WSJ : AB InBev Seeking Finance for SABMiller Deal

AB InBev Seeking Finance for SABMiller Deal

Potential Deal Would Bring Together the World's Two Largest Brewers

Budweiser cans run through a filling machine at an Anheuser-Busch InBev brewery in Los Angeles. Associated Press LONDON— Anheuser-Busch InBev BUD -1.03% NV is talking to banks about financing what could be a roughly £75 billion ($122 billion) deal to buy global beer rival SABMiller SAB.LN +10.79% PLC, according to a person familiar with the matter.

A tie-up between the world's two largest brewing companies has been rumored for years, but a revival in global merger activity this year has sparked renewed speculation about a deal. AB InBev isn't in active discussions with SABMiller, said the person, explaining the company is waiting to line up its financing before making a formal approach.

More Heineken First-Half Net Profit Falls (8/20/14) European Brewers Are Hurt in Russia (8/20/14) SABMiller Beer Volumes Rise (7/24/14) Beer Makers Pray for a Fruitful Summer (6/29/14) Heineken to Open New Brewery in Ethiopia (6/20/14) Is InBev's Latest Buy an Aperitif Before a Megadeal? (1/20/14) The talks about financing come on the heels of an approach by SABMiller to buy Dutch brewer Heineken HEINY -2.31% NV, which Heineken said Sunday it had rejected. The U.K. brewer hasn't been discouraged by Heineken's initial rejection and would consider another bid, according to another person familiar with the discussions.

AB InBev had a nearly 20% share of the global beer market in 2013, according to data service Euromonitor. It is trailed by SABMiller, with a 9.6% share, and Heineken, with a 9.3% share.

SABMiller, maker of Foster's, Peroni and Miller, is interested in Heineken's eponymous beer brand, which it would distribute through its channels in Africa, according to the person familiar with SABMiller's discussions. The person added that pursuit of a deal with Heineken wasn't motivated by a desire to stave off a bid from AB InBev.

>>> Cognizant To Acquire TriZetto, a provider of healthcare IT software and solu

To Acquire TriZetto, a provider of healthcare IT software and solutions, for $2.7B in cash 

TriZetto and its 3,700 employees will be a part of Cognizant's existing healthcare business, which currently serves more than 200 clients, including 16 of the top 20 U.S. health plans and four of the top five pharmacy benefit management companies. Healthcare currently represents approximately 26 percent of Cognizant's revenue.

CEO: The transaction is expected to be immediately accretive to Cognizant's non-GAAP EPS, excluding one-time transaction costs and adjustments

Cognizant intends to finance the transaction through a combination of cash on hand and debt, and has secured $1 billion of committed financing in support of the transaction. The transaction is expected to close in the fourth quarter of 2014. The purchase agreement provides for customary closing conditions and purchase price adjustments including, without limitation, adjustments for items such as cash, indebtedness and working capital.

Cognizant was advised by Credit Suisse, UBS Securities LLC and Centerview Partners. Legal counsel to Cognizant was provided by Latham & Watkins LLP and Nishith Desai Associates. TriZetto was advised by JP Morgan Securities LLC and Goldman, Sachs & Co. Legal counsel to TriZetto was provided by Kirkland & Ellis LLP.

NY Post : TV ratings to rise as Nielsen adds handhelds

No matter what they slap on the air this fall, television execs can bank on a nice ratings boost.
For the first time, the Nielsen ratings that are the lynchpin of the TV business will start counting viewers who watch shows via mobile apps on tablets, phones and other handheld devices.
Folding in mobile viewing is expected to add hundreds of thousands of new viewers overnight, according to several industry estimates.
Even better for networks dealing with youth-obsessed advertisers: the average age of their audience will skew younger.
Steve Hasker, Nielsen’s president of global product leadership, predicted that after years of declines, live TV ratings will “be flat or up” this season.
Hasker, speaking at a media conference on Thursday, said demand for Nielsen’s mobile ratings product has been off the charts as networks look to boost their numbers after years of live ratings erosion.
Consumers have been reading less and even visiting malls less in favor of watching online video, he added.
Nielsen’s latest “Cross Platform Report” shows that consumers spent 126 minutes a day using their phones, up from 48 minutes in 2012.
Brad Adgate, chief researcher for Horizon Media, said mobile ratings would be a boon for the online video space as well.
“The viewers are significantly younger,” Adgate said.
The median age of a primetime TV viewer is 55; it was 40 years old two decades ago.
Investors have been skittish about cable and broadcast stocks given the weak “upfront” ad sales market in the spring and fears that TV dollars are migrating to digital.
But some advertisers may be sitting on the sidelines, knowing there could be more eyeballs to buy in the future.
“Next year’s upfront will look very different,” said one media analyst.
David Poltrack, CBS’s chief research officer, said the move to measure mobile involves several positive developments for the networks.
For one, video-on-demand is growing faster than DVR playback. The networks can disable fast-forwarding on VOD platforms as opposed to ad-skipping DVRs.
There’s also dynamic ad insertion. Advertisers in the current episode of CBS’s “Big Bang Theory,” for instance, will also show up when viewers watch older episodes, enabling networks to get credited in the ratings.
Just as important for the targeted advertising model: “Nielsen will have the ability to identify within the app who the individual viewer is,” Poltrack said.
“Viewing via WiFi in the home has been around for over a year now, and people are using it more and more,” he said. “ We don’t have any good measure of that viewing.”
While many have criticized Nielsen for its slow move to measure mobile, the company was forced to wait while major clients sorted out their mobile rights issues and in some cases their entire business model, according to Hasker.
“Some didn’t know what their business models were; they weren’t ready,” he said at the Goldman Sachs Communacopia conference on Thursday. “But we were right on it and were ahead of our customers.”

(BFW) Apple Watch May Put Pressure on Low-End Swiss Watch Brands: CLSA

BN 09/15 08:55 *CLSA ANALYST JON OH COMMENTS ON APPLE WATCH IN BRIEFING
BN 09/15 08:55 *APPLE WATCH MAY POST COMPETITIONS TO LOW END SWISS BRANDS: CLSA
Apple Watch May Put Pressure on Low-End Swiss Watch Brands: CLSA
2014-09-15 09:21:42.155 GMT


By Billy Chan
Sept. 15 (Bloomberg) -- Low-end Swiss watch brands may face
competitive pressure from Apple watch, CLSA analyst Jon Oh says
in a briefing today.
* Swatch expected to be more affected by Apple watch because
of higher exposure in low- and mid-end segments vs peers,
CLSA analyst Aaron Fischer says
* Richemont, Rolex and other luxury watch brands to be less
impacted: Fischer

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To contact the reporter on this story:
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>>> S&P: Issues report saying ECB responds to threat of a triple dip

S&P: Issues report saying ECB responds to threat of a triple dip 

- While the TLTROs are likely to have a relatively positive effect on credit conditions in the periphery, their net effect on the ECB's balance sheet will be very modest at first. Furthermore, estimates put the buying capacity of the ABSPP at less than EUR10 billion a month, which suggests that the impact on the central bank's balance sheet will also be slow to materialise.
- This is why we believe that the ECB's recent decisions increase the probability that it will eventually launch a full-fledged quantitative easing program of private sector bond purchases to obtain a meaningful and relatively swift impact on its balance sheet.
- In our view, the vulnerability of the recovery in the eurozone, the elevated risks of a triple dip, and the threat of negative inflation would justify the recourse to additional non-conventional measures.

FT : Developing world is vulnerable to rapid fixed income growth

The rapid growth of emerging market funds, combined with “herd behaviour” by investors, threatens to be a source of “vulnerabilities” for the developing world, the Bank for International Settlements has warned.
Emerging market bond funds have seen their assets quadruple from $88bn to $340bn in the four years to the end of 2013, said BIS, quoting data from EPFR Global, while EM equity funds expanded from $702bn to $1.1tn.

Against this backdrop, Basel-based BIS, known as the central bankers’ bank, warned that over the past two years investment flows and asset prices had “amplified each other’s fluctuations”, raising the risk of emerging markets being “destabilised” by sudden outflows.
It found that emerging market fund managers used a narrower range of benchmarks than developed world managers, and investor flows were more “clustered” in emerging markets, raising the likelihood of correlated movements and “one-sided markets”.
“The way the industry is managed, [with] widespread benchmarking and short-term performance assessment, limits the degree to which individual portfolio managers can deviate from industry averages,” said Hyun Shin, a BIS economist.
“The behaviour of the ultimate investors can introduce further correlation. There is some evidence that during last year’s taper tantrum retail investors were prone to herding and they herded procyclically, which means they withdrew from funds when prices were falling and re-entered when they were rising, forcing funds to sell when prices were falling and buy when prices were rising.”
Mr Shin said institutional investors behaved in a more stable manner, “but it remains to be seen whether they will do so in more stressful periods”.
BIS warned that the prudential regulation of the asset management industry focused primarily on microprudential and consumer protection aspects. It called on policy makers to broaden their scope and “address issues that give rise to correlated behaviour across asset managers or the procyclicality of investor flows and asset prices” to design an “effective policy response”.
A senior figure at a large EM house argued that a major flaw in the system was that just 15 per cent of local currency bonds were included in mainstream indices, meaning passive funds and benchmark-constrained active funds were forced to funnel all their money into this small slice of the market. He said a solution would be for the World Bank or a similar organisation to collect its own daily pricing data, allowing the creation of far wider-ranging indices.
“There is a major market failure and the fact that it happens is an abrogation of duty on the part of international civil servants that is absolutely mind-blowing,” he said. “It would cost the World Bank or the IMF $10,000 per country per year to do this. That is a drop in the ocean.”
He also argued that EPFR data only captured a small slice of the market, mostly US mutual funds, meaning few conclusions can be drawn from it.
“The cacophony of alarmist [talk] is based on just 2 per cent of the [EM local currency government debt] asset class, it’s just a very visible 2 per cent. It’s important to put the volatility concerns into context.”

(UBS) SABMiller offer for Heineken

Abstract:
Bloomberg reports on SAB's offer to Heineken
Bloomberg reports that SAB made an approach to the controlling family of
Heineken to make an offer for the company two weeks ago, but the offer was
rejected by the Heineken family commenting that "The Heineken family has
informed SABMiller, Heineken and Heineken Holding N.V. of its intention to
preserve the heritage and identity of Heineken as an independent company. The
Heineken family and Heineken N.V.'s management are confident that the Company
will continue to deliver growth and shareholder value." This move by SAB would
effectively have been a poison pill against a possible bid by ABI. L'Arche
Green (Heineken family) holds a 51.482% stake in Heineken Holding which in turn
owns 50.005% of Heineken NV.

UBS views
We discussed this possible scenario in our 16 April report "" (p37),
attributing a low probability exactly for the reason that we thought the
Heineken family wishes to retain control of the business and would rather pick
up possible assets that could require disposal in an ABI/SAB combination.

Strategic rationale behind the offer
The strategic rationale of SAB combining with Heineken would be about adding
the Heineken premium brand to SAB's geographic footprint, especially in EM,
given that SAB lacks an international premium brand of scale (Grolsch, Peroni,
Pilsner Urquell are all small). However, a combination of SAB/Heineken would
likely raise anti-trust concerns in South Africa, Nigeria, Poland, Czech,
Romania, Holland, Italy and India. The fact that SAB approached Heineken to
create a possible poison pill against an approach by ABI, illustrates how
seriously the SAB Board and management views this possible scenario.

Valuation
We have a Buy rating on ABI with a DCF-based €94 PT while we are Neutral on
SABMiller (DCF-based PT 3,500p) and Heineken (DCF-based PT €56).

For a full version of this report, including disclosure information and analyst
certification, please see the attached PDF.

>>> What to look at today - 15/09/2014

US Market Closed lower on Friday with S&P finishing the week lower by 1,1%, Energy sector was one of the main driver of the market weakness closing down -1,5%, GS +1,2% helped the financial sector to close near its flat line, Consumer staples (-0.7%) and health care (-0.7%) registered comparable losses with the health care sector pressured by biotechnology, telecom services (-1.2%) and utilities (-1.8%)—were hampered by higher interest rates, volume were higher than the last few days @ 675mil shares...VIX @ 13,31 +3.99%...Talk of a benign slowdown in China following recovery in lending figures has
taken a back seat to renewed panic after August industrial output slowed to its lowest level since Dec 2008, retail sales slowed to a 4-month low while fixed investment growth is down at multi-year low rate. Copper and Crude oil are down over 1% in electronic trade on China data, Haitong cut Q3 GDP target to 7%, Everbright warned of a rising probability of hard landing, and ANZ estimated 9% industrial output required to achieve 7.5% annual GDP growth. Nikkei +0.25% Hang Seng -0.75% Shanghai +0.11%

Eur$1.2962 S&P -0.35% EurosStoxx -0.37% FTSE -0.29% Dax -0.54% SMI -0.14%

Keep an eye on :
- A2A IM : Says any merger project will be evaluated in the coming months
- AF FP : Air France Cancels 60% of Flights the 16th of sept on Pilot Strike
- AAPL US : To receive 0.15% cut from Apple Pay transactions - FT
- ASSAB SS : Assa Abloy CEO says it may make further Chinese buys; in talks with possible targets  - Dagens Industri
- EDF FP : EDF’s Flamanville Had Unplanned Shutdown of 1 Reactor: Le Monde
- EDP PL : ES Saude bidder Grupo Jose de Mello to sell EDP stake to part-finance its EUR 4.40/share bid
- GE US : GE Lighting flagged as next potential divest
- HEIA NA : SABMiller Said to Approach Heineken Family With Offer
- ICL IT : Israel Corp. to Sell About 6% of Israel Chemicals’ Shares
- MC FP : LVMH’s Biver Says TAG Heuer Has Plans for Smartwatch: NZZamS
- MEO GY : Metro rejects speculation of possible Media-Saturn, its consmer-electronic division sale - ARD
- MCR LN : Attachmate and Micro Focus in late-stage merger talks - FT
- MOR GY : Receives Research Grant to Develop Novel Therapeutic Antibodies Targeting GPCRs; worth up to €1M
- MUV2 GY : Reinsurer Munich Re Vows to Resist Pricing Pressures - WSJ
- NESN VX : Nestle Europe Chief Sees Rising Prices for Coffee Products: SaS
- NOBN VX : Danaher to Buy Nobel Biocare Holding for CHF17.10/Share in Cash (5.5% below friday closing price 18.10)
- NOVOB DC : Novo Nordisk CEO Says U.S. More Open to Obesity Drugs: FT
- NUM FP : Numericable to Roll Out New Service as Netflix Alternative: WSJ
- RBS LN : RBS Faces GBP5.6b Pension Funds Gap If Scotland Votes Yes: Times
- RHM GY : Rheinmetall in talks to acquire Thyssenkrupp's marine systems unit, could exit its automotive unit to finance deal - Der Tagesspiegel
- RNO FP : Renault’s Ghosn Sees Slow Recovery in European Car Market,
- RNO FP : Russia Car Market May Return to Growth Next Yr, Vedomosti Says
- ROG VX : Chugai CEO confirms no plan of Roche to gain full control
- SCR FP : Scor ‘On Track’ to Meet Targets, CEO Denis Kessler Says
- SPR GY : Axel Springer, Ringier Didn’t Reach Magazine Deal, Spiegel Says
- SREN VX : Swiss Re Sees Catastrophe Reinsurance Price Slide Slow in 2015
- SYNN VX : Cargill files suit against Syngenta GMO seeds in Louisiana court
- UNITED BISCUIT : United Biscuits suitor San Miguel mulling solo bid
- VOD LN : Netflix to Cooperate With Telekom, Vodafone in Germany: Wiwo
- VOW GY : Volkswagen’s Audi Plans New E-Tron Model Every Year: Autogazette