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.

  • Motorola sues Apple. Motorola (MOT) filed three complaints with the U.S. International Trade Commission, and filed related lawsuits in federal court, alleging patent violations by Apple (NASDAQ:AAPL). Motorola claims the iPhone, iPad, iPod Touch and certain Macs infringe 18 of the company's patents. This is the latest in a series of patent-violation lawsuits that companies have been tossing around as they battle for the mobile market; just last week, Microsoft (NASDAQ:MSFT) sued Motorola for patent infringement on smartphones. Earlier this year, Nokia (NYSE:NOK) sued Apple, Apple sued HTC, Motorola filed a complaint against RIM (RIMM)...
  • Verizon to get the iPhone. Verizon (NYSE:VZ) will start selling the iPhone (AAPL) early next year, according to media reports, ending the exclusive lock AT&T (NYSE:T) has had on the popular smartphone since 2007. Sources said Apple plans to produce a new version of the phone based on an alternative wireless technology used by Verizon, and will begin mass production of the model by the end of the year. The move is a boon for Verizon, and Apple undoubtedly hopes the deal will help juice sales of the iPhone, with some analysts suggesting the Verizon tie-up could bring in more than 10M new iPhone customers. Apple and Verizon declined to comment.
  • SABMiller thirsts for African deal. SABMiller (OTCPK:SBMRY) is reportedly in talks to buy the African beer operations of privately-held French drinks group Castel. A deal could be worth around £6B ($9.5B). The global brewing industry has seen several significant M&A deals in recent years, and speculation had recently centered on a possible SABMiller acquisition of the $10B-plus beer operations of Australia's Foster's Group (OTC:FBRWY).
  • Novelis in talks to buy BP's JV stake. Novelis is said to be in talks to buy out BP's (NYSE:BP) 60% stake in their U.S. joint venture for $600M in cash. A deal would be consistent with BP's strategy of shedding non-core assets and would allow Novelis, a unit of Indian aluminum maker Hindalco Industries (OTC:HNDNF), to increase its presence in the fast growing world aluminium market.
  • Lehman settles Ambac bankruptcy claims. Lehman Brothers (OTC:LEHMQ) and Ambac (ABK) reached a deal for the insurer to drop its $6.1B claim against Lehman's bankruptcy estate. In exchange, Lehman will drop its claim that Ambac owes it tens of millions of dollars under several disputed Ambac-insured derivatives deals. No money will change hands, but Ambac shares were buoyed by the news and closed +32% yesterday. The settlement, which needs bankruptcy court approval, will be reviewed on Oct. 20.
  • Oil spill panel finds fault with White House. An independent commission established to examine the causes of the Gulf oil spill found fault with the White House response to the incident, depicting an administration that was initially "over-optimistic" and then overreacted, allowing politics to play a role in the government's disaster response. The White House also blocked the publication of government agencies' worst-case estimates of how much oil was leaking out, and "created the impression that it was either not fully competent to handle the spill or not fully candid with the American people about the scope of the problem." (Read the reports here: I, II, III, IV)
  • GE jumps back into the M&A ring. GE (NYSE:GE) has once again become a buyer, announcing yesterday a $3B acquisition of Dresser, an energy infrastructure technology and service provider, and the purchase of a $1.6B portfolio of retail credit cards from Citigroup (NYSE:C). GE had also disclosed earlier in the day that it had made an £800M-plus ($1.3B) offer for British oilfield services firm Wellstream, though its bid was rejected. GE's acquisition enthusiasm is reflective of corporate America, as major firms sitting on huge cash reserves grow more willing to spend money on takeovers. It also marks a shift for GE, which has largely played defense for the last few years as it dealt with reverberations from the financial crisis.
  • TiVo rises on patent decision. TiVo (NASDAQ:TIVO) said yesterday the U.S. Patent and Trademark Office had “reaffirmed the validity of all claims” of its Time Warp patent, which was being re-examined at the request of EchoStar (NASDAQ:SATS). TiVo said the decision is final and cannot be appealed, and "brings us closer to ending EchoStar’s ongoing infringement." The news helped lift TiVo's shares 9.7% yesterday, while EchoStar closed -1% and DISH Network (NASDAQ:DISH), EchoStar's corporate cousin, closed -2.7%.
  • Horace Mann CEO resigns. Horace Mann's (NYSE:HMN) Louis Lower resigned as president and CEO of the company following his conviction last month of drunken driving. Lower also resigned his position on the board. CFO Peter Heckman, who has served as interim CEO for the last month, will take over Lower's role permanently.
  • California's creative accounting. Californian lawmakers have seemingly found a way to end the state's budget impasse and close a record $19B deficit, but it requires some creative accounting. Instead of relying on new taxes or fees, the proposal counts on the state receiving $5.3B from the federal government, nearly $2B more than Gov. Arnold Schwarzenegger projected in May. Lawmakers also assume the state's economic recovery will be strong enough to generate an additional $1.4B in state tax revenues. Critics say the creative accounting simply pushes the budget mess onto the desk of the next governor.

Earnings: Wednesday After Close

  • Marriott (NYSE:MAR): FQ3 EPS of $0.22 misses by $0.01. Revenue of $2.65B (+7.2%) vs. $2.66B. Shares -2.5% AH. (PR)

Today's Markets

  • In Asia, Japan -0.1% to 9685. Hong Kong flat at 22884. China +1.7% to 2656. India -1.1% to 20315.
  • In Europe, at midday, London +0.1%. Paris +0.3%. Frankfurt +0.1%.
  • Futures: Dow +0.1%. S&P +0.1%. Nasdaq flat. Crude +0.5% to $83.67. Gold +0.9% to $1359.30.

Thursday's Economic Calendar

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

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