"Looking over the landscape, we do not see too many competitors that would be willing to pay a similar premium to book value," says Janney's Ryan Byrnes, commenting on Endurance Specialty Holdings' (ENH -0.3%) hostile offer of 1.16x book value for Aspen Insurance Holdings (AHL +2.9%).
"The chance of another acquirer coming into the picture is uncertain," says Sterne Agee. "While we have seen competing offers in past insurance transactions over the last several years, the deal multiples in those instances were close to/below book value.”
Barclays isn't so sure, saying other suitors looking to increase their scale could emerge. Possible candidates: Allied World Insurance (AWH +0.7%) and Validus Holdings (VR +0.2%) - both were involved in 2011/2012's bidding war for Transatlantic, in which Alleghany ended up buying the company in a $3.4B deal.
Yingli (YGE +6.7%) and China's Shanghai Sailing Capital Management have signed an MOU to create fund through which the companies will invest in local downstream solar projects.
The fund will have an initial size of RMB1B ($161M), of which Yingli will contribute 51%. It mostly plans to invest in Yingli-built projects.
Shares are rallying thanks to the announcement, and a broader solar stock rally that has followed the DOE's solar loan proposal. Yesterday, Yingli announced a "framework agreement" to sell at least 300MW of plants to Chinese operator United PV.
Precision Drilling (PDS +5.3%) is upgraded to Overweight from Underweight at Morgan Stanley, which believes the oilfield services company may double its Canadian land-drilling business over several years, benefiting from its exposure to the liquefied natural gas market which should see meaningful secular growth.
The firm says Canadian service providers Calfrac Well Services (CFWFF) and Trican Well Services (TOLWF) also could see growth for pressure pumpers.
Bank of America (BAC -2.5%) boosted legal reserves by $2.4B in Q1, and management is playing coy about why, but the WSJ says the bank is near a multi-billion dollar settlement with the DOJ to end civil probes into a number of legacy issues. The talks have been ongoing for months, but intensified, say sources, after JPMorgan late last year settled for $13B.
"Holy Alibaba!" exclaims Bernstein's Carlos Kirjner after looking at the Q4 numbers disclosed by Yahoo (YHOO +5.7%) yesterday. He now values the Chinese e-commerce giant at $245B - 25x estimated 2016 earnings of $9.5B for its core Taobao and Tmall sites + a $7.5B valuation for Alibaba.com and Alipay. Taobao/Tmall profits are now expected to grow 41% in 2015, and 28% in 2016.
Wells Fargo and Gabelli have upgraded Yahoo: The latter calls shares "ready for takeoff" as hype surrounding Alibaba's (ABABA) IPO - an F-1 reportedly could arrive by Monday - continues growing.
Looking at Yahoo itself, UBS (Buy) is pleased with the top-line impact of the company's in-stream ads (now 20% of display ad volume). It's less happy with Yahoo's vague CC remarks (transcript) about the tax impact of Alibaba share sales and future cash returns, EBITDA weakness (due to growth investments), and high headcount.
SunTrust (Buy) observes rising mobile ad sales (along with in-stream and premium ads) helped display impressions rise 7%, and that the Americas (where new ad products have been launched first) is outperforming.
Marissa Mayer mentioned on the CC Yahoo's news app is respectively ranked #1 and #2 in the news app category on the App Store and Google Play, that most mobile search metrics rose nearly 100% Y/Y, and that video streams (boosted by the Olympics and recent content deals) rose 30% Q/Q.
Reports from the 12 Federal Reserve Districts suggest economic activity increased in most regions of the U.S. since the previous report, with consumer spending increasing as weather conditions improved, according to the latest Beige Book.
10 of the 12 districts saw improvement - mostly to "modest to moderate" - but activity declined in the Cleveland and St. Louis regions.
Manufacturing improved in most districts, reports on residential housing markets varied.
Stocks are little changed; 10-year Treasury yield +1.5 bps at 2.641%.
Though the Nasdaq is up 0.7%, many chip stocks are heading in the opposite direction (SOXX -0.6%) after Intel provided mixed Q1 top-line numbers for its business units - server chip sales were healthy, mobile sales were weak, and PC sales were in between - ASML lowered its 1H14 sales outlook and provided cautious 2H remarks (has dinged many chip equipment stocks), and Linear offered somewhat soft March quarter guidance.
Notable decliners: CRUS -3.3%. ENTR -3.3%. QUIK -2.4%. CAVM -2%. PSMI -3.6%. ADI -2.3%. TXN -1.4%. MXIM -1.5%. FCS -1.5%. The last four companies all compete against Linear.
Himax (HIMX -1.5%) is off after Chardan Capital lowered its PT to $9 from $12; the firm downgraded Himax in January. Shares tumbled on Monday, then ticked higher on Tuesday following a Q1 pre-announcement.