The Financial Times reported that Bain Capital, The Blackstone Group LP (NYSE: BX) and General Electric Company's (NYSE: GE) NBC universal will acquire The Weather Channel properties from Landmark Communications for approximately $3.2B in a leveraged buy-out. The Weather Channel will be run separately.
A top Goldman Sachs Group Inc (NYSE: GS) trader is defecting to GLG Partners Inc (NYSE: GLG), the UK's second-largest hedge fund. Goldman's Driss Ben-Brahim, a partner in the firm and the head of its emerging market trading business, will take over GLG's $1.2B emerging markets special situations fund, the Financial Times reported.
OTHER PAPERS:
Take-Two Interactive Software Inc (NASDAQ: TTWO), which makes video games, will probably sign video game creator Ken Levine to a new contract. The deal would bolster Take Two's argument that its value exceeds the $25.74 per share that Electronic Arts Inc (NASDAQ: ERTS) has offered as a takeover price for the company, The New York Post believes.
Deutsche Bank (NYSE: DB) shares are trading 4.2% higher in premarket action after the bank, seeking to calm investors, said it expects a profit in its second quarter.
While AT&T Inc. (NYSE: T) unveiled its pricing strategy for Apple Inc. (NASDAQ: AAPL)'s 3G iPhone to go on sale July 11 with a $199 and $299 (with contract) price points as expected, Canadians are outraged over Rogers Communications Inc. (NYSE: RCI)'s 3G iPhone rates and have created an online petition that collected over 19,000 signatures already.
AstraZeneca (NYSE: AZN) rose in Europe and is rising over 2.7% in premarket trading after winning a court case against Teva Pharmaceutical (NASDAQ: TEVA) and the Sandoz unit of Novartis (NYSE: NVS) over patents on its Seroquel schizophrenia drug.
Back on May 21st, the $34.1 billion buyout deal for BCE (NYSE: BCE) looked bleak. A Quebec court ruled that the process had to stop -- so as to evaluate the impact on bondholders. As a result, BCE's stock price plunged from $37.83 to $33.10.
Of course, the decision was immediately appealed to Canada's Supreme Court. And, it was a savvy move. Today, the high court agreed to allow the BCE deal to move forward (this is according to a report in the Wall Street Journal, which is a paid publication). In fact, there was no rationale provided (instead, this will be provided at a later date).
However, there are still headwinds on the buyout. Simply put, the credit crunch is still lingering and making it extremely difficult to pull off mega financings. The banks on the deal include Citigroup (NYSE: C), Deutsche Bank (NYSE: DB), Royal Bank of Scotland, and Toronto-Dominion Bank. Of course, they don't want to sustain any more losses on their balance sheets.
Then again, this does not mean the deal will fall apart. Rather, there will likely be pressure to renegotiate the price tag on the transaction. After all, this is what happened with the buyout of Clear Channel.
Stocks futures were lower early Tuesday morning ahead of the Federal Reserve Open Committee two-day meeting set to start today. On Wednesday, Fed chairman Bernanke will announce the policy decided, and while most investors expect a quarter point rate cut, they also expect the Fed to announce a pause in the cuts following some inflationary pressures.
On Monday, stocks finished the day little change ahead of the Fed meeting and despite some big deal news involving candy maker Mars and Warren Buffett's Berkshire Hathaway (NYSE: BRK.A) buying chewing gum maker Wrigley (NYSE: WWY) for some $22 billion. Also, Kirk Kerkorian's Tracinda Corp. announced its intention to purchase 20 million of Ford (NYSE: F)'s shares at $8.50 per share. With that, the Dow industrials ended the day down 20 points, or 0.16%, the S&P 500 fell 1 point, or 0.11%, while the Nasdaq rose 1 point, or 0.06%.
Not many economic releases today. Still, already RealtyTrac reported that foreclosures soared 112% in the first quarter, compared to a year earlier. And still in the housing sector that doesn't seem to be able to find a bottom yet, before the bell, the S&P/Case-Shiller home price index is due for release. Also today at 10 a.m. EDT, April consumer confidence index will be reported and economists are expecting the index will slide from the previous month. With higher food and energy prices, along with the troubles in the housing sector and the increasing troubles in the labor market, this is far from surprising.
Shares of Credit Suisse Group (NYSE: CS) are trading higher despite that fact that the company reported a loss for the first three months of the year, hit by its exposure to the credit markets. European shares didn't react to well though as it was the bank's first quarterly loss in five years.
Credit Suisse posted a first quarter net loss of $2.1 billion as the global effects of the U.S. subprime mortgage crisis came with substantial write-downs. Thus, the company was forced to write down 5.3 billion francs ($5.3 billion) in mortgage securities and big buyout loans.
Making some comments on its quarterly earnings figures, the company stated its dissatisfaction with the current results, but on the positive side "most of our businesses performed well, with revenues near, or in some cases above, those in the first quarter of 2007." Looking ahead, the company's Chief Executive Brady Dougan is confident that Credit Suisse "will continue to serve as a safe haven for clients in uncertain and volatile markets, and to seize the opportunities that arise in times of market dislocation to create long-term value."
Wendy's International Inc (NYSE: WEN), struggling since the 2002 death of founder Dave Thomas, and pressed by investor Nelson Peltz to improve results, will today announce a deal with Peltz, the Wall Street Journal reported.
The Wall Street Journal also reported that the House Financial Services Committee voted to approve $15B in loans and grants so that local governments can buy foreclosed homes throughout the U.S. Committee chairman Barney Frank said the bill will avoid abuse, including requiring that purchased homes be a minimum 60 days into the process.
Adding to evidence of a rally in corporate credit markets, the Financial Times reported that Deutsche Bank AG (NYSE: DB) is preparing another big sell-off of its leveraged loans in Europe.
OTHER PAPERS:
Several e-mails that have been obtained by the New York Post sent between Wall Street banks may prove a serious setback in the fight over the takeover Clear Channel Communications Inc (NYSE: CCU). The e-mails reportedly show the banks, led by Citigroup Incorporated (NYSE: C) and Deutsche Bank, looking to get out of financing the buyout by Bain Capital and THL Partners by offering terms "they know the [firms] won't be able to accept."
Deutsche Bank and other investment banks are apparently working on plans to develop a clearing house for the credit derivatives markets, in an effort to allay rising regulatory concern and investor skittishness about counterparty risk, The Financial Times reported Friday.
Deutsche Bank (NYSE: DB) and other banks are apparently trying to develop a plan that would allow only institutions with strong capital bases and credible trading histories to clear trades in the credit default swap markets with a central counterparty, The FT reported.
The derivatives market has experienced explosive growth in the past decade, with the instruments' value totaling $350-$450 trillion, depending on the methodology used. At the same time, the credit default swaps market has grown to $45-50 trillion.
Global clearing house
Economist David H. Wang told BloggingStocks Friday that, ideally, a global derivatives clearing house should take the form of a public, international organization administered by member nation states. Failing that, he'd like to see a private international organization administered by the major investment banks.
The Wall Street Journal reported that New York state's attorney general, Andrew Cuomo, has launched an investigation into auction-rate securities and is seeking information from some of Wall Street's biggest institutions including UBS AG (NYSE: UBS), Citigroup Incorporated (NYSE: C) and Merrill Lynch & Co Inc (NYSE: MER), a person familiar with the matter said.
According to the Financial Times, Deutsche Bank AG (NYSE: DB) and other investment banks are working on plans to develop a clearing house for the credit derivatives markets. In an attempt to reduce counterparty risk, the banks are trying to develop a system that would only allow institutions with strong capital bases and credible trading histories to clear trades in the credit default swap markets with a central counterparty.
OTHER PAPERS:
The news that The Royal Bank of Scotland Group Plc (NYSE: RBS) is planning a rights issue of between GBP5B and GBP12B received mixed reviews from British analysts and investors, the Telegraph reported. The analysts expect the bank to cut its dividend.
Wachovia Corporation (NYSE: WB) could announce a capital infusion of several billion dollars from outside investors as early as Monday, people familiar with the matter said. While final terms of the deal are still being worked on, the Wall Street Journal reported that the bank is expected to receive between $6B-$7B, in return the investor group would receive shares priced at roughly $23-$24 per share.
According to people familiar with the matter, the Wall Street Journal reported that Deutsche Bank AG (NYSE: DB) is seeking to sell as much as $20B in debt to a 'collection of investors,' which include private-equity firms.
U.S. stock futures were higher early in the morning, suggesting the first day of the new quarter might start with gains just as several financial firms announced actions taken that investors interpreted more as a sign the credit crisis has bottomed rather than deepening. Some data on the manufacturing industry is also on tap.
U.S. stocks finished a downbeat first quarter with advances Monday, with the Dow industrials rising 46 points, or 0.38%, the Nasdaq Composite rising 17 points, or 0.79%, and the S&P 500 rising 7 points, or 0.57%. Yesterday Wall Street focused on Treasury Secretary Hank Paulson's plan to overhaul financial regulation.
The focus today will be on financial firms as UBS (NYSE: UBS) and Lehman Brothers (NYSE: LEH) both announced raising capital. As UBS's writedowns due to exposure to the U.S. subprime crisis reached a whopping $40 billion over the past nine months, the Swiss bank said it would post first-quarter losses of $12.1 billion and that it would seek $15.1 billion in new capital. Despite the bank announcing that writedowns in the first quarter amounted to $19 billion, UBS shares are up 6.8% in premarket trading (6:00 a.m.) as investors chose to concentrate on action taken rather than losses.
HSBC Holdings (NYSE: HBC), a United Kingdom-based banking and financial services company, closed at $80.40 Thursday. HBC April option implied volatility of 39 is above its 26-week average of 29 according to Track Data, suggesting larger price movement.
Credit Suisse (NYSE: CS), a global financial services company, closed at $49.48 Thursday. CS overall option implied volatility of 55 is above its 26-week average of 34, suggesting larger price movement.
Deutsche Bank (NYSE: DB) closed at $112.26 Thursday. DB April option implied volatility of 44 is above its 26-week average of 33, suggesting larger price movement.
Option Update is provided by Stock Specialist Paul Foster of theflyonthewall.com
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MAJOR PAPERS:
Back on May 21st, the $34.1 billion buyout deal for 
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Here are some highlights from this past week's 
Stocks futures were lower early Tuesday morning ahead of the Federal Reserve Open Committee two-day meeting set to start today. On Wednesday, Fed chairman Bernanke will announce the policy decided, and while most investors 
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HSBC Holdings
McDonald's continues its coffee crusade
Cramer on BloggingStocks: Paulson and Bernanke step up to the plate
Google's $1.7 billion YouTube deal going down the tubes?
