Good morning. Here’s what you need to know.
Pfizer wants to buy Allergan for up to $US380 per share. “Pfizer Inc’s talks to acquire Allergan Plc in a $US150 billion deal that would see the U.S. drug giant redomicile in Ireland accelerated on Wednesday, as the U.S. Treasury prepared to clamp down further on such tax inversions,” Reuters’ Greg Roumeliotis and Kevin Drawbaugh reported. “Pfizer is negotiating a price of $US370 to $US380 for each Allergan share, a person familiar with the discussions said, asking not to be identified because the talks are confidential. Allergan shares ended trading on Wednesday at $US310.8 per share.”
Square’s IPO price is set, and it’s ugly. Payments startup Square will go public at $US9 per share. Selling 27 million shares, the company will raise $US243 million. At that price, the company is valued at $US2.9 billion, down from the $US6 billion valuation it had after its previous round of financing in October 2014.
The “Tinder” IPO price is set, and it’s not great. Online dating conglomerate Match Group priced its IPO at $US12 per share, giving the company a $US2.9 billion valuation. This was the low end of the $US12 to $US14 range it had in mind. It will be selling 33.3 million shares to raise $US400 million.
Best Buy is tanking. Best Buy reported Q3 results and they weren’t great. Comparable store sale increased by 0.8%, missing expectations for 1.0% growth. Earnings of $US0.41 per share was a bit stronger than the $US0.35 expected. The stock is down 6% in pre-market trading.
Keurig Green Mountain is going bananas. Shares of the coffee maker are surging after the company released Q3 results. Sales fell 13% to $US1.04 billion, which wasn’t as bad as the $US1.03 billion analysts had forecast. Earnings came in at $US0.85 per share, which was higher than the $US0.70 expected. “I’m particularly pleased with the benefits realised from our cost reduction efforts as well as our strong cash generation, both of which exceeded expectations in the fourth quarter,” CEO Brian Kelly said. “While we expect marketplace conditions will remain challenging in the near term, we have a stronger product line-up and price positioning as we enter the new holiday season.”
Starboard tells Yahoo to forget about spinning off Alibaba. “Starboard Value LP is putting new pressure on Yahoo Inc., calling on the company to halt the spinoff of its stake in Alibaba Group Holding Ltd. and instead sell its beleaguered Internet business,” the Wall Street Journal’s David Benoit and Douglas MacMillan report. “In a letter it sent Yahoo late Wednesday, the activist investor says Yahoo’s planned spinoff of more than $US20 billion in shares of the Chinese e-commerce giant now carries too much risk. That represents a change from Starboard’s stance last year, when it urged Yahoo to make the separation. The letter, which was reviewed by The Wall Street Journal, expresses frustration with Yahoo’s response to the activist.”
Japan reports an unexpected trade surplus. Japan reported a trade surplus of 111.5 billion yen for October. Economists were expecting a deficit of 246.3 billion yen. “The surprise surplus came courtesy of an unexpected plunge in imports,” Business Insider’s David Scutt observed. “From a year earlier they slipped by 13.4%, down on the 8.6% decline expected, with the contraction the steepest recorded since March this year.”
UK retail sales slump. Retail sales in the UK fell 0.6% in October, which was worse than the 0.5% decline expected by economists. “October’s drop in retail sales mainly reflects the unwinding of temporary stimuli rather than a weaker trend in consumer spending,” Pantheon Macroeconomics’ Samuel Tombs said. “Food store volumes fell by 1.3% from their level in September, which was boosted by consumers stocking up ahead of the Rugby World Cup. Meanwhile, clothing sales fell 1.8% month-to-month, perhaps reflecting milder-than-usual weather in October depressing demand for winter clothing lines.”
Markets are up. US futures are in the green with Dow futures up 40 points and S&P futures up 7 points. Asian market closed in the green with Japan’s Nikkei up 1.0% and Hong Kong’s Hang Seng up 1.6%. European markets are trading higher with the UK’s FTSE 100 up 1.3%, Germany’s DAX up 1.5%, France’s CAC 40 up 0.7%, and Spain’s IBEX up 1.0%.
Some good economic data on deck. At 8:30 a.m. ET, we’ll get the latest weekly tally of initial jobless claims and the November reading of the Philadelphia Fed Business Outlook index. For a complete preview of these events. Check out BI’s Monday Scouting Report.
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