• Northrop unloads TASC. Northrop Grumman (NOC) agreed to sell its TASC consulting unit to a pair of private-equity firms – KKR and General Atlantic – for .65B. TASC unit provides engineering and consulting services to the U.S. military and state governments. Northrop said it expects the sale to generate net cash proceeds of .1B, which it will use to repurchase shares. The deal is the latest in a recent uptick in LBO acquisitions which have returned after a two-year dry stretch. Still, with four banks – Barclays (BCS), Royal Bank Of Canada (RY), Deutsche Bank (DB) and a lending unit of the CPP – combining to put up senior debt of well under B, today’s deals are still a far cry from the mega-mergers of the credit boom.
  • G-20 keeps drip open. G-20 leaders said it’s too early to withdraw global stimulus efforts despite signs that a global economic recovery is underway. "Economic and financial conditions have improved following our coordinated response to the crisis," officials said in a communique (.pdf) following a two-day gathering in St. Andrews. "However, the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern. To restore the global economic and financial system to health, we agree to maintain support for the recovery until it is assured." Stocks, commodities and futures rallied Monday: "Markets don’t need to be worried that these governments and central banks are suddenly going to take away all the stimulus measures," one strategist said. "Risk appetite should remain supported into the end of the year."
  • Put up or shut up day for Kraft. Kraft (KFT) could raise the cash portion of its bid for Cadbury (CBY) to 400p ahead of today’s deadline, and is expected to take the bid directly to Cadbury’s shareholders. Kraft has enlisted Royal Bank of Scotland (RBS), Credit Suisse (CS), Barclays (BCS) and BNP Paribas to help provide a £5.5B bridge loan. Kraft’s initial bid of 300p and 0.2589 KFT shares per CBY share was valued at 745p/share, but is now worth about 720p with the decline in Kraft’s stock. According to U.K. takeover rules, by launching an offer today Kraft would set in motion a 28-day deadline to publish a prospectus on the offer for Cadbury shareholders, and would have 60 days to collect enough shares to clinch a deal.
  • Healthcare bill: next stop Senate. The Obama healthcare overhaul passed a House vote by a narrow margin Saturday (220-215), setting up a fractious debate in the Senate – where Democrats don’t enjoy the same broad majority – this week. The bill would cost .05T over a decade to provide health insurance to another 36M Americans. It requires most Americans to carry insurance, creates a new exchange where they can shop for it, and gives low income earners tax credits to help them pay for it. In an appearance Sunday, Obama said he is "absolutely confident" a healthcare bill also will pass through the Senate.
  • Sprint group to pour another .5B into Clearwire. Sources say Sprint Nextel (S) and a number of its Clearwire JV (CLWR) partners are preparing to pump another .5B or more into the wireless broadband provider. The Sprint group first invested .2B in Clearwire 18 months ago, taking a majority stake in a bet on Clearwire’s version of 4G wireless broadband, WiMax. Some rivals have favored a comparable technology knows as LTE. B of a new infusion would come from Sprint, with Comcast (CMCSA), Intel (INTC), Time Warner Cable (TWC) and Bright House Networks kicking in another 0M. Google, a key JV partner, isn’t thought to be involved in this round.
  • Comcast, GE agree on CNBU valuation. After weeks of wrangling, GE (GE) and Comcast (CMCSA) reportedly agreed to value NBC Universal at about B, and a deal to give Comcast a 51% stake in GE’s media and entertainment arm could come as early as this week, though it’s still unclear whether 20% NCBU stakeholder Vivendi has signed off on the proposal. Sources say the pair met last week with debt-raters to ascertain the impact of B in debt a new NBCU would assume as part of the combination, and hope this week to be told it would be considered investment grade.
  • Murdoch paper cleared of spy charges. The U.K. Press Complaints Commission said Monday it has found no proof journalists at Rupert Murdoch’s The News of the World regularly hacked the phones of public figures to secure sensational stories. The probe was prompted after reports in The Guardian said the practice at the tabloid was widespread. In response, the Guardian described the PCC’s report as complacent, saying the PCC did not have the "ability, the budget or the procedures to conduct its own investigations"
  • Axa Asia Pacific shuns B bid from parent. Axa Asia Pacific (AXAPY.PK), the Australian unit of France’s biggest insurer (AXA -1.1% premarket), rejected an unsolicited B bid from its parent and AMP Ltd. (AMLTF.PK). CEO Rick Allert said Axa Asia Pacific would consider a higher offer, but called today’s offer too low. Axa said today it will raise £2B through a rights offer to finance acquisitions.
  • Brown backs down on transactions tax. World leaders publicly snubbed U.K. PM Gordon Brown’s bold pitch for a global tax on financial transactions which would be used to fund future bailouts. Brown surprised ministers by pitching the initiative during a speech to the G-20 assembly Saturday to the dismay his peers, who unanimously agreed with U.S. Treasury chief Tim Geithner in saying economic leaders don’t think taxpayers should have to pay for future financial sector foibles. Brown backed down Sunday, though he continues to believe tighter bank regulation may not suffice to protect against future risk.
  • Reynolds eyes stake in smokeless tomorrow. Cigarette giant Reynolds American (RAI) is in advanced talks to buy closely held Niconovum AB, a Swedish maker of nicotine-replacement therapies such as Zonnic pouch and Zonnic gum. A deal would be the largest move by Reynolds into nicotine products, as sales of cigarettes continue to decline. Reynolds controls about 28% of the U.S. cigarette market, second to Altria (MO) which has about 50%. Sources say the deal could be valued at €30M.

Earnings: Mon. Before Open

  • DISH Network (DISH): Q3 EPS of {content}.18 misses by {content}.26. Revenue of .89B (-1.5%) vs. .93B. Net customers +241K to 13.85M. (PR)
  • Rockwell Automation (ROK): FQ4 EPS of {content}.37 beats by {content}.10. Revenue of .07B (-27.6%) in-line. (PR)
  • Windstream (WIN): Q3 EPS of {content}.24 beats by {content}.03. Revenue of 4M (-7.5%) vs. 7M. (PR)

Today’s Markets

Overseas markets and commodities surged Monday, and U.S. futures have gained overnight. The dollar is getting pounded in early trading.

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