- Macarthur rebuffs Peabody offer. Peabody Energy (BTU) made an unsolicited A$3.3B ($3B) offer for Australia's Macarthur Coal, but was rebuffed this morning. Macarthur's board said the "highly conditional proposal" doesn't represent "the best interests of shareholders" and undervalues the company's growth prospects by offering just a 7.5% premium to Macarthur's recent closing price. Peabody is still open to a deal and is in talks with Macarthur's three largest shareholders. BTU -1% premarket (7:00 ET).
- Baker Hughes agrees on conditional asset sale. Baker Hughes (NYSE:BHI) said yesterday that it reached a general understanding with antitrust regulators over asset sales it will have to make to gain approval for its merger with BJ Services (BJS). Baker Hughes will need to divest certain assets used to perform sand control services in the U.S. Gulf of Mexico, but the divestitures are not expected to have a material impact on the combined company. The company said it's working with regulators to finalize the proposal, which must then receive court approval before the deal can close. Shareholders from both companies will vote on the merger today.
- China may adjust yuan policy. China may adjust its exchange rate system next month, according to Chinese media reports, possibly allowing the yuan a more flexible exchange rate by widening its narrow daily trading band. A policy change next month could preempt the possibility the U.S. Treasury will label China a "currency manipulator" in a report due April 15. Separately, taking a stance opposed to that of the U.S., a high-profile World Bank official rejected claims that the yuan is undervalued and warned that "a yuan appreciation, if it happened soon, would destroy Chinese exports, push up property prices and accelerate the inflow of hot money into China."
- China rolls out new trading tools. China launched its trial program today for margin trading and short selling, part of its effort to introduce risky alternative-investment tools to its stock market. Though the initial impact of margin trading and short selling is expected to be limited, the two options are meant to better prepare investors for the April 16 launch of stock-index futures, a product that is both more complicated and riskier.
- Mutual funds score win on fees. The mutual fund industry won a key Supreme Court case yesterday on the fairness of fees. The court ruled in favor of an earlier legal standard that gave funds considerable leeway in setting their investment adviser charges. The ruling reduces the potential that lawmakers or lower courts could try to force the industry to lower the roughly $90B in fees collected annually.
- Bank of Ireland plans to raise capital. Bank of Ireland (NYSE:IRE) reported a net loss of €1.46B ($2B) for the last nine months of 2009, due to bad debts related to real estate, and said Q1 trading conditions remain "challenging." However, the bank also said today that it's working with a "syndicate of major international investment banks" to help raise the €2.7B of capital it needs by the end of the year, potentially making it the only participant in Ireland's "bad bank" plan to avoid a fresh bailout. IRE +12.3% premarket (7:00 ET).
- Astellas extends tender offer. Japan's Astellas Pharma extended its tender offer for U.S. drugmaker OSI Pharmaceuticals (OSIP) to April 23. The offer was set to expire today but only 37,858 OSI shares had been tendered for sale to Astellas as of yesterday, representing just 0.06% of OSI's outstanding shares. Astellas had previously decided to freeze its takeover attempt, but may ultimately make a new offer for OSI pending the tender offer extension and a review of OSI's non-public information.
- Blockbuster drops like a ton of blocks. Beleaguered Blockbuster (BBI) fell more than 10% again in trading yesterday, to just $0.25, following Monday's announcement that it's not in compliance with NYSE listing requirements regarding minimum market value. Blockbuster, which earlier this month said it may need to file for bankruptcy, plans to submit a plan to NYSE to demonstrate its ability to regain compliance within 18 months, and will ask shareholders to vote in May on a reverse stock split.
- Redwood may test market for unbacked MBS. Redwood Trust (NYSE:RWT) is reportedly trying to jumpstart the market for mortgage-backed securities that aren't backed by the government. Sources said Redwood may launch an offer next week of at least $200M of securities backed by newly-originated "jumbo" mortgages, loans that are too big for government backing. If successful, it would mark the first such sale in more than two years and the first step in the return of the private-label mortgage securities market.
- Novell wins Unix copyright case. A federal court ruled that Novell (NASDAQ:NOVL), not SCO Group Inc., is the rightful owner of two key Unix copyrights. The decision may mark the end of much of the copyright case that SCO filed against Novell in 2004, and could affect another Unix-related lawsuit that SCO filed against IBM (NYSE:IBM) in 2003.
- Terra Firma restarts EMI licensing talks. Private-equity firm Terra Firma has reportedly restarted talks to license the North American rights to its EMI music unit to Universal Music Group (OTC:VIVDY). The licensing deal would generate an estimated $300M over five years. Sources said Terra Firma is pushing to secure a deal, and an upfront cash payment, ahead of a key banking covenant test today.
- Confidence still struggling for altitude. Three data points released yesterday showed that while consumer and investor confidence have seen some minor gains, uncertainty still reigns. The ABC Consumer Comfort Index dropped one-point to -45. There was an increase in those rating the national economy positively, but positive ratings of personal finance slipped. Conference Board's Consumer Confidence Index came in at 52.5 vs. 51 expected and 46.4 prior, but "consumers continue to express concern about current business and labor market conditions. And, their outlook for the next six months is still rather pessimistic." The State Street Investor Confidence Index rose to 108 from a revised 102.6, but the breakdown saw a large jump in Asian confidence, a small increase in North American confidence and a fall in European confidence.
Earnings: Wednesday Before Open
Earnings: Tuesday After Close
- SAIC (SAI): Q4 EPS of $0.31 misses by $0.01. Revenue of $2.68B (+6.6%) vs. $2.69B. Lowers FY11 revenue, earnings guidance. Shares -4% AH. (PR, earnings call transcript)
- In Asia, Nikkei -0.1% to 11090. Hang Seng -0.6% to 21239. Shanghai -0.6% to 3109. BSE -0.3% to 17528.
- In Europe at midday, London +0.2% to 5684. Paris flat at 3990. Frankfurt +0.2% to 6155.
- Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.1%. Crude +0.6% to $82.86. Gold +0.3% to $1107.90.
Wednesday's Economic Calendar
7:00 MBA Mortgage Applications
8:15 ADP Jobs Report
9:45 Chicago PMI
10:00 Factory Orders
10:30 EIA Petroleum Inventories
- Notable earnings before Wednesday's open: OTC:APWR, BPZ, RAD
- Notable earnings after Wednesday's close: MOS, RIMM, OTC:RINO
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.