(BN) No Monsanto, No Problem for Syngenta on Path to Deal: Real M&A


No Monsanto, No Problem for Syngenta on Path to Deal: Real M&A
2014-08-27 22:00:01.4 GMT


(For a Real M&A column news alert: SALT REALMNA <GO>.)

By Brooke Sutherland and Patrick Winters
Aug. 28 (Bloomberg) -- Syngenta AG may be primed for a
deal, with or without Monsanto Co.
Syngenta and Monsanto held preliminary talks with advisers
earlier this year about a combination that never came to
fruition, people familiar with the matter have said. Syngenta’s
willingness to have such conversations signals it’s open to a
deal, whether as an acquirer or as a target, according to
shareholder Wintergreen Advisers LLC. With shares down 9.5
percent in the last 12 months amid slowing revenue growth,
Berenberg Bank said an acquisition could help the crop chemicals
company improve its prospects.
One option for $34 billion Syngenta is a takeover of Dow
Chemical Co.’s agricultural business, said Alembic Global
Advisors and SunTrust Banks Inc. Dow Chief Executive Officer
Andrew Liveris has suggested the company is open to divesting
that unit. DuPont Co. and Basel, Switzerland-based Syngenta
could also merge and then spin off the U.S. company’s non-
agricultural businesses, said Zuercher Kantonalbank.
“The last couple of months weren’t that pleasing for
shareholders,” Martin Lehmann, co-manager of 3v Asset
Management’s 3v Invest Swiss Small & Mid Cap Fund, which owns
shares of Syngenta, said in a phone interview from Zurich.
“Management is under pressure to do something smart, and that’s
not a bad thing.”
A representative for Syngenta said the company doesn’t
comment on speculation. Representatives for Midland, Michigan-
based Dow and Wilmington, Delaware-based DuPont declined to
comment.

Multiple Partners

“There are a lot of ways to win here,” David Winters, CEO
at Wintergreen, which oversees about $2.2 billion, including
Syngenta shares, said in a phone interview. “They’ve tipped
their hand that they’re willing to do something. Who they end up
doing the dance with and mating with, we’ll see but they’re
clearly at the dance.”
Monsanto, a $61 billion U.S. seed company, explored a
takeover of Syngenta earlier this year that would have allowed
it to move its legal address overseas for tax advantages,
according to people familiar with the matter in June. The talks
fizzled amid questions about strategic fit, antitrust issues and
the relocation to Switzerland, the people said, asking not to be
identified because the talks were private.
Monsanto later announced a $10 billion stock buyback, a
move that Matt Arnold of Edward Jones & Co. says reduces the
company’s financial flexibility.

Moving On

“The fact that maybe it didn’t happen with Monsanto
doesn’t mean it couldn’t happen with someone else,” Bill
Selesky of Argus Research Co., a New York-based analyst, said by
phone. “It’s a very positive sign that they’re willing to sit
down and talk and listen and possibly hammer out a deal. I
wouldn’t rule out somewhere down the road that Dow or DuPont
could buy Syngenta.”
While both companies may find a deal appealing, DuPont
would probably be a better fit, Selesky said. Its seed business
is bigger than Dow’s and has more brand recognition, he said.
A merger of $60 billion DuPont and Syngenta would create a
balanced portfolio, split almost evenly between crop chemicals
and seeds, a novelty in an industry where most companies focus
on one or the other, Martin Schreiber, an analyst at Zuercher
Kantonalbank in Zurich, wrote in an e-mail. If the two companies
joined, DuPont could then spin off its non-agricultural
operations and become a pure-play agricultural science company,
he said.

Better Taxes

On the other hand, Dow may be a better candidate to use a
Syngenta acquisition to relocate overseas for tax advantages,
said James Sheehan, an analyst at SunTrust. With the Treasury
Department weighing ways to discourage tax-inversion
acquisitions, DuPont’s well-known brands and sales to the U.S.
military may spark greater political pushback, he said.
“DuPont is likely to take a very cautious approach toward
this issue,” Sheehan said in a phone interview from Atlanta.
“Dow has a little bit more flexibility.”
Rather than sell itself, Syngenta could go on the prowl for
acquisitions of its own, said John Klein, a London-based analyst
at Berenberg.
Shareholders are getting impatient as a corporate
realignment three years ago hasn’t yet delivered the desired
results, Klein said. Syngenta’s 2013 profit fell short of
analysts’ estimates and sales that year grew at the slowest pace
since 2009.
“If they want to kickstart growth, they should make an
acquisition,” Klein of Berenberg said by phone.
The 9.5 percent drop in Syngenta shares the last 12 months
compares with a 19 gain for Monsanto and a 16 percent rise for
DuPont. Dow has climbed more than 40 percent.

Dow’s Situation

For Dow, selling its agricultural business may be a way to
unlock value as activist investor Dan Loeb pressures the company
to improve profitability, Sheehan of SunTrust said.
The $64 billion company is already planning to divest as
much as $6 billion of low-return assets. Reuters reported
yesterday that Dow is in the process of selling two of its
speciality chemicals subsidiaries, which could get a combined $2
billion.
When asked about a possible deal for the agricultural
division in July, Dow CEO Liveris said “there are no sacred
cows.”
That unit and Syngenta share similarities that would unlock
value if they were combined, Hassan Ahmed, co-founder of Alembic
Global Advisors, said in a phone interview. “A Dow agriculture
business and Syngenta marriage could actually result in
significantly higher synergies than a Syngenta marriage with a
more seed-oriented company such as DuPont’s agriculture business
or Monsanto for that matter.”
Mark Gulley of BGC Partners Inc. estimated the unit, known
as AgroSciences, could be valued at about $12 billion in a sale.

Alternative Ideas

Syngenta may be more inclined to make smaller acquisitions,
said Patrick Rafaisz, an analyst at Bank Vontobel AG in Zurich.
“Syngenta is in acquisition mode, but targets are usually
seed companies and bolt-on in nature,” Rafaisz wrote in an e-
mail. A large deal, especially with a crop chemicals company,
may not add value for shareholders and could distract management
when the focus should be on managing costs and pressing ahead
with its existing strategy, he said.
While Ahmed of Alembic says DuPont and Dow may be more
focused on slimming down than bulking up, Winters sees the
possibility of some sort of deal in Syngenta’s future.
“They’re probably willing to buy, they’re probably willing
to sell,” he said. “Either way, that’s why we own the stock
because we feel like it’s heads we win, tails we could win
bigger.”

For Related News and Information:
Monsanto Said to Have Considered $40 Billion Syngenta Deal
NSN N7OBAK6S972Y <GO>
Syngenta Profit Misses Goal, CEO Targets $1 Billion Savings
NSN N0IKFP6S972V <GO>
Dow Chemical Beats Profit Estimates as Prices Widen Margins
NSN N95ZFM6TTDSA <GO>
Syngenta deal news: SYNN VX <Equity> TCNI MNA <GO>
Top deal stories: TOP DEAL <GO>
Real M&A columns: NI REALMNA <GO>

--With assistance from Jack Kaskey in Houston.

To contact the reporters on this story:
Brooke Sutherland in New York at +1-212-617-0448 or
bsutherland7@bloomberg.net;
Patrick Winters in Zurich at +41-44-224-4117 or
pwinters3@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Whitney Kisling

>>> Vivendi - Oddo First comment

VIVENDI (BUY, TP24): TIT REVEALS A Eu7B BID FOR GVT WHILE TEF IMPROVES ...
Telecom Italia bids values GVT at Eu7b: Bid is 24% cash and 76% in shares.
Vivendi will have 15% of the NewCo Tim-GVT (TIT will hold 60%) and VIV will
hold around 20% of TIT.
Also this morning, TEF is increasing its bid to Eu7.45b (cash part at Eu4.6b)
-> In the end, TIT offer is as rumored while TEF bid of "only" Eu7.45b could
dissapoint as latest rumors were around Eu8b. VIV will review the 2 offers
duriong its board meeting today and will report H1 tonight after mkt

>>> Telecity could bid for Phoenix IT - Daily Telegraph

Telecity could bid for Phoenix IT

Telecity, an FTSE-250 datacenter operator, could make a takeover offer for listed UK-based rival Phoenix IT, according to a Daily Telegraph market report. The newspaper did not cite a source for the speculation.

The report noted that Telecity CEO Michael Tobin is to step down. The item went on to cite an analyst who suggested that buying Phoenix would not only address Telecity’s “strategic shortcoming,” but would also give the company a new chief executive in Phoenix’s Steve Vaughan.

Phoenix IT’s share price closed 1.25p up at 91.0p in London yesterday, 27 August, giving the company a market capitalisation of GBP 75.5m (EUR 94.8m).

Daily Telegraph

(BFW) Air One Seeks $2 Billion of Jets to Fight Singapore Air in India

Boeing or Airbus ? looks like not defined yet...


BN 08/28 06:15 *AIR ONE DIRECTOR ALOK SHARMA COMMENTS IN INTERVIEW IN NEW DELHI
BFW 08/28 06:15 *INDIA'S AIR ONE SAYS IN TALKS FOR $2B OF BOEING OR AIRBUS JETS
BN 08/28 06:15 *AIR ONE PLANS TO START FLYING FULL-SERVICE CARRIER BY MID-2015
BFW 08/28 06:15 *AIR ONE'S SHARMA: AIM TO LEASE 20 BOEING 737S OR AIRBUS A320S

Air One Seeks $2 Billion of Jets to Fight Singapore Air in India
2014-08-28 06:21:57.464 GMT


By Anurag Kotoky
Aug. 28 (Bloomberg) -- Air One Director Alok Sharma
comments on plans for airline in an interview in New Delhi.
* Air One in talks for $2b of Boeing or Airbus jets
* Sharma: Air One aims to lease 20 Boeing 737s or Airbus A320s
* Sharma: Plan to start flying full-service carrier by
mid-2015
* NOTE: Air One among six companies that last month got
permits to start airlines in India
* NOTE: Indian carriers have lost a combined 594 billion
rupees ($9.8 billion) over the past seven years, Sydney-
based consultancy CAPA Centre for Aviation estimates
* Related News:
* Singapore Air’s India Venture Eyes Flights Abroad
* Jet Air to Close Budget Unit in Profit Search


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

To contact the reporter on this story:
Anurag Kotoky in New Delhi at +91-11-4179-2019 or
akotoky@bloomberg.net
To contact the editors responsible for this story:
Arijit Ghosh at +91-22-6120-3649 or
aghosh@bloomberg.net
Sunil Jagtiani, Karthikeyan Sundaram

>>> Issues drilling update in Kenya and Ethiopia

Issues drilling update in Kenya and Ethiopia 
- The Etom-1 well in the Lokichar Basin on Block 13T (Kenya) has reached a total depth of 2000 meters and has discovered oil in the primary Auwerwer and Upper Lokhone target formations. The well encountered a range of between 5 and 20 meters of potential net pay sands based on wireline logging and drilling data. Oil has been recovered in MDT sample chambers which appears to be of similar quality to the oil found in the discoveries to the south.- Drilling on the Ngamia-3 and Amosing 2/2A appraisal wells also in the Lokichar Basin on Block 10BB (Kenya) has also been completed. The results of these wells appear to confirm the thickness and lateral extent of the Auwerwer sands at both locations and also has extended the known oil column significantly downdip which will extend the proven field areas. The range of thickness of Auwerwer reservoir quality sands in all six penetrations of these two structures is between 146 and 220 meters and the sands appear consistent over the field areas.

>>> Issues drilling update in Kenya and Ethiopia

Issues drilling update in Kenya and Ethiopia 
- The Etom-1 well in the Lokichar Basin on Block 13T (Kenya) has reached a total depth of 2000 meters and has discovered oil in the primary Auwerwer and Upper Lokhone target formations. The well encountered a range of between 5 and 20 meters of potential net pay sands based on wireline logging and drilling data. Oil has been recovered in MDT sample chambers which appears to be of similar quality to the oil found in the discoveries to the south.- Drilling on the Ngamia-3 and Amosing 2/2A appraisal wells also in the Lokichar Basin on Block 10BB (Kenya) has also been completed. The results of these wells appear to confirm the thickness and lateral extent of the Auwerwer sands at both locations and also has extended the known oil column significantly downdip which will extend the proven field areas. The range of thickness of Auwerwer reservoir quality sands in all six penetrations of these two structures is between 146 and 220 meters and the sands appear consistent over the field areas. - Source TradeTheNews.com

>>> What to look at today - 28/08/2014

US Market closed near the flat line, slightly higher for the S&P, Telco & Utilities held gains throughout the day Meanwhile, influential sectors like consumer discretionary (+0.1%), financials (-0.2%), health care (unch), and technology (-0.1%) ended mixed with respect to the S&P 500. News from Ukrain boarder one day after the Minsk meeting didn't reasssure the market...Volume are still weaqk below average, VIX @ 11.78 +1.29%...In Asia market still cautious on Russia/Ukraine situation...China numbers weak, overcapicity in some high ends sectors, could push PoBC to move with a cut of the RRR for banks or a policy rate cut...Nikkei -0.60% Hang Seng +0.10% Shanghai -0.38%

Eur$ 1.3209 S&P -0.08% EuroStoxx -0.10% FTSE -0.10% DAX-0.08% SMI -0.05%

Macro
- Merkel Sees France Deficit Narrowing if Hollande Pursues Reform
- Merkel Slams US Hegemony? "America Can't Solve All The World's Problems Anymore"

Keep an eye on :
- ABI BB : AB InBev Merger W/Coke Would Make Most Sense: Brasil Plural
- BALN VX : Baloise 1H Profit Rises 43%; Combined Ratio Drops
- BC IM : Cucinelli 1H Ebitda In Line, Sees 2014 Double-Digit Rev. Growth
- BVI FP : Bureau Veritas Misses 1H Profit Ests., Cuts EPS Growth Forecast
- EN FP : Bouygues Cuts 2014 Sales Outlook, Says 1H Op. Conditions Tougher
- FGR FP : Eiffage CEO Sees EU Nod for French Highway Stimulus This Year, CEO Will Propose Higher Div. If Targets Are Met
- GTO NA : Gemalto 1H Rev. EU1.13b vs Est. EU1.16b
- IBAB BB : Ion Beam 1H Adj. Ebitda Rises 19%, Operating Profit Margin 9.8%
- ELB BB : Electrabel to Sell 21% Stake in Flemish Distribution Operators
- ENEL IM : Italy to Sell 5% of Enel, 4.34% of Eni in Oct.-Dec., Sole Says
- ENI IM : Italy to Sell 5% of Enel, 4.34% of Eni in Oct.-Dec., Sole Says
- MAU FP : Maurel & Prom 1H Net EU59.3m Rises vs Loss EU10.5m Year Ago
- MONI LN : +13% yesterday on potential takevoer for IBM
- RI FP : Pernod FY Profit From Recurring Ops In Line With Ests.
- REP SM : Repsol Said to Drill 1st Phase of Canary Project on Own: Reuters
- ROG VX : Roche Retains Rights to Develop, Sell Chugai Products Worldwide
- TEF SM : Telefonica raises bid for Vivendi's Brazilian unit GVT to €7.45B - press
- TIT IM : Telecom Italia Confirms TIM Brasil Is Strategic Asset, Oi, Telefonica, Claro to Share Telecom Italia’s Tim Stake
- TIT IM : Telecom Italia Says Offer Values Vivendi's GVT Unit at EU7b, no right issue
- FR FP : Valeo Patent Complaint Over Federal-Mogul Wipers to Be Probed
- VIE FP : Veolia 1H Adj. Net Beats, Rev. in Line; Confirms 2014 Targets, Will Stick to Existing Cost-Cutting Targets, CEO
- VIV FP : Telecom Italia Says Offer Values Vivendi's GVT Unit at EU7b
- RF FP : Wendel 1H Net Drops 78%; Says in Good Shape to Meet 2017 Targets

>>> Brokers Upgrade & Downgrades - 28/08/2014

>>> Up
*ALCATEL-LUCENT RAISED TO OUTPERFORM AT SANFORD BERNSTEIN
*DEUTSCHE WOHNEN UPPED TO OVERWEIGHT AT MORGAN STANLEY
*DRAEGERWERK RAISED TO BUY VS HOLD AT BERENBERG
*HAMMERSON RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*IBERDROLA RAISED TO NEUTRAL AT MACQUARIE
*MORRISON RAISED TO HOLD VS SELL AT DEUTSCHE BANK
*PROSIEBENSAT.1 RAISED TO BUY VS HOLD AT BANKHAUS LAMPE

>>> Down
*ALSTRIA OFFICE CUT TO EQUALWEIGHT VS OVERWEIGHT: MORGAN STANLEY
*BP CUT TO UNDERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*CASTELLUM CUT TO UNDERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*FABEGE CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*GECINA CUT TO UNDERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*SEGRO CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*TESCO CUT TO HOLD VS BUY AT DEUTSCHE BANK

>>> PT changes


>>> Initiation
*AIR FRANCE-KLM RATED NEW HOLD AT ING, PT EU8
*CLOSE BROTHERS RATED NEW OVERWEIGHT AT BARCLAYS, PT 1,500P
*NORSK HYDRO RATED NEW UNDERWEIGHT AT MORGAN STANLEY, PT NOK32.5
*OMV RATED NEW HOLD AT JEFFERIES

>>> Call

>>> Telefonica raises bid for Vivendi's Brazilian unit GVT by approx 11% to €7.4

Telefonica raises bid for Vivendi's Brazilian unit GVT by approx 11% to €7.45B (includes €4.66B in cash) 
- The offer inlcudes a 12% sake in Telefonica Brasil
- Telefoncia plans to finance the offer through a capital hike at Telefonica Brasil and parent Telefonica.

**Note: The Telefonica offer is approx 6% above Telecom Italia's offer for GVT.


Telecom Italia makes cash and stock offer for Vivendi's Brazilian unit GVT worth €7B (as speculated) 
The offer is comprised of 24% cash and approx 76% in shares. 
- The offer is valid until Sept 20th.