Wall Street Breakfast: Burger King In Talks To Buy Tim Hortons

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 |  Includes: ANN, BBRY, BWFG, CME, ECR, GM, GNLAF, ITMN, MCD, OXY, QQQ, QSR, SNE, SON, SPY, TOPS, TOT
by: Wall Street Breakfast
Wall Street Breakfast
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Economy
Following the raised prospects of more policy easing from the ECB as early as next week, the euro plummeted this morning to its lowest level in nearly a year against the dollar. The drop follows ECB President Mario Draghi's confirmation on Friday that the central bank is prepared to respond with all of its "available" tools should inflation drop further. The euro dropped to $1.3185 in early trade, its lowest since September 2013, from around $1.3246 on Friday.

France has been thrown into a new political crisis after President Francois Hollande told Prime Minister Manuel Valls to form a new government. The move follows criticism of his policies by the country's Economy Minister Arnaud Montebourg. A statement released by Francois Hollande's office states that a new government will be formed on Tuesday in line with the "direction he (the president) has defined for our country."

Thailand's junta leader, General Prayuth Chan-ocha, has officially been appointed prime minister following an endorsement from the country's monarch. The new PM says he will appoint members to his new cabinet next month. Thailand's economy shrank in the first half of the year due to the mass protests against former leader Yingluck Shinawatra, however, growth did pick up in Q2, expanding 0.4% Y/Y and 0.9% Q/Q.

Japanese stocks rebounded to a 3-1/2-week high Monday, led by exporters and others due to a weak yen (which struck a seven-month low against the dollar this morning). The Nikkei closed at yet another record high since July 31, climbing 0.5% to 15,613.25, despite trading volume hitting its lowest in a week. The Topix gained 0.4% to 1,291.31, while the JPX-Nikkei Index 400 rose 0.4% to 11,751.23.

Stocks
Burger King Worldwide is in talks to buy Tim Hortons (THI) in a deal that would create the 3rd largest quick-service restaurant company in the world. The deal is being structured as a tax inversion, in which the new company would be headquartered in Canada. Tim Hortons and Burger King (BKW) are expected to remain distinct brands if the merger is finalized.

Roche will pay $74/share for InterMune (NASDAQ:ITMN), a 38% premium to its Friday close and 63% higher than Aug. 12 when news of a potential sale emerged. The $8.3B deal gives Roche (OTCQX:RHHBY, OTCQX:RHHBF) access to pirfenidone, which analysts predict will generate $1B in global sales by 2019. Pirfenidone joins Roche’s stable of pulmonary treatments, including Pulmozyme for cystic fibrosis, Xolair for asthma, and in-development asthma drug lebrikizumab.

A Twitter group called Lizard Squad has claimed credit for the denial-of-service attack on Sony's (NYSE:SNE) PlayStation Network. Sony says the attack did not access any personal information and that network service has now been restored. Lizard Squad also claimed that explosives were aboard a plane carrying Sony Online Entertainment President John Smedley to San Diego. The American Airlines flight was subsequently diverted and landed safely in Phoenix.

BlackBerry has once-again emerged victorious against Typo Products, a company co-founded by television personality Ryan Seacrest, after a U.S. court upheld a preliminary injunction which blocked the latter from selling its iPhone keyboard. The preliminary injunction was granted in March, following a complaint filed by BlackBerry (NASDAQ:BBRY) which stated that Typo's keyboard likely infringed on its patents.

CME Group delayed the start of trade on its electronic platform by four hours this morning, halting the sale of all contracts on its Globex Markets platform, apart from Bursa Malaysia derivatives, due to a technical glitch. Traders in Asia say CME's (NASDAQ:CME) delay will only have a limited impact, with thin volumes likely this morning due to the lack of major market-moving news over the weekend.

Despite the closing of three McDonald's restaurants in Moscow, Deputy Prime Minister Arkady Dvorkovich says Russian authorities are not planning on closing the chain in the country. "No one is talking about it at all (a ban on McDonald's (NYSE:MCD) in Russia)," says Dvorkovich. "It has just happened that the inspections were completed at the same time." The outlets were closed as Russia introduced a one-year ban on agricultural imports from the West.

Occidental Petroleum is in talks to sell as much as a $3B stake of the Shah natural gas field to Abu Dhabi-owned Mubadala Development. The company is looking to individually sell several of its Middle East assets after it failed to cut 40% of its operations in the region earlier this year. Additionally, Occidental Petroleum (NYSE:OXY) is looking to sell part of its stake in Dolphin Energy, which is also owned by Mubadala and Total (NYSE:TOT).

GM is weighing a decision over whether to delay the expansion of its $300M Russian plant near St. Petersburg due to the current business situation in Russia and lower sales volumes since the start of the year. Following the West's increased sanctions on the country, Russian car sales fell 22.9% last month, while GM (NYSE:GM) sales including its Opel, Chevrolet and Cadillac brands dropped 20.9% through the end of July.

Engine Capital, along with hedge-fund partner Red Alder, believes women's apparel retailer Ann (NYSE:ANN) could fetch approximately $2.5B should it sell itself. The investors, which control just more than 1% of Ann stock, have been in talks with Ann's management for weeks but plan to soon launch a public campaign saying they don't believe the company is moving fast enough.

Sonoco Products has agreed to purchase Germany's privately-held Weidenhammer Packaging for approximately $383M. The deal is expected to raise Sonoco's global packaging business to about $2.8B in annual sales, and be accretive to the company's 2015 base earnings in the range of $0.09 to $0.14 per share. Sonoco (NYSE:SON) plans to fund the acquisition through a combination of existing cash and debt.


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Today's Markets:
In Asia, Japan +0.5% to 15613. Hong Kong +0.2% to 25167. China -0.5% to 2229. India +0.1% to 26437.
In Europe, at midday, London flat. Paris +1%. Frankfurt +1%.
Futures at 6:20: Dow +0.2%. S&P +0.3%. Nasdaq +0.4%. Crude +0.1% to $93.78. Gold -0.1% to $1279.
Ten-year Treasury Yield flat at 2.41%

Today's economic calendar:
8:30 Chicago Fed National Activity Index
9:45 PMI Services Index Flash
10:00 New Home Sales
10:30 Dallas Fed Manufacturing Outlook

Notable earnings before today's open: OSIS, QIHU

Notable earnings after today's close: ADEP, FN, PSEC, RENN

See full real-time earnings coverage »

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