German Econ Min Gabriel: Domestic economy stabilized in Q3, general trend remains upward - No noticable increase in momentum in Q4; growth seen moderate
Almost £16bn has been added to the value of the European telecoms sector after an unexpectedly strong run of results, slowing a long-term decline in revenues at some of the region’s largest groups.
On Tuesday, shares in Vodafone rose more than 5 per cent – the most in more than a year – after the group showed that the worst might be over for the European telecoms sector. Vodafone reported a rapid take-up of mobile data alongside improvements in key service revenues.
Results from Deutsche Telekom, France’s Orange , Telecom Italia, KPN and others in the sector have also been taken positively by investors in recent weeks, leading some analysts to upgrade forecasts.
A combination of factors has helped companies, in particular the lessening of the impact of regulated price cuts. However, companies such as Vodafone have also pointed to the early benefits of investments to improve their networks, leading to more people upgrading to faster 4G smartphones such as the iPhone 6 and using more data to watch videos and listen to music.
Research by Citi for the FT shows that the value of the European telecoms sector has increased £16bn since the start of last month before the results season started.
The market value of the S&P Europe Telecoms index has reached about £306bn, with an increase of a further £8.2bn on Tuesday morning alone.
On Tuesday, Vittorio Colao, Vodafone’s chief executive, committed some of his own money to the rally with the purchase of £600,000 worth of shares at the price of 219p per share.
“Vodafone’s results, and those of the other telcos this quarter, show that 4G is taking off and that pricing power is coming back to the mobile sector,” said Simon Weeden, analyst at Citi.
“This is even before Vodafone’s investment programme has had a chance to make an impact and is also before many customers have got hold of an iPhone 6 which promises to raise the 4G game further.”
The share price bounce in Europe coincides with analyst warnings that the US market might have peaked after a strong performance over the past few years. Morgan Stanley this week pointed to price wars in the wireline and wireless markets, where companies “generally delivered results in-line or slightly below expectations”.
JPMorgan on Tuesday said the European reporting season had “delivered material financial outperformance” underscored by unwinding regulatory cuts, softening deflationary pressures and in comparison with particularly poor results last year.
“But operators are also highlighting impressive mobile data volume trends,” it said. “And this growth phase has a long way to go.”
Mr Colao said: “We are becoming a little bit more like America,” referring to rising 4G data use in Europe after similar moves in the US. European data traffic rose 64 per cent in the last quarter against the same period last year, Vodafone said.
Many analysts expect service revenues to become positive in the next two years although Mr Colao declined to provide any guidance. He also cautioned about getting too carried away. Revenues were still in decline at Vodafone – as elsewhere in the sector – even if “slower than before”, he said.
Moody’s, the rating agency, will on Wednesday publish its 2015 outlook on the telecoms sector, which again is more optimistic. It will predict revenue declines will slow further next year to between 2 per cent to 0.5 per cent.
However, analysts at Moody’s also said that there were still problems for the sector, citing a combination of “tough competition, low economic growth and persistent contraction in consumer spending in their home markets continuing to pressure revenues”.
Nutreco's rising share price indicates expectation of another Cargill bid
Shareholders could expect the share price of Nutreco, the Dutch animal feed producer, to rise further as Cargill is expected to retaliate against SHV's bid, het Financieele Dagblad reported, citing analysts.
SHV upped its bid to EUR 44.50 per share on Monday, in retaliation to a bid by US agrifood company Cargill and private equity firm Permira, who had offered EUR 43.20.
Investors seem to be anticipating a counter offer, as Nutreco’s shares are currently trading at more than EUR 45, the report said.
Analysts pointed to synergy opportunities from Cargill merging its Provimi division with Nutreco’s animal feed division. This would also allow Cargill an entry point into the fish feed market, which has healthy growth prospects. One possibility would be Cargill keeping the fish and animal feed parts and Permira taking on the struggling operations in Portugal and Spain, the report said.
SNS Securities analyst Gerard Rijk calculated a price of EUR 47 per share, based on growth prospects and previous takeovers, as well as Nutreco’s debt.
As both Cargill and SHV are family businesses, which don’t need an immediate return on their investment, a EUR 50-per-share offer is a definite possibility, the report said.
Het Financieele Dagblad
Global Resorts releases improved offer of EUR 23 per Club Med share
Story
Global Resorts, advised by Unicredit and Lazard, announced that it has acquired 2,164,242 shares in Club Med at a price of EUR 23 per share, increasing its shareholding to 5,720,681 shares representing 15.93% of the capital and 14.35% of the voting rights in the company.
Global resorts is therefore improving its offer for Club Med to EUR 23 per share. The price offered for the Oceane bonds in Club Med remain unchanged at EUR 22.41 per Oceane.
Trading on ordinary shares issued by CLUB MEDITERRANEE was suspended on EURONEXT PARIS yesterday 11 November and will resume today 12 November.
AMF, the French stock market regulator, will reveal later on the consequences of the improved offer on the timetable of the offer period, which is currently scheduled for closure on 20 November 2014.
The full French language release can be found here.
This development was also reported in daily Le Figaro, which claimed that Andrea Bonomi, the Italian entrepreneur behind Global Resorts, is currently negotiating the acquisition of further shares in Club Med to increase its stake to about 18.9%. The unsourced report noted that Chinese investment group Fosun, which has tabled a competing offer for Club med, currently owns 18.3% in the French group.
Source Regulatory Authority Press Release (Translated), Le Figaro
French Drug Firm Bets on Tiny Diabetes Device
Servier Backs Implantable Pump Developed by Boston-Based Intarcia Therapeutics
Servier has agreed to pay Intarcia Therapeutics Inc. $171 million up front, with potential additional payments that could increase the total to more than $1 billion, for rights to co-develop the device for most markets outside the U.S., the companies said. Closely held Intarcia retains full rights to the treatment for the U.S. and Japan.
The agreement amounts to a significant validation of the potential for the experimental pump, a matchstick-sized device that delivers a continuous dose of the drug exenatide to patients for up to a year. The pump is intended to address a major issue in treatment of Type 2 diabetes: the failure of most patients to stay on pills or take injections required to control their blood sugar.
The pump hasn’t yet been approved for sale; the companies plan to submit it to regulators in the first half of 2016.
“When we talk to patients with Type 2 diabetes, there is a huge burden of the treatment for them on their daily lives,” said Pascal Touchon, Servier’s vice president, scientific cooperation and business development. The company’s investment reflects its belief “about how important the innovation will be for patients and how large the potential might be if the innovation reaches patients,” he said.
World-wide, some 382 million people are currently living with diabetes, according to the International Diabetes Federation, more than 90% of them outside the U.S. The vast majority have the Type 2 form of the disease, which is often associated with being overweight or obese.
Intarcia said recently that in two late-stage studies involving a total of 520 patients, the device—when used with standard oral medicines—significantly lowered blood sugar as measured by a marker called hemoglobin A1c, when compared in most cases with standard oral medication alone. The company hasn’t yet published the data in peer-reviewed medical journals. Two other late-phase studies are under way.
Kurt Graves, chairman, president and CEO of Intarcia, said the deal with Servier was the result of a six-month process that involved discussions with 11 major drug companies. He declined to name other contenders.
In addition to the upfront payment, the achievement of regulatory milestones within the first two years will trigger payment of another $230 million. The remaining $650 million is tied to commercialization and sales targets.
Servier was a good fit, in part, because “they’re the one party that was happy to leave us in full control of the U.S. market,” Mr. Graves said, one of the company’s chief goals in finding a global marketing partner.
Servier, a closely held 60-year-old company controlled by a foundation, doesn’t have any U.S.-based operations. Servier had annual sales last year of €4.2 billion ($5.2 billion), Mr. Touchon said. It markets the diabetes drug Diamicron, which he said is the top global seller outside the U.S. among a class of drugs called sulphonylureas.
Intarcia’s pump, called the ITCA 650, is based on technology that enables medicine to remain stable at body temperature. It can be implanted in abdominal tissue in a five-minute procedure by doctors, physician assistants or nurses, Mr. Graves said. It releases exenatide continuously in micro quantities to allow stable control of blood sugar.
Exenatide is marketed in other forms by AstraZeneva PLC as Byetta and Bydureon for patients with Type 2 diabetes.
BN 11/12 07:09 *TULLOW MAY NEED SUBSTANTIAL NON-CASH EXPLORATION WRITEDOWNS
BN 11/12 07:07 *TULLOW SAYS TO CUT EXPLORATION SPEND SIGNIFICANTLY
BN 11/12 07:04 *TULLOW TO CUT EXPLORATION, APPRAISAL CAPEX TO $300M IN '15
BN 11/12 07:02 *TULLOW SAYS FINANCIAL PERFORMANCE YTD IN LINE WITH EXPECTATIONS
BN 11/12 07:01 *TULLOW SAYS REVIEWING CAPITAL EXPENDITURE
BN 11/12 07:07 *TULLOW SAYS TO CUT EXPLORATION SPEND SIGNIFICANTLY
BN 11/12 07:04 *TULLOW TO CUT EXPLORATION, APPRAISAL CAPEX TO $300M IN '15
BN 11/12 07:02 *TULLOW SAYS FINANCIAL PERFORMANCE YTD IN LINE WITH EXPECTATIONS
BN 11/12 07:01 *TULLOW SAYS REVIEWING CAPITAL EXPENDITURE
Tullow Sees Possibility for Substantial Writedown
2014-11-12 07:14:56.238 GMT
By James Ludden
Nov. 12 (Bloomberg) -- To cut exploration spend
significantly.
* Board to review 3-yr investment plan, main focus on French
Guiana, Mauritania.
* Sees possibility for “substantial non-cash exploration
writedowns”
* Impairment charge to relate to Uganda, all PP&E assets,
Spring Energy in Norway
* European output affected by underperformance
* Sees yr pretax op cash flow before working capital $1.7b
* Sees yr capex in-line w/ current guidance of $2.1b
* Sees 2015 capex ~$2b
Link to Company News:{TLW LN <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:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
2014-11-12 07:14:56.238 GMT
By James Ludden
Nov. 12 (Bloomberg) -- To cut exploration spend
significantly.
* Board to review 3-yr investment plan, main focus on French
Guiana, Mauritania.
* Sees possibility for “substantial non-cash exploration
writedowns”
* Impairment charge to relate to Uganda, all PP&E assets,
Spring Energy in Norway
* European output affected by underperformance
* Sees yr pretax op cash flow before working capital $1.7b
* Sees yr capex in-line w/ current guidance of $2.1b
* Sees 2015 capex ~$2b
Link to Company News:{TLW LN <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:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
CSR Shareholders to Vote on Qualcomm Deal Dec 4
2014-11-12 07:14:58.854 GMT
By Sam Chambers
Nov. 12 (Bloomberg) -- Court meeting and general meeting to
be convened on Dec 4.
* Subject to approval, co. sees scheme becoming effective by
end summer 2015. Statement
* Separately, CSR reports 3Q sales $212m vs est $212m (4
ests), underlying gross margin 60.1% vs 52.8% y/y
* 3Q underlying net income $34.4m vs $25.3m y/y
* Sees 4Q rev. “in line with management expectations”
* Statement
* NOTE: Qualcomm agreed to buy CSR for $2.5b
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Sam Chambers in London at +44-20-7673-2021 or
schambers7@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
2014-11-12 07:14:58.854 GMT
By Sam Chambers
Nov. 12 (Bloomberg) -- Court meeting and general meeting to
be convened on Dec 4.
* Subject to approval, co. sees scheme becoming effective by
end summer 2015. Statement
* Separately, CSR reports 3Q sales $212m vs est $212m (4
ests), underlying gross margin 60.1% vs 52.8% y/y
* 3Q underlying net income $34.4m vs $25.3m y/y
* Sees 4Q rev. “in line with management expectations”
* Statement
* NOTE: Qualcomm agreed to buy CSR for $2.5b
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Sam Chambers in London at +44-20-7673-2021 or
schambers7@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Banks Reach Settlement in Foreign Exchange-Rigging Probe
Major Financial Institutions See Resolution Over Allegations of Improper Behavior
LONDON—Five banks agreed Wednesday to pay a total of more than $3 billion to U.S. and British regulators to resolve allegations of improper behavior in the vast foreign-exchange market.
The settlements between the U.K.’s Financial Conduct Authority and the Commodity Futures Trading Commission and HSBC Holdings PLC, Royal Bank of Scotland Group PLC, UBS AG , Citigroup Inc. and J.P. Morgan Chase & Co. are the first in a flurry of expected settlements between various banks and regulators. The authorities have been looking into alleged wrongdoing in the currencies markets since last year.
The CFTC settlement was for a total of about $1.4 billion, while the FCA portion was £1.1 billion ($1.75 billion).
Barclays PLC, which had been in late-stage settlement talks with both regulators, pulled out at the last minute. The bank said in a statement that it had engaged with regulators and considered a settlement on “closely similar terms” to those announced on Wednesday but that after discussions with other regulators and authorities it had decided to seek a “more general coordinated settlement.”
The settlement agreements published Wednesday offer glimpses of bank traders communicating with each other in electronic chat-rooms and other venues in ways that authorities say were improper.
The settlements are the latest in a series of increasingly tough financial penalties against banks. Lenders have racked up tens of billions of dollars in penalties in recent years stemming from investigations into interest-rate manipulation, sanctions violations, and improperly selling a variety of financial products.
Wednesday’s deal is a rare example of regulators simultaneously settling allegations with multiple banks. Regulators are hoping to avoid a protracted settlement process that drags on for many years—the continuing investigation into manipulation of benchmark interest rates is approaching its seven-year anniversary. Banks, meanwhile, are eager to enter a group settlement that will avoid any one institution being singled out.
That setup has prompted criticism. The U.S. Justice Department and New York’s financial regulator, for example, are sitting out of Wednesday’s deal, and the latter has complained about the possibility of it giving banks a “sweetheart deal.”
The investigation into possible manipulation of foreign-exchange markets began in spring 2013 when the FCA started looking into allegations of wrongdoing. The probe initially focused on a key industry benchmark—the so-called fix calculated daily by WM/Reuters—but quickly mushroomed into an industrywide investigation that also dug into personal trading by bank employees.
Even before Wednesday’s settlement, the investigation has had ripple effects. Many banks have banned their employees from communicating with rivals via electronic-chat programs. Banks including UBS have restricted their employees from trading in their own accounts and from using mobile phones on the trading floor.
More than 30 traders, including some from all banks involved in Wednesday’s settlement, have been fired or suspended as part of the probe.
Some of those individuals are still facing criminal investigations in the U.S. and U.K., which aren’t likely to wrap up until at least next year, according to people familiar with the matter.
Songbird minority shareholders hold out for minimum 380p per share offer from QIA and Brookfield
Songbird Estates’ minority shareholders have said the Qatar Investment Authority (QIA) and Brookfield Group would need to offer a minimum of 380p to secure support for their takeover offer, The Times reported. The newspaper quoted one of Songbird’s leading minority investors, who said they would not support any agreed offer of less than 380p per share for the listed UK-based property company.
The Daily Mail reported dealer chatter that Songbird Estates is in line for an imminent knockout cash bid pitched at around the 400p-per-share mark.
As previously reported, Songbird Estates last week said it had rejected an initial takeover offer of 295p per share from QIA and Brookfield, a listed Canadian property company.
The shareholder quoted by The Times said estimates show that the value of Songbird’s assets, including GBP 6.3bn of properties in London’s Canary Wharf district, will increase by more than had previously been forecast. The investor added that Songbird has a strong pipeline of residential and office developments and pointed out that the Crossrail rail link would increase rental values.
The QIA is Songbird Estates’ biggest shareholder with a stake of slightly more than 28%. Brookfield holds a 22% stake in Songbird’s operating subsidiary Canary Wharf Group (CWG). Songbird holds a stake of close to 70% in CWG.
Minority shareholders in Songbird include Majedie Asset Management and Kames Capital, the item said. The four main investors in Songbird – the QIA, Glick Entities, China Investment Corp (CIC) and Morgan Stanley Real Estate – could play a decisive part in the takeover process, the article added.
Analysts cited by the report estimated that the bidders may need to increase their opening bid by 35%.
One analyst cited by the newspaper said QIA and Brookfield’s initial bid was 7.5% short of Songbird’s net asset value (NAV). Of ten recent successful offers for UK property companies, only three have been completed at a valuation less than the target’s NAV. The other seven deals were agreed at an average premium of 16% to NAV, the analyst added.
Songbird Estates’ share price closed 5.5p down at 325p on the London Stock Exchange yesterday, 11 November, giving the group a market capitalisation of GBP 2.40bn (EUR 3.06bn).
Source The Times (London), Daily Mail
PT Portugal: Apax Partners seeking local partners for bid
Apax Partners is seeking Portuguese partners for its bid on PT Portugal and close to tabling an offer, reported Diario Economico. Sources familiar with the situation told the Lusophone paper that informal contacts between Apax and Oi, owner of PT Portugal, are going well and an offer from the British private equity firm is expected soon.
Apax wants to join forces with one or more Portuguese partners for its bid on PT Portugal, the same sources said. The UK firm had originally planed to make a bid with Bain and CVC but these parties will withdraw as PT Portugal suitors, the sources said. Alltice, the French telco, made a EUR 7bn-plus offer for PT Portugal last week.
Source Diario Economico