Frontrunning: August 26
- That will teach the UAE who's boss: U.S. Won’t Consult Syria on Militant Strikes: White House (BBG)
- Putin Set to Meet Poroshenko as Ukraine Tensions Escalate (BBG)... but the de-escalation algo?
- Tim Hortons’ Canadian Fans Squeamish of American Hookup (BBG)
- Israeli air strikes target more Gaza high-rises (Reuters)
- How Steve Ballmer Became a Rookie Basketball Mogul (WSJ)
- Buffett to Help Finance Burger King Tax-Saving Deal (BBG)
- U.S. Factories Keep Losing Ground to Global Rivals (WSJ)
- Boehner, Camp Profit From Corporate Bid to Avoid U.S. Tax (BBG)
- Experimental U.S. hypersonic weapon destroyed seconds after launch (Reuters)
- The Neo-Neocons (WSJ)
- China Said to Consider $16 Billion EV-Charging Fund (BBG)
- California wine country quake losses seen in the billions (Reuters)
- Automotive Customer Satisfaction Dips for Second Straight Year (WSJ)
- Soros-Backed Insurer Tops Paulson Bets as U.S. Rules Loom (BBG)
- Ackman Gains 30% With Burger King, Herbalife Wagers (BBG)
Overnight Media Digest
* Berkshire Hathaway Inc chairman and CEO Warren Buffett is helping finance Burger King Worldwide Inc's takeover of Canadian coffee-and-doughnut chain Tim Hortons Inc , according to people familiar with the matter, in a surprise twist that thrusts the billionaire into a debate over U.S. taxes. (http://on.wsj.com/1vIpQae)
* The Pentagon is preparing to send surveillance aircraft, including drones, into Syrian airspace to gather intelligence on Islamist targets, laying the groundwork for a possible expansion of the limited U.S. military air campaign beyond Iraq.(http://on.wsj.com/VLdxNW)
* America's shale boom has raised hopes of a revival in U.S. manufacturing, in part fueled by cheaper energy. But U.S. factories still are losing ground to rivals in Asia and Europe. (http://on.wsj.com/1zvGfzk)
* Amazon.com Inc said on Monday that it has agreed to buy live-streaming gaming network Twitch Interactive Inc for about $970 million in cash.(http://on.wsj.com/1lsYepk)
* A federal judge ruled against a new law in Hawaii curbing genetically modified crops, handing a victory to seed and chemical companies in a battle over modern agricultural techniques. (http://on.wsj.com/YVUcvp)
* Amid the strongest market for commercial trucks in eight years, U.S. sales of natural-gas powered haulers are just inching ahead, slowed by premium prices, limited infrastructure and more efficient diesels. (http://on.wsj.com/1wuwYLv)
* Some of the largest financial institutions in the US say Lehman Brothers Holdings Inc needs to set aside $12.14 billion to settle claims over certain soured mortgage loans, more than double what the failed investment bank has currently set aside for the dispute. (http://on.wsj.com/1mKRnCB)
* A group of hedge funds that hold 1.3 billion euros ($1.72 billion) of Argentine government bonds has filed a suit against Bank of New York Mellon seeking to gain access to interest payments they are owed. (http://on.wsj.com/1tDN5SG)
Amidst an escalating standoff with Russia, Petro Poroshenko, Ukraine's pro-western president, called for snap parliamentary elections on Monday.
French President Francois Hollande on Monday evicted his Socialist government of leftwingers opposed to EU austerity.
The UK head of accounting firm Deloitte has warned that political uncertainty surrounding the general election in the United Kingdom next year is at the top of the corporate agenda.
Shares of fast-food chains Burger King and Tim Hortons rose on Monday after the companies revealed they were working on a potential merger that would result in tax savings for both companies.
Lufthansa has asked the German pilots' union VC to return to talks after the breakdown of pay discussions sparked fears of another costly strike.
Cyber security firm is in talks with banks and major financial services companies to create an alternative to Bloomberg instant messaging.
* Amazon.com Inc said it would buy Twitch, the most popular website for watching people play games for $1 billion. To win in its bid for Twitch, Amazon had to outmaneuver a who's who of the tech world, including Google Inc, strongly suggesting that these companies think the era of video-game viewing is just starting. (http://nyti.ms/1t7O53I)
* The long fight over Hewlett-Packard Co's $11.1 billion purchase of Autonomy got a new wrinkle on Monday, which might spell more legal pressure on Autonomy executives. On Monday, Judge Charles Breyer of United States District Court in San Francisco said that HP and the lawyers suing the company must file a revised proposed settlement agreement. (http://nyti.ms/1p6dLG2)
* A group of hedge funds, including George Soros's Quantum Partners and Kyle Bass's Hayman Capital, is seeking a 226 million euro ($298.4) interest payment on Argentine bonds from Bank of New York Mellon that was blocked by a United States judge last month. (http://nyti.ms/1APjBEE)
* Ann Inc, the parent company of the Ann Taylor stores, is being pressed to explore options, including a sale by the activist investor Engine Capital and the hedge fund Red Alder. In a letter made public on Monday, Engine Capital and Red Alder said they believed that the company could be worth $50 to $55 a share to an acquirer, or a 33 to 46.5 percent premium to its stock price as of Friday.(http://nyti.ms/1BX8kmZ)
* A cashless society is still a long way off, but automated machines that turn traditional money into virtual currency are cropping up across the globe. The trend has come to New York - Flat 128, a retailer that sells British jewelry and accessories in the West Village, is home to the first such machine in Manhattan and is becoming a destination for Bitcoin enthusiasts. Yet this new Bitcoin ATM is only a means for users to deposit cash and convert it to Bitcoins for their accounts; it does not offer cash withdrawals. (http://nyti.ms/1t81YP6)
* DraftKings, a fantasy sports site, is expected to announce that it has raised $41 million in a new round of financing. The investment was led by the Raine Group, a merchant bank that specializes in media and technology deals, and included three existing investors Redpoint Ventures, GGV Capital and Atlas Venture. (http://nyti.ms/1pb2ydm)
* Governor Jerry Brown of California on Monday signed into law a measure that requires smartphones sold in California to include smarter antitheft technology, a feature that lawmakers hope will help reduce phone theft. The bill, introduced by State Senator Mark Leno and sponsored by George Gascon, San Francisco's district attorney, requires a so-called "kill switch", which would render a smartphone useless after it was stolen, to be included on all smartphones sold in California starting in July 2015. (nyti.ms/1t7Z0KK)
* Thousands of hours of television programming are becoming available to rerun on digital networks and cable channels after new residual agreements between studios and Hollywood's three largest guilds. The shows now freed from "residual gridlock" include old broadcast series like "Charlie's Angels" and "The Flying Nun" and newer made-for-cable programs like "Breaking Bad" and "Sons of Anarchy," according to John Weiser, president of United States distribution for Sony Pictures Television. (http://nyti.ms/1APmEwr)
THE GLOBE AND MAIL
** Billionaire investor Warren Buffett will be helping to finance Burger King Worldwide Inc's planned merger with Tim Hortons Inc, the Wall Street Journal reported. Buffett's agreement with Burger King would likely take the form of preferred shares and be valued at around $10 billion, accounting for possibly up to 25 percent of the deal, the Journal said, citing sources familiar with the matter. (http://bit.ly/1qe36ND)
** The need to boost employment was at the forefront of New Brunswick's election campaign on Monday as the Liberals promised to improve roads and bridges while the governing Tories committed to a strategy for the shipping industry to create jobs. Liberal leader Brian Gallant announced in Moncton that he would spend C$900 million ($820.3 million) over six years on infrastructure, a plan he said would sustain about 1,700 jobs annually. (http://bit.ly/1ltn3l1)
** Canada's premiers are expected to renew their call for a public inquiry into murdered and missing aboriginal women when they gather this week in Charlottetown as the Council of the Federation. But with Prime Minister Stephen Harper continuing to reject the idea, national aboriginal leaders meeting with premiers this week will push for an alternative that would see key federal ministers sit down with aboriginal leaders to discuss the issue and potential courses of action. (http://bit.ly/1p5tnd6)
** Corporate America is making a mad rush to the exits in a bid to lower its tax bill. But experts say the odds of political intervention in the stampede have increased as a result of U.S. Burger King Worldwide Inc's plans to become Canadian. It's an issue that's gotten enormous attention in the United States. "They're declaring they're based someplace else even though most of their operations are here," U.S. President Barack Obama said of the trend in July. (http://bit.ly/1laYdG3)
** Data centers are booming in Canada as demand grows from companies wanting to store information within borders and amid growing concern about data privacy, prompting the likes of industry giants Salesforce.com Inc and SAP SE to expand their footprint within the country. (http://bit.ly/1qIRuje)
** The British embassy in Washington, D.C., was forced to apologize on Sunday for a tweet playfully commemorating the 200th anniversary of the burning of the White House, when troops from present-day Canada ransacked the presidential palace. The embassy apologized for the joke two hours later, following many outraged tweets from Americans who didn't find the episode quite as funny. (http://bit.ly/1nwLoRU)
** The delay in moving Department of National Defence employees into the former Nortel campus is costing taxpayers millions of dollars, according to documents leaked to the Ottawa Citizen. The government spent C$208 million to buy the Nortel complex. At a December 2013 briefing for journalists, defence officials said it will cost another C$506 million to refit the buildings and C$41 million in "transition costs," which are the costs of existing leases at other sites throughout Ottawa and Gatineau. But a January 2014 internal document noted that additional costs were being incurred because of the delay in moving employees to the campus. (http://bit.ly/1t8yLng)
CHINA SECURITIES JOURNAL
- Inner Mongolia Baotou Steel Rare-Earth Group Hi-Tech Co Ltd plans to invest nearly 8 billion yuan ($1.30 billion) to tackle environmental problems at its smelting plants and Baotou Huamei Products Co Ltd, the company said in an announcement late on Monday.
SHANGHAI SECURITIES NEWS
- China's insurance funds have shown growing interest in the primary market's non-public offering on the back of increased funding activities. Their interests also reflect a structural change in the insurance industry that could bring a new group of institutional investors in the stock market, the paper said in a commentary.
- Jiangsu Hengli Highpressure Oil Cylinder Co Ltd plans to acquire a 51 percent stake in a European counterpart in the amount of 2.5 million euros ($3.3 million), according to a company announcement.
- Some 42 companies planning initial public offerings (IPO) have been blacklisted for six months due to breach of conduct, according to a report by the Securities Association of China.
- Alipay, China's largest online payment provider, announced on Monday the official launch of Zhaocai Bao, an Internet finance platform that aims to reshape financing for small businesses to the tune of 1 trillion yuan ($162 billion) within 3 years.
- Chinese nuclear companies are preparing to export nuclear power reactors as they increase involvement in foreign projects and establish a complete industry chain, company officials and engineers said. Exporting plants will help domestic manufacturers improve their technology levels and recover the huge costs of research and development.
- Sales of new homes in Shanghai in August are likely to be very sluggish after seven-day transactions remained below 150,000 sq m for the third straight week. Purchases of new homes, excluding government-funded affordable housing, fell 0.98 percent to 129,700 sq m last week, Uwin Real Estate Information Services Co said in a report.
BIG SIX WAIT FOR INVESTIGATION TO ROLL THE DICE
Some time in May or June next year - in all likelihood after the general election on May 7 - the Competition and Markets Authority will publish the initial findings of its investigation into the energy market. It is an indication of the task facing the authority that analysts are not remotely confident about predicting the outcome.
POLL: 71 PCT FIND ALEX SALMOND VICTORIOUS IN SECOND SCOTTISH INDEPENDENCE DEBATE
Alex Salmond emerged as the clear winner of the second Scottish independence debate, besting Alistair Darling by a 71 percent to 29 percent margin, according to an instant Guardian/ICM poll of Scots who had watched the debate.
CO-OP MEMBERS WARNED MANAGEMENT SHAKEUP MAY NOT GO FAR ENOUGH
As members of the Co-Operative Group prepare to vote on sweeping changes to the way the troubled chain of supermarkets, chemists and funeral homes is managed, they have already been warned that the proposed shakeup may not go far enough.
BRITAIN DENIED KEY EU ROLE FOR NOT PICKING A WOMAN Jean-Claude Juncker expresses frustration that "despite my repeated requests," most governments, including Britain, have put forward men for the most important positions in Europe.
ALEX SALMOND DECLARED VICTOR OF SECOND INDEPENDENCE TV DEBATE AFTER HEATED CLASH
Alex Salmond has been declared the victor of the second independence TV debate with Alistair Darling after the showdown descended into an angry shouting match.
Fly On The Wall Pre-Market Buzz
Domestic economic reports scheduled for today include:
Durable goods orders for July at 8:30--consensus up 5.1%
S&P Case-Shiller 20-city composite home price index for June at 9:00--consensus up 8.4% from prior year
Consumer confidence for August at 10:00--consensus 89.5
Macerich (MAC) upgraded to Outperform from Market Perform at BMO Capital
SandRidge Permian (PER) upgraded to Outperform from Market Perform at Raymond James
Arcos Dorados (ARCO) downgraded to Neutral from Buy at BofA/Merrill
Bancolombia (CIB) downgraded to Underweight from Neutral at HSBC
Cemig (CIG) downgraded to Underweight from Neutral at JPMorgan
InterMune (ITMN) downgraded to Hold from Buy at Jefferies
InterMune (ITMN) downgraded to Market Perform from Outperform at JMP Securities
InterMune (ITMN) downgraded to Neutral from Overweight at JPMorgan
LIN Media (LIN) downgraded to Equal-Weight from Overweight at Evercore
Qihoo 360 (QIHU) downgraded to Neutral from Outperform at Credit Suisse
Simon Property (SPG) downgraded to Market Perform from Outperform at BMO Capital
Tim Hortons (THI) downgraded to Neutral from Buy at Longbow
Cray (CRAY) initiated with a Buy at Stifel
Enphase Energy (ENPH) initiated with a Buy at Needham
FCB Financial (FCB) initiated with a Buy at UBS
FCB Financial (FCB) initiated with an Overweight at JPMorgan
Goldman Sachs (GS) initiated with a Buy at MKM Partners
HealthEquity (HQY) initiated with a Neutral at RW Baird
Jarden (JAH) initiated with a Buy at Deutsche Bank
Loxo Oncology (LOXO) initiated with an Outperform at JMP Securities
Macrocure (MCUR) initiated with a Buy at Nomura
Marinus Pharmaceuticals (MRNS) initiated with an Outperform at JMP Securities
Mobileye (MBLY) initiated with a Buy at Deutsche Bank
Mobileye (MBLY) initiated with a Neutral at Goldman
Mobileye (MBLY) initiated with a Neutral at RW Baird
Mobileye (MBLY) initiated with an Outperform at Wells Fargo
Mobileye (MBLY) initiated with an Overweight at Barclays
RAIT Financial (RAS) initiated with an Outperform at JMP Securities
SunEdison (SUNE) initiated with an Outperform at FBR Capital
Transocean Partners (RIGP) initiated with an Equal Weight at Barclays
VTTI Energy (VTTI) initiated with an Outperform at Wells Fargo
Amazon (AMZN) confirmed the acquisition of Twitch Interactive for approximately $970M
DISH Network (DISH) petitioned FCC to deny Comcast (CMCSA), Time Warner Cable (TWC) merger
Comtech (CMTL) confirmed it is exploring strategic alternatives
Western Digital (WDC) said CFO Tim Leyden to retire and be succeeded by Olivier Leonetti
Premier (PINC), which reported Q4 results and provided FY15 guidance, said it will acquire Aperek for $48.5M
Kite Pharma (KITE) announced positive phase 1-2a results, demonstrating the potential to treat aggressive non-Hodgkin's lymphoma with an anti-CD19 chimeric antigen receptor, or CAR, T cell therapy
Companies that beat consensus earnings expectations last night and today include:
Taomee (TAOM), Tech Data (TECD), Renren (RENN), Premier (PINC)
Companies that missed consensus earnings expectations include:
Sanderson Farms (SAFM), Regis (RGS), Prospect Capital (PSEC), iKang Healthcare (KANG), Adept Technology (ADEP), Immunomedics (IMMU)
Berkshire (BRK.A) may provide 25% of financing for Burger King (BKW)/Tim Hortons (THI) deal, WSJ says
Time Warner (TWX) to offer buyouts to 4% of cable unit's staff, Reuters reports
Burger King (BKW) wants merger despite problems with dining combos, NY Times reports (THI)
Microsoft's (MSFT) web browser, media player targeted in China probe, Telegraph reports
Cliffs Natural (CLF) CEO supports sale of non-core assets 'at right price,' WSJ says
Fairchild (FCS) to shed 15% of workforce, WSJ reports
Madison Square Garden (MSG) has more room for gains, Barron's says
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