- Merger for Allscripts, Eclipsys. AllscriptsMisys Healthcare Solutions (OTC:MDRX) announced this morning a $1.35B merger with Eclipsys (OTCQB:ECLP). Both firms are healthcare IT providers, and their combined technology will make it easier for hospitals and other health providers to share patients' health information electronically. Eclipsys shareholders will receive 1.2 Allscripts shares for each Eclipsys share, a 19.4% premium to Eclipsys' closing price yesterday. Allscripts will also buy back a large portion of shares from Misys, a U.K.-based information services company that owns 55% of Allscripts.
- Santander buys BofA's Mexico unit stake. Banco Santander (STD) will pay $2.5B to buy Bank of America's (BAC) 24.9% stake in the Spanish bank's Grupo Financiero Santander. The purchase will give Santander a 99.9% stake in the unit, which is Mexico's third-largest bank. Bank of America bought the stake in 2003 for $1.6B. Premarket: BAC -0.7% (7:00 ET).
- Ambac may file for prepackaged bankruptcy. Ambac (ABK) may file a prepackaged bankruptcy, as regulator-halted payments are leaving it with a thin cushion to cover holding company expenses; the firm said it counts on dividends from its bond insurance unit for liquidity. According to a regulatory filing, at least a dozen big banks, including Citigroup (C), UBS (UBS), Deutsche Bank (DB) and Barclays (BCS) stand to get 16 cents on the dollar in cash (and 12 cents on the dollar in new debt) from Ambac guarantees on toxic securities. Premarket: ABK -6.5% (5:00 ET).
- Second Gulf spill. The Department of Interior confirmed there is a second oil spill in the Gulf of Mexico, but said the leak is very small, at less than one barrel per day. Earlier reports had suggested the spill was coming from a Diamond Offshore (DO) rig, sending the firm's shares down nearly 4% yesterday, but the leak is in fact coming from a well operated by privately held Taylor Energy.
- Pressure mounts on BP. BP (BP) is now collecting so much oil from the Gulf spill that it doesn't have a big enough boat to hold it all, government officials revealed yesterday. It's the latest in a series of BP miscalculations, and as the company's costs rise, speculation is beginning to grow that BP might file for bankruptcy, particularly as part of a merger that would enable it to cordon off its liabilities from the spill. With billions of dollars in cash on hand and market values substantially larger than BP's, Shell (RDS.A) and Exxon Mobil (XOM) could both be potential players in a BP merger. Meanwhile, new tests show plumes of oil deep in the Gulf are spreading, and some of the most toxic components are not rising to the surface where they can evaporate, raising fresh concerns about the potential impact on sea life. Separately, lawmakers are questioning whether the Deepwater Horizon rig was understaffed ahead of the explosion that triggered the spill, and have sent a letter to rig owner Transocean (RIG) asking the company to explain its records. Premarket: BP -1.7%, RIG -1.7% (7:00 ET).
- RBS speeds up asset sale. Royal Bank of Scotland (RBS) has accelerated its plans to sell off certain key businesses and branches. Morgan Stanley (MS) and Jefferies are among the final bidders for RBS Sempra Commodities’ North America business, which could go for as much as $2B as soon as next month. RBS has narrowed the field down to three bids, all from U.S. buy-out firms, for its WorldPay unit, which could get £2.5B-3B ($3.9B-4.6B) and be sold as soon as September. The auction of a 318-branch network is finishing up, with just Santander (STD) and BBVA (BBVA) left in the running. The branches could bring in £1B-2B ($1.45B-3B).
- Cuomo moves forward on home appraisals suit. A court ruled that New York Attorney General Andrew Cuomo may proceed with his 2007 lawsuit against First American Corp, the title insurer that has now split into First American Financial (FAF) and CoreLogic (CLGX). The suit alleges that First American and its eAppraiseIT unit, now part of CoreLogic, colluded with Washington Mutual to fraudulently inflate home prices, enabling it to extend larger home loans and pocket larger fees. WaMu is not a defendant in the case.
- Fire risk prompts GM recall. General Motors is recalling over 1.5M vehicles worldwide because of a defect in the window washer fluid system that could potentially cause a fire. Since the supplier that makes the system is no longer in business, GM will remove the feature and compensate drivers with $100. No injuries have been reported thus far.
- Gold's new high suggests central banks' involvement. Gold reached a new high yesterday, with contracts for June delivery closing at $1,244 per troy ounce. Gold also hit an intraday record of $1,252.10. The recent surge in the metal has prompted speculation that central banks are increasing their gold purchases, partly as a diversification away from the euro.
Earnings: Tuesday After Close
- Pall (PLL): FQ3 EPS of $0.58 beats by $0.08. Revenue of $616M (+10.8%) vs. $599M. Shares +0.3% AH. (PR)
- Take-Two Interactive (TTWO): FQ2 EPS of $0.34 beats by $0.08. Revenue of $268M (+53.8%) vs. $281M. Guides Q3 EPS, revenue above consensus. Shares +3.1% AH. (PR)
Today's Markets
- In Asia, Japan -1.0% to 9439. Hong Kong +0.7% to 19621. China +2.8% to 2584. India +0.3% to 16658.
- In Europe, at midday, London -0.1%. Paris +0.6%. Frankfurt flat.
- Futures: Dow +0.1%. S&P +0.1%. Nasdaq +0.1%. Crude +0.8% to $72.58. Gold -0.75% to $1236.30.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
10:00 Wholesale Trade
10:00 Hearing: China's Role in the WTO
10:00 Bernanke: State of the Economy
10:30 EIA Petroleum Inventories
1:00 PM 10-Year Note Auction
2:00 PM Fed's Beige Book
4:00 PM Fed's Bernanke: 'From Recession to Recovery' - Notable earnings before Wednesday's open: CIEN
Seeking Alpha editors Eli Hoffmann and Jason Aycock contributed to this post.
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