Wall Street Breakfast: Must-Know News

by: Rachael Granby
Rachael Granby
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

  • Astellas finally nabs OSI. Japan's Astellas Pharma agreed to buy OSI Pharmaceuticals (OSIP) for $4B in cash, after a months-long battle in which its original bid was rejected and a hostile tender offer was subsequently launched. To seal the deal, Astellas had to sweeten its offer by more than 10% to $57.50 per share, a 55% premium to OSI's closing price before Astellas made its original offer, but below OSI's recent $59.80 close.
  • UHS buys Psych Solutions. Hospital operator Universal Health Services (NYSE:UHS) agreed to buy Psychiatric Solutions (OTCPK:PSYS) for around $2B in cash and the assumption of about $1.1B of debt. The $33.75 per share offer is a 3.4% premium to Psychiatric Solutions' Friday closing price. UHS expects the deal to 'significantly' add to its earnings and to "further strengthen our behavioral health division, which has already grown substantially through capacity expansion and strategic acquisitions." Premarket: OTCPK:PSYS +2.7% (7:00 ET).
  • Man Group acquires GLG. Man Group (OTC:MNGPF), the world's largest publicly traded hedge fund group, agreed to buy GLG Partners (GLG), one of its biggest rivals, for $1.6B. The deal, which marks a 55% premium to GLG's Friday close, will create a hedge fund giant with $63B under management. Man Group is trying to diversify after facing criticism for its reliance on AHL, a trading program that accounts for half of its assets. Man Group -6.7% in London trading (7:00 ET).
  • Euro sinks on regional fears. The euro fell to the lowest level against the dollar in more than four years as concerns over European debt and the region's economic health continue to plague the currency. The euro's decline will likely continue through the week, as both long-term and short-term players move to offload the euro. The currency dropped as low as $1.2234 this morning, but could touch $1.2000 in the next few days. The euro is -0.3% vs. the dollar (7:00 ET), and is down 14% since the beginning of 2010.
  • Prudential launches rights issue. Prudential (NYSE:PUK) has moved forward with its $21B rights issue, releasing details of its planned sale of 13.96B new shares. The launch, which was delayed after U.K.'s regulators expressed concerns over Prudential's capital reserves, will allow the insurer to proceed with its $35.5B purchase of AIG's (NYSE:AIG) Asian unit, turning Pru into a major player in the Asian market and giving AIG the ability to repay a major chunk of its government aid. Premarket: PUK -2.15% (7:00 ET).
  • Pactiv is subject of LBO talks. Private equity firm Apollo Global Management is said to be in talks to buy packaging maker Pactiv (PTV). The price of a possible deal couldn't be determined, but with Pactiv's $3.2B market capitalization, any deal would be among the largest leveraged buyouts of the last two years.
  • AmEx, Permira team up to bid on RBS unit. American Express (NYSE:AXP) is working with U.K. private-equity firm Permira on a joint bid for Royal Bank of Scotland's (NYSE:RBS) payment processing unit. RBS had reportedly suggested that private equity bidders in the £2.5B ($3.6B) auction team up with a strategic partner to prove they can run the complicated payments business.
  • BP makes progress on oil leak. BP (NYSE:BP) had some partial success over the weekend in stemming the flow of oil from the Gulf of Mexico leak. The company inserted a tube into the leaking pipe and is now funneling a "not measurable" quantity of oil to a tanker on the surface. U.S. officials, however, called the tube a stop-gap measure that is only capturing some of the spillage and pushed BP to be more forthcoming with information about the size of the spill. Premarket: BP +0.3% (7:00 ET).
  • Sovereign funds pulled back in '09. Sovereign wealth funds invested significantly less in 2009 than they did the year before, with publicly disclosed investments falling 37% to $69B. Almost half of that sum came from Qatar Investment Authority, which invested more than $32B. On the upside, the pace of spending picked up in the fourth quarter, suggesting investments will continue to rise through 2010, with a likely rebound in financial services and real estate investments.
  • Friday's failures. Four more banks were closed on Friday, bringing this year's total failures to 72 so far. The closures in Georgia, Michigan, Missouri and Illinois will cost the FDIC's insurance fund an estimated $301.7M.

Earnings: Monday Before Open

  • Lowe's (NYSE:LOW): Q1 EPS of $0.34 beats by $0.03. Revenue of $12.4B (+4.7%) vs. $12.2B. (PR)

Today's Markets

  • In Asia, Japan -2.2% to 10236. Hong Kong -2.1% to 19715. China -5.1% to 2560. India -0.9% to 16836.
  • In Europe, at midday, London +1.1%. Paris +0.6%. Frankfurt +1.1%.
  • Futures: Dow +0.1%. S&P +0.2%. Nasdaq +0.2%. Crude +0.3% to $71.85. Gold +0.2% to $1230.50.

Monday's Economic Calendar

Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.

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