(ZH) SocGen Warns: "Now May Be The Time To Focus On The Short Side"

SocGen Warns: "Now May Be The Time To Focus On The Short Side"
As US QE has come to an end, depriving the world of US$1 trillion printed dollars a year, SocGen's Andrew Lapthorne warns, there are still plenty of things for investors to be concerned about. Indeed with asset prices where they are, investment returns look paltry from here on, as not only is there a long list of macroeconomic issues to worry about, but bottom-up firm level indicators are also flashing red. Valuations, as measured by median price to cash flow ratios, are near historical highs...

 

 

and the spread of company valuations within the market is near historical lows...

 

The implication is that downside risks are mispriced.
Throw in concerns over deteriorating earnings momentum, lacklustre earnings growth and poor earnings quality, and you have a set of variables that suggest it may be worthwhile to now focus on the short-side as much as on the long side.
*  *  *
So short strategies should be back on the menu
Steven Drobny of Drobny Capital is in the process of putting together his book "New House of Money" and Chapter 2, an interview with legendary short investor Jim Chanos of Kynikos Capital, is in this context chapters 1 and 2 are well worth a read.

>>> AT&T interested in potential Nextel Mexico acquisition; does not need Americ

AT&T interested in potential Nextel Mexico acquisition; does not need America Movil's assets for Mexico growth -
AT&T’s CEO Randall Stephenson has asserted his company is interested in considering an acquisition of Nextel’s Mexico-based assets, according to a newswire report. Nextel’s parent company, Reston, Virginia-based NII Holdings, has filed for Chapter 11 bankruptcy protection.

The Reuters report cited statements made by Stephenson during a press conference, during which the CEO added the company believes it has crafted a strategy to develop a “scalable growth platform” to achieve success in Mexico without acquiring assets expected to be sold by Mexico-based telecommunications company America Movil.

However, AT&T would not rule out looking at America Movil assets in the future if they seemed attractive, Stephenson added.

AT&T agreed last week to acquire Mexico-based mobile telephone company Iusacell, which has some 8.6 million customers, for USD 2.5bn, as reported by this news service. Nextel Mexico has 2.8 million customers, the newswire report noted.

The Iusacell acquisition contrasted with a September news reports that AT&T, as well as additional possible buyers Softbank, China Mobile and Bell Canada, had been contacted by America Movil for potential interest in acquiring America Movil’s telecommunications infrastructure. Furthermore, unnamed industry sources cited in a July report in the Mexican press asserted AT&T executives were, at that time, negotiating the possibility of buying America Movil assets.

As reported, recent regulatory changes, including reforms to Mexico's constitution, empowered the country's telecommunications regulator Ifetel last March to declare America Movil economically preponderant, based on its market share in excess of 50% in Mexico’s telecommunications sector, triggering regulatory action to reduce its holdings. America Movil announced on 8 July it plans to conduct asset sales to comply, sparking numerous reports and amble speculation regarding potential suitors.

(MergerM.) Altice has firepower to bump PT Portugal bid

Altice has firepower to bump PT Portugal bid

Altice [AMS:ATC] has the capacity to increase its offer for PT Portugal, it is understood.

Bain and Apax revealed a bid for PT Portugal today, 12 November, that had a number of similarities to the existing Altice bid, but has a number of conditions.

As reported in the statement from Oi [BVMF: OIBR3], the enterprise value of Bain and Apax's offer considers an earn-out payment of EUR 400m related to future revenue generation as well as EUR 400m related to EBITDA generation. The final price is subject to customary adjustments used in the purchase and sale of companies. Also, a final offer is subject to final approval by Apax and Bain Capital’s respective investment committees as well as the completion of legal due diligence by Apax and Bain Capital.

The offer made by Altice on 3 November is fully financed, unconditional and is a long term industrial project for Portugal Telecom, said a spokesperson for Altice. The group is a multinational cable and telecommunications company which already has assets in Portugal, he pointed out.

Unlike Bain and Apax, Altice has a strategic logic behind its bid meaning that it is not as constrained by financial restrictions. Altice’s press release states that it has completed due diligence. It would be ready to sign imminently, it was said.

A source from the Apax-Bain camp noted that Apax and Bain are large important funds that can get the financial structure in place. The source conceded that its financing is different than that of Altice, which has the financial firepower to pull the trigger at any moment. But, Altice is paying high fees to all the banks it is working with, this source claimed.

Altice has secured financing from JP Morgan, Credit Suisse and Deutsche Bank for its EUR 7.03bn bid for PT Portugal. The Apax/Bain bid is based on an enterprise value of EUR 7.075bn.

Oi appears so far to have not given clear dates of a process to the bidding parties. The bids for PT Portugal would not normally require shareholder approval from Oi shareholders.

However, this appears to be a grey area after the bid for Portugal Telecom at the Holding Company level from Isabel dos Santos.

Dos Santos, whose father is the Angolan president, has offered EUR 1.35 per share for PT SGPS [LIS:PT] , the listed holding company that previously held PT Portugal but now owns a 25.6% stake in Oi. Even though the dos Santos offer is directed at PT SGPS, Oi has said it is inopportune offer and rejected any changes to the terms of its merger agreement.

PT Portugal declined to comment. Oi and PT SGPS were not immediately available to comment.

(BFW) M&A Theme Back in ‘Full Force’, BMO Says; Lists Possible Targets

M&A Theme Back in ‘Full Force’, BMO Says; Lists Possible Targets
2014-11-12 17:20:27.195 GMT


By Arie Shapira
Nov. 12 (Bloomberg) -- BMO Vice President of Equity
Derivatives Alex Kosoglyadov, in a note to clients, lists
potential M&A targets based on volatility surface.
* Screens for M&A targets where 2nd month 25-delta skew in its
10th percentile or lower, where 2nd month 25-delta skew is
below 1 and where 2nd month ATM implied vol >60-day
realized:
* Consumer: BYD, DPS, EXPR, JAKK, PNK, RAI, SIRI, SAFM,
SWHC, TTS
* Energy: DRC, EROC, EXXI, IOC, KMP, PGH, TLM
* Financials: APO, ARR, GLPI, HTS, LYG, NBG, NCT, TWO
* Healthcare: ARIA, CERS, GERN, HALO, MDVN, MYGN, OCR,
ONTY, OPK, XON
* Industrials/Materials: GGB, HMY, NGD, NM, SID, SVM, XONE
* TMT: ATML, BLOX, FTR, HIMX, QIHU, UNXL
* TMT: ATML, BLOX, FTR, HIMX, QIHU, UNXL</li></ul>


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

(BFW) Alstom May Return EU3.5 Bln to EU4 Bln to Shareholders

BFW 11/12 18:58 *ALSTOM MAY RETURN EU3.5 BLN TO EU4 BLN IN CASH TO SHAREHOLDERS
BN 11/12 18:58 *ALSTOM SAYS REST OF FUNDS WOULD CUT DEBT, BOOST BALANCE SHEET
BN 11/12 18:58 *ALSTOM COMMENTS IN REPORT FOR EXTRAORDINARY HOLDERS' MEETING
BN 11/12 18:58 *ALSTOM BOARD RECOMMENDS KEEPING REMAINDER OF GE'S EU12.35 BLN
BN 11/12 18:54 *ALSTOM MAY RETURN EU3.5 BLN TO EU4 BLN IN CASH TO SHAREHOLDERS
BN 11/12 18:54 *ALSTOM CASH RETURN WOULD COME AS SHARE BUYBACK, CO. SAYS
Alstom May Return EU3.5 Bln to EU4 Bln to Shareholders
2014-11-12 19:02:42.436 GMT


By Marthe Fourcade
Nov. 12 (Bloomberg) -- Alstom board suggests keeping two-
thirds of EU12.35 bln coming from GE transaction, distributing
remainder to shareholders in buyback
* Money retained would help strengthen balance sheet, reduce
debt
* Alstom’s board cites plan in report for extraordinary
shareholders’ meeting

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mfourcade@bloomberg.net

(BFW) Rolex Top Swiss Watch Company With CHF5.4b Value: Handelszeitung

Rolex Top Swiss Watch Company With CHF5.4b Value: Handelszeitung
2014-11-12 16:08:25.745 GMT


By James Kraus
Nov. 12 (Bloomberg) -- Link to story (German)
http://tinyurl.com/pvdsdko

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jkraus2@bloomberg.net

(BFW) Kuoni, TUI Discuss Strategic Partnership, Handelszeitung Reports

{http://tinyurl.com/m8cnplb<Go>} in German

Kuoni, TUI Discuss Strategic Partnership, Handelszeitung Reports
2014-11-12 15:53:58.985 GMT


By James Kraus
Nov. 12 (Bloomberg) -- http://tinyurl.com/m8cnplb (German)

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(Makor) Special Situations: Bwin.Party (BPTY LN) - moving from BUY to HOLD/T


Special Situations: Bwin.Party (BPTY LN)

HOLD – TAKE PROFITS

 

BPTY LN: 125p

November 12, 2014

We downgrade our rating on BPTY for now, pending a deal or not.  We highlighted the stock as a BUY back in July with the stock trading at 95p with a 120p fair value in the event of a transaction.  The stock reached our target as the company confirmed it was in talks.

FULL REPORT ATTACHED

(BFW) *ACTAVIS SAID IN TALKS TO ACQUIRE ALLERGAN FOR OVER $60 BILLION

BN 11/12 14:59 *ACTAVIS, ALLERGAN SAID TO AIM FOR AGREEMENT LATER THIS MONTH
BN 11/12 14:59 *ACTAVIS SAID TO PLAN OFFERING STOCK, CASH IN ALLERGAN BID
BN 11/12 14:59 *ALLERGAN SAID TO SEEK OVER $210/SHARE FROM ACTAVIS
BN 11/12 14:59 *ACTAVIS SAID SEEKING TO PAY ABOUT $200/SHARE FOR ALLERGAN
*ACTAVIS SAID IN TALKS TO ACQUIRE ALLERGAN FOR OVER $60 BILLION
2014-11-12 14:59:49.615 GMT

--MOHAMMED HADI

-0- Nov/12/2014 14:59 GMT