>>> Closing Commodities: Crude Oil Sells Off, Erasing Gains

Closing Commodities: Crude Oil Sells Off, Erasing Gains
* Grains extended losses today, largely driven by yesterday's USDA reports (annual acreage report and quarterly grain stocks report)
* Sept corn fell 2 cents to $4.15/bu, Sept wheat fell 4 cents to $5.72/bu
* Crude oil sold off in afternoon trading, erasing all of its gains and closing one cent lower at $105.36/barre
* Aug natural gas lost one cent and finished at $4.46/MMbtu
* Gold and silver held gains. Aug gold rose $3.30 to $1325.60/oz, while July silver rose $0.08 to $21.11/oz
* July copper ended flat at $3.20/lb

>>> Fox News's Gasparino: Some bankers say Goldman Sachs may have to look at acq

Fox News's Gasparino: Some bankers say Goldman Sachs may have to look at acquiring E*Trade or Charles Schwab to counter dramatically changing business model "...regulations like the Dodd-Frank financial reforms have limited Goldmans ability to take risk 
- the full effect of which has now started to kick in. Some analysts say the firm may have to make dramatic changes to its business model as part of the job cuts. During the 1990s internet boom, Goldman considered buying electronic brokerages E*Trade (ETFC) and Charles Schwab Corp. (SCHW), and some bankers say Goldman may have to revisit such moves to adapt to the current regulatory environment. ... A Goldman spokesman declined to comment on possible acquisitions." 

WSJ : Constellation Could Stand to Come Back to Earth

Constellation Could Stand to Come Back to Earth

One star shines brighter than the rest at Constellation Brands Inc. STZ +0.31%

The beverages company found itself in the right place at the right time as Anheuser-Busch InBev BUD -0.03% NV's 2013 purchase of Mexico's Grupo Modelo GMODELO.MX -2.17% forced a disposal of its joint-venture stake in U.S. business Crown Imports. In buying the 50% holding it didn't already own, Constellation not only doubled its exposure to beer at a good price but got the opportunity to sell it far more profitably. That second part will kick in once it finishes expanding capacity at the state-of-the art brewery in Nava, Mexico, that it got as part of the deal.

Even today, the impact of Crown Imports on profitability is noticeable. Constellation's results for its first fiscal quarter through May, due Wednesday, should show that. Analysts see it earning 88 cents a share, up from 27 cents a year earlier.

There is more where that came from, if not on the bottom or top lines then in other items watched by many sophisticated investors.

Foremost is free cash flow, or what is left over to reward shareholders after investment needs have been met. Once its $1 billion investment in the brewery is done—it is slated to finish work by the end of 2016—free cash flow should double from predeal levels to $1 billion in fiscal 2017. That will result from lower capital spending and ending an interim supply contract with AB InBev.

The only problem is that while the stock market was slow to catch on to the attractiveness of Constellation's transformative deal, it is now reflected in the shares. The stock is up nearly 150% since the beginning of 2013—more than double Molson Coors Brewing Co. TAP +0.18% 's climb and nearly five times AB InBev's. Constellation's valuation looks rich compared with peers not just on a multiple of historical earnings but even 2017 projections.

Looked at another way, while the deal certainly was attractive, it is hard to square the $13 billion in extra debt-adjusted market value added since the start of last year with an incremental $500 million a year in free cash flow. That multiple of 26 times is well above the market price for existing brewers.

It has been delicious, but this brew is looking frothy.

>>> UBS is still Bullish on M&A theme on Healthcare...

UBS is still Bullish on M&A theme 

UBS: For MNK, they are 18% above consensus and believe owning the stock even if for just the qtr makes sense. They also see upside from IPXL (33%) and TEVA (6%) but believe the buy-side is ahead of the sell-side for these beats. They are also 2% above the Street for ACT, and if anything they may be too conservative with their est. JAZZ is the one stock where they are slightly above consensus (3%) and think Street numbers should probably come down some. In generics, ACT remains their favorite but they also like MYL and PRGO. THey like MNK, VRX, ENDP, and JAZZ. Thier focus remains on MRK and PFE

(MergerMarket) Actelion near-term bid would risk low premium

Actelion near-term bid would risk low premium

A takeover of Swiss biopharmaceutical firm Actelion [VTX:ATLN] based on its current share price risks receiving a premium below the sector average, said one of the top 10 shareholders.

A potential bidder could argue that a takeover premium has already been priced into Actelion’s share price, which has risen to a five-year high, the shareholder said. “The fear is that the takeover premium would be smaller than usual for a biotech company,” he said.

The average premium for biotech deals since 2006 is 35.1%, according to Dealreporter analytics. Actelion is currently trading at a EV/TTM EBITDA multiple of 21.2x. Applying the average 35.1% premium to Actelion, gives it an EV/TTM EBITDA of 29.1x. The average EV/TTM EBITDA multiple for US biotech companies is currently around 24x.

Actelion’s share price shot up after it announced positive results from its Phase III GRIPHON trial for Selexipag, its orally administered treatment for pulmonary arterial hypertension (PAH). This led to speculation that Actelion would become a more attractive tax inversion target. Its Q1 2014 effective tax rate was 12%, though that is expected to rise to 14% to 15%, said a person familiar with the company.

Actelion’s shares were trading at CHF 112.5 on 1 July, 23% above the closing price on 16 June, the last trading day prior to the announcement of Selexipag’s trial results.

In the medium term, Actelion’s share price could go above the CHF 100-130 range if there is more positive pipeline news, the shareholder speculated.

But, even as an inversion target, Actelion would not necessarily be an easy sell. It’s CHF 13.49bn (USD 15.16bn) market capitalization makes it too small for many US companies which have to fulfill an 80/20 US versus foreign company stock split in order to invert, said a sector banker. Gilead [NASDAQ:GILD], for example, has a market cap of USD 127.3bn.

Meanwhile, there may not be the strategic impetus for other potential US biotech bidders to do the deal. Amgen [NASDAQ:AMGN] already had a low effective tax rate of 3.5% in 2013, and would not need an inversion, said a source familiar with Amgen. Biogen Idec [NASDAQ:BIIB] has a broader drug development remit, while Celgene [NASDAQ:CELG] is not active in pulmonary hypertension, according to Olav Zilian, analyst at Helvea.

Also, Bayer [ETR:BAYN], previously tipped as a logical European bidder for Actelion, may not be interested in Actelion after the modest launch of Bayer's new PAH drug Adempas (riociguat), claimed a drug consultant.
Another complication in a takeover of Actelion is that any offer will likely have to be hostile, which increases interloper risk, said the source familiar with Amgen. Shortly after the selexipag results, CEO Jean-Claude Clozel reiterated his belief that Actelion should remain independent. The company also stated its desire to grow through acquisitions in PAH during its 16 June selexipag results conference call.

Actelion’s drug development went through a series of pipeline failures in 2011, culminating in Elliott Advisors taking a stake in the company but ultimately failing to push through plans for an audit, nominating alternative directors and lifting a cap on board directors. Management has learned a “tough lesson” and focused the business on its core area of PAH, earning back trust from its shareholders “to a certain degree,” said the shareholder.

Management will need to deliver on its pipeline both internally and externally in order to sustain that trust, said the shareholder.

Actelion has a phase IV study of Tracleer (bosentan) for pediatric PAH due to release results in 2H14. It is also assessing Opsumit (macitentan) for Eisenmenger's syndrome, and cadazolid for Clostridium difficile diarrhea in Phase III trials, with the former due to release results in 2016.

Actelion has the potential to grow from its current market capitalization to be of a size equal to mid-cap biotech peers such as Alexion [NASDAQ:ALXN], Regeneron [NASDAQ:REGN] and Vertex [NASDAQ:VRTX], according to the shareholder.

BlackRock is the top shareholder in Actelion with 5.64%. The management, which includes CEO Jean-Claude Clozel, also has a stake of more than 5%.

Actelion declined to comment.

(BFW) Bouygues Telecom Preparing for ‘Future With 4 Carriers’: CEO

Bouygues Telecom Preparing for ‘Future With 4 Carriers’: CEO
2014-07-01 16:42:42.127 GMT


By Jim Silver and Marie Mawad
     July 1 (Bloomberg) -- “With regard to a potential tie-up
with another carrier, for now there’s nothing concrete,” CEO
Martin Bouygues says at French National Assembly cmte hearing.
  * “If this operator or another want to find a solution for
    consolidation, why not? For now nothing is happening in this
    area,” Bouygues says
  * NOTE: June 26, Iliad Buying Bouygues Telecom Most Likely
    French Tieup: SocGen
  * NOTE: June 11, Bouygues to Cut 17% of Telecom Jobs After
    Merger Talks Fail

Link to Company News:EN FP <Equity> CN <GO>
Link to Company News:ORA FP <Equity> CN <GO>
Link to Company News:NUM FP <Equity> CN <GO>
Link to Company News:ILD FP <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:
Jim Silver at +1-212-617-7342 or
jsilver@bloomberg.net

Reuters - Club Med board to meet on Bonomi bid

(Reuters) - Club Mediterranee's board of directors will meet on Tuesday to review an offer made by top shareholder Andrea Bonomi for the French resort operator, a source close to the matter said.

"The board will meet this afternoon and look at the terms of the offer," the source said, without providing further details.

It was not immediately clear if the board would make a recommendation on the bid after the meeting.

WSJ : United Biscuits Considers IPO

United Biscuits Considers IPO
Owners Blackstone, PAI May Also Hold Talks With Potential Buyers for the Cookie Maker

LONDON—British snacks and cookie maker United Biscuits Ltd. is weighing a year-end initial public offering, said people familiar with the matter.

Bankers for the Jaffa Cakes maker had been holding informal meetings with potential buyers in recent weeks, said some of the people. But now United Biscuits' owners—private-equity firms Blackstone Group BX +1.17% LP and PAI Partners—believe they may be able to get more money by going public, rather than through a sale, they added.

The company is now looking at running a so-called dual-track process, according to the people, in which United Biscuits' owners would move forward with plans to take the company public while still engaging in talks with interested buyers to determine where they could gain the most lucrative exit.

A spokeswoman for United Biscuits declined to comment.

Blackstone and PAI bought United Biscuits for £1.6 billion ($2.7 billion) in 2006. A sale has been expected as eight years is long time for a private-equity firm to hold on to any given asset. In 2010, Blackstone and PAI tried to offload the business to China's Bright Food Group Co., but the two sides couldn't agree on United Biscuits' pension liabilities. An IPO would make pension issues less of a concern, one person familiar with the deal said.

Private-equity firms' first choice is often to sell a company to rivals or other companies. IPOs are becoming increasingly popular for many private-equity firms, as the public markets can often provide a better return than the private market. The European Private Equity and Venture Capital Association found that the number of private-equity-backed IPOs nearly quadrupled in 2013.

If United Biscuits is sold, it will be the second British cookie company to change hands in less than a year. In November, the Ontario Teachers' Pension Plan, one of the world's biggest pension funds, bought Burton's Biscuit Co., the 140-year-old maker of Maryland Cookies and Jammie Dodgers. The price wasn't disclosed.

United Biscuits posted sales of £1.10 billion in 2013 and is the world's sixth-biggest cookie maker by revenue in a list headed by Oreos maker Mondelez International Inc., MDLZ +0.76% according to Euromonitor International. The company has around a 25% share of the U.K. market, mainly through its 160-year-old McVitie's brand, which includes Jaffa Cakes and Digestives.

But the company has expanded beyond the U.K. in recent years and is targeting further growth in China, the U.S. and Africa.

(BFW) E-Plus Deal Approval May Spark More M&A, Change of KPN Ownership

E-Plus Deal Approval May Spark More M&A, Change of KPN Ownership
2014-07-01 15:28:34.506 GMT


By Sam Chambers
     July 1 (Bloomberg) -- The EU is set to rule on Telefonica’s
proposed $12b purchase of KPN’s German unit E-Plus by July 10.
Telefonica’s recent agreement to cede spectrum to Drillisch is
seen as having increased chances of deal approval. Deal
implications outlined below:

POSITIVE CATALYST:
  * Deal approval would boost investment case of the sector by
    providing greater regulatory visibility, help stabilize
    prices, Macquarie says
    * NOTE: Since 2005, European wireless avg. rev. per user
      has fallen by 53% to EU12: Bloomberg Industries data
  * Deal approval could trigger M&A activity in the Netherlands
    and Belgium, two of KPN’s other mkts: ING
  * Approval opens the door to in-market consolidation in Italy
    and Spain: Macquarie
  * Positive E-Plus ruling could pave the way for Tele2 to sell
    its Dutch and Norwegian operations: JPMorgan

AMX STAKE SALE:
  * MergerMarket reported that America Movil, KPN’s largest
    shareholder, will reevaluate its holding after E-Plus
    outcome is known
  * On June 28, Carlos Slim agreed to buy AT&T’s stake in AMX
    for $5.57b, a move Macquarie said may lead to AMX selling
    its KPN stake
    * NOTE: AMX has cut its KPN holding by ~17% since Aug.:
      Bloomberg data

RECENT EXAMPLES
  * The EU has approved in-market consolidation in Austria and
    Ireland, after imposing remedies:
  * In May, EU approved Hutchison’s acquisition of TEF’s Irish
    unit on condition it ceded up to 30% of its spectrum to at
    least one virtual network operator
  * When approving Hutchison’s purchase of Orange Austria in
    2012, the EU unsuccessfully tried to secure a new entrant
    into the mkt

DEADLINE/TIMING:
  * The EU has set a deadline of July 10 to rule on the deal; on
    June 30 EU commissioner Almunia said a decision would be
    reached in ’coming days’
  * The European Commission is scheduled to meet on July 1 and
    July 8



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 editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Gaurav Panchal