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Jul 29, 2014

Reuters | Deals Today - July 29, 2014: Airbus terminates sale of six A380 superjumbos to Japan's Skymark

Airbus terminates sale of six A380 superjumbos to Japan's Skymark
TOKYO (Reuters) - Airbus Group NV said on Tuesday it has terminated an agreement to deliver six A380 superjumbo jets to Skymark Airlines Inc after the Japanese discount carrier struggled to raise enough cash to pay installments on the aircraft.

Judge gives go-ahead for $2 billion sale of NBA's Clippers
LOS ANGELES (Reuters) - The estranged wife of Los Angeles Clippers co-owner Donald Sterling can proceed with the record $2 billion sale of the NBA team despite her husband's objections, a judge ruled on Monday, in a likely coda to a case of lingering racism in American sports.

Bain Capital to sell just under half of Japan telemarketer Bellsystem24 to Itochu
TOKYO (Reuters) - U.S. buyout firm Bain Capital has agreed to sell a 49.9 percent stake in Japanese telemarketing firm Bellsystem24 Holdings to Tokyo-based trading house Itochu Corp, the parties said in separate statements without disclosing the value of the deal

Panasonic to initially invest $200-300 million in Tesla battery plant: source
(Reuters) - Panasonic Corp plans to initially invest about 20 billion to 30 billion yen ($200-300 million) in Tesla Motors Inc's planned lithium-ion battery plant in the United States, a person familiar with the matter said on Tuesday.

Deutsche Bank's Postbank takeover hit by new regulatory delay
FRANKFURT (Reuters) - Deutsche Bank's takeover of Postbank was hit with a fresh regulatory delay on Wednesday, when Germany's Federal Supreme Court failed to give final clearance to the deal and instead referred a lawsuit over its terms to an appeals court.

Dollar Tree to buy Family Dollar to stave off competition
(Reuters) - Dollar Tree Inc agreed to buy rival discount chain Family Dollar Stores Inc for $8.5 billion to fend off growing competition from Wal-Mart Stores Inc and fellow discounter Dollar General Corp .

Property website Zillow to buy rival Trulia to cut costs
(Reuters) - Zillow Inc said it would buy smaller rival Trulia Inc for $3.5 billion, combining the top two U.S. real estate websites to cut costs, after they failed to produce profits from a rising number of home buyers shopping online.

Flash sale site Rue La La explores sale; Gilt interested: sources
(Reuters) - Online flash sale site Rue La La, which counts eBay as an investor, is exploring a sale that could value the company at around $400 million, people familiar with the matter said on Monday.

Airbus set to lose Japanese buyer for A380: sources
PARIS (Reuters) - European planemaker Airbus is set to lose its only Japanese customer for the A380 superjumbo as Skymark Airlines prepares to cancel an order for six jets worth more than $2 billion, industry sources said on Monday.

Singapore firm eyes Leighton property portfolio: Australian media
MELBOURNE (Reuters) - Singapore's City Developments Ltd and Australia's Stockland Group Ltd are considering bidding for Leighton Holdings' $7 billion residential and commercial property portfolio, a leading Australian newspaper reported on Tuesday.

U.S. Stock market Future Indications Update - July 29, 2014: U.S. stocks: Futures rise after Merck, Pfizer results Figures on consumer confidence, housing prices on tap -MarketWatch-.

LONDON (MarketWatch) — U.S. stock futures rose Tuesday, following better-than-expected quarterly results from drug makers including Merck & Co.
Investors are next set to assess reports that may show some slowing in U.S. housing prices and confidence among U.S. consumers.
Futures for the Dow Jones Industrial Average   DJU4 +0.07%  climbed 30 points to 16,946, while those for the S&P 500 index SPU4 +0.14% picked up 3 points at 1,976. The Nasdaq 100 indexNDU4 -0.13%  moved up 7 points to 3,967.Read more in Need to Know for Tuesday: Why short sellers are winners for 2014 so far .
A snapshot of consumer confidence from the Conference Board is due at 10 a.m. Eastern . The reading is expected to fall to 85.0 in July, after a jump in June to the index’s highest level in six and a half years. Confidence still remains well below pre-recession levels.
On tap at 9 a.m. Eastern is the Case-Shiller home price index for May, and that’s likely to show the cost of buying a home has tapered off after a significant runup last year.
Data released Monday showed pending U.S. homes sales fell 1.1% in June, the first decline in four months. That report “confirmed Fed Chair Yellen’s remarks before the Senate Banking committee earlier this month about the overall slowdown in the housing sector,” wrote Marshall Gittler, head of global FX strategy at IronFX, on Tuesday.
Yellen will lead monetary policy makers in their two-day meeting that begins Tuesday afternoon.
Ahead of the opening bell, shares of Merck & Co. MRK +1.52%   — a component of the Dow Jones Industrial Average DJIA +0.13%  — rose 1% in premarket trade after the drug maker’s adjusted earnings and sales surpassed expectations.
Shares of fellow Dow component Pfizer Inc. PFE +0.66%  gained 1.3% after the pharmaceutical company’s second-quarter results came in ahead of Wall Street’s targets.
Aetna AET -1.71%  gained nearly 5% premarket after the health insurer raised its 2014 operating earnings projection based on improvement in second-quarter results from the year-earlier period.
Logistics company United Parcel Service Inc. UPS -3.13%  dropped 3% in premarket, after missing forecasts and lowering its guidance.
Stock in Herbalife Ltd. HLF -12.34%  fell 11% ahead of the open, extending losses from late Monday when the nutritional supplements marketer posted quarterly results that missed Wall Street’s targets.
Investors will also keep watch for any update about further sanctions that may be imposed against Russia by the European Union related to its conflict with Ukraine.
After the regular session ends, Twitter Inc. TWTR +0.84%  is slated to release second-quarter results.
In Asia, most major stock markets ended higher, with Japan’s Nikkei AverageJP:NIK +0.57%  up 0.6%. In Europe, the U.K.’s FTSE 100 UK:UKX +0.47%  edged higher on upbeat earnings reports.
Oil prices CLU4 -0.59%  turned slightly lower, while gold GCU4 +0.31%   rose nearly $5. The U.S. dollar index DXY +0.08% , which measures the greenback against a basket of six other currencies, rose to 81.061 from 81.025 on Monday.
More must-reads from MarketWatch
Carla Mozee is a reporter for MarketWatch, based in London. Follow her on Twitter@MWMozee.

CNBC | Morning Squawk - July 29, 2014: Stocks get a boost from Pfizer, Merck earnings.

In the news today
Earnings from Dow-stocks Pfizer (PFE) and Merck (MRK) as well as Aetna (AET) are among today's before-the-bell reports. All three companies beat expectations, helpingU.S. stock futures turn higher in early trading. (CNBC)
Twitter (TWTR) is set to report its second-quarter results after the bell today. No matter what the company reports, the stock might fail to please investors who still have Facebook's (FB) blockbuster quarter on their minds. (CNBC)
Joining "Squawk Box" at 8:15 a.m. ET to preview Twitter's results is Youssef Squali, top Internet and media analyst at Cantor Fitzgerald. Then this afternoon, Twitter CEO Dick Costolo breaks down the numbers on "Closing Bell" at 4 p.m. ET.
As Fed policymakers kick off their two-day meeting, Wall Street isn't convinced the central bank can end its easy money policies without a market crash, a recession, or high inflation, according to a new CNBC survey.
Jeff Rosenberg, chief investment strategist for fixed income at BlackRock(BLK), joins us until 9 a.m. ET to talk about whether he thinks the Fed will be increasing interest rates sooner rather than later.
The Chinese government is confirming today that it's conducting an anti-monopoly investigation into Microsoft (MSFT), saying the firm has not fully disclosed information about its Windows operating system and Office software. (Reuters)
The buyer of Kurdish crude oil sitting off the coast of Texas is a company called Tamlay Trading of the British Virgin Islands, CNBC has learned. But it may never get custody of the oil because a Texas judge has ordered U.S. marshals to seize the cargo at the request of the Iraqi government.
U.K. oil giant BP (BP) announced today a 34 percent rise in profits, but highlighted concerns over its key Russian joint venture, which could be threatened by sanctions against Russia. (CNBC)
The U.S and Europe put aside their differences and agreed to sharply escalateeconomic sanctions against Russia over Moscow’s increased involvement in Ukraine and following the downing of Malaysia Airlines Flight MH17. (NY Times)
In a further escalation of tensions, the Obama administration accused Russia of conducting tests in violation of a 1987 nuclear missile treaty—going public with allegations that have simmered for some time. (AP)
Warning of a prolonged campaign, Israel struck symbols of Hamas control in Gaza today—defying international calls for a ceasefire in the heaviest bombardment of the fighting so far. (NBC News)

By the numbers
Following Monday’s disappointing data on pending home sales, another read on the housing market is due today with the latest Case-Shiller Home Price Index out at 9 a.m. ET. The pace of home price increases in May is seen slowing down, with economists looking for a 9.9 percent year-over-year increase in prices in the nation’s largest markets.
The Conference Board’s July Consumer Confidence Index is out at 10 a.m. ET, with consensus forecasts calling for a slight drop to 85.0 from June’s 85.2 reading.
In addition to this morning’s earnings and Twitter results this afternoon, Dow componentAmerican Express (AXP) is among the major after-the-bell releases.
Even if you're vigilant about paying bills, a delinquent debt could be dragging down your credit score. More than a third of consumers have a debt in collections on their credit file, according to a new report from Urban Institute.
Stocks to watch
UBS (UBS) today posted a rise in second-quarter net profit, as it booked a $280 million charge to help settle claims concerning German tax evaders. The Swiss bank also said it's one of several defendants in New York lawsuits over its dark-pool trading platform.
The Japanese unit of McDonald's (MCD) has withdrawn its earnings guidance for the year—saying it's working on a contingency plan, after a major meat supplier in China was shut down by regulators for food safety breaches.
Herbalife (HLF) stock was punished in pre-market trading today, after the nutritional supplement company fell short of estimates on earnings and revenue—its first miss since 2008. Last week, activist investor Bill Ackman again defended his short on the stock.
Darden Restaurants (DRI) said its CEO Clarence Otis is stepping down. The planned departure follows efforts by major shareholder Starboard Value to institute changesat the restaurant operator. Starboard will have at least three seats on the Darden board.
 Aecom Technology (ACM) plans announce the acquisition of stadium construction specialist Hunt Construction, according to the Wall Street Journal. It would be the engineering company’s second recent acquisition. Aecom bought URS Corp. for $4 billion in cash and stock earlier this month.
Ford (F) is raising prices on the newest versions of its best-selling F-150 pickup truck. The price increases will range from $460 to $3,615. The base XL will start at $26,615. The most-expensive Platinum version will start at $55,235.
A judge has issued a victory to Shelly Sterling over the objections of her estranged husband Donald Sterling—ruling she had the authority to sell the LA Clippers for $2 billion to former Microsoft CEO Steve Ballmer. (NY Times)
The Bluetooth-enabled Lechal smartshoe got off to a running start with 25,000 pre-orders, but it isn't clear whether consumers will want their feet to climb the technology ladder. (CNBC)

DealBook | Today's Top Headlines - July 29, 2014: Banks Cash In on Inversion Deals | Deutsche Bank's Profit Falls | Discount Chains Take On Big Retailers | Binary Capital Focuses on Mission.

For the latest updates, go to »
TUESDAY, JULY 29, 2014
BANKS CASH IN ON INVERSION DEALS The chief executives at JPMorgan Chase and Goldman Sachs have stated their allegiance to America, but these same banks are behind the recent spate of merger deals in which large United States corporations have renounced their citizenship in search of a lower tax bill, Andrew Ross Sorkin writes in the DealBook column. Investment banks are estimated to have collected, or will soon collect, nearly $1 billion in fees over the last three years advising and persuading American companies to move the address of their headquarters abroad.

"With seven- and eight-figure fees up for grabs, Wall Street bankers ‒ and lawyers, consultants and accountants ‒ have been promoting such deals, known as inversions, to some of the biggest companies in the country, including the American drug giant Pfizer," Mr. Sorkin writes. "None of the major Wall Street banks, which received help from American taxpayers in the form of hundreds of billions of dollars in loans, appear to have declined on principle to take an assignment from a client seeking to move its corporate citizenship abroad."

Mr. Sorkin adds: "Perhaps most troubling, many Wall Street banks are aggressively promoting these transactions to major corporations, arguing that such deals need to be completed quickly before Washington tries to block them." And while an overhaul of the corporate tax system may be the ultimate goal, gridlock in Washington suggests it is unlikely to come anytime soon. "In the meantime, more companies are expected to leave the United States," Mr. Sorkin writes. "And Wall Street banks will get paid to help them."
DEUTSCHE BANK'S PROFIT FALLS Deutsche Bank said on Tuesday that net profit fell 29 percent in the second quarter, to about $320 million, because of an overall decline in revenue and the continued cost of recovering from the effects of the financial crisis, Jack Ewing writes in DealBook. Revenue from April through June fell 4 percent, to 7.9 billion euros, in part, the bank said, because it continued to shed risky or unprofitable businesses and to reduce its dependence on borrowed money. The bank's co-chief executives focused on a 16 percent increase in pretax profit, mostly as a result of cost-cutting.

In response to recent settlements paid by other banks, Deutsche Bankincreased by €470 million the amount set aside for litigation expenses, bringing the total to €2.2 billion. Deutsche Bank's revenue from investment banking slipped 1 percent from the period a year earlier, to €3.5 billion. Profit in the investment banking unit rose 17 percent, to €885 million. A decline in fees from trading was offset by higher fees from helping clients issue shares on stock markets, the bank said.
DISCOUNT CHAINS TAKE ON BIG RETAILERS Even as the American economy appears to be improving, two of the nation's biggest deep-discount retailers are betting that a merger will help them compete for the country's poorest customers, DealBook's Michael J. de la Merced writes. Dollar Tree's proposed $8.5 billion takeover of Family Dollar Stores, announced on Monday, will form a new giant of the dollar-discount industry, which would be better equipped to take on the likes of Dollar General and Walmart Stores. By buying Family Dollar, Dollar Tree will have more than 13,000 stores in 48 states and in Canada, and more than $18 billion in annual revenue.

With the acquisition, Dollar Tree, which sells household supplies and party goods for $1 or less, will gain a retailer with a number of low-cost price points and access to poorer markets. Getting bigger may also help the pair pull together their buying power, negotiating bigger discounts from suppliers while finding ways to cut costs. The two companies expect tosave $300 million in annual costs by the third year after closing, which could prove especially important if Walmart continues to introduce more small-format stores to complement its traditional supercenter locations.

Family Dollar has been facing pressure from activist investors, including Carl C. Icahn and Nelson Peltz, to sell itself. Now, Mr. Icahn, who disclosed owning 9.4 percent of the company on June 6, is poised to walk away with a return of roughly 28 percent on his investment, William Alden writes in DealBook. Family Dollar did not say whether Mr. Icahn's lobbying was a factor in the deal with Dollar Tree, but the outcome "reaffirms Mr. Icahn's reputation as a canny investor who often seems to make money even when things do not go precisely his way," Mr. Alden adds.

Stock in Family Dollar soared as the market opened on Monday, reflecting the fact that the company has been in play for months, and the notion that other bidders might yet emerge, DealBook's David Gelles writes, though it seems unlikely that another company will make a counter bid anytime soon. For one, the deal announced on Monday includes a $305 million breakup fee that Family Dollar would have to pay Dollar Tree if the deal doesn't happen, meaning any bidder looking to top Dollar Tree's deal would have to factor that in, as well as any additional premium. Still, the possibility remains that Dollar Tree's bid could ignite a merger price war.
ON THE AGENDA The Federal Reserve's policy-making committeeconvenes for its two-day meeting. The Standard & Poor's/Case-Shillerhome price index for May is out at 9 a.m. The consumer confidence index is released at 10 a.m. Twitter reports second-quarter earnings after the market closes.

On the Hill: The House Committee on Oversight and Government Reform's Subcommittee on Economic Growth, Job Creation and Regulatory Affairs holds a hearing at 10 a.m. titled "Examining Allegations of Corruption at the Export-Import Bank."
BINARY CAPITAL FOCUSES ON MISSION The notion that the best entrepreneurs are driven by a bigger vision is front and center in the investment strategy at the new venture firm Binary Capital, Sarah Max writes in DealBook. Founded by Jonathan Teo, formerly of General Catalyst Partners, and his friend, Justin Caldbeck, Binary Capital closed its first fund on July 17, raising $125 million in just three and a half months. It turned away nearly half as many dollars.

The goal of Binary Capital's fund is to invest in 15 to 20 very early-stage consumer technology companies that have the potential to have a global impact, Ms. Max writes. The partners plan to contribute to that impact by giving a portion of their carried interest to charitable organizations chosen by their entrepreneurs. Eventually, they also hope toteam up with global nonprofit groups to use their technology and resources for causes in the developing world.
Contact: @melbournecoal | E-mail
Klépierre Agrees to Acquire Dutch Rival in $9.7 Billion Deal The all-stock deal to acquire Corio would create a combined company that owns 182 shopping centers worth more than $28 billion in 16 countries in Europe, with annual rental income of more than $1.6 billion.
Trulia often posts trends, such as this map showing the ratio of men living alone to women living alone in the New York City area.
Zillow to Buy Trulia for $3.5 Billion in All-Stock DealThe deal will create a giant repository of online listings for real estate and home values.
Tyson Foods to Sell Units to Defray Merger Costs Tyson Foods said on Monday that it would sell its Mexican and Brazilian poultry businesses to Pilgrim's Pride, a unit of Brazil's JBS, for $575 million, Reuters reports. Tyson, the world's second-biggest meat processor behind JBS, will use the proceeds to pay down debt from its pending $7.7 billion purchase of Hillshire Brands.
Donald Sterling Loses Bid to Block Sale of Clippers A judge issued a sweeping victory Monday for Rochelle Sterling, the estranged wife of Donald Sterling, ruling that she had the authority to sell the Los Angeles Clippers to the businessman Steve Ballmer, who has agreed to pay a record $2 billion for the franchise, The New York Times reports.
UBS Profit Up 15 Percent as It Grapples With Legal Matters UBS reported profit of about $875 million and disclosed that it was responding to inquiries about its private stock market, known as a dark pool, from federal and state authorities in the United States.
The headquarters of Morgan Stanley in New York.
Morgan Stanley to Increase Base Salaries for Junior Bankers The move is the latest by Wall Street to try to improve working conditions for those lowest on the totem pole.
Scott L. Bok, left, the chief executive of Greenhill & Company, and Robert F. Greenhill, the chairman, in 2006.
Greenhill Reports Lower Profit but Exceeds Expectations Amid a flurry of large deals worldwide, the boutique investment bank experienced a "relatively quiet" first half in transaction completions.
The British bank Barclays is relying on a
Whether 'Sophisticated' Clients of Wall Street Can Also Get Duped Wall Street firms accused of fraud often use the "sophisticated client" defense, arguing that their customers would not have been misled by slick marketing, Peter J. Henning writes in the White Collar Watch column.
For the latest updates, go to »
Home of the cheeseburger in paradise, Margaritaville on Duval Street in Key West in 2005.
Raine Takes Stake in Jimmy Buffett's MargaritavilleThe Raine Group has taken a minority stake in Margaritaville, the restaurant operator and brand licensing company named after the hit song by Jimmy Buffett.
Carlyle Nears $5 Billion Deal for Acosta The private equity firm Carlyle Group is said to be in advanced talks to buy Acosta Sales and Marketing in a deal that could value the consumer goods marketing agency at about $5 billion including debt, Reuters reports, citing an unidentified person familiar with the situation.
Darden Restaurants says it will use some of the proceeds from the sale of Red Lobster to pay down debt.
With Sale of Red Lobster Complete, Chief of Darden Restaurants to Step Down The chairman and chief executive of Darden Restaurants, Clarence Otis Jr., said on Monday that he planned to step down, months after waging a heated battle with activist hedge funds opposed to his turnaround plans for the embattled company.
Former Harbinger Official Settles S.E.C. Claims Over Fraud Peter Jenson, a former chief chief operating officer of Philip A. Falcone's hedge fund Harbinger Capital Partners, has agreed to pay $200,000 to resolve charges he aided a scheme to misappropriate fund assets, the Securities and Exchange Commission said on Monday.
Sales have been climbing in recent years for Virgin America.
Virgin America Files for I.P.O. Virgin America, the sleek low-cost American airline partly owned by Richard Branson, filed for an initial public offering on Monday.
WH Group Raises $2.05 Billion in Hong Kong I.P.O. WH Group, the Chinese pork producer that withdrew an initial public offering in April, has raised $2.05 billion in its new I.P.O. deal, which has attracted strong interest from retail investors, The Wall Street Journal reports.
Online Tool for Young Bankers Raises $1 Million in FundingThinknum, a start-up created by two former Wall Street analysts, allows users to share and collaborate on financial models.
Airbnb Expands Into Business Travel Airbnb introduced a new business travel initiative on Monday, expanding beyond the vacation and couch-surfing crowds the company has traditionally focused on, the Bits blog writes.
The Bear Case For Uber Venture capitalists love the on-demand car service Uber. "But if there are sane reasons to be bullish on Uber, there are equally solid grounds for doubt," Jeff Bercovici writes in Forbes.
Lloyds Bank will enter into a deferred prosecution agreement with the Justice Department.
Lloyds Bank to Pay Over $380 Million to Resolve Rate Manipulation Inquiries The British lender Lloyds Banking Group is the latest bank to admit wrongdoing by its employees in trying to manipulate the London interbank offered rate, or Libor.
A Lloyds Bank branch in London.
The Things Traders Say, Lloyds Edition "Oh dear … my poor customers …. hehehe!!" - and other communications cited by British and United States investigators into Libor manipulation.
German Group Sues to Block European Banking Union A group of euro-skeptics that has opposed Germany's participation in the currency said on Monday that it had filed a lawsuit to block a plan at the heart of efforts to prevent banking crises in Europe, The New York Times writes.