Wall Street Breakfast: Must-Know News

by: Rachael Granby
Rachael Granby
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.

  • Bristol-Myers buys ZymoGenetics. Bristol-Myers Squibb (NYSE:BMY) agreed to buy biotech firm ZymoGenetics (ZGEN) for $9.75/share in cash, buying itself "full ownership of a promising investigational biologic that strengthens our very diversified hepatitis C portfolio." The total purchase price is $885M, or about $735M net of cash acquired. Bristol-Myers expects the purchase to lower earnings by $0.03/share in 2010 and by $0.07/share in 2011. In after-hours trading, ZGEN +84%, BMY +0.3%.
  • Vodafone to shed China Mobile stake. Vodafone (NASDAQ:VOD) confirmed late yesterday that it will sell its 3.2% stake in China Mobile (NYSE:CHL) via a public offering led by Goldman Sachs (NYSE:GS), UBS (NYSE:UBS) and Morgan Stanley (NYSE:MS). The sale is expected to bring in £4.3B ($6.6B), and the company plans to use around 70% of the proceeds for a stock buyback and the rest to pay back debt. Analysts suggest several other stake sales could follow as Vodafone works to slim down, though disposals of its stakes in companies like France's SFR and Verizon Wireless (NYSE:VZ) could be more difficult because of the limited number of possible buyers.
  • Foster's rejects $2.5B offer for wine unit. Foster's Group (OTC:FBRWY) turned down an offer of as much as A$2.7B ($2.5B) for its struggling wine unit from an unidentified private equity firm. The company said it had considered the “indicative, non-binding” proposal, but ultimately decided that proceeding with its original plan of demerging its wine and beer businesses would provide the greatest shareholder value. In Aussie trading, Foster's closed +4.45%.
  • Hurd, now at Oracle, gets hit by H-P suit. Hewlett-Packard (NYSE:HPQ) filed suit against Mark Hurd, its former CEO, for violating confidentiality agreements, one day after Hurd was named president of Oracle (NYSE:ORCL). The lawsuit claims that Hurd's appointment to Oracle could cause H-P to lose customers, trade secrets and its competitive advantage, as it would be "impossible" for Hurd to serve as Oracle's president without using confidential information from his prior post. Oracle called the lawsuit "vindictive." Shares of Oracle rose 5.9% yesterday on news of Hurd's appointment; H-P closed down 1%.
  • Boeing open to a merger. Boeing (NYSE:BA) said yesterday it will consolidate its military aircraft business to four divisions from six, likely resulting in work reductions, including a 10% cut in the unit's executive positions. Notably, Dennis Muilenburg, Boeing's head of defense, also said yesterday that the company is "actively" looking at potential acquisitions and would not rule out a merger with another large defense contractor.
  • BP accepts partial spill blame. BP (NYSE:BP) will release its internal report today on the Deepwater Horizon disaster that led to the worst oil spill in U.S. history. Sources say BP shoulders some of the blame in the report, but it's unclear just how much; assuming too much blame potentially exposes the company to greater legal liability, while taking too little responsibility will prompt critics to accuse the company of shirking its responsibilities. BP has tried to position the report as an objective analysis of the events leading up to the spill. Premarket: BP +3.5% (7:00 ET).
  • SEC confirms 'quote stuffing' probe. The SEC's Mary Schapiro confirmed the agency is looking into "quote stuffing," the practice of placing an unusually large number of buy or sell orders for stocks in a fraction of a second, and then canceling the orders almost immediately. Schapiro said the SEC is considering requiring traders to hold orders open for minimum periods, and signaled more broadly that high-frequency traders will face new curbs in the aftermath of May's flash crash.
  • Coming soon: Google TV. Google (NASDAQ:GOOG) CEO Eric Schmidt firmed up the company's plans to launch Google TV in the U.S. this fall and internationally in 2011. It's "very unlikely" Google will get into content production itself and the company has instead been focused on building partnerships with various content providers. The move is still likely to face opposition from a Hollywood worried about illegal content.

Earnings: Tuesday After Close

  • Phillips-Van Heusen (NYSE:PVH): Q2 EPS of $0.72 beats by $0.18. Revenue of $1.1B (+108%) in-line. Raises FY11 Revenue and EPS guidance to $4.44B - $4.47B and $3.70 - $3.80 respectively. Shares +1.9% AH. (PR)

Today's Markets

  • In Asia, Japan -2.2% to 9024.6. Hong Kong -1.5% to 21089. China -0.1% to 2695. India +0.1% to 18667.
  • In Europe, at midday, London flat. Paris +0.2%. Frankfurt +0.2%.
  • Futures: Dow +0.2%. S&P +0.2%. Nasdaq +0.3%. Crude -0.4% to $73.79. Gold +0.1% to $1260.90.

Wednesday's Economic Calendar

Seeking Alpha's Market Currents team contributed to this post.

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