- Symantec buys VeriSign unit. Symantec (SYMC) reached an agreement to buy VeriSign's (VRSN) authentication services unit for around $1.3B in cash. The deal comes less than a month after Symantec spent $373M buying two other makers of data encryption technology. The three acquisitions are part of a strategy in which Symantec is trying to focus on protecting content, rather than securing the equipment where the data is stored. In after hours trading, VRSN +3%, SYMC +0.1%.
- Honeywell picks up Sperian Protection. Honeywell (HON) reached a deal to buy France's Sperian Protection, a maker of personal protective equipment, for €895.6B ($1.1B) in cash. The offer is a 93% premium to Sperian's shares on March 30, before a rival bid was submitted by private-equity firm Cinven Ltd., and a 67% premium to the Cinven offer. The deal requires clearance by U.S., French and EU regulators, and will further strengthen Honeywell's position in the protective equipment business.
- Bidders line up for Novell. As many as twenty bidders are said to be interested in buying Novell (NOVL), which is accepting offers from potential acquirers this week. Most, and possibly all, of the bidders are thought to be private-equity firms, and the offers are expected to exceed the original $5.75/share unsolicited bid from hedge fund Elliot Associates, which valued the firm at around $2B.
- Healthscope considers higher bid. Australian hospital operator Healthscope received an increased bid of A$1.8B ($1.5B), or A$5.75/share, up from A$5.50/share. The bid is widely believed to have come from private equity firms Carlyle Group and TPG Capital, though Healthscope would not confirm that. Insiders said the bidders don't intend to break up Healthscope's hospitals and pathology businesses, even though splitting up the business could yield as much as A$2B.
- Dubai World restructure debt. Dubai World has agreed in principle with its main creditors to restructure $23.5B of debt, though 40% of its creditors have yet to accept the deal. "The proposal puts the company on a sound financial footing and reflects the continued support of the government of Dubai and its lenders," said a key Dubai World executive, and also lifts some of the uncertainty over Dubai's debt-laden economy.
- American Apparel plunges on possible covenants breach. Shares of American Apparel (APP) nosedived yesterday after the company said it may violate its debt covenants based on existing business trends, and that it will delay filing its quarterly 10-Q with the SEC. The company also posted a Q1 loss; among other difficulties, operations were disrupted after it was forced to fire 1,500 undocumented workers in the third and fourth quarters. In regular trading yesterday, APP -40.5%.
- Google target of European probes. Google (GOOG) is the subject of several European probes for its unintentional collection of private data via unsecured wireless networks. Authorities in Germany, Spain, Italy and the Czech Republic are investigating Google and its Street View service, while EU Justice Commissioner Viviane Reding said "it is not acceptable that a company operating in the EU does not respect EU rules." Premarket: GOOG -0.7% (7:00 ET).
- HSBC accused of aiding fraud. HSBC (HBC) was accused of aiding an international fraud orchestrated by late California financier Danny Pang. A court-appointed receiver filed a lawsuit against HSBC earlier this month, accusing the bank of helping Pang create and send false accounting reports to convince investors their money was secure. The suit seeks to reclaim $1.9M in fees paid to HSBC and an unspecified amount in damages. Premarket: HBC -1.4% (7:00 ET).
- Financial reform vote delayed. A move to end debate on financial reform legislation failed, with the 57-42 vote falling short of the 60 votes needed. Democrats were seemingly taken by surprise at the results, and are scrambling to lock in support ahead of another cloture vote scheduled for this afternoon. Only when the debate is closed off will lawmakers be able to vote on passage of the bill itself.
- FOMC sees faster growth ahead. There were no major surprises in the FOMC minutes released yesterday. A majority of members favor postponing asset sales, most likely until after a rate hike which is still somewhere in the future. Most forecast faster growth in 2011 and 2012, with opinions beginning to diverge on the inflation outlook. Members acknowledged the possibility of spillover effect on the U.S. from Greece's debt crisis, particularly if the situation would have prompted intensified fiscal consolidation in the eurozone. Kansas City Fed President Thomas Hoenig was once again the lone dissenter on the policy statement.
- WaMu, FDIC near settlement. Washington Mutual and the FDIC expect to reach a settlement by Friday to resolve their legal disputes, a key step in ending 18 months of legal wrangling following the largest bank failure in U.S. history.
- Japan's growth falls short. Japan's economy grew less than expected in Q1, as GDP rose 4.9% on an annualized basis vs. consensus of 5.5%. The data puts pressure on the Bank of Japan to do more to fight deflation.
Earnings: Thursday Before Open
- MF Global (MF): FQ4 EPS of -$0.17 misses by $0.18. Revenue of $241M (-6.5%) in-line. (PR)
- Sears (SHLD): Q1 EPS of $0.16 beats by $0.02. Revenue of $10B (-0.1%) vs. $10.2B. (PR)
- Staples (SPLS): Q1 EPS of $0.28 beats by $0.01. Revenue of $6.1B (+4.1%) in-line. (PR)
Earnings: Wednesday After Close
- Advance Auto Parts (AAP): Q1 EPS of $1.19 beats by $0.19. Revenue of $1.8B (+8.7%) vs. $1.7B. Shares +4.2% AH. (PR)
- Applied Materials (AMAT): Q2 EPS of $0.22 beats by $0.01. Revenue of $2.3B (+24.3%) vs. $2.2B. Shares +0.2% AH. (PR, earnings call transcript)
- Aruba Networks (ARUN): Q3 EPS of $0.08 beats by $0.01. Revenue of $69M (+50.7%) vs. $66M. Shares +4.6% AH. (PR, earnings call transcript)
- Autodesk (ADSK): Q1 EPS of $0.29 beats by $0.06. Revenue of $475M (+11.5%) vs. $437M. Shares +3.9% AH. (PR, earnings call transcript)
- The Gymboree Corp (GYMB): Q1 EPS of $0.99 beats by $0.02. Revenue of $253M (+9.5%) vs. $254M. Shares +1.4% AH. (PR)
- Limited Brands (LTD): Q1 EPS of $0.25 beats by $0.06. Revenue of $1.9B (+12%) in-line. Shares -3% AH. (PR)
- PetSmart (PETM): Q1 EPS of $0.46 beats by $0.03. Revenue of $1.4B (+5.1%) in-line. Shares -2.4% AH. (PR)
- Synopsys (SNPS): Q2 EPS of $0.41 beats by $0.02. Revenue of $338M (+0.4%) vs. $334M. Shares -1.7% AH. (PR, earnings call transcript)
- In Asia, Japan -1.5% to 10030. Hong Kong -0.2% to 19546. China -1.2% to 2556. India +0.7% to 16520.
- In Europe, at midday, London -0.3%. Paris -0.4%. Frankfurt -0.9%.
- Futures: Dow -0.55%. S&P -0.6%. Nasdaq -0.8%. Crude -0.7% to $69.38. Gold -0.7% to $1185.10.
Thursday's Economic Calendar
- 8:30 Initial Jobless Claims
10:00 Leading Indicators
10:00 Philly Fed Business Outlook
10:30 EIA Natural Gas Inventory
2:00 PM Hearing: The Role of the IMF and Fed in Stabilizing Europe
4:30 PM Fed Balance Sheet
4:30 PM Money Supply
- Notable earnings before Thursday's open: CSC, DLTR, GME, MF, PDCO, ROST, SHLD, SPLS, TDW, WSM
- Notable earnings after Thursday's close: ARO, BRCD, CPWR, CRM, DELL, FL, FMCN, GPS, INTU, MRVL
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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