Shire Plans Investor Call Tomorrow to Boost Defense: Telegraph

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Shire Plans Investor Call Tomorrow to Boost Defense: Telegraph 2014-06-22 08:27:04.161 GMT

By Matthew Boyle June 22 (Bloomberg) -- Shire will detail reasons for rejecting AbbVie’s offers and emphasize its stand-alone value, Sunday Telegraph says, without citing anyone. * A deal could be done at ~GBP50/shr, Telegraph says, citing unidentified London financial industry sources * Shire and AbbVie declined to comment to Telegraph * NOTE: Yday, AbbVie Said to Weigh Higher Offer as Shire Rejects $46.5 Billion NSN N7H05X6VDKHT<GO>

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To contact the reporter on this story: Matthew Boyle in London at +44-20-3525-8675 or mboyle20@bloomberg.net To contact the editor responsible for this story: Celeste Perri at +31-20-589-8505 or cperri@bloomberg.net

Alstom Board Clears GE's Sweetened Offer for Power Business

Alstom Board Clears GE's Sweetened Offer for Power Business
Deal Still Hinges on French Government Reaching Agreement With Bouygues

PARIS—The board of French engineering group Alstom SA said Saturday it has officially accepted General Electric Co.'s sweetened offer for its power-equipment unit, ending a two-month scramble for the maker of turbines for power plants.
The deal still hinges on the French government finding an agreement with Bouygues SA to buy a 20% stake in Alstom from the construction-to-telecoms conglomerate. The government has said it wanted to become Alstom's largest shareholder before allowing GE to buy Alstom's assets.
The board accepted the revised offer made by GE on Friday, when the U.S. group changed its $17 billion initial offer for the whole of Alstom's power business to make it more palatable to the French government, which was reluctant to let the industrial jewel fall into U.S. hands.
Under the revised GE bid, Alstom would sell its gas turbine business, the largest part of the power-equipment unit, to the U.S. company and house the French part of its steam and nuclear turbines, renewable-energy activities and grid equipment in 50/50 joint ventures with GE.
The board said the new offer benefits Alstom, its shareholders and other stakeholders.
The new GE offer still values the power equipment business at $17 billion, but values the Alstom investment in the joint-ventures at €2.5 billion ($3.4 billion), the Alstom board said Saturday.
After the transaction, Alstom will buy GE's train signalling business and merge it with its own train business, that makes the signature French bullet trains. Alstom intends to focus on its train business in the future, the board said.
The original attempt to buy the Alstom assets in late April angered the combative French Economics Minister Arnaud Montebourg. He struck back, encouraging GE's German rival Siemens to team up with Japanese firm Mitsubishi Heavy Industries to make a separate offer.
The GE response to the Siemens-Mitsubishi counter offer, eventually convinced the French minister, who publicly blessed it Friday. Alstom's board followed Mr. Montebourg and accepted the GE bid.
Under terms of the deal made public so far, GE gets the majority of what it sought in first attempting to acquire Alstom, especially its global business in manufacturing and servicing gas and steam turbines, the giant machines at the heart of power plants.
Alstom's steam turbine business will raise GE's involvement in coal-fired power, especially in regions of the world where such facilities are still being built, like China and Africa. GE officials say that will complement GE's existing business making turbines for gas-fired power plants, in which it is the world leader.
Corrections & Amplifications
The GE-Alstom deal hinges on the French government finding an agreement with Bouygues SA. An earlier version of this article incorrectly spelled the company's name Bougues.

(Barron's) Are Analysts Too Bearish on Akamai? (MKM)

Are Analysts Too Bearish on Akamai?
Consensus estimates may not have factored in strength in business fundamentals.

uy-rated Akamai Technologies remains a top pick and we maintain our $80 price target.

We hosted a call with Akamai's (ticker: AKAM ) Chief Executive Tom Leighton Wednesday. The demand environment remains strong. Management is confident that secular trends are opening large market opportunities, investments in salesforce and channel expansion are beginning to pay dividends and recent strength is just the beginning.


Salesforce expansion continues with no sign of market saturation. Akamai hired more new sales reps last year than the past five-years combined.

Management is seeing a strong productivity ramp of new hires versus tenured reps. They believe this reflects a large, underserved market and see no signs of slowing.

Mainstream information technology is moving to more software-as-a-service (SaaS), cloud and mobile. This makes Akamai's Performance & Security solutions more applicable to a much larger base of potential customers.

Media still has a lengthy growth cycle ahead and believes there is more than five years of double-digit growth in media revenue ahead for the company.

Potential for customer insourcing is not a concern. The economics of building and updating a modern content delivery network (CDN) do not make sense for many (any) customers. Akamai has spent a cumulative $500 million in research and development and $350 million in capitalized software, along with $1.5 billion in cumulative capital expenditure.

Potential competition from Comcast ( CMCSA ) (or other multiple system operators (MSOs) is also not a concern. Akamai's top media customers serve hundreds of millions of users around the globe (1.3 billion in the case of Facebook ( FB )), demand that cannot be served by any Internet service provider or single network provider.

We think Wall Street estimates are still too low. The early 2013 sales hires are hitting full productivity, which should drive upside in the fourth and first quarters upside. The bulk of new hires will likely hit their productivity sweet spot in the second through fourth quarters of this year.

Consensus is about the midpoint of second-quarter guidance, then decelerates every quarter after. We believe consensus has yet to capture strength in business fundamentals and see several quarters of upside revisions as Street estimates catch up. We expect this will also drive multiple-expansion. Our call with management gives us additional confidence in the bull thesis.

--- Rob Sanderson

The companies mentioned in Hot Research are subjects of research reports issued recently by investment firms. Their opinions in no way represent those of Barrons.com or Dow Jones & Company, Inc. Share prices at the time the report was issued and the date of the report are in parentheses.

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(Barron's) Iraq Crisis Bolsters Oil Majors' Strong Outlook

Iraq Crisis Bolsters Oil Majors' Strong Outlook
A new focus on creating shareholder value and curbing capital outlays should help boost the shares of Royal Dutch Shell and Total.
Mounting violence in Iraq has proved the worth of oil stocks as a hedge against geopolitical risks. Oil stocks have gained as most other equities have been racking up losses. This is happening just as some European oil majors are cutting capital expenditures and aiming to boost shareholder returns.

The sector has been propelled upward in tandem with crude-oil prices amid worries that Iraqi oil supplies will be constrained. On Friday, Brent crude on the ICE futures exchange had retreated slightly but remained close to the nine-month peak of $115.06 a barrel reached Thursday after seven straight days of gains.

European oil majors had fallen out of favor with investors in recent years, as they pumped money into high-cost production in new oil fields, instead of rewarding shareholders. Now that's starting to change, as some of them rein in capital outlays and focus on cash generation. And, after years of weakness, the stocks are priced attractively, relative to other equities.

"The high level of cash flow available in the sector should, in our view, trigger share buybacks and cause dividend payments to rise…supporting total returns for shareholders," says Willem Sels, United Kingdom head of investment strategy at HSBC Private Bank.

SELS RECKONS THAT ENERGY stocks, hurt by a period of weak earnings, trade at a 20% discount to the wider global market. But profits are starting to surprise on the upside. "We expect the energy sector to outperform going forward, thanks to improving earnings revisions, better capital discipline, and hence, improving cash-flow trends," Sels adds.

Credit Suisse analyst Andrew Garthwaite is also upbeat on the sector. He expects integrated oil-company capital expenditures to fall in 2015 for the first time in more than a decade. He argues that the now-shrinking gap between oil-price forecasts and their actual level is a reasonable measure of earnings momentum. But even though oil prices have been stronger than expected for the past two years, profits have remained subdued. "This reflected capex and cost overruns, as well as production and tax difficulties," Garthwaite says. "We find it encouraging that earnings momentum is now catching up, closing this gap."

Anglo-Dutch oil giant Royal Dutch Shell (ticker: RYDAF) and France's Total (TOT) are among Credit Suisse's top picks.

Europe's major oil companies are undergoing leadership changes, with incoming chief executives tending to focus on shareholder returns and cash generation.

Ben van Beurden took over as Shell CEO at the beginning of this year, with a remit to slash costs and boost the company's performance. In April, the company said that a massive $2.86 billion write-down, mainly on its Asian and European refineries, had pushed down first-quarter profit 44% from the level a year earlier. Remarkably, that was better than forecast, and Shell stock rose after the announcement.

Shell buoyed investors again last month when it scrapped its scrip dividend—a payout in shares, rather than cash—paving the way for cash dividends and possibly stock buybacks. It recently also announced plans for an initial public offering of its Shell Midstream Partner business; said it is selling shares in Woodside Petroleum (WPL.Australia) for 6.1 billion Australian dollars; and forged a strategic partnership with the Chinese oil company CNOOC (CEO).

SAYS BARCLAYS ANALYST Lydia Rainforth, who has an Overweight recommendation on Shell, with a 27 British pounds ($45.96) price target: "Royal Dutch Shell is embarking on a restructuring plan focused on improving financial performance and enhancing capital discipline in order to drive both cash-flow growth and returns over the medium term. There is plenty of room to deliver this improvement, in our view, with nearly $120 billion of capital employed generating a [return on average capital employed] of 7% or less in 2013." Rainforth says that key projects in the Gulf of Mexico and Malaysia should help boost cash flow over the remainder of 2014.

Rainforth also has Total at Overweight, with a 55 euro ($74.67) price target. "Total remains one of the best-positioned European oil companies we cover for the coming three years, offering a combination of absolute value, growing production, and growing free cash flow," she says.

Total's commitment to generating cash rather than investing in costly exploration was demonstrated in May when it shelved a $10 billion Canadian oil-sands project. Total reckons that oil sands—which are made up of sand, water, and oil—represent an important untapped resource that could equal the Organization of the Petroleum Exporting Countries' reserves.

Bernstein analysts, who rate Total at Outperform, estimated that dropping the Canadian project should add $630 million to the company's free cash flow and save it $3.9 billion over the next four years.

Midday in New York Friday, Shell stock was at $41.35, while Total was at $73.41.

(Barron's) Sweet Dividends—With a Cherry on Top

Sweet Dividends—With a Cherry on Top
With returns on high-yield bonds hitting record lows, Barron's hunted for dividend stocks that could prove more rewarding. Some picks: GE, Amgen.

For bond investors, "junk" and "high-yield" used to be synonyms. No longer. Today's bonds from issuers with elevated risk of default simply don't pay all that much. Junk indexes from Barclays and Bank of America Merrill Lynch both hit record low yields of around 4.9% this past week. How low is that? One-year Treasury bills, about the safest investment ordinary investors can buy, have yielded an average of 5.1% since 1953. In other words, the dodgy stuff now pays less than the safe stuff used to.

Of course, junk bonds pay much more than today's Treasuries, whose yields have been suppressed by the Federal Reserve in an effort to stoke the economy. Investors have continued to pile into junk for this relative yield advantage. But then, with the one-year Treasury paying less than 0.1%, scratch-off lottery tickets almost compare favorably. That's no reason to buy them.

From here, junk-bond investors may have more to lose than to gain. In a rosy scenario, the economy gradually improves while the corporate default rate remains exceptionally low, and good junk-bond fund managers earn mid-single-digit returns over the next year. A gloomy scenario looks like 2008, when a popular exchange-traded junk fund, SPDR Barclays High Yield Bond (ticker: JNK), lost 26%. Bank of America Merrill Lynch is predicting total returns for U.S. high-yield of 4% to 5% this year. That's not bad—but the SPDR junk fund has already returned 4.4% year-to-date, implying little upside from here.

Enlarge Image

Illo: Stuart Goldenberg for Barron's
Earlier this month, JPMorgan Chase recommended that yield hunters cut junk-bond exposure and switch to stocks. We recently ran a search for stocks that should appeal to junk-bond refugees. It turned up six names, including Amgen (AMGN), Eaton (ETN), and National Oilwell Varco (NOV).

These shares aren't the highest-yielders around. That's for the best, because high yields often come attached to companies with limited growth potential. We began our search by looking only for those with current yields over 2%, roughly the dividend yield for the Standard & Poor's 500 index. But we also looked for estimates of peppy growth in coming years in both profits and dividend payments. For long-term investors, these shares have potential to become high-yielders over time. A 2.5% yield today becomes a 4.9% yield in seven years, assuming a company can increase its payment by 10% a year, and that its share price doesn't change. Of course, rising dividends can attract buyers, sending share prices gradually higher, resulting in handsome total returns.

Stocks are not a direct substitute for bonds. Both are important for investors who wish to keep overall portfolio risk in check. The ideas that follow are alternatives for investors who find that their junk-bond allocation has grown larger than they would like. That could have happened easily: The SPDR junk ETF has now returned an average of 12.6% a year over the past five years, according to Morningstar, versus 4.8% for its high-grade sibling, SPDR Barclays Aggregate Bond (LAG).

AMGEN IS ONE OF the world's largest biotech companies, with sales last year of $18.7 billion, but it has room for growth. Nearly 80% of its revenue comes from the U.S., which leaves plenty of potential to launch medicines overseas. And the company, which specializes in treatments for cancer, kidney disease, and inflammation, has a pipeline of 10 key drugs in late-stage clinical trials with results due through 2016.

Those should more than offset potential revenue declines from legacy drugs facing new competition. Overall revenue for Amgen is expected to increase only modestly, but free cash flow should grow much faster as research spending falls as a percentage of revenue. This year, free cash flow is expected to rise 13% to $6.4 billion. In three years, Wall Street expects it to hit $8.4 billion, or over 9% of the company's current stock market value. Amgen announced a 30% dividend hike in December, but with a yield of just 2%, payments look likely to keep rising at a double-digit pace in coming years.

General Electric (GE) raised its dividend payment 16% this year and plans to lift payments in line with earnings from here on. That looks like a good deal for yield-seekers. Shares already pay 3.3%. GE hopes to buy the power division of France's Alstom (ALO.France), which would cut into share repurchases this year and keep earnings-per-share growth modest, but Wall Street predicts 7% growth next year rising to 12% in three years. In September we predicted that GE stock, then $24, would rise more than 30% to $32 in two years (Sept. 23, 2013, "GE: Not Too Big to Grow"). It's close to $27 now. Keys to GE reviving growth include divesting itself of underperforming businesses, using software and analytics to sell new services to industrial clients, and, in the event of an Alstom deal, making good use of new sales inroads.

Just 13% as big as GE by stock market value, Eaton, which makes power, hydraulic, filtration, and other industrial equipment, isn't struggling to grow. Its earnings per share are expected to rise 15% this year and 17% next year. But Eaton faces a near-term risk in the form of a long-running antitrust case with Meritor (MTOR), which says Eaton used its clout unfairly in selling truck transmissions. A jury agreed. A judgment, which triples economic damages in such cases, could run $1.4 billion to $2.4 billion based on Meritor's claims, versus Eaton's projected earnings of $2.2 billion this year. Morgan Stanley views an award that large as unlikely and says investors should look past the litigation to Eaton's attractive growth prospects, because the stock could get a lift once the matter is resolved. Shares yield 2.5% and payments are expected to grow by nearly one-third over the next two years.

INVESTORS WHO HEED JPMorgan's advice to swap junk bonds for stocks might want to consider shares of JPMorgan Chase (JPM) itself. Its first-quarter profit tumbled 19% on declines in bond trading and mortgages. Many banks saw similar results, driven by the Federal Reserve scaling back bond purchases and by mortgage rates rising. JPMorgan has been investing in technology for its bank branches and new products for its asset-management business that should pay off once the climate turns healthier for banks. Wall Street predicts its earnings per share will top $7.40 in three years, versus a forecast of $5.38 this year. Dividend payments are expected to rise even faster. Shares currently yield 2.8%

International Paper (IP) posted a first-quarter loss on poor weather in North America, a mill shutdown, and a fall in the Russian ruble cutting into results for a joint venture in that country. But the results may understate the company's true earnings power. Box shipments are projected to grow modestly in the U.S. and faster overseas, which bodes well for containerboard demand. Mill restructurings should improve profit margins over time. And the Russian joint venture enjoys low materials costs and hence potential for healthy profits as production ramps up later this year. Free cash flow is expected to total $1.6 billion this year, rising to $2.2 billion in two years. The latter figure is more than 10% of International Paper's stock market value. Shares yield 2.9%. Management has recently spent roughly as much on share repurchases as on dividends.

At the end of May, National Oilwell Varco completed the spinoff of its distribution business NOW (DNOW). The remaining company, which makes equipment and components for oil and gas drilling, is valued at $34 billion. It holds $3.7 billion in cash and $3.1 billion in debt, and is expected to generate free cash of $2.2 billion this year, rising to $3.1 billion in 2016. Shares yield 2.3%, and analysts expect the company to spend its free cash on rising dividends—with payments hitting 3% of today's price within two years. In January we recommended shares of National Oilwell Varco for the company's potential to set the industry standard for floating oil production, storage, and offloading platforms, just as it has done for offshore drilling rigs. Shares since then have returned 12%, adjusted for the spinoff. They still look plenty affordable at 13 times this year's earnings forecast.

WSJ : Muslim Brotherhood's Spiritual Leader Sentenced to Death in Egypt

Muslim Brotherhood's Spiritual Leader Sentenced to Death in Egypt
More Than 180 Others Sentenced to Death in Latest Mass Trial

Relatives and families of members of the Muslim Brotherhood and supporters of ousted Egyptian President Mohammed Morsi react outside a court in Minya, south of Cairo, after the sentences of Muslim Brotherhood leader Mohamed Badie and his supporters were announced on Saturday. Reuters
MINYA, Egypt—The Muslim Brotherhood's spiritual leader and more than 180 others were sentenced to death Saturday by an Egyptian court in the latest mass trial following last year's overthrow of the country's Islamist president.

The ruling by the southern Minya Criminal Court is the largest confirmed mass death sentence to be handed down in Egypt in recent memory and comes from Judge Said Youssef, who earlier presided over the mass trial. It is the second death sentence for the Brotherhood's Supreme Guide Mohammed Badie since the crackdown against his group began.

The court acquitted more than 400 others in the case and family members of the accused wailed or cheered the verdicts.

The case stems from an attack on a police station in the town of el-Adwa near the southern city of Minya on Aug. 14 which killed one police officer and one civilian. Similar revenge attacks swept across Egypt following a security force crackdown on Cairo sit-ins supporting toppled President Mohammed Morsi that killed hundreds. The charges in the case ranged from murder, joining a terrorist organization, sabotage, possession of weapons and terrorizing civilians.

Initially, Youssef sentenced some 683 people to death over the attack, then sent the case to Egypt's Grand Mufti, the country's top spiritual leader. The Mufti offered his opinion, then sent the case back to Youssef to confirm his sentence.

Lawyers for the accused said they planned to appeal. Of the initial 683, all but 110 were tried in absentia, a defense lawyer said, meaning they will receive new trials once apprehended as guaranteed by Egyptian law.

The mass trials have drawn world-wide rebuke. However, the trials have continued with many Egyptians appearing to approve of the heavy-handed measures as a way to end the turmoil roiling their country since its 2011 revolt against autocrat Hosni Mubarak.

"There has been an excess in using the death sentences recently, which will only lead to more violence in society because people are now used to the idea of execution, killing and blood," prominent rights lawyer Negad el-Borai said.

Amnesty International described the ruling as one more "alarming sign of the Egyptian judiciary's increasing politicization," especially with "notable spike" in death sentences.

Also among those sentenced to death Saturday was a blind man named Mustafa Youssef.

"He was born blind. How would he kill, burn and loot?" asked Mahmoud Abdel-Raziq, Mr. Youssef's lawyer.

Saturday's hearing lasted for less than 15 minutes, a security official said. Only 75 prisoners were brought to a prison attached to the court but didn't attend the session. Mr. Badie, held in a Cairo prison, didn't attend, the official said.

Mr. Youssef arrived at the court in an armored vehicle and security officials escorted him inside.

Female relatives to those who were acquitted ululated, clapped and chanted the pro-military slogan: "The army and the people are one hand."

Those whose relatives received death sentences screamed in grief and shouted insults to the brother of the police officer slain in the Aug. 14 attack. They believe police shot the officer themselves as part of a conspiracy against their loved ones.

Ashour Qaddab, the brother of the slain police officer, broke into tears after the verdict.

"This is God's justice. to my brother's five orphans," Mr. Qaddab said. On hearing him, relatives of other defendants screamed: "Your brother was killed by police!"

(BFW) France Reaches Bouygues Price Agreement for Alstom Stake: AFP

France Reaches Bouygues Price Agreement for Alstom Stake: AFP
2014-06-21 17:22:49.509 GMT


By Alex Webb
     June 21 (Bloomberg) -- Accord for 20% stake in Alstom helps
clear path for GE to buy energy assets, AFP reports, citing an
unidentified person with knowledge of the talks.
  * An announcement will be made “later”: AFP
  * EARLIER: GE’s Alstom Deal Said Caught in Dispute Between
    France, Bouygues
  * NOTE, yesterday: GE Wins French Support on Alstom Deal With
    State Seeking 20%


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To contact the reporter on this story:
Alex Webb in Munich at +49-89-24447-8802 or
awebb25@bloomberg.net
To contact the editor responsible for this story:
Simon Thiel at +44-20-7673-2814 or
sthiel1@bloomberg.net

FT : Asos suspends website after warehouse fire

Asos suspends website after warehouse fire

Asos, the online retailer, was forced to suspend its website on Saturday, after a fire at its main warehouse in Barnsley, South Yorkshire.
“In order not to disappoint our customers we have temporality stopped taking orders, Asos said. “When we have clarity on the situation, we will issue a further statement.”

South Yorkshire Fire and Rescue, said the blaze at Park Spring Road, Barnsley, started at about 10pm on Friday night.
“At its height, the fire was tackled by 10 fire engines, an aerial ladder platform and a High Volume Pump. The warehouse was more than 60,000 square metres in size. The fire involved several floors of the building and fire crews worked hard to quickly bring the blaze under control,” the service said.
It added that the fire, which took over 60 firefighters to bring under control, was thought to have broken out on the second floor of the five storey building, before spreading to the third and fourth floors.
By Saturday morning, the blaze had been put out, with one fire engine remaining to ensure that no “hotspots” reignited.
An investigation into the cause of the fire was expected to begin later on Saturday.
The fire at the Barnsley sight comes at a delicate time for Asos, which issued a severe profit warning earlier this month, after it was hit by the strength of sterling and heavy discounting.
Asos warned in early May, that pre-tax profit this year would be about 30 per cent lower than expected, after it suffered a “triple whammy of the perfect storm on profit”.
But some rivals and analysts suggest there are fundamental changes in the online market, with bricks and mortar retailers becoming more assertive in their web operations.
It is not the first time that Asos has suffered damage to one of its distribution facilities. In December 2005, its then only warehouse was badly damaged by the explosion and fire at the Buncefield oil depot near Hemel Hempstead.
Asos also suspended its site after this disaster, which Nick Robertson, chief executive, told the FT at the time was the worst thing that could happen to an online retailer.
Asos also suspended its shares after the Buncefield blast, and began refunding customers whose orders could not be delivered.

(Les Echos) Alstom: showdown around the participation of Bouygues

Alstom: showdown around the participation of Bouygues

Negotiations are clamped between the state and Bouygues group, which yesterday announced its intention to take 20% of Alstom, Bouygues which now holds 29.4% equity. If the State has announced its intention to enter "on the basis of market price" (28 euros at the closing Friday night), Bouygues does not intend to sell off its stake, recorded in its accounts to 34 euros. According to AFP, he would ask 35 euros. Negotiations must be buckled before the opening of trading on Monday.
Saturday, Francois Hollande said he hoped progress "by the end of the day", adding that "if there were no such advances, if there was no such sale a price that is acceptable to the government, then there would necessarily return to the alliance as it has been announced. "
In any event, the State has the means of pressure on the group, which is largely dependent on government. "We have enough overall relations with Bouygues on many subjects so that it does not go bad. The offer MHI / Mitsubishi remains also always possible, "says a government source.
The executive made a surprise Friday night, inviting the State in the Alstom file. "The government has decided to enter the capital of Alstom up to 20% and become the largest shareholder of the company," said Economy Minister Arnaud Montebourg at a press conference. The state will buy it for two thirds of Bouygues' stake which now holds 29.4% of the shares of the group. Evaluated 1.7 billion during the last Alstom this entry to capital could be funded by the EPA (Agency interests of the State) or Bpifrance, without the need to sell assets.

The choice of General Electric
Arnaud Montebourg also announced that the choice of the state was focused on the amended offer of U.S. group General Electric , which was preferred to competitors Siemens and Mitsubishi Heavy Industries . But under "rigorous and respectful of the interests of France conditions," the minister said. The State will apply the decree of 14 May on foreign investment in France, allowing him to oppose an acquisition in the strategic energy sector.
"Alstom is maintained in most of its activities", welcomed Arnaud Montebourg, citing an "alliance of equals, the nature of that which had been made there forty years Safran and General Electric," and far from "buy-absorption-devouring" envisaged by the American cause.
Prime Minister Manuel Valls also welcomed these announcements, indicating that the choice of returning to GE "much to the Arnaud Montebourg commitment," and that "in terms of method, it is the anti-Florange" with reference to the conflict that opposed the fall of 2012 Jean-Marc Ayrault and Arnaud Montebourg, who campaigned at the time for nationalization Site ArcelorMittal Florange. For its part, the CFE-CGC union first French group, said that the entry of the state capital of Alstom was "reassuring" and that there was "no doubt now that the Board of Directors choose General Electric. "

"Brussels is the main obstacle to the creation of European champions"
Arnaud Montebourg called supply Siemens and Mitsubishi, "very serious, very credible, very seriously worked." But she "met the competition rules which are monitored by the European Commission. Brussels is the main obstacle to the creation of European champions, "he has said. Supporting management in the supply of GE, and prior discussions with the American group, may have also played a vital role." Had we both offers at the same time, they are worth, "said a government source.
The presentation of the operation is able and advantageous for governments that can boast of having preserved the French interests. And, even if, ultimately, GE will acquire many swathes of the French equipment: gas turbines, much steam turbines, 50% of renewable electricity networks.
"The deal will not strengthen Alstom least, since it provides cash to pay off debt, and allows it to benefit from the balance sheet of General Electric to offer its customers financing its projects, a key point in its business" insists one at Bercy. The decision to enter into exclusive negotiations with GE is now up to the Board of Directors of Alstom, which held its first meeting on Friday evening and is expected to decide before the opening of trading on Monday morning, if discussions are unlocked with Bouygues by then.
A reverse of the 2006 scenario
The government's plan to buy 20% of Alstom, Bouygues is the exact opposite scenario of 2006, when the construction group had taken the part of the State in the specialist transport infrastructure and energy.
In April 2006, Bouygues acquired the 21.03% that the State held in Alstom's capital from the public rescue it in July 2004. In 2007, Bouygues' stake was 25.3%, then time exceeded the 30% mark before falling to the current level of 29.4% after a capital increase of Alstom end of 2012, Bouygues had not followed at the time.
The 20% stake in Alstom represent € 1.7 billion, based on the current market capitalization of the group according to Thomson Reuters data. In 2006, Bouygues had purchased from the state about two billion euros

Les Echos : Alstom : bras de fer autour de la participation de Bouygues

Alstom : bras de fer autour de la participation de Bouygues

Les négociations sont serrées entre le groupe Bouygues et l’Etat, qui a annoncé hier son intention de prendre 20% du capital d’Alstom, dont Bouygues détient aujourd’hui 29,4%. Si l’Etat a annoncé son intention d’entrer « sur une base de prix de marché » (28 euros à la clôture vendredi soir), Bouygues n’entend pas brader sa participation, inscrite dans ses comptes à 34 euros. Selon l’AFP, il demanderait 35 euros. La négociation doit être bouclée avant l’ouverture de la bourse, lundi.
Ce samedi, François Hollande a déclaré qu'il espérait des avancées "d'ici la fin de la journée" avant de préciser que "s'il n'y avait pas ces avancées, s'il n'y avait pas cette vente à un prix qui, pour le gouvernement soit acceptable, alors il y aurait nécessairement à revenir sur l'alliance telle qu'elle vient d'être annoncée".
En tout état de cause, l’Etat dispose de moyens de pressions sur le groupe, qui dépend en grande partie des pouvoirs publics. « Nous avons suffisamment de relations globales avec Bouygues sur beaucoup de sujets pour que cela ne se passe pas mal. L’offre MHI/Mitsubishi reste d’ailleurs toujours possible », note une source gouvernementale.
L’exécutif a créé la surprise vendredi soir, en invitant l’Etat dans le dossier Alstom. « Le gouvernement a pris la décision d’entrer dans le capital d’Alstom à hauteur de 20% et de devenir le principal actionnaire de cette entreprise », a déclaré le ministre de l’Economie Arnaud Montebourg lors d’une conférence de presse. L’Etat rachètera pour cela les deux tiers de la participation de Bouygues qui détient aujourd'hui 29,4% des actions du groupe. Evaluée à 1,7 milliards d’euros au derniers cours d‘Alstom, cette entrée au capital pourrait être financée par l’APE (Agence des participations de l’Etat) ou Bpifrance, sans qu’il soit nécessaire de céder des actifs.

Le choix de General Electric
Arnaud Montebourg a aussi annoncé que le choix de l’Etat s’était porté sur l’offre amendée du groupe américain General Electric , qui a été préféré aux concurrents Siemens et Mitsubishi Heavy Industries . Mais sous conditions « rigoureuses et respectueuses des intérêts de la France », a poursuivi le ministre. L’Etat appliquera le décret du 14 mai sur les investissements étrangers en France, lui permettant de s’opposer à une acquisition dans le secteur stratégique de l’énergie.
« Alstom est maintenu dans la plupart de ses activités », s’est félicité Arnaud Montebourg, évoquant une « alliance entre égaux, de la nature de celle qu’avaient constituée il y a quarante ans Safran et General Electric», et bien loin du « rachat-absorption-dévoration », envisagé par l’américain à l’origine.
Le premier ministre Manuel Valls a aussi salué ces annonces, indiquant que le choix de GE revenait pour "beaucoup à l'engagement d'Arnaud Montebourg", et que, "en termes de méthode, c'est l'anti-Florange", en référence au conflit qui avait opposé à l'automne 2012 Jean-Marc Ayrault et Arnaud Montebourg, qui militait à l'époque pour une nationalisation du site ArcelorMittal de Florange. De son côté, la CFE-CGC, premier syndicat du groupe français, a affirmé que l'entrée de l'Etat au capital d'Alstom était "rassurant" et qu'il ne faisait "aucun doute maintenant que le conseil d'administration choisira General Electric".

"Bruxelles est le principal obstacle à la création de champions européens"
Arnaud Montebourg a qualifié l'offre de Siemens et Mitsubishi, "très sérieuse, très crédible, très sérieusement travaillée ». Mais elle s’est « heurtée aux règles de la concurrence qui sont surveillées par la Commission européenne. Bruxelles est le principal obstacle à la création de champions européens », a-t-il déclaré. Le soutien du management à l’offre de GE, et l’antériorité des discussions avec le groupe américain, ont sans doute aussi joué un rôle essentiel. « Si nous avions eu les deux offres au même moment, elles se valaient », souligne une source gouvernementale.
La présentation de l’opération est habile et avantageuse pour les pouvoirs publics qui peuvent se targuer d’avoir préservé les intérêts français. Et ce, même si, au final, GE rachètera bien des pans entiers de l’équipementier français : les turbines à gaz, une grande partie des turbines à vapeur, 50% des renouvelables et des réseaux électriques.
« Le deal n’en renforce pas moins Alstom, puisqu’il lui fournit du cash pour se désendetter, et lui permet de bénéficier du bilan de General Electric pour proposer à ses clients des financements sur ses projets, point clé dans ses métiers », insiste-t-on à Bercy. La décision d’entrer en négociations exclusives avec GE revient maintenant au conseil d’administration d’Alstom, qui a tenu une première réunion vendredi soir et devrait se décider avant l’ouverture de la bourse lundi matin, si les discussions avec Bouygues sont débloquées d’ici là.
Un scénario inverse à celui de 2006
Le projet du gouvernement de racheter 20% d’Alstom à Bouygues constitue le scénario exactement inverse de 2006, quand le groupe de BTP avait repris la part de l’Etat dans le spécialiste des infrastructures de transport et d’énergie.
En avril 2006, Bouygues avait acquis les 21,03% que l’Etat détenait au capital d’Alstom depuis le sauvetage public de celui-ci en juillet 2004. En 2007, la participation de Bouygues avait atteint 25,3%, a ensuite dépassé un temps la barre des 30%, avant de retomber au niveau actuel de 29,4% à l’issue d’une augmentation de capital d’Alstom, fin 2012, que Bouygues n’avait pas suivie à l’époque.
La participation de 20% dans Alstom représenterait 1,7 milliard d’euros, sur la base de la capitalisation boursière actuelle du groupe selon des données Thomson Reuters. En 2006, Bouygues avait racheté la part de l’Etat environ deux milliards d’euros.