- Endo to buy American Medical for $2.6B. Endo Pharmaceuticals (ENDP) will acquire American Medical Systems (AMMD), a urological medical devices supplier, for about $2.6B in cash to strengthen its core urology franchise. Endo will pay $30 a share for American Medical, a premium of about 29% to the stock's close on Friday. Endo will also assume $312M of American Medical's debt.
- NYSE says auf wiedersehen to Nasdaq-ICE bid. Sources say Nasdaq (NDAQ) and ICE (ICE) are set to lobby NYSE Euronext's (NYX) shareholders, after the latter yesterday rejected Nasdaq and ICE's joint $11.3B takeover offer. NYSE reaffirmed its commitment to a $9.7B merger with Deutsche Boerse (DBOEY.PK), criticizing the Nasdaq bid as one with an 'unacceptable execution risk.' Breaking up NYSE Euronext, creating a high debt burden and 'destroying invaluable human capital' would be a 'strategic mistake,' NYSE said. However, the exchange had to take calls from angry investors following the rejection of Nasdaq and ICE, whose next step after the lobbying could be to take their case directly to shareholders with a hostile offer.
- Obama to lay out deficit plan. Following Friday night's budget deal that averted a government shutdown with just an hour to spare, President Obama will lay out his own long-term plan on Wednesday for reducing the deficit. He will propose cuts to entitlement programs, including Medicare and Medicaid, changes to Social Security, and altering parts of the tax code he thinks benefit the wealthy. Obama will also call for tax increases for those earning over $250,000 a year, a measure already contained in the 2012 budget. On Friday, the president and congressional leaders agreed to slice $39B in spending in a deal that will fund the government for the next six months.
- U.K. report refrains from calling for I-banking separation. An interim report on British banks today shied away from recommending they should be forced to spin off their investment banking units, a move that may have prompted Barclays (BCS) and HSBC (HBC) to make good on threats to relocate their headquarters abroad. However the report from the Independent Commission on Banking did say that banks should ring-fence consumer units to protect depositors and enhance stability. It also recommended that the country's largest banks should hold core Tier 1 capital levels of about 10% and implement plans for orderly bankruptcy. In addition, the commission said that Lloyds (LYG) should substantially enhance a program of selling branches that it is carrying out to comply with an EU ruling following its 2008 merger with HBOS. Premarket: BCS +3.55%, HBC -0.5%, LYG +1.8%, RBS +3.2% (7:00 ET).
- BHP plays down Woodside bid report. BHP Billiton (BHP) has doused speculation it's in talks to buy Shell's (RDS.A) 24% stake in Australia's Woodside Petroleum (WOPEY.PK) and then make a takeover bid for Woodside worth A$46B ($48.6B). Reacting to a U.K. press report, BHP said it isn't "aware of any basis for the market speculation." Woodside CEO Don Voelte said he had no knowledge of any potential takeover bid from BHP. Colin Barnett, the premier of Western Australia, where Woodside is based, issued a 'hands-off' warning to BHP but did say that the company 'informally' talked to him about its potential interest in Woodside late last year. Separately, BHP has completed an A$6.3B off-market share buyback as part of an A$10B capital management program. Premarket: BHP +2.9% (7:00 ET).
- BP to seek extension for Rosneft pact. BP (BP) will look to extend the timetable for completing its contentious £10B ($16.4B) share-swap deal with Rosneft as it attempts to break the stalemate in negotiations with its partners in TNK-BP. Rosneft insists BP must reach a settlement with the four oligarchs controlling the TNK part of the joint venture by Thursday, also the day of its annual meeting. Last week, an arbitration tribunal ruled that the interim injunction prohibiting the closing of the deal with Rosneft will remain in place 'until further notice.'
- Glencore to pursue mergers after $10B IPO. Glencore, the world's largest commodities trading company, will be able to attempt acquisitions of $4B-$5B after it lists, CEO Ivan Glasenberg said. He indicated that Xstrata (XSRAF.PK), in which Glencore owns 34%, and Louis Dreyfus, the family owned trader looking for a sale or IPO, could be targets. While Glasenberg would only say that the IPO was 'imminent', bankers said the company will file an intention-to-float document in London on Thursday. They said Glencore plans to sell a 20% stake worth $10B-$12B, valuing the company at around $60B, making it London's largest ever flotation. A source said Glencore plans to list in Hong Kong as well as London.
- Alcoa seen earning Q1 net profit after loss last year. Dow component Alcoa (AA) is expected to disclose that it swung to a Q1 2011 net profit of $0.27 a share on sales of $6.16B when it kicks off earnings season after the close today. This compares with a loss of $0.20 on revenue of $4.9B in the same period a year earlier. A major question is how much higher costs for raw-materials and transportation have offset gains from higher aluminum prices. Alcoa's performance may reflect economic trends because it sells products across several industries, including to automobile, trucking, aerospace, consumer products and construction companies.
- Libya rebels will reject ceasefire unless Gaddafi quits. Libyan rebels won't accept an African Union ceasefire plan unless Muammar Gaddafi and his sons give up power. The AU said the Libyan leader has accepted a plan they presented to him yesterday in which he would end hostilities and hold talks about political reform, although there was no mention of him agreeing to resign. An AU delegation headed by South African President Jacob Zuma is due to meet rebel leaders today. After almost two months of fighting, Gaddafi and the rebels have fought to a stalemate despite the latter receiving military backing from NATO. Crude has risen more than 30% since the conflict began, and was trading at $111.58 at 6:35 ET.
- Warner to review bids this week. Warner Music Group (WMG) is expected to review second-round bids for the company this week, a source said. Up to 10 investors have made offers ranging from $2.8B to just over $3B on an enterprise-value basis. The potential buyers for all or part of Warner include Live Nation (LYV), BMG Rights Management, Platinum Equity, billionaire Ron Burkle's Yucaipa, billionaire Len Blavatnik, investor Ron Perelman, and Sony (SNE), which is specifically interested in Warner's song publishing unit.
- In Asia, Japan -0.5% to 9719.7. Hong Kong -0.4% to 24303. China -0.3% to 3023. India -1.0% to 19263.
- In Europe, at midday, London +0.2%. Paris -0.5%. Frankfurt flat.
- Futures at 7:00: Dow +0.3%. S&P +0.3%. Nasdaq +0.45%. Crude -0.95% to $111.72. Gold -0.4% to $1467.90.
Monday's Economic Calendar
- 5:15 Fed's Dudley: Financial Reform
12:15 PM Fed's Yellen: Economic Outlook
- Notable earnings before Monday's open: SHAW
- Notable earnings after Monday's close: AA
The SA Currents team contributed to this post.
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.