Wall Street News
EU banks must slash €3.2T in assets for Basel III. EU banks need to reduce their balance sheets by €3.2T and raise nearly €50B in capital over the next five years in order to comply with Basel III, the FT reports, citing an RBS study. The banks "most in need of fresh capital" are Barclays (BCS), Crédit Agricole (CRARY.PK), and — not surprisingly — Deutsche Bank (DB). Smaller banks will need to cut €2.6T in assets, a prospect that suggests lending to small businesses could dry up.
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Rockwell Collins to buy Arinc from Carlyle for $1.39B. Rockwell Collins (COL) has agreed to acquire flight-systems company Arinc from Carlyle (CG) for $1.39B. Arinc's provision of air-to-ground links is expected to make Rockwell Collins a major player in the market for next-generation traffic control and airborne communications. Arinc's 2013 revenues are projected at $600M. The acquisition will change Rockwell Collins' business mix to 54% commercial and 46% government from 52%-48% the other way round.
Prosecutors, FBI add to scrutiny on JPMorgan. The U.S. attorney's office and the FBI are reportedly investigating JPMorgan (JPM) over the bank's London Whaling loss in a probe that could lead to a fine and a reprimand. The inquiry adds to action from the SEC, as well as possible criminal indictments against two former JPMorgan employees. Prosecutors are also looking at whether the bank should have alerted authorities about the suspicions of some staff that Bernard Madoff was running a Ponzi scheme.
BlackBerry could find willing P-E buyers in Canada. A senior executive at a major Canadian pension fund that has worked with private-equity firms reportedly believes they and other funds in Canada would consider participating in any deal to take BlackBerry (BBRY) private. On Friday, the Canada Pension Plan Investment Board said it would be open to taking part in a BlackBerry buyout. With the company holding over $3B in cash, its market cap of $5.1B looks cheap, says one portfolio manager.
JCP, Ackman boardroom brawl extends into the weekend. J.C. Penney's (JCP) board reportedly met yesterday to consider taking action against Bill Ackman - the retailer's largest shareholder - after he made board deliberations public and urged the speedy replacement of CEO Mike Ullman. It's not clear whether Ackman violated any legal duty and the board seems to have few options for isolating him, although they could refuse to renominate him as a director.
GM to gradually exit South Korea. General Motors (GM) will gradually scale back its operations in South Korea amid rising labor costs and "militant unionism," Reuters reports. The operations account for around a fifth of the company's annual global production, with the high expenses exacerbated by the relative strength of the won. Labor cost per vehicle in South Korea this year is projected to be around 40% higher than GM's global average.
Government reviews use of anti-psychotic treatments on children. The Department of Health & Human Services is investigating the use of anti-psychotic drugs to treat Medicaid recipients aged 17 and under amid concern that the medicines are being over-prescribed. Medicaid spends billions of dollars a year on the drugs, which include those from AstraZeneca (AZN), Eli Lilly (LLY) and Johnson & Johnson (JNJ), as well as from Otsuka Holdings (OTSKF.OB), the provider of Abilify, the top prescription treatment by revenues in the U.S.
China investigates Sanofi for alleged bribery. China is reportedly investigating Sanofi (SNY) for allegedly paying bribes of 1.7M yuan ($277,600) to over 500 Chinese doctors in order to increase sales. The probe follows a report on Thursday in which a whistleblower accused the French pharmaceuticals company of making the payments. The inquiry also comes as authorities investigate GSK (GSK) for bribery and amid visits to other foreign drug companies, including Novo Nordisk (NVO), AstraZeneca (AZN) and Eli Lilly (LLY).
Novartis blockbuster drug hit by scandal in Japan. Researchers in Japan have retracted studies that promoted the benefits of one of Novartis' (NVS) biggest sellers in the country, the heart medicine Diovan. The withdrawals came after university led investigations found data had been tampered with to create false results. At least eight hospitals have said they'll stop prescribing the drug. However, the impact in the U.S. is seen as limited, partly because Diovan is well established and its patent has expired.
Court to discuss whether to fast-track Icahn's Dell lawsuits. Delaware's Court of Chancery is scheduled to hold a hearing today over whether to fast-track Carl Icahn's legal challenges to Michael Dell's and Silver Lake's bid to take Dell (DELL) private. Icahn wants simultaneous ballots on his and Michael Dell's proposals, while he's also unhappy about changes to the voting requirements that he believes have rigged the ballot against him.
CFTC probe of metals warehouse company gathers steam. The Commodity Futures Trading Commission has subpoenaed an unnamed metals warehousing firm for all of its documents and communications related to the London Metal Exchange since January 2010, Reuters reports. The speculation comes amid allegations that warehouse companies artificially boosted the price of metals, particularly aluminum. Companies ensnared in the affair include Goldman Sachs (GS), Glencore (GLNCY.PK) and Noble Group (NOBGF.PK).
Regulators close 18th bank of the year. Regulators shut Wisconsin-based Bank of Wausau on Friday, bringing the total number of bank failures this year to 18. The FDIC estimates that the cost of the latest closure to the Deposit Insurance Fund will reach $13.5M.