>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: MOBI +1.6%, BNS +0.7%.

M&A news: HSH +21.8% and PPC +3.2%(Pilgrim's Pride makes alternative offer to buy HSH; offers $45.00 per share in cash as alternative to HSH pending acquisition of PF), PFE +0.5% (Pfizer issues statement regarding AstraZeneca (AZN); does not intend to make an offer for AstraZeneca).

Select EU financial related names showing strength: NBG +3.1%, SAN +1.9%, CS +1.8% (upgraded to Buy from Hold at Deutsche Bank), DB +1.6%, BBVA +1.3%.

Select Utility stocks trading higher on reports of PJM capacity market secures new and diverse resources to meet future electricity demand: FE +3.7%, AES +2.8%, DUK +1.7%, PPL +1.3%, EXC +0.9%, NEE +0.5%, D +0.4%.

Other news: BCRX +23.1% (announces positive results from OPuS-1, a Phase 2 trial of BCX4161 for the prophylactic treatment of hereditary angioedema), NVGN +16% (announces milestone with its super-benzopyran (SBP) drug program), ARO +9.1% (closes strategic partnership deal/$150 min financing transaction with Sycamore Partners, announces two new Baord members), NADL+8.8% and SDRL +2.4% (announce investment and co-operation agreement with Rosneft to partner in Russian market ), SPEX +7.9% (attributed to positive blog mention on Friday, cont strength), INO +7% (reports breakthrough DNA-Based monoclonal antibody therapy completely protects animals from lethal viral challenge; unit sells animal health assets), SPPI +6.5% (mentioned positively on blog), ONVO +5.6% (disclosed 3D kidney tissue bioprinting activity update), TI +5.5% (potentially related to stong EU mkts), VRNG +5.5% (may be attributed to positive blog mention), ADXS +4.3% (co's HER2 immunotherapy candidate receives Orphan Drug Designation for treatment of osteosarcoma), STM +4.3% (positive Barrons mention), KNDI +4.1% (may be attributed to reports that China plans to remove millions of cars off road to ease pollution problem), BKS +3.9% (positive Barron's mention), ARMH +2.5% (strong EU mkts), ALLT +2.3% (receives a $5 mln order from a Tier-1 mobile operator for the Allot Service Gateway Tera), EMKR +2% (announces settlement and license agreement relating to patent infringement lawsuit brought by Nichia), BAC +2% (discloses it resubmitted its requested capital actions and certain 2014 CCAR to the Fed), INCY +1.9% (Co and and Bristol-Myers Squibb (BMY) enter clinical collaboration agreement to evaluate combination regimen of two novel immunotherapies), FEYE +1.8% (Analysis Platforms certified by North Atlantic Treaty Organization to handle information classified as NATO SECRET).

Analyst comments: ODP +5.4% (upgraded to Buy from Neutral at Goldman), EXXI +3.6% (initiated with an Outperform at BMO Capital Mkts), FRSH +2.9% (initiated by several analysts), SPLK +2.3% (upgraded to Outperform from Market Perform at Northland Capital), PANW +1.8% (upgraded to Buy from Neutral at Nomura), KORS +1.7% (target raised to $108 from $100 at Wedbush, CSCO+1.6% (upgraded to Buy from Hold at Deutsche Bank), WRE +1.2% (upgraded to Outperform at Robert W. Baird)

(NY Post) Rachesky’s game puts satellite company sale in jeopardy

Rachesky’s game puts satellite company sale in jeopardy

Hedge-fund manager Mark Rachesky is playing another game of “The Price is Right,” the Loral edition.
Rachesky’s MHR Fund Management, which owns a controlling stake in Loral Space & Communications, put the New York satellite company on the block in January.
The former Carl Icahn protégé is said to be seeking between $80 and $90 a share for Loral — well above Friday’s closing price of $70.94. The stock is down from a high of $82.13 after The Post first broke news of the auction.
The Ontario Teachers’ Pension Plan has been the lone bidder for Loral since late March and has reduced its offer price since gaining exclusivity, a source said.
The sale of Loral is really about gaining control of its sole asset: a 62.8 percent stake in Canadian satellite company Telesat.
Loral and the other Telesat shareholder, Canada’s Public Sector Pension Investment Board, have been exploring the joint sale of Telesat — which at Rachesky’s asking price would be worth more than $7 billion. PSP is planning to sell only part of its stake in Telesat.
The three parties — Rachesky, OTTP and PSP — need to come together in the next few weeks or the sales process will likely fall apart, sources said.
Rachesky appears comfortable waiting it out, in part because of Telesat’s latest strong earnings report. Revenue rose 7 percent in the quarter, while earnings before interest, taxes, depreciation and amortization, or Ebitda, jumped 13 percent.
However, he might be playing a risky game, as OTTP also has some leverage as the only bidder, one source said.
MHR declined comment and OTTP did not return calls.

(RTR) Siemens readying Alstom offer, trims cash component - sources

Siemens readying Alstom offer, trims cash component - sources {http://reut.rs/1opgj7q}

May 26 (Reuters) - Siemens is readying a formal offer for Alstom under which it would transfer its rail activities and less than 7 billion euros in cash to its French rival in exchange for its power assets, sources familiar with the German firm's thinking say.

The sources told Reuters on condition of anonymity that the offer under consideration put a slightly higher value on Alstom's energy activities than a rival bid from U.S. giant General Electric.

But the cash component is expected to be only a little more than half of what GE is offering.

"Valuations for all the different elements have been done, but depending on which dials you turn you will arrive at different numbers for the cash element of the Siemens offer," one of sources said, adding that in any case it would be below 7 billion euros. Another source confirmed the cash part of the offer would fall under this threshold.

This reflects the fact that Siemens would be transferring its trains business to Alstom, allowing the French government to trumpet the creation of a new European rail champion.

It also follows a decision by Siemens to exclude some Alstom energy activities -- nuclear, wind energy, and transmission and distribution (T&D) -- from its bid, two sources said.

Both Siemens and Alstom declined to comment.

Alstom is already in talks with GE over a 12.35 billion euro ($16.8 billion) all-cash offer for its power arm, which has been extended until June 23. Under strong political pressure, it has opened its books to Siemens so the German firm can propose its own deal if it wants to.

Excluding Alstom's nuclear and wind businesses from its bid could allow the the French group to sell them directly to state-controlled energy firm Areva. But it could also create problems as one source close to the French camp said it would be difficult to separate the nuclear side of the turbine business from non-nuclear activities.

As for the T&D business, valued at 1.5 to 2 billion euros, sources said Siemens was worried that acquiring Alstom's assets in this area would create formidable regulatory hurdles given the dominant position Siemens already enjoys in the sector.

Therefore, the German firm has decided to also exclude T&D -- a business that makes technology for transporting electricity from power plants to consumers -- from its offer.

As previously reported by Reuters, Siemens would be offering its rail activities and would propose creating a joint venture with Alstom in rail signalling.

One source said Siemens was keen to retain a controlling stake in any signalling venture, potentially another source of conflict as Alstom is also seen eager to have a majority share. How the signalling stakes are divided up would affect the cash component of the Siemens bid, the source added.

Sources said the offer also reflected a deduction of up to 800 million euros to cover potential compliance risks that Alstom's power unit faces in the United States, United Kingdom and Brazil.

While Siemens could present the formal offer for Alstom's power arm as early as Wednesday of this week, one of the sources said the German group may decide to take some extra time after GE extended its bid until June 23 at the request of the French government.

(Chicago Tribune) Warren Buffet : NExt Buy could be in Energy



From: LAURENT CHEKROUN ()
Subject: (Chicago Tribune) Some elephant hunting tips for Warren Buffet
NEW YORK (Reuters) - Far be it from us to offer tips to Warren Buffett, the most celebrated stock picker of his age, but here goes:

The Oracle of Omaha has suggested he will hunt for his next "elephant" - his favorite word for big acquisitions -- among energy companies. That could dovetail with the bet he made in 2009 when he bought Burlington Northern Santa Fe railroad, which has turned into an indirect play on the U.S. oil production renaissance: BNSF moves about a third of oil-by-rail, a surging segment of freight rail.


So, we have some ideas. Reuters screened for U.S. and Canadian companies with relatively low debt and market capitalizations above $5 billion, among other criteria.

First, because Buffett's Berkshire Hathaway has about $49 billion to spend, he's said he's looking at capital intensive companies, which offer plenty of chances to put that money to work.

He might like a hot niche like oilfield services or pipelines: good candidates could be Baker Hughes in drilling services or Williams Partners in oil and gas distribution, which would also expand the scope of his recently rebranded Berkshire Hathaway Energy unit.

Alternatively, he could opt for a safer play by scooping up another regulated utility to add to previous purchases such as NV Energy in Nevada and MidAmerican Energy, which serves customers in eleven states and added about $1.47 billion to Berkshire's profits in 2013. While not spectacular earners, regulated utilities tend to be steady, reliable cash generators, a feature Buffett likes. One candidate could be Pinnacle West Capital , though it may be a little smaller than what he's looking for.

None of Baker Hughes, Williams Partners and Pinnacle West responded to requests for comment.

"Electric generation, electric transmission and long-haul pipelines - they're being about as blunt as they can be that they're going to grow" in that area, said Kevin Birzer, a senior managing director at Tortoise Capital Advisors, which specializes in energy investments.

PINNACLE

Check out Pinnacle West, owner of the Arizona Public Service Company, which provides electricity to about 1.1 million customers and trades at a discount to peers by several measures, including price-to-cash flow and price-to-earnings. Between the company's $6.1 billion market cap and its $3.6 billion in net debt, for an enterprise value of $9.7 billion, the company may be smaller than Buffett wants.

Still, analysts from TheStreet Ratings noted Pinnacle West's reasonable debt and good cash flow from operations in calling the company a buy earlier this month.

"We feel these strengths outweigh the fact that the company has had sub-par growth in net income," they wrote in a report dated May 18.

BAKER HUGHES

If Buffett wants a company more closely tied to oil production, he could opt for Baker Hughes.

With a market cap of about $30 billion and net debt of about $3.9 billion, Baker Hughes' enterprise value of $33.9 billion comes in at the high end of what Buffett could spend while leaving himself the $20 billion cash cushion he's said he wants.

Even so, that large a deal might require him to team up with an outside partner as when he bought H.J. Heinz, an option Buffett has said he may pursue again.



Baker Hughes, which supplies oilfield services such as drill bits and fuel additives and has annual revenue above $22 billion, is trading at a discount to peers on several key metrics, including ratios measuring its enterprise value against both sales and earnings before interest, taxes, depreciation and amortization, or EBITDA, according to Reuters data.

Its first-quarter earnings beat expectations on a 7 percent increase in North American revenue, with better North American margins even as well count dropped.

The company also has significant presence overseas, including the Middle East, Latin America and Asia, offering a chance to broaden Berkshire's geographic reach.

One risk may be that Baker Hughes will be too closely tied to oil prices and the capital expenditure cycle for major petroleum producers for Buffett's taste.

WILLIAMS

In that case, Williams Partners could appeal.

Williams, which focuses in part on natural gas and oil transportation, has a market cap of about $22.8 billion, but with $8.3 billion of debt, its enterprise value is not all that much lower than Baker Hughes, about $31.1 billion.

Also like Baker Hughes, Williams, with total revenue of about $6.7 billion last year, scores well on a number of relative valuation markers, trading at discounts to peers on price-to-earnings and price-to-cash flow.

The company keeps generating cash thanks to "the combination of a core interstate gas transmission system and a liquids-leveraged midstream business," according to Morningstar.

That's an important attribute given its debt-to-equity ratio of 0.8, which is a bit above the industry norm.

Negotiating a deal with Williams could be complicated, given its status as a limited partnership 70 percent owned by Williams Cos .

But the company has another advantage Buffett likes - a wide moat, or competitive advantage, thanks to its ownership of the Transco gas mainline, which runs from Texas to New York.

"We think of the Transco pipeline system as a classic wide-moat asset, one that presents a highly attractive set of organic growth opportunities," the Morningstar analysts wrote.

(Chicago Tribune) Some elephant hunting tips for Warren Buffet

NEW YORK (Reuters) - Far be it from us to offer tips to Warren Buffett, the most celebrated stock picker of his age, but here goes:

The Oracle of Omaha has suggested he will hunt for his next "elephant" - his favorite word for big acquisitions -- among energy companies. That could dovetail with the bet he made in 2009 when he bought Burlington Northern Santa Fe railroad, which has turned into an indirect play on the U.S. oil production renaissance: BNSF moves about a third of oil-by-rail, a surging segment of freight rail.


So, we have some ideas. Reuters screened for U.S. and Canadian companies with relatively low debt and market capitalizations above $5 billion, among other criteria.

First, because Buffett's Berkshire Hathaway has about $49 billion to spend, he's said he's looking at capital intensive companies, which offer plenty of chances to put that money to work.

He might like a hot niche like oilfield services or pipelines: good candidates could be Baker Hughes in drilling services or Williams Partners in oil and gas distribution, which would also expand the scope of his recently rebranded Berkshire Hathaway Energy unit.

Alternatively, he could opt for a safer play by scooping up another regulated utility to add to previous purchases such as NV Energy in Nevada and MidAmerican Energy, which serves customers in eleven states and added about $1.47 billion to Berkshire's profits in 2013. While not spectacular earners, regulated utilities tend to be steady, reliable cash generators, a feature Buffett likes. One candidate could be Pinnacle West Capital , though it may be a little smaller than what he's looking for.

None of Baker Hughes, Williams Partners and Pinnacle West responded to requests for comment.

"Electric generation, electric transmission and long-haul pipelines - they're being about as blunt as they can be that they're going to grow" in that area, said Kevin Birzer, a senior managing director at Tortoise Capital Advisors, which specializes in energy investments.

PINNACLE

Check out Pinnacle West, owner of the Arizona Public Service Company, which provides electricity to about 1.1 million customers and trades at a discount to peers by several measures, including price-to-cash flow and price-to-earnings. Between the company's $6.1 billion market cap and its $3.6 billion in net debt, for an enterprise value of $9.7 billion, the company may be smaller than Buffett wants.

Still, analysts from TheStreet Ratings noted Pinnacle West's reasonable debt and good cash flow from operations in calling the company a buy earlier this month.

"We feel these strengths outweigh the fact that the company has had sub-par growth in net income," they wrote in a report dated May 18.

BAKER HUGHES

If Buffett wants a company more closely tied to oil production, he could opt for Baker Hughes.

With a market cap of about $30 billion and net debt of about $3.9 billion, Baker Hughes' enterprise value of $33.9 billion comes in at the high end of what Buffett could spend while leaving himself the $20 billion cash cushion he's said he wants.

Even so, that large a deal might require him to team up with an outside partner as when he bought H.J. Heinz, an option Buffett has said he may pursue again.



Baker Hughes, which supplies oilfield services such as drill bits and fuel additives and has annual revenue above $22 billion, is trading at a discount to peers on several key metrics, including ratios measuring its enterprise value against both sales and earnings before interest, taxes, depreciation and amortization, or EBITDA, according to Reuters data.

Its first-quarter earnings beat expectations on a 7 percent increase in North American revenue, with better North American margins even as well count dropped.

The company also has significant presence overseas, including the Middle East, Latin America and Asia, offering a chance to broaden Berkshire's geographic reach.

One risk may be that Baker Hughes will be too closely tied to oil prices and the capital expenditure cycle for major petroleum producers for Buffett's taste.

WILLIAMS

In that case, Williams Partners could appeal.

Williams, which focuses in part on natural gas and oil transportation, has a market cap of about $22.8 billion, but with $8.3 billion of debt, its enterprise value is not all that much lower than Baker Hughes, about $31.1 billion.

Also like Baker Hughes, Williams, with total revenue of about $6.7 billion last year, scores well on a number of relative valuation markers, trading at discounts to peers on price-to-earnings and price-to-cash flow.

The company keeps generating cash thanks to "the combination of a core interstate gas transmission system and a liquids-leveraged midstream business," according to Morningstar.

That's an important attribute given its debt-to-equity ratio of 0.8, which is a bit above the industry norm.

Negotiating a deal with Williams could be complicated, given its status as a limited partnership 70 percent owned by Williams Cos .

But the company has another advantage Buffett likes - a wide moat, or competitive advantage, thanks to its ownership of the Transco gas mainline, which runs from Texas to New York.

"We think of the Transco pipeline system as a classic wide-moat asset, one that presents a highly attractive set of organic growth opportunities," the Morningstar analysts wrote.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: HSH +22.9%, SPPI +6.3%, TI +5.5%, SPEX +5.3%, ODP +4.6%, NBG +3.7%, SDRL +3%, ARMH +2.5%, AZO +2.1%, DDD +2%, AES +1.9%, SAN +1.9%, DB +1.8%, CS +1.8%, BBVA +1.3%

Gapping down: DRTX -10%, JKS -8.2%, PF -6.7%, FRO -2.8%, AU -2.4%, GFI -2.3%, SPLS -1.8%, YY -1.8%, AZN -1.5%, HMY -1.3%, SLW -1%, GDX -0.9%, GLD -0.7%, SLV -0.7%, ABX -0.7%