Wall Street Breakfast: Must-Know News

by: SA Eli Hoffmann
SA Eli Hoffmann
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.
  • GM mulls job cuts, brand closures. Sources say GM (NYSE:GM) will cut thousands more jobs and reduce its eight brands - moves which would both humble the once-might carmaker, as well as offer competitors the chance to grab more of GM's market share. Some say the brands are a drain on GM's resources; proponents point to its closure of Oldsmobile earlier this decade, which saw many enthusiasts defect to other companies. With about $24B in cash, but burning $3B a quarter, analysts think GM need to raise $10-15B to keep afloat through 2010. Besides brand sales, it may consider spinning off its international operations, or offering the UAW a stake in the company in exchange for wage concessions. A share sale would be difficult due to its anemic stock price.
  • NBC and partners to buy The Weather Channel. NBC Universal (NYSE:GE) is buying The Weather Channel, with help from private-equity firms Blackstone (NYSE:BX) and Bain. Terms weren't disclosed; previous talk was for a $3.5B deal. The acquisition promises to be one of the year's biggest LBO deals to date.
  • Bud buyer getting impatient. Belgian brewer InBev raised the pressure on Anheuser-Busch (NYSE:BUD) Monday, saying it will attempt to oust A-B's board - which would require the consent of a shareholder majority. InBev reiterated it would still prefer to achieve a friendly combination with the U.S. brewer, but said barring constructive talks, its latest move will give shareholders an opportunity to have their say.
  • After you finish reading Wall Street BreakfastSeeking Alpha's Market Currentswill keep you current all day long.
  • Merrill may sell stakes in Bloomberg, BlackRock. Sources say Merrill (MER) is in active negotiations to sell its 20% stake in Bloomberg LP back to Bloomberg - part of a broader plan to raise $50B through asset sales. Merrill will also reportedly make a decision on whether to sell its stake in private-equity firm BlackRock (NYSE:BLK) early this week.
  • APP snags $3.7B bid. German healthcare company Fresenius agreed to pay $3.7B cash to acquire U.S. generic drugmaker American Pharmaceutical Partners (APPX). The $23/share price represents a 29% premium from Friday's close. Fresenius says the acquisition will give it a foothold in U.S. markets, and allow it to sell APP's lineup internationally. If certain targets are met, APP investors could get another $6/share. Fresenius fell 11% in Frankfurt.
  • CNOOC unit bids on Norway firm. Chinese oil producer CNOOC (NYSE:CEO) says it will offer about $2.5B for Norway oil-services company Awilco Offshore - an 18.7% premium. An acquisition would help CNOOC increase its number of drilling rigs and increase its international presence.
  • Store rentals weaken; apartments remain solid. U.S. shopping mall vacancies rose to 6.3% in Q2 from 5.9% in Q1 - the highest level since early 2002. But demand for apartment rentals remained strong, and rents rose by a surprising 1.1% over the quarter. Still, the growth in rental demand has not been as strong as the drop in homebuying, a possible indication people are doubling up or moving back in with their parents. The ICSC predicts 6,500 retail store closures this year.
  • Carmakers push back. Some auto makers are refusing to pay steel-price surcharges on previously-signed supply contracts. They may have reached the tipping point - unable to withstand higher prices, which could put pressure on steelmakers like ArcelorMittal (NYSE:MT) and United States Steel (NYSE:X).
  • Teva MS hopeful falls through. Shares of Teva Pharmaceutical (NASDAQ:TEVA) fell much as 6.8% in Tel Aviv today, after a higher-dosage treatment of its multiple sclerosis drug proved no more effective than the original, lower-dosage treatment.
  • BP strikes back. BP (NYSE:BP) is suing its Russian TNK-BP partners for $360M in back-taxes it says they should have payed. While not directly related to their current struggle, the two sides are clearly jostling for position.
  • UBS gives rosy outlook. Shares of UBS (NYSE:UBS) jumped 8.2% in Zurich Friday after it said Q2 will be about breakeven, and that it has no need for more capital. The Street's outlook was far more pessimistic.
  • BCE buyout as planned - more or less. The private-equity buyers of BCE (NYSE:BCE) said they will stick to the original C$42.75/share price tag. Still, the final price will be $2/share cheaper after BCE agreed to drop all dividends. Shares gained +12.4% to $39.50 in Toronto Friday.
  • UK manufacturing fell by 0.5% to an eight-month low amid high materials prices and slow economic growth. "The bank is still facing huge inflationary pressures. Rates will be on hold this week," Fortis economist Nick Kounis said.

Today's Markets

  • Asian markets were mainly higher Monday: Nikkei +0.9% to 13,360. Hang Seng +2.3% to 21,903. Shanghai +4.6% to 2,792. BSE +0.5% to 13,526.
  • Europe is higher at midday: London +0.46%. Paris +0.54%. Frankfurt +0.67%.
  • Futures at 7:00 AM: Dow -0.11%. S&P -0.14%. Nasdaq +0.12%. Crude -1.53% to $143.05. Gold -1.27% to $921.70.
  • Today's economic calendar:
    7:30 Fed's Janet Yellen speaks on economic outlook.
    10:00 Conference Board's Employment Trends
    3:00 PM Consumer Credit

Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.