Wall Street Breakfast: Must-Know News

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 |  Includes: ANRZQ, BGPIQ, BHP, BP, CEO, CHK, CHKP, CMCSA, GE, GLD, HMC, MEE, QQQ, RBS, RIO, SPY, USO
by: Rachael Granby
Rachael Granby
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.

  • Alpha buys Massey Energy. Alpha Natural Resources (ANR) announced over the weekend that it would buy Massey Energy (NYSE:MEE) for $7.1B in cash and stock, or $69.33/share. Alpha CEO Kevin Crutchfield said the 21% premium is well worth it and that Massey has been at the top of the company's acquisition list for some time. The deal will create the country's second-largest coal miner, and continues the industry's recent consolidation. Premarket: ANR -4.5%, MEE +13.4% to $64.90 (7:00 ET).
  • Chrysler posts full-year loss. Chrysler reported a 2010 net loss of $652M, mostly because of $1.2B of interest charges on its debt. Its Q4 loss widened to $199M, and it burned through $1B in cash during the quarter as it launched new vehicles. Looking ahead, Chrysler sees a net profit of $200M-500M for the year.
  • Markets keep close eye on Egypt turmoil. Moody's downgraded Egypt's government bonds to Ba2 from Ba1 and changed the outlook to negative from stable, pointing to "the recent significant rise in political event risk and concern that the policy response could undermine Egypt's already weak public finances." Egypt's plan to raise 4B Egyptian pounds ($683M) at debt auctions this week has been disrupted, and its banks and stock market remain closed. As the turmoil in Egypt continues, and protesters call for a 'million man march' tomorrow, markets are keeping a close eye on the country and the region, and most Asian markets took a hit this morning as investors shed riskier assets (see details below). Though Egypt is not a major oil producer, it does control the Suez Canal and traders worry an escalation of tensions could result in the closure of the canal, which is a major shipping artery and a minor thoroughfare for oil.
  • U.K. eyes RBS exit. The U.K. government could start selling its £46B ($73B) stake in Royal Bank of Scotland (NYSE:RBS) early next year, according to sources at the bank. An initial sale could include a stake of around £5B, though any offering is unlikely to take place until the sale will be profitable and won't precede a September 2011 report on whether banks should be broken up or purposefully weakened in order to spur competition.
  • Borders delays payment. Borders (BGP) said yesterday it will delay January payments to its vendors, landlords and other third-parties, as the cash-strapped company desperately tries to preserve liquidity. The move comes despite Borders' success last week in securing a conditional $550M credit line from GE Capital (NYSE:GE), though the conditions GE set were quite tough and require Borders to win several concessions from publishers and other third-parties. Borders has warned that it faces possible bankruptcy, and it's unclear whether this latest move is indeed the first step in what will likely be a difficult refinancing process or simply grasping at straws ahead of a bankruptcy filing some see as inevitable.
  • Chesapeake, CNOOC ink $1.3B shale deal. Chesapeake Energy (NYSE:CHK) and CNOOC (NYSE:CEO) announced their second shale deal in the past year, as the Chinese offshore oil producer continues its aggressive drive for overseas acquisitions. CNOOC will buy a 33.3% stake in Chesapeake leasehold acres in Colorado and Wyoming for $570M, and will fund 66.7% Chesapeake's share of drilling and completion costs until an additional $697M is paid. The second payment is expected to happen by the end of 2014.
  • BHP, Rio investors want cash. Shareholders have written to BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO), telling the miners to give up on their mega-deal ambitions and to instead initiate multi-billion pound share buyback plans. Some institutional investors have even gone so far as to threaten to vote against the re-election of directors unless the companies commit to returning cash to shareholders.
  • Profit down, outlook up at Honda. Honda (NYSE:HMC) reported this morning that FQ3 profit fell 40% from the year before to ¥81.1B ($995M), or ¥45.01 per share. Analysts had expected earnings of around ¥107B. Revenue was ¥2.1T vs. ¥2.24T the year before, and operating profit was ¥125.7B, which beat estimates of ¥110B. Despite the weak report, Honda raised its full year net profit forecast to ¥530B, a 97.5% increase in annual profit.
  • BP wants arbitration on Rosneft deal. BP (NYSE:BP) has requested fast-track arbitration to settle a dispute with the Russian shareholders of its joint venture TNK-BP. The shareholders oppose BP's recently announced share-swap and exploration venture with Rosneft, and a London court is scheduled to hear the case on Feb. 1, the same day Rosneft and BP will report their respective full-year results.
  • Comcast completes NBCU deal. Comcast (NASDAQ:CMCSA) announced on Saturday that it had completed its controversial takeover of NBC Universal (GE), creating a $30B media giant that controls both content and delivery. Comcast CEO Brian Roberts said the deal creates "the ideal entertainment and distribution company."
  • Friday's failures. Four more bank were closed on Friday, bringing this year's failures to 11 so far. The closures in Oklahoma, Wisconsin, Colorado and New Mexico will cost the FDIC's insurance fund an estimated $545.5M.

Earnings: Monday Before Open

  • Check Point Software (NASDAQ:CHKP): Q4 EPS of $0.73 beats by $0.04. Revenue of $318.5M (+17.1% Y/Y) beats by $14.5M. (PR)

Today's Markets

  • In Asia, Japan -1.2% to 10238. Hong Kong -0.7% to 23447. China +1.4% to 2790.
  • In Europe, at midday, London -0.4%. Paris -0.3%. Frankfurt -0.4%.
  • Futures at 7:00: Dow flat. S&P +0.1%. Nasdaq +0.1%. Crude flat at $89.34. Gold -1.1% to $1326.10.

Monday's Economic Calendar

The SA Currents team contributed to this post.


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