U.S. Markets closed

M&A Monday; Market Movers for the Week Ahead; Apple-Related Accusations

Dan Berman
Hot Stock Minute
M&A Monday; Market Movers for the Week Ahead; Apple-Related Accusations

It's an M&A Monday with a number of noteworthy deals announced. Among them, U.S. generic drug maker Perrigo (PRGO) is buying Dublin-based Elan (ELN) for $8.6 billion. The deal follows three hostile takeover bids for Elan from Royalty Pharma. The new company will be based in Ireland where the corporate tax rate is 12.5%. Elan is up more than 10% in early trading, adding to gains of 39% so far this year. Perrigo is down 2%, taking away from gains of 26% since the year began.

Another deal being digested today will create the world's biggest advertising firm. In a merger announced last night Omnicom (OMC) and France-based Publicis are merging to form a $35-billion powerhouse. The deal is designed to restore the balance of power between ad agencies and Silicon Valley behemoths like Google (GOOG) and Facebook (FB). But it could face regulatory scrutiny. As for other M&A activity this Monday, Canada's Hudson's Bay is buying luxury department store chain Saks (SKS). Also, Michigan-based Penske (PAG) is buying Australia’s "Western Star Trucks" for $200-milion.

We've got a busy week on the business calendar. Not only are we in the middle of earnings season. The FOMC begins a two-day meeting tomorrow. Then, on Wednesday we get our first reading on Q2 GDP. And on Friday, comes the big jobs report for July. So, how are all these likely to affect the markets in the week ahead? Yahoo! Finance Senior Columnist Mike Santoli has more in the video above.

There are new allegations of worker abuse at an Apple (AAPL) supplier in China. This time factories owned by Taiwan's Pegatron are under suspicion. In a report being released later today, Pegatron is accused of withholding employee pay and ID cards that workers needed to get jobs elsewhere. There are also claims of safety violations and poor living conditions. Apple has been shifting work away from Foxconn. In March of law year, three Foxconn plants were found to be in violation of Chinese last and Apple policies. One other note this morning about Apple, Bob Mansfield has been removed from the company website. He had been head of technologies for the company making $85-million a year. Now he's working on special projects.


Hertz (HTZ) matched on estimates this morning with its quarterly report. The car rental giant posted earnings of 45-cents a share on roughly $2.7 billion in revenue. Those numbers are records for the company which has now acquired former competitor Dollar Thrifty. Moving forward, the company is reaffirming its guidance for the year. Hertz is up 60% year-to-date, and has climbed 134% over the past year.

The Loews (L) controlled by the Tisch family (not to be confused with the home improvement chain) has posted earnings. The company missed earnings estimates by a dime posting 69-cents a share. Despite the miss on estimates, the company saw a surge in profits as its CNA Insurance group put Hurricane Sandy further behind it. Loews stock has been up about 11%. It's up 16% over the past 52 weeks.

Express Scripts (ESRX) reports after the closing bell. The company is expected to see a significant rise in earnings: $1.10 a share compared to 88-cents last year. However, consensus is for a revenue drop of more than $2-billion to about $25.5 billion. Year-to-date the stock is up about 22%, and just hit a 52-week high on Friday.

Herbalife (HLF) reports after the closing bell. This company, of course, has been in that tug of war between billionaires Bill Ackman, who calls the business model a Ponzi scheme, and Carl Icahn who's long the stock. Herbalife is expected to show significant growth over last year with earnings of $1.18 a share on $1.16-billion in sales. By the way, Icahn is the winner so far in the test of wills with the stock up 82% year-to-date. One other note on Icahn regarding his battle for Dell. This morning he said he opposes Michael Dell's proposal to change voting rules as shareholders decide the future of the company. Over the weekend Michael Dell said he won't be sweetening his new offer for $13.75 a share.