Big dollars pouring in to big deals today with three multibillion dollar mergers, two of the Worlds Largest advertising agencies agreed to merge. France will create a new ad biamus. And the scale and power to better compete for digital ad space. Also today, a big deal in the Luxury Retail space. Canadas Largest Department store chain, which already owns lord taylor is paying about two and a half billion dollars in cash for saks 5th avenue. The company will have 320 stores in some of the biggest cities in north america. A mega pharmaceutical merger, perago is paying for alon corp. , opening the way for it to move to ireland for much lower tax rate and to expand into italy. A smaller deal to tell you about, Sinclair Broadcasting group is buying eight abc affiliates along with a 24hour cable news channel in washington, d. C. , for just under 100 billion. The current owner is the owner of politico. Why is all this corporate buying going on now . Joining us to answer that, richard peterson, the direct irof valuations and risk strategies at s p 500 capital iq. Its Pretty Amazing to have all of these deals clustered together. Why now . Well, suzie, i think what we were saying, its a continuation of what has been transpiring over the past several years. If you look back in 2012, we had over 900 billion in announced transactions so far this year. Over 550s about. Some of these deals were in play earlier, for example, the alon deal announced today iks earlier this year Royalty Pharma made an unsolicited bid for the irish company. They rejected that offer and went about putting themselves into play, in terms of saks 5th avenue, weve seen strong activity in the corn assumer sector. Actually a treasurer, marquis name that investors are gravitating too. Some of these deals seem random as far as industries go. Have you them in drugs and television and retail and so forth. Is there any particular sector of the economy where you expect the activity to really get hot, and specifically talk about the advertising business. That one, omnicon is a huge deal, with the potential to spark new ones, right . In terms 6 sectors, its really the same cast of characters. Its financial, its health care, its technology, in regard to the advertising transaction today, its really a response to facebook. Facebook beat earnings expectations last week, these companies now are looking rather than promoting ideas or concepts, trying to create big data and try somehow to put out information that can grab different markets, i think were going to see more of that type of deal in a sense that competing with the facebooks of the world. And the googles of the world for that matter. I think, if you look at deals forthcoming, where you see potential activity in the cable tv sector, again, in big pharma, looking at response to health care regulation. That sector has over 200 billion or more available on the Balance Sheet to make acquisitions. You mentioned possibilities of ordeals and we have a graphic of some of the names, you went out on the limb to give us some names so investors can take advantage of the trend. Lets pull that up on the screen. How is there an urgency to get this done this year . Management has to be cognizant of the shareholders. Interest rates may come into play somewhat. We saw a tenyear yield. Potential buyers may be skiddish. They may go higher, maybe celebrating a deal now rather than later. I think in general, whats going to drive deals. Theyre going to continue to provide value to shareholders, sometimes these deals come about not as opportunity but as necessity. The fact that they need to expands competitive measures. Several years ago, when kraft foods acquired cadbury. Some of these deals were for cash, why . First of all, the cash is available. One thing too, cash is cheap. Even the fact that the rates have gone up a little bit over the past several weeks, Companies Still have the credit markets, can tap the bank loans, i go back to the fact that if you look at Nonfinancial Companies and the s p 500, they have about 1. 8 trillion available dominated by industrials, health care technology. And industrials last year, when eaten acquired cooper poc, an irish industrial firm. Thank you so much. Really appreciate you coming on the program. My pleasure. Richard peterson. Stocks edged a bit lower today on wall street, despite all those big named mergers we were just talking about. Investors appeared to be cautious ahead of this weeks twoday policy meeting. And fridays employment report for the month of july. Pending home sales for june, which turned slightly lower, coming off a sixyear high in may. Some analysts worried that rising Mortgage Rates would keep some would be home buyers on the site lines. The dow finished 36 points lower, the nasdaq off by 15, and the s p 500 lost 6. Cbs has waged a bitter standoff, centering on how much the cable giant pays cbs to retransmit signals in three major tv markets. Talks are ongoing with a new deadline set for 8 00 p. M. Eastern time tonight. Will the two reach a deal or will cbs tv stations go dark for millions of time warner subscribers . Julia boers ten joins us with the latest. Its really coming down to the wire, season the it . It is, but i have to say the fact that Time Warner Cable and cbs decided to extend their deadline by three hours until 8 00 p. M. Eastern tonight. Foregoing a potential blackout that could have happened at 5 00 p. M. Eastern, does seem like a good sign, like theyre getting closer to a deal. Cbs has made it clear, its willing to pull the plug on its channels if it cant get the price increases it wants. This media battle is contentious, because the core of the broadcast model is at stake. Hit shows like under the dome and radon van may be lost to time warner subscribers in new york and texas. Time warner cable says the price hike to provide cbs is unreasonable. The question is how much more time warner is willing to pay. What do subscribers think about a risk of a blackout . Theyre not happy, and willing to go elsewhere to find the content they want to watch if they cant find it on television. Heres what a slew of tv fans in new york and los angeles had to say. If theyre Holding People hostage, thats not a Good Business practice, i dont think. I dont know, go to netflix, i guess. Definitely a different avenue, netflix, hulu. I was under the impression free tv was free. They want their shows. There has to be a compromise somewhere. Dont get rid of channel 2. Im not over 50, so i dont have cable. I just search for things on the internet. And thats the big worry. With young people already questioning the value of cable, the question is, if a blackout of cbs for Time Warner Cable customers would drive them to cut the cord and simply find content elsewhere. Suzie . Well, you know, what do you think the chances are that cbs and time warner will come to a deal by the deadline . You know, i think the chances are actually pretty high right now. If you asked me before 5 00 p. M. , would i have said there would have been a good chance of a blackout. The fact that they came to an agreement to extend their negotiations for another three hours, makes it seem like they think they can probably resolve it in another three hours. Im over 50 and i still have cable. There have been lots of examples of cases like this, involving abc disney properties, i believe fox had one with another cabling provider. Most of the time these things get resolved, dont they . Well, they always get resolved eventually, and theres always some sort of compromise. The cable or the satellite tv provider, always sees some sort of increase. The question is how big of an increase, sometimes they do take a while to get resolved. Last year around this time, direct tv was in a battle with viac viacom, there were 20 million direct tv customers who didnt have access to mtv and nickelodeon, that went on for nine days, did eventually get resolved. This one i dont think will last that long. Julia, thank you very much. The raging battle over the future of the computermaker dell is also making news tonight. Michael dell says that even if shareholders reject his 24 billion offer to take the company private, hell stay on at the company. Carl ikon whose competing offer to share 40e8ders would keep dell publicly traded, warned the latest buyout skipped over an important shareholder safeguard, by making them vote and preventing them from passively descenting on the officer. Just a day before the president visits an amazon. Com warehouse in chattanooga tennessee to talk about jobs for the middle class, amazon said today it plans to hire 7,000 workers in 13 states. About 5,000 of those jobs will be at amazon distribution centers, where orders are packed and shipped. And the rest will be at Customer Service positions. Apple is in the crosshairs again. A Labor Rights Group is accusing apple of abusing some of its workers in china. China labor watch says that peglatron, a Chinese Company that makes iphones for apple, withholds employees pay, forces them to work extra hours. Prices are up 8 cents a gallon nationwide over the past two weeks. The latest sr. Have a shows a gallon of regular unleaded will now cost you 3. 67 on average. Chicago is the most expensive city to fill up, the average price there, 4. 10. Charleston, South Carolina has the nations lowest at 3. 34. Crude prices are up, gasoline prices are up, and this coming week, we get the latest earnings from some of the worlds Biggest Energy companies. Jackie deangelis has a look at whats ahead. Reporter the large cap sector has seen a 15 gain year to date. Its the middle of the road performance when compared to the other sectors. Will earnings give Energy Companies a jolt . Energy companies have come under pressure this year as falling bread prices have impacted their earnings as well as falling production volumes. Bp is the 23i6r9 to report on tuesday. The Company Beat Expectations last quarter, helped by two new oilfields and strong trading profits. Analysts typically strip out the special items and look for adjusted profit to be ahead of consensus. Bp is fighting lawsuits over the deep water horizon disaster more than three years ago. Looking to halt bill payments. Possible misconduct is investigated. A federal judge denied that request. Bps earnings are going to be weighed down by claims resulting from the macondo well spell from a few years ago. At the same time, theyre finishing up their Rehabilitation Project at the whiting facility. Theyre not going to see any profiting from that until the end of 2013. Experts are expecting revenues to be down on the prior year, in the teens, but they are looking for an apsb. Of course, that will depend on how margins are trending and how exxon is managing its costs. I expect that exxon is going to beat its expectations. The refining sector is going to weigh down exxons results. Natural gas prices are 15 higher. And thats going to help boost their earnings. Finally on friday, we hear from chevron. Wall street is expecting revenue and earnings to show a drop from the same quarter last year, when the Company Reported a big earnings beat. You could see this stock pop. For nightly Business Report, jackie deangelis. Still ahead, now you see it, now you dont. Online messages that selfdestruct. Its been popular on College Campuses for a while. It may be finding a new fan base on wall street. Well tell you why. Take a look at how the in R International markets close. Good news from washington, the u. S. Government expects to borrow 209 billion in the current quarter, thats 14 billion less than previous forecasts. And the tresh oarry expects to have a cash balance of 95 billion on hand when the fiscal period concludes at the end of september. The reason for that higher balance. Payments to uncle sam from the bailed out mortgage giants, fannie mae and freddie mac. The chairman of the Federal Reserve may have to give a deposition in a lawsuit over the bailout of insurance giant aig. A federal judge ruled that ben bernanke can be questioned in a lawsuit filed by the former ceo of American International group. Maurice greenberg is suing the federal government over the 182 billion bailout of the firm saying the terms of the deal were too costly. And hes seeking at least 25 billion back. The judge approved the questioning of a sitting fed chairman in a civil lawsuit saying bernanke has firsthand knowledge of the governments decision to bail out aig at the height of the financial crisis. Two dow components at the top of market focus tonight. First pfizer announcing innovation and exclusivity a day ahead of its Earnings Reports. They gained a half percent to close at 29. 54. And caterpillar. After a poor Earnings Report last week said it will buy back a billion dollars of its common stock from the french bank. Ceo doub doug oberhellman said caterpillar closed at 82. 03. Cf industries soared today. Hes taking a stake in the fertilizer company. The management should deliver a much larger dividend to his hedge fund. Shares of cf jumped almost 12 on heavy volume closing at 202. 30. Herbal life surged after the bell on earnings thabeet estimates on profits and remember news. The Nutritional Supplement revenues gained for the full year. They closed at 60. 57 and popped higher on the earnings news. And solid quarterly profits and revenues from express scripts after the market closed today. Both numbers were better than analyst estimates. The company, the largest pharmacy benefit manager in the u. S. Also upped its fullyear guidance. Shares traded down 1 for the regular session, closing at 66. 93. Have you heard of snapchat . Lots of people have. Its a program that lets smart phone and computer users send messages, pictures, videos to other users and seconds after theyre viewed they disappear. Theyre gone. Well, so thats the claim. Snapchat has made its way from school yards and College Campuses all the way to wall street. Are those messages really gone for good . And is sending now you see it, now you dont messages a good thing or can it be abused . In a world where the web is a weapon and an email can indict, social media that selfdestructs is a gold mine. As soon as theyre viewed theyre deleted from our servers. Snap chat is a 10 second timebomb for pictures and messages. Theyre gone from our servers for good. The ceo co founded the company from his stanford dorm room. Less than two years later, users send more than 200 million snaps a day. New York Magazine says mls wall streets been busy snapchatting. Whether embarrassing or excessive, its only short lived. Whats innocent could easily turn illicit. Theres a very good possibility and a lot of potential for wall street traders to be using that for insider trading. Unbeknownst to wall street, when asked if snap chat was being investigated. I dont know what youre talking about. It wont be that way forever. Law enforcement is always try to take the lead. Nobody should feel safe because youre using a particular method of communication. Emails are now the heart of the most high profile lawsuits in high finance from fabulous Goldman Sachs trader to steve cohen on the hook for his employees insider trading. Both defending content thats come back to haunt them. Is snap chat the answer . Hickman warns, even the most efemoral technology has a loophole. You think somebodys deleted. But once someone gets ahold of that phone, and they want to recover it, for a legal purpose or any type of nefarious use, you can do that within only a couple hours. Snap chats biggest risk, not a screen grab, but a subpoena. For nightly Business Report, kayla toushi. Are you at risk of hidden charges on your credit card . Theyre unwanted but not illegal. They may be costing you hundreds of dollars a year. Lets get a check on how commodities, treasuries and currencies performed today. The merger between usairways and American Airlines could sooning cleared for takeoff. European regulators are set to give the okay to the 11 billion deal creating the Worlds Largest airline. Approval hinges on the combined carriers agreeing to surrender several aircraft slots at airports in london and philadelphia to rival airlines. From the skies to the roads. Ford is recalling 33,000 late model hybrid cars to repair a component in the roof that did not meet federal requirements for protecting against head injuries. Thankfully no accidents or injuries have been reported because of the problem. Another big auto maker unveiled a brand new line of all electric and hybrid cars today. Hoping theyll become the industry standards. Bmw introduced its new i3 sedans. Made of lightweight carbon fiber and getting as much as 100 miles on one charge. Some models will have a tiny two cylinder gas engine that can double the cars driving range. The i3 hits u. S. Showrooms next 13ri spring. How many times have you signed up for something because it was free, only to learn you have been zapped with charges you never expected . Its happening to millions of us, and the cost is staggering. Sharon epperson has more. 27yearold athena carp noticed a strange charge on her credit card bill last summer. I was frustrated and confused because i didnt know what it was. Earlier in the year, she registered for wifi service at the airport. During the next six months she was hit with a recurring monthly charge of nearly 10. She didnt realize that was part of the deal. I was shocked i had fallen a victim of a service where so many other people have had really bad experiences. Boingo says its charges are explicitly stated in the signup process. But theyre not obvious to consumers. Nearly half of these gray charges are for services that offer customers a free trial, and that later convert to a paid subscription. Companies bank on people forgetting they signed up on those offers or missing the fine print. These are not illegal, they are not flawraudulent. Theyre sneaky, theyre tedious. Now, a new study finds theyre really adding up. Consumers are paying more than 14 billion in gray charges each year. Broken down another way, one in every three credit or debit cardholders in the u. S. Pay an average of 215 a year. The most common gray charges were between 20 and 50 last year. Also gym memberships, magazine sub scrubs and mail order programs. Consumers are most vulnerable online. Thats the Online Purchases where consumers are giving their card information, accepting these kinds of free offers that trigger gray charges. She learned her lesson the hard way. I have these moments where im about to type in my credit card information, i have so much fear of, its going to be a recurring fee. She now makes sure to read carefully before she clicks. Nor nightly Business Report, im sharon epperson. Its so easy to be duped, 7 here, 10 there. If you dont check the box, your subscription rolls over and you continue to be charged. You really do have to watch very closely. Finally tonight is the biggest jewelry heist in years, and it sounds like it came right out of a hollywood movie. A lone gunman was able to hold up as many as three security guards at the Carlton Intercontinental Hotel and make off with a staggering 136 million in diamonds and other jewelry from a diamond show being held at the hotel. The entire heist took only about a minute. 136 million . Wow we want to hear from you. Let us know which stocks youd like our market monitor to discuss this coming friday. Log on to our website and click on the link to submit your question along with where your from. Thats nightly Business Report for tonight. Thanks so much for joining us. Thanks from me as well, tyler mathisen, have a great evening, everybody. We hope youll join us here again tomorrow night. Welcome to film School Shorts, a showcase of the most exciting new talent from across the country. Experience the future of film next on film School Shorts. Film School Shorts is made possible by a grant from Maurice Kanbar celebrating the vitality and power of the moving image and by the members of kqed. Boy my mother was the first person in town to die from the mold
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