U.S. Stocks Rise; Merger Monday

Arthi Gupta
25 Oct, 2010
New York City

U.S. stocks traded higher after the G20 finance chiefs pledged to avert currency wars. Singapore Exchange agreed to acquire the operator of Australian Stocks Exchange for A$8.4 billion. CommScope confirmed talks with the Carlyle Group. BP agreed to sell interests in four Gulf of Mexico fields.

[R]9:35 AM New York – U.S. stocks traded higher after the G20 finance chiefs pledged to avert currency wars. Singapore Exchange agreed to acquire the operator of Australian Stocks Exchange for A$8.4 billion. CommScope confirmed talks with the Carlyle Group. BP agreed to sell interests in four Gulf of Mexico fields.[/R]

Asian markets gained after the G20 finance chiefs decided to give emerging economies more voting powers in the International Monetary Fund and European markets climbed.

Equinox Minerals agreed to acquire Citadel Resource for around A$1.25 billion.

Traders will look for direction today ahead of a key housing data and speech by the Federal Reserve Chairman Ben Bernanke. Investors are awaiting consumer sentiment, third quarter GDP and durable goods orders this week.

Financial chiefs from the G-20 nations agreed on Saturday to ''''refrain from competitive devaluation of currencies'''' and ''''move towards more market determined exchange rate systems,'''' according to a statement issued after their two-day meeting held at Gyeongju in South Korea.

Finance ministers from the G-20 nations have agreed upon reforms to the International Monetary Fund to give a greater say to developing countries. Europe agreed to surrender two seats on the 24-member IMF Executive Board to give more representation for rapidly growing countries. However, the U.S. will retain the veto over key decisions.

""The most important thing we achieved is agreement on a framework for curbing excess trade imbalances in the future,"" said, the U.S. Treasury Secretary Timothy Geithner.

The Singapore Exchange Ltd. agreed to acquire the Australian Securities Exchange Ltd. at A$48 per share in a cash and stock deal valued at about A$8.4 billion or $8.3 billion. The combination will create the world''s fifth largest listed international exchange group with a broad international shareholder base.

The Royal Bank of Canada, the Canadian financial services provider announced that Bermuda-based Athene Holding Ltd. agreed to acquire Liberty Life Insurance Company, the U.S. life insurance business of RBC Insurance for $628.1 million.

Hyatt Hotels Corp. and private real estate investment firm Starwood Capital Group said that affiliates of both the companies have formed a joint venture to develop an ocean front resort. Hyatt anticipates that its investment in the project will be approximately $90 million.

Perpetual Ltd., the Australian asset manager said that private equity firm Kohlberg Kravis Roberts’ takeover bid of up to A$1.75 billion does not reflect true value of the company. However, the company said it will hold talks with the private equity firm to assess the offer.

Equinox Minerals Ltd., the copper mining company announced its proposal to acquire Australia-based metals and gold mining company Citadel Resource Group Ltd., for a total value of around A$1.25 billion. The offer comprises 1 Equinox share for every 14.3 Citadel shares and A$0.105 in cash per Citadel’s share.

CommScope, Inc., the telecom equipment maker confirmed media reports that it is in discussions with private equity firm, The Carlyle Group regarding a possible acquisition of the company at $31.50 per share in cash.

BP plc agreed to sell its interests in four deepwater oil and gas fields in the U.S. Gulf of Mexico to Marubeni Oil and Gas for $650 million. The four mature producing deepwater oil and gas fields of Magnolia, Merganser, Nansen and Zia have a net production of about 15,000 barrels.

The sales are part of the company''s plan to divest up to $30 billion by the end of 2011 to help it meet its financial obligations that arose from the massive Gulf of Mexico oil spill.

Earnings Review

Coca-Cola Enterprises Inc. ((CCE)), the marketer, producer and distributor of non-alcoholic beverages said its board of directors declared a regular quarterly dividend of 12 cents per common share.

Genzyme Corporation ((GENZ)), the biotechnology company affirmed its fourth quarter earnings outlook and initiated earnings guidance for the full year 2011. For 2011, the company expects revenue, excluding discontinued operations, to increase to $5 billion to $5.1 billion in 2011 from outlook of $4.1 billion for 2010 and non-GAAP earnings of $4.30 to $4.60 per share, much higher than its current guidance of $1.85 to $1.90 per share for 2010.

KeyCorp ((KEY)), the holding company for KeyBank National Association reported third quarter total revenue, on a taxable equivalent basis, rose 15.2% to $1.13 billion from $981 million in the prior-year period. Net income generated in the quarter was $163 million or 19 cents per diluted share, compared to net loss of $422 million or 50 cents per share last year.

Kronos Worldwide, Inc. ((KRO)), the titanium dioxide pigments maker said third quarter net sales increased 21% to $376.6 million from $310.1 million in the comparable quarter a year ago. Net income in the quarter surged 273% to $32.1 million or 66 cents per diluted share, compared to net income of $8.6 million or 17 cents per share last year driven mainly by higher revenues and improved margins.

RadioShack Corporation ((RSH)), the specialty retailer of wireless communications, electronic parts, batteries and accessories reported third quarter net sales and operating revenues grew 6.2% to $1.05 billion from $990 million in the same period last year. Comparable store sales for company-operated stores and kiosks increased 6.2% during the 2010 third quarter, compared to the 2009 third quarter. Net income in the quarter rose 23% to $46 million or 37 cents per diluted share, compared to net income of $37.4 million or 30 cents per share last year.

Shaw Communications Inc. ((SJR.B)), the Canada-based diversified communications company stated fourth quarter service revenue rose 8% to C$938.87 million from C$872.92 million in the same quarter of fiscal 2009, driven by customer growth including from acquisitions and rate increases. Net income in the quarter declined 2.2% to C$121.58 million or C$0.28 per diluted share, compared with net income of C$124.27 million or C$0.29 per share last year.