WSJ : Trian Takes Stake in Bank of New York Mellon

Trian Takes Stake in Bank of New York Mellon
Stake Is Valued at About $1.05 Billio

Trian Fund Management LP has built a stake valued at about $1.05 billion in Bank of New York Mellon Corp. BK +4.47% , according to a person familiar with the matter.

The activist investor, led by Nelson Peltz, wants to discuss ideas for creating more shareholder value but hasn't yet had any conversations with the trust bank's management, the person said.

"Trian is a respected investment firm. We look forward to engaging with them as we do all our investors," a Bank of New York Mellon spokesman said Monday.

Bank of New York Mellon, an investment manager and the bank for Wall Street's banks, has made significant changes this year. It said in May that it would sell its corporate trust unit, and it sold its corporate headquarters building for $585 million.

Trian revealed the position for the first time Monday in a regulatory filing disclosing a small stake as of the end of March. The fund had told its own investors in a quarterly letter in April that it had a new "core position," though it provided few details on it at the time.

WSJ : GCC Countries Still Too Reliant On Oil and Gas Revenues, S&P Says

High oil prices have always been a double-edged sword for the Persian Gulf countries.

The region’s vast hydrocarbon reserves allowed for the rapid development of these countries’ economies and still provide an indispensable source of income. But over the years, the overreliance on energy-related revenues means governments have largely failed in designing more dynamic economic systems that ensure the creation of sufficient jobs and promote non-oil activities that would still be viable in the long run when reserves dry up.

The solution, economists and policymakers have always maintained, lies in economic diversification away from oil.

A new report from ratings agency S&P says the Gulf states’ dependence on energy-related revenues not only has increased but that economic diversification has barely improved which means a sharp drop in oil prices could have serious repercussions. On average, hydrocarbon-related revenues make up 46% of the GCC countries’ gross domestic product and three quarters of their total exports, according to S&P.

“This strong dependence on hydrocarbon revenues appears to be increasing,” the report said. “This is partly a result of high oil prices feeding through to the national accounts data, but also, because these countries have made only marginal progress in diversifying their economies away from hydrocarbons,” it added.

Among the six countries that make up the GCC, Bahrain and Oman are most at risk in case oil prices tumble, while Qatar and United Arab Emirates are the least vulnerable.

A key factor in assessing a country’s vulnerability is its fiscal breakeven oil price – the average oil price required for a state to avoid running a budget deficit.

In the case of Bahrain, S&P finds that the oil price would have to be 18 dollars higher than its current price for the country to balance its budget. Perhaps ironically, Bahrain is one of the most diversified economies in the Gulf alongside the U.A.E. but at the same time it has the least financial breathing space and time left to further diversify in anticipation of a possible market downturn.

Oman, meanwhile, is still completing a development plan that aims to expand its tourism, industry, agriculture and fisheries sectors. Still, S&P said the pace of that diversification plan remains too dependent on its energy income.

On the other side of the scale are Qatar and the U.A.E.. Doha has the second-lowest breakeven price among the six Gulf countries and is likely able to keep its production at current high levels for the longest period of time among all states in the region, S&P said.

The U.A.E. is also still oil-dependent, especially Abu Dhabi, though the other six emirates that make up the country have all developed non-energy industries in the absence of having large oil reserves.

(BFW) TUI Merger ‘Could Well’ Fail, Commerzbank Says

TUI Merger ‘Could Well’ Fail, Commerzbank Says
2014-06-30 12:42:41.555 GMT


By Richard Weiss
     June 30 (Bloomberg) -- Merger between TUI Travel and parent
company TUI AG faces “plethora of concerns” from TUI Travel
shareholders, analyst Johannes Braun says in note.
  * 75% of TUI Travel minority shareholders accepting deal is
    “major hurdle”: Commerzbank
  * TUI AG must persuade TUI Travel shareholders to swap
    “highly successful, asset-light, pure-play tourism
    shareholding with a very strong management track record”
    into what seems to be “asset-heavy German tourism
    conglomerate with an unproven management and (still)
    exposure to container shipping” without premium
  * Deal could add EU3 per share to TUI AG price target of EU12
  * Commerzbank keeps rating of stock at hold.

For Related News and Information:
Top Stories:TOP<GO>
Stories on Germany:TOPG<GO>

To contact the reporter on this story:
Richard Weiss in Frankfurt at +49-69-92041-287 or
rweiss5@bloomberg.net
To contact the editors responsible for this story:
Benedikt Kammel at +49-30-70010-6230 or
bkammel@bloomberg.net
Kim McLaughlin

>>> US Gapping Down

Gapping down
Select EU financial related names showing weakness: DB -1.3%, LYG -1.2%, ING -1.1%, BCS -1.1%, BBVA -1.1%

Select metals/mining stocks trading lower: X -1.7%, BHP -1.6%, HL -1.5%, IAG -1%, SLV -1%, GDX -0.7%.

Other news: APP -10.3% (adopts stockholder rights plan), CTHR -2.7% (announces closing of a new three-year $10 mln secured credit facility), VE -2.6% (still checking), WLT -2.6% (S&P lowered Walter Energy rating to 'CCC+' From 'B-' On Unsustainable Debt, Outlook Negative; Debt Ratings Lowered), EGLE -2.6% (disclosed Waiver and Forbearance Agreement update), PT -2.4% (reported clarifications regarding treasury investments), ALU -1.7% (still checking), GLCH -1.2% (delist from NASDAQ).

Analyst comments: MBI -4.9% (downgraded to Neutral from Buy at BTIG Research), TLYS -1.7% (downgraded to Neutral from Buy at B. Riley & Co), SYT -1.6% (downgraded to Underweight from Neutral at JP Morgan), WFC -0.6% (downgraded to Underperform from Neutral at Macquarie). 

>>> US GApping Up

Gapping up 
In reaction to strong earnings/guidance: .

M&A news: THS +5.1% (to acquire Flagstone Foods for $860 mln), PPG +2.9% (reaches agreement to acquire Comex; transaction is valued at $2.3), PHG +2.7% (announced that it will start the process to combine its Lumileds and Automotive lighting businesses into a stand-alone company within the Philips Group; will explore strategic options to attract capital from third party investors for this business), CNSL +2.2% (co and Enventis (ENVE, formerly HTCO) to merge).

Other news: DRNA +13.5% (researchers demonstrate promise of Dicerna investigational therapy in preclinical model of primary Hyperoxaluria Type 1), MNKD +11.9% (announces FDA approval of AFREZZAn for the treatment of Diabetes), FLML +7.4% (announces FDA approval of VAZCULEP), GRH +6.4% (announces multiple pipeline project in Pennsylvania and West Virginia; total capacity of 270,000 barrels per day), SREV +6.2% (Altai Capital Management discloses 9.9% active stake in 13D filing), CHCI +5.2% (enters into option agreement allowing repurchase of shares held by former Chief Operating Office), LBMH +5.1% (still checking), GPRO +4.7% (cont vol following IPO last week), ALIM +4.2% (Iluvien receives positive outcome of repeat-use procedure for 10 additional European countries), IDTI +3.7% (positive comments by Jon Najarian on Friday), EVAR +3.6% (initiated with a Outperform at Credit Suisse), AUO +2.5% (still checking), NTAP +2.3% (positive Barron's mention), IP +2.2% (positive Barrons mention), KPTI +1.5% (underwriters of its previously announced public offering of common stock have exercised their option to purchase an additional 397,087 shares of its common stock at a price of $42.50/share before underwriting discounts), MPEL +1.4% (Gambling insurance in China is now prohibited, according to reports), AMPE +1.1% (initiates study of multiple injections of Ampion into the knees of patients with oa of the knee to assess its healing and cartilage regeneration effects), .

Analyst comments: GWPH +5.1% (target raised to $147 from $97 at Piper Jaffray; Overweight), AMED +2.7% (upgraded to Hold from Sell at Deutsche Bank), MILL +2% (upgraded to Buy from Neutral at Sun Trust Rbsn Humphrey), UTEK +2% (upgraded to Buy at Noble Financial), YHOO +1.3% (upgraded to Overweight from Neutral at Piper Jaffray), KLAC +1.1% (upgraded to Buy from Neutral at B. Riley & Co), WTSL +1.1% (upgraded to Neutral from Sell at B. Riley & Co), FINL +1% (target raised to $35 from $33 at Monness Crespi & Hardt), MU +1% (added to Focus List at Credit Suisse) 

>>> US Early premarket gappers

Early premarket gappers

Gapping up: MNKD +19.3%, GPRO +5.6%, CHCI +5.2%, SREV +4.8%, GWPH +4.8%, VJET +3.5%, PHG +2.7%, YHOO +1.8%, IP +1.1%

Gapping down: APP -7.2%, VE -2.8%, WLT -2.7%, DB -1.9%, ALU -1.9%, SYT -1.9%, BHP -1.5%, LYG -1.4%, ING -1.3%, GLCH -1.2%, RAD -1.1%, BCS -1%