Frontrunning: June 10

  • Ukraine, Russia Fail to Reach Deal in Natural-Gas Talks (WSJ)
  • Boko Haram Kidnaps More Girls in Nigeria (WSJ)
  • Déjà vu: echoes of pre-crisis world mount (FT)
  • Money market rates hit new low as ECB moves gain traction (Reuters)
  • 'Dark Pools' Face New SEC Probe (WSJ)
  • White House-Congress rift over Bergdahl deal deepens (Reuters)
  • Buffett Ready to Double $15 Billion Solar, Wind Bet (BBG)
  • Taxpayers Face Big Medicare Tab for Unusual Doctor Billings (WSJ)
  • Lean Retirement Faces U.S. Generation X as Wealth Trails (BBG)
  • Employers’ skills gap claim does not show up in US wage data (FT)
  • He is holding out for the Zuckerberg overbid: Donald Sterling says LA Clippers not for sale (WSJ)
  • Currency Carry Trades Rise in ECB’s Negative-Rate World (BBG)
  • High Yields on Chinese Corporate Bonds Lure Investors, Concerns About Economic Growth Put Aside (WSJ)
  • Two GM lawyers, quality control executive among those pushed out over switch (Reuters)
  • Tyson Wins Bid Against Itself (WSJ)
  • Greek deputy prime minister taken to hospital (Reuters)
  • Betting on boring brings stock outperformance in 2014 (Reuters)


Overnight Media Digest


* General Motors Co's directors and executives head to Tuesday's annual shareholder meeting under pressure to explain what they will do about admissions that employees mishandled a deadly safety defect, and what they estimate the total cost of that behavior will be. (

* Tyson Foods Inc won the auction for Hillshire Brands Co, but it ended up paying hundreds of millions of dollars more than necessary to beat the next-best offer. Tyson's price of $63 a share for the Chicago-based maker of Jimmy Dean sausages and other meat products, turned out to be far more than Tyson needed to pay to beat out Pilgrims Pride Corp's bid. (

* The Securities and Exchange Commission is investigating a number of big "dark pools" and exploring whether the trading systems are properly disclosing to clients how they operate, treating all investors fairly and protecting confidential client information, people familiar with the probes said. (

* Merck agreed to acquire Idenix Pharmaceuticals Inc for $24.50 a share in cash, or $3.85 billion. Merck's offer is more than triple of the stock's Friday closing price of $7.23. The premium was fueled by a competitive bidding process, according to Merck. (

* Internet company GoDaddy Inc filed for its initial public offering and said it plans to raise up to $100 million. The company said the amount is a placeholder amount used in deciding registration fees and will likely change. (

* In the opening minutes of a trial that could upend American college sports, the National Collegiate Athletic Association on Monday said it settled a separate lawsuit over the use of college players' likenesses in videogames made by Electronic Arts Inc. The NCAA said it would pay $20 million to current and former Bowl Subdivision football players and Division I men's basketball players. The case had been set to go to trial in March. (

* Some Spanish government bond yields dipped below U.S. Treasury yields, adding another twist to a year of surprises for the world's bond markets. Yields on the 10-year Spanish bond fell to 2.579 percent on Monday, according to Tradeweb, lower than the 2.615 percent yield on the 10-year Treasury note for the first time since April 2010, before the euro zone tumbled into its debt crisis. (



Time Warner is finalising deal to buy New York-based Vice Media that would value the digital media and publishing group at more than $2 billion, according to people familiar with the matter.

The U.S. Supreme Court rejected a request from BP Plc to keep compensation payments for businesses affected by the 2010 Deepwater Horizon disaster suspended.

Talks brokered by the South African government to end the five-month platinum strike that is battering the country's economy collapsed on Monday with the world's top three producers in a deadlock with the Association of Mineworkers and Construction Union.

U.S. womenswear chain Chico's has been in talks over a potential sale to private equity bidders, according to sources, one of whom said the company would likely command a premium of about 30 per cent to its $2.36 billion market capitalisation.

Web hosting firm GoDaddy has filed for a U.S. initial public offering, saying it planned to raise up to $100 million as a place holder figure



* Just weeks after the Justice Department indicted five members of the Chinese army, accusing them of online attacks on United States corporations, a new report from CrowdStrike, released on Monday, offers more evidence of the breadth and ambition of China's campaign to steal trade and military secrets from foreign victims. The report ties a hacker group in Shanghai to attacks on governments, contractors and research companies. (

* BP, Exxon Mobil Corp, Royal Dutch Shell Plc , Total SA and other big Western oil companies are striking deals and plowing money into Russia even as more sanctions loom. (

* The latest video game consoles can play Internet radio, Netflix movies and YouTube video clips. But Sony and Microsoft, gearing up for a blistering battle in retail stores this holiday season, are reassuring consumers that their consoles are very much about games, too. (

* The consolidation of more than 80 lawsuits against General Motors into a single proceeding in Manhattan represents a small but meaningful victory for the automaker. (

* TransferWise, one of London's most prominent financial technology companies, said it had raised $25 million from a range of investors, including Peter Thiel, a co-founder of PayPal, and the British billionaire Richard Branson. TransferWise uses peer-to-peer technology that allows individuals around the world to swap currencies without incurring large bank transfer fees. (

* Facebook announced that it has hired David Marcus, the president of eBay's PayPal division and a former entrepreneur, to lead the expansion of its messaging products - and eventually, to figure out how to make money from them. (

* Merck will buy the biotechnology company Idenix Pharmaceuticals for $3.85 billion in an effort to bolster its arsenal of potential drugs in the competitive arena of hepatitis C treatments, the companies announced on Monday. (

* Landowners who say a North Carolina electronics plant poisoned their drinking water missed a filing deadline, the Supreme Court ruled on Monday. The decision, in a 7-to-2 vote, is likely to affect similar suits from the families of thousands of former Marines over what they say was toxic pollution at Camp Lejeune, also in North Carolina. (

* Environmental officials in North Carolina and Virginia signed an agreement with Duke Energy on Monday for the cleanup of toxic coal ash from the Dan River, which flows through the two states. (

* Walmart announced two high-level changes to its e-commerce team on Monday, as it pushes to ramp up its online business and compete with its archrival Amazon. The company said Joel Anderson, who has been president of in the United States for the last three years, was resigning from the company. The other change was the promotion of Fernando Madeira, who has been the president of Walmart's Latin American e-commerce division. (

* Time Warner is in talks to buy a large stake in Vice Media for as much as $1 billion, a deal that could include providing Vice with the television network HLN, people with knowledge of the negotiations said on Monday. Precise terms and valuations have not been agreed upon. (




- China will set a "ceiling" for coal consumption in regions that fail to fulfil the annual pollution reduction quota in a bid to reduce smog and improve air quality in seriously polluted provinces, the vice director of China's top economic planner National Development and Reform Commission (NDRC), Xie Zhenhua, said on Monday.

- China will create a national carbon emission trading exchange in three years, an official in charge of environmental protection at the NDRC said on Monday.


- China's local governments will be under high debt repayment pressure in 2014 as 21.89 percent of China's local government debt is due this year, Wang Baoan, the vice minister of the Ministry of Finance, said at a conference.

- CITIC Securities has been probed by the Shenzhen branch of China Securities Regulatory Commission (CSRC) over suspected insider dealing by one of its pharmaceutical analysts, sources told the paper.


- The Shanghai Cooperation Organisation, a China and Russia-led security group of Eurasia states, will set up a special unit to help fight terrorism at the end of 2013, one of the group's directors said, amid the growing threat of attacks in China and the region.


- Party cadres should model after good examples to further improve their working attitude, the paper which acts as a party mouthpiece, said in an editorial. This comes in the wake of the ongoing "mass line education movement", a party campaign aimed to promote support for the party among the people.


The Telegraph


Diageo, the maker of Johnnie Walker scotch whisky, has cut around 200 head office and regional jobs as its new chief executive, Ivan Menezes, cracks down on costs. (


Time Warner is close to buying a large stake in Vice Media that would value the alternative media company at between $2 billion and $3 billion. (

The Guardian


Credit Suisse may face legal action over Irish investor Tom Ryan's failed development bid for a 1980s office block in Canary Wharf. (


Lloyds Banking Group has underlined its determination to entice investors to back the stock market flotation of TSB by pricing shares in the new bank below its own valuation of the 631 branch network. (

The Times


The board of Sports Direct has reignited a row with its minority investors over executive rewards by creating a 200 million pound ($335.82 million) bonus fund that conceals a likely payout for Mike Ashley, its billionaire founder. (


Tesco has thrown down the gauntlet to the high street banks by launching its first current account, paying interest of 3 per cent and promising to eschew the industry's "smoke and mirrors" charging tactics. (


The boss of SSP played down recent "blips" in the stock market yesterday as the airport catering specialist served up appetising profits in advance of a possible 2 billion pound flotation. (

The Independent


Website domain company GoDaddy said late on Monday it has filed papers with regulators for an initial public offering of shares. (


The company behind coffee shops, food stores and restaurants at airports and train stations is hoping to cash in on Transport for London's plans to install retailers in soon- to-be empty ticket offices at Underground stations. (



Fly On The Wall 7:00 AM Market Snapshot

Domestic economic reports scheduled today include:
NFIB small business optimism for May at 7:30--consensus 95.8
Wholesale inventories for April at 10:00--consensus up 0.5%
JOLTs job openings for April at 10:00--consensus 4.05M



Alcatel-Lucent (ALU) upgraded to Neutral from Underweight at HSBC
Alexander & Baldwin (ALEX) upgraded to Market Perform from Underperform at Wells Fargo
Blount (BLT) upgraded to Buy from Hold at KeyBanc
Colgate-Palmolive (CL) upgraded to Outperform from Market Perform at BMO Capital
Entropic (ENTR) upgraded to Buy from Hold at Needham
First Quantum Minerals (FQVLF) upgraded to Overweight from Neutral at JPMorgan
HomeAway (AWAY) upgraded to Neutral from Underperform at BofA/Merrill
Netflix (NFLX) upgraded to Overweight from Equal Weight at Evercore
Republic Services (RSG) upgraded to Strong Buy from Market Perform at Raymond James
Sprint (S) upgraded to Outperform from Neutral at Macquarie
Twitter (TWTR) upgraded to Market Perform from Underperform at Wells Fargo
Union Pacific (UNP) upgraded to Outperform from Sector Perform at RBC Capital


Cognizant (CTSH) downgraded to Neutral from Positive at Susquehanna (COUP) downgraded to Sell from Neutral at Goldman
eHealth (EHTH) downgraded to Hold from Buy at Jefferies
KB Financial Group (KB) downgraded to Neutral from Overweight at JPMorgan
Las Vegas Sands (LVS) downgraded to Neutral from Buy at UBS
Tesoro Logistics (TLLP) downgraded to Sector Perform from Outperform at RBC Capital


AMD (AMD) initiated with an Outperform at Imperial Capital
Chevron (CVX) initiated with a Buy at Deutsche Bank
Coca-Cola Enterprises (CCE) initiated with a Hold at Jefferies
Coca-Cola (KO) initiated with a Hold at Jefferies
ConocoPhillips (COP) initiated with a Buy at Deutsche Bank
Cott Corp. (COT) initiated with a Hold at Jefferies
Dr Pepper Snapple (DPS) initiated with a Hold at Jefferies
Exxon Mobil (XOM) initiated with a Hold at Deutsche Bank
Hess Corp. (HES) initiated with a Buy at Deutsche Bank
Jumei (JMEI) initiated with a Buy at Goldman
Jumei (JMEI) initiated with a Neutral at Piper Jaffray
Marathon Oil (MRO) initiated with a Buy at Deutsche Bank
Monster Beverage (MNST) initiated with a Buy at Jefferies
Murphy Oil (MUR) initiated with a Hold at Deutsche Bank
Nimble Storage (NMBL) initiated with an Equal Weight at Barclays
Occidental Petroleum (OXY) initiated with a Hold at Deutsche Bank
PepsiCo (PEP) initiated with a Buy at Jefferies
TrueCar (TRUE) initiated with a Sector Perform at RBC Capital
TrueCar (TRUE) initiated with an Outperform at JMP Securities
TrueCar (TRUE) initiated with an Overweight at JPMorgan


eBay (EBAY) said PayPal President David Marcus leaving for Facebook (FB)
BE Aerospace (BEAV) announced plans to create two separate companies and raised FY14 EPS guidance to $4.35 from $4.30, consensus $4.39
Dendreon (DNDN) announced that CEO John Johnson will step down for personal reasons
Urban Outfitters (URBN) said Q2 comp sales to date 'approximately flat'
Receptos (RCPT) said that a Phase 2 study for RPC1063 in relapsing multiple sclerosis met its primary endpoint
ON Semiconductor (ONNN) announced it will acquire Aptina Imaging for about $400M in cash
PPL Corp (PPL), Riverstone to combine merchant power generation businesses to form Talen Energy. PPL, which named CFO Paul Farr as Talen's CEO, said it will focus on high-performing regulated activities following the spin-off. Effective June 10, Vincent Sorgi, currently VP and controller for PPL, is being named SVP of PPL and its CFO


Companies that beat consensus earnings expectations last night and today include:
SAIC (SAIC), HD Supply (HDS), Triangle Petroleum (TPLM), Enzo Biochem (ENZ), Limoneira (LMNR), Casey's General Stores (CASY)

Companies that missed consensus earnings expectations include:
Pep Boys (PBY), iKang Healthcare (KANG), Majesco (COOL)

Companies that matched consensus earnings expectations include:
Synergetics (SURG)


Chico's FAS (CHS) considers going private, FT reports
International Game Technology (IGT) hires Morgan Stanley (MS) to explore sale, Reuters says
Time Warner (TWX) finalizing investment in Vice Media, FT reports (WMT) U.S. CEO Joel Anderson to step down, Dow Jones reports
Facebook (FB) accidentally launched, pulled Slingshot app, The Verge reports
Icahn says Family Dollar (FDO) poison pill may hinder friendly dialogue, Reuters reports
AT&T (T) resolves lawsuit regarding not carrying Al Jazeera, Bloomberg reports
Target (TGT) CEO Mulligan shaking up company strategy, WSJ reports
Merck (MRK), Gilead (GILD) both remain strong long-term investments, Barron's reports


Acadia Healthcare (ACHC) files to sell $340M of common stock
Basic Energy (BAS) files to sell 6M shares of common stock for holders
Magnum Hunter (MHR) files to sell 23.57M shares for holders
Pacific Coast Oil (ROYT) announces sale of 2.65M trust units for holders
QIWI (QIWI) files to sell 7.97M American Depositary Shares
Sealed Air (SEE) files to sell 5M shares for holders
Signature Bank (SBNY) files to sell 2.1M shares of common stock
Verint Systems (VRNT) files to sell 5M shares of common, $300M of convert senior notes

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