- As scandals mount, White House springs into damage control (Reuters)
- Glencore Xstrata chairman ousted in surprise coup (Reuters), former BP CEO Tony Hayward appointed as interim chairman (WSJ)
- JPMorgan Chase asks Bloomberg for data records (Telegraph)
- Platts Retains Energy Trader Confidence Amid Price-Fix Probe (BBG)
- Syrian Internet service comes back online (PCWorld)
- Japan Q1 growth hits 3.5% on Abe impact although fall in business investment clouds optimism for recovery (FT)
- Soros Joins Gold-Stake Cuts Before Bear Market Drop (BBG)
- Factory Ceiling Collapses in Cambodia (WSJ)
- Sony’s $100 Billion Lost Decade Supports Loeb Breakup (BBG)
- Snags await favourite for Federal Reserve job (FT)
- James Bond’s Pinewood Turned Down on $300 Million Plan (BBG)
Overnight Media Digest
* A heated takeover battle has erupted around generic drug company Actavis Inc as industry players seek to shore themselves up amid increasing competition and fewer new knock-off-drug opportunities.
* U.S. officials dealt a blow to the fledgling digital currency called Bitcoin, freezing an account tied to the largest Bitcoin exchange just months after regulators warned such entities should follow traditional anti-money laundering rules.
* One of Goldman Sachs Group Inc’s top energy bankers, Stephen Daniel, has retired, leaving the firm a year after his personal stock holdings in a pipeline company proved a point of controversy in a takeover deal.
* Mexican home builders and their creditors have been hiring U.S. bankruptcy lawyers and other advisers, as the companies struggle with mounting debt obligations.
Two of the country’s leading builders, Urbi Desarrollos Urbanos SAB and Corporación Geo SAB, missed debt payments in April and have reported dismal earnings. Urbi is considering a bankruptcy filing in Mexico as one option, some people familiar with the matter said.
* The rise in prices for agricultural land slowed somewhat to start the year in parts of the U.S. farm belt, new reports showed, signaling a boom in land values might be moderating as commodity prices cool and incomes for farmers are expected to weaken.
* An industry group wants to add criteria to a form of debt-default insurance that would lead to payouts for bondholders when banks are rescued.
The International Swaps and Derivatives Association is circulating a proposal that would add another item to that list of “credit events” that lead to payouts for swaps holders. The group is circulating its proposal this week to various members of its Credit Derivatives Market Practice Committee.
* Groupon Inc is not likely to name a permanent new chief executive until next year, the daily deal company’s interim chiefs said.
The company, which stumbled badly after going public in 2011, has been looking for someone to fill the top job since it ousted Andrew Mason in February following a string of missteps and disappointing results.
* Texas is pickup truck country and the front line in an expanding battle among auto makers to load up on profits from pickups, one of the richest businesses up for grabs as the global auto business roars back to life.
After years of waiting on the sidelines, pickup buyers are returning to dealer showrooms, offering millions of dollars in profit and potentially lifelong brand loyalty to Ford Motor Co , General Motors Co or Chrysler Group LLC and rivals.
* Comcast Corp’s NBCUniversal unit is projecting advertising sales of more than $800 million for the Olympic Games next year in Russia, which would be a record for the Winter Games, despite the decision of two longtime sponsors to pass on the event
Google Inc has launched a subscription-based streaming music service on Wednesday ahead of rival Apple Inc , which pioneered online music purchases with iTunes but is yet to adopt the fast-growing newer business model.
In the last set of quarterly forecasts before Governor Mervyn King retires, the Bank of England predicted that Britain’s economic growth would be faster and inflation lower than it expected three months earlier.
RP Martin, the British interdealer broker that became involved in the Libor fixing investigation when two of its employees were arrested in December, suspended David Caplin, its chief executive, and Alan Farnan, an executive director, on Wednesday.
Lawyers for JPMorgan Chase & Co, one of the biggest customers of Bloomberg LP, have demanded details of which Bloomberg employees accessed data on the use of the bank’s financial terminals.
HSBC Holdings Plc said it would cut between 4,000 and 14,000 jobs as it intensified its cost-cutting efforts and became the first big bank in Europe to hint at a likely share buyback.
Britain’s Prime Minister David Cameron on Wednesday said he wanted Royal Bank of Scotland Group back in a state of “good health” and ready for sale “as fast as possible”, signalling a possible return of the state-controlled bank to private ownership before the next election.
* After the factory collapse in Bangladesh a search for new locations has taken on greater urgency for Western retailers, whose complex manufacturing needs already shrink the pool of potential locations.
* Under pressure from Wall Street lobbyists, federal regulators will soften a rule intended to rein in banks’ domination of the shadowy but lucrative derivatives market.
* In the midst of a closely watched investor vote on whether to separate the roles of chairman and chief executive at JPMorgan Chase, the firm providing tabulations of the vote stopped giving snapshots to the proposal’s sponsors.
* The Obama administration stepped up pressure on the Internal Revenue Service by ousting its acting commissioner and sought to insulate itself from the outcry over the agency’s special scrutiny of conservative groups.
* The U.S. administration is pushing for greater protections for reporters who refuse to identify sources, even as officials face anger over the seizure of Associated Press records.
* On Wednesday, Google unveiled a new Google Maps, by far the biggest redesign since it introduced Maps eight years ago. The company announced the maps at its annual I/O developers conference, where it also showed off new tools for search, photo editing and to-do lists, along with a music service and features for Android and Chrome apps.
THE GLOBE AND MAIL
* British Columbians voted overwhelmingly to send the Liberal Party back to power on Tuesday in one of the most dramatic political comebacks in recent Canadian history. The election was a stunning turnaround for Premier Christy Clark, although she was struggling Tuesday to hold her own seat in Vancouver-Point Grey.
* Canada will take the helm on Wednesday at a ministerial summit of the circumpolar, eight-nation Arctic Council, where Health Minister Leona Aglukkaq faces a clamour from southern nations seeking a greater role in the race to extract the Arctic’s vast oil and mineral riches. China, India, Japan, South Korea and Singapore all want observer status at the council as climate change exposes Arctic resources and opens new, shorter shipping lanes.
Reports in the business section:
* Ron Mock has completed his rise from the ashes of collapsed hedge fund firm Phoenix Research and Trading Corp, putting a controversial failure behind him to become the new chief executive of the Ontario Teachers’ Pension Plan.
Mock, 60, was named on Tuesday as the successor to Teachers Chief Executive Jim Leech, who is retiring at the end of the year. Mock is currently Teachers’ senior vice-president of fixed income and hedge funds, heading the largest of the pension plan’s six major asset management groups.
* Canada’s Conservative government said on Tuesday it would boycott a United Nations disarmament conference chaired by Iran – currently targeted by sanctions over its rogue nuclear arms program – on the grounds that it makes a “mockery” of the effort against arms proliferation. It is the latest sign of a new boldness in Canada’s stance against the Islamic Republic.
* Canada’s oil sands and U.S. tight oil plays will contribute more than one third of new supplies to global markets between now and 2018, the International Energy Agency says. Production from northern Alberta’s bitumen reserves, the world’s No. 3 deposit, North Dakota’s Bakken play and the Eagle Ford shale in Texas will provide 40 percent of new supplies in the next five years as global output surges by 8.4 million barrels a day, the Paris-based agency said Tuesday.
* Internet video provider Netflix is facing an onslaught of competing streaming services launched by Canadian media giants such as Bell, Videotron and Astral as they clamour to cash in on the increasingly popular platform. But Reed Hastings, chief executive of Los Gatos, California-based Netflix, is nonchalant about the market his company pioneered becoming increasingly crowded.
CHINA SECURITIES JOURNAL
- The People’s Bank of China Shanghai branch released data that showed individual housing loans continued to soar in the month of April. In April Shanghai’s new foreign exchange personal housing loans rose to 5.3 billion yuan.
SHANGHAI SECURITIES NEWS
- The Chinese trade hub of Yiwu plans to expand its pilot scheme to allow more cross-border yuan settlement at the end of May.
- Chinese airlines will get their first Boeing Co Dreamliners this quarter, said Boeing’s China President Marc Allen. China Southern Airlines is due to receive its first Dreamliner jumbo jet by the end of May.
* Dish Network Corp has lined up four banks to finance its $25.5 billion bid for Sprint Nextel Corp, escalating the bidding war against Japanese telecom company SoftBank Corp, according to two people familiar with the matter.
* RP Martin Holdings Ltd, the British interdealer broker that became involved in the Libor fixing investigation when two of its employees were arrested in December, suspended its chief executive and a director on Wednesday, a source familiar with the matter told Reuters.
* The consortium of investors seeking to take over Severn Trent Plc offered just under 20 pounds per share for the British water company, valuing it at around 4.7 billion pounds ($7.16 billion), a source told Reuters on Wednesday.
* The Portuguese government and JPMorgan Chase & Co are attempting to resolve a tussle over potentially costly derivative contracts sold by the U.S. investment bank to state-owned companies, a source familiar with the situation said.
* Swiss drugmaker Roche Holding AG is exploring a sale of its blood glucose meters business, three people familiar with the matter told Reuters on Wednesday, as the industry grapples with increased competition and reimbursement pressure.
* Macquarie Group Ltd -backed Asian Pay Television Trust has priced its Singapore initial public offering at S$0.97 per unit, at the bottom of a narrowed marketing range, people familiar with the matter told Reuters on Thursday, raising $1.14 billion.
* Before Optimer Pharmaceuticals Inc even put itself up for sale earlier this year, Cubist Pharmaceuticals Inc offered to buy the antibiotic maker for $20 per share, or nearly $1 billion, two people familiar with the matter told Reuters on Wednesday.
* Bain Capital LLC has emerged as the last party standing in the race for Yankee Candle Co Inc, three people familiar with the matter said, making it likely that the largest scented candle maker in the United States will stay in private equity hands.
* Singapore’s Changi Airport Group has sold its 8.36 percent stake in Italy’s Generale Mobiliare Interessenze Azionarie SpA at 1.43 euros per share, a source close to the situation said on Wednesday.
* British tour operator Thomas Cook Group Plc will announce plans to raise about 400 million pounds ($609.02 million) through a placing and rights issue on Thursday, according to two travel industry sources.
* Austin Brown, a portfolio manager with a focus on metals at Caxton Associates, has left the London office of the $6 billion U.S. hedge fund, according to a source at the company.
* Publishing company Mecom Group Plc is set to appoint veteran investment banker Rory Macnamara as its chairman as it continues to restructure its business, the Financial Times reported, citing people close to the company
Fly On The Wall 7:00 Market Snapshot
Beazer Homes (BZH) upgraded to Buy from Fair Value at CRT Capital
Con-way (CNW) upgraded to Hold from Underweight at BB&T
First Busey (BUSE) upgraded to Market Perform from Underperform at Keefe Bruyette
InterXion (INXN) upgraded to Buy from Neutral at Citigroup
Palo Alto (PANW) upgraded to Overweight from Equal Weight at Morgan Stanley
Rosetta Resources (ROSE) upgraded to Outperform from Market Perform at Wells Fargo
3D Systems (DDD) downgraded to Underperform from Market Perform at William Blair
ABB (ABB) downgraded to Neutral from Buy at Citigroup
AMD (AMD) downgraded to Sell from Neutral at Goldman
CSC (CSC) downgraded to Hold from Buy at Deutsche Bank
Chesapeake Utilities (CPK) downgraded to Neutral from Outperform at RW Baird
Chesapeake (CHK) downgraded to Neutral from Overweight at JPMorgan
Comstock Resources (CRK) downgraded to Hold from Buy at KeyBanc
Covanta (CVA) downgraded to Equal Weight from Overweight at Barclays
Everest Re (RE) downgraded to Equal Weight from Overweight at Morgan Stanley
Great Plains Energy (GXP) downgraded to Neutral from Overweight at JPMorgan
Iconix Brand (ICON) downgraded to Hold from Buy at Benchmark Co.
Jack in the Box (JACK) downgraded to Outperform from Top Pick at RBC Capital
Lincoln National (LNC) downgraded to Underperform from Neutral at Credit Suisse
MB Financial (MBFI) downgraded to Underperform from Market Perform at Raymond James
Medtronic (MDT) downgraded to Neutral from Outperform at Credit Suisse
Piedmont Natural Gas (PNY) downgraded to Neutral from Outperform at RW Baird
SodaStream (SODA) downgraded to Hold from Buy at Deutsche Bank
Stratasys (SSYS) downgraded to Underperform from Market Perform at William Blair
tw telecom (TWTC) downgraded to Equal Weight from Overweight at Morgan Stanley
Unum Group (UNM) downgraded to Underperform from Neutral at Credit Suisse
Amazon.com (AMZN) initiated with a Buy at Lazard Capital
Apple (AAPL) initiated with a Neutral at Susquehanna
Churchill Downs (CHDN) initiated with a Buy at Brean Capital
Interpublic Group (IPG) initiated with an Overweight at Evercore
Monarch Casino (MCRI) initiated with a Buy at Brean Capital
Stillwater Mining (SWC) coverage resumed with an Outperform at Wells Fargo
Wabtec (WAB) initiated with an Overweight at Atlantic Equities
eBay (EBAY) initiated with a Buy at Lazard Capital
DDR Corp. (DDR) acquired select prime power centers from its Blackstone (BX) JV for $1.46B
TC PipeLines, LP (TCP) unit entered agreements for $1.05B in pipeline stakes
Wells Fargo (WFC) confirmed reinstatement of $203M judgment in overdraft case
FDA approved Simponi (JNJ) to treat ulcerative colitis
Arch Coal (ACI), Meritage Midstream Services to form joint venture
HollyFrontier (HFC) announced unplanned downtime at refineries
OCZ Technology (OCZ) to delay filing 10-Qs
Companies that beat consensus earnings expectations last night and today include:
Prestige Brands (PBH), NetEase.com (NTES), Eagle Bulk Shipping (EGLE), Youku Tudou (YOKU), Acxiom (ACXM), Sapient (SAPE), Jack in the Box (JACK), Cisco (CSCO), Flexible Solutions (FSI)
Companies that missed consensus earnings expectations include:
TransAtlantic Petroleum (TAT), Aegean Marine (ANW), Multiband (MBND), Skechers (SKX)
Companies that matched consensus earnings expectations include:
Commtouch (CTCH), NetQin Mobile (NQ), Safe Bulkers (SB)
- The euro zone debt crisis has mutated into Europe’s longest slump of the post World War II era, with no recovery in sight for a broad swath of the continent. Continuing government austerity, banks that can’t or won’t lend and heavy household debts are weighing on many countries, the Wall Street Journal reports
- Valeant Pharmaceuticals (VRX) and Mylan (MYL) are weighing options after approaches made to Actavis (ACT) were rebuffed, and a report by the Wall Street Journal, citing a source, says Novartis (NVS) is weighing whether to launch its own bid for Actavis
- Google (GOOG) plans to help create a new laboratory to study quantum computing, a high-profile endorsement of the esoteric technology—and D-Wave Systems, a Canadian company that has been pursuing it since 1999. An unusual supercooled machine built by D-Wave, the Wall Street Journal reports
- BP (BP) wants Prime Minister Cameron to intervene with the U.S. government over the escalating cost of compensating U.S. companies for the Gulf of Mexico oil disaster in 2010, according to the BBC, Reuters reports
- Alternative asset managers such as Blackstone Group (BX) and KKR (KKR) have for decades scoured the stock market for undervalued companies. Now they are trying to convince investors that shares in their own firms are a bargain, Reuters reports
- Gold demand slid 13% to the lowest in three years in Q1 as record exchange-traded product sales by investors outweighed a surge in buying from China and India, says the World Gold Council, Bloomberg reports
- A year ago the U.S. housing market hit bottom after the biggest plunge in eight decades, and now signs of excess are re-emerging. The U.S. spring home buying season has been marked by a frenzy of demand fueled by the Fed’s move to push down borrowing costs, a scarcity of listings and Wall Street’s new appetite for foreclosed homes, Bloomberg reports
Ambit Biosciences (AMBI) 8.125M share IPO priced at $8.00
Customers Bancorp (CUBI) 5.373M share IPO priced at $16.75
Cyclacel Pharmaceuticals (CYCC) files to sell common stock
DDR Corp. (DDR) files to sell 32M shares of common stock
Diamondback Energy (FANG) 4.5M share Secondary priced at $29.25
OMA Airports (OMAB) files to sell 100M Series B shares for selling holder
Tesla (TSLA) files to sell 2.7M shares, CEO intends to buy $100M of stock
UBIC, Inc. (UBIC) 1.1M American Depositary Share U.S. IPO priced at $8.38
Wave Systems (WAVX) files to sell 1.8M shares for holders
William Lyon Homes (WLH) 8.7M share IPO priced at $25.00
QUARTERLY HEDGE FUND FILINGS
Berkshire Hathaway: NEW STAKES: Liberty Media (LMCA) and Chicago Bridge & Iron (CBI). INCREASED STAKES: Wells Fargo (WFC), IBM (IBM), Wal-Mart (WMT), DirecTV (DTV), and DaVita (DVA). DECREASED STAKES: Mondelez (MDLZ), Kraft (KRFT), and Bank of New York Mellon (BK). LIQUIDATED STAKES: General Dynamics (GD) and Archer Daniels (ADM).
Greenlight Capital: NEW STAKES: Oil States International (OIS), Hess (HES), Spirit (SPR), IAC/InterActiveCorp (IACI), and Capital Bank (CBF). INCREASED STAKES: Apple (AAPL). DECREASED STAKES: Microsoft (MSFT), Seagate (STX), Delphi (DLPH), CBS (CBS), and Computer Sciences (CSC). LIQUIDATED STAKES: Ensco (ESV), Xerox (XRX), Yahoo (YHOO), NVR (NVR), and Google (GOOG).