Wall Street Breakfast: Earnings Season Kicks Off – Seeking Alpha

Stocks

The parent company of British newspaper and tabloid site, Daily Mail, is in talks with private-equity firms about a possible offer for Yahoo (NASDAQ:YHOO), WSJ reports. A bid is likely to take one of two forms: 1) A PE partner would acquire Yahoo’s core business, with the Mail taking over news/media properties, or 2) The PE firm would acquire Yahoo’s core business and merge its media/news properties with the Mail‘s online operations. YHOO +1.4% premarket.

SAP Chief Executive Bill McDermott has ‘perfect and clear confidence’ Europe’s largest software company will meet its full year targets despite warning on Friday that Q1 results will be weaker than expected. Sales of software licenses to corporate clients, particularly in Brazil and the U.S., fell 13% during the period, as business customers continue to shift to cloud-based software instead of older software packages. SAP +1.5% premarket.

Admitting the Priv’s price was too high, BlackBerry (NASDAQ:BBRY) CEO John Chen told The National that the company will launch two mid-range Android handsets this year – one with a physical keyboard and one with a full touchscreen. “The fact that we came out with a high end phone [as our first Android device] was probably not as wise as it should have been.” While the handset division has shown some recent signs of improvement, Chen said he would still exit the segment if it cannot achieve profitability.

Wells Fargo has reached a deal to pay $ 1.2B to the Federal Housing Administration, in what is now the biggest recovery for loan origination violations in FHA history. According to the settlement, which covers the 2000-2010 period, Wells Fargo (NYSE:WFC) “admits, acknowledges, and accepts responsibility” for having falsely certified many of its home loans and for failing to file timely reports that had material defects or were badly underwritten.

Looking to pare its balance sheet after booking record impairments, Standard Chartered (OTCPK:SCBFF) is seeking to sell major assets in Asia, Bloomberg reports. The London-based bank is speaking with potential buyers for about $ 1.4B of stressed loans made to Indian firms including GMR Infrastructure (OTC:GMQRY), and has started a sale of around $ 3B of assets across the rest of the region. Those assets include loans as well as proprietary bond and equity investments in China, Indonesia and Malaysia.

Annaly Capital Management has announced a definitive merger agreement with Hatteras Financial (NYSE:HTS), which values the latter at $ 15.85 per share, or $ 1.5B. “With the acquisition of Hatteras, we significantly grow our diversified portfolio and broaden our investment options, further fortifying Annaly’s (NYSE:NLY) position as the market leading mortgage REIT,” commented CEO Kevin Keyes. The transaction has been unanimously approved by the boards of both companies.

In a world of barely visible interest rates, it pays to borrow, rather than invest, Bill Gross told Barron’s. One way to do that is to speculate in merger-arbitrage plays where the acquiring company does the borrowing for you – think Berkshire Hathaway’s (BRK.A, BRK.B) purchase of Precision Castparts last year or the current AB InBev (NYSE:BUD) bid for SABMiller (OTCPK:SBMRY) – both of which Gross’ Janus Unconstrained Bond Fund (MUTF:JUCAX) were/are in. Other ways include closed-end funds which borrow and lever assets and mortgage REITs.

Is Italy finally fixing its banks? Treasury and central bank authorities will meet with the country’s largest lenders later today, to firm up plans on a fund to tackle bad loans. Although the details remain under discussion, it foresees the establishment of a private vehicle that will include upwards of €5B in equity contributions, and a larger debt component. The backstop fund will mop up shares in distressed lenders, while a second vehicle will seek to buy non-performing loans at market prices.

Opposition is growing in Germany to Deutsche Boerse’s (OTCPK:DBOEY) planned $ 20B tie-up with London Stock Exchange (OTCPK:LDNXF), amid mounting concerns about the merged entity if Britain votes to leave the EU. Many want the exchange to be headquartered in Frankfurt instead, to reflect Deutsche Borse’s larger market capitalization, as well as the city’s status as home to the ECB and center of the euro’s settlement, clearing and payments.

More trouble at Valeant Pharmaceuticals… A Senate committee may soon start contempt proceedings against the drugmaker’s chief executive. “Michael Pearson was under subpoena to appear for a deposition related to the Senate Special Committee on Aging’s drug pricing investigation, and he did not comply with that subpoena,” Senators Susan Collins and Claire McCaskill said in a statement. “It is our intent to initiate contempt proceedings against him.” VRX unchanged premarket.

France and Germany have joined Britain in suspending export credit facilities for Airbus (OTCPK:EADSY) jet deliveries, expanding the fallout from a potential U.K. corruption probe. Last week, the Serious Fraud Office said it found anomalies in Airbus’ declaration of overseas agents. The move leaves both the world’s largest planemakers facing paralysis over government export financing, as Congressional delays leave the U.S. Export Import bank unable to support Boeing (NYSE:BA).

An experiment in which self-driving trucks crossed Europe has paved the way for adoption of the technology ahead of a crucial meeting of EU transport ministers this week. Six European truck companies – Volvo (OTCPK:VOLVF), Scania (OTC:SVKBF), Daimler (OTCPK:DDAIF), Iveco, DAF and MAN – took part in the project, in which they drove in connected convoys along highways. The technique, known as “platooning,” permits trucks to communicate via wireless technology, allowing them to brake and accelerate together.

Volkswagen CEO Matthias Mueller will likely push for a significant reduction in bonuses for the automaker’s management board today, sources told Reuters. The proposal follows criticism from the state of Lower Saxony, one of VW’s (OTCPK:VLKAY) major shareholders, about intentions to pay extras while the company grapples with its diesel emissions crisis and prepares to slash costs elsewhere. How much of a cut is being discussed? According to Germany’s Bild am Sonntag, Mueller will ask board members to accept a voluntary bonus reduction of about 30%.

After four failed attempts, SpaceX (Private:SPACE) has finally landed its Falcon 9 rocket on a drone ship at sea. The success is a crucial milestone, as it shows the company can land its rockets both on solid ground and the ocean. SpaceX hopes to recover as many rockets as possible to cut down on cost of creating new vehicles. The Falcon 9 costs $ 60M to make and $ 200K to fuel.

TransCanada has received authorization from the Pipeline and Hazardous Materials Safety Administration to restart the 590K barrel per day Keystone crude pipeline at reduced pressure. The channel, which delivers light and heavy crude from Hardisty, Alberta, to Cushing, Oklahoma, and Illinois, was shut last Saturday after TransCanada (NYSE:TRP) discovered a tube leak in South Dakota.

BP will face further pay plan opposition at its annual meeting on Thursday after British shareholder advisory group ShareSoc joined a chorus of shareholders objecting to CEO Bob Dudley’s $ 19.6M compensation package for 2015. “We consider the pay of the CEO to be simply too high, in a year when the company suffered a record loss of $ 6.4B. Even so his pay went up by 20%,” the group said, adding that the compensation package was partly due to BP’s “excessively complex” remuneration scheme.