Opening Bell: 07.29.13

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Merger Is Set To Create World’s No. 1 Ad Company (NYT)
After decades of buying up boutique firms, the advertising conglomerates Omnicom Group and Publicis Groupe finally set their sights on one another. The two announced a merger on Sunday that would create the world’s biggest family of agencies, with a stock market value of $35.1 billion and more than 130,000 employees.

Moelis, Rothschild Take Lead on Omnicom-Publicis Merger (Bloomberg)
For bankers, the merger of Publicis Groupe SA (PUB) and Omnicom Group Inc. (OMC) was notable for what it didn’t involve: the participation of a single large investment bank. Instead, New York-based boutique Moelis & Co. and Rothschild, the storied Paris-based merger adviser, worked with Omnicom and Publicis, respectively, shutting out their bigger competitors. The deal, which will create a globe-spanning advertising company with a market capitalization of more than $30 billion, will also give both firms a significant jump up the league tables for merger advice. ... “The reason we didn’t add more advisers is because we didn’t need them at the end of the day,” Omnicom Chief Executive Officer John Wren said at a press conference in Paris yesterday. “Maurice and I settled many of the issues,” he said, referring to Publicis CEO Maurice Levy.

Federal Reserve 'Doves' Beat 'Hawks' in Economic Prognosticating (WSJ)
The Wall Street Journal examined more than 700 predictions made between 2009 and 2012 in speeches and congressional testimony by 14 Fed policy makers—and scored the predictions on growth, jobs and inflation. The most accurate forecasts overall came from Ms. Yellen, now the Fed's vice chair. She was joined in the high scores by other Fed "doves," policy makers who wanted aggressively easy money policies to confront a weak U.S. economy and low inflation. Collectively, they supported Fed Chairmen Ben Bernanke's strategy to pump money into the U.S. economy. The least accurate forecasts came from central bank "hawks," those who feared Fed policies would trigger rising inflation.

Barclays to give capital plans update on Tuesday (Reuters)
Barclays confirmed it will set out how it plans to meet tougher UK rules on capital on Tuesday, responding to media reports it is considering selling new shares. Barclays said on Monday it had been in talks with Britain's financial regulator and would update the market alongside its half-year results. The bank is expected either to sell bonds that are wiped out if it hits trouble, known as CoCos, or to raise equity or a combination of both.

'Fart Spray,' Deer Repellant Draw Hazmat Team To Camp Wo-Me-To (Fallston Patch)
More than a dozen campers from Camp Wo-Me-To in Jarrettsville were decontaminated and six taken to a local hospital for treatment after deer repellent and fart spray caused them physical irritation. The Harford County Hazardous Materials team was called to the Christian-run camp near Rocks State Park after a 9-1-1 call around 10 p.m. Wednesday, according to a release from Harford County Department of Emergency Services. ... The Hazmat team determined two products—a deer spray and a product labeled "Liquid Ass"—were sprayed in two different cabins on Camp Wo-Me-To grounds, according to the release.

Yield Seekers Get Their Second Wind From Fed (WSJ)
As investors search for ways to earn more income from their portfolios while interest rates are still historically low, there has been a rebound in high-income-generating stocks such as utilities, real-estate investment trusts and energy-focused companies known as master limited partnerships, or MLPs. These stocks pay out a high level of dividends or other income relative to their share prices. "Interest-rate-sensitive sectors have definitely come off their lows and recovered," said Margie Patel, who oversees more than $1.5 billion as a senior portfolio manager at Wells Capital Management. "There's still a huge fundamental demand for income, and that's what stepped in when these companies got too cheap."

What next for the 'Wall Street Refiners' as JPM exits physical commodities? (Reuters)
As JPMorgan Chase & Co prepares to exit physical commodities trading, the spotlight is turning to the future of the two banks that have dominated Wall Street's involvement in the natural resources supply chain for 30 years. Goldman Sachs and Morgan Stanley two decades ago became known as the 'Wall Street Refiners' for their mastery of both financial and physical commodities. But since 2012 Morgan Stanley has looked at selling its commodity arm and Goldman has made moves to scale back its physical operations.

Voting Rule Change Is Viewed as Crucial to Dell Founder’s Takeover Bid (DealBook)
According to recent tallies, of the roughly 1.1 billion shares that have been cast so far, about 579 million have been cast in favor, while 563 million have been voted against the deal, people briefed on the matter said. That is not enough to win at the moment, however. According to the current rules set by Dell’s board, a majority of the company’s 1.476 billion shares eligible to be voted must be cast in favor of the deal; that number excludes the 16 percent stake that Mr. Dell holds. So the more than 334 million shares that have not voted yet are treated as no votes.

Treasury pledges extra £2m for Barclays probe (FT)
The UK Treasury is expected to pledge special “blockbuster” funding to the Serious Fraud Office to back its investigation into Barclays’ emergency fundraising five years ago, in a sign of the agency’s escalating probe into the bank. ... The agency announced in August 2012 that it had “opened an investigation into certain commercial arrangements between Barclays Bank and Qatar Holding in 2008”.

Man accused of drunk boating ‘devastated’ after bride-to-be and best man died in Hudson River crash (NYP)
The banker who killed a bride-to-be and her fiancé’s best man in a grisly boat crash has a history of reckless partying — and is shaking with guilt over his role in the tragic accident, friends told The Post yesterday. A pal of JPMorgan Chase employee Jojo John said the gregarious party boy — who has a 2010 drug-possession conviction — enjoyed speeding around local waterways with friends after a few drinks.

P&G chief seizes opportunity in era of three-day stubble (FT)
Men who are more willing to shave their bodies than their faces are looming as an opportunity for AG Lafley, Procter & Gamble’s newly-returned chief executive, as he seeks to revive the struggling business.

Robber Steals $53M in Jewels at Cannes Hotel (ABC)
The gunman walked into the luxury Carlton Intercontinental Hotel at around noon and headed for "La Cote," a room housing a temporary exhibit of jewelry by the prestigious Leviev diamond house, owned by the London-based Russian Israeli billionaire Lev Leviev, that had been due to run until the end of August. "The thief in his mid-40s entered the room of the exhibition, pulled a Colt .45 out at the employees, stuffed a bag with gems and walked out of the hotel," a Cannes police officer, speaking on condition of anonymity, told ABC News. "We do not know yet if the thief had accomplices, but we are investigating everything. It's a full scale investigation."

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Credit Suisse Profit Falls (Reuters) The Swiss bank said on Thursday third-quarter net profit fell 63 percent to 254 million francs, missing analysts' average forecast of 370 million. The quarter was hit by 1.05 billion francs in charges, mainly linked to its own debt. Brady Dougan: More Tough Times Ahead For Financials (CNBC) More aggressive cost cutting will be necessary in the coming years, Credit Suisse CEO Brady Dougan told CNBC Thursday, adding that he expects the financial services industry to continue to operate in a volatile market environment. The bank is targeting cost savings of a billion Swiss francs ($1.07 billion) by next year with further cuts in the years after that. “We believe we should be in mode of driving business more efficiently. We have cut 2 billion Swiss francs in the last year and we can take another billion in 2013 and [we have] set further targets for 2014 and 2015. We want to drive that efficiency and we are in a volatile revenue environment and that’ll be the case for the industry for some time,” Dougan said. CEOs Call For Deficit Action (WSJ) Chief executives of more than 80 big-name U.S. corporations, from Aetna to Weyerhaeuser Co. are banding together to pressure Congress to reduce the federal deficit with tax-revenue increases as well as spending cuts. The CEOs, in a statement to be released on Thursday, say any fiscal plan "that can succeed both financially and politically" has to limit the growth of health-care spending, make Social Security solvent and "include comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues and reduces the deficit." The CEOs who signed the manifesto deem tax increases inevitable no matter which party succeeds at the polls in November. "There is no possible way; you can do the arithmetic a million different ways" to avoid raising taxes, said Mark Bertolini, CEO of Aetna. "You can't tax your way to fix this problem, and you can't cut entitlements enough to fix this problem." Crew Of Argentine Ship Seized By Hedge Fund Elliot Associates Returns Home (AP) They were supposed to sail the Argentine military's signature tall ship into the port of Buenos Aires in full glory after a goodwill tour asserting the South American country's place in the world. Instead, hundreds of sailors had to abandon their frigate, evacuated on orders from President Cristina Fernandez, after the ARA Libertad was detained by a Ghanaian judge in a debt dispute. Frustrated and disheartened but determined to go back as soon as possible to retrieve their three-masted ship, the sailors arrived home early Thursday on an Air France charter. The Argentine government couldn't send one of its own planes, for fear that it, too, could be seized as collateral. China Surpasses US as Top Foreign Investment Venue (Reuters) China overtook the U.S. as the world's top destination for foreign direct investment in the first half of 2012, according to the United Nations Conference on Trade and Development. China absorbed $59.1 billion in foreign direct investment (FDI) in the first six months, down slightly from $60.9 billion a year earlier, the agency said in a report. The United States attracted $57.4 billion in 2012's first half, down 39 percent from a year earlier, it said. Stephen Colbert Makes Donald Trump An Offer (Mediaite) Reality star Donald Trump yesterday offered to donate $5 million to a charity of Barack Obama‘s choosing if the President “opens up and gives his college records and applications, and if he gives his passport applications and records.” Stephen Colbert, touched by Trump’s generosity, made an offer of his own last night. He is vowing to pledge $1 million from his Super PAC to any charity Trump wants if: “…you let me dip my balls in your mouth.” Fed Steady On Policy (WSJ) The Fed expanded bond purchasing at its September meeting and plans to do its next major evaluation of its bond-buying programs at its final meeting of the year on Dec. 11-12. Policy makers are still gathering evidence on whether their programs are working. "The Committee remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions," the Federal Open Market Committee, the Fed's policy-making committee, said in a statement issued at the end of its two-day meeting. Jobless Claims Show Moderate Labor Progress (Bloomberg) Jobless claims decreased by 23,000 to 369,000 in the week ended Oct. 20 from a revised 392,000 the prior period, the Labor Department reported today in Washington. Lazard Profit Drops As Merger-Advisory Revenue Falls (Bloomberg) Lazard, the largest independent merger-advisory firm, posted a 33 percent drop in third-quarter profit as revenue from advising on mergers declined. The firm said it would implement a cost-cutting plan. Earnings fell to $35.4 million, or 26 cents a share, from $52.9 million, or 39 cents, a year earlier, the Hamilton, Bermuda-based firm said today in a statement. The average estimate of 11 analysts surveyed by Bloomberg was for per-share profit of 21 cents. Japanese man pays $780K for virginity of 20-year-old Brazil woman, who’ll use money for charity housing project (NYDN) A Brazilian student is set to sell her virginity for a staggering $780,000 after she put it up for auction online. A man called Natsu, from Japan, fended off strong competition from American bidders Jack Miller and Jack Right, and a big-spender from India, Rudra Chatterjee, to secure a date with 20-year-old Catarina Migliorini. The auction ended at 4 a.m. EST this morning, and the physical education student — who said she will use the cash to build homes for poverty-stricken families — was the subject of 15 bids. “The auction is just business, I'm a romantic girl at heart and believe in love. But this will make a big difference to my area,” she told Folha newspaper. “If you only do it once in your life then you are not a prostitute, just like if you take one amazing photograph it does not automatically make you a photographer.