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Media Digest 10/9/2008 Reuters, WSJ, NYTimes, FT, Bloomberg

247wallst — Thu, 09 Oct 2008 02:59:22 +0000

According to Reuters, the US Treasury may buy interests in large banks following the model set up by the UK.

Reuters reports that IBM’s (IBM) earnings strength helped calm tech investors.

Reuters reports that MetLife (MET) and The Hartford (HIG) may be in merger talks.

Reuters reports that the deal for Citigroup (C) and Wells Fargo (WFC) to buy Wachovia (WB) has been hung up on the poor quality of Wachovia’s assets.

Reuters reports that Boeing (BA) and its union are seeking federal mediation over their strike.

The Wall Street Journal writes that central bank lowered rates on the same day to try to stimulate the credit markets.

The Wall Street Journal reports that AIG (AIG) needs more capital than the first $85 billion the government put in and will get another $37.8 billion.

The Wall Street Journal reports that Morgan Stanley (MS) tried to calm investors after its shares fell again.

The Wall Street Journal reports that Walgreen (WAG) dropped its deal for Longs Drugs (LDG) because of a worsening credit market.

The Wall Street Journal reports that the deep recession in California may be an example of what may happen in the rest of the country.

The Wall Street Journal reports that The Federal Reserve Bank of New York has summoned participants in the credit-default-swap market to another meeting.

The Wall Street Journal reports that EMI plans its own online music service.

The Wall Street Journal reports that the economy hurt most September results for retailers.

The Wall Street Journal writes that investors hope GE (GE) will not hit them with bad results.

The Wall Street Journal reports that Temasek, Singapore’s sovereign fund, passed on taking a stake in Bank of America (BAC)

The Wall Street Journal says that the SEC wants companies to do a better job of explaining how they value trouble assets.

The Wall Street Journal reports the United Technologies (UTX) will raise its dividend.

The Wall Street Journal reports that investors in Yahoo! (YHOO) are looking for a savior to improve that company’s share price.

The Wall Street Journal reports that Broadcom (BRCM) filed another patent suit against Qualcomm (QCOM).

The New York Times reports that Russia is struggling to keep market open because they are in a free fall.

The New York Times reports that pending home sales rose over 7% last month.

The New York Times reports that Microsoft (MSFT) will release new games in Japan to try to improve market share for the Xbox 360.

The FT reports that Libor is up despite rate cuts.

The FT reports that distressed debt levels hit a five-year high.

The FT reports that markets are bracing for the end of short-selling rules.

The FT reports that the IMF sees that current credit crisis as the worst shock to the economic system since the 1930s.

Posted in Press Digest Tagged: AIG, BA, BAC, BRCM, C, GE, HIG, IBM, LDG, MET, MSFT, QCOM, UTX, WAG, WB, WFC, YHOO

Longs Merger Plot Thickens (LDG, WAG, CVS)

247wallst — Wed, 17 Sep 2008 08:19:43 +0000

Longs Drug Stores Corporation (NYSE: LDG) is doing something which may seem odd to many, which is essentially a "going with the bird in the hand" strategy. The company has just announced that its board of directors has determined not to have buyout discussions with Walgreens (NYSE: WAG). This was after consultation with its legal and financial advisors. Walgreens had sent Longs an expression of interest that was announced on September 12.

Longs has decided to proceed with itsmerger offer from CVS Caremark (NYSE: CVS). There are many reasonscited for this rejection including regulatory concerns, a lack of aroadmap, a lack of shareholder compensation over delays, and theexpression of interest being non-binding.

Longs shares are actually down almost 2% at $75.00 in pre-markettrading. Here is the issue at hand. The CVS bid is $71.50 andWalgreens has indicated that it is willing to pay $75.00. There aresome potential antitrust problems and it is believed by many that arival bid would take much longer into 2009 to close than the CVS offer.

Now it boils down to one thing: Will Walgreens come back with a higher bid that forces Longs’ board of directors to play along?

Jon C. Ogg
September 17, 2008

Can Longs Buyout Save Drug Store Sector? (LDG, CVS, RAD, WAG)

247wallst — Wed, 13 Aug 2008 07:39:48 +0000

Longs Drug Stores Corporation (NYSE: LDG) is trading way up this morning after last night’s announcement that CVS Caremark Corporation (NYSE: CVS) will acquire the company. In a definitive agreement reached, Longs will receive $71.50 per share in cash in the buyout. After the assumption of debt and items, this buyout is valued at roughly $2.9 Billion.

CVS Caremark is getting 521 retail drugstores located in California,Hawaii, Nevada and Arizona as well as (and perhaps more important) theRx America subsidiary. Rx America offers prescription benefitsmanagement services to more than 8 million members and prescriptiondrug plan benefits to approximately 450,000 Medicare beneficiariesthroughout the US.

Longs has annual revenues of over $5 billion and this merger completionis expected in the fourth quarter of 2008. The deal is set to bedilutive to earnings in the first year and accretive to EPS beginningin 2010. CVS Caremark expects to achieve significant cost synergies ofapproximately $100 million in 2009 and approximately $140-$150 millionin 2010.

Caremark has been a great winner over the last few years and has beenrange-bound over the last 12 months. While Longs was already close to a52-week high, this represents an all-time high back into the 1980′s.

This merger also has shares of the troubled Rite Aid Corp. (NYSE: RAD)up at $1.40 after closing at $1.28 yesterday. Its shares have beentroubled for longer than anyone would care to recall, and we won’t evenspeculate at what price it would require from a buyer for "long andwrong" buried stock holders to approve a deal there if it was even made.

Walgreen Co. (NYSE: WAG) is indicated down slightly at $37.00 as it isdeemed as now being behind CVS on the deal curve. That stock isalready way down from highs north of $50.00 and up until the recentmoves it could be called dead money for the last 5-year period.

Jon C. Ogg
August 13, 2008

Top 10 Pre-Market Analyst Calls (CEL, EVEP, GMT, ITRN, CEC, LDG, NSM, SLRY, ELOS, TIVO)

247wallst — Thu, 15 May 2008 06:43:57 +0000

Analyst coverage is looking pretty thin on individual calls this morning, but here are ten of the analyst calls we are looking at this Thursday morning:

Cellcom Israel (NYSE: CEL) raised to Buy at Jefferies.
EV Energy (NASDAQ: EVEP) started as Buy at Citigroup.
GATX (NYSE: GMT) Raised to Outperform from Market Perform at Morgan Keegan.
Ituran Location and Control (NASDAQ: ITRN) raised to Overweight at JPMorgan.
CEC Entertainment (NYSE: CEC) cut to Hold at KeyBanc Capital Markets.
Longs Drug Stores (NYSE: LDG) Started as Buy at UBS.
National Semiconductor (NYSE: NSM) cut to Neutral at Merrill Lynch.
Salary.com Inc. (NASDAQ: SLRY) Cut to Market Perform from Outperform at Wachovia.
Syneron Medical (NASDAQ: ELOS) raised to Buy at Merriman Curhan Ford.
TiVo (NASDAQ: TIVO) Raised to Market Perform at FBR.

Jon C. Ogg
May 15, 2008