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Published August 4, 2009 at 4:44 PM
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Welcome to Deal Stocks, where we focus on a handful of select public
companies involved in activity across the deal spectrum -- including
M&A, private equity, IPOs, bankruptcies and corporate
restructurings. These are the transactions that define The Deal and are
likely contributors to a stock's gains or losses. Join in the
conversation on Twitter @dealstocks.
Market insecurities rose on Tuesday as traders swallowed the bitter pill that the American consumer might not be able to save the economy as quickly as originally hoped as wages and salaries fell 4.7% in the 12 months through June, the biggest drop since the records began in 1960. Even though pending home sales increased by 3.6% in June and consumer spending rose .04%, it may take as long
as 15 years for consumers to fully repair finances battered by
the decline in home values, stocks and employment, Edmund Phelps, winner of the Nobel prize in economics in 2006, told Bloomberg. That's not good news for companies, who'll look to adjust with continued downsizing and possibly look for potential acquirers if they're desperate enough.
Consumers may not have much money in their wallets, but PepsiCo Inc. (NYSE:PEP) does. And the soda company used plenty of it to acquire its largest bottlers in a $7.8 billion deal announced Tuesday. The potential merger prompted Moody's Investor Service to review its ratings on Pepsi. The deal pushed up shares of Pepsi to finish in the green. The Dow closed up 33.33, or .36%, while the Nasdaq inched up 2.70, or .13%, to 2,011.31.
In other news: - With the bad press piling up and the issue of post-bailout compensation
looming large, Goldman Sachs Group Inc.'s (NYSE:GS) CEO Lloyd Blankfein
has told employees to cut back on the conspicuous consumption, the New York Post said, citing sources.
- Eli Lilly & Co. (NYSE:ELI) has spun out its venture capital arm Lily Ventures to compensate its members more like a traditional venture firm, according to VentureWire.
- Struggling to stay afloat, CIT Group Inc. (NYSE:CIT) tweaked the terms of its tender offer further to bolster its chances of paying down an upcoming debt maturity. (The Deal Pipeline subscribers can read the full story here.)
- After a lull in new offerings, two new technology companies are set to debut on the
public markets: private equity-backed chipmaker Avago Technologies Ltd.
and business software maker CDC Software Corp.
- Donald Trump came out a winner in Atlantic City Wednesday as the businessman and BNAC, an affiliate of Beal Bank Nevada, said they will invest $100 million cash to buy Trump Entertainment Resorts out of Chapter 11. The real estate mogul lost out to bondholders and board members allied with them in February, resigning from the board and giving up day-to-day control of the casino. TER slipped into bankruptcy days later. But never one to give up easily, Trump submitted his own offer to the bankruptcy court in competition with that of bondholders and apparently got lucky.
- Bank of America Corp. (NYSE:BAC) settled SEC charges of making "materially false and misleading statements" in connection with its acquisition of Merrill Lynch & Co. last year. The charges are related to BofA's agreeing to pay up to $5.58 billion in bonuses to the investment bank's executives as part of the deal, published reports said.
In earnings news Tuesday: - European bank UBS (NYSE:UBS) reported a $1.3 billion loss, its seventh losing quarter of the last eight. The bank's bottom line continues to be hit by weakness in it private banking business as well as restructuring and impairment charges.
- Likewise GMAC Financial Services found itself $3.9 billion in the red for the second quarter. In the year-ago period last year GMAC lost $2.5 billion.
- BHP Billiton Ltd. (NYSE:BHP) said Jac Nasser will succeed
Don Argus as chairman when Argus retires in early 2010. Nasser, known
for leading big acquisitions as soon as he took the reins at Ford Motor
Co. (NYSE:F), comes in as BHP may be keen on more acquisitions since
the global recession is showing a few signs of easing.
- The Journal quotes former Medtronic Inc. (NYSE:MDT) chairman Bill
George on what General Motors Co. chairman Ed Whitacre should be doing. Mainly, says George, Whitacre should be keeping the
government out of the hair of GM CEO Fritz Henderson. The story then
notes that George was approached about the GM chairmanship, "but turned
it down, saying he was too busy."
- A dot-com has queued up in the IPO pipeline, with online genealogy research service Ancestry.com Inc. filing late Monday to raise $75 million in its public debut.
- Standard Chartered plc announced that it is hiring 300 relationship managers in priority banking in Singapore.
- George White, Maria Woehr and Gerald Magpily
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VITAL SIGNS |
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Figures are calculated
according to the latest stock data available at market close |
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August 4, 2009 |
|
Benchmark |
Spread |
Change from previous day |
1 week ago |
1 month ago |
1 year ago |
|
LIBOR 1-MONTH |
0.28 |
-0.004 |
0.29 |
0.30 |
2.46 |
|
LIBOR 3-MONTH |
0.47 |
-0.001 |
0.50 |
0.56 |
2.80 |
|
TED |
0.28 |
-0.009 |
0.29 |
0.41 |
1.13 |
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Exchange |
Average |
Change from previous day |
1 week ago |
1 month ago |
1 year ago |
|
VIX |
24.89 |
-0.67 (-2.62%) |
25.01 |
27.95 |
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T-bond |
Current Price/Yield |
Price/Yield change |
|
3-Year |
99-12 / 1.72 |
-0-02 / .022
|
|
5-Year |
99-21.5 / 2.70 |
-0-05 / .034 |
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10-Year |
95-14 / 3.68 |
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