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Market News: Sealed Air, SAC, Nokia, Yahoo, Pfizer, Teva, Google, Amazon…
Posted by Stock Online Trader on June 1, 2011 in Market News
- Sealed Air to buy Diversey for $4.3B. Sealed Air (SEE) has agreed to buy privately-held Diversey in a cash-and-stock deal worth $4.3B. Diversey is a “leading solutions provider to the global cleaning and sanitization market.”
- SAC facing another probe. The SEC is investigating SAC Capital for possibly using inside information to profit from AstraZeneca’s (AZN) $15B takeover of biotechnology firm MedImmune in 2007, sources said. The probe is in addition to inquiries into the hedge fund’s trading activities by New York federal prosecutors and by Iowa Senator Charles Grassley. The SEC investigation is part of a broad inquiry into trading by various hedge funds in stocks connected to some of the biggest healthcare deals of the past decade. News of the probe comes ahead of the start today of the insider-trading trial of Winifred Jiau, a former consultant with ‘expert networking’ firm Primary Global Research.
- Nokia continues to plummet after earnings warning. Shares in Nokia (NOK) fell -9.5% premarket after plunging 14.4% yesterday following an earnings warning. The stock is trading at its lowest level in more than 13 years. Analysts slashed their price targets for the cell phone maker and questioned whether it could ever recapture lost market share. “Symbian smartphone sales are falling off faster than expected and we are skeptical that new Windows Phone models will be able to replace lost profits,” said one analyst. Nokia said Q2’11 phone sales will be ‘substantially below’ its previous forecast and it abandoned its full-year outlook, blaming difficult conditions in China and Europe.
- Axa to sell Canadian ops to Intact for $2.7B. France’s Axa (AXAHF.PK) has unveiled a five-year plan to boost profits and cut debt, the start of which is the sale of its Canadian business to Intact Financial (IFCZF.PK) for C$2.6B ($2.7B). Under the program, Europe’s second-largest insurer is aiming for underlying growth of 10% percent in EPS by 2015 and to make €1.5B ($2.16B) in pre-tax cost savings, also by 2015. For Intact, Canada’s largest property and casualty insurer, the deal will generate an internal rate of return of 20%, increase annual operating EPS by 15% in the ‘mid-term,’ and save at least C$100M a year through cost cuts.
- Schneider to buy Telvent for $1.4B. France’s Schneider Electric (SBGSY.PK) has agreed to buy Telvent (TLVT), a developer of software for ‘smart’ electricity grids, for about $1.4B. The offer of $40 a share represents a 16% premium to Telvent’s close yesterday. The transaction has a strong chance of being accepted by Telvent’s shareholders, as Spanish construction-to-energy conglomerate Abengoa will sell its 40% stake in Telvent to Schneider as part of the deal.
- Yahoo reaches phone and Alibaba deals. Yahoo (YHOO) has forged an agreement for Taiwan semiconductor company MediaTek to integrate the U.S. firm’s Web offerings into chips for mobile phones. Incorporating services such as instant messaging, e-mail and Flickr will provide traditional phones capabilities similar to those of smartphones. Chips made by MediaTek, one of the largest suppliers in the world to the cell phone sector, go largely into handsets sold in China and other emerging markets. Yahoo’s partnership with Mediatek comes as Yahoo reportedly moves towards resolving a dispute with China’s Alibaba (ALBCF.PK) over the transfer of its Alipay online payments business to Alibaba CEO Jack Ma.
- Pfizer and Teva settle over epilepsy drug. Pfizer (PFE) and Teva (TEVA) have settled a patent lawsuit over generic versions of Pfizer’s Neurontin epilepsy drug. In the deal, financial terms of which weren’t disclosed, Teva will be allowed to continue selling the copy of Neurontin under license from Pfizer. The latter was seeking compensation for profit it lost when sales plunged to $150M in 2005 from $2.5B the previous year because of the low-cost competition from generic treatments. The settlement ended a trial that was under way in federal court.
- FDA reviews safety of birth control pills. The FDA is reassessing the safety of birth control pills that contain the hormone drospirenone, including Bayer’s Yaz suite of products, which generated $1.47B in sales last year. The review follows two recent reports that found that women taking the pills had a two-to-threefold greater risk of blood clots. The FDA expects to receive the results of a study of 800,000 people later this summer.
- WHO: Cell phones may cause cancer, maybe. Using a mobile handset may increase the risk of getting certain types of brain tumors, a report (.pdf) from a World Health Organization agency said, although the research does contain caveats. Citing a summary of studies, the International Agency for Research on Cancer said this is the first time an agency working group has surveyed research on radio frequency electromagnetic fields from handsets to make a definitive recommendation. However, the IARC also said the evidence is ‘limited’, while a senior official said “it’s not…clearly established that the use of mobile phones does in fact cause cancer.”
- Schmidt’s Facebook admission. Former Google (GOOG) CEO Eric Schmidt believes his biggest mistake as head of the search company was his inability to cope with the threat from Facebook. “I screwed up,” he said at a tech conference. Google attempted to partner with Facebook, which would have provided access to the latter’s trove of data about Web surfers and their friends, but was rebuffed. Schmidt also disclosed that Google has recently renewed a partnership with Apple (AAPL) to provides map technology to the iPhone and iPad. At the conference, the company launched Google Offers, a daily discount service similar to that of Groupon.
- Bank incompetence stalls foreclosures. Attempts to repossess homes are being prevented in some cases by delinquent borrowers showing courts that banks failed to properly assign ownership of their mortgages after they were pooled into mortgage-backed securities. In other cases, borrowers say lenders backdated or fabricated documents to fix those errors. The problems come as banks are mired in a massive backlog of foreclosures, which, as one economist indicated, is hitting house prices. Yesterday’s S&P/Case-Shiller (.pdf) index showed that prices in 20 cities dropped in March to mid-2002 levels. The report described the data as “the confirmation of a double-dip in home prices across much of the nation.”
- California assembly approves online sales tax. California’s lower house has passed a bill that would require Internet companies such as Amazon (AMZN) to collect sales tax for online purchases by state residents. Amazon has threatened to sever ties with more than 10,000 affiliates in California over the issue, and in February the company said it would close a facility in Texas for the same reason. The bill will now go to California’s Senate for approval.
Source: SeekingAlpha
Market News: Ashland, Goldman Sachs, Greek Aid, NYSE…
Posted by Stock Online Trader on May 31, 2011 in Market News
- Ashland to buy International Specialty for $3.2B. U.S. chemicals producer Ashland (ASH) has agreed to buy privately held International Specialty Products for about $3.2B in cash in a bid to expand in high-growth markets such as personal care, pharmaceuticals and energy. The acquisition of ISP, which earned sales of $1.6B and EBITDA of $360M for the year ended March 31, should immediately add to Ashland’s EPS. To pay for the deal, the company plans to use available cash and committed capital from several banks. However, if the financing falls through, ISP could require Ashland to pay a $413M termination fee.
- Goldman offered stake to Libya after losing $1.3B. Goldman Sachs (GS) offered Libya’s sovereign-wealth fund the chance to become one of its largest shareholders after the bank lost almost $1.3B of the fund’s money in equity and currency trades during the financial crisis, according to sources and internal documents. Goldman made six proposals designed to enable Libya to make its money back, including giving the fund $5B in shares in return for investing $3.7B in Goldman. Talks ran into the summer of 2009 but eventually fell apart and nothing more was done.
- EU to meet deadline for Greek aid. The EU has ruled out a ‘total restructuring’ of Greek debt and will decide on extra assistance for the country by the end of June so it doesn’t run out of cash soon after. The decision comes after Germany reportedly dropped – for now – its push for restructuring after the ECB effectively threatened to bring down Greece’s banking system. EU officials said a new €65B package could involve a mixture of EU and IMF loans and additional revenue measures, including unprecedented external involvement in Greece’s privatization program. Greeks, meanwhile, have been holding mass protests against further austerity, while unions have been striking against privatization.
- EU probes deals for hard-disk drive makers. EU regulators have opened in-depth investigations into two acquisitions of hard-disk drive businesses by U.S. companies. The EU is examining Western Digital’s (WDC) $4.3B purchase of a Hitachi (HIT) unit and Seagate Technology’s (STX) $1.4B buy of a Samsung Electronics (SSNLF.PK) operation. The transactions would cut the number of large manufacturers of mechanical hard-disk drives to three from five, leaving Western Digital with 50% of the market, Seagate with 40% and Toshiba (TOSBF.PK) with around 10%. However, drive makers have been slashing prices to compete with flash memory and solid-state drive storage. A decision on the deals is due by October 10.
- NYSE plans dual clearing houses. NYSE Euronext (NYX) is looking to create two parallel clearing services if it buys LCH.Clearnet and if its merger with Deutsche Boerse (DBOEY.PK), which owns Eurex Clearing, goes through. NYSE has partnered with data vendor Markit in early talks about a possible joint takeover of LCH.Clearnet, a source said. The Anglo-French clearing house confirmed it has received offers from exchange operators after reports linked it with bids from Nasdaq OMX (NDAQ) and the London Stock Exchange (LDNXF.PK) as well as NYSE, although LSE has denied it’s in talks.
- Japan data mixed as Moody’s warns of downgrade. Japan’s economy has started to recover from the devastation of the March earthquake, new data shows, but the mixed nature of the figures suggests the rebound is fragile. Factory output edged up 1% in April, which was well short of economist estimates of 2.8%, although manufacturers predicted an 8% rise for May and a 7.7% increase in June as factories get back on line. Unemployment inched up to 4.7% in April from 4.6% in March, while wage earnings and household spending fell. One economist spoke of a possible “V-shaped recovery” for Japan, although Moody’s put the country’s Aa2 ratings on review for a possible downgrade, highlighting its concerns over the government’s response to “faltering economic growth prospects.”
- Eurozone CPI falls as unemployment holds steady. Inflation in the Eurozone was an annualized 2.7% in May (.pdf) compared with economist expectations and an April figure of 2.8%, although CPI is still well above the ECB’s target of just under 2%. Unemployment remained unchanged at 9.9% in April (.pdf) for the third month despite small declines in the number of jobless in Germany, France and Italy. Holland and Austria had the lowest rate with 4.2% and Spain the highest with around 20%.
- ‘Call of Duty’ to draft subscribers. Activision Blizzard (ATVI) plans to set up a monthly subscription service for its ‘Call of Duty’ video game as it looks to exploit the massive popularity of the title. ‘Call of Duty Elite’ is due to be launched in the autumn and will provide content that isn’t offered on the discs sold in stores, including tools that analyze player performance and are modeled on those from stock-trading websites. ‘Call of Duty’ has about 7M daily players, and the previous edition of the game earned global retail sales of over $1B during its first six weeks on shelves.
- Airline revenues from top-up fees take off. Almost 50 of the world’s leading airlines increased revenues from ancillary sales by 38% to €15.11B ($21.8B) last year as carriers offset higher fuel costs by generating extra income without raising basic fares. A growing number of airlines have been charging for services once included in ticket prices, such as for baggage, food and in-flight entertainment. They are also earning revenue from services previously restricted to loyal customers, including access to airport lounges. The top three carriers for total ancillary revenue are United Continental (UAL), Delta Air Lines (DAL) and American Airlines (AMR).
- VW launches MAN bid. Volkswagen (VLKAY.PK) has triggered a mandatory takeover offer for MAN by increasing its stake to over 30% as it looks to create Europe’s largest truck maker. However, VW’s offer of €95 a share, which values MAN at €13.8B ($19.7B), is below the latter’s share price today, and is possibly designed to put off MAN shareholders and allow VW to gradually buy shares in the market. VW is also aiming to receive regulatory approval for closer co-operation, and eventually a tie-up, between MAN and Sweden’s Scania (SVKBF.PK), in which VW has a controlling stake.
Source: Seeking Alpha
Watchlist – 27th May
Posted by Stock Online Trader on May 26, 2011 in Stock Picks, Watchlist
