WSJ : Treasury Officials Preparing Options to Address Tax Inversions

Treasury Officials Preparing Options to Address Tax Inversions
Current Timetable Likely Means White House Action on Inversions Is Several Weeks Away

Treasury officials are working through different ideas and the recommendations aren't expected to be made imminently, the official said. Still, the process, and recent comments by President Barack Obama on the matter, appear to increase the likelihood that the Obama administration will take some concrete steps to either prevent companies from making the reorganizations, or to remove some of the benefits from such moves.

This process likely pushes the timeline for White House action into September. Changes could range from concrete rules to proposals that take months to implement. But the interim Treasury process isn't expected to take "months," the Treasury official said.

Inversions are complicated tax deals, but they are popular because they essentially allow a U.S. company to transfer certain operations—the "headquarters"—overseas to a low-tax nation, such as Ireland. The company then no longer has to pay the higher U.S. tax rate on certain earnings, though the corporate relationship between the foreign headquarters and the U.S. operations can be extremely complex.

After a wave of tax inversion deals, with more expected in the coming months, the White House several weeks ago called on Congress to take steps to prevent companies from pursuing inversions.

Although Democrats and Republicans have said tax inversions should be deterred, they have much different views on how to proceed. A number of Democrats in Congress believe lawmakers should pass a stopgap measure to deter companies from pursuing these deals, while a number of Republicans have said the only way to stop inversions is through a comprehensive overhaul of the tax code.

After several weeks of waiting for Congress to move, the White House recently announced it would consider taking interim steps on its own. Tax experts have varying views on what steps the Obama administration could take. Some believe the White House's powers are relatively limited, given how Congress already has tried to address inversions through law. But others believe the White House has ample flexibility to step in and have raised a number of different ideas for administrative actions, including steps to address earnings stripping, the taxation of interest, and the treatment of debt and equity,

Businesses, lawyers, and tax advisers are watching the White House process closely, as several more "inversion" deals are expected to be rolled out in the coming weeks.

Reuters - Telefonica to offer Vivendi a TV content deal in GVT bid -source

Telefonica to offer Vivendi a TV content deal in GVT bid -source

Aug 18 (Reuters) - Telefonica will offer Vivendi a television content-sharing deal alongside its bid for Vivendi's Brazilian broadband telecoms business GVT, taking its overall offer to around 7 billion euros ($9.4 billion), a source said on Monday.

The Spanish company launched a 6.7 billion euro cash-and- shares bid for GVT earlier this month but is facing a possible challenge from Telecom Italia, which has said it is considering making a counter offer.

Telecom Italia is preparing to offer up to 7 billion euros ($9.4 billion) to outbid Telefonica, Bloomberg reported on Sunday, citing people with knowledge of the plan.

"This hasn't been made public yet but Telefonica's offer is worth more than the 6.7 billion euros currently on the table because it includes a television content deal with Vivendi," a source with knowledge of the matter told Reuters.

The audiovisual business is strategic for both Vivendi - market leader in France - and Telefonica, which has increased pay-TV subscribers in Spain over the past few months and launched a bid for its domestic rival DTS.

"Telefonica's presence in the pay-TV market (vs. Telecom Italia) increases the appeal of a possible content agreement," Banco Sabadell said in a note to clients.

"We would not rule out Telefonica improving the offer for GVT in order to get hold of the asset, which would complement its fixed business in Brazil and would speed up the consolidation of the Brazilian market," it said.

Telefonica Brasil owns the country's biggest mobile operator, Vivo.

WSJ : SoftBank's U.S. Cellphone Strategy Takes Shape

SoftBank's U.S. Cellphone Strategy Takes Shape
Sprint Unit to Sell Smartphones Made With Sharp; Apps Service Is Unveiled

TOKYO— SoftBank Corp. 9984.TO +0.44% gave a glimpse of its plans to tackle the U.S. cellphone market, unveiling a deal to develop low-cost smartphones for its Sprint Corp. S -1.35% unit and a new service that would allow unlimited downloads from select applications.

SoftBank said Monday that together with fellow Japanese company Sharp Corp. 6753.TO +0.95% it has developed a smartphone with near-frameless displays that it plans to sell through Sprint. It also introduced App Pass, a service that it plans to launch later this month, which will have a lineup of 100 applications as diverse as games, recipes and free access to news.

SoftBank and U.S.-based Sprint will offer the handset, the Aquos Crystal, exclusively. The handsets will come with App Pass preinstalled, the Japanese telecommunications company said.

While SoftBank didn't disclose pricing for the U.S. market, its pricing in Japan offers a look at the kind of services it is trying to bring to the U.S. to set Sprint apart from rivals Verizon Communications Inc. VZ -0.15% and AT&T Inc. T -0.39%

In Japan, for example, SoftBank said the handset will be offered free of charge to new users switching from other carriers. For $3.61 a month, users would have access to $390 in apps that would cost $390 to download separately. As part of the plan, users also would receive $4.88 of credit to use for in-app purchases. Sprint is expected to announce a similar plan in the U.S. on Tuesday.


After shelving plans to buy smaller carrier T-Mobile US Inc. TMUS -0.58% earlier this month, Sprint is studying aggressive price plans to stop subscriber losses. Sprint, which has previously focused on an expensive network overhaul, is ready to pare costs and engage its rivals in fierce price competition under its new chief executive, Marcelo Claure. The company has been unprofitable since 2007, and winning customers will be a challenge. Many prospective users have their connections locked up in contracts, while rivals already offer low-cost plans. Cable rollouts of Wi-Fi networks also might threaten cellular-network demand.

"We can use our scale to gain price competitiveness and win exclusive agreements," said Maki Tahara, who heads SoftBank's marketing strategy.

SoftBank also said Monday it plans to sell ¥400 billion ($3.91 billion) of bonds to individual investors, which some analysts took as a sign that the company is looking for further expansion. At the time that SoftBank abandoned its bid for T-Mobile, the company was looking at more than a dozen other acquisition targets, people close to SoftBank founder Masayoshi Son have said.

The handset deal provides a boost for Sharp, which had all but abandoned global phone sales and has been vying with Sony Corp. 6758.TO +0.16% for a distant No. 2 spot in the Japanese smartphone market, after Apple Inc. AAPL +1.23% Sharp sold only 5.5 million handsets in the fiscal year ended in March, after four straight years of declines. The SoftBank deal will help it achieve a sales target of 6.3 million units this year, it said.

The deal comes as Sony, which has been trying to get a better foothold in the U.S. smartphone market, had been wooing Sprint as well.

Sony has approached Sprint about selling Sony's Xperia smartphone in the U.S., according to people familiar with the talks. Sony, which had pegged hopes for a turnaround on its mobile operations, had also approached Verizon and AT&T, touting the new phone's advanced camera and audio technologies, they said.

The status of those talks wasn't clear Monday, but Sony last month slashed its sales forecast for smartphones, and said its mobile unit might need to cut its forecast again to an annual loss.

"We had received a number of offers from different vendors," said SoftBank's Yoshiaki Adachi, a manager in charge of product design. "That we would be able to make this offering exclusive was a large draw."

Future tie-ups with other phone makers are a possibility, he said, declining to comment further.

Sony declined to comment on any talks with Sprint, adding that the company doesn't comment on speculation.

Japan's phone makers, pioneers in mobile Internet technology, are fighting for relevance. Abroad, they are hemmed in by Apple Inc.'s iPhones at the high end of the market while Chinese brands such as Huawei Technologies Co., Lenovo Group Ltd. 0992.HK +1.04% and Xiaomi Inc. are gaining market share at the low end. At home, the iPhone is increasing its market dominance with a 67.4% share after NTT DoCoMo Inc.'s decision last fall to begin supplying the smartphone.

Japanese handset maker NEC Corp. stopped making smartphones last year, while Panasonic Corp. 6752.TO -0.12% also withdrew from making consumer smartphones. Most handset sales at Sharp and Fujitsu Ltd. 6702.TO -0.98% come from within Japan, while Sony's sales are largely confined to Japan and Europe.

"We need the U.S. market to truly establish ourselves in the telecom sector. Japan is not enough," Sharp President Kozo Takahashi said. "We are deeply grateful for this chance to battle in the U.S. market."

*CHINESE TROOPS ENTER 25 KM DEEP INTO INDIAN TERRITORY: PTI

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BFW 08/18 14:14 *CHINESE TROOPS ENTER 25 KM DEEP INTO INDIAN TERRITORY: PTI

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Chinese Troops Enter 25km Deep Into Indian Territory: PTI Link 2014-08-18 14:17:24.67 GMT

By Karthikeyan Sundaram Aug. 18 (Bloomberg) -- Story: {NSN NAI8LT3HHEDC<Go>}

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(BFW) *CHINESE TROOPS ENTER 25 KM DEEP INTO INDIAN TERRITORY: PTI

BFW 08/18 14:14 *CHINESE TROOPS ENTER 25 KM DEEP INTO INDIAN TERRITORY: PTI
Chinese Troops Enter 25km Deep Into Indian Territory: PTI Link
2014-08-18 14:17:24.66 GMT


By Karthikeyan Sundaram
Aug. 18 (Bloomberg) -- Story: {NSN NAI8LT3HHEDC<Go>}


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RTR - UBS says widens background checks for specialist employees


(Reuters) - Switzerland's biggest bank UBS (UBSN.VX) said it had expanded the number of employees that are subject to internal background checks to around 15 percent of its workforce in a move than came in the wake of numerous scandals.

Under the new policy, roughly 9,000 employees of the Zurich-based bank will be subject to internal vetting, a spokesman for UBS told Reuters, confirming a report on Monday by Swiss finance website, Inside Paradeplatz.

UBS is beefing up policing of its employees as it grapples with a probe into potential rigging of the global foreign exchange market, including by the Securities and Exchange Commission, U.S. justice officials, and Britain's Financial Conduct Authority.

The spokesman said UBS had already been vetting some current employees but would not confirm how many. He said the expansion was part of the bank's operational risk strategy.

Senior management, including managing directors, will continue to be vetted. Under current checks, a larger number of specialist staff members with access to sensitive information will also be subject to criminal background checks, as well as scrutiny of their credit rating, UBS said.

Inside Paradeplatz reported that employees were told last Monday of the new system and that they have until Aug. 31 to return the necessary documents.

Foreign exchange trading represents the latest in a series of scandals at the Swiss bank, including a rogue trader which cost UBS more than $2 billion (1.2 billion pounds) in 2011.

Two years ago, UBS agreed to pay $1.5 billion bribery in connection with efforts to rig benchmark interest rates, and last year it paid $885 million to settle allegations it misrepresented mortgage-backed bonds during the housing bubble.

The bank's share price fell in June following a research report which said it could have to pay $8 billion in fines and settlements relating to the alleged collusion and price-manipulation in the global currency market.

fT : Louis Bacon’s Bahamas battle reaches New York court

A battle over Clifton Bay, a postcard-perfect patch of turquoise waters off the western coast of the Bahamas, has raged for years between a billionaire hedge fund owner and a Canadian clothing mogul. It has now spilled into a New York courtroom in what one side hopes will finally settle the score.
Louis Bacon, the billionaire founder of hedge fund Moore Capital Management, took legal action last week by asking a US court to try to gain access to videotaped footage he believes will help him prove that Peter Nygard, founder of clothing manufacturer Nygard International and his Bahamian neighbour, has engaged in a smear campaign against him.

The backdrop is a long-running legal feud involving multiple lawsuits over whether Mr Nygard is, as Mr Bacon alleges, harming the environment around Clifton Bay, a beach made famous by James Bond movies, where both men have compounds.
Mr Nygard’s lawyer said he planned to file a counter lawsuit.
“This lawsuit is a continuation of Louis Bacon’s malicious campaign against Peter Nygard with the objective of obtaining Mr Nygard’s Bahamian property (Nygard Cay), through illegal means, and to wrongfully continue to damage Mr Nygard’s businesses and reputation,” the lawyer said in a statement.
The founder of the fashion line has previously said, according to a statement published by the Canadian Broadcasting Corporation, he supports the environment and that reports about his effort to rebuild have not been presented “accurately”.
The setting for the feud is the exclusive Lyford Cay community on Clifton Bay. In 1993 Mr Bacon bought a 150,000 sq ft estate in a gated community. His nextdoor neighbour is Mr Nygard, who also owns a large estate and has been a permanent resident of the Bahamas since 1986.
Mr Nygard has constructed a “Robinson Crusoe playground” with volcanic, smoking Mayan temples, a disco club and 20 themed cabanas where he has hosted celebrities, according to his website.
Their battle was seared following a 2009 fire at Mr Nygard’s property. Mr Nygard sought permits to redevelop the property but was rejected by the Bahamian government, according to court filings. Mr Bacon’s court filing in the New York case asserts that Mr Nygard believed Mr Bacon was behind the rejection and a critical CBC broadcast. My Nygard has filed a libel lawsuit against the CBC.
Mr Bacon, a self-described environmentalist, in March 2013 co-founded Save the Bays, a non-profit coalition made up of neighbours including Robert F Kennedy Jr and Nicholas Brady, a former US Treasury secretary, with a focus on Clifton Bay.
Two months later Save the Bays asked a Bahamian court to halt dredging of sand and other development activity to expand the property. The non-profit company filed a second lawsuit over a perceived lack of transparency over Mr Nygard’s development plans. A court in the Bahamas issued an injunction ceasing all work and enjoined the government from considering any future applications for Nygard Cay.
Mr Bacon alleges in the New York case that Mr Nygard has retaliated over the 2010 rejection of redevelopment permits by engaging in a smear campaign, including paying journalists to write stories on websites and the posting of videos on YouTube of manipulated news clips suggesting Mr Bacon had engaged in insider trading.
Mr Nygard responded to the Save the Bays lawsuits, in the statement posted by the CBC, saying: “The required environmental assessments have been completed and are in the hands of the government, including the most recent assessment completed in February 2014. These assessments confirm that there has never been any adverse environmental impact caused by Nygard activities.”
He called legal actions by Save the Bay “a complete farce and an improper manipulation of the public process to acquire Nygard Cay”.
Mr Bacon is trying to use US courts to obtain evidence relating to five defamation lawsuits pending in Bahamian courts, in which he is suing a number of defendants but not Mr Nygard, and the two lawsuits by Save the Bay.
His application to the New York court claims “smoking gun” evidence has emerged from a 28-year-old videographer hired by Nygard International to chronicle the magnate. Mr Bacon, through his legal team at Gibson Dunn & Crutcher, is asking the US judge to order the videos be turned over to him and his legal team.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: CMGE -0.4%, JKS -0.3%

M&A news: TI -2.2% (plans to bid for Vivendi (VIVHY)'s GVT for EUR 7 bln, according to reports), VRX -2% (extends exchange offer to acquire all of the outstanding shares of Allergan (AGN) to December 31, 2014), DLTR -1.3% (in response to FDO/DG news).

Analyst comments: INVN -2.8% (downgraded to Neutral from Buy at Goldman), NXPI -2.3% (downgraded to Sell from Neutral at Goldman), WERN -2.3% (downgraded to Underperform from Neutral at BofA/Merrill), MNST -0.9% (downgraded to Hold from Buy at Jefferies), WCG -0.9% (downgraded to Neutral from Outperform at Wedbush), MXIM -0.9% (removed from Conviction Buy list at Goldman).

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: MOBI +16.2%, LCI +5.5%.

M&A news: DG +8.9% (Dollar General (DG) offers to acquire FDO for $78.50/share in cash), FDO +4.6% (Dollar General (DG) offers to acquire FDO for $78.50/share in cash), YHOO +1.1% (acquired ClarityRay).

Select China related names showing strength: CHL +3.1%, JD +2.1%, DANG +1.8%.

Select pharma/biotech stocks trading higher: AZN +2.1%, GILD +2%, CELG +1.3%.

Select names showing strength following positive Barron's mention: SLB +1.8%, COP +1.3%, GCI +0.7%.

Other news: JRJC +4.7% (announced that it has launched China's first independent web-based securities trading platform), TASR +4.6% (demand increasing for its cameras following Ferguson incident, according to NYPost), JBLU +3.4% (still checking), GTAT +3.1% (still checking), KNDI +2.7% (reports of EV production increase in China), HLSS +0.9% (announces filing of restated financial statements; no impact to retained earnings for 2Q14), BITA +0.9% (announces joint venture with Yong Da Group and UXIN ), TSLA +0.8% (announces its 85 kWh Model S now has an 8 year, infinite mile warranty on both the battery pack and the drive unit), BIIB +0.7% (PLEGRIDY approved in the US for the treatment of multiple sclerosis), LOGI +0.7% (granted Nasdaq extension for compliance with listing rule).

Analyst comments: ACHN +7.4% (upgraded to Buy from Hold at Deutsche Bank), TKMR +6.1% (initiated with a Outperform at Leerink Partners), HK +2.7% (upgraded to Buy from Hold at MLV & Co), ARMH +1.9% (added to Conviction Buy list at Goldman), SEAS +1.8% (initiated with a Outperform at Credit Suisse), XENT +1.3% (initiated with a Overweight at Piper Jaffray), HPQ +0.9% (upgraded to Buy at Monness Crespi & Hardt), GE +0.7% (reinstated with an Outperform at Credit Suisse), AAPL +0.6% (positive comments from RBC, also pos mention in Barrons)

(BFW) Barclays Dark Pool Trading Volume Rises to Highest Since Suit

Barclays Dark Pool Trading Volume Rises to Highest Since Suit
2014-08-18 12:03:52.104 GMT


By Richard Partington
Aug. 18 (Bloomberg) -- About 106 million U.S. shares traded
in dark pool in week beginning July 28, up 21% compared with
87.6 million in week beginning July 21: Finra data.
* Barclays is 13th largest dark pool operator in U.S.
* Volume in largest dark pool run by Credit Suisse rose 19% to
455.6 million in same period
* NOTE: Barclays dark pool volume fell 8.6% last week
* NOTE: NOTE: Attorney General filed suit against Barclays on
June 25


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Edward Evans