FT : Banks ready to sell HeidelbergCement's bricks unit

Banks ready to sell HeidelbergCement's bricks unit

An improving US housing market is lifting materials makers as far as Germany.

HeidelbergCement is preparing to sell its bricks and construction materials business as it looks to cash in on revitalised building activity in the US and Europe with a deal that comes at a time of widespread change in the global construction industry, M&A correspondents Ed Hammond and Arash Massoudi report.

The German materials conglomorate has interviewed banks in recent weeks to run the sale of its Building Products division, according to several people familiar with the matter, with an eye to taking the business to market this summer.

The division, which generates annual sales of about $1.4bn, is expected to be priced at between $1.5-$2bn.

The exact portfolio of assets Heildelberg intends to sell has not yet been determined, according to sources, so the end value of any sale could vary, however.

A spokesperson for Heidelberg could not immediately be reached for comment.

RTR - Siemens and Mitsubishi finalise Alstom offer

Siemens and Mitsubishi finalise Alstom offer

(Reuters) - Germany's Siemens (SIEGn.DE) and Japan's Mitsubishi Heavy Industries (7011.T) are putting the finishing touches on a joint offer for Alstom's (ALSO.PA) turbine businesses that includes a cash element of roughly 9 billion euros (7.1 billion pounds), sources close to the bidders said.

Under the complex offer, Siemens would acquire the gas turbines business of Alstom while Mitsubishi would inject cash and industrial assets into a joint venture in steam turbines, the sources said.

As part of the deal, Mitsubishi and the French government would take stakes in Alstom, acquiring a portion of the shares currently held by French group Bouygues (BOUY.PA), one source close to the matter specified.

Alstom would keep control of its energy transmission and renewables activities, which would not be part of the Siemens-Mitsubishi bid.

In a second step that one source described as "completely independent" of the turbines deal, Siemens and Alstom would combine their rail activities.

It is still unclear what stakes the two firms would have in this business. If the French government took a stake, one senior source said Berlin would also consider buying shares in order to stay at "eye level" with Paris in a group combining the high-speed ICE and TGV train activities of Siemens and Alstom.

"What is being discussed is an industrial and commercial partnership in turbines," one source familiar with the matter told Reuters. "But it's not enough for a deal to make sense on paper. You need to see the stars align."

Two separate sources said Siemens and Mitsubishi would be offering about 9 billion euros in cash under the turbines offer. That compares to the 12.35 billion euros ($16.9 billion) offered by U.S. conglomerate General Electric (GE.N) for all of Alstom's energy assets, including turbines, renewables and grid operations.

"The offer can't be compared with that of GE as they're so different in nature," another source close to Mitsubishi said.

Siemens, Alstom and Mitsubishi all declined comment.

UNWIELDY HOLDING

Under the proposed offer, which is expected to be rubber stamped by the supervisory board of Siemens on Sunday evening, Alstom would have a future in the energy business and be at the centre of a European rail champion -- both potentially attractive prospects for the French government.

"GE could still win a deal but for that they would have to do what the French government wants, in other words come up with an alliance rather than a buyout," the source close to the matter said.

But the complex proposal would also turn Alstom into an unwieldy holding company, with myriad stakes in disparate businesses. That may ultimately make it difficult for Siemens and Mitsubishi to convince Paris that its deal is a jobs creator.

When GE Chief Executive Jeff Immelt met with French President Francois Hollande last month, he promised to create 1,000 new engineering and manufacturing jobs within three years, according to sources close to the talks.

French Economy Minister Arnaud Montebourg reiterated in a newspaper interview on Friday that he favoured an alliance that preserved Alstom's identity, industrial sites, decision centres and jobs.

(FP) The Battle for Iraq Is a Saudi War on Iran

The Battle for Iraq Is a Saudi War on Iran
Why the ISIS invasion of Iraq is really a war between Shiites and Sunnis for control of the Middle East.

"Be careful what you wish for" could have been, and perhaps should have been, Washington's advice to Saudi Arabia and other Gulf states that have been supporting Sunni jihadists against Bashar al-Assad's regime in Damascus. The warning is even more appropriate today as the bloodthirsty fighters of the Islamic State of Iraq and al-Sham (ISIS) sweep through northwest Iraq, prompting hundreds of thousands of their Sunni coreligionists to flee and creating panic in Iraq's Shiite heartland around Baghdad, whose population senses, correctly, that it will be shown no mercy if the ISIS motorcades are not stopped.
Such a setback for Iraqi Prime Minister Nouri al-Maliki has been the dream of Saudi Arabia's King Abdullah for years. He has regarded Maliki as little more than an Iranian stooge, refusing to send an ambassador to Baghdad and instead encouraging his fellow rulers of the Gulf Cooperation Council (GCC) -- Kuwait, Bahrain, Qatar, the United Arab Emirates, and Oman -- to take a similar standoff-ish approach. Although vulnerable to al Qaeda-types at home, these countries (particularly Kuwait and Qatar) have often turned a blind eye to their citizens funding radical groups like Jabhat al-Nusra, one of the most active Islamist groups opposed to Assad in Syria.
Currently on vacation in Morocco, King Abdullah has so far been silent on these developments. At 90-plus years old, he has shown no wish to join the Twitter generation, but the developments on the ground could well prompt him to cut short his stay and return home. He has no doubt realized that -- with his policy of delivering a strategic setback to Iran by orchestrating the overthrow of Assad in Damascus showing little sign of any imminent success -- events in Iraq offer a new opportunity.
This perspective may well confuse many observers. In recent weeks, there has been a flurry of reports of an emerging -- albeit reluctant -- diplomatic rapprochement between the Saudi-led GCC and Iran, bolstered by the apparently drunken visit to Tehran by the emir of Kuwait, and visits by trade delegations and commerce ministers in one direction or the other. This is despite evidence supporting the contrary view, including Saudi Arabia's first public display of Chinese missiles capable of hitting Tehran and the UAE's announcement of the introduction of military conscription for the country's youth.
The merit, if such a word can be used, of the carnage in Iraq is that at least it offers clarity. There are tribal overlays and rival national identities at play, but the dominant tension is the religious difference between majority Sunni and minority Shiite Islam. This region-wide phenomenon is taken to extremes by the likes of ISIS, which also likely sees its action in Iraq as countering Maliki's support for Assad.

ISIS is a ruthless killing machine, taking Sunni contempt for Shiites to its logical, and bloody, extreme. The Saudi monarch may be more careful to avoid direct religious insults than many other of his brethren, but contempt for Shiites no doubt underpinned his WikilLeaked comment about "cutting off the head of the snake," meaning the clerical regime in Tehran. (Prejudice is an equal-opportunity avocation in the Middle East: Iraqi government officials have been known to ask Iraqis whether they are Sunni or Shiite before deciding how to treat them.)
Despite the attempts of many, especially in Washington, to write him off, King Abdullah remains feisty, though helped occasionally by gasps of oxygen -- as when President Barack Obama met him in March and photos emerged of breathing tubes inserted in his nostrils. When Sheikh Mohammed bin Zayed, the crown prince of Abu Dhabi -- and, after his elder brother's recent stroke, the effective ruler of the UAE -- visited King Abdullah on June 4, the Saudi monarch was shown gesticulating with both hands. The subject under discussion was not revealed, but since Zayed was on his way to Cairo it was probably the election success of Egypt's new president, Abdel Fattah al-Sisi, considered a stabilizing force by Riyadh and Abu Dhabi. Of course, Sisi gets extra points for being anti-Muslim Brotherhood, a group whose Islamist credentials are at odds with the inherited privileges of Arab monarchies. For the moment, Abdullah, Zayed, and Sisi are the three main leaders of the Arab world. Indeed, the future path of the Arab countries could well depend on these men (and whomever succeeds King Abdullah).
For those confused by the divisions in the Arab world and who find the metric of "the enemy of my enemy is my friend" to be of limited utility, it is important to note that the Sunni/Shiite divide coincides, at least approximately, with the division between the Arab and Persian worlds. In geopolitical terms, Iraq is at the nexus of these worlds -- majority Shiite but ethnically Arab. There is an additional and often confusing dimension, although one that's historically central to Saudi policy: A willingness to support radical Sunnis abroad while containing their activities at home. Hence Riyadh's arms-length support for Osama bin Laden when he was leading jihadists in Soviet-controlled Afghanistan, and tolerance for jihadists in Chechnya, Bosnia, and Syria.
When the revolt against Assad grew in 2011 -- and Riyadh's concern at Iran's nuclear program mounted -- Saudi intelligence reopened its playbook and started supporting the Sunni opposition, particularly its more radical elements, a strategy guided by its intelligence chief, former ambassador to Washington, Prince Bandar bin Sultan. The operation's leadership changed in April, when Bandar resigned in apparent frustration over dealing with the cautious approach of the Obama administration, but Saudi support for jihadi fighters appears to be continuing. (The ISIS operation in Iraq almost seems the sort of tactical surprise that Bandar could have dreamt up, but there is no actual evidence.)
In the fast-moving battle that is now consuming northern Iraq, there are many variables. For Washington, the option of inaction has to be balanced by the fate of the estimated 20,000 American civilians still left in the country (even though the U.S. military is long-departed). Qatar, the region's opportunist, is likely balancing its options of irritating its regional rival, Saudi Arabia, while trying not to poke the Iranian bear. There are no overt Qatari fingerprints yet visible and Sheikh Tamim bin Hamad al-Thani, just celebrating his first full year in power after his father's abdication in 2013, may be chastened by the public scolding he received from the rest of the GCC after he was accused of interference in the domestic affairs of his brother rulers. Additionally, Doha may be cautious in risking Iran's ire by an adventure in Iraq. Having just given five Taliban leaders refuge as part of the Bowe Bergdahl swap, Qatar has effectively clearly stated where it lies in the Sunni-Shiite divide.
There is a potentially important historical precedent to Saudi Arabia's current dilemma of rooting for ISIS but not wanting its advances to threaten the kingdom. In the 1920s, the religious fanatic Ikhwan fighters who were helping Ibn Saud to conquer Arabia were also threatening the British protectorates of Iraq and Transjordan. Ibn Saud, the father of the current Saudi king, gave carte blanche to the British to massacre the Ikhwan with machine-gun equipped biplanes, personally leading his own forces to finish the job, when the Ikhwan threatened him at the battle of Sabilla in 1929.
It's hard to imagine such a neat ending to the chaos evolving in the Euphrates river valley. At this stage, a direct confrontation between Saudi and Iranian forces seems very unlikely, even though, as in Syria, the direct involvement of the Iranian Revolutionary Guard Corps cannot be ruled out. What is clear that the Syrian civil war looks like it will be joined by an Iraqi civil war. ISIS already has a name for the territory, the al-Sham caliphate. Washington may need to find its own name for the new area, as well as a policy.

Express Channeling J. Crew Implies at Least 67% Buyout Premium

+------------------------------------------------------------------------------+

Express Channeling J. Crew Implies at Least 67% Buyout Premium 2014-06-13 16:50:37.797 GMT

By Tara Lachapelle June 13 (Bloomberg) -- Here’s what Express Inc. would look like strutting in J. Crew Group Inc.’s buyout shoes. Express, the clothing retailer targeting shoppers in their 20s, would be valued at $23 to $27 a share in a sale based on similar retail buyouts in recent history. That implies a premium of at least 67 percent. Private-equity firm Sycamore Partners, which took Hot Topic Inc. private last year, said yesterday that it’s interested in acquiring the 90.1 percent of Express that it doesn’t already own. The company had a market value of $1.14 billion as of yesterday and a $51 million net cash position as of last month. Buyers of U.S. clothing retailers in the past five years paid a median valuation of 9.3 times trailing 12-month earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg based on transactions larger than $500 million. That multiple would result in a takeover price of about $27 a share for Columbus, Ohio-based Express, giving it an enterprise value of $2.2 billion including Sycamore’s stake. Comparable transactions include the Hot Topic buyout, as well as deals for J. Crew Group Inc., Rue21 Inc. and Charming Shoppes Inc. The apparel chains were sold at a median 13 percent discount to trailing 12-month sales, data compiled by Bloomberg show. That suggests a slightly lower offer of about $23 a share for Express. Express’s stock rose 20 percent to $16.32 as of 12:41 p.m. New York time today, signaling investors expect to get bought out for at least that much. A deal at $23 a share would be a 67 percent premium to its average price in the 20 trading days through yesterday. On average, analysts estimate the shares will trade for only about $16 apiece in a year if the company isn’t acquired, data compiled by Bloomberg show. Leveraged buyouts have lost their popularity in the past year as U.S. stock indexes reached records. A Bloomberg News analysis found that public-to-private LBOs were just 6 percent of all U.S. private-equity deals this year through April, compared with an average of 50 percent over 10 years.

For Related News and Information: Express Soars After Sycamore Says It Plans Takeover Offer NSN N73VNO6JIJUQ<GO> Express Tumbles as It Cuts Forecast, Plans to Close Stores NSN N6EM6Y6TTDSB <GO> Carlyle to TPG Grab Discarded Company Assets as LBOs Slump NSN N5O3GM6S972J<GO> Express acquisition news: EXPR US <equity> TCNI MNA <GO> Real M&A columns: NI REALMNA <GO> Top deal stories of the day: DTOP <GO>

To contact the reporter on this story: Tara Lachapelle in New York at +1-212-617-8911 or tlachapelle@bloomberg.net To contact the editors responsible for this story: Beth Williams at +1-212-617-2307 or bewilliams@bloomberg.net Whitney Kisling

(BFW) Italy Said to Weigh Public Backstop for Banks Before Stress Test


 BN 06/13 14:54 Italy Said to Weigh Public Backstop for Banks Before Stress Test

Italy Said to Weigh Public Backstop for Banks Before Stress Test
2014-06-13 14:56:29.821 GMT


By Andrew Frye and Lorenzo Totaro
     June 13 (Bloomberg) -- The Italian government is
considering options for a public backstop to cover potential
shortfalls in bank capital ahead of European stress tests in
October, two people with knowledge of the plan said.
  * Officials are considering multiple options, said the two
    people who declined to be named because the review is
    private.
  * The government may set up a fully financed pool that would
    be ready for use immediately or draw up the legal framework
    without raising funds, said one of the people
  * The government may also opt to do nothing, the person said
  * Filippo Sensi, spokesman for Prime Minister Matteo Renzi,
    didn’t return a call and a text message seeking comment

Story Link:NSN N744306JIJUV<GO>

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporters on this story:
Andrew Frye in Rome at +39-06-4520-6322 or
afrye@bloomberg.net;
Lorenzo Totaro in Rome at +39-06-45206326 or
ltotaro@bloomberg.net
To contact the editors responsible for this story:
Brian Swint at +44-20-7073-3444 or
bswint@bloomberg.net