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Frontrunning: October 7

  • Liberian Rubber Farm Becomes Sanctuary Against Ebola (WSJ)
  • The World’s Most Powerful Central Banker: Janet Who? (BBG)
  • Islamic State moves into south west of Syrian Kurdish town (Reuters)
  • Waldorf to Be Biggest Chinese Property Purchase in U.S. (BBG)
  • Spain Seeks People in Contact With Ebola-Infected Nurse (BBG)
  • Hong Kong protests at crossroads as traffic, frustration pile up (Reuters)
  • Immigration: Grim Caseload at the Border (WSJ)
  • China Cuts Thousands of ‘Phantom’ Workers From State Payroll (BBG)
  • U.S., U.K. Regulators Push to Settle Deutsche Bank Libor Case This Year (WSJ)
  • Wall Street Moles Go to NY’s Top Cop, Spurning SEC Cash (BBG)
  • Pimco's outflow headaches only just beginning (Reuters)
  • Japan Lawmakers Flag Need for Exit Strategy as Yen Falls (BBG)
  • At 78, Former Executive Still Flips Burgers for $7.98 (BBG)
  • Marc Andreessen on Finance: ‘We Can Reinvent the Entire Thing’ (BBG)
  • Russia Spends $1.68 Billion Reserves in 2 Days to Buoy Ruble (BBG)
  • AT&T Says Employee Gained Unauthorized Access to Data (BBG)
  • Samsung Electronics heads for annual profit fall after weak third-quarter guidance (Reuters)
  • Rio Tinto rejects Glencore merger approach amid iron ore slump (Reuters)
  • Millennials Spurring Canadian Condo Boom Bet on Rates (BBG)
  • A Trader Nicknamed ‘BearWhale’ Is Freaking Out the Bitcoin Markets (NYMag)


Overnight Media Digest


* The U.S. Supreme Court effectively expanded the right of gay marriage to more than half the nation Monday as it let stand lower-court rulings that struck down bans in five states. (

* After months bemoaning Democrats' financial advantage, the National Republican Senatorial Committee collected a record $15.5 million in September - more than doubling its August haul of $6 million. (

* A group of volunteer scientists and immigrant-rights activists are helping officials in Texas identify unknown migrants who die each year trying to sneak across the U.S.-Mexico border. (

* Latin America is on track this year to post its slowest rate of annual growth since 2009, when the global financial crisis began to be felt in the region, the World Bank said Tuesday. The bank cut its growth forecast for the region by nearly half to 1.2 percent, following expansions of 2.4 percent and 3 percent in the previous two years. (

* Samsung Electronics Co estimated its third-quarter operating profit more than halved from a year earlier, hit by weak smartphone sales, forcing the company to rely more on its chip business to drive future earnings growth. As stiff competition from Chinese vendors continues to pressure its mobile division profit, investors have sold off Samsung shares on concerns about its outlook. (

* Hackers who breached JP Morgan's computer network earlier this year also tried to infiltrate a number of other financial institutions, but the companies believe they were unsuccessful. (

* Glencore approached Rio Tinto in July about a takeover that would have been among the biggest deals in mining history, but its proposal was rejected. (

* U.S. regulators on Monday said they would review the overall process for deciding whether big financial firms are "systemically important." The move, announced at a meeting of the Financial Stability Oversight Council, showed how the group of top U.S. regulators is trying to fend off criticism from the financial industry and members of Congress while also establishing itself as the prime U.S. watchdog for spotting financial-system risks. (

* Hilton Worldwide Holdings Inc is selling its flagship hotel, the historic Waldorf Astoria in Manhattan, for $1.95 billion, illustrating the heated competition - particularly among foreigners - for famous luxury properties that only a few years ago struggled to fill their rooms. (

* Regulators are in talks with Deutsche Bank over a possible settlement of hundreds of millions of dollars to resolve rate-rigging allegations. (

* Blackstone Group LP and Carlyle Group LP are exploring new ways to buy global companies in partnership with major investors, including potentially making acquisitions outside their existing funds, according to people familiar with the firms' thinking. (

* Apple Inc last year said it would invest $700 million to build the world's biggest artificial-sapphire factory. On Monday, the company running that factory - GT Advanced Technologies Inc - filed for bankruptcy protection. The bankruptcy filing comes less than a month after Apple unveiled new iPhones with glass screens, rather than sapphire. (

* Live Nation Entertainment Inc is in talks to buy a majority of C3 Presents, the promotion company behind festivals such as Lollapalooza and Austin City Limits, according to a person familiar with the matter. (

* After spending seven years persuading companies to go public, Duncan Niederauer is switching sides. The former chief executive of the New York Stock Exchange's parent is taking a part-time role at Battery East Group LLC, a small firm that helps private companies raise money from big investors. (



The European Commission is set to begin a formal probe into allegations that Luxembourg allowed Inc to benefit illegally from state subsidies for its European operations for almost 10 years, the Financial Times reported on Monday.

Volkswagen AG said it will use robots to cope with the shortage of workers caused by Germany's retiring baby boomers, to ensure that the car manufacturing is not affected.

Former Deutsche Bank AG CEO Josef Ackermann has been nominated as chairman of Bank of Cyprus, its U.S. based investors Wilbur Ross and Tyrus Capital said on Monday.

Euro Disney said on Monday it had agreed a 1 billion euro funding deal backed by its largest shareholder, the Walt Disney Co, which includes a share sale and a debt restructuring, to allow it to invest in the business.



* The Justice Department is preparing a fresh round of attacks on the world's biggest banks, again questioning Wall Street's role in a broad array of financial markets. The Justice Department has widened its focus to include a criminal investigation into banks that set an important benchmark for interest rate derivatives, a previously unreported development that coincides with international regulators proposing overhauls to the rate-setting process. (

* Henry Paulson, who was Treasury secretary when the government rescued the American International Group, said on Monday that a bankruptcy of the insurance giant would have been "catastrophic" for the economy, but acknowledged that the terms of the government's bailout were "punitive." (

* In the latest move, Blockchain, a Bitcoin wallet provider and software developer, is expected to announce on Tuesday that it has closed a roughly $30.5 million fund-raising round, led by Lightspeed Venture Partners and Wicklow Capital. The investment, raised from Blockchain's first round of outside financing, is one of the biggest in the digital currency industry to date.(

* Postmedia Network Canada Corp will buy Quebecor Inc's Sun Media newspaper assets for C$301 million ($269.62 million) for the group, which includes The Toronto Sun and The London Free Press. (

* Electra Private Equity said on Monday that its shareholders had rejected a bid by activist investor Edward Bramson for two seats on the firm's board. The rejection came after a spirited back-and-forth between Electra, a British private equity firm, and Sherborne Investors Management, Mr. Bramson's New York-based investment vehicle, in the weeks ahead of Monday's shareholder meeting. (

* Thrive, which has invested in popular start-ups like Instagram and Warby Parker, plans to announce on Monday that it has raised a new $400 million fund, its third since its founding four years ago. Money for the new fund came from existing investors like Princeton University and the Wellcome Trust, as well as new mostly not-for-profit institutional investors. (

* Late Monday in New York, Rio Tinto, the British-Australian mining giant, said it had been approached by its smaller rival Glencore Plc about a $150 billion merger, but declined to pursue a deal. (

* A week after California enacted a landmark law restricting the ways education technology companies can use the information they collect about elementary through high school students, a group of leading industry players is pledging to adopt similar data protections nationwide. The 14 companies include Microsoft Corp ; Houghton Mifflin Harcourt, the educational publishing house; Amplify, a developer of digital curriculums; and Edmodo, an online network for schools that allows teachers to assign homework and measure students' progress. (




** Prime Minister Stephen Harper invited the front-runner for Toronto's mayor election John Tory to meet with him in Ottawa, The Globe and Mail has learned. Harper - a public supporter of the Ford family before the drug and police scandals of the past year - sought a meeting with Tory at which the pair discussed a wide range of topics, including the mayoral race and the future of Canada's largest city. (

** The number of Canadian military advisers deployed to Iraq is rising as the Harper government defends its plan to send CF-18 fighters to strike Islamic State militants by telling Parliament that humanitarian aid alone is an insufficient response to the Mideast crisis. (

** Cpl. Ron Francis, the New Brunswick Mountie who garnered national attention for smoking medical marijuana while in uniform, has been found dead of an apparent suicide. Francis made national headlines last year after he complained he wasn't allowed to smoke medicinal marijuana for post-traumatic stress disorder while in uniform. (


** In an attempt to shelter himself from accusations of anti-Semitism following a Toronto mayoral debate, Doug Ford declared on Monday that his wife is Jewish. (

** State-owned Kuwait Foreign Petroleum Exploration Co. (Kufpec) is investing $1.5-billion in Chevron Corp's liquids-rich shale resources in about 330,000 net acres in the Kaybob area of the Duvernay in west-central Alberta, the companies said. Chevron will remain the operator and has commenced a full appraisal drilling program that ends in 2017. (

** Air Canada and its pilots' union have reached a tentative 10-year labour deal, a full year and a half before the current contract expires, in a signal that once-icy labour relations are beginning to thaw. (



The Times

Bank to ring-fence balances up to 1 million pounds

Bank customers who place large temporary sums in their accounts after selling their home or inheriting money will qualify for special protection under new Bank of England proposals. Under the financial regulator's plans, "temporary high balances" of as much as 1 million pounds (1.61 million US dollar) will qualify for the full deposit protection that applies only to the first 85,000 pounds of money in a bank.(

Recession looms over eurozone amid German factory slowdown

German factory orders collapsed in August at the fastest rate in five years as investor confidence in the eurozone took another beating. Amid fears that the currency bloc is slipping back into recession, economists said that the shock slump in Germany made the prospect of full-scale quantitative easing more likely. (

The Guardian

Virgin Atlantic scraps Little Red domestic services

Virgin Atlantic has announced plans to scrap its domestic airline, Little Red, after just 18 months. The carrier has struggled to fill seats on its flights linking London Heathrow with Edinburgh, Aberdeen and Manchester and finally admitted defeat after weeks of speculation that the operation would be axed. (

Tesco turns to Ikea and Compass to beef up board

Tesco Plc has bolstered its board with the appointment of the former Ikea chief and the chief executive of Compass as non-executive directors. The composition of the supermarket's board has been criticised after a series of profit warnings and last month's revelation that expected first-half profits had been overstated by 250 million pounds. (

The Telegraph

BSkyB shareholders wave through Sky Europe takeover

British Sky Broadcasting Group Plc shareholders have overwhelmingly approved the company's plan to buy Sky Deutschland and Sky Italia from Rupert Murdoch's Twenty-First Century Fox Inc. (

France cautions Germany not to push Europe too far on austerity

France has denounced the Eurozone' s austerity regime as deeply misguided and issued a blunt warning to Germany and the EU institutions that demands for further belt-tightening may set off a political backlash, endangering European stability. (

Sky News

TPG Eyes 2 billion pounds bid for Tesco Clubcard arm

Sky News has learned that TPG, one of the world's biggest buyout firms, made an approach several months ago to Tesco Plc about acquiring Dunnhumby, a wholly owned subsidiary that bankers say is worth well over 2 billion pounds. (

Banks face shake-up at payments firm Vocalink

Sky News has learned that Andrea Leadsom, the city minister, and Mark Garnier, an influential member of the Treasury Select Committee, recently met bank executives and the boss of Vocalink to discuss the company's future ahead of the launch of the independent payments industry regulator next spring. (

The Independent

Walt Disney in 1 billion euros bail-out for loss-making Euro Disney theme park

Walt Disney Co has come to the rescue of its loss-making French theme park with plans for a 1 billion euros (1.26 billion US dollar) bail-out. The funding deal for Euro Disney could see the suburban Paris-based theme park removed from its French stock market listing. (

Conde Nast moves beyond print in profit squeeze

Even magazines giant Conde Nast is feeling the squeeze as the publisher of Vogue and GQ diversifies beyond print by investing more in technology, ecommerce and education. Pre-tax profits at UK arm Conde Nast Publications tumbled 16 per cent to 8.8 million pounds last year, with revenues dipping 6.3 per cent to 110 million pounds.(

Corporate Finance

* Private-equity firm TPG has approached troubled British grocer Tesco PLC to buy its data gathering and analysis subsidiary Dunnhumby, which is worth well over 2 billion pounds ($3.21 billion), the Sky News reported on Monday.

* Occidental Petroleum Corp, the fourth-largest U.S. oil and gas producer by market capitalization, is looking to sell its North Dakota oil assets for as much as $3 billion as the company seeks to focus on profitable regions, Bloomberg reported on Monday.

* Live Nation Entertainment Inc, the concert and ticketing giant, is in advanced talks to buy a majority stake in C3 Presents, an independent concert promoter, whose portfolio includes the popular Lollapalooza and Austin City Limits festivals. The prospective deal that has been in negotiations for months but still not completed, would give Live Nation a stake of 51 percent in C3 Presents and value C3 at around $250 million, the New York Times reported, citing two people with knowledge of the talks. (

* Blockchain, a Bitcoin wallet provider and software developer, is expected to announce on Tuesday that it has closed a roughly $30.5 million fund-raising round, led by Lightspeed Venture Partners and Wicklow Capital. The investment, raised from Blockchain's first round of outside financing, is one of the biggest in the digital currency industry to date, the New York Times reported. (

* Billionaire Patrick Drahi's cable and telecoms company Altice SA is looking to acquire the Portuguese assets of Brazilian carrier Oi SA, a source familiar with the matter told Reuters.

* Apollo Global Management LLC and Riverstone Holdings LLC are preparing Talos Energy LLC for an initial public offering that could value the oil and gas company at over $2 billion, including debt, according to people familiar with the matter.

* Spanish power firm Iberdrola has hired JPMorgan Chase & Co to sell some foreign renewable assets which could raise up to 2 billion euros ($2.52 billion) to help fund an acquisition in the fast-growing U.S. market, three sources with knowledge of the matter said.

* Thailand's Bangkok Airways Co Ltd launched on Monday an up to $604 million initial public offering that people familiar with the deal said was priced lower than previous plans as prospects for a pick-up in tourism remain weak.



Fly On The Wall Pre-Market Buzz


Domestic economic reports scheduled for today include:
JOLTS job openings for August at 10:00--consensus 4.71M
Consumer credit will for August at 15:00--consensus up $20.0B



Air France-KLM (AFLYY) upgraded to Overweight from Underweight at JPMorgan
Alcobra (ADHD) upgraded to Outperform from Market Perform at FBR Capital
Becton Dickinson (BDX) upgraded to Buy from Hold at Stifel
CNOOC (CEO) upgraded to Outperform from Market Perform at Bernstein
China Unicom (CHU) upgraded to Overweight from Equal Weight at Barclays
Crown Holdings (CCK) upgraded to Outperform from Neutral at Macquarie
Dick's Sporting (DKS) upgraded to Buy from Neutral at Goldman
Fortuna Silver Mines (FSM) upgraded to Outperformer from Sector Performer at CIBC
Horsehead Holding (ZINC) upgraded to Outperform from Market Perform at FBR Capital
Ingersoll-Rand (IR) upgraded to Buy from Neutral at Goldman
IntercontinentalExchange (ICE) upgraded to Buy from Neutral at Citigroup
Leidos (LDOS) upgraded to Neutral from Underperform at Credit Suisse
MGM Resorts (MGM) upgraded to Buy from Hold at Deutsche Bank
Natus Medical (BABY) upgraded to Outperform from Market Perform at William Blair
Noodles & Company (ndls) upgraded to Buy from Hold at Jefferies
RockTenn (RKT) upgraded to Buy from Neutral at BofA/Merrill
Sun Life Financial (SLF) upgraded to Overweight from Equal Weight at Barclays
WellCare (WCG) upgraded to Buy from Neutral at Sterne Agee
Yamana Gold (AUY) upgraded to Neutral from Underweight at HSBC


Alcobra (ADHD) downgraded to Hold from Buy at Canaccord
BAE Systems (BAESY) downgraded to Hold from Buy at Cantor
CareFusion (CFN) downgraded to Neutral from Overweight at JPMorgan
Commerce Bancshares (CBSH) downgraded to Underperform at Raymond James
Dunkin' Brands (DNKN) downgraded to Hold from Buy at Jefferies
Great-West Lifeco (GWLIF) downgraded to Equal Weight from Overweight at Barclays
Hibbett Sports (HIBB) downgraded to Neutral from Buy at BofA/Merrill
Las Vegas Sands (LVS) downgraded to Hold from Buy at Deutsche Bank
PG&E (PCG) downgraded to Fair Value from Buy at CRT Capital
Ryanair (RYAAY) downgraded to Neutral from Overweight at JPMorgan
Sunesis (SNSS) downgraded to Hold from Buy at Cantor
Sunesis (SNSS) downgraded to Neutral from Buy at Roth Capital
Total System (TSS) downgraded to Equal-Weight from Overweight at Evercore
U.S. Bancorp (USB) downgraded to Market Perform from Outperform at Raymond James


Apple (AAPL) reinstated with a Buy at BofA/Merrill
Aratana Therapeutics (PETX) initiated with an Overweight at Piper Jaffray
BioMed Realty (BMR) initiated with a Buy at Mizuho
BlackBerry (BBRY) initiated with an In-Line at Imperial Capital
CBOE Holdings (CBOE) initiated with a Neutral at Citigroup
Hibbett Sports (HIBB) initiated with a Neutral at Goldman
Karyopharm (KPTI) initiated with an Outperform at Wedbush
Keurig Green Mountain (GMCR) initiated with a Buy at Goldman
Materialise (MTLS) initiated with a Buy at Canaccord
NRG Yield (NYLD) resumed with a Neutral at Citigroup
Navios Acquisition (NNA) initiated with a Buy at GMP Securities
Paylocity (PCTY) initiated with an Outperform at Northland
ReWalk Robotics (RWLK) initiated with a Buy at Jefferies
ReWalk Robotics (RWLK) initiated with a Hold at Canaccord
ReWalk Robotics (RWLK) initiated with an Equal Weight at Barclays
Salem Communications (SALM) initiated with a Buy at Noble Financial
TESARO (TSRO) initiated with a Buy at Jefferies
UnitedHealth (UNH) initiated with an Overweight at Piper Jaffray
Vantiv (VNTV) initiated with an Outperform at Pacific Crest
Vectrus (VEC) initiated with a Buy at CRT Capital
VeriFone (PAY) initiated with an Outperform at Pacific Crest


The European Commission opened an in-depth investigation to examine whether the decision by Luxembourg's tax authorities with regard to the corporate income tax to be paid by Amazon (AMZN) in Luxembourg comply with the EU rules on state aid
Rio Tinto (RIO) confirmed no discussions taking place with Glencore
Yara International (YARIY) CEO Jørgen Ole Haslestad resigned amid CF (CF) merger talks
Turner Broadcasting System, a subsidiary or Time Warner (TWX), will reduce its global workforce of some 14,000 full-time employees by approximately 10%
Zillow (Z) reported 82.81M monthly unique users in September


Companies that beat consensus earnings expectations last night and today include:
CalAmp (CAMP)

Companies that matched consensus earnings expectations include:
Container Store (TCS), Team (TISI)

Samsung (SSNLF) reports Q3 operating profit guidance 4.1T won vs. 10.20T won last year
Aegion (AEGN) reduces FY14 EPS guidance to $1.27-$1.37, consensus $1.54
Adobe (ADBE) targets FY15 adjusted EPS approximately $2.00, consensus $2.07
IDT Corp (IDT) reports Q4 adjusted EPS 39c, one estimate 37c
Container Store (TCS) sees FY14 adjusted EPS 41c-46c, consensus 49c
Container Store (TCS) raises FY14 EPS view to 52c-57c with gains, from 49c-54c


Justice Department set to attack more large banks by year end, NY Times reports (BAC, C, GS, UBS, DB, BCS, JPM;MS, USB, WFC)
Deutsche Bank (DB) in talks to settle rate-rigging allegations, WSJ reports
Live Nation (LYV) in talks to acquire majority stake in C3 Presents, NY Times reports
Visa's (V) CIO leaves company to join Charles Schwab (SCHW), Re/code reports
Becton Dickinson (BDX) acquisition of CareFusion (CFN) will benefit investors, Barron's says


BreitBurn Energy (BBEP) files to sell 14M common units representing limited partners
Burlington Stores (BURL) files to sell 8M shares for holders
KCAP Financial (KCAP) files to sell 3M shares of common stock
Kosmos (KOS) files to sell 15M shares for holders
Natural Resource Partners (NRP) 8.5M share Secondary priced at $12.02
iBio (IBIO) files to sell 23.42M shares for holders