Wall Street Breakfast: Must-Know News

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.

Sanofi, Merck call off animal health JV. Sanofi-Aventis (NYSE:SNY) and Merck (NYSE:MRK) abandoned plans to form an animal health joint venture, saying it no longer made sense in light of the 'increasing complexity' of disposals and regulatory reviews needed for the deal. The decision is a blow to the firms' plans to achieve economies of scale in the consolidating industry, and to smaller firms that were eager to buy assets that Sanofi and Merck would have been forced to sell as part of the tie-up. Sanofi and Merck each said they remain committed to their individual animal health units, which generated annual sales of $2.6B and $2.9B respectively last year.

Barclays mulls bid for Maiden Lane MBS. Barclays (NYSE:BCS) is reportedly one of a number of investors considering making a bid for a portfolio of mortgage-backed securities currently owned by the New York Fed in investment vehicle Maiden Lane II. These are the same mortgage-backed securities for which AIG (NYSE:AIG) made a $15.7B bid last week. Sources said Fed officials are hesitant to seal a quick deal with AIG because of a possible backlash in public opinion; this reluctance could work in favor of bids by Barclays and others.

Deutsche Bank loses swaps case. A German court ruled this morning that Deutsche Bank (NYSE:DB) inappropriately advised one of its clients on the risks involved in buying interest-rate swaps. To compensate for damages caused, Deutsche Bank must pay €541K ($769K) plus interest. Though it's a relatively small sum of money for Deutsche Bank, the verdict is potentially significant as it could change how German banks market complicated derivatives products to their clients.

Fed to publish bank info. Following a Supreme Court ruling, the Federal Reserve plans to release the details of its emergency lending program which was activated during the peak of the financial crisis. The Clearing House Association, a trade group representing large banks, had tried to get the Supreme Court to overturn an earlier federal appeals court ruling which ordered the Fed to disclose which commercial banks tapped emergency loans. A Fed spokesman said the central bank would comply with the Supreme Court order, but didn't specify when the data is due to be released.

Liberty Media buys Kabel BW. John Malone's Liberty Global (NASDAQ:LBTYA) beat out at least two other bidders and will buy Kabel BW, Germany's third largest cable firm, for €3.16B ($4.5B). The deal brings Liberty another 2.4M customers, and requires antitrust approval, as it follows a 2009 purchase of Unitymedia, Germany's number two cable TV company. Kabel owner EQT bought the company from Blackstone (NYSE:BX) five years ago for €1.3B.

Interest grows in troubled bank assets. PIMCO has apparently raised more than $1.5B for its new Bravo fund, short for Bank Recapitalization and Value Opportunities. The fund aims to buy assets from banks looking to strengthen their balance sheets, and underscores growing investor appetite for such assets as troubled commercial and residential mortgages. The fund may also invest directly in banks through securities like warrants and convertible debt.

Microsoft sues over Nook patents. Microsoft (NASDAQ:MSFT) filed suit against Barnes & Noble (NYSE:BKS), Foxconn and Inventec for patent infringement related to Barnes & Noble's Android-based (NASDAQ:GOOG) Nook e-reader and Nook Color tablet. The patents at issue cover functions that allow speedier Web surfing and interaction with e-books. The suit is part of Microsoft's broader legal battle against Google's mobile operating system.

Apple sues Amazon over App Store. Apple (NASDAQ:AAPL) has filed suit against Amazon (NASDAQ:AMZN), accusing the giant online retailer of trademark infringement over the use of the term 'App Store.' In the suit, filed Friday but just disclosed, Apple asks a court to block Amazon from using the term and seeks unspecified damages. Amazon says it uses 'Appstore,' as one word and with a lower case 's;' Apple's trademark, though approved by authorities, is also being challenged by Microsoft.

RIM plays out Playbook strategy. Research In Motion (RIMM) announced its plans this morning for making its BlackBerry Playbook tablet available in over 20,000 retail outlets in North America. Best Buy (NYSE:BBY), one of the preferred Playbook retailers, will offer Wi-Fi models featuring 16GB, 32GB or 64GB of storage at $499, $599 and $699 respectively. The prices are in line with similarly equipped iPads (AAPL).

Earnings: Tuesday Before Open

  • Dollar General (NYSE:DG): Q4 EPS of $0.65 beats by $0.06. Revenue of $3.49B (+9.4% Y/Y) in-line. Company issues upside guidance, sees FY'12 EPS of $2.20-2.30. Rev growth Y/Y 12-13%. Open 625 new stores in 2011. (PR)

Today's Markets

  • In Asia, Japan +4.4% to 9608. Hong Kong +0.8% to 22858. China +0.3% to 2919. India +0.8% to 17988.
  • In Europe, at midday, London +0.0%. Paris +0.1%. Frankfurt -0.2%.
  • Futures at 7:00: Dow flat. S&P -0.1%. Nasdaq +0.1%. Crude -0.3% to $102.03. Gold -0.1% to $1425.40.

Tuesday's Economic Calendar

The SA Currents team contributed to this post.

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