*ALTICE IN TALKS WITH BANKS TO FINANCE EU7B PORTUGUESE DEAL
* Tesla – long idea
Compared Tesla to Apple a few years ago
Premiumisation of auto mkt
Tesla – product advantage
Name game min $/kwh, innovation each yr ult worth $10k/car = huge competitive adv vs other auto players
‘Apple of the auto industry’
Efficient money raising to finance growth
Biz model akin to Porsche or Harley Davidson
Ramp much quicker for Tesla though, more like historic growth Ford
Scope $4bn ebit in a few yrs growing 25% pa
* Transocean – short idea
Growth deepwater, oil was above fundam level = last 10 yrs
Shale ‘black swan’ for energy indus
Flattening cost curve for oil price
Growth less energy intensive, gas growing, solar innovations
Shale 18 mths payback vs 15 yrs deepwater
So lots deepwater capex at risk
Drilling 25% deepwater cost
Derating, now earnings collapse
X0.6 p/b , 30% uncontracted for ’15, 50% for ‘16
Think reality on x1.6ish bk
FT blog asserts that Google could possibly buy Netflix in 2015
Spirit Pub/Greene King merger still on despite UK MPs’ anti pub tie vote
Greene King [LON:GNK] is going ahead with its plan to merge with Spirit Pubs [LON:SPRT] despite the House of Commons vote to allow pub tenants to exit rental ties to parent companies, a Greene King spokesperson and a source close to the situation said.
The House of Commons yesterday (Tuesday) passed an amendment to a bill that could mean pub owners will no longer be able to determine which beer their tenants purchase.
The vote sent pub stocks tumbling Wednesday morning. Greene King was down 4.45%, Spirit Pubs dropped 7.18%, Punch Taverns [LON:PUB] fell 10.89% and Enterprise Inns [LON:ETI] dropped 15.27%. The bill now enters a report stage before a Third Reading in the House of Commons and passage through the House of Lords, according to the UK parliamentary website.
A top 20 Greene King shareholder noted analyst reaction that the law change would have a much greater effect on tenanted pub companies like Enterprise and Punch Taverns than on Greene King and Spirit.
Announcing the deal, Greene King said that of its 1,900 pubs, just under 900 represent its leased business. Spirit has 433 leased pubs in its estate of 1,227.
Brewer and pub operator Greene King uses its pub network to promote its own beer brands through “pub tie” agreements with tenants. Pub companies in the UK have run ties for hundreds of years, allowing them to feed their own beer or preferred suppliers’ beers into a large proportion of the UK’s pub outlets.
In written evidence to Parliament on the Small Business, Enterprise and Employment Bill published on the parliamentary website on 15 October, Greene King said “any proposals which would add a free-of-tie option to the legislation should be avoided, as this would at the very least lead to significant pub closures and job losses.”
The brewer and pub owner said it has run its business “very successfully for over 200 years based on the tied pub model.” Over 75% of its tenanted and leased estate of 860 pubs is operated under a traditional short-term tenancy agreement, Greene King said.
“We were concerned about calls during Second Reading for the legislation to go further and include a mandatory free-of-tie option for tenants,” Greene King wrote. “This would have a hugely negative impact on Greene King. We have operated pubs under the Beer Tie for over 210 years and strongly believe the model is not broken and that it will continue to evolve over time as an integral part of our diversified business,” it said.
“Should the existence of an enhanced code be deemed necessary, it should address the more damaging leases – the long-term fully repairing and insuring leases, rather than the traditional short-term tied tenancy agreements which make up the vast majority of our estate, and are the tenancies operated by the family brewers. Whereas the short-term tenancy offers a low cost entry and ease of exit for tenants, the longer-term leases require a higher level of investment from the tenants, who also receive less support and are tied into longer contracts,” Greene King said.
Barclays analysts wrote they would expect pub companies to challenge the new clause on legal grounds. However, assuming it does receive royal assent, they noted it is difficult to anticipate the number of tenants that would opt for a free-of-tie arrangement.
"Some of them will no doubt be happy with the relationship where low rent is effectively subsidised by 'high' beer prices," the Barclays analysts wrote.
Sony Re-Evaluates Support for Free Music Streaming
Move Prompted By Taylor Swift Pulling Music from Spotify
“Actually, a lot of conversation has taken place over the last week in the light of that,” said Kevin Kelleher, chief financial officer of Sony Music. “What it all really comes down to is how much value are the music company and the artist getting from the different consumption methods.”
Ms. Swift’s decision this month to leave Spotify, which shares with artists a portion of the proceeds from ad sales and from fees for its paid, ad-free premium version, sent shock waves through the music business. With sales of CDs in a long-term slump and digital downloads beginning to decline, the industry has been looking to streaming as its brightest hope.
Despite Ms. Swift’s thumbs-down to Spotify, Mr. Kelleher said Sony remained “very encouraged” by the growth of subscription-based streaming services, which let users skip ads in exchange for monthly fees.
The company said Tuesday, at a briefing for analysts and investors, that it expects music-division revenue to increase to a range of $4.8 billion to $5.2 billion for the fiscal year ending in March 2018, from $4.8 billion in the current year.
“The key question is, are the free, ad-supported services taking away from how quickly and to what extent we can grow those paid services?” Mr. Kelleher said. “That’s something we’re paying attention to as content owners who license our content to the different platforms. It’s an area that’s gotten everyone’s attention.”
That sentiment has been growing in the industry. One record-label executive told The Wall Street Journal recently that he regretted ever having agreed to allow licensees to offer any on-demand listening features free. “In hindsight we made a mistake,” he said.
Mr. Kelleher’s comments came at the first of two briefings that Sony has scheduled to provide updates on the progress of its restructuring. Tuesday’s session focused on the entertainment arm, including music and the Hollywood studio division, while a meeting next week is devoted to the electronics business.
Sony Chief Financial Officer Kenichiro Yoshida, smartphone chief Hiroki Totoki and PlayStation videogame head Andrew House are all expected to take the stage on the second day.
While its electronics operation remains challenged, with smartphone sales falling short of expectations, Sony has moved to cut losses in businesses such as making television sets. Fixing the Xperia phone business is an urgent task for Sony, Chief Executive Kazuo Hirai said. Mr. Totoki is expected to provide details about how he will rebuild the Xperia arm—efforts that are likely to extend into the next fiscal year.
Sony’s entertainment arm, meanwhile, continues to deliver steady earnings.
“Some say the entertainment unit is just a side business to Sony, but it is an important pillar for us as it brings a steady flow of profits,” Mr. Hirai said.
Sony said it expects its Hollywood studio business, Sony Pictures Entertainment, to generate revenue of $10 billion to $11 billion in fiscal year 2018, up from $8.1 billion in the current year. Sony executives said the company plans to invest in markets such as India, where the company has a growing slate of TV channels, as it contends with slowing growth elsewhere.
Sony executives said that the activist investor Daniel Loeb recently dropped a campaign to get Sony to partially spin off its entertainment arm, hoping to unlock what he described as hidden value in that side of the company. Mr. Loeb said in October that his hedge fund, Third Point LLC, had sold its Sony stake, acquired in May 2013, making a 20% gain.
After Mr. Loeb became involved, Sony moved to increase transparency around the entertainment arm’s operations in an effort to position it as central to the company’s turnaround efforts.
RTRS - VERRAZZANO'S RAMBOURG SAYS SEES 35-60 PCT UPSIDE IN VALUE OF ACCOR STOCK
*SOHN LONDON: RAMBOURG NAMES ACCOR AS TOP PICK IN EUROPE
2014-11-19 13:35:43.46 GMT
--SAM CHAMBERS
-0- Nov/19/2014 13:35 GMT
2014-11-19 13:35:43.46 GMT
--SAM CHAMBERS
-0- Nov/19/2014 13:35 GMT
SunEdison: Color on Wind Acquisition
- Brean Capital (From 11/18) note SUNE and its yieldco, Terraform Power (TERP) announced a definitive agreement to acquire First Wind for $2.4B. As a result, SUNE raised its 2015 project installation and CAFD from TERP guidance and indicated its timetable for receiving Incentive Distribution Rights (IDR's) from TerraForm Power has been accelerated. Firm views the acquisition as transformative and should improve the Company's overall risk profile relative to its peers. Maintain Buy rating and $23 target.
- FBR Capital (From 11/18) notes transaction marks the entry of SunEdison into the wind sector, and should transform the company from being a pure solar developer to a more diversified operator of renewable energy assets. Based on firm's existing portfolio estimates for 2017, and assuming SunEdison successfully adds about 2.1GW of wind assets and drops them into TerraForm, the pro forma asset mix would be about 60% solar and 40% wind. At the first glance, FBR estimates that the operating assets were acquired at a discount to some other recent transactions, while the cash value paid for the pipeline should generate a low double digit ROI, assuming only 2.1GW of assets are successfully developed by 2017.
- Needham Research notes it likes the deal as it: 1) substantially increases SUNE's TAM with a proven team; 2) accelerates growth with faster project construction; 3) enables SUNE (and TERP) to become the largest renewable energy developer; and 4) increases value creation for SUNE through TERP. Needham sees the increased leverage on its balance sheet as an incremental risk, but mgmt should be able to navigate any issue given its proven track record in financing. Reiterate Buy and raise tgt to $28.
Sanofi Said to Consider Smith & Nephew, Takeda Executives as CEO
2014-11-19 13:23:17.789 GMT
By Albertina Torsoli
Nov. 19 (Bloomberg) -- Sanofi has considered Olivier Bohuon
of medical-device maker Smith & Nephew Plc and Takeda
Pharmaceutical Co.’s Christophe Weber as possible replacements
for ousted Chief Executive Officer Chris Viehbacher, said people
familiar with the situation.
The board of Paris-based Sanofi has started contacting
potential candidates and wants to move quickly with the
recruiting, said the people, who asked not to be identified
discussing private matters. Eric Cornut, Novartis AG’s chief
ethics officer, also is a potential candidate, as is Olivier
Brandicourt, head of Bayer AG’s health-care business, some of
the people said.
The names cited in the search indicate Sanofi is focusing
mostly on French executives with pharmaceutical experience. The
company last month ousted Viehbacher, a Canadian-German, saying
relations between him and the board weren’t close enough and
that he failed to sufficiently execute the strategy. Some
investors said there was a culture clash between Viehbacher and
the board, which is mostly French. Chairman Serge Weinberg said
nationality wouldn’t be a criteria in the search.
“You’ve got to have somebody who is agile enough to deal
with resource allocation on the one hand, but also has the
ability to catch on to changes,” Michael Leuchten, an analyst
at Barclays Plc in London, said by phone. “This is where people
are a little bit concerned now, because people thought
Viehbacher had that.”
Bohuon, Weber
Bohuon previously worked at drugmakers Pierre Fabre SA,
Abbott Laboratories and GlaxoSmithKline Plc. He declined to
comment on the Sanofi job when asked about it on a conference
call last month.
Weber, another former Glaxo executive, joined Osaka, Japan-
based Takeda as chief operating officer in April and the company
plans to have him become CEO next year. He’s unlikely to accept
a Sanofi offer after such a short time at Takeda, three people
said.
Bohuon, Weber and Brandicourt are French. Cornut, who is
Swiss, ran Novartis’s French operations. The board may be
considering other candidates and could still turn to someone
else, one person said.
AstraZeneca Plc CEO Pascal Soriot also remains a possible
candidate, although he has already been approached and said he
wasn’t interested, the people said. Soriot, who is French, is
unlikely to leave his current job for the Sanofi one, they said.
Asked about the job on a Nov. 6 conference call, Soriot said he
couldn’t say whether he was interested.
Cambridge Meeting
The search is under way as Weinberg, who’s serving as
interim CEO, prepares to brief investors tomorrow in Cambridge,
Massachusetts, on Sanofi’s new medicines, including the insulin
Toujeo and the cholesterol treatment alirocumab.
Weinberg has been busy meeting with employees and others
since becoming interim CEO, two people familiar with his role
said. Within an hour of Viehbacher’s ouster he started calling
members of the executive team to reassure them of the company’s
strategy, one of them said.
The week of Nov. 3 he visited company offices in Cambridge
and New Jersey to meet employees, three people said. He also
spoke by phone and then met in person with Len Schleifer, the
CEO of Regeneron Pharmaceuticals Inc., Sanofi’s partner on
alirocumab and other treatments, according to one person.
Ben Atwell, a spokesman for London-based Smith & Nephew,
Jocelyn Gerst, a Takeda spokeswoman in Deerfield, Illinois, Eric
Althoff at Basel, Switzerland-based Novartis, Jack Cox at Sanofi
and Christian Hartel, a spokesman for Leverkusen, Germany-based
Bayer, declined to comment.
For Related News and Information:
How Sanofi Boss Saw Story End in 60 Hours After Boardroom Tussle
AstraZeneca’s Soriot Tries to Deflect Sanofi CEO Job Speculation
Sanofi CEO’s Ouster Mirrors Teva Corporate Culture Clash: Health
Top health news: HTOP <GO>
--With assistance from Makiko Kitamura in London, Simeon Bennett
in Geneva and Jacqueline Simmons in Paris.
To contact the reporter on this story:
Albertina Torsoli in Geneva at +41-22-317-9202 or
atorsoli@bloomberg.net
To contact the editors responsible for this story:
Phil Serafino at +33-1-5530-6277 or
pserafino@bloomberg.net
Andrew Pollack
2014-11-19 13:23:17.789 GMT
By Albertina Torsoli
Nov. 19 (Bloomberg) -- Sanofi has considered Olivier Bohuon
of medical-device maker Smith & Nephew Plc and Takeda
Pharmaceutical Co.’s Christophe Weber as possible replacements
for ousted Chief Executive Officer Chris Viehbacher, said people
familiar with the situation.
The board of Paris-based Sanofi has started contacting
potential candidates and wants to move quickly with the
recruiting, said the people, who asked not to be identified
discussing private matters. Eric Cornut, Novartis AG’s chief
ethics officer, also is a potential candidate, as is Olivier
Brandicourt, head of Bayer AG’s health-care business, some of
the people said.
The names cited in the search indicate Sanofi is focusing
mostly on French executives with pharmaceutical experience. The
company last month ousted Viehbacher, a Canadian-German, saying
relations between him and the board weren’t close enough and
that he failed to sufficiently execute the strategy. Some
investors said there was a culture clash between Viehbacher and
the board, which is mostly French. Chairman Serge Weinberg said
nationality wouldn’t be a criteria in the search.
“You’ve got to have somebody who is agile enough to deal
with resource allocation on the one hand, but also has the
ability to catch on to changes,” Michael Leuchten, an analyst
at Barclays Plc in London, said by phone. “This is where people
are a little bit concerned now, because people thought
Viehbacher had that.”
Bohuon, Weber
Bohuon previously worked at drugmakers Pierre Fabre SA,
Abbott Laboratories and GlaxoSmithKline Plc. He declined to
comment on the Sanofi job when asked about it on a conference
call last month.
Weber, another former Glaxo executive, joined Osaka, Japan-
based Takeda as chief operating officer in April and the company
plans to have him become CEO next year. He’s unlikely to accept
a Sanofi offer after such a short time at Takeda, three people
said.
Bohuon, Weber and Brandicourt are French. Cornut, who is
Swiss, ran Novartis’s French operations. The board may be
considering other candidates and could still turn to someone
else, one person said.
AstraZeneca Plc CEO Pascal Soriot also remains a possible
candidate, although he has already been approached and said he
wasn’t interested, the people said. Soriot, who is French, is
unlikely to leave his current job for the Sanofi one, they said.
Asked about the job on a Nov. 6 conference call, Soriot said he
couldn’t say whether he was interested.
Cambridge Meeting
The search is under way as Weinberg, who’s serving as
interim CEO, prepares to brief investors tomorrow in Cambridge,
Massachusetts, on Sanofi’s new medicines, including the insulin
Toujeo and the cholesterol treatment alirocumab.
Weinberg has been busy meeting with employees and others
since becoming interim CEO, two people familiar with his role
said. Within an hour of Viehbacher’s ouster he started calling
members of the executive team to reassure them of the company’s
strategy, one of them said.
The week of Nov. 3 he visited company offices in Cambridge
and New Jersey to meet employees, three people said. He also
spoke by phone and then met in person with Len Schleifer, the
CEO of Regeneron Pharmaceuticals Inc., Sanofi’s partner on
alirocumab and other treatments, according to one person.
Ben Atwell, a spokesman for London-based Smith & Nephew,
Jocelyn Gerst, a Takeda spokeswoman in Deerfield, Illinois, Eric
Althoff at Basel, Switzerland-based Novartis, Jack Cox at Sanofi
and Christian Hartel, a spokesman for Leverkusen, Germany-based
Bayer, declined to comment.
For Related News and Information:
How Sanofi Boss Saw Story End in 60 Hours After Boardroom Tussle
AstraZeneca’s Soriot Tries to Deflect Sanofi CEO Job Speculation
Sanofi CEO’s Ouster Mirrors Teva Corporate Culture Clash: Health
Top health news: HTOP <GO>
--With assistance from Makiko Kitamura in London, Simeon Bennett
in Geneva and Jacqueline Simmons in Paris.
To contact the reporter on this story:
Albertina Torsoli in Geneva at +41-22-317-9202 or
atorsoli@bloomberg.net
To contact the editors responsible for this story:
Phil Serafino at +33-1-5530-6277 or
pserafino@bloomberg.net
Andrew Pollack
Gapping down
In reaction to disappointing earnings/guidance: EJ -9.4%, LEJU -8.9%, VIPS -5.3%, XUE -4.9%, BBSI -3.5%, KE -1.8%, SNSS -1%
Select metals/mining stocks trading lower: RIO -1.8%, HMY -1.7%, IAG -1.7%, AU -1.6%, BHP -1.5%, VALE -0.5%
Other news: CLF -10.9% (to pursue exit options for its Eastern Canadian operations), CLVS -7% (reported Interim data from rociletinib (CO-1686) Phase 1/2 study), RSH -3.5% (seeing reports that Monach has ended negotiations to take over a $140 mln loan), KKR -2.5% (may be considering PETM bid, according to reports), HMC -2.1% (related to Takata air bag recall), SDRL -2% (still checking), TTM -1.3% (related to Takata air bag recall), TRP -1.1% (Keystone Pipeline bill did not get 60 votes needed in Senate), FOLD -0.8% (prices 13,850,000 shares of its common stock at $6.50 per share)
Analyst comments: BBRY -5.7% (downgraded to Underweight from Equal-Weight at Morgan Stanley), TSLA -3% (Hearing Morgan Stanley cutting FY15 EPS below consensus), MOV -1.4% (downgraded to Mkt Perform from Outperform at Barrington Research), DNR -0.5% (downgraded to Hold at Wunderlich)
In reaction to disappointing earnings/guidance: EJ -9.4%, LEJU -8.9%, VIPS -5.3%, XUE -4.9%, BBSI -3.5%, KE -1.8%, SNSS -1%
Select metals/mining stocks trading lower: RIO -1.8%, HMY -1.7%, IAG -1.7%, AU -1.6%, BHP -1.5%, VALE -0.5%
Other news: CLF -10.9% (to pursue exit options for its Eastern Canadian operations), CLVS -7% (reported Interim data from rociletinib (CO-1686) Phase 1/2 study), RSH -3.5% (seeing reports that Monach has ended negotiations to take over a $140 mln loan), KKR -2.5% (may be considering PETM bid, according to reports), HMC -2.1% (related to Takata air bag recall), SDRL -2% (still checking), TTM -1.3% (related to Takata air bag recall), TRP -1.1% (Keystone Pipeline bill did not get 60 votes needed in Senate), FOLD -0.8% (prices 13,850,000 shares of its common stock at $6.50 per share)
Analyst comments: BBRY -5.7% (downgraded to Underweight from Equal-Weight at Morgan Stanley), TSLA -3% (Hearing Morgan Stanley cutting FY15 EPS below consensus), MOV -1.4% (downgraded to Mkt Perform from Outperform at Barrington Research), DNR -0.5% (downgraded to Hold at Wunderlich)