportedly made a confidential IPO filing earlier this year and could disclose its plans today. Zulily received a valuation of $1B at its last funding round in November, when it raised $85M. Founded in 2009, the company sells children's and women's clothing, and could be on course to earn $650M in annual revenues. Zulily specializes in "flash sales" in which it offers products for a short period, usually at a heavy discount.
Samsung eyes acquisitions to increase strength in software. Samsung (OTC:SSNLF) has put together a list of companies it might be interested in buying as it looks to boost its software capabilities. The South Korean giant has also allocated $1.1B for early stage and venture capital investments in the U.S. Samsung is eyeing companies in Silicon Valley in particular, as well as in Israel and other parts of the world, including in the areas of games, mobile search, social media and mapping-related services.
GSK to apply for approval for malaria vaccine. GlaxoSmithKline (GSK) intends to submit its RTS,S malaria vaccine to the European Medicines Agency for authorization after highly encouraging results from a Phase III trial that involved more than 15,000 children in Africa. Over an 18-month period, RTS,S cut infections by 46% in infants who were aged 5-17 months when they received the initial dosage, and by 27% in 6-to-12-week-old babies. If the drug makes it to market, it would be the world's first vaccine for malaria, which kills 660,000 people a year.
Top Economic & Other News
U.S. eyes deal on Asia-Pacific trade agreement by year-end. The U.S. still hopes that it can finalize the highly ambitious Trans-Pacific Partnership free-trade pact by the end of 2013, as scheduled. U.S. Trade Representative Michael Froman said trade ministers could discuss the agreement at a WTO meeting in early December, although a number of issues remain. Speaking at the Asia-Pacific Economic Cooperation (APEC) summit in Bali, Froman said these include intellectual property, state-owned enterprises, labor and the environment.
Chinese services PMI slips. HSBC China services PMI declined to 52.4 in September from 52.8 in August and came in well below the official reading of 55.4. With HSBC focusing on smaller private-sector companies and the official figure on larger state-owned enterprises, the data could indicate a two-tier recovery. In the HSBC survey, an increase in new business offset a fall in new orders, although business expectations dropped sharply to 58.7 from 62.
German trade surplus up as exports recover. Germany's trade surplus rose to €15.6B in August from €15B in July and topped consensus of €15.1B. Exports recovered to rise 1% on month from a fall of 0.8%, while imports increased 0.4% vs +0.3%. "Global trade remains off-color, which is putting the brakes on German exports," says Thomas Gitzel at VP Bank. "The outlook for the coming months is much more promising. Important freight indicators have risen considerably."
Argentine President to undergo "low-risk" surgery. Argentine leader Cristina Fernandez de Kirchner is due to undergo what's considered low-risk surgery today to drain blood from between her brain and skull. The procedure comes at a time of sky-high inflation and other economic problems, and ahead of mid-term Congressional elections that could see Kirchner's left-wing Victory Front coalition lose its majority. A reduction in the power of the President would be positive for Argentina's debt, says Greylock's Diegeo Ferro.
Alpha-Rich Stock Movers and Great Calls
1) On September 27, Saj Karsan said Universal Security Instruments (UUU) trades at less than the value of current assets, with a joint venture thrown in for free, providing an extraordinary risk-reward. The shares are +12.2% since. Read article »
2) On June 18, Richard Zeits wrote up the bullish case for Penn Virginia (PVA), arguing that a recent deal could drive 100% upside. The stock is +56.7% to date. Read article »
Alpha-Rich Stocks To Watch
1) Third Point Reinsurance (TPRE) has been public for just a short period but has a long history of out-performance behind it. Insurance executive Ashleigh Rogers calls for 30% upside. Read article »
2) Bravo Brio Restaurant Group (BBRG) has a real-estate advantage, potential to beat analysts' estimates, and a cheap valuation, factors that add up to a buy for restaurant analyst Shaun Currie. He calls for 30% upside. Read article »
Alpha-Rich articles are the best long and short ideas on Seeking Alpha. SA Pro subscribers receive early access to these Alpha-Rich articles, which often move markets. For more information about SA Pro and becoming a subscriber, click here.
In Asia, Japan +0.3% to 13895. Hong Kong +0.9% to 23179. China +1.1% to 2198. India +0.4% to 19984.
In Europe, at midday, London -0.8%. Paris -0.4%. Frankfurt -0.3%.
Futures at 6:20: Dow flat. S&P flat. Nasdaq flat. Crude +0.8% to $103.82. Gold -0.2% to $1322.30.
Ten-year Treasury Yield +2 bps to 2.65%.
Today's economic calendar:
7:30 NFIB Small Business Optimism Index
7:45 ICSC Retail Store Sales
8:30 Trade Balance
8:55 Redbook Chain Store Sales
10:00 Job Openings and Labor Turnover Survey
1:00 PM Results of $32B, 3-Year Note Auction
Notable earnings before today's open: WWW
See full real-time earnings coverage »
Wall Street Breakfast is sent out by email for free -- Get it now »