TheChek News Flow

Two consortiums funds and industrial cement industry remain in contention.

Lafarge and Holcim's assets generate the rush of investors

The circle tightens around the cement plant of Lafarge and Holcim. The two giants, who have achieved mid-December the green light from Brussels for their proposed merger to $ 39.5 billion, await second-round bids for the purchase of their assets in France, Germany, Great Britain , Canada, Austria, Hungary and Serbia, the Philippines and Brazil. A set weighing nearly 5 billion euros of turnover for an expected price of 5 to 7.5 billion euros.

A third defection

Four consortia fund of US private equity firms and industrial manifested themselves at the opening of the auction. But on the eve of entering the decisive stage that forces to submit binding offers, a third defection took place - after the German HeidelbergCement in November and Bath duo Onex next month - according to several sources : that the consortium formed by the Advent fund, BC Partners and Temasek. Global competition is very tight, the verification procedures open to candidates constraints and expectations very high sellers. The expected valuation range is at least eight times Ebitda of the assets sold (between 600 and 700 million per year). A requirement which would be based on the expectation of doubling within two years of the EBITDA margin of all that is now down cycle.

That leaves two consortia: the CVC with two sovereign wealth funds (Singapore's GIC and Adia, the Abu Dhabi Fund) and that formed by Blackstone, Cinven and Canadian MPC. These defections does not necessarily place them in a strong position to negotiate prices down. Industrial positioned themselves on pieces of the perimeter. The names of the Irish cement manufacturer CRH associated to the Mexican Cemex were cited, as well as the Turkish Sabanci, Brazilian Votorantim Cimentos and Indian UltraTech Cement and Birla. Or "a puzzle to 5 or 7 pieces to give the whole thing is very simple, if industrial property value the assets," says a source

Deux consortiums de fonds et des industriels du secteur du ciment restent en lice.

Les actifs de Lafarge et Holcim suscitent la ruée des investisseurs

Le cercle se resserre autour des cimenteries de Lafarge et Holcim. Les deux géants, qui ont obtenu mi-décembre le feu vert de Bruxelles pour leur projet de fusion à 39,5 milliards de dollars, attendent les offres de second tour concernant le rachat de leurs actifs en France, en Allemagne, en Grande-Bretagne, au Canada, en Autriche, en Hongrie et en Serbie ainsi qu'aux Philippines et au Brésil. Un ensemble pesant près de 5 milliards d'euros de chiffre d'affaires pour un prix attendu de 5 à 7,5 milliards d'euros.

Une troisième défection

Quatre consortiums de fonds, des firmes de capital-investissement américaines et des industriels s'étaient manifestés à l'ouverture des enchères. Mais à la veille d'entrer dans l'étape décisive qui contraint à déposer des offres fermes, une troisième défection a eu lieu - après celle de l'allemand HeidelbergCement en novembre et du duo Bain et Onex le mois suivant -, selon plusieurs sources : celle du consortium formé par le fonds Advent, BC Partners et Temasek. La compétition mondiale est très serrée, les procédures de vérification ouvertes aux candidats très contraintes et les attentes des vendeurs élevées. La fourchette de valorisation espérée représente au moins huit fois l'Ebitda des actifs vendus (entre 600 et 700 millions d'euros par an). Une exigence qui reposerait sur l'anticipation d'une multiplication par deux d'ici à deux ans de la marge d'Ebitda de l'ensemble qui est aujourd'hui en bas de cycle.

Resteraient donc deux consortiums : celui de CVC avec deux fonds souverains (le singapourien GIC et Adia, le fonds d'Abou Dhabi), ainsi que celui formé par Blackstone, Cinven et le canadien CPP. Ces défections ne les placeraient cependant pas forcément en position de force pour négocier un prix à la baisse. Des industriels se sont positionnés sur des morceaux du périmètre. Les noms du cimentier irlandais CRH associé au mexicain Cemex ont été cités, ainsi que celui du turc Sabanci, du brésilien Votorantim Cimentos et des indiens UltraTech Cement et Birla. Or « un puzzle à 5 ou 7 pièces pour céder le tout est très simple, si les industriels valorisent bien les actifs », affirme une source

The primary driver is that our ally, Saudi Arabia, has declared war on the booming American shale and energy exploration industry.

Yes, America, we are in an all-out energy war against the Middle East’s oil heavyweight champions.

The Saudis’ latest move tips their hand to a price war.

While oil inventories are already sky-high, and US exploration and production is at a 25-year high, why would our “friends” the Saudis announce this week that they will raise the price of oil for

Asia and other buyers but cut the price for oil it sells here in America?

It’s simple — they are trying to break the backs of the American energy production companies.

The Saudis are losing market share to the US startups and — you guessed it — they’re not happy about it.

So they are willing to start an oil price war by flooding the market with gobs of excess crude just to wash away the entrepreneurial upstart Americans.

In the years between 2001 and 2011, the weekly US field production of crude oil measured in the first week of December steadily averaged 5.5 million barrels per week.

As of the first week of December 2014, the US is now producing 9.1 million barrels per week.

The International Energy Agency estimates that if the boom continues, it will make the US the world’s largest producer by 2015, five years earlier than originally forecast.

That is, if it is not derailed by Saudi aggression in the oil market.

It’s really quite simple to see what’s going on here. The Saudis would like nothing more than for a whole bunch of US shale and oil producers to fold.

That already began when Austin, Texas-based WBH Energy filed for bankruptcy on Jan. 4.

The shame of it is there are a lot of well-paying US jobs and small businesses that will become the casualties of the Saudi aggression. It’s a war over oil all right — a price war.

Talks between Loral and the Ontario Teachers’ Pension Plan, which were active in the fall, have ended, two sources close to the situation said.

In late October, Loral shares began a 15 percent rise, to $78.14, after reports had Ontario close to buying Loral from Rachesky’s MHR Fund Management.

Loral shares closed Friday at $78.32, up marginally.

Ontario had a handshake deal to buy Loral for roughly $85 a share, sources said, and the plan was to complete the deal once Loral settled a suit with Via­Sat Inc. over patent infringement.

Loral on Dec. 2 announced a $45 million settlement.

Then Rachesky, a former protégé of Carl Icahn, failed to reach a deal with Ontario on who would pay the costs.

At the same time, Ontario found it was more expensive to raise financing for the deal to buy Rachesky’s 38 percent stake in Loral than it would have been in the fall.

“When the leveraged financing market stabilizes, the sides will be back putting it together,” a source said.

The pension is “so fed up with Rachesky they can’t see straight,” another source who believed it might take much longer for the sides to ever get back together said. Rachesky declined comment. Ontario did not return calls.

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Proposed Pact Points to Growing Role of Genetic Diagnostics in Cancer Treatment

Roche Holding AG agreed to pay $1.03 billion for up to a 56.3% stake in Foundation Medicine Inc. in a collaboration that underscores the growing importance of genetic diagnostics in the treatment and development of drugs for cancer.

Under the agreement, Roche will launch a tender offer for about 15.6 million shares of the Cambridge, Mass., maker of molecular diagnostic tests for about $780 million, or $50 a share, and it will also acquire five million new shares of the company, also for $50 each. The amount is a 109% premium over Foundation’s closing price of $23.93 on Friday.

Foundation has developed and markets two tests—one for solid tumors such as lung cancer and melanoma and one for blood cancers such as leukemia—that use next-generation genetic sequencing to identify mutations that are the drivers of a patient’s disease. Doctors can use the results to try to match patients with available drugs that target the identified mutations or with clinical trials testing such drugs.

This “personalized medicine” approach is helping to transform cancer treatment and prompting an intense search among drug and biotechnology companies for new driver mutations and drugs that take aim at them.

Under the agreement, in addition to the equity, Roche may invest at least an additional $150 million for research and development collaboration between the two companies. The R&D will include using the tests in the development of drugs in Roche’s pipeline, said Michael Pellini, Foundation’s president and chief executive officer.

Other R&D efforts will focus on developing new cancer blood tests known as liquid biopsies and tests that could be used in conjunction with drugs that enable the body’s immune system to fight cancer, he said.

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Roche is making “a meaningful commitment to Foundation Medicine as well as to the molecular information space,” said Dr. Pellini, who would remain as president and chief executive officer under the agreement. “The overriding reason for this relationship is that we believe we can have a greater impact on patient care in oncology.”

Foundation’s Foundation One test for solid tumors lists for $5,800 while its Foundation Heme test for blood cancers is priced at $7,200. The tests aren’t widely covered by insurance, though the company says it often succeeds in negotiating reimbursement on an individual basis. Foundation says it has sold about 35,000 tests since the first one was launched in June 2012.

As part of the agreement, Roche will market the tests outside the U.S. and support Foundation’s commercial efforts in the U.S., Dr. Pellini said.

Roche will get three seats on the board, which will be expanded to nine members, while Foundation will remain as an independent publicly traded company. Foundation has agreements with more than two dozen pharmaceutical and biotech companies involving the use of its tests in drug development, Dr. Pellini said. They won’t be affected by the deal, which is subject to regulatory approval.

In a statement, Daniel O’Day, chief operating officer of Roche’s Roche Pharma unit, said combining Foundation’s genomic and molecular information with Roche’s expertise in oncology will enable the companies to “bring personalized health care in oncology to the next level.”

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- PMO LN : Premier Oil Says It Can Break Even on $35-a-Barrel Oil: Times

- QIA GY : Qiagen Full Yr EPS Guidance Cut to ~$1/Shr on $47m Charges

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