(MergerMarket) Iliad can finance increased T-Mobile offer but synergies hard to

Iliad can finance increased T-Mobile offer but synergies hard to prove

Iliad [EPA: ILD] can “easily” find additional equity to increase its USD 15bn offer for T-Mobile US, a source close to the situation said, describing its USD 33 per share offer as the starting point for negotiations.

Iliad last month offered USD 15bn in cash for 56.6% of T-Mobile US [NYSE:TMUS], at USD 33 per share. It valued the remaining 43.4% of T-Mobile US at USD 40.50 per share on the basis of USD 10bn of synergies to the benefit of the T-Mobile US shareholders.

Deutsche Telekom [ETR:DTE], which owns 67% of T-Mobile US, rejected the offer on the basis it did not add value for shareholders. As a standalone company, T-Mobile is worth USD 40 per share, a person familiar with the company said.

Iliad’s approach would leave Deutsche Telekom with a 29% stake in T-Mobile US. But, Deutsche Telekom wants to sell out of T-Mobile US completely over the next few years, which may be difficult with around 30%, the source said. So, Iliad will likely have to increase the stake it proposes to buy from Deutsche Telekom.

Iliad said its original USD 15bn offer would be financed via a combination of debt and equity, having the support of banks – understood to be BNP Paribas and HSBC – for the former. The equity portion would be approximately EUR 2bn, with Iliad founder Xavier Niel participating in the capital increase.

An increase in the stake it proposes to buy from Deutsche Telecom will require an increase in both equity and debt financing, but an increase just in the USD 33 per share offer price can be financed through additional equity only, the source said.

EUR 2bn is not a large amount for Iliad, the source said, especially given Niel’s participation, he added.

Additional equity could be raised at the Iliad level or from new investors in T-Mobile US, the source said.

But, as well as increasing its offer, Iliad must also prove there are synergies to a deal. A sector banker following the situation was sceptical, believing Iliad does not possess the assets or business to entice Deutsche Telekom into a deal.

Given that Iliad is a reseller of services and does not own its own network, it is difficult to see how it will realize USD 10bn of synergies from the T-Mobile network, the banker said. There are no cost synergies to be gained from tower consolidation or benefits from combining the spectrum of the two companies, he noted.

Deutsche Telecom, meanwhile, has done an excellent job at creating value with the US assets since its failed deal with AT&T [NYSE:T]. After US regulators shot down the deal, T-Mobile received 10MHz of nationwide spectrum. T-Mobile was also able acquire 700MHz of spectrum from Verizon [NYSE:VZ] earlier this year, a purchase financed from the AT&T USD 4bn break-up fee.

T-Mobile’s purchase of wireless company MetroPCS also saw T-Mobile listed separately on the New York Stock Exchange. Deutsche Telekom can sell shares of the company slowly over time or execute a secondary offering, this banker said.

RBC Capital - Dollar Tree (DLTR) may take one more shot, but ultimately unlikely

Dollar Tree (DLTR) may take one more shot, but ultimately unlikely they can outbid Dollar General (DG) for Family Dollar (FDO) --
RBC Capital Mkts believes DLTR could raise its bid for FDO given the incremental revenue/GM synergies firm highlighted, but suspect that DG will ultimately win-out in a bidding war for FDO. This should be a win for DG and FDO shareholders. DLTR would miss-out on the synergy opportunities, but would add $305 million to their coffers and should revert to their steady growth algorithm.

>>> Dick's Sporting Goods beats by $0.01, beats on revs; guides Q3 EPS midpoint

Dick's Sporting Goods beats by $0.01, beats on revs; guides Q3 EPS midpoint below consensus; reaffirms FY15 guidance

Reports Q2 (Jul) adj. earnings of $0.67 per share, $0.01 better than the Capital IQ Consensus Estimate of $0.66; revenues rose 10.3% year/year to $1.69 bln vs the $1.65 bln consensus.
  • Consolidated same store sales increased 3.2%, compared to the Company's guidance of an ~1 to 3% increase. Same store sales for DICK'S Sporting Goods increased 4.1%, while Golf Galaxy decreased 9.3%. Second quarter 2013 consolidated same store sales decreased 0.4%, adjusted for the shifted retail calendar due to the 53rd week in 2012.
  • eCommerce penetration for the second quarter of 2014 was 6.3% of total sales, compared to 5.6% in the second quarter last year.
  • In Q2, the co recorded pre-tax charges totaling $20.4 million related to the restructuring of its golf business. These actions were taken to align the cost structure with current and expected trends in golf.
Co issues in-line guidance for Q3, sees EPS of $0.38-0.42 vs. $0.42 Capital IQ Consensus; comps +1-3%.

Co reaffirms guidance for FY15, sees EPS of $2.70-2.85 vs. $2.77 Capital IQ Consensus; comps +1.3%.

(BFW) Cinven Raises Iomart Offer to 300p-Shr, Deadline Extended

BN 08/19 11:00 *IOMART RISES AS MUCH AS 6.6% IN LONDON TRADING
BN 08/19 10:52 *IOMART: DEADLINE EXTENDED FOR DUE DILIGENCE, TALKS CONCLUSION
BN 08/19 10:52 *IOMART: PANEL CONSENTED DEADLINE EXTENSION TO SEPT. 16
BN 08/19 10:50 *IOMART GROUP IOM STATEMENT RE RULE 2.6 EXTENSION
Cinven Raises Iomart Offer to 300p-Shr, Deadline Extended
2014-08-19 11:05:09.386 GMT


By Gaurav Panchal
Aug. 19 (Bloomberg) -- Says following receipt of indicative
proposal from Cinven regarding a possible offer for Iomart at
300p-shr, Takeover Panel extended deadline to Sept. 16 from the
earlier Aug. 21.
* Extension to conduct initial due diligence and enable the
parties to conclude ongoing discussions
* Statement:{NSN NAJVGE3HBS3K <GO>}
* July 24: Iomart Indep. Directors Rejected Cinven Offers of
275p, 285p {NSN N97PZU6JTSF5 <go>}

Link to Company News:{2628534Z LN <Equity> CN <GO>}
Link to Company News:{9990648Z LN <Equity> CN <GO>}
Link to Company News:{DAY LN <Equity> CN <GO>}
Link to Company News:{IOM LN <Equity> CN <GO>}

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

To contact the editor responsible for this story:
Gaurav Panchal at +44-20-7392-0511 or
gpanchal2@bloomberg.net

>>> Home Depot beats by $0.08, reports revs in-line; raises FY15 EPS above conse

Home Depot beats by $0.08, reports revs in-line; raises FY15 EPS above consensus, reaffirms FY15 revs guidance; Q2 comps +5.8%

Reports Q2 (Jul) earnings of $1.52 per share, $0.08 better than the Capital IQ Consensus Estimate of $1.44; revenues rose 5.7% year/year to $23.81 bln vs the $23.61 bln consensus.
  • Co issues guidance for FY15, raises EPS to $4.52 from $4.38 vs. $4.41 Capital IQ Consensus Estimate; reaffirms FY15 revs of +4.8% to ~$82.59 bln vs. $82.52 bln Capital IQ Consensus Estimate.
  • Comparable store sales for the second quarter of fiscal 2014 were positive 5.8%, and comp sales for U.S. stores were positive 6.4 percent.
  • Guidance Details: This earnings-per-share guidance includes the benefit of the Company's year-to-date share repurchases of $3.5 billion and the Company's intent to repurchase an additional $3.5 billion of shares over the remainder of the year.

WSJ : TV Broadcasters Sue Over FCC Auction of Airwaves

TV Broadcasters Sue Over FCC Auction of Airwaves
Industry Group Says Changes Could Reduce Coverage Areas, Impose 'Repacking' Expenses

The National Association of Broadcasters filed a lawsuit on Monday arguing the Federal Communications Commission's plan to auction off airwaves next year would hurt TV stations in both their coverage areas and their wallets.

The FCC is planning to hold its first-ever spectrum reverse auction next year, where TV stations in large cities will take bids to give up their airwaves so they can be resold to wireless carriers to meet the exploding demand for mobile broadband. Stations that take part in the auction can either go out of business or move to another channel that uses fewer airwaves.

The NAB's lawsuit challenges the FCC's auction rules, arguing they don't go far enough to protect broadcasters that don't participate in the voluntary proceeding. The NAB has been adamant that stations that don't take part should not have their coverage area reduced, or be forced to pay out of pocket for the expense of moving their broadcast signal to a new frequency, a process called repacking.

"We've said from day one, if stations want to volunteer to go out of business, that's their prerogative. But for those stations that choose to remain in business, they should be held harmless," NAB spokesman Dennis Wharton said.

Due in part to the NAB's lobbying, Congress included language in the 2012 auction legislation that directed the FCC to take all reasonable efforts to preserve broadcasters' coverage areas, and to fully compensate stations for the costs of the moving process. The NAB's lawsuit filed Monday in the D.C. Circuit Court of Appeals challenges whether the FCC went far enough to preserve broadcasters' coverage areas, and argues that stations will still have to pay as much as $500 million out of pocket to cover their repacking expenses.

Should the NAB win in court, the FCC could be forced to redo its auction rules, or delay the auction while it work to address NAB's concerns.

Such lawsuits challenging FCC proceedings are common, and frequently resolved before the court has a chance to weigh in. A broadcast industry source said the FCC could potentially convince the NAB to drop its lawsuit by increasing the $1.75 billion set aside to compensate broadcasters for repacking, and making more of an effort to ensure that stations won't see their coverage areas significantly reduced.

"We are confident that the Report and Order fulfills the mandates established by Congress on this complex matter," an FCC spokesperson said via email.

The NAB denied that the lawsuit is an attempt to delay the auction, emphasizing that it has asked the court for an expedited review. Representatives for both the wireless industry and a coalition of TV stations that might participate in the auction expressed hope that the court would address NAB's concerns in time to avoid a delay to the auction, which is scheduled for mid-2015.

"While we would prefer to work together collaboratively to address NAB's concerns rather than resort to litigation, we are hopeful the court addresses these issues quickly and that the NAB adheres to its commitment for an expedited process without unnecessary delays," said Scott Bergmann, vice president for regulatory affairs for CTIA-The Wireless Association.

NY Post : Sprint Launches New Price War, Debuts $100 Family Plan

--> is it the Niel Effect ? could be interesting to see the next move in the US...could see some pressure on DTE.

Sprint on Monday announced new family rate plans allowing up to 10 lines to share 20GB worth of data for $100 per month.

It’s the first move in what is expected to be far more aggressive pricing under newly named CEO Marcelo Claure. Sprint is also offering to reimburse up to $350 of the costs of ending a contract with another carrier, a move first tried by rival T-Mobile. The plans will be available starting Friday.

There are a bunch of caveats on Sprint’s new plans, with some of the pricing being offered only for a limited time. Also, to get the cheapest pricing, all customers must be coming from another carrier and bringing over their number. Even for those customers, the $100-per-month pricing is good only through the end of 2015 and requires signing up before the end of September.

“Sprint is offering the best value to data-hungry consumers. Period,” Claure said in a statement. “We are doubling the high-speed wireless data because today’s customers rely so much on their smartphones and tablets.”

AT&T has been advertising up to four lines for $160 per month, while T-Mobile has been offering four lines for $100 per month, though that price is being offered for less than two years.

Sprint noted it will have news on new individual rate plans later this week.

Family plans are some of the most competitive parts of the market, with carriers valuing the low turnover that comes into signing up an entire family. Until the latest move, Sprint had focused on “framily” plans, which allowed customers to join with friends and family for group discounts without being combined onto a single bill.

These new family plans are of the industry standard variety, with a single bill covering all included devices.

“We wanted to go with plans that were head-to-head (with the competition) and take the gloves off,” Kevin Kunkel, Sprint West region vice president, told Re/code. The company will continue to allow people to add members to their framily plan but plans to stop heavily marketing such plans.

Kunkel noted that it is a “new day” for Sprint with new rates, a new CEO and an improved network.

Claure was named to replace Dan Hesse earlier this month, with Sprint parent SoftBank also saying it was ending — at least for now — its bid to try to acquire T-Mobile US.

NY Post : Citibank could lose Argentina banking license

If the banking giant obeys a US judge’s order, it risks losing its banking license in Argentina — and the $2 billion it has in local deposits.
But if it follows Argentine law, it risks violating a US federal court order.
Citi finds itself in this precarious position after Manhattan federal court judge Thomas Griesa — who is overseeing the bitter battle between hedge-fund mogul Paul Singer and Argentina over an estimated $3 billion due on bonds defaulted upon in 2001 — ordered the bank not to pay out on some of the country’s locally issued bonds.
Griesa initially exempted Citi’s Argentine law bonds from his sweeping order — stopping payouts to exchange bondholders unless Argentina also paid Singer and other holdout bondholders who demanded full payment.
But Griesa changed his mind last month after learning that some of the bonds for which Citi is custodian were also exchange bonds.
Argentina missed a July 30 deadline to pay the Singer group, throwing it into a technical default.
Citi has until Sept. 30 to fall in line. The bank’s appeal was fast-tracked last week; a hearing is scheduled for Sept. 18.
Obeying Griesa would put the bank in “an untenable and extremely dangerous position — which could lead to consequences as serious as the loss of Citibank Argentina’s banking license and its takeover by the Republic,” Citi lawyer Karen Wagner, of Davis Polk, wrote in a brief filed late Friday with a federal appeals court.
Argentina President Cristina Kirchner has amped up the pressure on Citi.
In a recent speech, Kirchner reminded Citi of its obligations under Argentine law and noted that her government decides who gets banking licenses in the country.
The potential fallout is a major concern for Citi, which has a huge retail banking presence in Argentina — and throughout South America, which is siding with Argentina.
About 18 percent of Citi’s revenues come from Latin America.
Citi was one of the US banks furiously working behind the scenes to cut a deal with Singer and the other so-called holdouts to resolve Argentina’s debt default. But those negotiations broke off last week.