JPMorgan Chase reported a 7.3 percent drop in fourth-quarter earnings on Tuesday, underscoring how expensive it has been for the bank to obtain peace with Washington, Jessica Silver-Greenberg reports in DealBook. The net earnings of $5.28 billion, or $1.30 a share, fell slightly below Wall Street analysts’ expectations of $1.35 a share.
“We are pleased to have made progress on our control, regulatory and litigation agendas and to have put some significant issues behind us this quarter,†Jamie Dimon, the bank’s chief executive, said on Tuesday.
JPMorgan has paid roughly $20 billion over the last 12 months to resolve government investigations.
HUGE OFFER FOR TIME WARNER CABLE RANKLES CABLE INDUSTRY  | Charter Communications has been eyeing Time Warner Cable for months, but the cable operator’s management has refused to discuss a deal, David Gelles reports in DealBook. So on Monday, Charter offered $37.8 billion for the cable operator, which could bring a long battle between the two cable companies to a close.
By offering $132.50, Charter took its case directly to shareholders, essentially matching Time Warner Cable’s current market price. Including debt, the offer values the company at $61.3 billion. But Time Warner Cable’s board continued to give Charter the cold shoulder, calling the latest proposal “grossly inadequate†and “a nonstarter.â€
Mr. Gelles writes: “Charter’s bid, which has been expected for months, kicks off a potential round of consolidation in the cable television industry at a time when the cable operators are seeking to increase their bargaining power with the cable and broadcast networks such as Fox, ESPN and CBS.â€
GOOGLE BUYS NEST IN QUEST TO ‘KNOW EVERYTHING’  | Google has already made significant headway into gleaning information on people’s behavior by analyzing online activity. But Google took a step further into people’s private lives on Monday with its $3.2 billion acquisition of Nest Labs, a company that makes Internet-connected home devices like high-tech thermostats, Claire Cain Miller writes in The New York Times.
“Google likes to know everything they can about us, so I suppose devices that are monitoring what’s going on in our homes is another excellent way for them to gather that information,†said Danny Sullivan, a longtime Google analyst.
Ms. Cain Miller writes: “It is easy to see how Google products could be integrated into Nest. For instance, Nest users who log in to Google could theoretically someday see their home’s temperature or an alert about the presence of smoke in Google Now or in email, and information about a person’s home life could be used to target ads.â€
THE MAN WHO HOLDS THE KEYS TO ALIBABA’S I.P.O.  | “Joe Tsai’s phone is ringing off the hook these days, and you would be forgiven if you have never heard of him,†Andrew Ross Sorkin writes in the DealBook Column. “It is Mr. Tsai, a Taiwanese-born former lawyer who was educated at Yale, and not Alibaba’s more famous founder, Jack Ma, who is making the big decisions on the I.P.O. And that has made him Mr. Popularity among the investment banking elite.â€
ON THE AGENDA  | JPMorgan Chase and Wells Fargo announce earnings before the bell. Retail Sales for December are out at 8:30 a.m. Two regional Federal Reserve bank presidents discuss the economy â€" Charles I. Plosser, president of the Philadelphia Fed, speaks at 12:45 p.m., and Richard W. Fisher, president of the Dallas Fed, takes the stage at 1:20 p.m. The House of Representatives holds a hearing at 10 a.m. on the effects on homeowners of the Consumer Financial Protection Bureau’s new mortgage rules. Tony Fadell, co-founder of Nest, is on Bloomberg TV at 1 p.m. Paul A. Volcker, a former chairman of the Federal Reserve, is on Fox Business News at 1 p.m. Frank Keating, president and chief executive of the American Bankers Association, is on CNBC at 11:20 a.m.
SUNTORY’S DEAL FOR BEAM  | Suntory of Japan’s acquisition of Beam Inc. for $13.6 billion on Monday is the first big deal of 2014 and one of the largest takeovers in the liquor business in years, Michael J. de la Merced and David Gelles write in DealBook. Suntory is offering $83.50 a share, 25 percent above Beam’s closing price on Friday, valuing the company at more than 20 times earnings before interest, taxes, depreciation and amortization for the 12 months ended Sept. 30.
The deal transforms Suntory into the world’s third-largest distiller and transfers another major American distiller to foreign hands. Other liquor giants, Britain’s Diageo and France’s Pernod Ricard, have been snapping up their share of American brands over the years.
“A big whiskey acquisition is a shot in the arm for the global spirits industry, but there may not be many more substantial liquor deals to strike,†Mr. Gelles writes in DealBook. Many of the remaining distillers lack the scale or the capital to strike a deal of similar magnitude, which could leave smaller, boutique spirit groups as the most attractive targets.
The deal, one in a string of recent big-ticket alcohol purchases, would not have been possible without William A. Ackman, the founder of the hedge fund Pershing Square Capital Management. Mr. Ackman pushed for the creation of Beam Inc. by calling for the breakup of its predecessor, Fortune Brands, a company that also sold golf equipment, Mr. de la Merced reports in DealBook.
SAC’S COHEN SPOTTED AT KNICKS GAME?  | Steven A. Cohen may have attended Monday night’s New York Knicks game at Madison Square Garden, according to a photograph posted on Twitter. The picture was posted at around 10:45 p.m. with the caption, “Is that Steve Cohen at tonight’s Knicks’ game?†setting off a round of speculation. But some late-night tweeters thought the photograph was Photoshopped.
Celesio’s Shares Tumble After McKesson Bid Fails  | Shares of the German pharmaceutical wholesaler Celesio fell nearly 6 percent in trading in Frankfurt after the McKesson Corporation failed to garner enough shareholder support for its proposed $8.3 billion acquisition to proceed. DealBook »
McKesson Comes Up Short on Celesio Tender Offer  | An $8.3 billion deal for the German pharmaceutical wholesaler Celesio failed to receive the minimum shareholder support, but McKesson did not say whether it would continue to try to acquire the company. DealBook »
Drug Makers Express Interest in Pfizer Unit  | The drug makers Valeant Pharmaceuticals International, Actavis and Mylan have shown interest in purchasing Pfizer’s branded generics business, though no active discussions are occurring at this time, Reuters reports, citing unidentified people familiar with the situation. REUTERS
After Deal, Suntory Rating on Review  | The rating agency Moody’s has placed Suntory’s credit rating on downgrade review, cautioning that the $16 billion deal for Beam Inc. would result in a “significant increase in debt burden,†The Financial Times writes. FINANCIAL TIMES
A Bold Move by Suntory  | The strategic imperative for the Japanese corporation is clear, as it is for just about any consumer goods company in the incredibly shrinking Japan, notes Rob Cox of Reuters Breakingviews. DealBook »
Credit Suisse Tells Junior Bankers to Take Saturdays Off  | The Swiss bank, which has a major presence on Wall Street, issued new guidelines to discourage analysts and associates from working in the office on Saturdays. DEALBOOK
Investors Rush to Nontraditional Bonds  | In a quest for yield, investors are purchasing bonds backed by nontraditional properties, including a bond backed by a homeless shelter, The Financial Times reports. FINANCIAL TIMES
Former HSBC Executive to Lead Openreach  | Joe Garner, a former HSBC executive, will take the helm of Openreach, a division of the British telecommunications company BT, The Financial Times reports. FINANCIAL TIMES
Across Wall Street, Efforts to Revise a Hard-Charging Culture  | As several major banks think hard about the workload of their junior employees, 2014 will probably be remembered as the year that Wall Street tried to offer some relief to the grunts. DealBook »
Stung by Scandal, Giant Pension Fund Tries to Make It Right  | Réal Desrochers, head of private equity investments at the California Public Employees’ Retirement System, hopes to improve the fund’s performance, and reputation. DealBook »
Carlyle Preparing to Buy Johnson & Johnson Unit  | The private equity firm Carlyle Group is said to be lining up $3.7 billion in financing to support its purchase of Johnson & Johnson’s ortho clinical diagnostics unit, Reuters reports, citing unidentified people familiar with the situation. The deal to buy the unit, which makes blood-screening equipment and laboratory blood tests, could be signed by the end of this week. REUTERS
French Firm Halfway to Funding Target  | The French private equity firm PAI Partners has raised nearly half of its 3 billion euro fund-raising target four years after two of its most senior executives left the firm, The Financial Times reports, citing unidentified people familiar with the situation. FINANCIAL TIMES
Elliott Turns Its Attention to Juniper Networks  | The hedge fund Elliott Management wants Juniper Networks to cut costs, return money to shareholders and streamline its product offerings. DealBook »
Former Citigroup Executive Joins Hedge Fund as Chairman  | John P. Havens, who resigned as chief operating officer of Citigroup in 2012 when Vikram S. Pandit was ousted as chief executive, has found a new home at the hedge fund business that was spun out of the bank. DealBook »
Hedge Fund Backs Men’s Wearhouse Bid for Jos. A. Bank  | Eminence Capital, which owns a 9.8 percent stake in Men’s Wearhouse and a 4.9 percent stake in Jos. A. Bank, wrote a public letter to Jos. A. Bank’s board on Monday, urging the directors to accept the offer. DealBook »
Why Barington Still Opposes Darden’s Plan to Spin Off Red Lobster  | The activist hedge fund said on Monday that Darden’s plan to bolster its stock price did not go far enough in breaking apart the restaurant company. DealBook »
Ratings Cause Twitter Stock Volatility  | Analysts are not agreeing on Twitter’s valuation, which is driving large swings in the company’s stock price, Bloomberg News reports. BLOOMBERG NEWS
Oyster, a Start-Up for E-Reading, Raises $14 Million  | Oyster, which gives customers access to more than 100,000 books for $10 a month, has raised $14 million in a new round of financing. The new investment was led by Highland Capital Partners and included additional capital from an existing investor, Peter Thiel’s Founders Fund. DealBook »
Lowe’s Backs Home Projects Site  | Lowe’s is partnering with Porch.com, a start-up based in Seattle that has developed a new way of recommending home improvement professionals, the Bits blog reports. NEW YORK TIMES BITS
BuzzFeed Backers Start Animal Website With $2 Million  | The Dodo, a website dedicated to animal news and features and financially backed in large part by Ken Lerer, the current chairman of BuzzFeed, went live this week with $2 million in funding , ReCode reports. RECODE
Ohio Company Raises Funds for Investor Software  | Crowdentials Inc., a start-up based in Ohio, has raised $300,000 for its technology platform, which makes it easier for venture capitalists, investment banks, private equity and angel investors to invest in start-ups, funds and other assets, The Wall Street Journal reports. The software verifies investors online so entrepreneurs can ensure their future backers meet the legal definition of “accredited investor.†WALL STREET JOURNAL
Groupon Acquires Ideeli  | Groupon has purchased ideeli, a flash online fashion retailer, for $43 million in cash, TechCrunch reports. The acquisition is a big loss for ideeli’s investors, including Kodiak, Credit Suisse and the venture capital firm StarVest Partners, who have sunk $107 million into the company since it was founded in 2007. TECHCRUNCH
Secretive Apple Squirms in Gaze of U.S. Monitor  | An inspector appointed by a federal judge to make sure that Apple complies with antitrust laws has drawn strong objections from the company, which says he is intruding on operations.
DealBook »
Burton R. Lifland, Judge Who Oversaw Madoff Bankruptcy, Dies at 84  | Mr. Lifland, the judge who was overseeing the winding down of Bernard L. Madoff’s huge Ponzi scheme, died on Sunday, according to the clerk for the federal bankruptcy court in Manhattan. DealBook »
Target’s Woes May Be a Boon for Security Firms  | After its data breach, Target hired a credit-monitoring company and a security firm to help with its internal investigation. DealBook »
Push to Combat Insider Trading May Go Too Far  | The latest crackdown by New York State’s attorney general, Eric T. Schneiderman, may end up blurring the already thin line between permissible securities analysis and illegal conduct, Peter J. Henning writes in the White Collar Watch column. DealBook »
Europeans Struggle to Set Derivatives Rules  | The European Union plans a last-ditch effort to reach agreement on one of the biggest issues highlighted by the financial crisis: how to rein in trading of derivatives and other complex instruments. DealBook »
Fed Investigating Currency Rate-Fixing  | The Federal Reserve is said to be looking into whether traders at the world’s biggest banks played a role in manipulating benchmark currency rates, Bloomberg News reports, citing an unidentified person familiar with the situation. The Fed joins other authorities, including those in London, in investigating whether traders shared information that allowed them to rig foreign exchange rates. BLOOMBERG NEWS
