- Hertz sweetens Dollar Thrifty offer. Hertz (HTZ) raised its offer for Dollar Thrifty (DTG) by $10.80/share to $50/share, or around $1.56B, to top a rival offer from Avis (CAR). Hertz and Dollar Thrifty amended their merger agreement, first inked in April, to reflect the higher price; the other substantive terms of the merger remain the same. To address potential antitrust concerns, Hertz has already begun to divest its deep-discount Advantage Rent-a-Car brand. A vote on the deal by Dollar Thrifty shareholders has been delayed to Sept. 30 from Sept. 16.
- H-P closes in on ArcSight deal. H-P (HPQ) is said to be close to a deal to acquire security-software maker ArcSight (ARST) for around $1.5B. ArcSight, which closed on Friday at $35.10, was reportedly asking for around $42/share; the price per share that H-P is considering paying couldn't be determined. A deal could be announced as soon as today, and would be H-P's fourth acquisition in the last month as it pushes into higher-margin areas like software, networking, storage and services. Premarket: HPQ +0.2% (7:00 ET).
- Genzyme sells genetics unit. Genzyme (GENZ) agreed to sell its genetics unit to Laboratory Corp. of America (LH) for $925M in cash in order to focus on its core growth areas. Genzyme had put the unit up for sale in May under a plan to increase shareholder value.
- Primus fights back on Nan Shan rejection. Primus Financial, one of the bidders for AIG's (AIG) Taiwan unit, reportedly plans to appeal regulators' decision to block the deal, and would consider bidding again if AIG put the unit back up for sale. Primus, which will only be able to appeal if co-bidder China Strategic agrees to take the same course of action, declined to comment. Similar appeals to Taiwan's regulators in the past have never succeeded.
- Deutsche Bank to raise capital, bid for Postbank. Deutsche Bank (DB) confirmed earlier rumors that it plans to raise at least €9.8B ($12.5B) by selling stock to meet stricter capital requirements (see details below) and to make a bid for Deutsche Postbank (GM:DEUPF). Deutsche Bank, which already holds a 30% stake in Postbank, plans to offer €24-25/share in cash to gain control of the consumer lender and will take a charge of around €2.4B in Q3 to mark down the value of its existing Postbank stake. The purchase will help reduce Deutsche Bank's reliance on investment banking. Premarket: DB +2.9% (7:00 ET).
- Basel III tightens capital requirements. The Basel Committee on Banking Supervision more than doubled the capital requirements for banks, though lenders will have eight years to fully comply with the new standards. Banks will be required to have common equity equal to at least 4.5% of assets, weighted according to risk, and regulators plan to introduce an additional capital buffer of 2.5%. If a bank fails to meet the second buffer, it will be barred from paying dividends, though it won't be forced to raise cash. The required Tier 1 capital ratio will be at least 6%. The new rules could force banks, especially European ones, to raise more funds, but expectations for the tighter Basel III rules have largely been priced in to bank stocks already and the long window for full compliance is boosting shares premarket: C +0.8%, BAC +1.85%, WFC +0.9%, DB +1.9%, UBS +2.1%, RBS +3.15%, ING +2.5%, STD +2.4%, BCS +1.8%, LYG +3.7% (6:00 ET).
- Eurozone nearly doubles GDP forecast. The European Commission nearly doubled its forecast for 2010 eurozone GDP growth, raising its estimate to 1.7% from the 0.9% growth it had forecast in May. The upward revision is mainly because of much stronger growth out of Germany, and is roughly in line with updated ECB projections of 1.4-1.7% eurozone growth this year. The eurozone economy contracted 4.1% in 2009.
- Chinese investors may bid for Prudential. Prudential (PUK) may be the target of a takeover offer by a group of Chinese investors who had backed Pru's failed bid for AIG's (AIG) AIA Group. The investors are also examining other options, including buying a large stake in AIA or taking control of Pru's Asian business. Sources said the deliberations are still in early stages, while Pru said it's aware of the potential interest but hadn't opened talks yet. Premarket: PUK +3.3% (7:00 ET).
- Bailout nation. Harrisburg, Pennsylvania's debt-laden capital, will receive $3.6M in expedited payments from the state and $850K in grants in order to make a $3.29M bond payment due on Wednesday. Governor Ed Rendell said it's not a bailout and will give the city some "necessary breathing space." A default on Wednesday's payment would have created the second-largest general-obligation bond default this year, exacerbating the fears of investors in the $2.8T market that more bad news from debt-strapped cities is probably coming and could weigh on bond prices.
- AOL bets on bigger ads. AOL (AOL) is hoping larger, splashier ads will help turn around its flagging fortunes by pulling in more ad dollars from major brands. The new ads, which sources say AOL plans to unveil later this month at the Advertising Week conference, are four times larger than AOL's usual ads and include room for several special functions such as a photo gallery, videos, coupons, social-media updates, text messaging or maps.
- In Asia, Japan +0.9% to 9322. Hong Kong +1.9% to 21658. China +0.9% to 2688. India +2.2% to 19208.
- In Europe, at midday, London +1.1%. Paris +1.1%. Frankfurt +1.0%.
- Futures: Dow +0.8%. S&P +0.8%. Nasdaq +0.8%. Crude +1% to $77.24. Gold flat at $1246.80.
Monday's Economic Calendar
- 2:00 PM Treasury Budget
- No notable earnings today.
Seeking Alpha's Market Currents team contributed to this post.
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