Nestle starts to taper L'Oreal stake in €6.5B deal. L'Oreal (OTCPK:LRLCF) has agreed to acquire 8% of its capital from Nestle (OTCPK:NSRGY) for €6.5B ($9B) in a deal that will reduce the latter's holding in the cosmetics group to 23.29% from 29.4%. L'Oreal will pay €3.4B of the total sum in cash and the rest by handing over 50% of its stake in Swiss dermatology pharmaceuticals company Galderma, a 50-50 joint venture between Nestle and the French firm.
Barclays Q4 loss widens, to axe up to 12,000 jobs. Barclays' (NYSE:BCS) Q4 net losses rose to £514M ($843.9M) from £364M a year earlier, partly due to increased restructuring costs, a higher levy related to riskier financing, and a £331M charge for litigation and regulatory penalties. Barclays intends to axe 10,000-12,000 jobs in 2014 in order to trim costs. Raising eyebrows is a 10% increase in the bank's 2013 bonus pool to £2.38B even though adjusted pretax profit fell 32%. Shares were -3.1% premarket.
Global stocks higher ahead of Yellen testimony. Global equities were higher at the time of writing as investors awaited Janet Yellen's first Congressional appearance since becoming Fed Chair earlier this month. At a hearing before a House panel today, Yellen is expected to reiterate the bank's plan to continue scaling back its QE program, although investors will be looking for any indications of a change of course following disappointing U.S. jobs and other economic data.
Top Stock News
Reuters: Boeing faces challenges in raising 787 output. Boeing (NYSE:BA) is struggling to cope with an increase in the production of 787 jets to 10 a month and is facing a major backlog of unfinished work, Reuters reports. The ramp up in output is important for the firm to be able to start breaking even on the Dreamliner. Meanwhile, Boeing is considering introducing a medium-range plane similar in size to the 787 following strong customer interest. The company has yet to develop a successor to the 757 after ending production of the popular mid-range aircraft in 2004.
Ackman exits General Growth Properties in $556M deal. General Growth Properties (NYSE:GGP) has repurchased all of Pershing Square's 28M shares in the company for $556M. The deal comes after Bill Ackman's hedge fund sold 25M shares in the shopping-mall owner in September for $500M. Ackman helped rescue General Growth in 2009 by persuading it to file for bankruptcy and then taking part in its subsequent restructure. The investment has been one of Ackman's most profitable. In 2011, he told Bloomberg that it "turned $60M into $1.6B."
Third Blackstone hotel chain takes another step to IPO. La Quinta Holdings has filed to raise up to $100M in an IPO, putting the hotel chain on course to become the third such Blackstone (NYSE:BX) portfolio company to list its shares following Hilton Worldwide (NYSE:HLT) and Extended Stay (NYSE:STAY) at the end of last year. La Quinta, which Blackstone bought for $3B in 2006, initially filed for an IPO under the JOBS Act in December.
Rackspace CEO quits, profit falls 30%, shares tumble. Rackspace Hosting (NYSE:RAX) CEO Lanham Napier has retired after eight years in the job and following a sharp drop in the Web-infrastructure provider's share price over the past year. Napier will be replaced by co-founder/chairman Graham Weston on an interim basis while Rackspace searches for a permanent hire. The company announced the news in tandem with its results for Q4, when higher costs caused profits to fall to $21M from $29M a year earlier despite revenue rising 16% to $408M. Shares slumped 11.4% premarket.
Top Economic & Other News
BOE reviewing claims staff condoned forex manipulation. The Bank of England is reviewing allegations in a Bloomberg report that two officials told currency traders it wasn't improper to share impending customer orders with counterparts at other companies, Deputy Governor Andrew Bailey has told a U.K. parliamentary panel. "We haven't seen the evidence in the Bloomberg report," Bailey said. The traders' practices are the focus of an expanding investigation into alleged manipulation in the foreign-exchange market.
House to vote to extend government debt authority. The House intends to vote tomorrow on a bill to lengthen the government's borrowing authority until March 2015 and restore cost-of-living increases for military veterans. The restored benefits would be paid for by extending cost reductions in certain programs, including Medicare, for a year. Whether the bill will gain enough support from Republicans or Democrats is unclear.
Small firms to get another year's relief from Obamacare. The government has announced yet another delay to a crucial part of Obamacare, saying that businesses with 50-99 full-time workers won't have to provide health insurance to their workers until 2016. Larger firms will have to cover at least 70% of employees by 2015 and 95% a year later. The original plan was for companies to offer coverage this year, but in July, that was delayed until 2015.
Top Ideas: Movers and Great Calls
1) On Thursday, fund manager Saj Karsan said retailer hhgregg (NYSE:HGG) had been unfairly punished by the market following an earnings miss, as investors misread temporary problems as a "new normal." Shares have snapped back and are +20.4% since his call. Read article »
2) Buysider Ravee Mehta saw 50% short-term upside for Internet lead generator Autobytel (NASDAQ:ABTL) in November, with more room to run down the line, as pricing increases drove revenue and earnings growth. The stock is +47.4% to date. Read article »
Top Ideas To Watch
1) Timber company Pope Resources (NASDAQ:POPE) has an underwhelming yield for an MLP and is vulnerable to any slowdown in the housing industry, leaving it substantially overpriced, writes Fincom Investment Partners. Read article »
2) Alpha Vulture says Rella Holding's (OTC:RLLHF) ownership of a publishing unit is given hardly any value by the market despite the subsidiary's strong profit and cash flow. Read article »
Top Ideas are the best long and short ideas on Seeking Alpha. SA PRO subscribers receive early access to these Top Ideas, which often move markets. For more information about SA PRO and becoming a subscriber, click here.
In Asia, Japan closed. Hong Kong +1.8% to 21963. China +0.8% to 2104. India +0.1% to 20363.
In Europe, at midday, London +0.9%. Paris +0.8%. Frankfurt +1.3%.
Futures at 6:20: Dow +0.4%. S&P +0.4%. Nasdaq +0.4%. Crude +0.3% to $100.33. Gold +0.7% to $1284.10.
Ten-year Treasury Yield + 2bps at 2.7%.
Notable earnings after today's close: ACGL, ANDE, BDE, CALX, CEB, CNVR, CRL, CSOD, CUTR, CVA, DIOD, DVA, EEFT, EGN, FEYE, FOSL, FRT, HTS, JIVE, MKTO, MRIN, MX, PHH, PKG, PL, QDEL, RLOC, RPXC, SCI, SGEN, SGMO, SKT, SSNC, TRIP, TRMB, TWTC, VSAT, WSH, WU
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