(BFW) CVC, Advent in Lead to Bid for 50% of UniCredit’s Pioneer: Sole

CVC, Advent in Lead to Bid for 50% of UniCredit’s Pioneer: Sole
2014-08-22 07:09:00.647 GMT


By Elisa Martinuzzi
Aug. 22 (Bloomberg) -- Banco Santander still interested in
acquiring stake in asset manager, Il Sole 24 Ore reports,
without saying how it obtained the information.
* Deal with Santander would be more complicated because
businesses would have to be integrated: Sole
* Offer from CVC, Advent Capital higher than Santander’s: Sole
* UniCredit board to review decision on exclusive talks at
meeting in September: Sole
* NOTE: UniCredit Plans to Keep Big Stake in Pioneer, CEO
Ghizzoni Says NSN N9U6XJ6JTSEM<GO>


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To contact the reporter on this story:
Elisa Martinuzzi in Milan at +39-02-8064-4218 or
emartinuzzi@bloomberg.net
To contact the editors responsible for this story:
Edward Evans at +44-20-3525-3190 or
eevans3@bloomberg.net
Simone Meier

FT : No need for banks in an era of intellectual capital

No need for banks in an era of intellectual capital

Silicon Valley deals are not based on factors that bankers can model, writes Felix Salmon

It is merger season in Silicon Valley. More than $100bn in technology deals were done in the first half of this year alone, according to Mergermarket. The numbers for the second half will probably be even bigger. The year-end tally will include Facebook’s $19bn acquisition of WhatsApp, Oracle’s $5.3bn purchase of Micros Systems and a significant entry from normally deal-shy Apple, which has agreed to buy headphone maker Beats for $3bn.
Amid all of this, one element is missing: bankers. Investment banks are used to earning big fees when corporate clients absorb other companies. But many big deals are being completed without the buyer using any investment bank at all.

This is heartening news for all of us who think that financial services companies in general, and investment banks in particular, are too big and too important. No longer is being an investment banker seen as the best way for a young, talented graduate to make lots of money and achieve great worldly success. Smart kids are moving to San Francisco rather than New York or London. They fund their start-ups with west coast money, build their companies with west coast talent and see multibillion-dollar deals being done between members of their west coast peer group. It makes little sense to turn to an east coast investment banker for “expert” advice on career-defining strategic decisions when there is no reason to believe that expert has a deeper understanding of your industry than you do.
It is no coincidence that the rise of the self-advised mega-merger has coincided with the rise of the California-based venture capital industry as the most important single funding source for technology companies. There are still initial public offerings, of course, and gigantic public companies: Google and Apple have a combined market capitalisation of $1tn. But Silicon Valley, as a rule, does not fund itself in the stock market any more. The flotation of Apple in 1980 and of Microsoft in 1986 came at a time when those companies were investing heavily in developing the Macintosh and Windows systems.
But the 2004 and 2012 IPOs of Google and Facebook did not give those companies money they needed for anything. They already had big cash piles, and have made much more money since. Going public was a way to allow shareholders to cash out, not a means of investing for the future. These days, if a technology company wants to raise money to invest in generating growth, it will call on well-connected venture capitalists who provide more than just cash. Silicon Valley has more than enough money to fund itself in-house. Bankers and capital markets are not the only game in town.

In fact, many technology companies are finding that banks are not even necessary, as The New York Times has reported this week. A Morgan Stanley analyst armed with a beautifully formatted, discounted cash flow projection would not be able to help Mark Zuckerberg, the Facebook chief executive, work out whether Snapchat was worth $1bn or $10bn, or whether WhatsApp was worth $2bn or $20bn. After all, Mr Zuckerberg knows better than anyone how a transaction that looks optimistic today can look like the bargain of the century tomorrow.
Today’s big Silicon Valley deals are not based on corporate synergies, or the amount that earnings per share will increase after the deal closes. They are not, therefore, based on the sort of thing that bankers can model. (Very few of the acquired companies have any earnings at all; some even lack revenues.)
Instead, they are based on attributes that are much harder to quantify. Will this company’s product change the way that billions of people interact? Is it run by the kind of visionary who could prove to be a lethal competitor if she is not brought into the fold today?
In situations such as these, it matters little if the acquiring company overpays. After all, big tech companies have never had more cash than they have today, and they are finding it just as hard to put their money to work as everybody else is. The logic behind Facebook’s acquisition of WhatsApp, a smartphone messaging platform that is more or less free to use, is simple: capturing a slice of the time people spend on their mobiles matters more than money. It wants to become the dominant technology company of the mobile age. That is not an area where bankers can help. Indeed, they would be harmful, adding an extra layer of meetings and spreadsheets that only serve to dispirit a potential target. Founders do not want to negotiate with bankers: they want to negotiate with fellow founders, such as Larry Page or Mr Zuckerberg.
A banker with gold cufflinks and an expensive suit might be useful if you are interested in buying a public company run by a board of grandees and a hired chief executive. But such deals are now few and far between. In a Silicon Valley devoted to transforming the way we live, bankers have been disrupted: they have gone from being a necessary evil to an unnecessary one. And no one is shedding any tears.

FT : Spectre of ‘lost decade’ haunting Europe

Spectre of ‘lost decade’ haunting Europe

When Nobel Prize-winner Joseph Stiglitz was asked in Germany this week if the country and its neighbours would suffer a lost decade, his response was unequivocal.
“Is Europe going the same way as Japan? Yes,” Mr Stiglitz said in Lindau at a meeting for Nobel Laureates and economics students. “The only way to describe what is going on in some European countries is depression.”

Dire gross domestic product figures, which showed the eurozone’s recovery had stuttered to a halt in the second quarter, and inflation at a four-and-a-half year low of just 0.4 per cent in July have been a stark reminder of the problems befalling the world’s second-largest economic bloc.
Hopes of a meaningful recovery this year have faded, overtaken by concerns that a rise in geopolitical tensions could worsen conditions in the months ahead.
Beyond the latest figures, the big picture is bleaker still. Despite hopes that the worst ravages of the region’s sovereign and banking crises are behind it, the eurozone’s economy remains smaller than it was before the collapse of Lehman Brothers in the autumn of 2008.
With debt burdens worryingly high in parts of the currency area, low inflation and little growth risk causing another crisis. That has bolstered calls for the European Central Bank, facing price pressures of less than a quarter of its target, to embark on broad-based asset purchases immediately.

The ECB has signalled it will not embark on quantitative easing until at least the end of the year, preferring instead to gauge the impact of the package of measures announced in June, which include up to €1tn in cheap loans for the eurozone banks. The central bank further believes its health check of the bloc’s biggest lenders, whose results will be announced in October, will help to boost investor confidence.
The governing council will also hope that signs the Bank of England and the US Federal Reserve are beginning to consider raising rates will weaken the single currency, boosting exports and lifting inflation.
But waiting carries risks.
John Llewellyn, of Llewellyn Consulting, said: “QE by the ECB looks almost an inevitability. But it would probably have to be massive. And having left it so late, with low-growth expectations now embedded; with deflation an increasing spectre; and with only a limited availability of financial instruments to buy, the ECB may well have missed the boat.”
Chart
Ken Wattret, economist at BNP Paribas, said: “The longer the inflation rate is allowed to stay so low, and continually approach zero, the smaller the cushion against deflation. Inflation expectations can also suddenly turn into something much more destabilising. The experience in Japan is a warning in both respects.”
Mario Draghi will speak at the Kansas City Federal Reserve’s Jackson Hole’s symposium on Friday. But the ECB president has already insisted that the fate of the currency bloc’s recovery lies in the hands of governments; more monetary stimulus would be of little use unless national politicians make commitments to reform business practices, he said earlier this month.
Though Germany’s downturn is viewed by many as a blip, economists believe the problems in France and Italy, the region’s second and third largest economies, are more persistent.

Neither country has grown at all this year and a tense time in Brussels looks likely in the weeks ahead as leaders ask for leniency on budget deficit target. Berlin has already signalled it will resist their efforts, with Angela Merkel, Germany’s chancellor, saying on Wednesday in Lindau that it was possible to achieve economic growth and cut spending.
Analysts warn political intransigence and lack of leadership have undermined confidence.
“Policy makers, and most economists, have forgotten the powerful self-fulfilling nature of expectations,” Mr Llewellyn said. “If businesses expect little or no growth in demand, they do not invest in new capacity. Demand remains weak; business expectations are thereby fulfilled; and stagnation results.”
The latest figures on GDP and inflation have also renewed arguments that the structure of monetary union is flawed. While neither the US nor the UK are back to full strength, both of their economies have surpassed their pre-crisis peak. Rather than mirroring its counterparts to the west, the eurozone has begun resembling Japan, which has faced a decade-long struggle to eliminate deflation and stagnant growth.
Chart
Unlike Asia’s second-largest economy, however, where joblessness remained under 5.5 per cent, unemployment in the currency area is 11.6 per cent. If it does come, growth in the months ahead looks set to remain too weak to dent joblessness.
““Europe has very talented people and [if] country after country is not working, it has to be a systemic problem. The basic problem was that it’s not an optimal currency area,” Mr Stiglitz said. “Combining flawed structure with flawed policies has been devastating.”

FT : US TV takeovers threaten UK creative economy, says C4 chief

US TV takeovers threaten UK creative economy, says C4 chief

US takeovers of British television companies are threatening the UK’s creative economy, a leading industry figure has warned, casting a cloud over what could be one of the biggest corporate deals of the coming year.
David Abraham, chief executive of Channel 4, said the British TV industry risked becoming “a victim of its own success”, with new US owners likely to replace investment in innovative homegrown shows with cheaper imported programmes.

He took particular aim at a potential takeover of rival ITV by US cable group Liberty Global, comparing it with Pfizer’s bid for AstraZeneca, which the US pharmaceutical company abandoned amid opposition from AstraZeneca’s board and British politicians.
“In Britain we value some things beyond money alone,” Mr Abraham said, delivering the MacTaggart lecture at the annual Edinburgh TV festival.
He launched a personal attack on Liberty’s billionaire chairman John Malone, adding him to the list of media “bogeymen” and noting that he “famously hates to pay tax”.
The intervention comes as US television companies seek to acquire British broadcasters and production companies in response to slowing growth in their home market.
This year Discovery Communications and Liberty Global, both part-owned by Mr Malone, have paid £550m for All3media, the maker of Midsomer Murders, while Sumner Redstone’s Viacom has agreed to buy Channel 5 for £350m from Richard Desmond.
Liberty also bought a £481m stake in ITV last month, although it ruled out making a bid for the whole of the broadcaster, whose market value is currently £8.5bn. Liberty already owns Virgin Media, the cable company.
“Our free-to-air channels have become the must-have accessories, the tiny dogs of 2014, amongst US media companies eager to stay ahead of each other by internationalising their revenues, priming their distribution pipes and shielding their tax exposure,” Mr Abraham said.

Like the BBC, Channel 4 is publicly owned with a remit to invest in groundbreaking entertainment and current affairs coverage. But while the BBC has been hindered by management scandals, Channel 4 has yet to produce a string of popular shows to match its one-time stalwart, Big Brother.
In his speech, Mr Abraham sought to defend the role of publicly-owned broadcasters, saying that the BBC had “much to admire”, and pointing to Channel 4’s coverage of the 2012 Paralympics and current affairs.
Proponents of television mergers say that they create players capable of negotiating and completing with the likes of Amazon, Netflix and Apple. ITV has also increased investment in British drama, producing and exporting shows such as Mr Selfridge.
However, Mr Abraham argued that US groups like Viacom would be more likely to air international series than invest in ideas that were tailored to UK audiences.
“Scale demands an increased focus on cost-cutting and margins. Reformatting ideas is more efficient than the messy business of finding new ones. Fear of risk overtakes an appetite for it,” he said.
Mr Abraham also risked a battle with BSkyB saying it should pay for the right to include programmes by Channel 4, ITV and others on its platform.
“The UK is now one of the very few major markets in the world where public service broadcasters receive no payment for the immense value their channels bring to pay platforms,” he said.
Sky’s head of corporate affairs Graham McWilliam said the proposal amounted “to a discriminatory tax on millions of licence fee paying viewers to watch public service content that is supposed to be free.”

FT : Janet Yellen to see Jackson Hole return to wonky roots

There will be no Wall Street economists in the audience when Janet Yellen addresses the Kansas City Fed’s annual Jackson Hole conference for the first time as chairwoman of the Federal Reserve.
Economists from investment banks have for years rubbed shoulders with policy makers at the conference and their expulsion, taking the event back to its roots as a wonky occasion for central bankers, reflects Fed sensitivity about any perception of privileged access for financiers.
Even though investors have come to expect market moving news from Jackson Hole – the theme of this year’s event is labour markets – the shift in the guest list towards policy makers highlights that the conference was never designed to communicate monetary policy.

The 2013 forum included Wall Street economists such as Martin Barnes of BCA Research and Jim O’Sullivan of High Frequency Economics and financial guests such as Phillipa Malmgren of Principalis Asset Management. But they are all absent this year.
“Some of this is an issue around the potential appearance problems of having people from major primary dealers at a conference sponsored by the Fed,” said one economist of a Wall Street bank, who was not invited this year even though he has previously attended. The financier said he did not want to be named because he did not “want to sound like a crybaby”.
Ethan Harris, chief economist of Bank of America, who is not attending this year, noted that there was a risk that officials could miss out on the different vantage point of the financial sector.
He said: “A good example of that was the 2008 Jackson Hole. The meeting occurred right in front of the worst financial crisis in modern history but the main topic of discussions among the attendees was the risk of higher inflation. That was certainly not the view of the financial sector economists at the time.”
Wall Street financiers are replaced this year by guests such as William Spriggs, chief economist of the AFL-CIO, the umbrella organisation for the US union movement.
“The primary audience for the Jackson Hole economic symposium has always been central bankers,” said Diane Raley, head of public affairs for the Kansas City Fed. “This year’s symposium focuses on labour markets and the audience composition is designed to be a complement to this important public policy discussion and debate.”
The political sensitivity of the conference for the Fed was highlighted by a group of young civil society protesters, working the hall outside the conference room, wearing green T-shirts emblazoned with the slogan “What Recovery?”
While the Jackson Hole event is the pride and joy of the Kansas City Fed, the Federal Reserve in Washington has sometimes been uncomfortable as the hoopla around the conference grows year after year.
Ben Bernanke, in his later years as Fed chairman, made sporadic efforts to play down the conference, giving a low key speech in 2011 and skipping it altogether in 2013.
Having chosen to attend, Ms Yellen knows that her speech will be scrutinised for policy signals. Minutes of the Fed’s July policy meeting show that it is making progress on plans to raise interest rates but has not made any decisions.
One point Ms Yellen may choose to emphasise again is that the Fed will raise interest rates earlier than planned if economic data keep coming in stronger than expected.
The central bank has been using steadily stronger words to try to send that message but financial markets have paid little attention, with the 10 year bond yield near its lowest level for a year at 2.41 per cent. That could mean Ms Yellen sounds more hawkish than markets expect.
Most of this year’s Jackson Hole guests are central bankers, from Brazil to Turkey to Latvia. One last-minute absentee was Ksenia Yudaeva, the first deputy governor of the Bank of Russia, perhaps reflecting tensions over Ukraine.
Mario Draghi, president of the European Central Bank, and Haruhiko Kuroda, governor of the Bank of Japan, are attending. They will both speak at the event.

WSJ : Chinese Are Traveling More, Shopping Less (--> -ve for luxury sector )

Chinese Are Traveling More, Shopping Less
As Prices Fall at Home, Luxury Brands Can't Bank On China's Tourists Alone to Fuel Sales

Zhiyuan Zhuang, an assistant store manager at a Bottega Veneta shop in Milan, remembers the boom times through 2012, when the first wave of Chinese shoppers were a ray of sunlight amid the gloomy European economy. "We used to have older clients accompanied by their translators who would buy without thinking as if they were not spending their money," Mr. Zhuang said.

"They have disappeared now," he added. "Now we are seeing more young couples who pick and choose."

Dora Tao is typical of a more sophisticated Chinese traveler. The 38-year-old accountant from Shanghai used to buy things for her friends, family and colleagues when she traveled to Germany for work. "I bought at almost every luxury store on the main shopping street in Frankfurt, mainly for other people," said Ms. Tao. Her purchases included Louis Vuitton scarves for business associates, bought on behalf of a friend, and German cooking pans and cuckoo clocks, which her relatives wanted.

Almost 100 million Chinese took trips abroad last year, accounting for 27% of the value of all tax refund claims made with Global Blue, a duty free shopping expert. The WSJ's Wei Gu speaks with Francis Belin from Swarovski about why shoppers are cutting back.
But this summer when she took her family and parents to Austria, the Czech Republic and Germany, they went to a concert at Vienna's Golden Hall and tried rafting for the first time. They shopped only to pick up some medicines they can't find in China.

Ms. Tao's changing tastes are typical of Chinese shoppers. More Chinese than ever are traveling abroad, but they are shopping less.

But the shopping craze is losing its momentum. Tax-refund claims by Chinese tourists in Europe grew just 18% in 2013, compared with 57% in 2012, said Global Blue.

"The Hong Kong market is weak and so is Western Europe," said Erwan Ramboug, author of "The Bling Dynasty: Why the Reign of Chinese Luxury Shoppers Has Only Just Begun."


A shopper carries a Chanel bag at a mall in Hong Kong. Bloomberg News
"This might seem unimportant if Chinese travelers are simply shopping in different cities," added Mr. Ramboug, a co-head of global consumer and retail research at HSBC. "However, not all sales that have been lost from one market are being recouped in another." He still believes in the long-term buying power of Chinese consumers but advises investors to stay away from luxury stocks for the moment.

Luxury-goods sellers and industry analysts give different reasons for the weakness. They cite Beijing's anticorruption campaign, the strong euro and tension between Hong Kong and mainland China, which is keeping tourists away and hurting luxury-goods sales in the Chinese territory.

Prada Group said revenue in Europe fell by 1% in the first half of the year, partly due to the fall in tourism volume from China. LVMH Moët Hennessy Louis Vuitton SA MC.FR +0.62% blamed an "unfavorable currency environment" for its weak results in Europe during the same period.

In Hong Kong, mainland tourist arrivals fell 2% year on year during a May holiday that is traditionally a huge shopping period. Fewer mainland tourists contributed to a 6.9% year-on-year decline in June retail sales in Hong Kong, while sales of jewelry, watches and other luxury goods plunged 28%.

Some retailers blame the decline on a souring relationship between Hong Kong and mainland China, which has led to protests against mainland tourists in front of some shops. "You shouldn't underestimate the impact of those people in groups of two or three, in front of your shops chanting, 'We don't want your money, just go back home,' " said Francis Belin, head of Swarovski's Asia consumer-goods business. "This has gone viral."

But there is a simpler—and, for the luxury-goods industry, more worrisome—explanation. Chinese are refusing to pay inflated prices for luxury products. The trend is just starting, but it could weigh on profits even if sales rebound.

Luxury goods have long been more expensive in China than abroad, creating an incentive to shop overseas. That price gap is closing. In February 2013, premium handbags were on average 50% more expensive in China than in Europe, according to Luca Solca, the head of luxury goods at Exane BNP Paribas. Now, they are 40% more expensive. The portion of the markup that can't be explained by China's import duties is largely gone.

The gap between Hong Kong and mainland China is even smaller, as retailers mark up prices in Hong Kong in response to higher rents. In 2013, the price of a classic Chanel quilted bag rose by 31% in Hong Kong but just 10% in Shanghai, according to brokerage firm CLSA. As a result, a bag that was 20% more expensive in Shanghai than in Hong Kong is now about the same price.

As China's big spenders disappear, those prices have nowhere to go but down.

WSJ : Chinese Are Traveling More but Shopping Less

Chinese Are Traveling More but Shopping Less

Zhiyuan Zhuang, an assistant store manager at a Bottega Veneta shop in Milan, remembers the boom times through 2012, when the first wave of Chinese shoppers were a ray of sunlight amid the gloomy European economy. “We used to have older clients accompanied by their translators who would buy without thinking as if they were not spending their money,” Mr. Zhuang said.

“They have disappeared now,” he added. “Now we are seeing more young couples who pick and choose.”

…

Almost 100 million Chinese took trips abroad last year, accounting for 9% of international trips outside China, according to the World Tourism Organization. They outspent travelers from other countries, accounting for 27% of the value of all tax-refund claims made in 2013 with Global Blue, which processes refunds at airports for shoppers visiting from abroad.

But the shopping craze is losing its momentum. Tax-refund claims by Chinese tourists in Europe grew just 18% in 2013, compared with 57% in 2012, said Global Blue.

…

Luxury-goods sellers and industry analysts give different reasons for the weakness. They cite Beijing’s anticorruption campaign, the strong euro and tension between Hong Kong and mainland China, which is keeping tourists away and hurting luxury-goods sales in the Chinese territory.

>>> What to look at today - 22/08/2014

US Market closed higher helped by Blue Chips. Equity indices climbed out of the gate thanks to early strength among the four countercyclical sectors. Despite the early outperformance, the defensively-oriented sectors ended below their opening highs, while the six cyclical groups were mixed. Financials (+1.1%) and technology (+0.5%) contributed to the modest advance, while other heavily-weighted groups like consumer discretionary (-0.1%), industrials (unch), and energy (unch) kept the market from going on a bigger run. Volume were below average @ 550mil shares...VIX @ 11,74 -0,4%..After Hours : TFM +8.4%, GME +6.5%, CRM +2.1%, GPS +1.2%, ARO -7.2%, INTU -1.3% following earnings/guidance... Hawkish dissenter Plosser spoke after the US market close, expressing concern that monetary policy is not reacting to changing data, warning Fed would have to move faster if it waits too long, and also noting wage inflation is too lagging to determine monetary policy...Quiet trading in Asia ahead of Jackson Hole today...China : Yest. Flash PMI put a pause in mkt momentum, After this number Barclays talking of two interest rate cuts by the PBoC in H2. UBS wrote that "even with additional policy easing including cuts in mortgage down payment requirement and rates, we see property sales and starts declining further in 2015 and GDP growth slowing to 6.8%".
--> Jackson Hole Symp. : Yellen speaks at 10amET, while ECB's Draghi - unlikely to be "outdove" - is scheduled to appear at 2:30pmET

Eur$ 1.3289 S&P +0.06% SX5E -0.10% FTSE +0.06% DAX -0.05% SMI -0.16%

Macro
- Fed's Plosser (hawk, FOMC voter and recent dissenter): Main concern is that monetary policy is not reaching to changing data - CNBC interview 

Keep an eye on :
- AIR FP : Airbus CEO Enders Buys 11,000 Company Shares: Regulatory Filing
- BNP FP : BNP Paribas Invited to Bid for Role as Adviser to BES Successor
- HAV FP : Havas: Agility is Better than Scale - WSJ
- MAERSKB DC : Maersk Oil Reduces Some Exploration in Mexico Gulf: Berlingske
- NOK1V FH : Nokia's share gains on Here sale speculation - Kauppalehti Online
- OMV AV : OMV's Gas Restructuring May Take a Year, Roiss Tells WiBlatt
- RWE GY : Germany to Approve RWE Unit Sale to Russian Investor: Reuters
- SAP GY : SAP May Move After Salesforce Sees EPS Above Estimates
- SFZN SW : Siegfried 1H Ebit 16.6m Swiss Francs vs 15.6m Swiss Francs
- SN/ LN : Speculation Stryker will come back with a bid in November
- SOW GY : Software Names Duffaut Chief Customer Officer on Executive Board
- TAMN SW : Tamedia 1H Net Income From Cont. Ops CHF 59.4m Vs CHF 54.8m, Acquires 20.4% Stake in Financial Advisory Co
- UBSN SW : UBS Sets Up Danish Wealth Management Unit, Borsen Reports
- VIV FP : Telecom Italia offer for GVT to be one-third cash and two-thirds shares - Italian Press
- VOD LN : Moved higher on speculative rumors coming back, AT&T, China Mobile, mentionned >300p
- ZKAN SW : Zuercher Kantonalbank 1H Profit Falls 15%; Confirms Forecast

>>> Brokers Upgrades & Downgrades - 22/08/2014

>>> Up
*EDP RENOVAVEIS RAISED TO BUY VS HOLD AT BERENBERG
*ENEL GREEN POWER RAISED TO BUY VS HOLD AT BERENBERG
*HUGO BOSS RAISED TO BUY AT DEUTSCHE BANK
*LONMIN RAISED TO CONVICTION BUY VS NEUTRAL AT GOLDMAN
*NOBEL BIOCARE RAISED TO HOLD VS SELL AT DEUTSCHE BANK

>>> Down
*DUNELM CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
*HALFORDS CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*NETCARE CUT TO NEUTRAL VS BUY AT GOLDMAN
*PRADA CUT TO HOLD AT DEUTSCHE BANK

>>> PT Changes


>>> Initiation
*KAZAKHMYS RESUMED OVERWEIGHT AT JPMORGAN
*MAGFORCE RATED NEW BUY AT BERENBERG; PT EU8.25

>>> Call

(Daily Mail) Vodafone shares rise amid red hot rumours over AT&T cash bid

Vodafone put on 1.45p to 202.6p amid red hot speculation that advisers of AT&T are now working around the clock on a cash bid worth more than £3 a share for the UK mobile phone giant, which is currently capitalised at around £53billion.
After intense speculation in January, the second largest US mobile operator was forced to say that it didn’t plan to make a bid for Vodafone. That meant it could not offer to buy Vodafone or a stake of 30 per cent or more in the company for six months.
AT&T has been allowed to make a move since late July and the weak performance of the Vodafone share price has persuaded the board to set the wheels in motion. AT&T has been looking in Europe for growth as its home market becomes more competitive. An acquisition of Vodafone would mean AT&T taking over Europe’s biggest wireless carrier and creating the world’s largest telecommunications operator by sales.
With more than 500million wireless subscribers worldwide, the combined company would be able to challenge Google and Apple when negotiating handset subsidies and wringing profit out of growing technologies such as mobile advertising. It would give AT&T access to markets including the UK and Germany, with Vodafone continuing to add wireless and broadband assets in Europe.

But Vodafone has another heavyweight admirer. China Mobile, one of the world’s largest mobile phone firms, was sniffing around earlier in the year with speculation then rife that it was interested in acquiring a stake in Vodafone up to 20 per cent . The idea being to set up a joint venture to target the booming African market as the UK company has a strong presence there.
Back in January it would have had to pay close to £3 a share, but now a bid of around 220p a share would probably see it trouser a strategic stake. Should AT&T launch a full bid, the state-backed Chinese group could definitely have something to say about it.
Vodafone has been seen as a takeover target ever since chief executive Vittorio Colao agreed to sell the company’s 45 per cent stake in Verizon Wireless to Verizon for £70billion in September 2013.