Monday's Early Headlines
- CIT Group Scratching to Survive. - CIT Group (CIT) remains in active discussions with its principal regulators on ways to improve its near-term liquidity position, the company said. The troubled commercial lender said it is discussing its application to participate in the Federal Deposit Insurance Corp.'s Temporary Liquidity Guarantee Program, as well as liquidity solutions that don't involve access to the program. CIT said it is in talks for the near-term transfer of assets into CIT Bank through certain waivers and the transfer of its vendor finance and trade finance businesses into CIT Bank. If approved, these transfers would enhance CIT's liquidity position, the company said in a statement late Sunday.
- UBS, U.S. Agree to Delay of Litigation. - Swiss banking giant UBS (UBS) and the U.S. and Swiss governments agreed to a 15-day suspension of litigation related to the Internal Revenue Service's effort to identify thousands of suspected American tax evaders. The Associated Press reported Sunday that the parties were seeking a settlement and asked a federal judge to delay high-stakes hearings on the Internal Revenue Service's efforts.
- Geithner To Discuss Finance Rules With U.K. Leaders. - Treasury Secretary Timothy Geithner on Monday plans to meet with U.K. Prime Minister Gordon Brown and Chancellor of the Exchequer Alistair Darling to discuss the details of U.S. and U.K. efforts to stem the financial crisis, according to a report in The Wall Street Journal. Discussions this week will range from volatility in commodity prices to financial regulations to Iran sanctions, Treasury staffers told the Journal.
- RHJ Says Opel Talks at 'Advanced Stage.' - RHJ International confirmed Monday it is negotiations with General Motors (GMGMQ) about an acquisition of a majority stake in GM's European unit Opel. It was reported by The Financial Times that RHJ was putting together an improved offer for Opel with plans to present the offer to GM either Monday or Tuesday.
- Microsoft Pitching Razorfish to Ad Firms. - Microsoft (MSFT) is pitching to five of the world's biggest advertising companies a deal to buy its digital ad agency Razorfish, The Wall Street Journal reports, citing executives familiar with the situation. The pitch from the software giant includes a proposal to use Microsoft's advertising technologies and possibly buy hundreds of millions of dollars of ad space across its Web properties, the report said.
- Microsoft's Software Battle with Google Heats Up. - Elsewhere, Microsoft will step up its battle with Google (GOOG) this week as it is set to launch online versions of some of its core software, including final plans for a "cloud" operating system designed to extend Windows to the Internet, according to The Financial Times. The news comes days after Google announced its own operating system, dubbed Chrome OS, to compete with Microsoft's own Windows.
- Bank of America Trying to Avoid $4 Billion Government Fee. - Bloomberg reported Monday that Bank of America (BAC) is trying to avoid paying billions of dollars in fees to U.S. taxpayers for guarantees against losses at Merrill Lynch, saying the rescue agreement was never signed and the funding never used. Regulators contend Bank of America owes at least part of a $4 billion fee it agreed to pay in January because the company benefited from implied U.S. backing on about $118 billion of Merrill Lynch assets, such as mortgage-backed bonds, the report said, citing people familiar with the matter.
- Japanese Beer Makers in Merger Talks. - Kirin Holdings and Suntory Holdings are in merger talks in a move that could create a formidable competitor to the world's leading brewer, Anhesuer-Busch Inbev N.V, according to The Wall Street Journal. If the merger goes through, it would create a food-and-beverage giant with combined sales in 2008 of 3.8 trillion yen ($41.12 billion). That includes about 1.2 trillion yen worth of beer sales, the report said.
Earnings and Economic News
- Philips Profits Plunge as Sales Fall 19%. - Consumer electronics makers Philips Electronics (PHG) reported second-quarter net income of 44 million euros ($61.4 million), a 94% decline from year-earlier net income of 732 million euros as sales fell 19%. However, earnings before interest, taxes and amortization of 118 million euros topped the estimates of analysts surveyed by Thomson Reuters.
- Earnings Due After Monday's Close - CSX Corp. (CSX) and Novellus (NVLS) are expected to report quarterly results after 4 p.m. EDT Monday.