- Sanofi, Genzyme open merger talks. Sanofi-Aventis (SNY) has reportedly sent a formal takeover proposal to Genzyme (GENZ) valuing the company at $18.4B, or $69 per share, and the two sides are discussing the offer. However, sources suggested Genzyme is unlikely to accept a deal under $80/share and is keeping in mind other possible suitors, including GlaxoSmithKline (GSK), Johnson & Johnson (JNJ) and Pfizer (PFE). In after-hours trading, Genzyme gained 2.2%.
- A golden merger for Kinross, Red Back. Kinross Gold (KGC) agreed to pay $7.1B in an all-stock deal to acquire the rest of fellow Canadian firm Red Back Mining (RBIFF.PK). The deal marks a 17% premium to Red Back's closing price yesterday, and will create a "gold growth powerhouse" with ten mines and four projects in eight countries. It also reflects a growing M&A trend in the industry; as gold discovery rates keep falling and the price of the metal keeps rising, gold-mining firms are realizing it's "often cheaper to buy growth rather than find it." In after-hours trading, Kinross fell 3.9%.
- H-P settles DoJ probe. Hewlett-Packard (HPQ) agreed to settle a Justice Department probe into a kickback scheme related to government contracts. The settlement is expected to reduce third quarter earnings by $0.02 per share. H-P denied wrongdoing and did not release additional details of the settlement, which must still be finalized. In yesterday's trading, H-P gained 3.3%.
- Santander moves on rivals' assets. Royal Bank of Scotland (RBS) is expected to announce, possibly as soon as today, the sale of a 318-branch network in the U.K. to Banco Santander (STD) for as much as £2B ($3.2B). The purchase will allow Santander to continue the major expansion of its U.K. business, pushing Santander ahead of HSBC (HBC) as the fourth-largest network in the country. Sources say Santander has also reached a preliminary deal in the U.S. to buy $4.3B of car loans from HSBC.
- Amazon, Apple focus of e-book pricing probe. Connecticut Attorney General Richard Blumenthal is investigating deals struck by Apple (AAPL) and Amazon (AMZN) with e-book publishers for possible anticompetitiveness. Both Amazon and Apple have "most favored nations" agreements with major publishers that guarantee they'll receive the best prices for e-books. With the e-book market "set to explode," Blumenthal said the deal arrangements warrant "prompt review of the potential anti-consumer impacts." Shares of Apple and Amazon closed up 1.8% and 1.85% respectively in yesterday's trading, while e-book rival Barnes & Noble (BKS) gained 6.5%.
- GE, Intel form healthcare JV. GE (GE) and Intel (INTC) announced the creation of a 50/50 joint venture in a new healthcare operation expected to launch by year's end. The companies have collaborated before on bringing technology into homes of seniors and those with chronic conditions via "telehealth." Financial terms of the deal weren't disclosed. In yesterday's trading, GE gained 1.8% and Intel climbed 2.7%.
- Stratospheric profit jump for mining firm. Xstrata (XSRAF.PK) reported its H1 net profit more than tripled to $2.3B, or $0.78 per share, thanks to an increase in the selling prices for all its commodities and $243M of cost savings. Revenue for the period grew 43% to $13.6B. Xstrata also approved two major projects that will help the coal and copper miner achieve its target for 50% higher production by 2014. Shares of Xstrata are +0.6% in London trading (7:00 ET).
- MetLife increases share sale. MetLife (MET) priced a common stock offering yesterday evening of 75M shares at $42 a share, which would raise $3.15B; this is around $1B more than the insurer had said it would raise to fund its acquisition of AIG's (AIG) Alico unit. Some analysts had expected an even bigger increase in the size of the offering, to as much as $4B-5B, in an effort to avoid a possible ratings downgrade from S&P, which has expressed concern over MetLife's capitalization following the acquisition. Premarket: MET -1% (7:00 ET).
- BP faces insider trading probe. The SEC is reportedly investigating possible insider trading at BP (BP) in the aftermath of the Gulf oil spill. Regulators are also looking into whether BP properly disclosed information on risks related to its deepwater oil operations in the Gulf of Mexico. The investigation is in a preliminary stage. Premarket: BP -0.4% (7:00 ET).
- Bernanke: Long way to go for recovery. "We have a considerable way to go to achieve full recovery in our economy," Bernanke said yesterday, "and many Americans are still grappling with unemployment, foreclosure, and lost savings." Constraints faced by budget-strained state and municipal governments are also hindering the recovery.
- Washington Post sells Newsweek. The Washington Post Co. (WPO) confirmed it's selling Newsweek to Dr. Sidney Harman, founder of Harman International (HAR). Terms of the deal were not disclosed, but Harman has agreed to keep most of the staff, while Washington Post Co. will retain the pension assets and liabilities. WPO closed up 3.2% yesterday.
- RIM to let India monitor BlackBerry. Research in Motion (RIMM) has agreed to let Indian security agencies monitor its BlackBerry services, according to a report in The Economic Times. The company will share with Indian security agencies its technical codes for corporate email services, open up access to all consumer emails within 15 days and also develop tools in the coming months to allow monitoring of chats. The move follows a ban on some BlackBerry services in the United Arab Emirates and Saudi Arabia, and ongoing security concerns in India.
- Funds fight for Occidental board seats. Two prominent institutional investors are fighting for board seats at Occidental Petroleum (OXY). In a letter sent to directors, Relational Investors LLC and the California State Teachers' Retirement System said they would try to unseat at least 4 of Occidental's 13 board members during the company's 2011 annual meeting, as the two funds are uneasy about the company's executive compensation and succession plans.
- Morgan Stanley to sell hedge fund. Sources said Morgan Stanley (MS) plans to spin off FrontPoint Partners, the hedge fund it bought in 2006, since the financial reform bill restricts bank ownership of such funds. This would mark the first big structural move by a Wall Street firm in response to the Dodd-Frank financial reforms.
Earnings: Tuesday Before Open
- Baker Hughes (BHI): Q2 EPS of $0.41 misses by $0.02. Revenue of $3.37B (+44.4%) vs. $3.48B. (PR)
- Cognizant Technology Solutions (CTSH): Q2 EPS of $0.56 beats by $0.04. Revenue of $1.10B (+42.3%) vs. $1.02B. (PR)
- Dow Chemical (DOW): Q2 EPS of $0.54 misses by $0.02. Revenue of $13.62B (+20.3%) vs. $13.69B. Shares -1.1% premarket. (PR)
- Emerson Electric Company (EMR): FQ3 EPS of $0.78 beats by $0.10. Revenue of $5.64B (+10.8%) vs. $5.57B. (PR)
- NiSource (NI): Q2 EPS of $0.13 beats by $0.04. Revenue of $1.09B (+9%) vs. $1.11B. (PR)
- NYSE Euronext (NYX): Q2 EPS of $0.64 beats by $0.05. Revenue of $654M (+6.9%) vs. $660M. (PR)
Earnings: Monday After Close
- Brookdale Senior Living, Inc. (BKD): Q2 EPS of -$0.08 beats by $0.02. Revenue of $549M (+9.6%) in-line. Shares -1.5% AH. (PR)
- DaVita (DVA): Q2 EPS of $1.06 in-line. Revenue of $1.6B (+4.4%) in-line. (PR, earnings call transcript)
- Developers Diversified Realty (DDR): Q2 EPS of $0.25 beats by $0.01. Revenue of $202M (+2.3%) vs. $198M. (PR)
- Forest Oil (FST): Q2 EPS of $0.42 beats by $0.01. Revenue of $208M (+14.3%) vs. $220M. Shares +0.6% AH. (PR)
- Hologic (HOLX): FQ3 EPS of $0.30 beats by $0.01. Revenue of $421M vs. $418M. Shares +5.9% AH. (PR, earnings call transcript)
- Nationwide Health Properties (NHP): Q2 EPS of $0.57 beats by $0.02. Revenue of $109M (+12.8%) vs. $102M. Shares -0.4% AH. (PR)
- Principal Financial Group (PFG): Q2 EPS of $0.63 misses by $0.03. Revenue of $2.3B (-0.6%) vs. $2.4B. Shares -1.5% AH. (PR)
- SBA Communications (SBAC): Q2 EPS of -$0.30 beats by $0.03. Revenue of $155M (+13.4%) vs. $152M. Shares -2.6% AH. (PR)
- UDR Inc. (UDR): Q2 EPS of $0.28 in-line. (PR)
- VeriSign (VRSN): Q2 EPS of $0.24 in-line. Revenue of $169M (+9.7%) vs. $167M. Shares +2.4% AH. (PR, earnings call transcript)
- Vulcan Materials Company (VMC): Q2 EPS of $0.12 misses by $0.12. Revenue of $736.2M (+2%) vs. $759.4M. Shares -3.3% AH. (PR)
- In Asia, Japan +1.3% to 9694. Hong Kong +0.2% to 21458. China -1.7% to 2627. India +0.2% to 18115.
- In Europe, at midday, London -0.2%. Paris -0.3%. Frankfurt +0.2%.
- Futures: Dow flat. S&P -0.1%. Nasdaq +0.1%. Crude +0.7% to $81.90. Gold +0.2% to $1188.
Tuesday's Economic Calendar
- Auto sales
7:45 ICSC Retail Store Sales
8:30 Personal Income and Outlays
8:55 Redbook Chain Store Sales
10:00 Factory Orders
10:00 Pending Home Sales
5:00 PM ABC Consumer Confidence Index
- Notable earnings before Tuesday's open: ADM, AMT, ARM, BHI, CLX, COH, CTSH, DF, DHI, DISCA, DOW, DUK, EMR, ETR, FAF, FE, HCP, HNT, MA, MFA, MGM, MMC, MRO, NI, NYX, OMX, PFE, PG, PH, PNW, RDC, SII, SPR, SRE, TAP, THC, VNO, VSH
- Notable earnings after Tuesday's close: ACAS, ACF, APC, AVB, BEXP, BRE, CBL, CBS, CHK, ERTS, HRS, HTZ, LBTYA, MOLX, PBI, PCLN, UNM, WFMI, XCO, XL
Seeking Alpha's Market Currents team contributed to this post.
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