FT : Stryker readies bid for UK's Smith & Nephew

Stryker, the US medical device maker, is preparing a takeover bid for UK rival Smith & Nephew, in what would be the latest multi-billion dollar healthcare deal to hit the market this year.

Stryker, which makes hip implants and knee replacements, has hired banks and is working on assembling finance for the bid, according to people familiar with the matter.

The process is at an early stage and the exact value Stryker is putting on Smith & Nephew could not be ascertained. However, any offer would likely be some way above the London-based group's £8.53bn market value, report the FT's Ed Hammond, Neil Hume and Andrew Ward.

An acquisition of Smith & Nephew would cut Stryker's tax bill using a so-called "inversion", under which a US company uses an overseas takeover to relocate its headquarters, thus avoiding US corporate tax obligations.

To qualify for an inversion, Styker, which has a market value of $30.5bn, would need to fund a large part of the deal with stock.

The medical device sector has already seen one blockbuster transaction this year. In April, Zimmer, the maker of the eponymous walking frame, agreed to acquire Biomet for $13.35bn.

Smith & Nephew has also been involved in its own dealmaking, with the announcement in February of a $1.7bn agreed takeover of AthroCare, a Texas-based medical devices company.

Consolidation in the healthcare sector is being driven reflects pressure to increase competitiveness as governments and healthcare providers try to ratchet down prices. Other big players in the medical devices market include Johnson & Johnson of the US.

Under the leadership of Olivier Bohuon, chief executive, Smith & Nephew has been diversifying into faster-growing businesses to offset sluggish demand for its replacement hip and knee joints.

Stryker did not immediately respond to request for comment. Smith & Nephew declined to comment.

The company's shares have jumped 14 per cent on the news a bid may be in the offing, to £10.85.

Fwd:>>> Buy Marks& Spencer Sell Ahold - Follow Up on trade idea

I still have 25% of the position left and I will use the move today to close this position as the spread is up 10% since we opened the position.
Thanks
Laurent
From: LAURENT CHEKROUN () At: May 13 2014 16:11:00
To: LAURENT CHEKROUN ()
Subject: Fwd:>>> Buy Marks& Spencer Sell Ahold - Follow Up on trade idea
The spread is up another 2% today, the strategy is up 6.15% net since set up I will take profit on half of what is left and will keep the balance because looks like there is some more upside...I put a stop on the last part of the trade at 5% perf ie 32.46 on the ratio.

----- Original Message -----
From: LAURENT CHEKROUN ()
To: LAURENT CHEKROUN ()
At: Apr 25 2014 10:49:16

Spread is up 4.9% since recommendation - I will take profit on half of the position.
Laurent

----- Original Message -----
From: LAURENT CHEKROUN ()
To: LAURENT CHEKROUN ()
At: Apr 22 2014 15:58:58

The spread is +4% since we set up on thursday....continue to think that there is some decent potential on this one.

we initiated @ 30.90 (Ratio), trading now @ 32.15 (4% higher), will start to unwind @ 34 (+10%)

Laurent

----- Original Message -----
From: LAURENT CHEKROUN ()
At: Apr 17 2014 12:22:05

{MKS LN Equity AH NA Equity GRT D <GO>}

* Marks & Spencer
- Company pulished on the 10/04 and was weak because of misunderstanding on Q4 Gross Margin Weakness, Company is expected to publish FY on the 20th of May...but numbers have been adjusted now
- M&S generak merchamfise should continue to head in the good direction, food is quite isolated from a branded food price war
- Strong execution from management and potential cash return could help the stock to rebound
- Historically MKS is trading with a 20% to UK Market P/E, trading only with 5% now

* Ahold
- Since Last publication on 27th of Feb stock outperformed the SXRP by 7%, publication can justify that move but there is no clear reason on fumdamentals
- weak LFL sales growth in the US (-2.1%) and in the Netherlands (-1.0%),
- Risk of stiffer competition and margin rebasing in the Dutch market (more powerful competitors, with in particular Jumbo)
- Still no real signs of pick-up in volumes or food inflation in the US
- It looks fully valued to us – trading at a 2014e P/E ratio of 13.7x vs 12.8x for peers

* The spread is trading on bery low historical levels - we can see a quick reversal, historical lows (-3.3% / 29.86 )
MKS 410 levels appear to be a strong support, stock can trade quickly to 460/470 levles
AH : 14 levels are a strong resistance, could see stock trading back on support 200d MA on 13 levels

BUY MKS SELL AHOLD

>>> Michael Kors on Conference Call

Michael Kors on Conference Call  

Higher SG&A due to higher retail occupancy, higher distribution cost, increased marketing expense, and increase in employee related costs...

Seeing an increase in brand awareness globally and has opportunity to expand it even further in coming quarters.... saw very healthy growth across all segments and geographies....

500 new shops globally this year... momentum building in jewelry business; focus on expanding watch and jewelry offerings... new fragrance and beauty collection performing well; will continue global roll out of this collection; plan on being a global player in this segment.

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: DSW -17%, GOMO -11.3%,CRMT -11.2%, WTSL -9.9%, DAKT -5.3%, BCRX -3.9% (discloses financial outlook for 2014: Sees FY14 operating expenses in upper half of previously announced range of $48-59 mln).

M&A news: VRX -0.3% (Valeant Pharma to sell filler and toxin assets to Nestle for $1.4 billion; VRX increases merger proposal For AGN).

Select drug/biotech name showing weakness: GSK -1.6% ( Independent discusses rumors that GlaxoSmithKline may make GBP 1 bln bid for Ariad), MRK-1%, AZN -0.8% (Barron's positive on PFE after dropping AZN bid), TEVA -0.4%.

Select metals/mining stocks trading lower: RIO -1.4%, BBL -1.2%, AU -1.2%,BHP -0.7%.

Other news: ACUR -26.2% ( announces the FDA advised that data from co's AVERSION hydrocodone bitartrate with acetaminophen product candidate are insufficient to support an intranasal abuse deterrence claim), DDD -5% (is offering 5,950,000 shares of its common stock in an underwritten public offering.), MNKD-4.4% (still checking), CACH -3.3% (commences $14 mln public offering of common stock), BEE -3% (announces offering of 34 mln shares of common stock; announced that it has signed an agreement to acquire the remaining 63.6 percent ownership interest in the 757-room Hotel del Coronado for $210 mln), BCRX -2.9% (commences $100 mln public offering of common stock), BXE -2.9% (announces $250 mln bought deal financing of 25.65 mln common shares at $9.75 per share; increases FY14 CapEx budget and exit guidance), CRI -2.3% (still looking around), HCN -2.2% (announces its anticipated second quarter 2014 acquisition pipeline of ~ $414 million; announces 12 mln share common stock offering), DYAX-2% (following 28% move higher yesterday--boosted by BCRX read-thru; confirmed enrollment in trial this morning), DEO -1.5% (still checking; initiated with a Hold at Kepler), BKD -0.9% (announces secondary offering of 19.4 mln common shares by certain affiliates of Fortress Investment Group), SSYS -0.3% (following DDD offering).

Analyst comments: LOW -0.6% (Lowe's downgraded to Sell from Hold at Canaccord)

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: FORM +7.8%, QIHU +5.7%, TOL+3.5%, KORS +3.3%, WDAY +2.3%, SDRL +0.9%.

M&A news: AGN +2.4% (VRX increases merger proposal FORAGN).

Other news: SPEX +22.2% (continued momentum), PRAN +5.3% (continued strength), POWR +2.7% (Becker Drapkin Management discloses 8.8% active stake in 13D filing), LEJU +2.5% (Tencent Holdings discloses 16.1% active stake in 13D filing), CLVS +2.4% (following 9% move lower yesterday), SPPI +2.3% (completes enrollment in Phase 2 Trial of SPI-2012; Spectrum expects to make a Phase 3 Go/No-Go decision before the end of the year), FEYE +2.2% (still checking), PPC+1.9% (Pilgrim's Pride (PPC) may raise offer for HSH to $50/share, analysts say, according to Bloomberg real M&A column), ARIA +1.7% ( Independent discusses rumors that GlaxoSmithKline (GSK) may make GBP 1 bln bid for Ariad; ARIA also confirms will present at upcoming investor conferences), JDSU +1.6% (announces $100 mln common stock repurchase program), KBH +1.6% (following TOL results),RBS +1.4% (plans to cut mortgage business in the United states by 2/3, according to reports ), ANH +1.3% (Board of Directors authorizes co to acquire up to an additional 10 mln shares of the co's common stock through its share repurchase program), CERN +0.9% (increases share repurchase program by $100 mln), SPWR+0.7% (SunPower and Xcel Energy to Build 50-Megawatt Solar Power Plant in Colorado), GOOG +0.7% (in the process of developing prototype for self driving car, according to reports), RYN +0.5% (approves separation of Rayonier Advanced Materials; declares special dividend distribution of all outstanding shares of Rayonier Advanced Materials common stock to Rayonier's shareholders ), AAPL+0.4% (Apple and NTT DOCOMO to offer iPad in Japan starting on Tuesday, June 10; plans to decrease Beats purchase price to $3 bln from $3.2 bln, according to reports ; tgt raised to $655 from $590 at Barclays; maintain Equal Weight), CRM+0.3% (following WDAY results), URBN +0.3% (announces authorization to repurchase 10 mln shares), PFE +0.3% ( following positive Barron's mention),YHOO +0.2% (Microsoft does not plan to sell search to Yahoo (YHOO), according to reports ).

Analyst comments: TI +4.5% ( added to Conviction Buy List at Goldman), VEEV+4.3% (initiated with an Overweight at JPMorgan), FCEL +4% (resumed with a Buy at Stifel; tgt $2.90), TWTR +2.9% (upgraded to Buy from Neutral at Nomura), GTAT+2.2% (resumed with a Buy at Stifel), RKUS +1.1% ( initiated with an Outperform at BMO Capital Mkts), FSLR +0.5% (resumed with a Buy at Stifel)

>>> US Early premarket gappers

Early premarket gappers

Gapping up: SPEX +34.7%, FORM +7.8%, QIHU +7.2%, TOL +6.6%, WDAY +4.5%, POWR +2.7%, LEJU +2.5%, CLVS +2.4%, AGN +2.4%, JD +2.3%, FEYE +2.2%, PPC +1.9%, JDSU +1.6%, RBS +1.4%, ANH +1.3%, CERN +0.9%, SDRL +0.9%, SPWR +0.7%, GOOG +0.7%

Gapping down: ACUR -16.7%, CRMT -14.1%, WTSL -13.9%, GOMO -10.5%, DDD -5%, MNKD -4.4%, CACH -3.3%, BEE -3%, BCRX -2.9%, BXE -2.9%, BCRX -2.9%, HCN -2.2%, DYAX -2%, BKD -0.9%

(WSJ) BMW Expects Strong Chinese Demand for Electric Cars

BMW Expects Strong Chinese Demand for Electric Cars
German Auto Maker Expects China to Become World's Largest Market for Electric Cars in Five Years


BMW AG BMW.XE -0.25% expects strong demand for its i series of electric cars in China, which the company expects to become the world's largest market for electric vehicles in five years.
Speaking at an event in Shanghai on Wednesday, Karsten Engel, chief executive for BMW's China operations, said BMW aims to sell up to 1,000 i3 and i8 cars in the country this year.
BMW's i series cars will go on sale in China in September, but sales will be limited to four cities due to a supply shortage and concerns over a lack of charging infrastructure.
The lack of adequate charging facilities makes electric cars a tough sell in most countries. In China, where privately owned parking spaces are few and bureaucratic hurdles many, car makers are finding the going even tougher.
In a bid to boost sales of electric vehicles in China, BMW on Wednesday unveiled plans to set up charging stations in Shanghai, the country's financial hub.
The German auto maker said it would work with State Grid Shanghai Electric Vehicle Co., a unit of one of China's top two state-owned utility providers, and Expo Shanghai Group, a state-owned property company, to install more than 50 charging stations as part of a pilot program.