(Merger Market) Telecom Italia minorities to support potential G

Telecom Italia minorities to support potential GVT counter-bid 

Telecom Italia’s (TI) [BIT:TIT] minority shareholders association, ASATI, is supporting the Italian incumbent’s potential counter-bid for Global Village Telecom (GVT), its president, Franco Lombardi, told Dealreporter.

ASATI is counting on TI activist shareholder Marco Fossati, who owns a 5% stake in the company, to support the counter-bid. The association controlled around 1% of the ordinary shares in TI as of 31 December 2013.

According to Lombardi, ASATI proposed TI’s board mandate CEO Marco Patuano to evaluate a potential merger with GVT. A TI board meeting was held this afternoon to approve the 1H14 results.

ASATI spoke against a possible sale of TIM Brasil [BVMF:TIMP3] in the past.

On 4 August, Vivendi [EPA:VIV] said it received a binding offer from Telefonica [BME:TEF] and its subsidiary Telefonica Brasil to acquire its Brazilian subsidiary, GVT, for a total enterprise value of BRL 20.1bn (approximately EUR 6.7bn). Approximately 60% of the deal would be payable in cash while the remaining amount would be funded with Vivo shares (12% of the future combined entity).

A person close to Vivendi described Telefonica’s offer as “unsolicited,” adding that the two parties did not hold talks prior to today’s announcement.

Acquiring GVT would be a defensive move on TI’s part to guard its presence in the Brazilian market, where TIM Brasil could be subject to takeover attempts as a standalone entity, a sector banker following the situation said.

Lombardi estimated that TI would need to raise around EUR 3bn to finance the cash component of a potential GVT bid. “A rights issue would be very welcomed [by TI shareholders],” he added.

Shareholders of TI would be more willing to support an increase in capital if it were aimed at financing M&A activities, the first sector banker and a second sector banker following the situation said.

“It is hard to convince shareholders to take part in a rights issue when all you are aiming for is deleveraging and boosting investments”, the first banker said. But by linking it to a counter-bid for GVT the scenario changes drastically, he noted.

In this context, the proceeds of a cash call could be used to partially finance the offer for Vivendi’s subsidiary, while the rest could be used for deleveraging and investments, said the first sector banker.

Telefonica management has proven its ability to integrate broadband and mobile assets, said the second banker. Should it win GVT, the deal would give Telefonica an opportunity to use these skills, he noted. But on the other hand, TIM Brasil would be left as a mobile operator with little opportunities to expand, he said, noting the Brazilian enterprise could find itself in a difficult position.

If the merger between GVT and Telefonica Brasil completes successfully, Vivendi would have the opportunity to acquire 8.3% of Telecom Italia from Telefonica.

Vivendi said it would evaluate Telefonica’s offer at its next supervisory board meeting. Vivendi has until 3 September to reply to Telefonica’s proposal.

>>> Horizon Oil may receive takeover interest following collapse of Roc Oil merg

Horizon Oil may receive takeover interest following collapse of Roc Oil merger 

Horizon Oil, the ASX-listed oil and gas business, could receive takeover interest following the collapse of its merger with Roc Oil, the Australian Financial Review reported.

According to the unsourced report in the paper’s Street Talk column, Horizon’s proposed merger with Roc Oil was meant to save the companies from takeover approaches, but it was scuppered when Roc recommended a rival offer from Fosun.

Horizon’s cash reserves are relatively low and it has desires to build a mid-scale LNG facility costing nearly USD 2bn, the article said, while noting the outcome of the Roc deal raised questions about its future as an independent company.

Possible buyers include Oil Search, Santos, and InterOil, the article said, with both Oil Search and Santos controlling acreage close to Horizon’s major assets in Papua New Guinea's Western Highlands.

Canada’s Talisman Energy is seeking to divest noncore assets, some of which are located in Papua New Guinea. The possibility of buying Talisman’s assets could lift the price for Horizon, which has preemptive rights over certain assets. Talisman has not yet confirmed its intentions.

Horizon’s partners Mitsubishi and Osaka Gas may also be interested, but they are unlikely to move until the Canadian firm reveals its plans.


Source Australian Financial Review

RTR - Belgium's UCB explores sale of generics unit Kremers Urban

(Reuters) - Belgian pharmaceutical company UCB (UCB.BR) is exploring a sale of its Kremers Urban Pharmaceuticals Inc division, a U.S. specialty generics business that could fetch as much as $2 billion, according to people familiar with the matter.

UCB is just the latest drug company looking to shed non-core businesses. Other companies that are exploring similar sales include GlaxoSmithKline Plc (GSK.L), Sanofi SA (SASY.PA) and Merck & Co Inc (MRK.N).

UCB is working with investment bank Lazard Ltd (LAZ.N) on the sale of the business, which is expected to be valued between $1.5 billion and $2 billion and attract both other companies and private equity firms, the people said on Tuesday.

Kremers Urban is projected to have earnings before interest, tax, depreciation and amortization of around $170 million in 2014, the people added.

UCB and Lazard representatives did not respond to a request for comment.

Based in Princeton, New Jersey, Kremers Urban is a maker of generic drugs with high barriers to market entry. Its product for the treatment of attention deficit disorder was approved by the U.S. Food and Drug Administration last year.

Kremers was acquired by Schwarz Pharma Manufacturing in the mid 1990s, before Schwarz was acquired by UCB in 2006.

Based in Brussels, UCB focuses on drugs for the treatment of conditions in the immune system and the central nervous system. It generated revenue of 3.4 billion euros ($4.5 billion) in 2013.

>>> US Notable After Hours

Notable after hours earnings movers: CRTO +14.7%, ZAGG +9.1%, DRYS +6.3%, FUEL -20.8%, GRPN -16.5%, GMED -15.8%

Companies trading higher after hours following earnings/guidance:

CRTO +14.7%, ZAGG +9.1%, DRYS +6.3%, BAXS +5.9%, ORIG +3.1%, SMCI +2.3%, ATVI +2.3%, FEYE +1.7%, PNNT +0.5%, OXGN +0.4%

Companies trading lower after hours following earnings/guidance:

FUEL -20.8%, GRPN -16.5%, GMED -15.8%, FSLR -5.4%, Z -4.3%, TTWO -4.4%, FTR -2.4%, AVNR -0.6%, RSYS -0.3%, DIS -0.2% 

>>> US Close Dow-0,84% S&P-0,97% Nasdaq -0,71%

Closing Market Summary: Stocks Succumb to Broad-based Profit Taking

The stock market ended the Tuesday session on a broadly lower note. The S&P 500 lost 1.0% with all ten sectors ending in the red. The Russell 2000 outperformed, but still shed 0.3%.

Equity indices were on the defensive from the get-go with the early weakness attributed to disappointing data from overseas. China got the ball rolling overnight with a disappointing HSBC Services PMI report (50.0 from 53.1), which fell to its lowest level on record. Things looked a little bit better in Europe, where Services PMI readings from Germany, Great Britain, and Spain improved, but the overall eurozone reading unexpectedly slipped to 54.2 from 54.4.

Another item that kept dip-buyers on the sidelines was disappointing guidance provided by Target (TGT 58.03, -2.67). The retailer lost 4.4% after priming the market for below-consensus results that will include a $148 million expense stemming from the data breach that occurred last year.

Staying on the earning theme, apparel retailer Coach (COH 35.80, +1.49) rallied 4.3% after reporting better than expected earnings and revenue. For its part, the overall consumer discretionary sector (-0.7%) ended a bit ahead of the broader market.

Outside of the discretionary space, the industrial sector (-0.6%) was the only other cyclical group that was able to finish ahead of the broader market. Dow component Boeing (BA 121.27, +1.34) added 1.1%, which contributed to the relative strength. Transport stocks were not as fortunate with the Dow Jones Transportation Average falling 1.1%.

Other heavily-weighted sectors were not as fortunate with financials (-1.0%) and technology (-0.9%) ending in line with the S&P 500, while energy (-2.1%) lagged throughout the session. Pioneer Natural Resources (PXD 209.98, -12.43) pressured the sector, falling 5.6%, in reaction to below-consensus revenue. Marathon Oil (MRO 38.46, -0.76) also slumped, losing 1.9%, despite its better than expected earnings. Crude oil, meanwhile, fell 1.0% to $97.33/bbl.

Afternoon action saw equities extend their losses with the slide attributed to comments from Polish Foreign Minister Radoslaw Sikorski, who said Russia is poised to pressure or invade Ukraine. However, it is worth noting that the comments did not introduce anything new as Russian troop movements along the border with Ukraine have been watched for months. In all likelihood, the headline was a convenient excuse to take some money off the table after the market could not erase its early loss.

Also of note, the afternoon remarks helped Treasuries recover their intraday losses. The 10-yr note ended flat with its yield at 2.48% after the benchmark yield notched a session high just north of 2.52%.

Participation was a bit below average with less than 690 million shares changing hands at the NYSE.

Economic data was limited to Factory Orders and the ISM Services Index:
  • Factory orders increased 1.1% in June following a downwardly revised 0.6% decline (from -0.5%) in May 
    • The consensus expected factory orders to increase 0.5% 
    • Durable goods orders increased 1.7% in June after declining 0.9% in May, representing a significant upward revision from the advance release (+0.7%) 
    • Excluding transportation, durable goods orders rose 1.9% in June, up from an originally reported 0.8% increase in the advance release 
  • The ISM Non-manufacturing Index increased to 58.7 in July from 56.0, while the consensus expected an increase to 56.5 
    • That was the highest reading since the ISM reformulated the index in January 2008 
      • Including the old survey methods, the index reached its highest level since late 2005 
Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET, while the June Trade Balance (consensus -$45.20 billion) will be released at 8:30 ET.
  • S&P 500 +3.9% YTD 
  • Nasdaq Composite +4.2% YTD 
  • Dow Jones Industrial Average -0.9% YTD 
  • Russell 2000 -3.5% YTD

Cerner to Buy Siemens Health Services for $1.3b

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PZM 08/05 20:03 Cerner to Acquire Siemens Health Services for $1.3 Billion BN 08/05 20:04 *CERNER, SIEMENS JV TO INVEST IN PROJECTS BN 08/05 20:04 *CERNER SEES DEAL ADDING $0.25 IN '16 BN 08/05 20:04 *CERNER TO FUND DEAL WITH CASH ON HAND BN 08/05 20:04 *CERNER & SIEMENS TO FORM A ALLIANCE BN 08/05 20:03 *CERNER EXPECTED TO BE OVER $0.15 ADDING TO CERNER ADJ EPS '15 BFW 08/05 20:03 *CERNER TO BUY SIEMENS HEALTH SERVICES FOR $1.3B BN 08/05 20:03 *CERNER TO BUY SIEMENS HEALTH SERVICES FOR $1.3B

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Cerner to Buy Siemens Health Services for $1.3b 2014-08-05 20:04:42.868 GMT

By Brad Skillman Aug. 5 (Bloomberg) -- Cerner to acquire the assets of Siemens’ health information technology business unit, Siemens Health Services, for $1.3b in cash * Transaction is expected to be more than 15c accretive to Cerner’s non-GAAP diluted EPS in 2015, and more than 25c accretive in 2016 * CERN halted

Link to Statement:{NSN N9UNPC3PWT1C <GO>} Link to Company News:{CERN US <Equity> CN <GO>} Link to Company News:{SIE GR <Equity> CN <GO>}

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

To contact the editor responsible for this story: Brad Skillman at +1-212-617-2763 or bskillman1@bloomberg.net

Goldman, Morgan Stanley Dark Pool Trading Probed by N.Y. AG: FBN

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Goldman, Morgan Stanley Dark Pool Trading Probed by N.Y. AG: FBN 2014-08-05 19:05:01.967 GMT

By Arie Shapira Aug. 5 (Bloomberg) -- New York AG Eric Schneiderman’s probe of dark-pool trading has been extended to Goldman Sachs and Morgan Stanley, Fox Business Network’s Charlie Gasparino reports, citing people familiar. * Other firms “under the microscope” include Credit Suisse, Deutsche Bank, UBS and Barclays * Reps for GS, MS, attorney general declined to comment to FBN

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

To contact the reporter on this story: Arie Shapira in New York at +1-212-617-1488 or ashapira3@bloomberg.net To contact the editors responsible for this story: Brad Skillman at +1-212-617-2763 or bskillman1@bloomberg.net Jeremy R. Cooke

Bernardo Says Tef/GVT Offer to Be Studied for Mkt Concentration

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Bernardo Says Tef/GVT Offer to Be Studied for Mkt Concentration 2014-08-05 19:44:33.593 GMT

By Christiana Sciaudone Aug. 5 (Bloomberg) -- Brazil Communications Minister Paulo Bernardo speaks in Sao Paulo. * Consolidation not good for consumer * Consumers benefit from more companies * Telefonica and GVT are unlikely both to bid in 700mhz auction; either one or the other. * Companies can buy more than one license at auction * Bernardo said he was taken by surprise by TCU’s suspension of the 4G auction last night * NOTE: Brazil’s auction of 4G wireless airwaves was suspended by the agency that monitors government spending, citing grave irregularities in its design. {NSN N9UABQ6JTSEC<Go>} * Bernardo says doesn’t see changes to essence of 700mhz auctions * BNDES has credit lines ready for telcos * All telecom sectors should pay lower taxes * Brazil isn’t offering services that people want * Bernardo says trying to reduce state taxes on tablets * Cos that don’t bid for 700mhz to face competitive problems * Bernardo sees growth of pay TV slowing to 11% this yr from 30% in 2013

Link to Company News:{VIVT4 BZ <Equity> CN <GO>} Link to Company News:{TIMP3 BZ <Equity> CN <GO>} Link to Company News:{OIBR4 BZ <Equity> CN <GO>}

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

To contact the reporter on this story: Christiana Sciaudone in Sao Paulo at +55-11-2395-9268 or csciaudone@bloomberg.net

To contact the editor responsible for this story: Richard Jarvie at +54-11-4321-7732 or rjarvie@bloomberg.net