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frontrunning:


EU Court: Google Must Remove Certain Links on Request (WSJ)... people have right to be forgotten on Internet (Reuters)
Harsh weather: German Investor Confidence Drops for Fifth Straight Month (BBG)
More harsh weather: China Slowdown Deepens (BBG)
Harsh weather as far as the eye can see: China’s New Credit Declines (BBG)
"Alien" artist, surrealist H.R. Giger dies aged 74 (Reuters)
Pfizer urges AstraZeneca to talk as UK lawmakers slam offer (Reuters)
Property sector slowdown adds to China fears (FT)
Russia says EU sanctions will hurt Ukraine peace efforts (Reuters)
U.S. Considers Relaxing Crude Oil Export Restrictions (WSJ)
Yellen Wage Signals Showing Slack May Be Missing Cost Speedup (BBG)
Investors bet on BoE acting to ease property market and raise rates (FT)
Lehman Trade a Gift That Keeps Giving for Paulson to King Street (BBG)
Attorney General Holder Tightens the Squeeze on Banks (WSJ)
The Secret Brazil Happy Meal McDonald’s Keeps Under Wraps (BBG)
All-Madrid Soccer Final Soured by $2,000 Hotels in Portugal (BBG)


Overnight Media Digest

WSJ

* AT&T Inc is close to sealing a takeover of DirecTV that could value the satellite-television provider at about $50 billion. The two sides are discussing a deal that would involve a mix of cash and AT&T stock. An agreement could be reached in two weeks if not sooner, people familiar with the matter said. (http://r.reuters.com/dyg39v)

* Pfizer Inc laid out a case for its proposed $106 billion takeover of AstraZeneca PLC in documents sent on Monday to two U.K. parliamentary committees. For the first time, Pfizer said that its five-year commitments to the U.K. - made 10 days ago as part of an unsolicited takeover bid of $84.26 a share - were legally binding. AstraZeneca rejected the offer, saying the proposal substantially undervalued the company. (http://r.reuters.com/hyg39v)

* Hillshire Brands Co agreed to buy Pinnacle Foods Inc for $4.3 billion in a bet that mixing hot dogs and frozen cakes with pickles, syrup and salad dressing will add up to a more appetizing business. The deal, announced on Monday, would create a company with about $6.6 billion in annual revenue and a broad array of brands including Hillshire's namesake lunch meats, Jimmy Dean sausages and Ball Park hot dogs. (http://r.reuters.com/jyg39v)

* Several major advertisers, including MasterCard Inc , Mondelez International and Verizon Wireless in the past year have moved a portion of the money they previously spent on television to online outlets, conscious that viewers are more frequently watching video online. And with online outlets in recent weeks unveiling plans to ramp up their programming, more shifts are likely, say media buyers. (http://r.reuters.com/nyg39v)

* London Stock Exchange Group PLC has emerged as a contender for Russell Investments, the stock-index and asset-management business that is on the auction block. The U.K. stock-exchange operator is among a small group of late-stage bidders for Russell, which Northwestern Mutual Life Insurance Co officially put on the auction block early this year. (http://r.reuters.com/ryg39v)

* Citizens Financial Group Inc filed for an initial public offering with the Securities and Exchange Commission on Monday. In the filing, Citizens said the number of shares to be offered and the price range for the proposed deal haven't yet been determined. However, it plans to raise up to $100 million in the offering. (http://r.reuters.com/wyg39v)

* Federal prosecutors asked a judge for a stiff sentence of more than five years in prison for Michael Steinberg, a former senior employee of SAC Capital Advisors LP convicted of insider trading last year. Steinberg, who is free on bail, is scheduled to be sentenced Friday in federal court in Manhattan. (http://r.reuters.com/zyg39v)

* Becker Drapkin Management LP, an activist investor that targets smaller companies, has taken a 7.2 percent stake in XO Group Inc, according to a regulatory filing on Monday. The investment fund supports XO Group's recently named Chief Executive Michael Steib but is raising questions about the continued operational role of co-founder and Chairman David Liu and losses piling up under Liu's watch in China. (http://r.reuters.com/cah39v)



FT

The United States and its leading European allies are mulling wider sanctions on the Russian economy along with a ban on the export of high-tech energy equipment, if Moscow is seen disrupting Ukraine's presidential elections on May 25.

British law makers will demand "cast iron" guarantees from U.S. drug maker Pfizer on jobs and investment for up to 10 years if it buys AstraZeneca.

Citizens Financial Group Inc, the U.S. unit of Britain's Royal Bank of Scotland, filed with U.S. regulators for an initial public offering of common stock that would raise about $100 million.

AT&T Inc is in active talks to buy satellite TV provider DirecTV and may finalise a deal in the next few weeks that could be worth close to $50 billion, according to people familiar with the matter.

The head of KPMG in the Netherlands resigned on Monday, the accounting firm said, less than a month after authorities launched a criminal investigation into alleged tax fraud at a venture it set up to build a new Dutch headquarters.



NYT

* With TransCanada's Keystone XL pipeline snarled in a regulatory and legal struggle south of the border, Canadian oil companies are proposing many new and expanded pipelines that would connect the oil sands fields with new markets in China and across the world. The planned projects that would snake east and west as well as south, could break the virtual United States monopoly market for Canadian oil exports. (http://r.reuters.com/qyg39v)

* A string of departures from the Fed's seven-member board over the last year has left the central bank on the verge of operating with just three governors for the first time in its 100-year history. Three nominees are awaiting Senate confirmation, but so are scores of nominees to other offices. (http://r.reuters.com/syg39v)

* AT&T is in talks to buy DirecTV for at least $50 billion, and the two sides are actively working toward an announcement. If completed, the deal would give AT&T, the country's second-largest wireless carrier, control of the country's largest satellite television provider, further reshaping the rapidly changing telecommunications and television industries. (http://r.reuters.com/vyg39v)

* Rejecting an unusual $50 billion unsolicited bid, Allergan , the maker of Botox, said its best days were ahead of it and signaled it would consider making acquisitions of its own as it worked to stay independent. Allergan said the offer by Valeant Pharmaceuticals and William Ackman "substantially undervalues Allergan and is not in the best interests of the company and its stockholders." (http://r.reuters.com/xyg39v)

* Pfizer Inc pledged on Monday to keep jobs in Britain if it succeeds in taking over British drug maker AstraZeneca Plc, and it questioned whether AstraZeneca can stand on its own much longer. Pfizer's chief executive is expected to appear before a parliamentary committee in London on Tuesday as the American pharmaceutical giant tries to convince British lawmakers that a Pfizer-AstraZeneca combination is viable. (http://r.reuters.com/bah39v)

* Toyota said on Monday that it would allow a battery-supply deal with Tesla Motors to expire this year and would focus instead on building cars running on hydrogen fuel cells, a next-generation technology that rivals Tesla's all-electric systems. (http://r.reuters.com/gah39v)

* Since the financial crisis, the annual meetings of Wall Street banks have become focal points for shareholder anger about foreclosures, taxpayer bailouts and income inequality. While gadflies and social activists have flocked to shareholder meetings across corporate America for decades, banks' annual meetings can be quite contentious. (http://r.reuters.com/hah39v)



Canada

THE GLOBE AND MAIL

* Railway company Montreal, Maine & Atlantic Railway Ltd and three of its employees will be charged with criminal negligence in connection with a train accident on July 6 last year, according to the Quebec prosecutor's office. The devastating accident occurred after a train hauling volatile crude oil broke free from its brakes and ran down a hill into the small town of Lac-Mégantic, causing a massive explosion and killing 47 people. (http://r.reuters.com/pyj39v)

* Rob Ford and his brother Councillor Doug Ford's role in helping a client of their family firm gain access to top city executives has renewed calls for investigative action against them. Toronto's integrity commissioner suspended investigations this month after Rob Ford announced he was going to rehab. (http://r.reuters.com/ryj39v)

Reports in the business section:

* AutoCanada Inc, which is playing a leading role in consolidation of Canada's automobile dealerships, is poised to shake up the Calgary market with its purchase of Hyatt Automotive Group. (http://r.reuters.com/wyj39v)

NATIONAL POST

* The political fortunes of the Parti Québécois are getting worse and worse, with support now at a historic low. One month after its crushing electoral defeat to the Liberals, a new poll shows that, had an election been held on May 7-8, support for the party would have been a mere 19 percent. (http://r.reuters.com/xak39v)

FINANCIAL POST

* The housing boom has not only resulted in record real estate prices, it has spawned an unprecedented number of real estate agents. Toronto had 35,000 real estate agents in December 2012 which has grown to 39,000 this year. Much of it is an influx of speculative careers from would-be real estate agents who see a quick buck to be made - up to 5 percent of the house price - that comes with it. (http://r.reuters.com/jak39v)

* Canada's aboriginals have threatened to go to court if Prime Minister Stephen Harper approves the Alberta-to-West Coast oil pipeline next month, and if he does, to sabotage the project if proponent Enbridge Inc dares to build it. (http://r.reuters.com/pak39v)



Britain

The Telegraph

SCOTLAND FACES RISK OF CAPITAL FLIGHT, WARNS DEUTSCHE

An independent Scotland faces the risk of "capital flight" if it cannot strike a deal to keep the pound, Europe's largest investment bank, Deutsche Bank, has warned. (http://link.reuters.com/heg39v)

VINCE CABLE URGED TO PROTECT ASTRAZENECA

Members of the Business Select Committee will on Tuesday demand that Vince Cable tightens Britain's takeover rules to protect AstraZeneca from a possible 63 billion pound hostile bid from Pfizer. (http://link.reuters.com/jeg39v)

The Guardian

PFIZER SAYS UK JOBS PLEDGE LEGALLY BINDING

Pfizer has said it will keep its promises about retaining high-skill jobs and manufacturing in Britain as the U.S. firm's boss prepares to face questions from MPs on the proposed takeover of AstraZeneca. (http://link.reuters.com/keg39v)

ANNUAL RETAIL SALES GROWTH SLOWS, DESPITE BOOST FROM EASTER PERIOD

Retailers enjoyed an Easter boost in sales last month but it was not enough to prevent the worst underlying performance for more than a year. The British Retail Consortium's monthly report suggested sales were up 4.2 percent on a like-for-like basis in April on a year earlier as bank holiday shoppers bought furniture and snapped up clothing to suit the warmer weather. (http://link.reuters.com/meg39v)

The Times

BSKYB FACES HOSTILE RECEPTION TO PAY-TV TALKS WITH SKY ITALIA AND DEUTSCHLAND

BSkyB, Britain's largest pay-TV company, is in talks to buy Sky Deutschland and Sky Italia, in deal estimated at 10 billion euro. (http://link.reuters.com/seg39v)

BUSINESS LEADERS ECHO PUBLIC DISTRUST OF PFIZER'S 63 BLN STG BID

The public overwhelmingly opposes Pfizer's takeover of AstraZeneca, according to polls, showing the scale of the challenge faced by the U.S. drugs company in overcoming doubts about its 63 billion pound offer. (http://link.reuters.com/peg39v)

Sky News

CITY STAR WOODFORD TO MEET PFIZER BOSS READ

London-based prominent fund manager Neil Woodford will meet the boss of Pfizer this week for talks about the U.S. pharmaceuticals giant's proposed 63 billion pound takeover of AstraZeneca. (http://link.reuters.com/reg39v)

CARLYLE TESTS APPETITE FOR 1 BLN STG DENTAL CHAIN

Integrated Dental Holdings, UK's largest privately owned dental chain, will either be put up for sale or floated on the stock market by private equity firm Carlyle Group LP. (http://link.reuters.com/qeg39v)



Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Retail sales for April at 8:30--consensus up 0.4% from prior month
Import price index for April at 8:30--consensus up 0.3% from prior month
Business Inventories for March at 10:00--consensus up 0.4%

ANALYST RESEARCH

Upgrades

Bridgepoint Education (BPI) upgraded to Hold from Sell at Deutsche Bank
Danone (DANOY) upgraded to Equal Weight from Underweight at Morgan Stanley
Hub Group (HUBG) upgraded to Buy from Hold at KeyBanc
KKR (KKR) upgraded to Overweight from Equal Weight at Evercore
Masco (MAS) upgraded to Buy from Hold at Jefferies
QIAGEN (QGEN) upgraded to Neutral from Underweight at HSBC
Time Warner (TWX) upgraded to Outperform from Market Perform at Bernstein

Downgrades

BE Aerospace (BEAV) downgraded to Neutral from Overweight at JPMorgan
Baker Hughes (BHI) downgraded to Market Perform from Outperform at Bernstein
Carmike Cinemas (CKEC) downgraded to Hold from Buy at Topeka
Concho Resources (CXO) downgraded to Hold from Buy at Wunderlich
Douglas Emmett (DEI) downgraded to Market Perform from Outperform at Wells Fargo
Electrolux downgraded to Neutral from Buy at Longbow
Endeavour (END) downgraded to Neutral from Buy at SunTrust
Hillshire Brands (HSH) downgraded to Neutral from Overweight at JPMorgan
Nabors Industries (NBR) downgraded to Market Perform from Outperform at Bernstein
Pinnacle Foods (PF) downgraded to Hold from Buy at Stifel
Safeguard Scientifics (SFE) downgraded to Equal Weight from Overweight at First Analysis
Whirlpool (WHR) downgraded to Neutral from Buy at Longbow

Initiations

City Office REIT (CIO) initiated with a Buy at Janney Capital
Global Cash Access (GCA) initiated with a Hold at Stifel
Grainger (GWW) initiated with an Overweight at Morgan Stanley
HD Supply (HDS) initiated with an Equal Weight at Morgan Stanley
WESCO (WCC) initiated with an Equal Weight at Morgan Stanley
Watsco (WSO) initiated with an Equal Weight at Morgan Stanley

COMPANY NEWS

Pfizer (PFE) said possible offer for AstraZeneca (AZN) represents compelling holder value
Elizabeth Arden (RDEN) reported a significant miss on Q3 results and said it has engaged Goldman Sachs (GS) to explore potential strategic alternatives. The company also implemented a broad restructuring and cost savings progam, targeting annual savings of $40M-$50M upon full implementation of the program
CEMEX (CX) said CEO Lorenzo Zambrano passed away
Halozyme Therapeutics (HALO) reported Q1 results that narrowly missed expectations and announced that the Data Monitoring Committee now supported enrollment in the company's PEGPH20 study
Vantiv (VNTV) agreed to acquire Mercury Payment Systems from Silver Lake for $1.65B
magicJack (CALL) reported quarterly revenues below analyst estimates and said it activated 196,000 subscribers during Q1

EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Cubic (CUB), Installed Building Products (IBP), Ophthotech (OPHT), Encana (ECA), Synergy Pharmaceuticals (SGYP), Sunshine Heart (SSH), Elbit Systems (ESLT), Wix.com (WIX), DFC Global (DLLR), Supernus (SUPN), Thompson Creek (TC), Atlantic Power (AT), Endeavour Silver (EXK), CorEnergy (CORR), American Apparel (APP), InnerWorkings (INWK), LipoScience (LPDX), Esperion Therapeutics (ESPR), Convergys (CVG), magicJack (CALL), Aerie Pharmaceuticals (AERI), Everyday Health (EVDY), Engility Holdings (EGL), McKesson (MCK), Premier (PINC), Trovagene (TROV), Rackspace (RAX)

Companies that missed consensus earnings expectations include:
CST Brands (CST), Surgical Care Affiliates (SCAI), Resolute Energy (REN), Consolidated Water (CWCO), Arc Logistics (ARCX), Odyssey Marine (OMEX), Health Insurance Innovations (HIIQ), Fuel Tech (FTEK), Elizabeth Arden (RDEN), Capitala Finance (CPTA), TG Therapeutics (TGTX), Cardiome (CRME), American Midstream Partners (AMID), Apricus Biosciences (APRI), Halozyme (HALO), ADMA Biologics (ADMA), Unilife (UNIS), Fontegra Financial (FRF), Omeros (OMER), Puma Biotechnology (PBYI), Parametric Sound (HEAR), Lifeway Foods (LWAY), Virtusa (VRTU), Penn Virginia (PVA), Hannon Armstrong (HASI), Kindred Biosciences (KIN), DealerTrack (TRAK), Orion Energy (OESX), Rockwell Medical (RMTI), Cara Therapeutics (CARA), Onconova (ONTX), Portola Pharmaceuticals (PTLA), Acorn Energy (ACFN), 2U (TWOU), Arena Pharmaceuticals (ARNA), PDL BioPharma (PDLI), Continental Building (CBPX)

Companies that matched consensus earnings expectations include:
Babcock & Wilcox (BWC), Cytori Therapeutics (CYTX), Towerstream (TWER), Spark Networks (LOV), Osiris (OSIR)

NEWSPAPERS/WEBSITES

AT&T (T) in talks to buy DirecTV (DTV) for approximately $100 per share, Bloomberg says
Credit Suisse (CS) tax evasion settlement might exceed $2B, Reuters says
DOJ, AG Holder may reach multibillion-dollar settlements with banks (CS, BAC), WSJ reports
Sony (SNE) may ditch OLED TVs for 4K LCD sets, Nikkei reports
EA (EA) executives, including COO, recently sold almost $5M in stock, Re/code reports
Google (GOOG) must remove certain links if requested, EU court says, WSJ reports
Facebook (FB) said to be looking to open China sales office, Bloomberg reports
Pfizer (PFE) says too early to discuss U.S. AstraZeneca (AZN) impact, Bloomberg says

SYNDICATE

Antero Resources (AR) files to sell 10M shares for holder
Concho Resources (CXO) 6.5M share Secondary priced at $129.00
Daqo New Energy (DQ) files to sell 2M American Depositary Shares
ExamWorks (EXAM) files to sell 3.1M shares of common stock
GTx (GTXI) files to sell $150M of common stock, warrants
Gramercy Property Trust (GPT) files to sell 34M shares of common stock
MDC Partners (MDCA) files to sell 3.5M class A suborinate voting shares for CEO
Northstar Realty (NRF) 30M share Spot Secondary; price range $15.40-$15.60
ONEOK Partners (OKS) files to sell 11M common units for limited partners
SVB Financial (SIVB) files to sell 3.9M shares of common stock

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