In the news this morning, Citigroup downgrades Apple as the iPhone 5 goes on sale in China, AIG sells the remainder of its stake in AIA, Google is close to a deal to settle an antitrust investigation, Diet Pepsi is getting a new sweetener and mergers in the REIT and utility sectors.
Analysts at Citigroup (C) lowered their rating on Apple (AAPL) to Neutral from Buy over the weekend. Analyst Glen Yeung said research shows “near-term supply-chair order cuts,” call the strength of the iPhone 5 into question. The price target on the stock was lowered to $575 per share from $675. The downgrade came the same weekend that the company reported selling more than 2 million iPhone 5s in China in the first three days the phone was on sale.
American International Group
After the U.S. government sold its stake in the insurer last week, the company is selling the remainder of its stake in AIA Group Ltd. AIG (AIG) is selling the final 13.7% stake in the company for about $6.5 billion in an offering on the Hong Kong exchange.
Google (GOOG) is reportedly close to reaching a deal with the Federal Trade Commission that would end the agency's antitrust investigation in to the search-engine giant. The New York Times reported that claims that Google biases search results in favor of its own products have been taken off the table. Terms of the deal will reportedly include Google making some voluntary commitments, being sued and signing a consent decree and agreeing to license, on reasonable terms, patents that regulators decide are essential for wireless communications.
The beverage company is changing the sweetener in Diet Pepsi. Some cans of the new formula are already on sale around the country, with more entering the marketplace as shelf space becomes available. Pepsi (PEP) is adding acesulfame potassium to the traditional aspartame in what it says is an effort to keep the drinks tasting fresh longer.
American Realty Capital
American Realty Capital (ARCT) is buying privately held American Realty Capital Trust III for $12 in cash or the right to receive 0.95 of a share of American Realty Capital. The combined company will be better diversified with an enterprise value of $3 billion and more than 800 properties in its portfolio. Adjusted funds from operations for 2013 are expected to be 93 cents per share in 2013 and $1.08 per share in 2014.
Laclede Group (LG) will buy Missouri Gas Energy and New England Gas Co. for $1.02 billion. The deal, which includes the assumption of about $20 million in debt, is expected to close next summer. The two utilities were part of Southern Union Co. until that company was purchased by Energy Transfer Equity (ETE) earlier this year.