- ING drops on spin-off, rights issue. Dutch financial services company ING Group (NYSE:ING) said Monday it will raise up to €7.5B ($11.3B) in a share issue, and split up its insurance and banking businesses, after reaching a deal to repay the government half of its €10B bailout loan ahead of schedule. ING has until the end of January to repurchase government-owned shares, and will launch the share issue on Nov. 25. "We appreciate the ongoing support of the Dutch state," CEO Jan Hommen said, "but fully recognize that it is in the best interest of all parties that we get back on our own feet as quickly as possible." Shares -8.1% premarket.
- Peltz takes a foothold in Legg Mason. Legg Mason (NYSE:LM) will name activist investor Nelson Peltz to its board after he quietly accumulated a 4.3% stake; in exchange for the board seat, Peltz's Trian will agree to accumulate no more than 9.9% of the company over the next two years, and will vote its share in favor of the company's slate of nominees during that period. "We welcome Nelson," Legg CEO Mark Fetting said in a statement. "We look forward to benefiting from his insights and experience as we work together to build greater value for our clients and our shareholders." Peltz prefers to think of himself as a 'constructivist investor,' though he is known to pepper management with 'idea' phone calls and emails at late hours and on weekends.
- BofA's TARP exit hits snag. Sources say Bank of America's (NYSE:BAC) plans to repay its TARP loans have fallen into question due to a dispute over how much more capital it needs to raise in order to exit government oversight. Having raised $40B in new equity since May, BofA thinks it's ready to return the government's $45B investment. But some officials say it should be required to raise more than the $40B determined by government stress tests, to give it the ability to deal with any potential economic relapses. Until it exits government assistance, BofA remains bound by pay czar Kenneth Feinberg's compensation limitations, which bank executives fear will hamper its abilities to recruit talent.
- NABE survey offers cheery outlook. U.S. companies expect to hire and invest more over the next six months, according to a survey released this morning by the National Association for Business Economics, and for the first time in a year more businesses reported a rise in capital spending over the previous quarter than a decline. All 78 panelists said business decisions are being made with expectations of positive GDP growth in 2010; of those, 73% see real GDP expanding 1-3%. The survey "provides new evidence that the U.S. recovery is underway," Chicago Fed's William Strauss said. "Improving credit conditions might be part of the explanation, with respondents indicating that credit remains tight but less so than earlier in the year."
- Capmark goes under. Not unexpectedly, troubled commercial real estate lender Capmark filed for bankruptcy protection on Sunday, wiping out the private-equity investments of KKR, Goldman Sachs (NYSE:GS) and Five Mile Capital, which bought 75.4% of Capmark for $1.5B in cash and more than $7B in debt in 2006; GMAC owns the remainder. Capmark is negotiating the terms of the bankruptcy with its creditors, including Citigroup (NYSE:C) and JPMorgan (NYSE:JPM), but they have not yet reached an agreement over a prepackaged bankruptcy. U.S. banks hold more than $1T worth of mortgages backed by commercial property, on which analysts predict they could suffer losses in the neighborhood of $150B. Bad commercial property debts have played a pivotal role in the demise of many of the 106 banks that have failed so far this year.
- FDA OKs BioCryst's swine flu drug. The FDA approved emergency use of BioCryst Pharmaceuticals' (NASDAQ:BCRX) experimental intravenous antiviral drug peramivir to treat severe cases of H1N1. "Based upon the totality of scientific evidence available, it is reasonable to believe that peramivir IV may be effective in certain patients," it said in a letter. The authorization is only for hospitalized patients who are not responding to either oral or inhaled antiviral treatments, or for whom nonintravenous drug delivery is not feasible.
- China: undertones of an exit. China's economic growth is likely to speed up this quarter, but the government will stay the course with its loose fiscal policy, senior officials said today. Still, analysts say the "unmistakable shift" in official statements signal Beijing is starting to think about how to unwind its pro-growth policies. China set itself a goal of 8% GDP growth this year, which officials say it's on track to fulfill.
- Lloyds eyes outsourcer CPA Global. Lloyds' (NYSE:LYG) private-equity arm LDC is reportedly in talks to acquire legal outsourcing company CPA Global for £400M ($652M). Lloyds is stepping up its buyout activity, aiming to become a dominant player in Britain's dwindling private-equity deal market.
- Blackstone hopes for magic from Merlin. Looking to take advantage of buoyant equity markets, Blackstone (NYSE:BX) is reportedly preparing to float its theme park operator Merlin Entertainments next year. Citigroup (C), Goldman Sachs (GS), Deutsche Bank (NYSE:DB), UBS (NYSE:UBS) and Nomura (NYSE:NMR) are advising on what could be a $3.3B IPO. Merlin - which owns the London Eye, Madame Tussauds and the Sea Life centers - is the world's number-two park operator, after Disney (NYSE:DIS).
- Madoff crony found dead. Jeffrey Picower, alleged to have extracted $7.2B from Madoff's Ponzi scheme, was found dead at the bottom of his Palm Beach pool Sunday. Madoff trustee Irving Picard alleges Picower and a group of longtime Madoff investors knew or should have known of the fraud, because they requested and received oversized returns of up to 950% on their investments.
Earnings: Mon. Before Open
- Alberto-Culver (NYSE:ACV-OLD): FQ4 EPS of $0.33 beats by $0.01. Revenue of $358M (-7.2%) vs. $387M. (PR)
- Corning (NYSE:GLW): Q3 EPS of $0.42 beats by $0.03. Revenue of $1.48B (-4.9%) vs. $1.42B. (PR)
- Lorillard (NYSE:LO): Q3 EPS of $1.44 misses by $0.08. Revenue of $1.42B (+26.1%) vs. $1.32B. (PR)
- McGraw-Hill Companies (MHP): Q3 EPS of $1.07 beats by $0.02. Revenue of $1.88B (-8.4%) vs. $1.94B. Avg. daily volume for major exchange-traded derivatives fell 23.2% from a year ago. (PR)
- National-Oilwell Varco (NYSE:NOV): Q3 EPS of $0.95 beats by $0.16. Revenue of $3.09B (-14.5%) vs. $2.9B. "While difficult credit market conditions have led to order rates below our expectations so far this year, we continue to pursue new rig opportunities aggressively, and seek and execute strategic internal growth and acquisition opportunities." (PR)
- RadioShack (NYSE:RSH): Q3 EPS of $0.30 misses by $0.01. Revenue of $990M (-3.1%) vs. $961M. (PR)
- Tellabs (NASDAQ:TLAB): Q3 EPS of $0.07 beats by $0.01. Revenue of $389M (-8.3%) vs. $394M. Shares +2.1% premarket. (PR)
- Verizon (NYSE:VZ): Q3 EPS of $0.60 beats by $0.01. Revenue of $27.27B (+10.2%) in-line. Shares +2.4% premarket. (PR)
- Weingarten Realty Investors (NYSE:WRI): Q3 FFO of $0.50 misses by $0.04. Revenue of $145M (-6.2%) vs. $143M. Sees full-year FFO of $2.08-2.16 vs. $2.26 consensus. Overall occupancy increased to 91.1% from 90.9% in Q2. "Conditions across most of the existing portfolio appear to be stabilizing as retailers are learning to adapt to current market conditions by managing inventories." (PR)
Overseas markets were mostly higher Monday.
- Asia: Nikkei +0.8% to 10363. Hang Seng +1.7% to 22590. Shanghai +0.1% to 3110. BSE -0.4% to 16740.
- Europe at midday: FTSE +0.4% to 5264. CAC +0.6% to 3829. DAX +0.7% to 5781.
- Futures at 7:00: Dow +0.3% to 9960. S&P +0.4% to 1081. Nasdaq +0.4%. Dec. crude -0.4% to $80.19. Gold -0.4% to $1,055.40. 30-year Tsy -0.29% to 118-222. 10-year -0.23%. 5-year -0.13%. 2-year -0.03%. Euro +0.2% vs. dollar. Yen +0.4%. Pound +0.2%.
Monday's Economic Calendar
8:30 Chicago Fed's National Activity Index
10:30 Dallas Fed's Manufacturing Outlook
12:00 PM Chicago Fed's Midwest Manufacturing Index
- Notable pre-market earnings: ACV-OLD, GLW, LO, MHP, NOV, ONB, RSH, TLAB, VZ, WRI
- Notable post-market earnings: ARRS, BIDU, COG, DRYS, FLEX, HMA, MAS, PCL, SLG, VRTX
Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.