- New Gulf rig fire, oil leak raises questions. After a fire broke out early yesterday on a Mariner Energy (ME) offshore platform in the Gulf of Mexico, the Coast Guard initially reported that a mile-long oil sheen was visible, but subsequently recanted. The rig has been shut down and its 13 workers were evacuated, and the accident ultimately may not do much harm to the Gulf, but it's prompting some lawmakers to call for an extended ban on offshore drilling because it's an "inherently dangerous practice." Mariner's platform, operating in just 340 feet of water, wasn't covered by the existing moratorium. Meanwhile, BP (BP), which said this morning that its costs relating to the Deepwater Horizon spill have risen to $8B, warned it may not have the money to pay for the $20B compensation fund if Congress passes legislation barring the company from getting new offshore drilling permits. Premarket: BP -0.6% (7:00 ET).
- H-P bags 3Par, Dell to look elsewhere. H-P (HPQ) won the heated bidding war for 3Par (PAR) with an offer of $2.4B, or $33/share, that 3Par's board approved yesterday evening. Dell (DELL) had said earlier in the day it wouldn't increase its most recent proposal to match H-P's, and as a result would receive a $72M break-up fee from 3Par. Analysts expect Dell to spend the $2B it didn't deploy on 3Par to build out its storage portfolio, and several potential acquisition targets closed higher yesterday on rumors, including CommVault Systems (CVLT +5.2%), Isilon Systems (ISLN +3.5%), Compellent Tech (CML +18.6%) and Netezza (NZ +3.4%). Shares of Dell could get a boost as well as the company puts the failed acquisition behind it.
- Goldcorp bags Andean Resources. Goldcorp (GG) agreed to pay C$3.6B ($3.4B) for all the outstanding shares of Australia's Andean Resources (ANDPF.PK), representing a 35% premium to Andean's closing price yesterday in Toronto. The boards of both companies have approved the deal, which now must be approved by 75% of Andean's shareholders. The deal is a blow to Eldorado Gold (EGO), which had offered C$3.4B to buy Andean, and adds to this year's record pace of gold mining takeovers as producers discover less of the metal while prices keep advancing. Shares of Andean, which is listed in both Canada and Australia, soared 31% in Sydney trading.
- Abbott calls off vaccine unit's auction. Abbott Laboratories (ABT) has called off the sale of its European flu-vaccine business after initial bids came in below its expectations. Four or five bidders had expressed interest but the offers in the range of €500M ($640M) were deemed too low. Though the identity of the bidders couldn't be ascertained, the unit was expected to draw interest from drug giants including GlaxoSmithKline (GSK) and AstraZeneca (AZN).
- Burger King sells itself for $4B. Burger King (BKC) agreed to sell itself for $4B, including the assumption of debt, to 3G Capital. The $24/share deal represents a 46% premium to the company's share price before acquisition rumors began. It's the largest leveraged buyout of a fast-food chain ever, and Burger King's second in the last eight years, leaving frustrated franchisees and investors wondering whether the burger chain needs a new strategy rather than yet another new owner. Shares of Burger King closed up 25% to $23.59 in yesterday's trading.
- Blockbuster misses another bond payment. Struggling Blockbuster (BLOKA.PK, BLOKB.PK) said it missed another interest payment on its bonds, disclosing in a regulatory filing that it was unable to make a semiannual payment to junior noteholders because it still hadn't made a payment to senior bondholders that was due in July. The company has already said it may have to liquidate if it can't restructure its $1B-plus of debt.
- HSBC warns it may relocate HQ from the U.K. HSBC (HBC) made its clearest warning yet that it may move its headquarters abroad if U.K. regulators ultimately decide that banks need to split their high street banking from their riskier investment banking activities. Stuart Gulliver, HSBC's investment banking head and a likely successor to CEO Michael Geoghegan, said he was "genuinely concerned" regulators might opt to break up big banks, and "[that] has significant implications clearly for where we may choose to headquarter our institution." Barclays (BCS) and Standard Chartered (SCBFF.PK) have made similar, though more veiled, comments.
- AIG pushes ahead on AIA IPO. As expected, AIG (AIG) filed to list its AIA life insurance unit on the Hong Kong exchange, reportedly with a record 11 bookrunners, highlighting the insurer's determination to raise as much money as possible. The listing is likely to bring in around $15B, which would be used to repay part of the funds owed to the New York Fed. The banks chosen to help sell AIA stock include Barclays (BCS), JPMorgan (JPM), Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS), Deutsche Bank (DB), Bank of America (BAC), Credit Suisse (CS) and UBS (UBS).
- Rare glimpse into China's forex reserves. China offered a rare glimpse today into its foreign exchange reserves, the largest stockpile in the world at $2.45T. A report in the China Securities Journal, an official newspaper, cited unnamed reserve managers who said the holdings are roughly in line with global averages, with 65% allocated to dollars, 26% to euros, 5% to pounds and 3% to yen. China also reiterated its discomfort at a global financial system dominated by the dollar, warning that "once a reserve currency's value becomes unstable, there will be quite large depreciation risks for assets."
- China, local gov't jittery over Potash bid. Chinese investors have approached at least one major Canadian pension manager about putting together a bid for Potash (POT) to rival BHP Billiton's (BHP) $39B hostile offer. The disclosure by Alberta Investment Management Corp., which said it wasn't interested in making a bid, is one of the first concrete signs backing up speculation that China is trying to derail the deal so that its future supplies of fertilizer won't be jeopardized. Meanwhile, the Saskatchewan government is concerned that either a BHP buyout or a Chinese takeover of the Canadian firm could affect jobs and government revenue, and has suggested it may consider changes to its potash royalty system to limit risks associated with any eventual deal.
- Wheat ban extended, fears of a global food crisis. Russian Prime Minister Putin extended his country's grain-export ban through at least Nov. 2011, after announcing last month that Russia would suspend grain exports until the end of this year. Wheat prices rose only slightly, as some had already anticipated a prolonged export freeze from the world's former no. 3 wheat exporter, but the announcement added to growing fears about the possibility of a global food crisis. Wheat futures +1.05% (7:00 ET).
Earnings: Thursday After Close
- Finisar (FNSR): FQ1 EPS of $0.31 beats by $0.08. Revenue of $208M (+61.5%) vs. $201M. Shares +10.4% AH. (PR)
- H&R Block (HRB): FQ1 EPS of -$0.36 beats by $0.05. Revenue of $275M (-0.4%) vs. $265M. Shares +7.5% AH. (PR, earnings call transcript)
- In Asia, Japan +0.6% to 9114. Hong Kong +0.5% to 20972. China flat at 2655. India -0.1% to 18221.
- In Europe, at midday, London +0.5%. Paris +0.7%. Frankfurt +0.4%.
- Futures: Dow +0.1%. S&P +0.1%. Nasdaq +0.2%. Crude -0.35% to $74.76. Gold +0.1% to $1254.90.
Friday's Economic Calendar
- 8:30 Nonfarm payrolls
9:45 Fed's Evans: OTC Derivatives Clearing
10:00 Fed's Lockhart: Economic Outlook
10:00 ISM Non-Manufacturing Index
- Notable earnings before Friday's open: CPB
Seeking Alpha's Market Currents team contributed to this post.
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