(BFW) Almunia Had ‘Zero Discussions’ With Operators on New Phone Deals

Almunia Had ‘Zero Discussions’ With Operators on New Phone Deals
2014-07-02 12:10:34.317 GMT


By Gaspard Sebag
     July 2 (Bloomberg) -- EU Competition Commissioner Joaquin
Almunia says he has had “zero discussions” with companies
about future mergers in the telecommunications industry.
  * “You can ask the players in this market if they want to
    merge or not,” Almunia tells reporters in Brussels after
    press conference concerning approval of Telefonica/KPN
    German deal
  * SEE: Telefonica Wins Conditional EU Approval for E-Plus
    Takeover NSN N831J76KLVS4 <GO>


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To contact the reporter on this story:
Gaspard Sebag in Brussels at +32-2-285-4317 or
gsebag@bloomberg.net
To contact the editors responsible for this story:
Anthony Aarons at +44-20-7673-2227 or
aaarons@bloomberg.net
Peter Chapman

Reuters - Time Warner (TWX) specualtion, Robert Murdoch could be interested

Reuters - Murdoch's ambitions may take center stage in Sun Valley


The 83-year-old Twenty-First Century Fox Inc chief executive officer, a regular at investment bank Allen & Co's annual gathering, is in the midst of a deal that would give Fox the firepower to buy a content company.

Fox's 39 percent-owned British Sky Broadcasting Group Plc is negotiating to buy Fox's Sky Italia and its Sky Deutschland subsidiary in a deal that could net Fox as much as $13 billion.

"He's got the capital, resources and credibility to do a deal," said Mark Boidman, managing director of investment bank Peter J. Solomon Company, who is not attending the conference. "He's in a good position to know what to go after and when to do it."

Sun Valley will be teeming with CEOs whose companies might fit the bill. Among expected attendees are Time Warner Inc CEO Jeff Bewkes and Viacom Inc CEO Philippe Dauman.

Murdoch's interest in Time Warner despite its $62 billion market value has been the subject of industry speculation. He still covets the owner of HBO, among other potential targets, according to a former News Corp employee told by executives recently about Murdoch's interest.

The source did not know if Murdoch had made an approach. Time Warner spokesman Keith Cocozza and Fox spokesman Nathaniel Brown declined to comment.

"I'm not sure he could afford it, but you never want to say that about Rupert Murdoch," said former Viacom President Frank Biondi, an Allen & Co regular who is not going this year.

Some of the highest-profile chieftains in media and technology, from Facebook Inc's Mark Zuckerberg to Apple Inc's Tim Cook, gather at Sun Valley each year.

The conference generated deal discussions in the past. Comcast Corp CEO Brian Roberts discussed NBC with General Electric Co CEO Jeff Immelt one year. Biondi says he began talks to sell Madison Square Garden to John Malone's Liberty Media Corp there, but the deal fell apart.

Murdoch will be accompanied by sons Lachlan and James. Earlier this year, the elder Murdoch elevated Lachlan to non-executive co-chairman and James to co-chief operating officer. James has been especially interested in acquisitions, said a former top executive at News Corp familiar with their thinking.

Murdoch will not be the only acquisition-minded executive in Sun Valley next week.

Discovery Communications Inc CEO David Zaslav, whose company in May bought control of European sports TV programmer Eurosport, will be there.

So will Liberty Global Plc CEO Mike Fries, whose company and Discovery are negotiating to buy a stake in Formula One racing.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: RGSE +8%, GBX +7.4%, RAX +6.9%, AEZS +6.6%, STEM +6.5%, ALU +5.7%, POZN +5.3%, SHLM +5%, SSLT +4.9%, TRN +2.8%, ABMD +1.9%, AZN +1.6%, VIPS +1.5%, BCS +1.3%, BAC +1.3%, HSBC +1.2%, BHP +1.2%, GWPH +1%, HMY +1%, RDY +0.9%, TTM +0.9%, XON +0.8%, DDD +0.7%, RIO +0.7%

Gapping down: MCP -17.5%, CAMP -13.9%, GPRO -3.4%, VE -3.2%, ORAN -3%, PAYX -2%, BMY -1.4%, JPM -0.6%

>>> Paychex (PAYX) : In-line quarter and guidance --> -2% Pre-open

Paychex: In-line quarter and guidance; customer growth improves - Oppenheimer

Oppenheimer notes PAYX reported a mixed 4Q14 and FY15 guide. EPS of $0.40 compared to our/Street $0.39/$0.40 estimates, while the FY15 EPS guide brackets our/Street expectations. Services revenue growth of 6% Y/Y was consistent with thier est. PAYX provided FY15 Services revenue and net income guidance of 8-10% (reflects 2 pts benefit from change in HRS reporting going forward) and 6-8% (implies $1.83 at mid-point), respectively. They await mgmt commentary on the sales environment heading into FY15. PAYX appears fairly valued, in their view, at ~23x their CY14E.

(TechCrunch) Rackspace (RAX) Wants To Take Itself Private --> +9% pre open

Rackspace — the publicly-listed enterprise cloud services company that competes against the likes of Amazon’s AWS, Microsoft and Google — has been in the spotlight after announcing in May that it has hired bankers to help consider offers to parter with or be acquired by another company. However, it could choose a third option: taking itself private.

Following the likes of Dell in turning away from public market accountability while it focuses on developing its business in a fast-changing tech world, we have heard from a source that Rackspace has been negotiating with a private equity firm to borrow capital for the deal, with a plan to make an official announcement as soon as this week (keep in mind that we’re hurtling to a public holiday in the U.S.).

“The pressures of being a public company are too much,” another source within the company noted.

A Rackspace spokesperson says the company does not comment on rumor or speculation. In other words, we have not been able to confirm what the source has told us.

But it’s an interesting option that does not seem to be off the table even if you read the documents Rackspace has filed.

While Rackspace hired Morgan Stanley to evaluate offers from third parties, it’s also been consulting the board on “other alternatives which could advance Rackspace’s long-term strategy,” as the 8-K notes.

Taking the company private, as another opportunity, “has gained sufficient traction” among the board, our source claims.

The option of going private has come amid at least three acquisition bids, including offers from HP and IBM, the source continues. The HP offer was for up to $43/share. As a point of comparison, right now, Rackspace is at $33.66 with a market cap of just under $4.8 billion. An offer at that premium would value the company at over $6.1 billion.

The second source confirmed to us that HP was a name floated for a partnership.

The IBM offer fell through, our first source says — detail that has not been confirmed by IBM directly, even if the bigger sentiment has been seemingly bolstered by other public statements its executives have made.

Other companies that have been suggested as potential buyers (or partners) include CenturyLink, Cisco, Dell and EMC. Citigroup analysts have estimated that a CenturyLink offer, were one to be made, could come in at around a $44/45-per-share premium.

If our source is accurate, the news makes some sense simply in the context of what is happening with the company right now.

Rackspace has been busy building out an open source platform layer called OpenStack on top of its hosting business to differentiate itself and compete better against the Amazons of the world. It offers Open Stack solutions across a range of infrastructure-as-a-service products, including dedicated, “Bare Metal” configurations such as this recent OnMetal addition.

Offering OpenStack and effectively open sourcing its infrastructure means less engineers and less engineering costs, and it lets Rackspace spend more on support, our source noted. “Rackspace’s whole angle is ‘managed cloud ‘ versus AWS/Azure’s ‘unmanaged cloud.”

But building out a business in a tech area like cloud-based hosting, which has become very commoditized, is a tough business.

Infrastructure is cheap and other companies that compete with Rackspace in the business of offering cloud services continue to lower prices. All of this has contributed to Rackspace’s mixed fortunes in the public markets. Its stock price has dropped by nearly 57%, or over $44, since a high in January 2013.

You could argue, however, that some of that drop has been too harsh and undervaluing Rackspace, given that the company’s been seeing growing revenues and improving margins (both of which were up in the most recent quarter). This is both why the company is an “attractive takeover target,” as our source says, but also possibly why the board has thought the offers being made were too low.

It’s also a fair enough argument for taking the company private — to move Rackspace away from the “fickle” public market consensus, as one observer has described a potential delisting scenario.

The last time Rackspace was private, as a startup, it counted companies like Sequoia, Norwest and Red Hat among its investors.

An HP bid, some have noted, could be in line with a wider strategy at HP to invest heavily in building more cloud services. HP, along with IBM and Red Hat, have been among those endorsing OpenStack.

Our source had said that an announcement could come this week. The 8-K form warns against expecting quick decisions (indeed, it’s been 1.5 months since that announcement was made). “The company has not set a timetable for completion of this process,” the company writes, “and does not intend to discuss or disclose further developments with respect to this process unless and until the Board approves a specific partnership or transaction.”

>>> SHLM +3% after better numbers...could spec chem. in Europe....

A. Schulman beats by $0.08, beats on revs; guides Q4 EPS below consensus

Reports Q3 (May) earnings of $0.74 per share, $0.08 better than the Capital IQ Consensus Estimate of $0.66; revenues rose 17.7% year/year to $645.7 mln vs the $632.79 mln consensus.

Co issues downside guidance for Q4, sees EPS of $.61-0.66 vs. $0.67 Capital IQ Consensus Estimate.

"I am pleased with our excellent third-quarter financial results which reflect continued demand in our key end markets as well as contributions from our recent acquisitions. Unlike last year's unusual third quarter, I believe we have returned to our typical historic pattern where our third quarter is the strongest. While our results are strong, we will continue to look for operational efficiencies, drive product mix improvement and seek acquisitions that expand our markets and provide profitable growth. We are pleased with our global organic growth rate, particularly in Europe where improved mix and growing automotive sales have bolstered our quarter and nine-month results. Globally, we continue to achieve double-digit growth in our custom performance color product family. In Europe, Middle East and Africa (EMEA) we continue to see steady growth in other key markets such as packaging. In the Americas, we saw a similar pattern with strength in our engineered plastics product family as a result of our acquisitions, and we had significant contributions from our specialty powders business. In Asia Pacific (APAC), we continue to improve volume and sales by executing our growth activities aided by our recent Perrite acquisition. Globally, our recent acquisitions contributed to a 10.2% quarter-over-quarter increase in net sales. We expect this growth rate to continue now that we have closed on the acquisition of Ferro Corporation's specialty plastics business."

>>> US Software Security - Northland Capital initiation (PANW, FEYE, FTNT)

* Palo Alto Networks initiated with a Outperform at Northland Capital; tgt $95 -- they believe Palo Alto's leadership in next generation firewalls will drive further share gains and allow expansion into adjacent markets
* FireEye initiated with a Market Perform at Northland Capital; tgt $37 -- Despite a robust growth outlook, FireEye's distance from profitability, lack of a firewall and high multiple keep them on the sidelines
*Fortinet initiated with a Outperform at Northland Capital; tgt $30 -- they expect the investments Fortinet made in its sales force during 2013 to drive share gains and margin leverage through 2015

>>> Smith & Nephew: Brean Capital raises Hip and Knee ests

Smith & Nephew: Brean Capital raises Hip and Knee ests

Brean Capital raises their hip and knee estimates for SNN in the quarter as growth appears to have resumed for hips and knees following a light 1Q, which was hurt by pronounced seasonality. They now see SNN growing hips 3% (3% WW) versus their original estimates for flat revenue growth. As for knees, They now expect 9% US (6% WW) versus their original 4% (1% WW) growth projection. They note this increase in growth, however, is expected to be offset by weakness within the advanced wound care business. Maintains Hold, maintains rev ests but raises EPS. Firm notes the stock is pricing in a possible takeover offer from Stryker (SYK) at the end of the year.