>>> T-Mobile US: Iliad (ILIAF) in search of partners for TMUS bid - Oppenheimer

T-Mobile US: Iliad (ILIAF) in search of partners for TMUS bid - Oppenheimer

Oppenheimer discusses reports Iliad is having some success in gaining traction with private equity/strategic partners to make an improved joint bid for TMUS. They think strategic partners such as AMX (which has over 5M prepaid subs in the US and lots of capital) would make a lot of sense; CMCSA and DISH could also but not by the Iliad set October deadline. Iliad coud potentially bid $35-40 if it could raise ~$ 5 bln in equity. They believe TMUS's stated desire for additional spectrum would leave Dish Network as the primary partner, which they generally view as positive for TMUS, but note that this could also limit the bid price if Iliad and DISH decide to combine on an offer for the co.

>>> Mechel Steel trading lower by another 30% this morning on continued concerns

Mechel Steel trading lower by another 30% this morning on continued concerns 

Russian miner MTL is lower by another 30% this morning on continued bankruptcy concerns. MTL is currently indicated at $0.71/share. The stock lost 35% in Moscow trading today.
This morning's weakness follows a 30% decline in MTL yesterday following comments from a Russian economic minister suggesting that bankruptcy was the most likely scenario.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: CNET +20.1%, SUPN +9.5%, JRJC +7.9%, SLXP +7.8%, TKMR +7%, RWLK +6.4%, RWLK +6.4%, USAT +5%, ECYT +3.6%, PHG +2.7%, GOLD +2.3%, MBLY +2.3%, HMY +1.7%, NEM +1.6%, SLW +1.6%, ABX +1.4%, GDX +1.4%, GLD +1.4%, HLF +1.3%, FOE +1.2%, AU +1.2%, RIO +1.1%, SLV +1%, BHP +0.7%, MM +0.6%

Gapping down: MTL -41.2%, ASNA -11.7%, ALCS -6.9%, DKS -5.9%, SHPG -5.7%, GEL -5.1%, AZN -4.6%, SNN -3.4%, ABT -2.1%, YHOO -1.9%, TSLA -1.7%, TOT -1.4%, BABA -1.3%, DB -1.3%, TWTR -1.1%, BCS -1%, SAN -1%

>>> The bull market in bonds won’t end well.

The bull market in bonds won’t end well.

Worries about overheated debt markets dominated discussion at an investor conference in New York on Monday, with hedge-fund managers and corporate executives expressing concerns about the bond market as the Federal Reserve moves closer toward raising interest rates.

"Bonds are at ridiculous levels," Julian Robertson, founder of one of the earliest hedge funds in Tiger Management Corp., said on a panel at the Bloomberg Markets Most Influential Summit. "It’s a world-wide phenomenon that governments are buying bonds to keep their countries moving along economically."

Howard Marks, the chairman of Oaktree Capital Group LLC, said interest rates are "unnaturally low today." Leon Cooperman, founder of Omega Advisors Inc. and former partner at Goldman Sachs, said bonds are "very overvalued."

The problem is no one knows when, or if, disaster will strike.

(BFW) Pfizer May Return for Astra Despite New Inversion Rules: Citi

Pfizer May Return for Astra Despite New Inversion Rules: Citi
2014-09-23 10:21:18.12 GMT


By Allison Connolly
Sept. 23 (Bloomberg) -- Pfizer may restart talks with Astra
shareholders post Nov. 26 given the multiple strategic, cost and
tax benefits that remain despite U.S rules discouraging
inversion, Citi (buy) says in note.
* Sees little negative impact from the U.S. measures on the
economic benefit from the proposed Pfizer acquisition of
Astra
* Est. Astra intrinsic value on a stand-alone basis is GBP54
based on pipeline
* NOTE: Late yday, Obama Says New Rules Designed to Discourage
Corporate Inversions


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aconnolly4@bloomberg.net
To contact the editors responsible for this story:
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jludden@bloomberg.net
Gaurav Panchal

(MS) Global Oil Services Drilling & Equipment : Equipment M&A

Siemens’ offer for DRC puts the spotlight on M&A within the broader oilfield equipment space. We explore the value to DRC as well as potential valuation upside for other energy equipment names, many of which have lagged.

Siemens’ offer for DRC: DRC has agreed to sell itself to Siemens for ~$7.6bn, or $83/share. This is the largest transaction in our space since ESV’s acquisition of Pride in 2010. The proposed offer values DRC’s business at 17.4x LTM EBITDA and 15.8x FY1 EBITDA, near the high end of multiples among sizeable transactions in our space. See page 3 for our M&A tracker table.

DRC to benefit from Siemens’ scale. DRC management has highlighted that the merger with Siemens will allow DRC to leverage Siemens’ larger footprint to (i) market and accelerate development of its suite of technologies, (ii) provide cross-selling opportunities for Siemens’ products under the DRC brand name. We note that Siemens’ reported $83 offer
is about a 40% premium to where DRC traded several months ago prior to deal speculation, and 14% above where it closed on Wednesday following Sulzer’s announcement that it was in talks with DRC.

M&A in Oil Services: The most recent major deal in our space occurred when GE acquired Lufkin over a year ago. With the S&P500 at an all-time high and offshore equipment names continuing to lag, more M&A may come to pass. On p. 2, we explore the hypothetical upside if the market were to value equipment names at multiples comparable to DRC’s
imputed acquisition multiple. However, we are currently aware of no deals involving these companies.

(CS) Commodities Forecasts - The Unincredible Bulks

The peak years of the China-driven supercycle saw unrelenting industrial commodity demand and supply failing to keep up. That is now well past. Supply is now the primary consideration driving our outlook for each commodity.
■ Bulks – there is too much supply. Coal prices may improve in CY15 as producers capitulate, but that just changes the outlook from grim to uninspiring. Iron ore is a couple of years behind coal, but following the same path to pitiless pricing with relentless supply expansions by major miners.
■ Base metal outlooks are diverse. We are positive for zinc and lead because there is insufficient supply. Prices need to rise to stimulate mining and refining. Conversely there seems to be too much supply for copper, although the true balance is shrouded by the temporary demand for financing applications. There's more nickel inventory than we thought, so supply constraints will take longer to bite, cooling the allure. Aluminium is finely balanced – in deficit currently, but price improvements threaten to bring on more supply and drown the emerging price recovery.
■ Our positive view for PGM's is based on supply struggling to keep up with steadily increasing demand, centred around vehicles. Supply is dominated by Russia, with geopolitical issues, and South Africa with its fractious unions and troubled mines. We expect stockpiles to contract over the next 18 months, opening a path to higher prices.
■ For gold and silver, demand is still critical. The increasing wealth of India and China is seeing stronger demand for gold and silver for jewellery and hoarding that should underpin the metal prices against the vagaries of interest rate and ETF movements.

(BFW) Credit Suisse Open to Acquisition Opportunities, Khan Says

Credit Suisse Open to Acquisition Opportunities, Khan Says
2014-09-23 08:15:14.398 GMT


By Giles Broom and Jeffrey Voegeli
Sept. 23 (Bloomberg) -- Credit Suisse open to transactions,
hiring teams, Iqbal Khan, CFO of private banking and wealth
management, says at Euroforum conference in Zurich.
* Co. can benefit from market consolidation, Khan says
* NOTE: Julius Baer CEO Says He Isn’t in Sale Talks With
Credit Suisse NSN NC1VPJ6K50YF <GO>
* NOTE: Swiss Private Bank Deal Speculation Overblown,
Vontobel CEO Says NSN NBQY4V6S972G <GO>


Link to Company News:CSGN VX <Equity> CN <GO>

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(Jeffries) Global Equity Strategy : US: A Sweet Spot For The US Consumer

Key Takeaway
The US consumer might be set for an unexpected lift in purchasing power.
Firstly, while average earnings remain subdued, US employment conditions
appear to be improving. Indeed, some surveys suggest that earnings are
growing much faster than the 'average' (see Exhibit 5). Secondly, Household
wealth continues to grow annually at double digit levels.
Thirdly, China's slowing economic growth is already making a dent in global
commodity demand. In particular, oil prices have slipped as China's import
demand has flagged. Fourth, imported prices for overseas goods have fallen
helped by excess supply in emerging markets and a firmer dollar. The stronger
dollar tends to reduce the price of imported garments, technology goods as
well as household furnishings.
‘A bargain is something you can’t use at a price you can’t resist’, Franklin Jones
‘We used to build civilizations. Now we build shopping malls’, Bill Bryson
The US is no different than Japan or Germany where companies have made
significant productivity gains during the past two decades but wages have
remained static. The productivity gains from globalization, automation and leaner
inventory management has been passed mostly to shareholders or companies which have
lowered their debt levels (see Exhibit 4). Although US headline wages do not appear to
be growing, a glance at some of the hiring data suggests much tighter labor markets (see
Exhibits 10-12) .
Interestingly, thousands of miles across the Pacific, China’s economic slowdown
from plus 8% growth to around 7% has caused a reverberation in commodity
markets. In Aug., China's industrial production slumped to a six year low. Value added
industrial output rose by almost 7% but down from 9% in July, the lowest rate of change
since Dec. 2008. Net commodity demand has been slipping through 2014 (see Exhibits
24-29). Falling commodity prices are likely to provide a one-off boost to US real incomes.
Furthermore, imported prices of goods into the US have been slipping due
to weaker demand in Europe and emerging markets. The stronger dollar is also
making the price of imports ‘cheaper’. Household wealth net worth jumped US$1.4 trillion
in the second quarter helped by higher stock prices and resilient house prices. Consumer
sentiment surveys such as the University of Michigan have continued to climb from their
2008 lows (see RHS chart).
The bottom line is that the US consumer is set to benefit from a tailwind
of falling commodity prices, a strong dollar and record household wealth.
We would argue that labour markets are tighter than surveys suggest. Importantly,
analyst earnings are on the whole being revised up alongside firming share price target
prices. However conviction levels are still quite weak given the low percentage of ‘Buy’
recommendations. On the sector, we are turning more favorable on the US consumer for
the first time in a year.
Within the Jefferies universe of retailing stocks, those that have more than double digit
upside and a strong earnings upward revision during the past quarter include ClubCorp
(MYCC, Buy, TP: US$30.0), American Eagle Outfitters (AEO, Buy, TP: US$20.0),
Under Armour (UA, Buy, TP: US$80.0) and Foot Locker (FL, Buy, TP: US$66.0).
A wider list is shown in Exhibits 1-3. Our S&P 500 target of 1,950 has been surpassed and
we would expect the next few weeks to offer a more attractive entry point.
Jefferi

(Kepler-Cheuveurx) Autos & Parts : Truck Matters

* Daimler and VW least vulnerable to delayed European rebound
To us, a rebound in European demand is the key short-term catalyst. Given recent news (short-time work at MAN trucks), we cut our market estimates from -5% to -8%, now believing the European rebound will not materialise before year-end (vs. Q3 assumed before), and lower our operating profit estimates on average by 4% for 2014 and our TPs by 3%. Daimler and VW look the least vulnerable to a delayed rebound.

* Regulatory framework continues to drive truck globalisation
The truck industry is globalising technologically due to converging and tightening emission standards. The related rising R&D costs along with the cyclicality of the industry mean that companies need scale and flexible cost structures, but also that truck OEMs can share components across regions. Long-term, this gives global players, Daimler and Volvo, a cost advantage over local players, and forces the latter to consider M&A.

* Top pick: Daimler – the best of both worlds in trucks
Our favourite truck OEM is Daimler (Buy, TP cut from EUR80 to EUR79) while our stance on VW (Buy prefs, TP cut from EUR226 to EUR224) is based on its light vehicle activities. For CNH Industrial (Hold, TP USD8.4) and Volvo
(Hold, TP cut from SEK95to SEK88), we see no short-term catalysts.