>>> CaixaBank faces EUR 3bn capital shortfall if ECB changes regulations

CaixaBank faces EUR 3bn capital shortfall if ECB changes regulations 

CaixaBank [BME:CABK] could be forced to raise EUR 3bn in capital if the European Central Bank (ECB) removes the Spanish bank's status as a financial conglomerate, El Confidencial reported. The Barcelona-based bank is confident that it will be able to maintain this status or reduce its capital needs if it cannot, the report said.

Banks have a status of financial conglomerate if more than 10% of their revenue comes from insurance, the report said, adding that BNP Paribas [EPA:BNP], Crédit Agricole [EPA:ACA], Crédit Mutuel, KBC [EBR:KBC], ING [NYSE:ING] and Unicredit [BIT:UGC] all benefit from this category. The ECB is thinking of removing the category, the report said.

El Confidencial

>>> Afren suitor SEPLAT advised by RBC and Citi on bid approach

Afren suitor SEPLAT advised by RBC and Citi on bid approach

Nigerian oil and gas group SEPLAT [LON:SEPL] is being advised by RBC and Citi on its “highly preliminary approach” to Afren [LON:AFR], according to a person familiar with the matter. The two banks worked on SEPLAT’s IPO in April this year, alongside BNP Paribas, Standard Bank and Renaissance.

Morgan Stanley and Bank of America Merrill Lynch are Afren’s corporate brokers but a recent news report suggested that the company had engaged Rothschild to shore up its defences.

Today (22 December) Afren said to have received an early approach from SEPLAT regarding a possible combination with Afren. SEPLAT will have until 19 January 2015 to either announce a firm offer or walk away. SEPLAT's share price jumped to 49.39p on the announcement.

The Africa and Iraq focused oil and gas group could attract the attention of other potential bidders, according to two sector sources. Decent assets, combined with management issues and a falling oil price make the company an attractive target, said the sources. Afren recently dismissed its CEO, COO and two associate directors after an investigation into unauthorised payments by management and senior employees.

It has assets in West Africa, most of which are located in Nigeria – both on and offshore – East Africa, South Africa and the Kurdistan region of Iraq.

A reported suitor is another Nigerian oil and gas group South Atlantic Petroleum (also known as SAPetro), which has been acquiring shares in the company and now owns 7.055%, according to a 16 October regulatory filing. SAPetro is the exploration vehicle of businessman and former Nigerian minister Theophilus Danjuma.

Nigeria has seen oil and gas activity in 2014 with a bid round for marginal fields but is seen as a difficult country to work in for foreign operators, said one of the sources.

Glencore [LON:GLEN] would also make sense as a bidder, said the second source. Earlier this year the commodity group acquired Caracal Energy in neighbouring Chad.

A buyer could look to divest Afren’s Kurdistan assets separately, suggested the second source.

Now is seen as a good time to acquire oil and gas assets due to the dramatic fall in the oil price, which has impacted share prices across the board.

Part of the reason for listing SEPLAT earlier this year was to raise money for acquisitions, according to the person familiar. SEPLAT became the first Nigerian company to dual list in London and Lagos when it floated earlier this year.

>>> US Close Dow+0,87% S&P+0,38% Nasdaq+0,34% Russell+0,50%

Closing market Summary: Dow and S&P Hit New Closing Highs

Remember last week's rally effort following the pronouncement from the FOMC that it will be patient in raising the fed funds rate? Well, it's not over yet. The stock market on Monday continued its winning ways with each of the major indices adding to their gains. Both the Dow Jones Industrial Average and S&P 500 closed at new all-time highs.

Throughout Monday's trading, there was a clear preference for owning Dow Jones Industrial Average stocks. Our sense of things is that participants were favoring these names for their liquidity, which is optimal in the event positions need to be exited quickly, and for their appeal as conservative options to participate in further upside should the year-end rally continue.

Either way, it was a good day for the price-weighted average, which saw 27 of its 30 components advance. IBM (IBM 161.45, +2.94) was the biggest price mover while Intel (INTC 37.22, +0.85), up 2.3%, was the biggest percentage gainer.

Those stocks helped lead the information technology sector (+1.1%), which was the best-performing sector in the S&P 500. Its gains helped offset weakness in the health care (-1.2%) and energy (-1.0%) sectors.

Health care was weak due in large part to a large loss in Gilead Sciences (GILD 92.90, -15.55), which followed reports that pharmacy benefits manager Express Scripts (ESRX 82.34, +1.37) is going to displace Gilead's hepatitis C drug, Sovaldi, in favor of a less expensive offering from AbbVie (ABBV 66.96, -0.75), Viekira Pak, which recently won FDA approval and will become the exclusive option in the formulary for patients with genotype 1 hepatitis C.

Essentially, the decision by Express Scripts created some angst about potential pricing pressures for the drug makers. Not all drug makers were weak on Monday, yet Merck (MRK 58.95, -0.63) was one of Dow's three losers, which also included Chevron (CVX 112.05, -0.88), and ExxonMobil (XOM 93.31, -0.33).

The energy sector traded in negative territory throughout the day, pressured by a renewed drop in oil and natural gas prices. WTI crude futures dipped 3.3% to $55.27/bbl while natural gas futures, hit with forecasts for warmer winter temperatures ahead in the northeast, plunged 8.2% to $3.18/btu.

Commodities in general were weak on Monday with a stronger dollar pressuring some of the action. To that end, gold futures slipped 2.0% to $1172.60/troy ounce; meanwhile, copper futures fell 0.4% to $2.87/lb.

There didn't appear to be any abject concerns in the stock market about the weakness in commodity prices signaling economic trouble ahead. Granted the materials sector (0.05%) underperformed, yet the industrials (+0.9%), consumer discretionary (+0.9%), and financial (+0.6%) sectors outperformed.

Interestingly, the 10-yr Treasury note battled back from modest losses and went out at its highs for the day as stocks were advancing into the close to finish at their best levels of the session. The highs weren't that high for the Treasury market. The 10-yr note was unchanged at 2.165%, yet its steady state didn't necessarily reflect the same amount of confidence in the outlook that the stock market's continued gains did.

A weaker-than-expected Existing Home Sales report for November, which showed a 6.1% decline in homes sold from October to an annualized rate of 4.93 million units ( consensus 5.20 mln), lent a measure of support to the Treasury market.

Tuesday will feature an extensive lineup of economic releases that includes the Durable Orders, Third Estimate for Q3 GDP, Personal Income and Spending, University of Michigan Consumer Sentiment, and New Home Sales reports.

Volume was on the lighter side of recent averages as 772 million shares traded at the NYSE.
  • Nasdaq Composite +14.5% YTD
  • S&P 500 +12.5% YTD
  • Dow Jones Industrial Average +8.3%
  • Russell 2000 +3.1% YTD

>>> US Gapping Up

In reaction to strong earnings/guidance: None

M&A related: SANW +35.2% ( to acquire DuPont Pioneer's alfalfa research and production assets for $42 mln), CACQ +1.3% (merging with CZR in all stock transaction) CZR +3.8% (merging with CACQ in all stock transaction).

A few Russia names are trading higher amid bounce in ruble, decline in bond yields there: QIWI +3.4%, YNDX +3%.

Other news: ACHN +14.5% (announced positive data on hepatitis C treatment), ENTA +21.2% (FDA approves AbbVie's (ABBV) Viekira Pak; ENTA is partnered with ABBV on drug), CYTX light volume +20% (on Friday morning co amended BARDA contract to accelerate thermal burn injury countermeasure), BCRX +10.2% (receives FDA approval for the treatment of acute uncomplicated influenza ), PLUG +5.6% (still checking), TASR +3.6% (announced multiple orders of its TASER brand next generation Smart Weapons and Conducted Electrical Weapons), NLNK +3.5% & Merck (MRK) announce collaboration to manufacture Ebola vaccine candidate supported by $30 mln government award), PBR +3.4% (still checking), CBST +2.1% (announces FDA approval of new antibiotic ZERBAXA).

Analyst comments: BBRY +2.1% (upgraded to Buy from Hold at TD Securities), RAD +1.8% (upgraded to Outperform from Market Perform at Cowen).

>>> US GApping Down

In reaction to disappointing earnings/guidance: SGOC -56.8% (announced FY14 interim financial results: revenues decreased 70% to $34.1 mln), TESO -7.3% light volume (guides Q4 below consensus following oil price decline).

Other news: GILD -11.6% (Express Scripts (ESRX) agreed to make AbbVie's (ABBV) Hep C drug (Viekira Pak, approved on Friday) the exclusive treatment for most patients), OCN -10% (WSJ reports Chairman may resign amid settlement), NEWM-1.8% (files for $150 mln offering of common stock).

>>> APP US : confirms receipt of acquisition offer valued at $1.30-1.40/shr

Appoints Colleen B. Brown as Chairman, effective immediately; confirms receipt of acquisition offer valued at $1.30-1.40/shr 

The Board of Directors confirmed that it has received an indication of interest to acquire the Company for $1.30 to $1.40 per share. The Board takes these matters seriously, and it will evaluate this proposal in the ordinary course of business. 

The Company remains focused on positioning American Apparel for a successful turnaround.The board announced that Allan Mayer and David Danziger have stepped down as Co-Chairmen of the Board and will be replaced by Board Member Colleen B. Brown as Chairperson. 

Mr. Mayer and Mr. Danziger will continue to serve as Members of the Board and will retain their positions as Chairs of the Compensation and Audit committees, respectively.Ms. Brown, who joined the Board in August and has been serving as Chair of the Nominating and Governance Committee, brings years of experience as both a chief executive and board member of publicly traded companies. Ms. Brown has been instrumental in driving impressive turnarounds, returning several companies to profitability, and has been nationally recognized for her outstanding contributions in enhancing shareholder value.

>>> Wm Morrison Xmas sales could trigger 2015 buyout or rights issue speculation

Wm Morrison Xmas sales could trigger 2015 buyout or rights issue speculation - Analysis
* Buyout firms could look again if figures improve
* Xmas sales seen as key to CEO’s future
* Rights issue, asset sales talk could arise if numbers disappoint

Wm Morrison [LON:MRW] buyout or rights issue speculation could resurface in the New Year, according to several M&A advisers following the situation. The company faces its own crunch time in 2015 as pressure builds on CEO Dalton Philips and incoming chairman Andy Higginson to deliver, they said.

Morrisons may be forced to review every inch of its business along the lines of Tesco’s [LON:TSCO] ongoing review if a new pricing strategy and cost cutting fail to bite, the advisers said. Asset sales could come on the agenda if extra capital and a change of strategy is required, they warned.

Buyout funds backed off take-private plans in early 2014 after running the numbers and determining competition from other supermarkets was too strong, said the first adviser, who is familiar with one fund’s process. But, increasing pressure on Tesco and J Sainsbury [LON:SBRY] during 2H14 could see firms reopening their Morrisons files, this adviser said.

Funds should be expected to have in mind the numbers needed for them to begin looking again, a second adviser said. As the focus on Tesco inevitably subsides, Morrisons will find itself centre-stage again in 2015, the second said. “They’ve been quite lucky for six months,” this adviser said, describing Morrisons as a “lame duck”.

Philips’ job could hang on Christmas numbers to be released on 13 January 2015, an industry analyst speculated. In November it was thought Morrisons would emerge from Christmas in better shape following an analyst and investor presentation. But, expectations have come off somewhat through December, the analyst said.

One option available to Higginson is leading a take-private consortium himself, the first adviser claimed. The possibility cannot be ruled out due to Higginson being an intellectually tough and commercially mined individual, a third said. Higginson formally takes up the Chairman role in spring 2015. He joined the Morrisons board in October after stepping down from chairing Poundland [LON:PLND].

But funds should remain wary of backing a take-private based on current trading, two other advisers said. This means Christmas sales numbers will be the most watched supermarket sector figures in years, one said. Funds are to unlikely to have the stomach to handle two years of negative cash flow if the outlook for 2015 disappoints, they said.

Buyout groups would require Higginson brings in a stronger management team, meaning Philips could be gone either way, the first adviser claimed. An early move on management could reveal the chairman’s intentions, this adviser explained. Former Tesco director Higginson would be in a position to cherry pick top executives from the ailing giant, while also looking to the likes of Poundland.

Meanwhile, buyers exist for Morrison’s manufacturing divisions, one adviser said. While it might have to take a hair cut on the bread business, the likes of Greencore [LON:GNC] and Bakkavor could be interested in Morrison’s pies and fish arms. Its meat business could be divided up between existing competitors as well, this adviser suggested.

A Morrisons spokesperson declined to comment on speculation of a buyout, rights issue or asset sales. The spokesperson pointed to Philips’ comments made in November that it was making good progress on plans set out in March to generate GBP 2bn in cash and GBP 1bn in cost savings over three years.

Morrisons said in November that it expects underlying 2014/15 profit before tax to be in a range of GBP 335m to GBP 365m (previously GBP 325m to GBP 375m). The 13 January Christmas trading statement will cover the six weeks to 4 January. Its financial year-end is 1 February, with preliminary results announced on 12 March.

Ophir Has Irrevocables From Investors Holding 28% of Salamander

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Ophir Has Irrevocables From Investors Holding 28% of Salamander 2014-12-22 11:36:44.549 GMT

By Benjamin Dow (Bloomberg) -- Ophir says Salamander investors to vote in favor of resolutions, against Sona asset disposal resolution. * NOTE: Ophir bid for Salamander worth 0.5719 Ophir share * NOTE: In Nov., Sona Petroleum got approval to bid for Salamander’s Thai assets; Sona said that month that Salamander should seek shareholder approval for asset sale Statement

For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

To contact the reporter on this story: Benjamin Dow in Moscow at +7-495-771-7735 or bdow2@bloomberg.net Benjamin Dow