Wall Street Breakfast: Must-Know News

by: Wall Street Breakfast
Wall Street Breakfast
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.

Top Stories
Sprint raises Clearwire offer. Sprint (NYSE:S) has increased its bid to buy the approximately 50% of Clearwire (CLWR) it does not own from $2.90 to $2.97 a share, valuing the entire company at about $10B. The price represents a 128% premium to Clearwire's close the day before news of the acquisition discussions reached the market. The offer is reportedly as high as Softbank (OTCPK:SFTBF) will let Sprint go, although some Clearwire minority shareholders are looking for $5-8 a share.

Japanese stocks rise after LDP wins landslide. The Nikkei 225 ended 0.9% higher after Shinzo Abe's LDP won a landslide victory in Japan's election yesterday. Abe immediately set out to fulfill his promise to make the Bank of Japan print more money that the new government can throw at the moribund economy. As such, he plans to put together a "large scale" supplementary budget to stimulate the economy and will set the BOJ a 2% inflation target.

AIG plans to unload rest of AIA stake. Looking to raise maybe another $6.5B in cash, AIG (NYSE:AIG) is selling its remaining 13.7% stake in Hong Kong based AIA Group (OTCPK:AAGIY). Hank Greenberg used to call AIA the crown jewel of AIG, but today's shareholders will no doubt be excited about the stock-buyback possibilities, especially when you add in the $4.23B from the insurer's sale of 80.1% of its ILFC plane-leasing unit.

Top Stock News
Apple sells over 2M iPhone 5 devices in China. Who needs China Mobile (NYSE:CHL)? Apple (NASDAQ:AAPL) sold over 2M iPhone 5 units in China in just three days after launching the device on Friday. China Unicom's (NYSE:CHU) healthy pre-order activity probably had a lot to do with it. For reference, Apple said in September that it sold over 5M iPhone 5s three days after the device went on sale in the U.S., Japan and seven other locales.

UBS rate-rigging fine to hit $1.6B. The fine that UBS (NYSE:UBS) will reportedly pay to settle allegations that it manipulated inter-bank rates is $1.6B, well above the $1B figure that was mooted at the end of last week. Meanwhile, RBS (NYSE:RBS) is reportedly close to agreeing a deal to pay £350M to settle similar accusations.

Cost of Dutch 4G auction sends Vodafone shares tumbling. Vodafone (NASDAQ:VOD) shares were -2.5% at midday in London after the company agreed to pay €1.4B for Dutch 4G spectrum in an auction that raised €3.8B in total from KPN (OTCPK:KKPNF), T-Mobile (OTCQX:DTEGF) and Tele2 (OTCPK:TLTZF), as well as from Vodafone. Investors are concerned about the amount operators are going to have to shell out in auctions across Europe, although cash-strapped governments are probably delighted.

KKR raises $6B for second Asia fund. KKR (NYSE:KKR) has reportedly raised $6B for its second Asia fund, making it the biggest private-equity fund in the region. The capital-raising, which was over-subscribed, adds to KKR's $4B first Asian P-E vehicle and contrasts with the trouble it's having in the U.S. in attracting cash.

First Quantum ups Inmet bid to C$5.1B. First Quantum Minerals has again raised its unsolicited bid for fellow Canadian company Inmet Mining, this time to C$5.1B ($5.17B) in cash and stock, saying the combined firm could become one of the world's top five copper producers within five years. The C$72 a share proposal follows previous offers of C$62.50 and C$70.

Eni to pour $8B into Libya. Eni (NYSE:E) intends to invest $8B in Libya over the next 10 years to develop its production operations in the country and on further exploration. Eni is the biggest foreign energy company in Libya, accounting for a third of its oil output when Muammar Gaddafi was in power. Eni is also in talks with Libya's government about an MOU for a $400M social-sustainability program.

United Continental pilots OK new pay deal. United Continental Holdings (NYSE:UAL) pilots have agreed to a new four-year contract that covers United Airlines and Continental pilots following the companies' merger in 2010. The deal includes hefty pay rises and lump-sum payments in exchange for allowing the carrier to increase efficiency such as by using regional partners to fly more 76-seat jets, which remain profitable even when fuel prices are high.

Akamai to name founder and CTO as new CEO. Akamai (NASDAQ:AKAM), which helps deliver content over the Internet, is expected to announce today that it is appointing founder and CTO Tom Leighton as its new CEO from January 1 to replace Paul Sagan. Leighton, who expects that Akamai will continue its recent shopping spree, believes that the company has the capability of incorporating its software in all connected devices and taking Internet speeds to a new level.

Bank failures this year rise to 51. Regulators closed Missouri's Community Bank of the Ozarks on Friday, making it the 51st bank failure this year. The cost to the FDIC's deposit-insurance fund is estimated at $10.4M.

Top Economic & Other News
Obama rejects tax hike / spending cuts offer from Boehner. President Obama has reportedly rejected an offer from John Boehner to increase taxes for those earning over $1M a year in exchange for major cuts in entitlement programs. It's a major concession by the Republicans in the protracted talks over a deal to avert the fiscal cliff, but Obama wants to raise taxes on those earning over $250,000, while Democrats oppose key GOP proposals for reducing entitlements.

U.S. approaching $16.4T debt ceiling. While much attention has focused on averting the fiscal cliff, the U.S. is just $66B below its $16.4T debt ceiling, which it's due to hit towards the end of the month. The Treasury would then embark on some fiscal maneuvering that could buy it another 6-10 weeks. As with the fiscal cliff, Republicans want cuts to entitlement programs before agreeing to increase the debt limit again.

Detroit has "serious financial problem." A preliminary review by Michigan has found that Detroit has a "serious financial problem," with reporting problems causing cash-flow projections to significantly oscillate on a monthly basis. The review could lead to the declaration of a fiscal emergency and prompt the appointment of an emergency financial manager. A municipal filing for bankruptcy protection, the biggest in U.S. history, could ultimately ensue.

India slashes growth forecasts. India's government has cut its fiscal-year GDP growth forecast to 5.7-5.9% from a prior outlook of 7.6% but expects inflation to ease from 7.2% in November to 6.8-7% by the end of March, when the FY ends. Along with "benign global commodity prices," the lower inflation will "facilitate a softening of the monetary policy stance of the RBI," the government said.

Editors' Picks
2013: The Year Of Printing Money
United Continental Has Flown Too High, Too Fast
Use Caution When Buying Japanese Stocks

Today's Markets:
In Asia, Japan +0.9% to 9829. Hong Kong -0.4% to 22514. China +0.5% to 2160. India -0.4% to 19244.
In Europe, at midday, London -0.5%. Paris -0.4%. Frankfurt -0.1%.
Futures at 7:00: Dow +0.1%. S&P +0.2%. Nasdaq -0.15%. Crude -0.1% to $86.65. Gold -0.2% to $1693.70.

Today's economic calendar:
8:30 Empire State Mfg Survey
9:00 Treasury International Capital
12:30 PM Fed's Lacker: Economic Outlook

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