WSJ : Deutsche Bank Nears $2 Billion Property Sale

Deutsche Bank Nears $2 Billion Property Sale
German Bank Seeking to Capitalize on Buoyant U.S. Commercial Real-Estate Market

FRANKFURT— Deutsche Bank AG is close to selling most of a $2 billion portfolio of commercial real-estate loans to U.S. private-equity firm TPG, people familiar with the matter said.

The deal is driven by an upswing in the U.S. commercial real-estate market, which will allow Deutsche Bank to post a profit on the sale, these people said.

The transaction is subject to regulatory approval but could be signed as soon as this month, these people said. Deutsche Bank, Germany’s largest lender, will retain a minority stake in the portfolio.

The assets to be sold include mortgages for shopping malls and office buildings originated by Deutsche Bank and outstanding debt that it bought on the market.

The sale comes amid Deutsche Bank’s effort to reduce assets on its balance sheet to mitigate effects of increasingly strict banking rules. The German lender aims by the end of next year to shed €250 billion ($313 billion) in assets, weighted by their risk. At the end of September it had already disposed of nearly €200 billion in assets, or roughly 80% of its target.

The U.S. commercial real-estate market has surged recently. Banks issued $28 billion in commercial mortgage-backed securities, or CMBS, in the third quarter, the highest quarterly level since the housing crisis hit in 2007, according to data from Commercial Mortgage Alert. Deutsche Bank is poised to sweep the four major league tables for underwriters and lenders of these securities. The bank said in May it would continue investing in strengthening its U.S. commercial real estate financing business.

Booming demand for commercial real estate securities is increasingly attracting private-equity firms, who are amassing funds from investors looking to bet on rising commercial-property prices around the world. TPG is pushing a step further by snapping up commercial real-estate brokers that link buyers to sellers and landlords to renters.

A venture led by TPG last week completed a $1.05 billion acquisition of Chicago-based DTZ, a real estate services firm with 209 offices in 52 countries and more than $1.9 billion in annual revenue. TPG plans to merge DTZ with Cassidy Turley, a Washington, D.C., firm, which the venture is set to buy before the end of the year, in a deal valued at up to $600 million.

“Cassidy Turley is a leading real estate services business in the U.S. and will complement DTZ’s existing very strong businesses in Asia and Europe as well as DTZ’s existing U.S. businesses,” Ben Gray, Managing Partner Asia at TPG said in September.

The commercial real-estate industry has seen a flurry of acquisitions in recent years, partly in response to globalization. As companies have opened offices throughout the world, they increasingly have preferred real-estate firms that can help them solve their space needs in numerous locations.

Deutsche Bank’s portfolio being sold is held by its special situation group, which is headed by Jonathan Pollack, the bank’s global head of commercial real estate and head of risk for structured finance. Mr. Pollack, a leading figure in commercial real estate financing, previously helped start the bank’s European commercial real-estate business and ran the European commercial mortgage-backed securities trading desk.

RTR - Standard Chartered CEO says no plans to raise capital

(Reuters) - Standard Chartered plc Chief Executive Peter Sands said on Wednesday the bank has no plans to raise capital and is comfortable with its capital ratios.

"I am committed to leading the bank and returning us to a trajectory of sustainable growth," Sands told reporters at the opening of the Asia-focused bank's new wealth management center in Hong Kong.

The bank is under pressure to improve performance after three profit warnings this year and a 30-percent plunge in its shares. Grim earnings last month showed the tough task facing Sands as he tries to turn around the bank after 10 years of record earnings came to a halt last year.

"The board and I are confident in the strength of management team," Sands added, when asked if the bank needed to make changes.

Standard Chartered's London shares were flat in early trades, while the benchmark U.K. stock index was down 0.4 percent

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: PLUG -14.4%, NOAH -5.9%, SEAS -5.9%, SJM -5.4%, YDLE -5%, FLO -4.6%, NLST -4.1%, AG -3.7%, M -3.4%, EZCH -2.2%, GOL -1%, LXFT -1%, CEL -0.8%

M&A news: BBT -3.7% (to acquire SUSQ for $13.50 per share), CTSH -0.5% (acquires Odecee)

Select EU financial related names showing weakness: NBG -4.5%, BCS -2.5%, ING -2.3%, SAN -2.1%, DB -2.1%, LYG -1.2%, HSBC -1.2%

Select oil/gas related names showing early weakness: RDS.A -2.8%, BP -1.6%, TOT -1.5%

Other news: MLNX -8.6% (files to delay Form 10Q), FCEL -4.4% (in symp with PLUG), FANG -3.7% (launches secondary common stock offering of 2 mln shares ), BLDP -3.2% (in symp with PLUG), PBR -1.6% (announced that its consolidated oil and gas production in Brazil and abroad reached 2.795 mln boe)

Analyst comments: JBLU -2.1% (downgraded to Neutral from Overweight at JP Morgan), DISCA -2% (downgraded to Mkt Perform from Outperform at Bernstein), CMCSA -1.6% (downgraded to Hold from Buy at Maxim Group), E -1.4% (downgraded to at ), AUY -1% (downgraded to Sector Perform at RBC Capital Mkts), VIAB -0.8% (downgraded to at ), CYH -0.8% (downgraded to Market Perform from Outperform at Wells Fargo), JPM -0.8% (downgraded to Mkt Perform from Outperform at Bernstein)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: GEVO +28.1%, FOSL +10.4%, (also Fossil and Michael Kors announced that they have renewed their global licensing agreement through 2024 ), ATRA +9.9%, EVDY +9.7%, CSIQ +7.6%, SUPN +6.8%, PAHC +5.8%, TAHO +5.7%, WUBA +5.6%, MTOR +5.4%, HPJ +5.3%, OPWR +4.9%, BZH +2.9%, LMNS +2.6%, SANW +2.6%, YY +2.4%,AEO +1.8%, SLW +1.7%, IPWR +1.1%, CYCC +1%, TEF +0.9%, ENR +0.6%

M&A news: SUSQ +34.8% (BBT to to acquire co valued at $13.50 per share), MATX +7.8% (Matson to acquire Horizon's Alaska operations; acquisition accretive to Matson's earnings and cash flow; transaction value of $0.72 per common share plus repayment of debt )

Select solar stocks trading higher in sympathy with CSIQ earnings: MY +6.9%, SOL +3.6%, JKS +3%, FSLR +1.2%

Other news: DRRX +4.2% ( provides update on POSIDUR program: FDA finds it acceptable to conduct only one additional soft tissue clinical trial to generate the data required for product approval for indication of soft tissue post-surgical analgesia ), CLNE +3.8% (Ryder (R) signs alliance with mansfield CLNE to provide natural gas vehicle solutions ), LITB +3.2% (confirming Singles Day sales), MNDL +1.7% (announced that Digital Turbine Ignite is currently available on a number of Verizon Wireless smartphones and will be added to more over the next several quarters), DOW +1.2% (announced that its Board has declared a $0.42 per share in the Q4, a 14% increase), ARCP +1% (comments on litigation it filed against RCS Capital Corporation (RCAP)), SWKS +0.9% (authorized the repurchase of up to $300 mln of the company's common stock), AOL +0.6% (Some Investors want AOL and Yahoo (YHOO) merger, according to reports)

Analyst comments: QLTY +2.2% (upgraded to Buy at Stifel), HMY +1.9% (upgraded to Neutral from Sell at UBS)

>>> Rockwell Automation beats by $0.04, reports revs in-line; guides FY15 EPS in

Rockwell Automation beats by $0.04, reports revs in-line; guides FY15 EPS in-line

Reports Q4 (Sep) earnings of $1.86 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus Estimate of $1.82; revenues rose 3.8% year/year to $1.78 bln vs the $1.8 bln consensus.
  • Organic sales growth was 4.4 percent, and currency translation reduced sales by 0.7 percent. Fiscal 2014 fourth quarter sales were up 8.0 percent compared to the third quarter of fiscal 2014, despite nearly a full point of currency headwind.
Co issues in-line guidance for FY15, sees EPS of $6.55-6.95, excluding non-recurring items, vs. $6.81 Capital IQ Consensus.

"Despite heightened uncertainty in some regions, the U.S. economy remains strong, and forecasts call for continued moderate global economic growth. Based on these factors, along with underlying demand trends, we are projecting fiscal 2015 organic sales growth of 2.5-6.5%"

WSJ : Heineken Seeks to Grow Global Brand Portfolio

Heineken Seeks to Grow Global Brand Portfolio
Heineken Rolls Out More Brands Globally in Bid to Boost Growth and Profits

AMSTERDAM—For Heineken NV, the 150 year-old Dutch beer maker, one global brand isn't enough.

Building on its experience in turning Heineken into a global brand, the company is now trying to do the same with drinks such as Desperados, a tequila flavored beer, and Affligem, a Belgian abbey beer. It is also using Radler, a mix of lemonade and beer, to give existing local brands a boost and tap a new audience.

With traditional lager sales under pressure in Europe and the U.S., the company, which is still controlled by the Heineken family, is rolling out some of its brands around the globe and launching new varieties in local markets to boost growth and profits. It also sees an opportunity to serve customers at times when they don’t drink beer, as well as those that don’t drink it at all.

“Heineken is and will always be the priority, but going forward our global offering will be a lot broader,” Alexis Nasard, Heineken’s chief marketing officer who is also responsible for the company’s business in Western Europe, said in an interview.

Heineken’s decision to push these brands isn’t just a shot in the dark. Flavored beers, craft and specialty beers as well as non- or low-alcohol beer alternatives offer higher margins and are outperforming the market for traditional lager in mature markets, analysts say.

“Brewers are positioning products as not just beer, because consumers are just bored by drinking the same old beer,” said Amin Alkhatib, an alcoholic drinks analyst at Euromonitor International. On top, traditional beer markets have become saturated over the past 10 years, causing brewers to target people that drink wine or spirits as well as younger people and women. “They are going after the nontraditional beer drinker,” he added.

The Dutch brewer isn’t the only one trying to benefit from these trends. Anheuser-Busch InBev NV said last week it is launching a tequila-flavored beer called Oculto in the U.S. next year, while it also announced it was buying a U.S.-based craft beer maker.

Heineken ranked third in global beer volume last year, with a market share of 9.2%, according to Euromonitor. The research firm estimates that Anheuser-Busch InBev held the first spot with 19.7% of the market, followed by SABMiller PLC at 9.6%.

But it isn’t all about scale. Heineken tries to segment in order to have as many offerings as possible. “The art of that exercise is providing as much diversity as possible without letting cost and complexity get out of hand,” Mr. Nasard said.

With Radler, each region chooses one of three recipes that best fits with the taste of the local beer that is used to mix the lemonade with. The same goes for advertising, which follows the same storyboard everywhere but is tailored to the positioning of the local brand.

Through Radler, which has a lower alcohol content, Heineken is targeting non-beer drinkers as well as those that do, but at occasions when they don’t normally consume alcohol. “I drink Amstel in the evening before I go to the restaurant with my friends, but when I’m on the beach or doing sports, I’ll have a Radler,” Mr. Nasard explains, adding that 75% of people buying Radler don’t usually drink beer.

Heineken sees three trends that will drive demand going forward. It expects people will consume more drinks with lower or no alcohol; flavored beers, such as Desperado; or craft and specialty beers, such as Affligem.

“Belgium abbey beer carries a lot of heritage and credibility, that’s why we felt it had a lot of global potential,” Mr. Nasard said.

Depending on the characteristics of a market, Heineken decides how many varieties of Affligem are launched.

“For example, in France where Affligem has existed for 10 years, we can afford several line extensions,” Mr. Nasard said, adding that in a market where it was just launched this year resources need to be spend on making people familiar with what the brand is about. “And then use the line extension to renew their interest in the brand or to widen their repertoire.”

The efforts are part of Heineken’s innovation strategy, which was launched in 2010 and aimed to grow sales of products on the market for under three years from 2.6% of sales to 6% by 2020. New products and brands that are perceived as premium also allow the company to charge higher prices, resulting in higher margins, Mr. Nasard said.

The company has already surpassed its target with 7.5% of sales coming from innovations, but that is no reason to sit back and relax.

“As long as you innovate, you will perpetually see a reappraisal, which keeps the category dynamic and avoids commoditization,” Mr. Nasard said. “If you don’t innovate, you’re dead.”

>>> Family Dollar files solicitation/recommendation statement; reaffirmed its re

Family Dollar files solicitation/recommendation statement; reaffirmed its recommendation of the Dollar Tree (DLTR) merger

After careful consideration, including a thorough review of the terms and conditions of the Offer with Family Dollar's financial and outside legal advisors, and consistent with its fiduciary duties under applicable law, the Board, by unanimous vote of all of its directors at meetings held on September 15, 2014, October 13, 2014 and November 10, 2014, reaffirmed its recommendation of, and declaration of advisability with respect to, the Dollar Tree merger, concluded that the Offer does not constitute and is not reasonably expected to lead to a "Company Superior Proposal" as defined in the Dollar Tree merger agreement and is not in the best interests of Family Dollar, and recommended that Family Dollar's stockholders reject the Offer and not tender their Shares pursuant to the Offer.