Liberty Global Finalizes Acquisition of Virgin Media

By Minyanville Staff  FEB 06, 2013 5:15 PM

Today's financial recap and tomorrow's financial outlook.

 





There was no economic data released today and Treasuries remained strongly bid throughout the day. Equities attempted to open lower, but buyers showed up and equities finished the day unchanged. Crude oil futures opened the day down as much as 2%, but after mixed inventory data from the Department of Energy in the mid-morning, retraced all of its losses to finish slightly positive.

This morning, Liberty Global (NASDAQ:LBTYA) finalized its deal to acquire Virgin Media (NASDAQ:VMED) for $47.87 per share in cash and stock, or the equivalent of $16 billion. The move will push Liberty into the British cable TV market, and it is a very lucrative deal. Both Virgin Media and Liberty Global sank as the increased debt load from the acquisition will hurt the cash flow of the companies.

British bank Royal Bank of Scotland (NYSE:RBS) settled its claims with the US CFTC and British BBA over LIBOR manipulation today. The bank was fined $612 million by regulators and will be forced to claw back up to three-quarters of bonuses paid out to employees who were implicated. The fine is the second largest levied against a bank for LIBOR manipulation, with UBS (NYSE:UBS) being fined over $1.5 billion.

The US Postal Service will discontinue Saturday mail delivery service by August in an attempt to save money over the next few years, though package delivery service will continue. The USPS is expected to show a $16.7 billion loss this fiscal year.

After the close, Green Mountain Coffee Roasters (NASDAQ:GMCR) beat earnings, reporting EPS of $0.76 vs $0.65 estimates and revenues barely nudged higher at $1.34 billion vs $1.33 billion estimates. Forward guidance was lower than expected, which caused the stock to drop more than 9% in the post-market.

Tomorrow's Financial Outlook

Tomorrow we will see a return to some volatility after today's sluggishness. The ECB will release its monthly rate decision, the first one to draw any attention in quite a while. The ECB is likely to comment on the repayment of 3-year LTRO funds that were issued last year during the height of the crisis and its outlook on where the euro has gone. During the prior two meetings, much of the council was torn on whether or not a rate cut would be necessary. For tomorrow's decision, the unanimous consensus is that the central bank will leave its benchmark interest rate unchanged at 0.75%.

The Bank of England will also make its monthly monetary policy decision, with no change anticipated for the main rate.

In the US, the weekly jobless claims will be released with only a small improvement to 360,000 from last week 368,000 expected. The prior two weeks of claims have seen sharp volatility as seasonal adjustments caused fluctuations. Near the close, the Federal Reserve will release consumer credit data from December, with a modest expansion of $14 billion estimated.

In earnings, Starwood Hotels (HOT), Advance Auto Parts (AAP), Phillip Morris (PM), Cigna (CI), Sprint (S), Activision Blizzard (ATVI), OpenTable (OPEN), LinkedIn (LNKD), Coinstar (CSTR), Riverbed Technology (RVBD), and American Capital Agency (AGNC) will report.

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