Good morning! Here’s what you need to know:
Alibaba’s Record-Breaking IPO May Already Be Covered. “Alibaba Group Holding Ltd. has received enough orders for its record-breaking initial public offering to cover the entire deal within just two days of its launch, people familiar with the IPO process said on Wednesday,” reported Reuters’ Jessica Toonkel, Olivia Oran, and Elzio Barreto. “There was no indication as to where most of that demand was in the $US60-$66 per share indicative range for the IPO, said the people, who couldn’t be named because details of the offering demand aren’t yet public.”
… Investors Say Alibaba’s Jack Ma Is Killing It … “While corporate governance remains a concern, several fund managers and analysts said [Alibaba CEO] Ma gave an impressive performance during the company’s pitch in Boston on Tuesday for what stands to be the largest-ever U.S. technology IPO,” reported Reuters’ Tim McLaughlin. “He’s executed well,” said Will Danoff, who runs Fidelity Investments’ $US111 billion Contrafund.
… But None Of Alibaba’s Bankers Have The Whole Story. “Alibaba Group Holding Ltd.’s desire to keep tight control over its $US21.1 billion share sale has left a vacuum at the helm of its banking syndicate, leading underwriters to take unusual steps to manage the offering, according to sources familiar with the situation,” reported Reuters’ Liana Baker, Elzio Barreto, and Olivia Oran. “The move gives Alibaba control of the process as no one bank has a complete picture of what is going on. It also helps avoid potential pitfalls of relying too much on one institution. Facebook’s botched 2012 IPO was also one of the reasons for this choice, sources have previously said.”
Dollar General Goes Hostile With Family Dollar Bid. “Dollar General Corp. said it would take its $US9.1 billion offer directly to shareholders of Family Dollar Stores Inc., after being spurned twice by its smaller rival,” reported Reuters’ Siddharth Cavale. “The company said it had started a tender offer to buy all shares of Family Dollar for $US80 per share.”
Microsoft Is Near A $US2 Billion Deal. “Microsoft Corp. is in serious discussions to buy Mojang AB, the Swedish company behind the popular ‘Minecraft’ video game, according to a person with knowledge of the matter,” reported the Wall Street Journal’s Evelyn Rusli, Shira Ovide, Sven Grundberg, and Joann Lublin. “The deal would be valued at more than $US2 billion and could be signed as early as this week, the person said. A Microsoft spokesman declined comment, as did Mojang Chief Executive Carl Manneh.”
U.S. Mortgage Applications Drop. The MBA Mortgage Applications Index dropped by 7.2% during the week ending Sept. 5, a sign that fewer Americans were on the market to buy a home.
Sign Of Life In The French Economy. Industrial production activity unexpectedly climbed by 0.2% month-over-month in July; economists were expecting a 0.5% decline from the ailing economy. “A second month of positive growth in the French industrial sector is encouraging, but mean-reversion in energy production is distorting the headline print,” noted Pantheon Macroeconomics’ Claus Vistesen. “Energy production was up 2.0% month-on-month with the other key goods production components weak across the board. The improvement is real, but we would like to see more broad-based gains across sectors before we get too optimistic.”
Markets Are Mixed. In Europe, Britain’s FTSE is up 0.2%, France’s CAC 40 is up 0.1%, and Germany’s DAX is flat. Asia closed mixed, with Japan’s Nikkei up 0.2% and Hong Kong’s Hang Seng down 1.9%. U.S. futures are up modestly with Dow futures up 13 points and S&P futures up 1.4 points.
Ackman Goes Hyperbolic On Allergan. “Allergan has distinguished itself in running the most shareholder-unfriendly, hostile defence process perhaps in the history of corporate America,” said Pershing Square Capital’s Bill Ackman in a letter to Allergan’s board. Ackman and Valeant Pharmaceuticals are currently trying to take over the Botox-maker.
Santander Chairman Dies. “Emilio Botin, one of Spain’s most powerful men who transformed Santander from a small domestic lender into the eurozone’s biggest bank, has died of a heart attack, aged 79,” reported Reuters’ Sonya Dowsett and Sarah White. “The bank said on Wednesday it would hold a board meeting later in the day to nominate a successor as chairman. Analysts and investors have long expected this would be Botin’s eldest daughter, Ana Botin, who heads Santander’s British business.”