(Exane) Daimler : too soon to sell ?

A Fair Share: Looking beyond the cycle

As Daimler shares edge towards the EUR70 level, is now the right time to head for the exit? We
remain convinced that it’s still too early in either Mercedes’ market share revival or the European
truck cycle to sell now. We stay at Outperform with a target price of EUR80.

* A fair share: Are we still too conservative on Mercedes’ growth potential?
We believe Mercedes is entering a structural growth phase that extends beyond the current
product cycle. Having lost 500bp of global share over the past decade (and 800bp in EU), we
believe a younger customer base, catch-up potential in China and more competitive
product/technology will enable Mercedes to begin to claw back market share. However our (&
consensus) estimates assume a barely flat share through to 2018. Clawing back 50% of lost share
could boost our Mercedes long-term EBIT by c.20%. In the shorter-term, we expect Mercedes
pricing to surprise positively as its takes back the product age crown that BMW has held for the
past 5 years.

* Operating leverage concerns misplaced: Q2 should ease concerns
A strong top-line seems a safe assumption. But what about the drop through to margins? The
bears made much of this at Q1, missing the point that Mercedes already delivered in Q1 nearly
50% of the entire EBIT delta we forecast for the FY in Mercedes. As the C and GLA contribution
kicks in from Q2, we expect a steady uptick in Mercedes margins towards 9% by Q4. Meanwhile
small but significant actions by management in recent months to trim the cost base (e.g. sales
network, RRPSH, EADS) bode well for future capital efficiency in our view.

* Valuation still attracts – we still see 15% upside to our EUR80 TP
That leaves valuation as the final piece of the equation. Here too we are still comfortable with the
Daimler case. At 9.8x P/E 15e and 50% EV/Sales, Daimler trades at a c.10% discount to its historic
average, despite offering up an EPS CAGR of 14% over 2013–16e. And while optically Daimler
trades in line with BMW on EV/Sales, excluding trucks (at a Volvo multiple), we calculate Daimler is
trading at a 20% discount to BMW. We value Daimler at EUR80 on a 2015 SOP.

(BFW) Buy Man, Numeric Holding Deal May Be Turning Point, Panmure Says

Buy Man, Numeric Holding Deal May Be Turning Point, Panmure Says
2014-05-29 07:15:14.210 GMT


By Gaurav Panchal
     May 29 (Bloomberg) -- Man Group could boost profit by
GBP40m if rev. yield was 1% and Numeric Holding made 30%
operating margin, Panmure says after co. confirms it is in talks
about a deal.
**Says acquiring its way out of a tight corner is the right
thing for Man Group to do
**Man Group had excess capital of $1b at Dec. 13 so this would
be paid for in cash: Panmure
  * RBC says transaction would be all-cash, no shares due to
    large cash balance at Man; cash transactions are highly
    accretive
    * This deal would further diversify Man away from AHL, is
      consistent with Man’s strategy to acquire a US-based
      asset manager



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

To contact the reporter on this story:
Gaurav Panchal in London at +44-20-7392-0511 or
gpanchal2@bloomberg.net
Roger Neill

WSJ : Nixed Mergers Slow to Pre-Recession Pace

Nixed Mergers Slow to Pre-Recession Pace

Pfizer Inc.PFE 0.00%’s fizzled mega-offer for British rival AstraZenecaAZN.LN 0.00% PLC aside, canceled deal offers are running at their lowest level since 2006, according to data tracker Dealogic.

Through Wednesday, 284 global deal offers were withdrawn by the prospective acquirer or rejected by the proposed target so far this year, Dealogic said. This puts the number on pace for 700 on the year, which would be roughly in line with the number of unravelings in 2006.

From 1995 through 2013, scuttled and spurned offers have averaged just over 800 per year. The recent peak was 1,441 during the recession six years ago.

From 2008 through 2012, an average of more than 1,200 offers per year failed to come to fruition, before the numbers fell to more in line with the recent historical average last year.

Other recent, high-profile mergers that remain on the table include Apple Inc.’s purchase of high-end headphone maker Beats Electronics LLC, Comcast Corp.CMCSA -0.40%’s pending purchase of Time Warner Cable Inc.TWC -0.21% and AT&T Inc.T +0.37%’s planned takeover of DirecTVDTV -0.54%.

However, in addition to Pfizer’s failed bid for AstraZeneca, Publicis Group SAPUB.FR +0.75% and Omnicom Group Inc.OMC +0.84% called off their merger earlier this month after the management teams couldn’t agree who would run the combined advertising company for the long haul. Meanwhile, General Electric Co.GE +0.34% is trying to convince the French government of the merits of its $17 billion bid for Alstom SAALO.FR +1.06%’s power equipment business.

(BFW) EU Autos Slow Recovery On Track: JPM; Daimler Has Upside: Exane

EU Autos Slow Recovery On Track: JPM; Daimler Has Upside: Exane
2014-05-29 07:06:57.695 GMT


By Brian Lysaght
     May 29 (Bloomberg) -- European auto market recovery is
“slowly materializing,” with discounts stabilizing at high
level in Europe and falling for premium brands in China,
JPMorgan says.
  * Car order index rising slowly in Europe
    * Prefer suppliers (Valeo, Faurecia, Pirelli) to carmakers
    * Daimler to deliver sequential margin improvement next 3
      qtrs; VW is best volume carmaker for recovery: JPM
  * Exane says it’s too early to sell Daimler, shares have 15%
    upside to PT EU80; reiterated outperform
    * 2Q results should ease concerns of bears about margins;
      expect a steady increase in Mercedes margins to 9% by 4Q
    * Trades on 9.8x 2015e P/E, ~10% historic discount

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(NY Post) Apple’s acquisition of Beats could shake up music biz

Apple’s acquisition of Beats could shake up music biz

Apple’s $3 billion purchase of Beats Electronics could reinvigorate the tech titan — and shake up the music industry by boosting valuations of some companies, one music industry heavyweight told The Post.
The sale of Beats, co-founded by Jimmy Iovine and Dr. Dre, will form “a bridge between Apple and the music industry and help align their interests in getting behind subscription streaming in a big way,” according to Sony Music CEO Doug Morris.
“[Jimmy’s] dream is to take streaming music global and he created an enormously successful company” with Dr. Dre, Morris said in an interview Wednesday after Apple announced its purchase of Beats.
The announcement said both Iovine and Dr. Dre will join Apple’s payroll.
“I hope you are as excited as I am about this new chapter in our history,” Apple CEO Tim Cook said in a memo to employees.
The memo confirmed The Post’s exclusive story on Tuesday that the deal would come in at $3 billion and be announced this week.
Apple will shell out $2.6 billion cash — with an additional $400 million to vest over time.
“They made Apple look cool,” noted Morris, something even Apple seemed to acknowledge in its release. Apple gave props to the team’s ability to get Beats headphones into the heart of pop culture in under five years, noting that customized versions of the headphones have been created by Lady Gaga, Lil Wayne and Nicki Minaj.
“This is going to cause a lot of excitement and re-evaluation of record companies. It’s a rebirth of the record business,” said Morris, a good friend of Iovine, who first brought the music mogul’s Interscope label to Universal in the 1980s.
“I realized [Jimmy] is one of a few special people and gave him the opportunity, and that’s where Beats came from,” added Morris commenting on his friendship. “He’s now my richest friend.”
Iovine was one of the original supporters of Apple’s iTunes store and was friendly with the late Apple founder Steve Jobs.
Iovine, 61, is the chairman of Universal Music Group’s Interscope Geffen A&M.
After Morris led Universal’s investment in Beats, it was retained and nurtured by UMG Chairman and CEO Lucian Grainge through a variety of possible buy-out scenarios from HTC and Sony Electronics, among others.
“Based on mutual trust and respect, UMG’s singular relationship with Jimmy permitted his innovation to flourish in all these ways,” Grainge said in a statement.
Iovine, who held a 25 percent stake in Beats, is now worth $970 million, according to Forbes. Dr. Dre is worth up to $800 million.

>>> What to look a today - 29/05/2014

US Market Closed Slightly lower on light volume with 621mil shares, Retail was in focus after, Brown Shoe (BWS 29.34, +2.90), and Michael Kors (KORS 97.01, +1.27) posted respective gains of 10.8% and 1.3% after beating earnings estimates, whileChico's FAS (CHS 15.14, -0.47) missed estimates. The stock fell 3.0%, while the overall industry group did not fare much better. The SPDR S&P Retail ETF (XRT 82.93, -0.77) lost 0.9%, homebuilders displayed intraday strength following above-consensus quarterly results from Toll Brothers (TOL 36.38, +0.74). Shares of TOL jumped 2.1%, while the iShares Dow Jones US Home Construction ETF (ITB 24.03, -0.04) surrendered its modest gain just ahead of the close...Japan retail sales registered their biggest annual decline in over 3 years, as both m/m and y/y figures missed estimates. Note that this is the first reporting month of data since consumption tax went up to 8% from 5% on April 1st. Former BOJ Dissenter (Shirai) said confident central bank to achieve its inflation target in next 2y, easing will continue FY15/16...Nikkei +0.01% HS+0.25% Shanghai -0.18%


Eur$ 1.3602 S&P Fut +0.10% European Fut. Unch FTSE +0.13% CAC+0.02%

Macro
- European Companies Scale Back China Expansion Plans, Group Says
- Almost One-Third of World’s Population Is Overweight {NSN N6ARUR6S972H <go>}

Keep an eye on :
- AGK LN : Aggreko Names Centrica's British Gas Head Chris Weston as CEO
- AZA IM : Etihad Board Approves Deal With Alitalia, Messaggero Reports
- BKIA SM : Fortress to Bid For Bankia, FCC Stake in Realia, Expansion Says
- BKIA SM : Spain Prepares to Sell Further 11% of Bankia, Confidencial Says
- CNA LN : Centrica International’s Weston in Talks to Leave, in Advanced Talks to Name Conn CEO: Sky News
- DBK GY : Deutsche Bank Preparing for Fines in Forex Probe: Reuters
- DTE GY : Softbank CEO talking about acquisition - SPrint bit for T-Mobile is still on the play
- KGF LN : Kingfisher 1Q Retail Profit GBP142m; Est. GBP152m
- EMG LN : Man Group Says in Talks to Buy Numeric Holdings
- NOVN VX : Italy Confirms Seeking EU1.2B Damages From Roche, Novartis Denies Allegations of Italy Anti-Competitive Practice
- PAH3 GY : Porsche Checks for Potential Flaws in Macan Brake Boosters
- PRS SM : Prisa Says Rights on New Class A Shrs to Start Trading May 31
- REP SM : Repsol to Pay Extraordinary Dividend in Cash on June 6
- RLIA SM : Realia to receive offer from Fortress
- ROG VX : Italy Confirms Seeking EU1.2B Damages From Roche, Novartis, Roche Disagrees With Italian Demand for Damages
- UBI FP : Ubisoft Says Watch Dogs Sets Co. Record for First-Day Sales
- UBSN VX : UBS May Assess Acquisition Opportunities in Wealth Management
- VOD LN : Softbank Corp CEO: Softbank needs to gain more scale and does want to buy another company - Recode conf- Consumers in the US paying 10x more for broadband, despite 10x slower speeds than Japan - Vodafone was mentionned as a target
- YOOX IM : Yoox Stays a Most Favored Italian Stock Despite Drop, High P/E