How Big A Deal Is A Big Deal? Monday morning is traditionally the time we get the most merger and acquisition news - hence the often used (and overused) term “Merger Monday”. But how big a deal should we make over a deal?
$1 billion is our line of demarcation: if a deal is worth less than that, we most likely won’t break into programming for it - if it’s going to move a stock that’s familiar, it’s likely to be included in Stocks To Watch, a "Squawk Box" segment done by anchor Joe Kernen that occurs several times throughout the morning. An example this morning: Symantec , the biggest maker of anti-virus software, buying Altiris for $830 million. Familiar enough to be interesting, not so huge that we need to give it full out, break-in treatment. It appeared in stock segments throughout the day with Joe and stocks reporter Bob O’Brien, and Symantec CEO John Thompson appeared on "Morning Call" at 10:55 am.
On the other hand: we found out at 7:55 am that Merrill Lynch was acquiring First Republic Bank for $1.8 billion. That’s above that $1 billion mark, but perhaps even more important was the whopping premium Merrill is paying: 46%. That’s big. We broke into our programming to have the "Squawk Box" anchors talk about the deal, with the bid/ask chart immediately showing the impact the deal would have on the First Republic stock: huge!
Sometimes, a deal falls into a gray area. Citigroup announced it would buy U.K. online bank Egg Banking from British insurer Prudential PLC for $1.13 billion. It’s above our magic billion dollar line and it involves a well known company.
But it also involves the purchase of a unit, not an entire company, and in any event, Prudential PLC isn’t traded in the U.S. Therefore, it was of interest as a Citigroup strategic story but not as breaking news. We wrote up a story and inserted it in the show at a logical point as a regular reader rather than as an urgent matter.
Random? Arbitrary? Perhaps. Our job is to assess each story, be flexible, and do the best possible job for the viewers.