FT : Airbus staff quizzed in SFO probe into alleged Saudi corruption

Airbus staff quizzed in SFO probe into alleged Saudi corruption

The UK Serious Fraud Office has made arrests and questioned four individuals in connection with its long-standing investigation into alleged corruption in Saudi Arabia by a subsidiary of Airbus, the European aerospace and defence group.
Two individuals who have been questioned are still employees at GPT Special Project Management – the Airbus subsidiary that specialises in communications equipment for the Saudi national guard – according to people familiar with the investigation. Another two are former GPT employees.
The interviews signify another change in pace in the SFO’s probe. Almost two years ago the probe was ratcheted up to a criminal inquiry; before that the agency allowed Airbus to carry out an internal inquiry into allegations made by a whistleblower relating to GPT’s £1.5bn contract to supply equipment to the Saudis.

The new activity could signal that the SFO is in the final stages of its probe, according to legal experts.
The SFO is examining whether GPT bribed individuals in connection with its contract to supply communications equipment to the Saudi national guard.
Details about gifts allegedly given to Saudi generals, and payments made to a Cayman Islands bank account, were passed to the SFO by Ian Foxley, a former Saudi-based employee of GPT.
GPT has a contract to design, operate and maintain communications systems to the Saudis under a government-to-government programme called Sangcom. The UK Ministry of Defence is GPT’s sole customer under that contract, and is supposed to approve the Airbus subsidiary’s expenditures.
An SFO spokesperson said: “In connection with a Serious Fraud Office investigation, we can confirm that a search warrant has been executed and a number of arrests have been made. Officers from the National Crime Agency assisted the SFO with its operation.”
If the SFO has enough evidence to charge individuals or the company, and the agency believes prosecution to be in the public interest, it has to first seek permission from Dominic Grieve, UK attorney general, who must sign off on any overseas corruption prosecutions relating to the period before July 2011 when new UK anti-bribery laws came into effect.
Airbus said: “Airbus Group understands that four former and current employees were recently interviewed under caution as part of a wide-ranging SFO investigation into subsidiary GPT. At this stage we cannot add anything further to our previous statements on this matter.”
Last year Airbus said its own investigation into GPT yielded no evidence of wrongdoing. The results of the company’s inquiry were passed to the SFO.
The US authorities are also aware of the allegations made by Mr Foxley.
The case has echoes of the SFO’s inquiry into alleged bribery in Saudi Arabia and other countries by BAE Systems. That case was significantly narrowed by Downing Street on national security grounds in 2006, casting a shadow on UK anti-corruption efforts.
BAE eventually pleaded guilty in the UK to one count of false accounting over a Tanzanian radar system. It paid $400m to US authorities to settle allegations over its Saudi Al-Yamamah contract.

>>> Closing Commodities: Oil, gold, silver largely recover morning losses

Closing Commodities: Oil, gold, silver largely recover morning losses
* Precious metals fell into negative territory following the Job Openings and Labor Turnover Survey for May report which showed job openings increased to 4.635 mln from 4.464 mln.
* Aug gold retreated from a session high of $1325.70 per ounce and brushed a session low of $1314.30 per ounce. It eventually settled at $1316.60 per ounce, just 50 cents below the break-even level.
* Sep silver touched a session high of $21.25 per ounce shortly after floor trade opened but chopped around near the unchanged line following the release of May JOLTS data. Unable to gain momentum, it settled 1 cent higher at $21.02 per ounce.
* Aug crude oil advanced to a session high of $104.20 per barrel moments after equity markets opened but quickly retreated into the red. It brushed a session low of $102.98 per barrel and settled with a 0.1% loss at $103.36 per barrel.
* Aug natural gas spent its entire floor session in negative territory, dipping as low as $4.13 per MMBtu in morning action. It eventually settled with a 0.7% loss at $4.20 per MMBtu.

Templeton’s Mobius Sees China Heading in ‘Right Direction’: FUW

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Templeton’s Mobius Sees China Heading in ‘Right Direction’: FUW 2014-07-08 16:16:52.86 GMT

By Jeffrey Vögeli July 8 (Bloomberg) -- Opening of formerly state-run sections of Chinese economy to bring “unexpected growth dynamic,” says Franklin Templeton fund manager Mark Mobius, according to Swiss newspaper Finanz und Wirtschaft. Mobius also says: * Some Chinese companies will go bankrupt as economy restructured * India stock market “euphoria” after Modi’s election “somewhat exaggerated,” investors should wait until market corrects * PetroChina Co Ltd, Ambev SA, Samsung Electronics Co. among Mobius’ preferred stocks

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To contact the reporter on this story: Jeffrey Vögeli in Zurich at +41-44-224-4107 or jvogeli@bloomberg.net To contact the editor responsible for this story: Frank Connelly at +33-1-5365-5063 or fconnelly@bloomberg.net

Special Sit. SHPG/ABBV - The Fourth Proposal Tops the Others (Until the Next Proposal)

The Fourth Proposal Tops the Others (Until the Next Proposal)

This morning, AbbVie Inc. (NYSE-ABBV) announced a Fourth Proposal in its attempt to co-join with Shire PLC (Nasdaq-SHPG, LSE-SHP). The updated merger consideration is comprised of £22.44 cash and 0.8568 ABBV per SHP share (for an indicative value of £51.15). Using a 1.7115 USD/GBP exchange ratio, the proposal valued SHPG at $262.55 per share (based on the ABBV closing price of $57.40 on 7/7/14). The implied proposal premiums for SHPG shares are 37% to the prior day ($191.71), 47% to the prior 20 day average close ($178.88), 51% to the prior 40 day average close ($174.38) and 86% to 12/31/13 ($141.29). The implied 2014E and 2015E valuation multiples for standalone SHPG (deal-related excluding any tax efficiencies and operating synergies) are 20.0x and 17.9x EV/EBITDA and 27.0x and 24.4x P/E, respectively. Later in the morning, SHPG released a statement noting ABBV did not give the company notice of its “revised conditional non-binding proposal” before it was publicly announced and that its Board will meet to review it.

The latest proposal was made 10 days before the 7/18/14 deadline for the firm intention of an offer to SHP. The implied deal value is an 11% increase over the prior £46.26 per SHP share indicative value and is inline with shareholder expectations of a $260/share deal price. The current proposal reflects a 31% premium to the initial indicative value of £38.97. Despite the apparent “good news” of the higher proposal price, SHPG shares traded down to the low-$230s (after being indicated in the $240/share range pre-market). Our thoughts on the weakened ABBV price in trading today are as follows: • The recent failed attempt by Pfizer Inc. (NYSE-PFE) to reach an agreement to merger with UK-incorporated AstraZeneca PLC (NYSE-AZN) after making four proposals does not inspire much confidence that this situation will be different; • ABBV share price has traded straight down this morning which we ascribe to a mix of additional share hedging (both the proposal and the sector) and concerns that the stock will return to the low-mid $50s range on no transaction; • Expectations that ABBV would increase its proposal had been priced into SHPG over the past week and investors are taking profits on the trade; and • ABBV has been bidding against itself and is running out of room to meaningfully increase the merger value of a final Proposal.

Assuming a $210/share SHPG downside (similar to the ~20% discount to the last PFE proposal of £46.26 per AZN share indicative value), the deal probability has swung from 60% pre-market to 40% currently. We believe 50% is more appropriate (at least until the SHPG Board issues a formal response) and that the dynamics of this situation are better than the AZN/PFE. On 6/20/14, SHPG rejected ABBV’s Third Proposal, emphasizing that it undervalued the “full benefits” of its growth strategy to double revenues to $10B by 2020 (“10x20” plan). This does not seem to be outright rejection of an unsolicited proposal based on a long-term business strategy to bring conceptual R&D products to market (the AZN defense) but rather ascribing the right price premium for an existing drug portfolio with product extension possibilities. We believe this latest proposal is meant to at least get the parties to the table to have meaningful discussions (which is one step farther that AZN/PFE).

SHPG does not have the same political and economic exposure in the UK as AZN, and ABBV is less that half the size of PFE. While a transaction is not going to fly under the radar screen, it certainly should attract less attention over tax efficiencies than the PFE proposal; ABBV had an overall FY13 tax rate of ~22% compared to 27% for PZE. ABBV may have limited room to increase its current proposal; we estimate 4% P/F 2014 EPS accretion using $500M savings, a 5.5% blended interest expense, and an adjusted 13% tax rate for ABBV standalone and deal synergies. However, we believe SHPG could trade up to the mid-$240s if the parties at minimum agree to have serious discussions prior to the upcoming firm offer deadline. The companies seem to have more compatible corporate cultures than AZN/PFE; SHPG has had a history of making tuck-in acquisitions and ABBV was spun off from Abbott Laboratories (NYSE-ABT) in 2013. We believe that ABBV is committed to a transformative deal; the proposal put forth today is a signal of support from SHPG shareholders that had indicated $260/share was an acceptable takeover value.

>>> Shutterfly(SFLY) Marathon Partners Equity Management discloses increased 5.0


Marathon Partners Equity Management discloses increased 5.07% stake (up from 3.8%) - filing 

- Reporting Persons have no plans or proposals which, other than as expressly set forth below, would relate to or would result in: (a) the acquisition of additional securities of the Issuer or the disposition of presently-owned securities of the Issuer; (b) any extraordinary corporate transaction involving the Issuer; (c) a sale or transfer of a material amount of assets of the Issuer; (d) any change in the present Board of Directors or management of the Issuer; (e) any material change in the present capitalization or dividend policy of the Issuer; (f) any material change in the operating policies or corporate structure of the Issuer; (g) any change in the Issuer's charter or by-laws; (h) the Shares of the Issuer ceasing to be authorized to be quoted in the over-the-counter security markets; or (i) causing the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934. The Reporting Persons, however, reserve the right, at a later date, to effect one or more of such changes or transactions in the number of shares they may be deemed to beneficially own. The Reporting Persons have been and may continue to be in contact with members of the Issuer's management, the Issuer's Board of Directors, other significant shareholders and others regarding alternatives that the Issuer could employ to improve shareholder value.

(BFW) Smith & Nephew Gets FDA Warning Letter on Fla. Plant Inspection

Smith & Nephew Gets FDA Warning Letter on Fla. Plant Inspection
2014-07-08 13:23:27.81 GMT


By Catherine Larkin
     July 8 (Bloomberg) --
Link to June 11 letter: {NSN N8EAG2BE07IB <go>}

Link to Company News:{SN/ 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:
Catherine Larkin at +1-312-443-5968 or
clarkin4@bloomberg.net

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: IPCI -10.3%, ACTS -5.5%, ACLS -3.1%.

Select financial related names showing weakness: NBG -3.5%, ING -2.4%, LYG -2.3%, UBS -1.5%, BCS -1.3%, DB -1.3%, SAN -0.9%, CS -0.9%, HSBC -0.9%, .

Select Airline related stocks trading lower following Air France lowered guidance: DAL -1.5%, JBLU -1.4%, LUV -1.1%.

Other news: ZGNX -8.5% (following FDA granting priority review designation for Purdue Pharma's once-daily hydrocodone Bitartrate Extended-Release tablets formulated with abuse-deterrent properties news), CAMT -6.2% (pulling back from yesterday's advance), USU -5.5% (Court approves USEC disclosure statement; Chapter 11 process moves forward; Voting on Plan of Reorganization begins soon), SDRL -3.5% (launches $1 billion 2019 convertible bond concurrently with a voluntary incentive payment offer to convert the existing $650 million 3.375% convertible bond due 2017), BLUE -3% (commenced an underwritten public offering of $100 million of its common stock, PSTI -2.6% (initiates South Korean Arm of multinational Phase II Intermittent Claudication trial ), CGEN-2.3% (still checking), TAT -1.3% (co announced that net sales for the second quarter of 2014 are expected to be slightly lower than net production), TSLA -0.9% (target of trademark infringement case, according to reports out overnight).

Analyst comments: TFM -6.2% (downgraded to Sell from Neutral at Goldman), CSC -0.6% (initiated with a Underweight at Morgan Stanley).

>>> US Gapping up

Gapping up
In reaction to earnings/guidance: PHG +3.6%, ASX +0.6%.

M&A news: MIC +6.1% (to acquire the 50% of International-Matex Tank Terminals it does not currently own.for $910.0 mln in cash and $115.0 mln in stock; co to raises Q2 dividend 1.3% to $0.95.), SHPG +0.8% (AbbVie (ABBV) raises bid for Shire; Fourth Proposal represents indicative value of GBP51.151 as of July 7, 2014), .

Select metals/mining stocks trading higher: MUX +2.5%, HMY +2.4%, AUY +1.9%, AU +1.8%, PAAS +1.3%, GDX +0.9%.

Other news: NURO +28.6% (FDA clears NURO wearable technology for OTC use in treatment of chronic pain), CERE +14.3% (licenses DNA browser software to Bayer (BAYRY) CropScience), APP +5.7% (Standard General disclosed 0.9% stake in 13D with letter agreement), DNDN +5.2% (extending late gains in premarket trade), BODY +3.9% (683 Capital Management disclosed 18.9% active stake in 13D filing), PHH +3.3% (completed divestiture of its Fleet Management Services Business; co intends to repurchase up to $450 mln in stock, redeem its 9.25% Sr. Notes due 2016; deploy up to $200 mln to re-engineer mortgage business; invest up to $150 mln in select growth initiatives), GTAT +3.3% (early strength following yesterday's 12% selloff), FSC +2.3% (announces a 10% increase to its monthly dividend), KOOL +2.2% (provides regulatory update on its proposed U.S. Pivotal Critical Limb Ischemia Clinical Trial), TTM +2% (strong India mkts overnight), DRYS +1.6% (announces Ocean Rig UDW (ORIG) proposed offering by its wholly owned subsidiaries of $500.0 mln senior secured notes due 2022), LOV +1.5% (named Michael McConnell Chairman), CEL+1.4% (announces results of its debenture offering in Israel).

Analyst comments: TXMD +22.8% (initiated with a Outperform at FBR Capital), CGI +7% (upgraded to Buy from Hold at Stifel), GRPN +6.2% (upgraded to Buy from Neutral at B. Riley & Co), MRD +3.7% (initiated with an Overweight at Barclays, initiated with a Strong Buy at Raymond James, among others), ABY +3.7% (initiated with a Outperform at RBC Capital Mkts and Buy at Citigroup),GES +2.6% (upgraded to Overweight from Neutral at Piper Jaffray), ECYT +2.3% (assumed with a Buy at Brean Capital), SIMO +1.5% (target raised to $28 at Needham), XRX +0.9% (initiated with a Overweight at Morgan Stanley), WMB +0.7% (added to US Focus list at Credit Suisse), RIO +0.6% (upgraded to Overweight from Equal Weight at Barclays), VALE +0.4% (upgraded to Equal Weight from Underweight at Barclays)

>>> AbbVie Raises Offer 11% to £51.15/shr (£22.44 in cash and 0.8568 in stock) f


AbbVie Raises Offer 11% to £51.15/shr (£22.44 in cash and 0.8568 in stock) from £46.26/shr prior 

Following the announcement on June 25, 2014, where AbbVie outlined its strong strategic rationale and commitment regarding a combination with Shire, AbbVie and its financial adviser have met with, or spoken to, a large number of Shire shareholders, who collectively represent a majority of Shire's outstanding shares. The majority of these shareholders are longer-term holders of Shire, including the majority of Shire's largest shareholders. Today, AbbVie is pleased to outline its revised proposal of £22.44 in cash and 0.8568 ordinary shares of New AbbVie for each Shire share. The Fourth Proposal represents an indicative value of £51.151 as of July 7, 2014. 

The indicative value of the proposal represents an increase of approximately 11 percent and approximately a £3 billion increase to the indicative offer value of £46.26[5] per share; an increase of £2.00 and approximately 10 percent in cash per Shire share; a premium of 75 percent to Shire's closing share price of £29.25 on April 17, 2014 and approximately £13 billion of incremental aggregate value for Shire's shareholders; a premium of 48 percent to Shire's closing share price of £34.67 on May 2, 2014 (the last practicable date prior to AbbVie's initial proposal) and approximately £10 billion of incremental aggregate value for Shire's shareholders; and an implied Enterprise Value / Last Twelve Months' EBITDA (as reported by Shire) multiple of approximately 25x. 

In addition, this revised indicative proposal increases the ownership that will be held by Shire shareholders to approximately 24 percent of a new holding company of the combined group. For reasons that AbbVie outlined in previous announcements, presentations and press releases from June 25, 2014, AbbVie continues to believe that AbbVie's attractive stock has meaningful upside potential independent of a transaction, and New AbbVie's share price would be well-positioned to appreciate and re-rate. 

AbbVie Chairman and CEO Richard Gonzalez: "This transaction is a combination of two leading companies with leadership positions in specialty pharmaceuticals that would create a global market leader with unique characteristics and a compelling investment thesis. AbbVie will bring greater financial strength and R&D experience to this combination that will enable both companies to reach their full potential for their shareholders and patients in need across the globe. AbbVie has made a compelling offer to Shire that creates immediate and long-term value to shareholders of both companies. We think its shareholders should strongly encourage the Shire board to engage in constructive dialogue with AbbVie."'