TheChek News Flow

- China Coal Industry Association said to have agreed to cut production by an annual 10% in the second half of this year.

- Link: {http://betaville123.blogspot.co.uk/ }

Opportunity In Wireless

Buying T-Mobile would allow Dish to offer video, high-speed Internet and wireless voice and data service across the country in one package. Currently, it offers video services but its satellite Internet service isn’t as fast as those from wired providers. The company wants to compete better in the saturated U.S. pay-TV market by offering a viable bundling option where it can combine its satellite service and wireless capabilities, and offer consumers a convenient option of a single subscription.

Dish sees this bundling potential as a growth opportunity, which is not readily available in the pay-TV market. Pay-TV penetration is currently very high, with more than 90% of the U.S. TV households subscribing. Given the saturation level and slowdown in the housing market, it is difficult to see significant growth in the U.S. pay-TV subscribers. Moreover, the rise of alternative video platforms such as Netflix is adding to the woes of pay-TV operators. While the U.S. wireless market is also highly saturated, the demand for data services continues to increase and consumers are willing to pay for mobile Internet connectivity.

Why Would T-Mobile Make Sense For Dish?

T-Mobile U.S serves approximately 47 million subscribers, generating revenues of over $24 billion with a current market value of close to $25 billion. It has an advanced nationwide 4G and 4G LTE network, in which Dish has significant interest. The most important part for both players is that the acquisition may not bother regulators, as it would not eliminate one of the top four U.S. carriers. Last month, Sprint had to walk away from a takeover of T-Mobile after regulators expressed concern about losing one of the industry’s largest companies and the resulting impact on competition (see Sprint’s T-Mobile Deal Called Off, CEO Replaced As Turnaround Efforts Pick Up). All eyes will now be on Dish and Iliad as they vie for T-Mobile, and it will be interesting to see how the story unfolds from here.

Why The November AWS-3 Spectrum Auction Is Important

In its November auctions, the FCC will invite bids for a total of 65 MHz of spectrum split into two sub-bands. One sub-band is 15 MHz of unpaired spectrum from 1695-1710 MHz, available as one 5 MHz block and one 10 MHz block, and two 25 MHz of paired spectrum from 1755-1780 MHz (uplink) and 2155-2180 MHz (downlink), available as three 5 MHz blocks and one 10 MHz block each. The FCC has set a reserve price for the 1695-1710 MHz band of around $580 million and $10.07 billion for the paired 1755-1780 MHz and 2155-2180 MHz bands. While T-Mobile, Verizon and AT&T along with Dish have all expressed interest in the AWS-3 spectrum auction, Sprint has decided to stay away from it. The November auction is important for companies such as Dish, as it would give a clear picture of the value of the existing spectrum held by the telecom operators. It is possible that the AWS-3 auction will raise the value of spectrum currently held by the wireless operators, and it will be interesting to see how this impacts the industry at large in the near term. It will also be interesting to see if Dish makes a formal bid for T-Mobile following the auction.

US hedge fund manager Bill Ackman has decided to switch the planned listing of one of his funds from London to Amsterdam, following several years of trying to float in the British capital.

Mr Ackman’s Pershing Square hedge fund, which has been trying to raise money for a so-called permanent capital vehicle for at least two years, said yesterday that it was formally launching a $2bn fundraising on the Euronext Amsterdam exchange.

Pershing Square has built a reputation as an aggressive investor that made large profits from forcing changes at the companies it invests in.

Earlier this year, Mr Ackman pressed Botox manufacturer Allergan to put itself up for sale.

He has also achieved notoriety for what he has called a “patriotic” bet against the nutritional supplements company Herbalife, which he has argued is a pyramid scheme, repeatedly attacking its business model in public. Herbalife has denied the allegations.

By selling shares in his fund on an exchange, Mr Ackman will in effect be able to manage the funds raised in perpetuity – meaning he avoids the risk of large-scale investor redemptions that exist in a regular hedge-fund structure.

Raising capital in this “permanent” form allows managers such as Mr Ackman to wage long-term campaigns for corporate change without worrying about investors losing their patience and pulling money out.

While the choice to list the vehicle in Europe is unlikely to have any impact on the geography of where Mr Ackman chooses to invest, he has previously said that he believes the continent is ripe for a wave of activist investment campaigns. This year, Dan Loeb’s Third Point hedge fund took a stake in the Dutch conglomerate Royal DSM, arguing it was valued at lower than the sum of its parts.

People familiar with the process said Amsterdam offered sufficient liquidity to make it an attractive lower cost alternative to London.

US private equity group KKR previously used Amsterdam for a listing, before moving to New York.

Story

Dutch brewer Anheuser-Busch Inbev is in talks with banks to support what could be a USD 122bn (GBP 75bn) offer for the UK's SABMiller according to the Wall Street Journal.

An article attributed to a source who was not named noted that the Dutch company is considering such an offer on the heels of Heineken’s rebuff yesterday of an offer from the UK brewer. No formal overture would be made until finance was in place, the source said.

Additionally, the WSJ noted that SABMiller may well return to the plate on the Heineken offer, in the words of another unidentified source. The interest from SABMiller is not directly linked to a desire to put off Anheuser-Busch’s from its courtship.

Belgian newspaper l'Echo also reported on the developments and noted that SABMiller stock gained 12% in midday trading on the back of the speculation.

Source Wall Street Journal, L'Echo