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Opening Bell: 5.2.07

Dow Jones Holders Say Murdoch Bid May Trigger Auction (Bloomberg)
Last night, after word came out that the majority of the Bancroft family's shares were opposed to the merger, something a little surprising happened, the market didn't seem to believe it. After surging during the day, the stock basically held onto its gains after the news, in after hours trading. In other words, people are confident that a deal of some sort is going to get done. Naturally, some are suggesting that a number of other bidders will emerge, with names such as GE (cause of its CNBC unit) and the Washington Post getting thrown around. But we're skeptical that anyone else will line up to the plate right now, particularly at these prices. As for private equity, Rupert Murdoch probably hit the nail on the head when he said that his own offer is too big and generous to be topped by a private equity firm. Oh yeah, and get this, some money manager out there told Bloomberg that Google might be interested. That guy should lose his license.
AutoSales Reveal the Slow Motion Slowdown Continues (The Big Picture)
Barry Ritholtz recently had a post looking at the way the housing slowdown was affecting other parts of the economy. It wasn't pretty. The upshot was that the slowdown was, well, slowing things down. Today the Journal picks up on this story, noting the deterioration in the US car market. Even Toyota is seeing a sales slump! This would definitely seem like cause for worry, as it underscores the argument that the economy is all based on housing and when that goes, the rest goes. Toyota!?
Yum Brands Makes Gains, Mostly in Sales at China Unit (NYT)
Who says our trade with China is a one-way street? Why says that we get electronics and plastics, and in exchange all we give them is IOUs? Obviously nobody who pays attention to Yum Brands, as its KFC, Taco Bell and Pizza Hut chains are doing quite nicely in China, thank you very much. Sales there grew by 31%, pushing the company's over growth to 14%, which is pretty solid. Granted, some will argue that all of the food probably comes from China, and that we're not exporting anything. That's not true though -- we're exporting a brand, and the profit margins on a brand are way more than they are on a chicken thigh.
Big Profits Made in Dow Jones Calls (WSJ)
Well duh. This is becoming a regular occurrence. A day or two after every single buyout announcement, it's revealed that some folks out there made some particularly well-time trades, netting them enormous profits in a short period of time. Why should this be a surprise? The offer has apparently been on the table for two weeks, during which time lots of people will find out about it, some of whom will quietly mention it over a drink at a bar, and some of those people who heard it will mention it to someone else (cause they were crossing their fingers when they promised not to tell), and a handful of someone else's will place some speculative bets on it. Get over it.

FDA: Contaminated feed could affect farms nationwide (CNN)
The FDA has said that the issue of contaminated feed is likely to affect farms nation wide, including many that rear animals for human consumption. Lovely. At first we were thinking that there may be a silver lining in all of this, that this episode might reveal that the entire food chain is sort of messed up, and that it's ridiculous how much certain grains are at the core of everything we eat. But if anything, expect more subsidies to American farmers, so that they can better compete with the Chinese, melamine-adding counterparts. Probably good news for ADM.
A chilly quarter for profit at ADM (Tribune)
Speaking of ADM, the food purveyor to the world, the company reported punk earnings in its most recent quarter, as massive interest in ethanol failed to make up for what was a weak quarter agriculturally. The company blamed -- get this -- frozen rivers during the wintertime, which prevented barges from getting where they needed to be. Analysts were apparently (and rightly) skeptical, since every winter gets cold. In fact, this winter was unseasonably warm, if we recall correctly, so the frozen rivers argument doesn't really hold up
Cablevision Nears Deal With Dolans (NYT)
According to people in the know (hope they've got their calls lined up), Cablevision is finally close to selling itself to its founding family, the Dolans, which will resolve a multi-year, tortured negotiation. Thank god. This story went on way too long. All they have to do now is sign the dotted line, wait for the Ben Stein column that bashes the deal, and then move on.
Hawaiian Telecom Bids Aloha to Directories Unit (Dealbook)
This isn't a particularly exciting or relevant story, but we just mention it because we're constantly amazed at how much phone books are worth. Hawaiian Telecom, which publishes 10 directories on Oahu, Maui, Kauai and the Big Island is dumping the unit for $435 million. Sure, their circulation is high, but does anyone actually read it?