TheChek News Flow

>>> US Close Dow +0,08% S&P +0,00% Nasdaq +0,05%

Closing Market Summary: Stocks End Flat Despite Renewed Eurozone Concerns

The major averages spent some time on both sides of their flat lines on Wednesday before ending little changed. The S&P 500 settled on its flat line with six sectors finishing in the red, while the Russell 2000 (+0.3%) displayed relative strength throughout the session.

Although stocks finished on a flat note, the early indication suggested the market could be in for a rough day as economic data from the eurozone and domestic corporate news weighed.

On the economic front, Germany reported its second monthly decline in factory orders (-3.2% versus expected 1.0%; prior -1.6%), while the Italian economy slipped into recession following its second consecutive quarterly GDP contraction (-0.2%; previous -0.1%).

Back at home, two potential acquisitions were called off with 21st Century Fox (FOXA 32.33, +1.03) terminating its pursuit of Time Warner (TWX 74.24, -10.95) and Sprint (S 5.90, -1.38) withdrawing its offer for T-Mobile (TMUS 31.06, -2.85).

In addition, shares of Walgreen (WAG 59.21, -9.91) plunged 14.3%, which also contributed to the early weakness. The drugstore operator said it will acquire the remaining 55.0% stake in Alliance Boots that it does not currently own and that it will not move its corporate headquarters out of the United States.

Despite the opening weakness, the S&P 500 was quick to find support at its 100-day moving average. The index breached that level for the first time since mid-April, but was able to claw back to its flat line in short order. However, extending the rebound proved challenging as a handful of influential sectors like consumer discretionary (-0.3%), health care (-0.1%), industrials (-0.5%), and technology (-0.2%) weighed.

Notably, the industrial sector lagged throughout the session amid weakness in defense contractors and transport stocks. The PHLX Defense Index lost 1.0%, while the Dow Jones Transportation Average fell 0.6% to extend its week-to-date loss to 1.4%. Almost all 20 components of the bellwether complex posted losses with the lone bright spot appearing among airlines. Alaska Air (ALK 42.94, +0.22) and JetBlue (JBLU 10.92, +0.14) added 0.5% and 1.3%, respectively.

Elsewhere, the health care sector posted a slim loss, while biotech stocks displayed some intraday volatility. The iShares Nasdaq Biotechnology ETF (IBB 251.82, +0.18) ended just above its flat line after alternating between gains and losses during the session.

On the upside, yesterday's weakest sector—energy (+0.4%)—seized the lead at the open, but surrendered a significant portion of its gain during the afternoon.

Outside of energy, financials (+0.4%), materials (+0.7%), and consumer staples (+0.9%) were the only sectors to register gains. The materials space drew strength from mining stocks. The Market Vectors Gold Miners ETF (GDX 26.69, +0.59) gained 2.3%, whereas gold futures jumped 1.8% to $1308.30/ozt.

Treasuries held gains throughout the session, but the 10-yr note relinquished roughly two-thirds of its advance by the close. The benchmark 10-yr yield slipped two basis points to 2.47%.

Participation was a bit below average with fewer than 680 million shares changing hands at the NYSE floor.

Economic data was limited to the June Trade Deficit and the MBA Mortgage Index:

The U.S. trade deficit narrowed to $41.50 billion in June from an upwardly revised $44.70 billion (from $44.40 billion), while the consensus expected an increase to $45.20 billion

According to the advance estimate for Q2 2014 GDP, the BEA assumed the trade deficit widened to roughly $45.10 billion in June. The fact that the deficit was much smaller than the BEA expected suggests that the new trade balance will contribute positively in the second estimate

The goods deficit fell to $60.30 billion in June from $63.30 billion in May

The services surplus remained at $18.70 billion

Exports increased by 0.1% in June, while imports declined 1.2%

The weekly MBA Mortgage Index rose 1.6% to follow last week's 2.2% decline

Tomorrow, weekly initial claims (consensus 308K) will be released at 8:30 ET, while the Consumer Credit report for June (consensus $15.80 billion) will cross the wires at 15:00 ET.

S&P 500 +3.9% YTD

Nasdaq Composite +4.3% YTD

Dow Jones Industrial Average -0.8% YTD

Russell 2000 -3.1% YTD

>>> Oi to continue pursuing asset sales this year

Oi to continue pursuing asset sales this year

The sale of assets remains as a priority for Brazilian listed telecom Oi in 2014, said CEO Zeinal Bava, according to a Portuguese-language report from Valor Economico.

According to the executive, the company will continue to focus this year on the process of sale of non core assets, in order to extend its debt maturity and improve the funding costs.

In June, Oi agreed to sell 1,641 mobile phone towers for BRL 1.2bn (USD 528.9m), as reported. The sale of the towers will bring a non-recurring positive effect of BRL 1bn (USD 440.7m) to the company's EBITDA in the 4Q14, Bava told Valor.

The company’s net debt increased to BRL 46.2bn (USD 20.36bn) in June from BRL 30.3bn (USD 13.35bn) in March. Despite the positive impact of BRL 7.96bn (USD 3.5bn) from the capital increase carried out in May, Oi had to consolidate the BRL 21.28bn (USD 9.37bn) debt of Portugal Telecom, the newspaper added.

Source Valor Economico

(9to5) Paul Deneve brings YSL’s Europe President and Retail chief into the Apple

Paul Deneve brings YSL’s Europe President and Retail chief into the Apple fold

Apple has just made another significant hire from the global fashion industry: Yves Saint Laurent’s Europe President and Retail Head Catherine Monier. Sources say that Monier left the Paris, France-based fashion icon earlier this summer and that she started at Apple within the last few weeks. The sources added that former Yves Saint Laurent CEO Paul Deneve, who joined Apple last year to work on “Special Projects” under Apple CEO Tim Cook, was behind the hire and that Monier will work on Deneve’s team…

Monier began working at Yves Saint Laurent in 2012, and prior to working under Deneve in France, she worked in various executive retail and wholesale roles at several fashion brands in the Paris area.

Sources say that Deneve’s team at Apple has been working on new strategies for Apple’s official retail stores in order to make the stores more capable of selling and marketing fashion and wearable goods. The timing of Monier’s placement on this team is also no coincidence: Apple is gearing up to launch a fashion and fitness-oriented wearable band this fall, and Apple will need all the expertise in selling fashion goods that it can get its hands on prior to the launch.

The recent appointments of Deneve and Monier come as former Burberry CEO Angela Ahrendts transitions into Apple’s Senior Vice President of Retail and Online Stores position. As a trio of fashion industry executives, along with lesser-known players such as former Burberry Social Media Marketing Head Musa Tariq, Apple has the ability to combine acumen in fashion with its established expertise in sensor-packed gadgets with fitness and health-oriented software.

Apple and a Yves Saint Laurent representative have yet not responded to requests for comment.

WSJ : Tibco Reaches Out to Potential Buyers --> +7,93%

Tibco Reaches Out to Potential Buyers

Business Software Maker Has Approached Possible Suitors, Including Private-Equity Firms

Business-software firm Tibco Software Inc. TIBX +7.51% has been approaching potential suitors, including private-equity firms, according to people familiar with the matter.

The early-stage sale talks aren't part of a formal process and are being spearheaded by Tibco Chief Executive Vivek Ranadivé, the people said.

The sale talks come after months of difficulties for Tibco. The company has fallen short of earnings expectations and its Spotfire data software has lost ground to rivals. Its stock price had fallen 14% this year through Tuesday's market close, giving it a stock-market value of $3.2 billion.

In afternoon trading, Tibco shares were up 11% at $21.37.

The company's sliding stock price drew the attention of Praesidium Investment Management Co., owner of more than 3% of Tibco's stock. In a letter to Tibco's board in June, Praesidium said it would share with other stockholders and potential acquirers its analysis for ways the Tibco board can boost the stock price.

Praesidium—Tibco's fourth-largest shareholder, according to S&P Capital IQ—said in its letter it sees "a substantial opportunity to unlock value" in "a company that is currently falling far short of its significant potential."

Tibco last week amended its executive change-in-control and severance plan, which are sometimes known as golden parachutes. The new plan allows key executives to receive a more generous exit package should Tibco be acquired. In a filing, the company said its compensation committee believes the changes "more closely align with current market practices and create appropriate incentives for our management team."

>>> Valeant Pharma: ISS recommends Allergan (AGN) shareholders call a special me

Valeant Pharma: ISS recommends Allergan (AGN) shareholders call a special meeting of shareholders; ISS comments on Valeant's 'enormous success over the tenure of its current CEO'

Valeant Pharmaceuticals International and Pershing Square Capital Management, L.P. commented on ISS recommendation in support of Pershing Square's effort to call a special meeting of Allergan (AGN) shareholders. Pershing Square is seeking to call a special meeting to address a number of important matters, including the removal of six incumbent directors from the Allergan Board, which has failed to do any reasonable investigation of the Valeant offer.

* ISS commented: "Many of the initiatives [Allergan] has announced, moreover—reducing R&D and SG&A expense, looking at acquisitions—are strategies Valeant has used to enormous success over the tenure of its current CEO."

* "Allergan bylaws are far more restrictive than any of the comparator companies the board apparently reviewed, with no discernable advantage for Allergan shareholders."

(MergerMarket) Gannett shut out other interest in Cars.com

Gannett shut out other interest in Cars.com

Gannett's (NYSE:GCI) negotiated price and terms for Cars.com is understood to have headed off continued unsolicited interest from other parties.

Yesterday, Gannett announced that it paid USD 1.8bn for the 73% it did not own of Classified Ventures, the parent company of used car listings provider Cars.com.

The deal values the total company at USD 2.5bn. Classified Ventures is co-owned by Tribune Media Company (OTC:TRBAA), which owns 28%, The McClatchy Company (NYSE:MNI), Graham Holdings Company and A. H. Belo Corporation (NYSE:AHC).

The Wall Street Journal reported on 9 March that the consortium was exploring a sale of Cars.com, seeking a valuation between USD 2.5bn and USD 3bn. At the time, a Bloomberg report indicated that Cox Enterprises and Apax Partners, owners of similar assets in other markets, were interested in a purchase.

In a statement to this news service, John Dyer, Cox Enterprises’ president and CEO, said: “We're committed to providing the world's largest digital automotive marketplace, and we will continue to play a critical role in the industry for dealers, manufacturers and car shoppers.”

The terms of the sale allow the sellers to continue to purchase Cars.com’s listings at preferred wholesale rates for five years in their local markets.

Gannett simultaneously announced the purchase and the spinoff of its newspaper assets, which create separate broadcast and publishing entities. Cars.com will be absorbed by the broadcast company. Gannett’s current market cap is around USD 7.7bn.

Though Gannett stock was up by 7% in premarket trading on news of the publishing spinoff, consistent with the rewards other companies have had for separating strong, growing broadcast operations from weakening print assets, the shares opened with only a 3% gain. The stock closed 1.3% lower on the day, at USD 33.87.

One industry banker said Wall Street was reacting negatively to the fact that Gannett paid so much for Cars.com, a figure he estimated to be 21 times cash flow. The banker said that observers perceive the price as “extraordinarily” expensive. Cars.com is a very attractive asset, said the banker, but added that “whatever multiple expansion there should have been on the split was given back in paying that kind of premium.”

During a conference call with analysts and investors, Gannett CEO Gracia Martore indicated that the company made a different calculation. She said that based on "the 2014 pro forma incremental EBITDA, estimated, we're paying USD 1.8bn and we're getting about USD 155m in incremental estimated EBITDA for 2014. And if you do that math, it implies a multiple of 11.7 times."

A station broker said that Gannett's move was not a reaction to the frenzied M&A environment for TV stations. Rather, this broker said, its decision to separate its newspapers from its broadcast outlets was probably inevitable as soon as the company announced its USD 1.5bn acquisition of Belo Corporation in June 2013. That USD 2.25bn deal, which included Belo's 20 TV stations, nearly doubled the size of Gannett's portfolio.

The broker pointed out that with 43 stations and 25% US audience penetration, Gannett had little room to grow within the constraints of regulation prohibiting cross-ownership of newspaper and television assets. This left a spin as the only reasonable way to continue making acquisitions, the broker said.

In the largest markets that Gannett is in, there are few tuck-in acquisition opportunities, the station broker and a banker said. Gannett may therefore be looking to add stations in some of its mid-sized and smaller markets.

Gannett declined requests for comment.

>>> United Biscuits mandates Centerview for dual-track process; Kellogg consider

United Biscuits mandates Centerview for dual-track process; Kellogg considering GBP 2bn bid

United Biscuits Limited, the UK-based snack foods manufacturer, is in the middle of a dual-track process, according to a Sky News report.

According to the article, the firm has hired Centerview Partners to guide it through the process.

The company is being looked at by the Kellogg Company, who appointed Barclays to assess the GBP 2bn offer.

The "likeliest option" however, according to the report, would be a public listing. Blackstone and PAI Partners have hired Goldman Sachs and JPMorgan and are examining the possibility of an IPO.

Source Sky News

FBR Capital sees a dimming of merger fever in content stocks. Not just for the TWX pairing. But the broader concept of a big consolidation wave among TV content suppliers. Consolidation is at times a follow-the-leader exercise. And the combination of two of the biggest players would have motivated other TV content cos -- many of which are family controlled -- to focus more on the need for mergers to gain scale, even though that argument was never part of Fox's case for Time Warner. Lacking that example, content cos will tend to shift back to business as usual.
TAG notes FOXA's withdrawal of its bid for TWX may have reflected Rupert Murdoch's realization that getting a deal done would have cost FOXA a ratings downgrade. Furthermore, with no other bidders coming forward, FOXA was effectively bidding against itself and had no other player to split up the assets. That said, other possible M&A for FOXA include STRZA and AMCX, which trade at a tenth of what FOXA offered for TWX. There is likely, no other TWX bidder. They see industrial logic for the combining of VIAB and CBS which would create a company that looks like FOXA.