- Icahn Enterprises to buy Dynegy. Dynegy (DYN) announced this morning that its board had unanimously agreed to an acquisition by Icahn Enterprises (IEP) for $5.50/share. Dynegy will solicit superior proposals until January 25. The offer is a 10% premium to Dynegy's average closing stock price over the last 30 trading days; Dynegy closed yesterday at $5.45.
- Novartis, Alcon agree to merger. Novartis (NVS) agreed to merge with Alcon (ACL) in a deal worth $12.9B. Novartis will pay Alcon $168/share for the 23% stake it doesn't already own and will reactivate a share buyback to minimize shareholder dilution. The move is the 'logical conclusion' of Novartis' initial investment in Alcon, said Novartis chairman Daniel Vasella, and will see Novartis become "the global leader in eye care." Premarket: NVS +6.2%, ACL +2.2% to $166 (7:00 ET).
- Moody's may downgrade Spain. Moody's warned it may downgrade Spain's Aa1 credit rating. The country's high refinancing needs in 2011 and the possibility of a further rise in Spain's public debt ratio were contributing factors to the warning. However, Moody's noted that Spain remains much stronger credit-wise than other stressed eurozone countries and therefore any rating cut would likely still leave Spain in the Aa region, indicating Moody's foresees at worst a two-notch cut. The news sent Spain's IBEX 35 index down 2%, and shares of Spanish banks took a hit: STD -3.3%, BBVA -3.2% (7:00 ET).
- Simon Property bids for Capital Shopping. Simon Property Group (SPG) made a 425 pence/share offer for Capital Shopping Centres Group, valuing the U.K. company at £2.9B ($4.6B). It's a 26% premium to Capital Shopping's closing price on Nov. 24, the day before Simon's interest was disclosed. Capital Shopping has thus far refused to cooperate with Simon, and Simon said its announcement doesn't constitute a firm offer and there can be no certainty that a final bid will ultimately be made.
- Atos buys Siemens unit. French IT services firm Atos Origin agreed to buy Siemens' (SI) IT solutions and services division for €850M ($1.13B). Atos will also receive a seven-year outsourcing contract worth €5.5B to operate Siemens' IT infrastructure and applications worldwide. Under the deal, Siemens will become a major shareholder with a 15% stake in Atos. Premarket: SI +1.3% (7:00 ET).
- DoJ to join BP civil suits. The Justice Department is expected to join today civil lawsuits against BP (BP) and its contractors related to the Gulf of Mexico oil spill. The government's civil complaint is only the first salvo of what promises to be a long legal fight in assigning blame for the spill, and joining the private litigation could help the government build a civil and possibly a criminal case against the companies involved.
- No surprises from FOMC. There were no surprises in yesterday's FOMC announcement, as the committee maintained its near-zero rates, expects no rate changes for an 'extended period,' and stuck to its bond-buying plan. Kansas City Fed's Thomas Hoenig issued the only dissenting vote. The committee noted that the economic recovery is continuing, but not fast enough to cut unemployment. Household and business spending is rising moderately. Employers remain reluctant to hire, housing is still depressed, and underlying inflation measures are still trending down.
- EMS rises on possible sale. Shares of Emergency Medical Services (EMS) shot up 17% yesterday after the ambulance service provider said it's "reviewing various strategic alternatives," a phrase that's often code for a company putting itself up for sale. Sources said EMS has received takeover approaches from private-equity firms and has hired Goldman Sachs (GS) to help it evaluate its options.
- Zale considers sale of unit. Zale (ZLC) is said to be considering the sale of its Piercing Pagoda kiosk business. The unit is profitable but revenue has been falling and sources say Zale wants to focus on its fine jewelry operations. Buyout firms including Apollo Global Management are said to be among the firms interested in buying the unit. Shares of Zale fell 8.2% in yesterday's trading.
- GE sees improved outlook. GE (GE) CEO Jeffrey Immelt was upbeat when he delivered the company's annual outlook yesterday, saying GE expects its businesses to show solid earnings growth in 2011, with revenue flat to up 5% vs. consensus of a 3% revenue decline. GE will generate 'high double-digit' growth in China next year, compared with the company's annual growth of ~20% in China during the past decade. While acknowledging that investors have been 'put through a lot,' Immelt said 'we see across the portfolio things getting better.' GE also plans to repurchase the $3B of preferred stock sold to Berkshire Hathaway (BRK.A) by October at the latest. (More: Liveblog of the event)
- Rosatom to buy Mantra. Rosatom Corp., Russia’s nuclear holding company, agreed to buy Australia's Mantra Resources (OTC:MNRZF) for A$1.16B ($1.15B) to gain access to Mantra's Tanzanian uranium assets. Rosatom, which is making the purchase through its ARMZ Uranium subsidiary, may subsequently resell Mantra to its Canadian unit, Uranium One (OTC:SXRZF). The A$8/share deal is an 8% premium to Mantra's last trading price. Shares of Mantra rose 4.5% in Aussie trading.
- Caspian Pipeline group greenlights expansion. Chevron (CVX) said this morning that it and the rest of the shareholders in the Caspian Pipeline Consortium unanimously approved a $5.4B expansion of the 900-mile pipeline. The investment will increase the capacity of the pipeline, which carries crude oil from Western Kazakhstan to a dedicated terminal in the Black Sea, to 1.4M barrels per day from 730,000. The consortium's three largest shareholders are Chevron, Transneft (OTC:TRNFF) and KazMunaiGaz (KMG).
- Lions Gate shareholders spurn Icahn. Lions Gate (LGF) shareholders voted yesterday for all 12 of the company's board nominees, a major defeat for activist investor Carl Icahn who had been pushing his own slate of nominees. Despite the defeat, the fact that Icahn still holds a 33% stake in the company means he's likely to continue to aggressively pursue his agenda for the company, including pressuring it to cut costs and raise its stock price. Lions Gate fell 6.35% in yesterday's trading.
Earnings: Wednesday Before Open
- Joy Global (JOYG): FQ4 EPS of $1.39 beats by $0.23. Revenue of $1.05B (+8.9%) vs. $0.9B. (PR)
- In Asia, Japan -0.1% to 10310. Hong Kong -1.9% to 22975. China -0.5% to 2911. India -0.8% to 19648.
- In Europe, at midday, London -0.4%. Paris -0.8%. Frankfurt -0.7%.
- Futures at 7:00: Dow -0.3%. S&P -0.3%. Nasdaq -0.3%. Crude -1.1% to $87.31. Gold -1% to $1389.80.
Wednesday's Economic Calendar
- 7:00 MBA Mortgage Applications
8:30 Consumer Price Index
8:30 Empire State Mfg Survey
8:30 Real Earnings
9:00 International Capital Flow
9:15 Industrial Production
10:00 NAHB Housing Market Index
10:30 EIA Petroleum Inventories
- Notable earnings before Wednesday's open: JOYG
The SA Currents team contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.