(BFW) *BOUYGUES TELECOM CEO: MERGER TALKS FAILED WITH ORANGE, ILIAD

 BN 06/11 14:09 *BOUYGUES TELECOM CEO OLIVIER ROUSSAT SPOKE IN PARIS
 BN 06/11 14:09 *BOUYGUES TEL TO KEEP LOW-PRICE STRATEGY IN FIXED LINE BUSINESS
 BN 06/11 14:09 *BOUYGUES TEL TRIED TO BUY MVNO VIRGIN MOBILE: CEO
 BN 06/11 14:09 *BOUYGUES TEL CEO SAYS ILIAD IS NOT FOR SALE
 BN 06/11 14:09 *BOUYGUES TEL PLAN BASED ON 4 MOBILE CARRIERS IN FRANCE: CEO
 BN 06/11 14:09 *BOUYGUES TEL PLAN BASED ON FUTURE AS `AUTONOMOUS' CO.: CEO
 BN 06/11 14:09 *BOUYGUES TELECOM CEO: MERGER TALKS FAILED WITH ORANGE, ILIAD
*BOUYGUES TELECOM CEO: MERGER TALKS FAILED WITH ORANGE, ILIAD
2014-06-11 14:10:27.391 GMT

--HEATHER BURKE

-0- Jun/11/2014 14:10 GMT

(BFW) *GE SAYS ‘CONSTRUCTIVE DISCUSSIONS’ CONTINUE WITH ALSTOM

 BN 06/11 13:32 *GE COMMENTS IN E-MAILED STATEMENT ON SIEMENS-MITSUBISHI TALKS
 BN 06/11 13:32 *GE `CONFIDENT' ON TALKS ABOUT ALSTOM ASSET ACQUISITION
 BN 06/11 13:32 *GE SAYS `CONSTRUCTIVE DISCUSSIONS' CONTINUE WITH ALSTOM
*GE SAYS ‘CONSTRUCTIVE DISCUSSIONS’ CONTINUE WITH ALSTOM
2014-06-11 13:32:57.273 GMT

--LIBBY SALLABERRY

-0- Jun/11/2014 13:32 GMT

(GS) Media - Havas, Puiblicis, Prosieben, SkyD DMGT, Vivendi, Reed,...

“Show me the money!” improved capital allocation to drive returns

* Multiples high, but better capital allocation creates selective value
After 4.5 years of outperformance, the sector is down 3% ytd relative to the
European market driven partly by I/B/E/S consensus earnings revisions
(-11% for 2014 and -8% for 2015). 1Q14 earnings were lacklustre and
indications for 2Q14 show a slower growth trajectory for an advertising
recovery than expected. Despite a relatively high NTM P/E of 17.3x for the
sector, we still see selective value opportunities as repaired balance sheets
and more disciplined capital allocation should drive improvement in
structural outlooks and returns.

* M&A centre stage in pay TV, but limited elsewhere
In this report, we look more closely at capital deployment as a driver of
future growth and returns. We forecast €15bn of acquisitions in the next
five years, up from €10 bn in the last five, but see the focus as bolt-on
rather than transformational given: (1) integration risks in subsectors with
high personnel costs such as agencies and publishers; (2) ownership
restrictions in free TV; (3) market concentration in several TV and publishing
markets; and (4) blocking economic and voting stakes. We see consolidation
as most likely in European pay TV with BSkyB looking to acquire assets in
Italy and Germany and Mediaset exploring options for its pay TV unit.

* Greater cash returns to increasingly become a focus
With strong FCF conversion and a lack of major M&A opportunities, we
expect cash returns to increasingly become a focus. We forecast buybacks
to double in 2014-18 vs. the last five years and dividends to increase 83%
with overall cash returned as percentage of FCF rising from 46% to 57%.
Of the subsectors, we expect broadcasters to return the most cash.

* Key beneficiaries from uses of cash
We retain a 50% M&A weight in our valuation for SkyD (Buy) and add a
33% weight for Havas, which we upgrade to Buy. We expect greater capital
returns from ProSieben and DMGT (both CL Buy), Publicis (Buy), Vivendi
(NR) and Reed Elsevier (Neutral). We estimate more defensive capital
allocation at Pearson and Lagardere which we downgrade to Sell. Our top
picks remain stocks with several strategic options such as portfolio realignment
(DMGT, Mediaset), capital returns (ProSieben), restructuring
(Solocal) and cost savings (Mediaset).

>>> SAP AG Awarded Contract by Shell for Cloud Services


SAP AG Awarded Contract by Shell for Cloud Services
- Shell has signed a long-term contract to help Shell extend ever more value from its current IT investments and help accelerate its transition to SAP HANA in the cloud. Shell is a longstanding SAP customer and this latest agreement extends the relationship between the two giants through the end of the decade. 
- SAP will embed a team of experts into the Shell organization to work closely together with Shell to extend value from its current SAP environment.

>>> US Gapping down

Gapping down In reaction to disappointing earnings/guidance: BNNY -2%, UNFI -1.5%, I -1.5%, OXM -1.3%.

Select EU financial related names showing weakness: NBG -3.4%, UBS -1.9%, ING -1.8%, SAN -1.3%, DB -1%, BCS -0.9%.

Other news: OREX -15.9% (receives three month extension of FDA NB32 review), PVA -5% (announced proposed private offering of $250 mln of depositary shares representing convertible preferred stock), RCPT -3.7% (filed $150 mln shelf ), CTIC -3.2% (still checking), HLT -2.7% (files for 90 mln share common stock offering by selling shareholders), SN -2.5% (announces offering of 5 mln shares of common stock & private offering of $700 mln in Senior Notes), IDRA -2.3% (still checking), EXC -2.1% (plans to commence concurrent registered offerings of 50 mln shares of its common stock in connection with forward sales agreements and 20 mln equity units), STAY -2% (announced offering of 21 mln paired shares by selling stockholders), BAC -1.1% (settlement negotiations with DoJ hit a roadblock, according to reports), CHL -1.1% (Moody's said China Mobile's investment in True Corp is credit negative), PRAN -1% (seeing continued strength (+20% over past two days)), LLY -0.9% (announces top-line results of Phase III Hepatocellular Carcinoma trial; did not meet its primary endpoint; overall survival favored the CYRAMZA arm but was not statistically significant), DAL -0.8% (German carrier Lufthansa issued profit warning).

Analyst comments: DCIX -1.5% (downgraded to Underweight from Equal weight at Barclay), BA -1.2% (downgraded to Sector Perform at RBC Capital Mkts), BEAV -0.7% (downgraded to Hold from Buy at Jefferies, downgraded to Hold from Buy at Canaccord Genuity), DDD -0.6% (downgraded at Gabelli).