(BFW) Goldman Sachs European Unit First-Half Profit More Than Triples

Goldman Sachs European Unit First-Half Profit More Than Triples
2014-09-02 14:36:46.436 GMT


By Ambereen Choudhury
Sept. 2 (Bloomberg) -- Goldman Sachs International says
pretax profit in the half year ended June 30 rose to $1.1b from
$335m a year ago, according to accounts posted on the firm’s
website.
* Sales climbed to $3.3b from $3b
* Financial advisory and underwriting revenue climbed 45% to
$856.4m
* Fixed-income revenues fell about 4% to $1.4b
* Administrative expenses were $2b vs $2.5b
* Goldman Sachs International operates in Europe, Middle East
and Africa.

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Ambereen Choudhury in London at +44-20-3525-3862 or
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Elisa Martinuzzi, Jon Menon

Next SoftBank takeover target's name might start with 'V'

TOKYO -- Speculation is swirling over SoftBank's next big takeover target, after the Japanese mobile carrier last month dropped a bid to acquire T-Mobile US.

At an earnings briefing Aug. 8, SoftBank Chairman and CEO Masayoshi Son was quizzed about the decision to abandon the quest to buy the No. 4 U.S. wireless company. The deal, which would have been conducted through recent U.S. acquisition Sprint, faced considerable resistance from regulators.

On the subject of alternatives, Son said he is always thinking about his options.

Some observers believe the tycoon has already set his sights elsewhere. "SoftBank receives a lot of acquisition proposals from around the world," said Satoru Kikuchi, an analyst at SMBC Nikko Securities. "Son might have terminated negotiations with T-Mobile because he had found another attractive possibility."

The Vodafone connection

Europe is home to a number of major mobile communications companies, among them Deutsche Telekom, T-Mobile's German parent, Vodafone of the U.K. and Telefonica of Spain.

Some say Son has a particular affinity for Vodafone, stemming from SoftBank's takeover of the British company's Japanese business in spring 2006. Son shuttled back and forth between Japan and the U.K. to quickly close the deal, which was valued at 1.75 trillion yen (about $15 billion at the time).

"I wouldn't be surprised if our CEO acquired Vodafone, since we are no strangers to each other," one SoftBank executive said.

The potential for a shakeout in the European communications industry seems to lend credence to the idea.

When SoftBank and Vodafone struck their deal over the Japanese unit, the British company had a market value of $134 billion -- larger than any other global communications enterprise. But Vodafone's European operations subsequently lost steam, eroding the market value by roughly 30%.

Many European countries have four or more players in their domestic mobile markets. Tough price competition has worn them out, hindering investments in high-speed communications services like LTE, or long-term evolution -- a technological standard widespread in Japan.

The European Commission, the executive arm of the European Union, in late May gave Hong Kong conglomerate Hutchison Whampoa the green light to buy Telefonica's Irish mobile business. Carriers' deteriorating competitiveness could prompt authorities to be more welcoming to other acquisitive foreign companies.

Still, going after Vodafone would be ambitious to say the least. "The total acquisition price of Vodafone would be at least $100 billion," one analyst said.

To put that in perspective, consider SoftBank's holdings in Alibaba Group, the massive Chinese e-commerce company. Alibaba's market value is expected to surpass $150 billion after its upcoming initial public offering, and SoftBank owns a roughly 34% stake.

Last autumn, there was talk that AT&T of the U.S. would take over Vodafone, but that soon dissipated.

It is possible that a company like SoftBank could seek to buy Vodafone on a country by country basis. The U.K. carrier does business in regions including India and Africa.

Another try for T-Mobile?

Another common view is that Son will make a second run at T-Mobile in the U.S. He is said to be determined to win in the American market, which he sees as the center of the world.

T-Mobile's fortunes might hold the key.

The company is winning customers by offering low fees and holding other sales promotions. These efforts are being fueled by a $4 billion breakup fee AT&T paid to T-Mobile three years ago.

AT&T had sought to acquire T-Mobile, only to retract the plan due to opposition from U.S. authorities.

The windfall helped T-Mobile rev up its sales engine. But many in the industry warn that the money will not last forever. If T-Mobile loses momentum, American officials may warm up to industry consolidation.

SoftBank is also expected to pursue companies that provide services and content for smartphones. Last fall, it bought Finnish online game developer Supercell.

One long-running rumor is that SoftBank wants to invest in Line, the Tokyo-based operator of the free calling and texting app of the same name. The app has nearly 500 million users worldwide.

reuters : Telecom Italia investor Fossati says TIM Brasil won't go cheap

(Reuters) - Telecom Italia investor Marco Fossati said any offer for TIM Brasil should value the Brazilian wireless operator at around 11 times core earnings, or twice its current market value of 10 billion euros ($13 billion) .

Consolidation in Brazil is heating up after Grupo Oi unveiled plans last week to take over TIM Brasil and Telefonica started exclusive talks to buy broadband operator GVT from France's Vivendi.


"If Brazilian operators want to reduce the number of players to three from four, bagging enormous synergies, it would be better if they presented an offer that values TIM Brasil at 11 times its EBITDA," Fossati told Reuters in a phone interview on Tuesday.

"Otherwise we will not take it into consideration," he said.

The Italian businessman, the second largest investor in the Italian group with a stake of just under 5 percent, said the exit of Telefonica from Telecom Italia was positive and he welcomed the possible entrance of Vivendi in the Italian incumbent's capital. (1 US dollar = 0.7621 euro)

WSJ : Anglo American CEO Says Open to Takeover Offers

Anglo American CEO Says Open to Takeover Offers
Mark Cutifani Aims to Boost Miner's Return on Capital Employed to At Least 15% in 2016

LONDON—The chief executive of Anglo American AAL.LN +1.61% PLC, one of the world's largest mining companies, said he won't pull up the drawbridge if a compelling takeover offer arrives.

"My job is to create value, however that may be shown," said Mark Cutifani, an industry veteran tasked 15 months ago with turning things around at Anglo after the departure of former chief executive Cynthia Carroll.

"Our job is to do a good job with the business, and at the end of the day, if somebody sees value, then there's a conversation to be had," said Mr. Cutifani.

"I'm not anti. I'm very open. I'm not scared by it," he said in an interview with The Wall Street Journal. But Mr. Cutifani, 56 years old, said his overriding ambition remained transforming Anglo into a top miner in its own right.

"That's not what we're setting this business up for," Mr. Cutifani said, referring to any future deal. In 2009, Anglo-Swiss mining firm Xstrata PLC made an approach that was rebuffed by Ms. Carroll. Since then, Xstrata has been absorbed by Glencore GLNCY +0.67% PLC.

Mr. Cutifani's key aim is to boost Anglo's return on capital employed to at least 15% in 2016. That measure slipped to 10% in the first half of 2014 from 11% a year earlier.

"It's an imperative that we have to get to. We've got to be doing better than that number," said Mr. Cutifani. Earlier this year, Anglo said it would sell some of its older, deep-level platinum shafts, a process Mr. Cutifani said would take at least another 18 months.

With assets in commodities ranging from iron ore to platinum and diamonds across several continents, Anglo is one of the world's most diversified mining companies. But bad bets—including one by Ms. Carroll on a Brazilian iron-ore mine that has run more than $6 billion over budget—have eaten into profits. Anglo's shares have fallen 55% since early 2011.

Investors have also fretted about Anglo's exposure to South Africa, where its subsidiary Anglo American Platinum Ltd. AMS.JO +1.18% —known as Amplats—has been hit by a five-month strike this year.

Mr. Cutifani has aimed to slash Anglo's costs and put several peripheral assets up for sale. The company's shares are up 17.5% this year, outperforming both of its bigger rivals, BHP Billiton Ltd. BHP.AU +0.54% and Rio Tinto RIO.LN +0.70% PLC.

Amid a global commodities downturn, Rio and BHP have also been selling assets, focusing investment on a smaller universe of commodities and steering away from a diversification model that until recently characterized many of the world's biggest miners. Mr. Cutifani, however, said he still believes in the diversified-mining model.

"We're less focused on driving into a favored commodity because in our view, there are so many unpredictable issues," he said.

Investors and analysts are closely tracking Mr. Cutifani's turnaround efforts.

"Either the company outperforms under Mark Cutifani's leadership, and demonstrates the value of tons in the ground, or it fails to do so and is put out of its misery in fairly short order," said Paul Gait, an analyst at Sanford C. Bernstein.