WSJ : For Halliburton, Replacing Baker Board May Not Be Easy

For Halliburton, Replacing Baker Board May Not Be Easy
Baker Hughes’s Board Is Distinguished but Graying Group of Industry Executives

In its effort to force a merger on Baker Hughes Inc. by replacing its board, Halliburton Co. will be confronting a distinguished but graying group composed mostly of energy-industry executives.

Halliburton notified Baker Hughes that it would nominate a slate of directors to run against the existing board after talks between the two companies reached an impasse, Baker Hughes said late Friday. The company says its annual meeting is set for April.

The brewing battle between two of the world’s three largest oil field contractors is rare for the energy sector, and Halliburton’s bid for control isn’t likely to be a cakewalk.

Halliburton declined to comment; Baker Hughes didn't respond to a request for comment, and its directors couldn't immediately be reached or declined to comment.

Houston-based Baker Hughes, which has a stock-market value of about $26 billion, is governed by directors who include the executive chairman of Devon Energy Corp. , and the former heads of Marathon Oil Corp. and Sunoco Inc., among others. Combined, the company’s 11 board members won re-election in April with an average of 94% support of votes cast by shareholders.

In June, Baker Hughes expanded its board to 13 and elected two new members. Excluding the two newest directors, the average board member was 66.1 years old in April, slightly older than the boards of other big companies. The average director of S&P 1500 companies in 2013 was 63.2 years old, according to proxy adviser Institutional Shareholder Services.

The Baker Hughes board may recruit new candidates for its board by April; three current members, including the lead independent director, will have reached the company’s mandatory retirement age of 72 by next year’s election. The board, excluding the affected directors, can waive the retirement clause.

It isn’t clear that turnover on Baker Hughes’ board would give Halliburton an edge in a proxy battle. Baker Hughes isn’t in financial distress. The company posted record revenue of $22.4 billion last year, generating $1.5 billion after capital spending.

But Baker Hughes, by its own assessment, has lagged behind Halliburton and other rivals in several key performance measures. Its total shareholder return, a measure of stock performance and dividends, was zero over the last three years, according to its March proxy statement. It ranked itself 4th among peers in increasing revenue, profit margins and return on capital employed over the last three years.

Baker Hughes’ profits from pumping used in hydraulic fracturing, a mainstay of its business, fell short of its expectations last year. And the company acknowledged earlier this year it has struggled to retain employees.

The issue of retaining talent has surfaced in the fraught negotiations with Halliburton. The company on Friday said Halliburton had refused to agree not to poach its employees before they reached a deal.

Earlier this year, Baker Hughes proposed two measures to issue 30 million shares to compensate executives and other employees, in part to motivate and retain them. A compensation consultant hired by the company estimated it would dilute existing shareholders by 4.7%. Shareholders overwhelmingly approved the measures.

>>> What to look at this Week End - 14th/15th of November2014


Macro
- ECB’s Coeure Says Euro Area Must Boost Productivity, Investment
- Putin Says Gazprombank May Ask Ukraine to Repay $3.2b Early
- Putin Said to Plan to Leave G-20 Earlier Than Scheduled Sunday
- FT : Sovereign debt rule change ‘could prompt €1.1tn rebalancing

Keep an eye on :
- ALV GY : Pimco Total Return to See ’Massive’ Withdrawals in Jan: Fox Bus.
- BHI US : Baker Hughes -2/3% agfter Hours on Friday on news of talks stalled - few articles about Hostile Bid
- BKIA SM : Bankia gives Credit Suisse mandate to sell Metrovacesa stake before year end
- ORPN US : Soros Bought Stake in BioBlast Pharma in 3rd Quarter
- BMPS IM : Monte Paschi Derivatives Trade Cut Core Capital EU411m: Reuters
- BT/ LN : BT Rules Out Sale of Global Services Unit: Sunday Telegraph
- CRG IM : Carige not to carry out merger before capital increase
- CO FP : positive article in the Barron's, IPO of Cnova e-Commerce business could be a good trigger for the stock
- BN FP : Danone Said to Weigh Medical-Nutrition IPO as Sale Talks Falter
- EDF FP : France Won’t Start Stake Sales With EDF, Francaise Des Jeux
- EDF FP : EDF Considering Sale of Stake in RTE Power Grid, JDD Reports
- LI FP : Klepierre Buys 60% of Massalia to Develop Prado Shopping Center
- SPM IM : Saipem preferred buyer could be from the GCC or Italy, Subsea 7 and Seadrill of Norway, also mentioned as potential buyers, are unlikely buyers
- SMDR LN : Ophir to abandon pursuit of Salamander Energy this week - Sunday Times
- SAN FP : Sanofi Unit Genzyme’s Lemtrada Approved by FDA
- SAN SM : Banco Santander Units Subpoenaed by NYC on Auto Loans: NYT
- SHB LN : Shaftesbury stakebuilding by Samuel Tak Lee prompts takeover speculation
- SHP LN : Paulson & Co. Increased Shire Stake to $2.3b in 3Q
- SPD LN : Sports Direct Weighs Bid for LA Fitness, Sunday Express Reports
- SPD LN : Kitbag Sale Attracts Interest of Sports Direct: Sunday Telegraph
- TALK LN : Talktalk, Telefonica UK to Start Mobile Service: FT
- UBER-IPO : Uber to Announce Partnership With Spotify, NYT Reports
- VIV FP : Vivendi to Scout Takeovers (Earlier)
- ZTS US : Zoetis Adopts 1-Yr Holder Rights Plan

>>> Ophir to abandon pursuit of Salamander Energy this week

Ophir to abandon pursuit of Salamander Energy this week
Ophir Energy is preparing to abandon its attempt to take over its UK-listed competitor Salamander Energy within days, a Sunday Times report said. The brief unattributed report noted that a rival GBP 375m (USD 588m) knockout bid for Salamander came from Spain-based CEPSA and the private-equity house Jynwel Capital last week.


Source Sunday Times

WSJ : Allergan, Actavis Near Deal

Allergan, Actavis Near Deal
Companies’ Boards to Meet to Bless Cash-Stock Transaction

Actavis PLC and Allergan Inc. are nearing a friendly deal that could swipe the Botox maker from hostile suitor Valeant Pharmaceuticals International Inc., according to people familiar with the matter.

The boards of the two companies are expected to meet to review a cash-and-stock deal, the people said. An agreement could be announced as early as Monday, some of the people said, but timing could slip and one person said later in the week could be more likely.

An agreement could thwart the monthslong efforts of Valeant and activist investor William Ackman to jointly take over Allergan, the maker of Botox. Their most recent bid was $53 billion in cash and stock, though Valeant has entertained boosting it.

A combination of Allergan and Actavis would create a diversified pharmaceutical company selling both brand-name and generic drugs for stomach, eye, skin and other conditions. The company would ring up about $23 billion a year in sales, putting it around the top 10 of pharmaceutical companies by revenue.

(BN) Allergan, Actavis Nearing Deal to Combine, WSJ Reports

Allergan, Actavis Nearing Deal to Combine, WSJ Reports
2014-11-16 18:34:50.995 GMT


By Sylvia Wier
Nov. 16 (Bloomberg) -- Allergan Inc. and Actavis Plc are
close to a combination that would thwart hostile efforts by
Valeant Pharmaceuticals International Inc., the Wall Street
Journal reported, citing unidentified people familiar with the
matter.
The deal would be cash and stock and could be announced as
early as tomorrow, the Journal said, citing the people.
Separately, CNBC reporter David Faber tweeted today that
the deal could worth more than $210 a share.

Link to Company News:{VRX CN <Equity> CN <GO>}
Link to Company News:{ACT US <Equity> CN <GO>}
Link to Company News:{AGN US <Equity> CN <GO>}
Link to Company News:{2638211Z US <Equity> CN <GO>}

For Related News and Information:
Top Stories:{TOP<GO>}

To contact the editor responsible for this story:
Sylvia Wier at +1-212-617-8958 or
swier@bloomberg.net

>>> Bankia gives Credit Suisse mandate to sell Metrovacesa stake before year end

Bankia gives Credit Suisse mandate to sell Metrovacesa stake before year end
Bankia intends to sell the 19.07% stake it holds in the Spanish property company Metrovacesa before the end of the year, Europa Press reported citing unspecified official sources from the nationalised Spanish bank. Credit Suisse has the mandate, according to the report.

When it exited the stock market on 13 May 2013, Metrovacesa was worth EUR 2.233bn, the Spanish-language report said. It then reduced its capital by EUR 1.077bn.
As well as its Metrovacesa stake, Bankia still hold industrial stakes in the property company Realia (24.95%) and the infrastructures group Globalvia (50%). The report cited sources from the bank who said Bankia plans to sell those during the first half of next year.


Source Europa Press

RTR - France ready to sell more stakes in energy firms-minister

France ready to sell more stakes in energy firms-minister EDF.PA GSZ.PA - RTRS

(Reuters) - France is ready to sell more of its stakes in energy companies and its holdings only need to be big enough to have influence over corporate strategy, French Energy and Environment Minister Segolene Royal said on Sunday.

Royal said on French television that with Industry Minister Emmanuel Macron she had examined the state's energy sector assets to determine how big a stake the state needs to have.

Asked whether the government would be ready to drop its stakes in the two main energy firms, power utility EDF EDF.PA of which the state owns 84 percent and gas utility GDF Suez GSZ.PA of which it owns 33.6 percent, she said those stakes could fall.

"There is no reason whatsoever to keep these stakes at the same level, as long as we maintain the same influence over their strategy," Royal said.

RTR -India's Reliance Entertainment plans to acquire Western game studios in 201

India's Reliance Entertainment plans to acquire Western game studios in 2015 - RTRS

15-Nov-2014 19:27

(In second paragraph corrects title to "Chief Executive Reliance Entertainment-Digital" and "DreamWorks Animation Studios" to "DreamWorks Studios")

By Malathi Nayak

Nov 15 (Reuters) - India's Reliance Entertainment plans to begin acquiring North American and European mobile game studios starting in early 2015, in hopes of becoming a significant global player in the fast-growing mobile games industry.

The company, which is the biggest stakeholder in DreamWorks Studios, is in talks with bankers to identify and acquire up-and-coming mobile game studios in North America and Europe to boost sales, Chief Executive of Reliance Entertainment-Digital Manish Agarwal told Reuters in a phone interview.

"We will go full steam in the January and February time frame in terms of identifying studios," Agarwal said. "Gaming is going to be the largest share of the pie of entertainment time spent, and Reliance would like to be a sizeable player in that space."

Reliance Entertainment is a unit of Reliance Anil Dhirubhai Ambani, one of India's largest conglomerates, with businesses ranging from financial services to infrastructure and power. Its Reliance Games unit is looking at smaller studios at $2 million to $5 million a pop, at least initially, according to Agarwal.

Agarwal said the potential for Reliance Games is "huge."

"In three years, our business will make $50 million in net revenue, and in five years we'll be a $100 million company," he said. Net revenue is after cuts taken by app stores from Google, Apple and others.

Reliance Games, which to date has focused on making titles related to Hollywood properties in partnership with studios such as Warner Bros, Sony 6758.T and Lions Gate LGF.N, hopes to use acquisitions to expand into other genres, Agarwal said. Genres of interest include real-time action strategy akin to Supercell's "Clash of Clans," puzzlers like King's KING.N "Candy Crush Saga," builder games like Supercell's "Boom Beach," and social casino games.

Reliance Games develops its own titles at its Pune-based studio in India as well as partnering with other game studios. With about 50 million downloads, its most successful game franchise has been "Real Steel," with action titles based on the DreamWorks movie with the same name featuring Hugh Jackman.

In the face of competition from larger and more seasoned players such as King and Japan's GungHo Online Entertainment 3765.T, Reliance has yet to make waves in a competitive mobile gaming space that investors worry is a fickle, hit-driven business.

Agarwal, who did not identify targets, made it clear that Reliance does not want studios that could be one-hit wonders, such as OMGPOP, which was acquired by Zynga ZNGA.O for $200 million but shut down over a year later.

Reliance Games wants nimble studios of five to 12 members and that are "one game away from creating that elusive hit and looking to scale," Agarwal said. "If the game is already doing good, the shelf life of the game could be six to 12 months."

Currently, about 70 percent of Reliance Game's revenue comes from North America, the UK, Russia and Korea, and about 20 percent from India, mostly from games offered through telecom carriers rather than app stores.

"For us, it is not an India story as yet as the opportunity lies in growing globally, Agarwal said. "India is the fastest growing market in terms of Android and gaming is going to compete with TV watch. ... What China is today, India will be in the next 24 to 36 months."

 

FT : Sovereign debt rule change ‘could prompt €1.1tn rebalancing

Sovereign debt rule change ‘could prompt €1.1tn rebalancing

More than a trillion euros of government bonds may have to change hands if eurozone regulators press ahead with ambitions to toughen rules governing banks’ sovereign debt holdings, new analysis shows.
A limit on banks’ exposure to their own government’s debt could prompt a €1.1tn rebalancing of euro area sovereign debt portfolios, mostly away from banks’ home governments, according a report from Fitch Ratings.

The biggest impact would be felt in the German government debt markets, as banks were forced to shed €330bn of Bunds.
The next biggest overhaul would be in Italian debt, where €243bn of sovereign bonds would have to change hands, and then Spain, where the figure would be €206bn. In Greece €16bn-worth of government bonds would have to change hands.
As a share of government debt, the largest rebalancing would be in Spain, where bonds worth more than 20 per cent of general government gross debt would have to be put up for sale. Germany, the Netherlands and Belgium would all have to see a rebalancing of more than 10 per cent of gross government debt.
The overall impact would be offset to the extent that rival banks snapped up bonds that euro area lenders were forced to sell.
Danièle Nouy, the head of the euro area’s new Single Supervisory Mechanism, has repeatedly expressed concerns about banks’ heavy holdings of bonds issued by their own governments.
The region wants to break the so-called doom loop between banks and their sovereigns, in which a deterioration in a government’s bond market undermines the health of its financial system – something that was seen at the heights of the euro crisis.
As things stand, most sovereign debt holdings are exempt from “large exposures” limits applied to banks’ lending to companies and individuals, allowing banks to accumulate huge portfolios of their own country’s sovereign debt.
“Medium-sized Italian and Spanish banks have a particularly strong home bias,” Fitch said, “with the median bank in both countries having nearly all of their sovereign exposure to their home sovereign.”
The ECB has not set out specific plans to tackle the issue. But the Fitch report shows that if regulators were to adopt a Basel rule that caps banks’ exposure to a single counterparty at 25 per cent of total capital resources, it would trigger a large overhaul.
The scale of the overall portfolio rebalancing would be even larger, €1.34tn across the region, if the large exposure limit were set at 10 per cent, an idea some euro area officials have mooted.
It is not clear if banks would respond by shifting into bonds issued by other euro area governments, or by reducing their sovereign holdings and moving into other assets. Any change in the rules would probably be implemented only very gradually.
Ms Nouy told the Financial Times in February: “Sovereigns are not risk-free assets. That has been demonstrated, so now we have to react. What I would admit is that maybe it’s not the best moment in the middle of the crisis to change the rules.”
She suggested the idea of “some kind of large exposures limits so you don’t put all your eggs in the same basket”.