WSJ : Iberdrola to Import Gas From America

Iberdrola to Import Gas From America
Spanish Utility in $5.6 Billion Deal With Cheniere Energy

Spanish utility Iberdrola SA IBE.MC +0.92% and Houston-based Cheniere Energy Inc. LNG +8.94% have reached a nearly $5.6 billion natural-gas deal, as Europe looks to secure energy supplies and the U.S. pushes efforts to export gas amid tensions with Russia.

Supply worries have ratcheted up across the European Union as Russia and the West face off over Ukraine. The Russian state-run OAO Gazprom OGZPY -2.39% provides 30% of Europe's gas, around half of which flows through Ukraine.

Meanwhile, the boom in hydraulic fracturing, or fracking, has raised the prospect of the U.S. becoming a major gas exporter in the next decade. Washington is reviewing some two-dozen projects to export gas.

It will be a while before large volumes of gas from the U.S. start to cross the ocean. There is also no guarantee that Europe can depend on sustained deliveries of gas from the U.S. Over the past few years, Asian buyers have scrambled to import gas, raising prices.

So far, only one project—Cheniere's Sabine Pass export terminal in Louisiana—has received final approval from the U.S. government. It is expected to begin shipping liquefied natural gas, or LNG, by early next year. The Obama administration is also studying whether it should relax decades-old laws restricting oil exports.

Iberdrola's deal for U.S. gas would serve primarily customers in the U..K., plus some in Spain. The 20-year agreement, which starts in 2019, is for delivery of about one billion cubic meters of LNG a year, or enough to supply about 750,000 U.K. homes.

Under the agreement, U.S. natural gas would be liquefied at a plant in Corpus Christi, Texas, and then shipped to a gas import facility at the Isle of Grain in the U.K. Cheniere hasn't made a final investment decision about building the Texas export terminal, but expects to this year.

Cheniere already has deals to supply U.K. utility Centrica CNA.LN -0.21% PLC, oil and gas company BG Group BG.LN -0.29% PLC and French oil major Total SA FP.FR -0.46% from its LNG terminal at Sabine Pass. Spanish utility Endesa SA ELE.MC +0.83% said last month that it had also secured gas from Cheniere's proposed Corpus Christi plant.

>>> US Close Dow+0,11% S&P+0,18% Nasdaq-0,18%

Closing Market Summary: Stocks End May on Mixed Note

The major averages finished the month of May on a mixed note. The S&P 500 added 0.2%, locking in a monthly gain of 2.1%, while the Nasdaq Composite (-0.1%) and Russell 2000 (-0.5%) lagged. The two indices narrowed their monthly gains to 3.1% and 0.8%, respectively.

Outside of the relative weakness among small-cap issues, the Friday session was very quiet as evidenced by the S&P 500 spending the entire trading day in a seven-point range. Similarly, intraday volume was largely in line with yesterday's session, which saw the lowest volume of the year, but today's final tally was boosted by semi-annual MSCI rebalancing. As a result, more than 900 million shares changed hands at the NYSE floor.

Overall, countercyclical sectors fared better than the growth-sensitive side of the market. In fact, all four defensively-oriented sectors—consumer staples (+0.7%), health care (+0.3%), telecom services (+0.3%), and utilities (+0.8%)—outperformed, while five of six cyclical sectors were unable to keep up with the S&P 500. Meanwhile, the financial sector (+0.2%) settled in line with the S&P 500 after spending the bulk of the session just above its flat line.

Interestingly, the health care sector was able to finish among the leaders even as biotechnology followed in the footsteps of the Russell 2000. The iShares Nasdaq Biotechnology ETF (IBB 239.59, -1.37) lost 0.6%. Furthermore, the underperformance of biotech weighed on the Nasdaq, which also had to contend with losses among some top-weighted technology components.

Specifically, the largest Nasdaq component—Apple (AAPL 633.00, -2.38)—shed 0.4%, but it is worth mentioning the decline followed a big rally over the past two weeks. Despite today's loss, the largest tech stock surged 7.3% in May. Outside of Apple, Cisco Systems (CSCO 24.62, -0.06) and Oracle (ORCL 42.02, -0.18) also contributed to the underperformance of the Nasdaq.

Elsewhere, the consumer discretionary sector ended just behind the broader market even as participants received another dose of disappointing earnings from the retail space. Express (EXPR 12.61, -1.02), Guess? (GES 25.50, -1.38), and Pacific Sunwear (PSUN 2.42, -0.52) lost between 5.1% and 17.7% in reaction to below-consensus earnings and/or guidance, while the SPDR S&P Retail ETF (XRT 83.78, +0.34) added 0.4%.

Also of note, today's disparity between small caps and blue chip listings did little to scare investors as evidenced by a 1.2% decline in the CBOE Volatility Index (VIX 11.43, -0.14), which ended the day just a shade above its lowest close of the year.  On the fixed income side, Treasuries alternated between gains and losses, but ultimately settled flat with the 10-yr yield at 2.47%.  

Reviewing today's data:
  • Personal Income increased an in-line 0.3% in April, but consumption fell 0.1% against the 0.2% increase that was expected by the consensus. Once again, the report failed to show any pent-up demand resulting from the severe winter weather. Core PCE prices rose 0.2%, as expected. 
  • The Chicago PMI increased to 65.5 in May from 63.0 in April. The consensus expected the Chicago PMI to fall to 60.3. New order levels accelerated as the related index increased to 70.2 in May from 68.7 in April. That did not translate into stronger production as the index fell to 64.4 in May from 70.5. Instead, much of the new orders growth was marketed for backlogs as that index increased to 61.4 from 54.9. The strength of the backlogs index should support elevated production levels. 
  • The final reading for the May University of Michigan Consumer Sentiment Index increased to 81.9 from 81.8 in the preliminary reading. Consumer sentiment is still down from an 84.1 reading in April. The consensus expected the Consumer Sentiment Index to fall to 81.4. The Current Conditions Index fell to 94.5 in the final May reading from 95.1 in the preliminary reading. The Consumer Expectations Index increased to 73.7 from 73.2.
On Monday, the ISM Index for May and April Construction Spending will be reported at 10:00 ET 

  • S&P 500 +4.1% YTD 
  • Dow Jones Industrial Average +0.9% YTD 
  • Nasdaq Composite +1.6% YTD 
  • Russell 2000 -2.4% YTD 

>>> US Earning Preview - 02/06 - 06/06

* Monday:
Pre Market - CONN, CVGW
After Hours - ZQK, KKD, GWRE, CMCM
* Tuesday:
Pre Market - DG, GIII, AMWD, MEAS
After Hours - ABM, ASNA, MFRM, FCEL, AMBA, RENT, DATE
* Wednesday:
Pre Market - LDSO, BF.B, HOV, IXYS, CYBX
After Hours - PVH, GEF, FIVE, BV, RLD
* Thursday:
Pre Market - NAV, SJM, UTIW, JOY, CIEN, TITN, MIXT, BRLI, NX, VRA, VNCE
After Hours - THO, MTN, PAY, COO, DMND, ALOG, CMTL, ZOES, SEAC, RALY

(MergerMarket) Stryker-Smith & Nephew tie up would face roadblocks, bankers say

Stryker-Smith & Nephew tie up would face roadblocks, bankers say
A tie up between Stryker Corporation (NYSE:SYK) and Smith & Nephew (NYSE:SNN) would face significant regulatory risk, said three industry bankers.

The two medical device companies overlap in the orthopedic implants market, said two of the bankers. Regulatory authorities would take issue with the significant overlaps between the companies, which would be problematic for a deal to clear, added the bankers.

This week the Financial Times reported that Kalamazoo, Michigan-based Stryker was raising debt for a possible bid for Smith & Nephew. Stryker subsequently denied it was planning a bid for the UK company.

The idea of a tie up between the two companies had been floated for a long time in the banking community, said a fourth banker, who added a deal would be highly unlikely. Stryker does not need to do a large deal and has a history of being conservative when it comes to acquisitions, this banker pointed out.

Stryker recently completed several acquisitions, including Berchtold Holding, a provider of healthcare equipment such as surgical tables and surgical lighting systems, Patient Safety Technologies, a healthcare IT company, and Pivot Medical, a maker of products for hip arthroscopy. Berchtold was acquired for USD 172m, Patient Safe for USD 120m and Pivot for an undisclosed sum.

While two of the bankers said they were not aware of an impending debt raise by Stryker, a potential debt raise would not be unusual for a company like Stryker, said one of the bankers. The company has a large portion of its cash offshore and regularly raises debt for corporate purposes such as its quarterly dividend policy, added the banker. Stryker last announced a dividend on 22 April of USD 0.305, which will be payable on 31 July.

On 28 April, the company announced it had priced an offering to sell USD 1bn in notes. The funds were to be used for refinancing of indebtedness, as well as general corporate purposes. The company has USD 2.764bn in debt.

While the orthopedic implant market may not be one in which Stryker would be able to bulk up, the company could buy large assets in other areas, said the second banker. Stryker has a wide strategic focus, the banker noted and could make large buys in adjacent areas. One of the bankers noted that Stryker could make buys in wound care as a way to expand overseas. Stryker has a medical and surgical division, a reconstructive division and a neurotechnology and spine division.

(BN) Samwers’ Rocket Internet Said to Seek $4 Billion Value in IPO

{http://www.rocket-internet.de/}
Samwers’ Rocket Internet Said to Seek $4 Billion Value in IPO
2014-05-30 19:01:26.289 GMT


By Ruth David, Matthew Campbell and Aaron Kirchfeld
     May 30 (Bloomberg) -- Rocket Internet GmbH, the online
startup investor founded by Germany’s Samwer brothers, is
planning an initial public offering that may value the company
at more than 3 billion euros ($4 billion), according to two
people familiar with the situation.
     Rocket is working with Berenberg, JPMorgan Chase & Co. and
Morgan Stanley on a share sale that’s planned for Frankfurt
later this year, the people said, asking not to be identified
discussing a private matter. Berlin-based Rocket, which calls
itself the world’s largest Internet incubator, has investments
in more than 75 companies including online retailer Zalando SE.
     Food-delivery startup Just Eat Plc and King Digital
Entertainment Plc, the creator of Candy Crush games, are among
companies that have gone public this year, even as investors are
cautious about how new businesses will generate profits. The
STOXX 600 Technology Index has fallen this year in an otherwise
rising market.
     Rocket and its ventures have received over 2 billion euros
in external funding, according to Swedish holding company
Investment AB Kinnevik. The Samwer brothers, Alexander, Marc and
Oliver, founded Rocket in 2007.
     “We focus on what’s best for the company and that is
concentrating on our operations, in order to build a business
for the long-term,” said Andreas Winiarski, a spokesman for
Rocket. He declined to comment on a possible IPO.
     Representatives at JPMorgan and Morgan Stanley declined to
comment. A Berenberg spokesman couldn’t immediately be reached
for comment.

                          Cloning Capital

     The Samwer brothers have a model of finding a promising
Internet business in the U.S. and cloning it internationally.
Since starting their first so-called dot-clone in 1999, a German
version of EBay Inc., they’ve duplicated sites such as those of
Airbnb Inc., EHarmony Inc. and Pinterest Inc. Zalando, a
Zappos.com Inc. clone, is also planning an IPO this year, people
familiar with the matter say.
     Rocket starts companies, hires staff and provides
marketing, design and management know-how until the fledgling
company can fend for itself.
     Known for putting Berlin’s startup scene on the map, the
Samwers are also credited for sticking Germany with a reputation
as the copycat capital of Europe. If both Zalando and Rocket go
public this year, they will also revive IPO activity from
Berlin, which hasn’t seen a sizable technology sale since
Hypoport AG in 2007, data compiled by Bloomberg show.

For Related News and Information:
Samwer Brothers Build Startup Scene With Clones of EBay to Fab
NSN M06K520D9L35 <GO>
Top Stories: WTOP<GO>
Top Deal Stories: DTOP<GO>
Bloomberg Industries: BI <GO>
Economic Statistics: ECST <GO>

--With assistance from Christopher Spillane in Johannesburg and
Niklas Magnusson in Stockholm. 

To contact the reporters on this story:
Ruth David in London at +44-20-3525-8095 or
rdavid9@bloomberg.net;
Matthew Campbell in London at +44-20-3525-8684 or
mcampbell39@bloomberg.net;
Aaron Kirchfeld in London at +44-20-3525-8830 or
akirchfeld@bloomberg.net
To contact the editors responsible for this story:
Aaron Kirchfeld at +44-20-3525-8830 or
akirchfeld@bloomberg.net
Mohammed Hadi, James Callan

>>> Allergan, Inc Valeant and Pershing Square increase offer, raise cash compone

Allergan, Inc Valeant and Pershing Square increase offer, raise cash component by $13.70 to $72 and leave stock component at 0.83 shares of Valeant stock (implied deal value of approx $180/shr or about $54B)

Each Allergan share would be exchanged for $72.00 in cash and 0.83 shares of Valeant common stock, based on the fully diluted number of Allergan shares outstanding. This offer is subject to prompt good faith negotiation of a merger agreement between Valeant and Allergan. Shareholders will continue to be able to elect cash and/or Valeant stock, subject to proration. Pershing Square, Allergan's largest shareholder with a 9.7% stake, has agreed to elect only stock consideration in the transaction and exchange their Allergan shares for Valeant shares at a 1.22659 exchange ratio, based on yesterday's closing stock prices of Allergan and Valeant, and receive no cash consideration. New offer maintains contingent Value Right for DARPin of up to $25/shr. > 

Pershing Square will receive $20.75 per share less consideration than other AGN shareholders, providing substantially more value and cash for other AGN stockholders 

Bill Ackman, CEO of Pershing Square said: "Early this morning, I called Mike and offered to give up $600 million of value to the other Allergan shareholders and exchange our shares for Valeant stock if Valeant were prepared to increase its offer to the other Allergan shareholders. We believe that our gesture to the other Allergan owners makes an extraordinarily strong statement about our belief in the long-term value of this highly strategic business combination. We are delighted that Valeant has agreed to step up for the benefit of all Allergan shareholders. We look forward to the Allergan board immediately entering into negotiations with Valeant and finalizing this transaction." 

J. Michael Pearson, Chairman and CEO of Valeant stated: "We believe our revised offer provides enormous value to both Valeant and Allergan shareholders. We strongly believe that applying Valeant's operating philosophy, strategy, and financial discipline to a broader set of durable assets will continue to create substantial returns for shareholders over the short, intermediate, and long term. We are very committed to getting this deal done, and are now modifying our offer with the assistance of Pershing Square to increase the economics for all Allergan shareholders."

WSJ : Valeant Again Boosts Bid for Allergan

Valeant Again Boosts Bid for Allergan
Valeant Has Hinted At Possibility of Hostile Offer

Valeant Pharmaceuticals International Inc. VRX +1.42% again boosted its takeover bid for botox maker Allergan Inc., AGN +6.77% now offering about $53.3 billion in cash and stock, subject to prompt good-faith discussions on a merger agreement.

The revised offer comes two days after Valeant's last bid, which valued Allergan at $49.4 billion. At that time, Valeant Chairman and CEO J. Michael Pearson also hinted at a possible increased offer -- but not until Allergan officials agreed to sit down and negotiate.

The new bid values Allergan at about $179.25 a share and includes the possibility of an additional $25 a share, depending on the future revenue of Allergan's developmental eye-treatment.

Allergan shares had declined in response to Wednesday's raised bid, as analysts were mixed on whether the bump was high enough. The stock climbed in response to the latest offer Friday, but still traded well below the offer price at about $166 a share.

Mr. Pearson has also raised the possibility of a hostile tender offer for Allergan shares or a fight over the company's board. He maintained that Valeant would prefer friendly negotiations and reiterated he wouldn't "overpay" for the deal or offer all-cash.

Valeant has on its side activist investor William Ackman, whose Pershing Square Capital Management LP owns about 9.7% of Allergan and could launch a proxy fight to change Allergan's board.


Pershing Square on Friday said it would take all stock for its position and received $20.75 a share less in overall consideration than the rest of Allergan's shareholders

Earlier this week, Valeant sold the rights to some of its skin-care products in an attempt to smooth the antitrust review process if its takeover bid is successful.

Since Valeant's bid for Allergan was first disclosed in April, the companies have been engaged in a public war of words, with Valeant accusing Allergan's management of spending too freely on research and development and on sales and marketing. Valeant has promised that it would cut the combined company's R&D spending by 69%, to $400 million a year from about $1.3 billion.

Allergan, meanwhile, has warned shareholders that Valeant's cost-cutting would threaten future sales growth for products such as Botox, which is being studied in several new medical indications including depression and juvenile cerebral palsy.

Allergan also has questioned the stability of Valeant's stock price and business model, going so far as to have forensic accountants conduct a review of Valeant's long-term sustainability.

>>> MSCI - Change tonight LVMH, BNP, BARC, ALTICE - Full Report Attached(UBS)

* Largest Constituent Changes
-VESTAS WIND SYSTEMS (VWS DC) Addition 11.58m Shares
-PANDORA (PNDORA DC) Addition 5.38m Shares
-UNITED RENTALS (URI US) Addition 2.12m Shares
-GENWORTH FINANCIAL A (GNW US) Addition 10.90m Shares
-TECHTRONIC INDUSTRIES CO (669 HK) Addition 57.30m Shares
-SPORTS DIRECT INT'L (SPD LN) Addition 13.91m Shares
-BOLLORE (BOL FP) Addition 0.28m Shares

* Largest Buys
-VESTAS WIND SYSTEMS (VWS DC) Addition 11.58m Shares
-LLOYDS BANKING GROUP (LLOY LN) Float & Share Change 351.66m Shares
-PANDORA (PNDORA DC) Addition 5.38m Shares
-LVMH (MC FP) Float & Share Change 1.22m Shares
-ENDO INTERNATIONAL (ENDP US) Addition 3.12m Shares
-BARCLAYS (BARC LN) Float & Share Change 49.14m Shares
-BNP PARIBAS (BNP FP) Float & Share Change 2.90m Shares
-UNITED RENTALS (URI US) Addition 2.12m Shares
-GENWORTH FINANCIAL A (GNW US) Addition 10.90m Shares
-ALTICE (ATC NA) Addition 3.14m Shares

* Largest Sells
-IBM CORP (IBM US) Share Change -0.97m Shares
-SERCO GROUP (SRP LN) Deletion -28.56m Shares
-SCHNEIDER ELECTRIC (SU FP) Float & Share Change -1.63m Shares
-PORTUGAL TELECOM SGPS (PTC PL) Deletion -32.63m Shares
-BP (BP/ LN) Share Change -15.79m Shares
-EXXON MOBIL CORP (XOM US) Share Change -1.22m Shares
-APPLE (AAPL US) Share Change -0.21m Shares
-CGG (CGG FP) Deletion -8.28m Shares
-ROYAL DUTCH SHELL B (RDSB LN) Share Change -2.60m Shares
-CISCO SYSTEMS (CSCO US) Share Change -4.51m Shares