Wall Street Breakfast: Must-Know News

by: SA Eli Hoffmann
SA Eli Hoffmann
Seeking Alpha's flagship daily business news summary, gives you a rapid overview of the day's key financial news. It is published before 7:00 AM ET every market day and delivered to over 900,000 email subscribers.

  • Safran boosts U.S. business with $1.1B L-1 buy. French security firm Safran said it will pay $1.1B for L-1 Identity Solutions (NYSE:ID) ($12/share), a 24% premium to Friday's close. Safran will incorporate L-1 into its existing Morpho security arm, where it will join previous acquisitions including Motorola's (MOT) Printrak biometrics unit and GE's (NYSE:GE) Homeland Protection unit. L-1 provides secure ID credentials to government and commercial customers, and specializes in biometric security, such as fingerprint, iris and face recognition.
  • Junk demand blasts above pre-crisis levels. Strong demand for junk bonds has pushed prices to the highest level since June 2007 - at the height of the credit boom. BofA's benchmark junk debt index rose last week above 100 for the first time since the start of the credit crisis, a level that assumes bonds will generally be repaid in full. Sales of U.S. junk bonds reached $168B last week - already surpassing 2009 when the $164B total set a record.
  • Macondo's dead; issues live on. Shares of BP (NYSE:BP) are marginally higher premarket (+1%) after it confirmed it has finished capping Macondo by drilling a relief well into its base. No oil has leaked since a temporary cap was installed on July 15, but BP said the permanent plug represents "a significant milestone." BP also said payouts to people affected by the spill have increased dramatically since it surrendered authority for dispensing funds to an independent administrator. Total spill response costs now stand at $9.5B.
  • General Mills craves Yoplait. General Mills (NYSE:GIS) is pondering a £1B takeover bid for Yoplait after the French firm tried to scrap a distribution deal between the companies, sources say. General Mills declined to comment.
  • Her Majesty wants access to your bank account. UK tax collectors proposed today that all paychecks be processed by the government, which would deduct taxes before transferring funds to employees. The agency described the plan, which would require employers to share real-time information with tax authorities, as a "radical" change from the current system.
  • Greek stress tests postponed. European regulators and the IMF have agreed to postpone stress tests for Greek banks by a month after a government bond auction last week was well received. Tomorrow National Bank of Greece (NBG) will auction three-month paper, which could give further indication of investors' confidence.
  • Big small plans for Wal-Mart. Commercial real estate brokers say Wal-Mart (NYSE:WMT) is gearing up for a move into small convenience stores in large urban markets like Chicago and LA, hoping to revitalize sagging domestic growth. Street chatter suggests Wal-Mart is in the market for hundreds of locations across the U.S. Separately, Wal-Mart has begun experimenting with online purchases delivered free to FedEx (NYSE:FDX) outlets in a bid to boost sales in locations like LA and Boston where Wal-Mart has little to no store presence.
  • Nissan looks to boost China sales. Nissan (OTCPK:NSANY) plans to double its production in China to 1.2M units by 2012, looking for a 10% share of the world's No.1 auto market. The goal is 20% higher than Nissan's previous target, underscoring its strong interest in China, which has been a bright spot for automakers during the global downturn.
  • Apple pushes iMag store. Sources say Apple (NASDAQ:AAPL) is trying hard to persuade publishers to help it create a hub for buying newspaper and magazine subscriptions. An iPad-based subscription service would give publishers a much-hoped-for source of growth, but they are also wary of letting Apple gain the same degree of influence over the periodical market that it has over music sales.
  • China kicks GM's tires. Sources say China's No.1 automaker SAIC has approached GM about taking a "single digit" stake in the automaker's IPO this fall. In a posting Friday, the Treasury said the much-awaited IPO will be open to a wide range of U.S. and overseas investors - which may or may not extend to Beijing. A SAIC spokeswoman commented only that, "SAIC is closely watching the process of a GM IPO."
  • French banks docked €385M for fee cartel. The French competition watchdog has fined 11 banks - including HSBC (HBC), Societe Generale (OTCPK:SCGLY) and BNP Paribas (OTCQX:BNPQY) - €385M for colluding to charge bloated fees on checks and other banking services.
  • PE firms eye Honda bike business. A group of private-equity firms including KKR & Co. (NYSE:KKR) and Bain Capital are competing to buy a 15% stake in Honda's (NYSE:HMC) Hero Honda Motors, India's biggest motorcycle maker. The stake is valued at about $1.1B.
  • Verizon to name new president, COO. Sources say Verizon (NYSE:VZ) will name wireless chief Lowell McAdam as president and COO, clearing up the question of who will succeed CEO Ivan Seidenberg, who turns 64 this year. Verizon has lacked a president and COO since Dennis Strigl retired in 2009.

Earnings: Monday Before Open

  • Lennar (NYSE:LEN): FQ3 EPS of $0.16 beats by $0.11. Revenue of $825M (+14.5%) vs. $777.4M. Shares +2.6% premarket. (PR)

Today's Markets

  • Asia: Japan +1.2%. Hong Kong flat. China -0.4%. India +1.6%.
  • Europe at midday: London +1.2%. Paris +0.8%. Frankfurt +0.6%.
  • Futures at 7:00: S&P +0.51%. 10-yr +0.05%. Euro +0.38% vs. dollar. Crude +0.43% to $75.24. Gold +0.3% to $1281.30.

Monday's Economic Calendar

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