- Roche bids for rest of Genentech. Underscoring Big-pharma's hunger for new products, Swiss Roche (OTCQX:RHHBY) offered to buy the 44% of Genentech (Private:DNA) it doesn't own for $89/share ($43.7B) - a one-day premium of 8.8% and one month premium of 19%. "We will be better able to share technologies and expertise in pharmaceuticals and diagnostics," Roche CEO Severin Schwan said. The transaction would also leverage the companies' synergies. It is, however, a bold and somewhat risky move, inasmuch as the two have always insisted that DNA's independence and freedom is critical to its success. DNA is up 11% in the pre-market. [PR]
- Yahoo activist calls for compromise. Sources say dissident shareholder Eric Jackson will on Monday call on Yahoo (NASDAQ:YHOO) to compromise and accept a mixed board that includes nominees from Carl Icahn's rival slate - perhaps five incumbents and four Icahn nominees. "It's become clear over the last two weeks that many shareholders are reluctant to support the entire list of Icahn nominees," Jackson says in a statement to be issued today. A different source says Yahoo's board sees no need to compromise. Update: Yahoo (YHOO) now says it has settled its differences with Carl Icahn, who will receive three board seats out of an expanded 11 - for himself and two cohorts. Robert Kotick steps down.
- EU looks to cooperate with SEC on rating agencies. Sources say the European Commission wants to cooperate closely with the SEC on the planned regulation of credit rating agencies. "Because of the importance of the U.S. financial markets it would make no sense to take action in isolation."
- Bernanke, Paulson pressed for broader moves. Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson are under pressure to imitate big-government of days gone by and use taxpayer money to shore up the balance sheets of Fannie Mae (FNM) and Freddie Mac (FRE), or set up new agencies to buy and refinance mortgages in default, or even take over the failing financial institutions. The current "fire-brigade approach to dealing with the fallout from the extremely weak domestic economy is eroding general confidence in the U.S. financial system," economist Brian Bethune says.
- FDIC implicated in predatory lending. After the 2001 seizure by federal officials of Superior Bank FSB, then a national subprime lender, the FDIC continued to run the bank's subprime-mortgage business for months as it looked for a buyer. During the period, it funded more than 6,700 high-interest, subprime loans worth more than $550M. The loans, which the FDIC eventually sold to another bank, were afflicted with the same problems for which regulators are now faulting commercial lenders: "lending to unqualified borrowers, inflated appraisals, and poor verification of borrowers' incomes."
- Tier 1 tumbling. Investors may have lost confidence in once revered financial-health ratios such as Tier 1. The scope and severity of the current financial turmoil have made it tough to predict mortgage-related losses and the toll they will take on banks' capital.
- Chinese stake talks spur HSBC. Shares of HSBC (HBC) gained 2.5% in London on reports of a possible investment by China Investment Corp. HBC does not appear to need cash, and the stake may be bought on the open market. HSBC wants to be the first foreign company to list on a mainland China exchange.
- Vodafone's Ghana business facing opposition. Members of Ghana's opposition party have so far blocked the government's attempt to sell Vodafone(NASDAQ:VOD) a 70% stake in the country's state-owned telecom for £450M.
Earnings: Monday Before Open
- AMTEK (NYSE:AME): Q2 EPS of $0.68 beats by $0.11. Revenue of $649M (+24.9%) vs. $627M. Sees full-year EPS of $2.50-2.54 vs. $2.47. [PR]
- Albemarle (NYSE:ALB): Q2 EPS of $0.67 beats by $0.02. Revenue of $621M (+10.1%) vs. $635M. [PR]
- Bank of America (NYSE:BAC): Q2 EPS of $0.72 beats by $0.19. Revenue of $20.32B vs. $18.37B. Provision expense rose by $4.02B to $5.83B, reflecting charge-offs of $3.62B and $2.21B in increased loss allowances. [PR]
- Hasbro (NASDAQ:HAS): Q2 EPS of $0.25 beats by $0.03. Revenue of $784M (+13.4%) vs. $675M. "While input cost inflation continues to be challenging, thus far we have been able to mitigate most of the impact through cost savings initiatives and pricing actions." [PR]
- Radcom (NASDAQ:RDCM): Q2 EPS of -$0.34 beats by $0.46. Revenue +57% to $3.7M. [PR]
- Dr. Reddy's (NYSE:RDY): FQ1 net income fell 26%, beating consensus. Revenue rose 26%. [PR]
- RPM (NYSE:RPM): FQ4 EPS of $0.75 beats by $0.06. Revenue of $1.08B (+7%) in-line. Sees full-year EPS of $1.85 vs. $1.90. [PR]
- IMS Health (RX): Q2 EPS of $0.40 in-line. Revenue of $601M (+11.8%) vs. $593M. [PR]
- PetMed Express (NASDAQ:PETS): Q2 EPS of $0.28 beats by $0.01. Revenue of $68.4M vs. $65.3M. [PR]
- Timken (NYSE:TKR): Sees Q2 EPS of $0.96 vs. $0.78 consensus, and full-year EPS of $2.95-3.10 vs. $2.90. Results benefited from "higher volume, improved mix and better execution more than offsetting the impact of declining automotive demand." [PR]
- UnionBanCal (UB): Q2 EPS of $1.02 beats by $0.10. Revenues of $633M (-3.9%) vs. $681M. Sees Q3 EPS of $1.10-1.20 vs. $1.01. [PR]
- Washington Federal (WFSL): Q3 EPS of $0.38 beats by $0.02. [PR]
- Weatherford International (NYSE:WFT): Q2 EPS of $0.43 misses by $0.02. Revenue of $2.23B (+22.8%) in-line. [PR]
- XM Satellite Radio (XMSR): Adds 322K net subscribers in Q2 to 9.65M - up 17% from a year ago. Churn fell to 1.67% from 1.77% last quarter and 1.84% a year ago. [PR]
- Asia markets all closed up Monday. Hang Seng +3% to 22,533. Shanghai +3% to 2,861. BSE +1.5% to 13,845. Nikkei - closed.
- European markets are higher at midday. London +0.2%. Paris +0.9%. Frankfurt +0.4%.
- Futures are following overseas markets up. Dow +0.25%. S&P +0.4%. Nasdaq +0.6%. Crude +1.25% to $130.50. Gold +0.75% to $965.
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