- BHP Billiton's bid to buy Potash turns hostile. Despite being called "grossly inadequate" by Potash's (POT) board, mining company BHP Billiton (BHP) says it will take its $38.6B bid to acquire Potash directly to shareholders of the fertilizer company. BHP chairman Jac Nasser said that the cash offer represented a 32% premium over a 30-day trading period. BHP confirmed Wednesday that it intended to make an all-cash offer to acquire Potash for $130 a share. Shares of Potash closed +27.7% Tuesday at $143.17. Premarket: POT -0.6%, BHP -0.9% (7:00 ET).
- GM may issue preferred shares along with IPO. GM is expected to issue preferred shares when it launches its IPO. The shares, which would be listed on the NYSE, could give the automaker some proceeds, since the offering of common shares will mostly go to paying back government loans. They are also expected to lure hedge funds and other new investors because they have qualities of both debt and equity. The IPO may be filed with the SEC today, and would be the second largest in U.S. history behind Visa's (V) nearly $20B IPO in 2008.
- Some Dell shareholders are unhappy with the boss. Michael Dell, founder of the computer empire that bears his name, didn't exactly get a ringing endorsement when he was reelected to Dell's (DELL) board earlier this month. In fact, more than 25% of the votes cast withheld support for Dell's candidacy, indicating they are unhappy with his performance as chairman and CEO. He received the lowest number of votes in favor of his election of all 11 directors reelected.
- Reynolds Group bags Hefty owner with $4.4B offer. Reynolds Group, a Chicago-based subsidiary of New Zealand's Rank Group, will pay about $4.4B to purchase Pactiv (PTV), a maker of packaging materials, including the line of Hefty garbage bags. Including debt, the deal is valued at about $6B and could close as soon as later this year.
- Mattel accused of spying by maker of Bratz dolls. MGA Entertainment, the maker of the popular Bratz line of dolls, accused rival Mattel (MAT) of spying on other toy companies for more than 15 years. In a filing in a Los Angeles federal court, MGA said Mattel workers, with the approval of executives, stole product ideas, price lists, and advertising strategies from rival toy companies, including MGA, Hasbro (HAS) and Sony (SNE). MGA's allegations are largely based on deposition testimony from a former Mattel employee.
- Nidec to Buy Emerson Electric motor unit. Japanese maker of disk drive motors, Nidec (NJ), says it has agreed to purchase the motor and controls unit of Emerson Electric (EMR) as it attempts to expand its home appliance and automotive business in the U.S. Although terms of the cash deal, which is scheduled to be completed by the end of September, were not disclosed, the offer was thought to be in the area of $700M. It is Nidec's fourteenth deal in 5 years. Nidec shares were up 3% in overnight trading.
- American Apparel on the edge of bankruptcy. In a regulatory filing, American Apparel (APP) warned that it could breach a loan covenant and raised doubts about whether it could continue as a going concern. The company also said that it received a subpoena from the U.S. Attorney's office for the Southern District of New York, and from the SEC, regarding the resignation of its former auditor. Deloitte resigned as the company's auditor in March after raising questions about the company's financial reporting. Shares closed down 25.9% yesterday to $1.03.
- HBO stands in the way of Netflix's online plans. Plans by Netflix (NFLX) to offer movies from the largest studios online are not going over so well with HBO. Time Warner's (TWX) pay channel and home to some of the biggest hits on television holds cable and internet rights to movies from a number of studios, including Warner Bros. and Universal, and says it is unlikely to make a deal with Netflix for online distribution rights. Netflix already has such agreements in place with Epix cable channel and Liberty Media's (LCAPA) Starz channel.
- SEC launches investigation of trading in General Growth. The SEC has launched a formal probe into allegations of insider trading by current and former officers and directors of mall owner General Growth Properties (GGP). An informal investigation started in October 2008, after the stock declined rapidly due to debt problems. The company has been in bankruptcy protection since April 2009 and plans to exit later this year. As many as 10 officers and directors may face charges that they improperly disposed of shares.
- China Huaneng in talks to acquire a stake in InterGen. China's biggest electricity producer, China Huaneng, is in advanced talks to purchase a stake in InterGen, a Massachusetts-based power utility for about $1.2B. The state-owned Chinese company is seeking 50% of InterGen, which is jointly owned by the Ontario Teachers' Pension Plan and India's GMR Infrastructure. With the deal, Huaneng would gain access to 12 power plants in the U.K., Netherlands, Mexico, Australia and the Philippines.
- U.S. bankruptcies hit a five-year high. Bankruptcy filings in the U.S. reached the highest rate since 2005, according to government data released yesterday. There were 422,061 bankruptcy filings between April and June of this year, according to the Administrative Office of the U.S. Courts, up 9% from 388,148 in the prior three-month period, and up 11% from 381,073 a year earlier. For the year ended June 30, there were 1.57M bankruptcies, up 20% from 1.31M a year earlier. Consumer bankruptcies rose 21% to 1.5M, and business bankruptcies rose 9% to 59,608.
Earnings: Wednesday Before Open
- Suntech Power (STP): Q2 EPS of $0.03 misses by $0.06. Revenue of $625.1M (+94.7%) vs. $600.8M. Shares +0.7% premarket. (PR)
Earnings: Tuesday After Close
- Analog Devices (ADI): FQ3 EPS of $0.65 beats by $0.05. Revenue of $720M (+46.3%) vs. $707M. Shares +2% AH. (PR, earnings call transcript)
- In Asia, Japan +0.9% to 9241. Hong Kong -0.5% to 21023. China -0.2% to 2666. India +1.1% to 18257.
- In Europe, at midday, London -0.7%. Paris -0.4%. Frankfurt -0.2%.
- Futures: Dow -0.1%. S&P -0.1%. Nasdaq -0.2%. Crude -1% to $74.99. Gold -0.2% to $1225.50.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
10:30 EIA Petroleum Inventories
- Notable earnings before Wednesday's open: BJ, CHS, DE, STP, TGT
- Notable earnings after Wednesday's close: AMAT, BRCD, LTD, NTAP, SNPS
Seeking Alpha's Market Currents team contributed to this post.
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