Frontrunning: March 26

  • Berezovsky Died of Hanging Without Struggle, Police Say (BBG)
  • BRICS Nations Plan New Bank to Bypass World Bank, IMF (BBG)
  • China pledges more investments to Africa (FT)
  • BOJ's Kuroda signals targeting longer-dated JGBs (Reuters)
  • North Korea orders artillery to be combat ready, targeting U.S. bases (Reuters)
  • Supreme Court to take up gay marriage for the first time (Reuters)
  • U.S. Cracks Down on 'Forced' Insurance (WSJ)
  • Japanese courts press Abe on electoral reform (FT)
  • Vietnam accuses China of attack on fishermen in South China Sea (Reuters)
  • Italy's High Court Overturns Knox Acquittal (WSJ)
  • Facebook’s Zuckerberg Said to Explore Forming Political Group (BBG)


Overnight Media Digest


* Dell Inc said it received two alternative acquisition proposals from Blackstone and activist investor Carl Icahn, following a $24.4 billion deal last month to be taken private by founder Michael Dell.

* The BlackBerry Z10 phone from BlackBerry has received tepid marketing support from AT&T since its debut in stores on Friday, dealing the company an early setback in its drive to improve sales in the crucial U.S. market.

* Boeing Co began the first in a series of 787 Dreamliner test flights on Monday, preparing for regulators to evaluate changes to its lithium-ion battery system and marking another step in the plane maker's effort to return the jet to commercial service.

* Centrica Plc, one of the UK's main energy providers, has signed a deal to buy billions of cubic meters of liquefied natural gas from a U.S. plant, in the first deal clearly intended to bring gas from North America to the UK.

* The U.S. Department of Transportation proposed a $1.7 million fine against Exxon Mobil Corp for failing to properly prepare for what the department says were known flooding risks to one of its pipelines that ruptured in 2011 and spilled 1,500 barrels of crude into Montana's Yellowstone River.

* T-Mobile USA has become the first major wireless carrier in the United States to drop smartphone subsidies, moving away from a model that has helped companies like Apple Inc bank large profits at a steep cost to carriers' margins.

* Oracle Corp on Monday said it agreed to acquire telecommunications software provider Tekelec, continuing a recent effort to profit from the explosion of smartphones and tablet computers burdening carriers' networks.

* Beijing-based Li Ning Co Ltd said in a statement to the Hong Kong Stock Exchange that it plans to downsize after reporting a $318.8 million loss for 2012 and a 25 percent drop in revenue.

* Online video site Hulu has had talks with several potential buyers including Guggenheim Partners, one of several options the company, owned by News Corp and Walt Disney Co, is considering as it tries to resolve uncertainty about its strategic direction.

* A Kuwaiti sheik alleges that a senior executive at Switzerland's UBS AG offered $20 million to get the bank an advisory role on one of the biggest-ever acquisitions in the Middle East, but the bank later backed out of the deal, according to the sheik's testimony in a Dubai court case.

* Canada's Bombardier Inc has condensed its production plans for a second, larger version of its CSeries jetliners to try to keep its tight schedule for the first deliveries of the new planes, according to people familiar with the matter.

* Law firm Howrey LLP was in a "death spiral" for nearly two years, according to new lawsuits that claim the firm's partners didn't seem to know the depth of its financial problems.



Fund manager Schroders Plc is to pay 424 million pounds ($646 million) for smaller rival Cazenove Capital, as it moves to bulk up its private banking arm running money for wealthy clients. Michael Dell is willing to explore the possibility of working with Blackstone Group LP and Carl Icahn regarding alternative offers for Dell

U.S. regulators approved Nasdaq OMX Group's $62 million compensation plan for firms that lost money in Facebook Inc's glitch-ridden market debut.

Yahoo Inc has snapped up mobile news aggregator Summly, founded by 17-year-old Nick D'Aloisio two years ago from his home in London.

Cynthia Carroll, the outgoing chief executive of Anglo American , warned mining industry shareholders to either get out of the sector or adjust their expectations.

Dutch package delivery firm TNT Express said the sale process of its Chinese business is underway and that it is pursuing the sale of its Brazilian arm.

Britain's Centrica Plc signed a long-term deal to import U.S. natural gas at a time when the domestic gas production continues to decline while U.S. output hits record highs.



* Michael Dell considers Blackstone Group LP's preliminary proposal for Dell Inc to be potentially friendly to management and may reach out to talk later this week, a person briefed on the matter said on Monday.

* Facebook Inc is no longer relying solely on what its users reveal. Instead, it is tapping outside data sources to learn even more about them, and to sell more finely targeted ads.

* Concord Music Group, an independent music company with an artist roster that includes Paul McCartney, Paul Simon and Creedence Clearwater Revival, has been sold to Wood Creek Capital Management, a private equity firm that has been quietly building a collection of music assets.

* Rengan Rajaratnam pleaded not guilty on Monday to insider trading charges while he worked for the now-defunct Galleon Group, coming nearly two years after the conviction of his older brother, the fallen hedge fund titan Raj Rajaratnam.

* Shares in Bankia SA, the giant Spanish mortgage lender whose collapse last year led to a banking crisis in Spain, slumped on Monday in the first day of trading after regulators wiped out most of the stock's value.

Regulators said on Friday that Bankia shares would be revalued at 1 cent each as the custodial managers who now oversee the bank try to create a clean slate. The new valuation was a condition of Bankia getting a capital injection of 10.7 billion euros ($13.9 billion) from European rescue funds.

* A survey of 800 large and midsize employers including PepsiCo Inc and Wal-Mart Stores Inc found that employers are increasingly trying to lower healthcare costs by using incentives to persuade workers to make better lifestyle choices.

* Puerto Rico has gone on a campaign to promote tax incentives that took effect last year, marketing its beautiful beaches, private schools and bargain costs in an effort to lure affluent American hedge fund managers and business executives to its shores.

* Messages from the world's largest law firm, DLA Piper, disclosed in a dispute over fees, will likely add to a perception that law firms inflate bills by performing superfluous tasks and overstaffing assignment




* Companies hoping to snag a piece of the biggest roadwork contract in Quebec's history will first have to prove they're corruption-free, a major test for the province as it aims to fix its failing infrastructure while tackling graft in the construction industry.

* Ontario premier Kathleen Wynne has stepped up her push for new taxes or tolls to pay for public transit expansion, warning that without such measures, badly needed infrastructure will never see the light of day.

Reports in the business section:

* Finance Minister Jim Flaherty says Canada is nearing an elusive free-trade agreement with South Korea, but some Canadian exporters warn they are years behind other countries that already have deals with the Asian manufacturing powerhouse.

* Canada's New Democratic Party (NDP) is about to reintroduce legislation designed to ensure Canadian companies are not using conflict minerals in their supply chain - and that consumers can be certain their smartphones and other electronics are free of minerals fuelling violence in the Democratic Republic of the Congo.


* Conservative MP Mark Warawa, who wants Canadian parliamentarians to condemn sex-selection abortions, is refusing to back down after his motion was deemed out of order last week by a House of Commons committee.

Warawa is urging MPs to reverse that decision and allow a vote in the Commons on the issue. He will plead his case on Wednesday to the Commons' procedural affairs committee.


* The apparently lacklustre sales of BlackBerry's new flagship Z10 handset in the United States have caused some observers to wonder if the delayed launch in the smartphone maker's most important market have dealt a blow to its chance at a comeback.




-- China Investment Corporation has signed a contract with Russian companies to work together in promoting infrastructure investment and development in far eastern Russia, according to an official announcement.

-- Dongfeng Automobile Co Ltd reported a 95 percent fall in net profit to 21.7 million yuan and a 17 percent fall in revenue to 17.7 billion yuan in 2012, according to the company's annual report.

-- Bright Dairy and Food Co. reported a 31 percent rise in 2012 net profit to 311 million yuan. The firm hopes to achieve 15.8 billion yuan in revenue this year.


-- China's inflation could fall to around 2 percent in March from a year earlier and the whole year number is likely to be around 2.6 percent, said Song Guoqing, member of the Central Bank Monetary Policy Committee, adding that gross domestic product (GDP) could grow 8.3 percent.

-- China's Securities Regulatory Commission, Beijing branch said it will promote securities companies to list in the stock market.


-- Chinese President Xi Jinping will be invited to the opening ceremony of the Boao Forum for Asia (BFA) Annual Conference 2013 and he will deliver a keynote speech.

-- China should crack down on 'naked officials' -- officials who have most of their assets and close family abroad -- and seek to regulate and identify which cadres fall into this category.


Fly On The Wall 7:00 Market Snapshot



BroadSoft (BSFT) upgraded to Market Perform from Underperform at Raymond James
Electronic Arts (EA) upgraded to Overweight from Neutral at Piper Jaffray
Green Dot (GDOT) upgraded to Outperform from Market Perform at JMP Securities
LaSalle Hotel (LHO) upgraded to Outperform from Market Perform at BMO Capital
Peabody Energy (BTU) upgraded to Outperform from Market Perform at Raymond James
RF Micro Devices (RFMD) upgraded to Outperform from Perform at Oppenheimer


Ashland (ASH) downgraded to Neutral from Buy at Longbow
Cabot Oil & Gas (COG) downgraded to Hold from Buy at Stifel
Gordmans Stores (GMAN) downgraded to Hold from Buy at Stifel
Gordmans Stores (GMAN) downgraded to Neutral from Overweight at Piper Jaffray
Kraton Performance (KRA) downgraded to Perform from Outperform at Oppenheimer
Magellan Health (MGLN) downgraded to Market Perform from Outperform at Raymond James
MeadWestvaco (MWV) downgraded to Neutral from Buy at UBS
Southwestern Energy (SWN) downgraded to Hold from Buy at Stifel


Brookfield Residential (BRP) initiated with a Buy at Citigroup
Fusion-io (FIO) initiated with a Perform at Oppenheimer
Luminex (LMNX) initiated with a Neutral at Wedbush
ON Semiconductor (ONNN) initiated with a Buy at BofA/Merrill
TRI Pointe Homes (TPH) initiated with an Outperform at FBR Capital


Raytheon (RTN) said it will consolidate its businesses to streamline operations, and sees a workforce reduction of about 200 employees. The company also named Thomas Kennedy as COO
Magellan Health Services (MGLN) said that Magellan Complete Care of Arizona, a joint venture owned 80% by Magellan and 20% by Vanguard/Phoenix Health Plan, was notified by the state of Arizona that it was not selected as the Regional Behavioral Health Authority in GSA6; Maricopa County
Onyx Pharmaceuticals (ONXX) and Bayer (BAYRY) announced approval of Stivarga in Japan for the treatment of patients with metastatic colorectal cancer
Green Mountain (GMCR) appointed Michael Degnan Chief Legal Officer, General Counsel


Companies that beat consensus earnings expectations last night and today include:
Children's Place (PLCE), Gordmans Stores (GMAN)

Companies that missed consensus earnings expectations include:
Cascade Bancorp (CACB), U.S. Auto Parts (PRTS), Focus Media (FMCN)

Companies that matched consensus earnings expectations include:
AuRico Gold (AUQ), Sonic (SONC)


  • The board of Hulu, which is owned by News Corp (NWSA) and Disney (DIS), has reached out to potential buyers to gauge interest in acquiring the company, according to Reuters.
  • T-Mobile (DTEGY) has decided to drop smartphone subsidies, becoming the first major wireless carrier in the U.S. to do so, reports the Wall Street Journal.
  • Several Supreme Court justices seemed skeptical about the practice of brand name pharmaceutical companies paying generic companies to keep their cheaper drugs off the market for a longer time, according to The New York Times.
  • Zynga (ZNGA) CIO Debra Chrapaty is leaving the company to become CEO of Nirvanix, an enterprise cloud storage company, according to an AllThingsD report.


ARCA Biopharma (ABIO) files to sell $20M in common stock, warrants
Arcos Dorados (ARCO) files to sell 2.3M shares of common stock for holders
Calumet Specialty Products (CLMT) files to sell 5.25M shares of common stock
Coastal Contacts (COA) files to sell common stock
Rainmaker Systems (RMKR) files to sell $7.2M in common stock
The First Bancorp (FNLC) 662K share Spot Secondary priced at $16.25


No comments yet! Be the first to add yours.