William Hartley: Wall Street Breakfast: Must-Know News

Rio advances on Riversdale. Rio Tinto (RIO) moved forward with an A$3.9B ($3.9B) offer for Australian coking coal developer Riversdale Mining, after its earlier A$3.5B bid was rebuffed. Analysts said the move makes strategic sense for Rio, whose portfolio was underweight coking coal. The A$16/share offer was recommended by all of Riversdale’s board, except for the director appointed by major shareholder Tata Steel (TATLY.PK), but investors sent Riversdale shares up 1.6% in Aussie trading to A$16.57, suggesting they expect either a sweetened offer or a rival one. Premarket: RIO -1% (7:00 ET).
Rovi buys Sonic Solutions. Rovi Corp. (ROVI) will pay $720M in cash and stock to buy Sonic Solutions (SNIC), the owner of popular digital video player software DivX. The $14.17/share offer is a 26% premium to Sonic's closing price yesterday. Rovi said the combined company will be better positioned to help movie studios sell content in the fast-growing digital entertainment market. The deal is expected to add $0.05-0.10 per share to Rovi's adjusted earnings. Premarket: SNIC +24.7% to $13.97 (7:00 ET).
Advantest raises offer for Verigy. Advantest (ATE) has raised its takeover offer for Verigy (VRGY) by 23% to roughly $900M, equivalent to $15/share. Advantest had previously proposed to acquire Verigy for $12.15/share. Verigy's board will consider the offer, but in the meantime its $600M merger deal with LTX-Credence (LTXC) remains in effect.
AIB poised for capital injection. Irish Finance Minister Brian Lenihan is expected to ask Ireland's top court today for permission to inject €3.7B ($4.8B) of capital into troubled Allied Irish Bank (AIB). The move would leave the Irish government with more than a 90% stake in the lender, up from its current 19% stake. AIB is expected to acquiesce to the request, which would allow the injection to occur immediately, and the court's involvement would allow the bank and the government to completely sidestep shareholders. Following the capital injection, the government may de-list AIB's shares, despite earlier speculation that the stock would continue trading for at least the near future. Premarket: AIB -15.6% to $0.92 (7:00 ET).
Hilton settles Starwood suit. Hilton Worldwide reached an agreement to settle a corporate-espionage lawsuit filed last year by Starwood Hotels (HOT). Hilton officials had been accused of stealing confidential Starwood documents in order to build a modern boutique-style chain. As part of the settlement, Hilton agreed to never develop its Denizen lifestyle brand and can't start developing a similar brand for two years. Hilton must also make an unspecified payment to Starwood, and must let a court-appointed monitor review its marketing material to ensure Hilton doesn't benefit from material in the Starwood documents.
Barnes & Noble shareholder cuts stake. Money manager Aletheia Research and Management, the third largest shareholder of Barnes & Noble (BKS), has cut its stake in the struggling bookstore chain. According to regulatory filings, Aletheia now owns 7.67M Barnes & Noble shares, or a 12.7% stake, down from 14% last month and 15.1% earlier in the year.
Comcast-NBCU deal review extended to January. Comcast (CMCSA) confirmed yesterday that the regulatory review of its proposed NBC Universal (GE) deal will continue into January, stymying the company's plans to close the controversial deal by the end of 2010. There had been ongoing rumors that regulatory approval would be delayed, but until yesterday both parties in the transaction had stood firm on their original timeline.
AstraZeneca, Abbott part ways on Certriad. AstraZeneca (AZN) ended its license agreement with Abbott Laboratories (ABT) to develop Certriad, a drug meant to treat mixed dyslipidemia. The mutual decision was prompted by an FDA decision in March 2010 which caused a regulatory delay in the drug's commercialization, and the two firms jointly determined that their licensing agreement was "no longer commercially attractive."
U.S. files WTO complaint against China. The Obama administration filed a complaint with the WTO over subsidies China provides its wind-energy manufacturers, acting on a petition brought by the United Steelworkers union. The U.S. claims that the Chinese government fund which awards grants to wind power manufacturers appears to require recipients to use Chinese-made parts, which violates WTO rules.

Earnings: Wednesday After Close

Bed Bath & Beyond (BBBY): Q3 EPS of $0.74 beats by $0.08. Revenue of $2.2B (+11.1%) vs. $2.1B. Shares +6.6% AH. (PR, earnings call transcript)
Micron Technology (MU): FQ1 EPS of $0.15 misses by $0.13. Revenue of $2.3B (+32%) vs. $2.4B. Shares -3.6% AH. (PR, earnings call transcript)

Today's Markets

In Asia, Japan -0.2% to 10346. Hong Kong -0.6% to 22903. China -0.8% to 2855. India -0.2% to 19983.
In Europe, at midday, London +0.1%. Paris -0.4%. Frankfurt +0.1%.
Futures at 7:00: Dow flat. S&P -0.1%. Nasdaq -0.2%. Crude +0.1% to $90.61. Gold -0.3% to $1383.60.