>>> DRAX -4.65% on news

*DRAX SAYS WILL NOW CONSIDER OPTIONS FOR FULL CONVERSION OF UNIT
*DRAX SAYS WON'T APPEAL AGAINST COURT OF APPEAL DECISION
*DRAX: COURT DISMISSED CO. APPLICATION FOR JUDICIAL REVIEW
*DRAX CONFIRMS COURT OF APPEAL ALLOWS DECC APPEAL

(BFW) M&A Breakup Risk Elevated on Potential Tax Legislation: Citi

M&A Breakup Risk Elevated on Potential Tax Legislation: Citi
2014-08-07 09:22:36.887 GMT


By Sam Chambers
Aug. 7 (Bloomberg) -- The U.S. Treasury will probably firm
up its proposals to curb tax benefits of corporate inversion
deals in the S/T and enact legislation by year end, Citi says
after a call with a legal expert.
* Citi: U.S. may seek to place limits on the uses of offshore
cash and the deductibility of interest expenses incurred to
fund overseas operations
* Cos. may expedite pending deals; regulation would
increase break-up risk of deals involving significant
amounts of offshore cash, such as Covidien/Medtronic
* In pharma, Citi prefers Actavis and Teva, due to their
greater focus on organic growth
* NOTE: Yday Deutsche Bank said the probability of legislative
action on inversions this year is very low
* NOTE: Walgreen/Alliance Boots to be based in the U.S.
* NOTE: Yday AstraZeneca, Shire fell after the Treasury said
it was examining whether it had the authority to bypass
Congress and curb corporate inversions


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First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Sam Chambers in London at +44-20-7673-2021 or
schambers7@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net
Gaurav Panchal

(BFW) *RUSSIA IS READY TO REVIEW USE OF TRANSSIBERIAN AIR ROUTES

--> -ve Euorpean Carriers

BN 08/07 08:32 *RUSSIA IS READY TO REVIEW USE OF TRANSSIBERIAN AIR ROUTES
BN 08/07 08:30 *RUSSIAN FOOD PRODUCERS WILL SUPPLY MARKET: MEDVEDEV
BFW 08/07 08:29 *MEDVEDEV SAYS FOOD IMPORT BAN WAS DIFFICULT DECISION FOR RUSSIA
BFW 08/07 08:29 *MEDVEDEV SAYS RUSSIA FORCED TO IMPOSE RETALIATORY MEASURES
BN 08/07 08:29 *MEDVEDEV SAYS FOOD IMPORT BAN WAS DIFFICULT DECISION FOR RUSSIA
BN 08/07 08:28 *MEDVEDEV SAYS RUSSIA FORCED TO IMPOSE RETALIATORY MEASURES
BFW 08/07 08:27 *RUSSIA BANS FOOD IMPORTS FROM EU, US, CANADA, AUSTRALIA, NORWAY
BN 08/07 08:27 *RUSSIA BANS FOOD IMPORTS FROM EU, US, CANADA, AUSTRALIA, NORWAY
BN 08/07 08:26 *RUSSIA BANS FOODS FROM AUSTRALIA, CANADA, NORWAY AS WELL
BN 08/07 08:25 *RUSSIA BANS ALL DAIRY, CHEEESE, FISH FROM EU, US
BN 08/07 08:25 *RUSSIA BANS ALL BEEF, PORK, FRUIT, VEGETABLE FROM EU, US
BFW 08/07 08:24 *MEDVEDEV SAYS RUSSIA WAITED LONG TIME TO REACT TO SANCTIONS
BN 08/07 08:24 *MEDVEDEV SAYS RUSSIA WAITED LONG TIME TO REACT TO SANCTIONS
*RUSSIA IS READY TO REVIEW USE OF TRANSSIBERIAN AIR ROUTES
2014-08-07 08:32:31.367 GMT

--JENNY PARIS

-0- Aug/07/2014 08:32 GMT

(MAKOR) Relative Value: YOOX AND ASOS: BUY YOOX IM and ASC LN

Relative value: YOOX Spa (yoox im)

BUY – also buy Asos (ASC LN)

 

YOOX IM: Eur 17.30; ASC LN: 23.87

August 6, 2014

We recommend building-up an investment position in Yoox.  Yoox is a leading online fashion/lifestyle store.   The company was founded in 2000 and has been growing furiously with sales expected to reach over $1bn next year.  The company has long-standing relationships with designers, manufacturers, and official retailers worldwide. 

The stock is listed in Milan, and it was IPOed in Dec 2009 at Eur 4.30. The shares rose to almost Eur 35 at the end of 2013, and have been correcting since then to the current Eur 17 level. We believe that at the current share price the stock is starting to look undervalued at 11.5x 2016 ebitda given its growth potential and even its takeover attractiveness to an Amazon, or a major fashion retailer that could gain a high quality on-line presence immediately. We note that Yoox runs Kering’s online business for most of its brands.  Richemont is also the owner of Net-a-Porter, a competitor to Yoox.  As luxury fashion starts moving increasingly on-line, Yoox is particularly well placed to become a strategic investment.  The current correction represents an opportunity to enter the investment at favorable long-term valuations.

 

http://www.yooxgroup.com/en/investor_relation/press_releases/presentations_2014.asp

 

http://www.yoox.com/us/women

Both Yoox and Asos are attractive and we recommend both as BUYS, with a preference for Yoox because of its luxury positioning.  We also withdraw our SELL on Amazon and move to a HOLD rating.  The stock is down almost 25% year to date just when profitability is (finally?) about to explode (from 2015 onward).

 

FULL REPORT ATTACHED

 

(MAKOR) Relative Value: SELL/SHORT NOVARTIS (possible long hedge with Glaxo)

Relative value: NOVARTIS

SELL/SHORT – partial long hedge with Glaxo

 

NOVN VX: CHF 78.25 

 August 6, 2014

We recommend selling/shorting Novartis.  We have highlighted in various long/short MRPT reports the overvaluation of Novartis within the global pharma space.  We re-iterate our bearish view on Novartis based on significant overvaluation and lack of growth.  Moreover, not that we ascribe a lot of value to that kind of voodooesque analysis, but the charts “look” horrible.

Novartis is most mean reverting with Glaxo and Sanofi.  Interestingly it is not mean reverting vs. “across the street” competitor Roche of which it owns 33%. We have recommended recently in our MRPT model a long GSK / short NOVN position which was closed for loss limit reasons.  On value/fundamental grounds we continue to recommend this long/short trade.  However, given the overvaluation of Novartis and the very extended relative performance of the sector vs. the MSCI World Index, we would recommend such long/short trade with a SHORT BIAS (the timing is a bit off for long SAN FP/short NOVN, but this is also a justifiable trade).

FULL REPORT ATTACHED

 

(BFW) Sumitomo Rubber Lifts Full-Year Forecasts After 1H Profits Jump

--> Watch Michelin & Continental
BN 08/07 06:30 Sumitomo Rubber Reports Half-Year Group Earnings Results
Sumitomo Rubber Lifts Full-Year Forecasts After 1H Profits Jump
2014-08-07 06:35:38.292 GMT


By Kurt Schussler
Aug. 7 (Bloomberg) -- Raises full-yr net income target 4.3%
to 49b yen; analyst est. 47.8b yen.
* Increases oper. profit forecast 1.2% to 84b yen; est. 84.6b
yen (12 analysts)
* For 1H ended June 30:
* Net income +41% y/y to 21.8b yen; est. 19.5b yen (3
analysts)
* Oper. profit +18% to 35.1b yen; est. 36.1b yen (5
analysts)
* Sales +9.5% to 378.6b yen; est. 377.5b yen (4 analysts)
* Table


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

To contact the reporter on this story:
Kurt Schussler in Tokyo at +81-3-3201-2089 or
kschussler1@bloomberg.net
To contact the editors responsible for this story:
Jan Dahinten at +65-6212-1164 or
jdahinten@bloomberg.net

(Les Echos) T-Mobile U.S.: Sprint disqualified, Free takes the risk of patience

T-Mobile U.S.: Sprint disqualified, Free takes the risk of patience

Faced with the reluctance of the U.S. antitrust authorities, Sprint waives buy T-Mobile U.S..
Now the sole candidate, Free would not hurry up its price, deemed insufficient by the seller Deutsche Telekom.
lI is urgent to wait. Free and its parent company Iliad does not seem eager to improve their offer on the U.S. operator T-Mobile U.S. yesterday after the bombshell of the night: then he coveted for months the U.S. subsidiary of Deutsche Telekom, on sale since 2011, Sprint, the third U.S. operator, owned by Japan's Softbank, has finally decided to throw in the towel. Too complicated from the point of view of antitrust rules.
Xavier Niel and his men, it is already a first victory. It remains today the only buyer in the running, with its formal 15 billion unveiled last week offer. "It was naive to think it was intended to compete with Sprint offers. He played the card the only alternative ", decrypts an analyst.
From the outset, Free relied on a red light from U.S. regulators to a merger between Sprint and T-Mobile U.S.. Winning bet. The chairman of the Federal Communications Commission ( FCC ), Tom Wheeler, yesterday confirmed its position, welcoming the withdrawal of Sprint and repeating his preference for a market with four operators, "good for American consumers."
Free a beautiful stand alone in the running, however, it is still far from having folded the case. Reportedly, Deutsche Telekom had not acknowledged Wednesday afternoon, the French proposal. Side Iliad, therefore, nothing to pack. Especially since the German group really tiquerait the amount proposed by Iliad, and was about to reject the offer of French. Deutsche Telekom could be tempted to raise the stakes with Free. Or simply choose to continue his American journey solo. Which would demand some investments to reposition T-Mobile U.S. for good with its competitors, Verizon and ATT mastodons.
Wait and see
Free in, it seems we do not want to improve the offer for the moment, even take the risk of the emergence of new competitors. "From a tactical point of view, it is not in our interest to do ... especially now that Sprint has withdrawn," said a source familiar with the matter. Especially on the bottom, Iliad considers making a correct proposition by offering $ 33 per share - and even 36 dollars, integrating synergies announced. A premium of 42% over the price of the end of 2013, before the first rumors of a merger with Sprint.
Similarly, a source close to Free, contacted yesterday after removing Sprint, assured Iliad was not looking for partners to help improve its offer. Xavier Niel had yet opened the door to such partners on Friday night in an interview with the "Wall Street Journal". And Reuters Tuesday evoked discussions between Iliad and operators U.S. cable or satellite (Dish Networks, Cox Communications and Charter Communications), or funds like Ontario Teachers Pension Plan or the Singapore GIC.
"Iliad can find investment companies concerned, but it may be more complicated with local industrial partners cable or satellite, an analyst estimated yesterday. From the point of view of governance and capital participation, to partner with a company like Iliad, it will likely follow a very aggressive strategy is not obvious at all. " He added: "Let Iliad find partners within one or two months, the case is closed."
Iliad sticking to its position, it is Deutsche Telekom could now have in hand. The German operator presents its interim results this morning. A priori, the Americas should be on the agenda.

Les Echos : T-Mobile US : Sprint hors course, Free prend le risque de la patienc

Devant les réticences des autorités antitrust américaines, Sprint renonce à acheter T-Mobile US.
Désormais seul en lice, Free ne serait pas pressé de monter son prix, jugé insuffisant par le vendeur Deutsche Telekom.
lI est urgent d'attendre. Free et sa maison mère Iliad n'avaient pas l'air pressés d'améliorer leur offre sur l'opérateur américain T-Mobile US, hier, après le coup de théâtre de la nuit précédente : alors qu'il convoitait depuis des mois la filiale américaine de Deutsche Telekom, en vente depuis 2011, Sprint, le troisième opérateur américain, détenu par le japonais Softbank, a finalement décidé de jeter l'éponge. Trop compliqué du point de vue des règles antitrust.
Pour Xavier Niel et ses hommes, c'est déjà une première victoire. Il reste aujourd'hui le seul acheteur en lice, avec son offre formelle à 15 milliards de dollars dévoilée la semaine dernière. « Il fallait être naïf pour penser qu'il visait à concurrencer l'offre de Sprint. Il jouait la carte de la seule solution alternative », décrypte un analyste.
Dès le départ, Free misait sur un feu rouge des autorités de régulation américaines à une fusion entre Sprint et T-Mobile US. Pari gagnant. Le président de la Commission fédérale des communications (FCC), Tom Wheeler, a confirmé hier sa position, se félicitant du retrait de Sprint et répétant sa préférence pour un marché à quatre opérateurs, « bon pour les consommateurs américains ».
Free a beau rester seul en lice, il est toutefois encore loin d'avoir plié l'affaire. Selon nos informations, Deutsche Telekom n'avait toujours pas accusé réception, mercredi après -midi, de la proposition française. Du côté d'Iliad, donc, pas de quoi s'emballer. D'autant que le groupe allemand tiquerait vraiment sur la somme proposée par Iliad, et s'apprêtait à rejeter l'offre du français. Deutsche Telekom pourrait être tenté de faire monter les enchères auprès de Free. Ou tout simplement choisir de poursuivre son périple américain en solo. Ce qui réclamerait quelques investissements pour repositionner T-Mobile US pour de bon face à ses concurrents, les mastodontes Verizon et ATT.
Attendre et voir venir
Chez Free, il semble qu'on ne souhaite pas améliorer l'offre pour le moment, quitte à prendre le risque de voir apparaître de nouveaux concurrents. « Du point de vue tactique, ce n'est pas dans notre intérêt de le faire maintenant... surtout que Sprint s'est retiré », souligne une source proche du dossier. D'autant que sur le fond, Iliad estime avoir fait une proposition correcte en offrant 33 dollars par action - et même 36 dollars, en intégrant les synergies annoncées. Soit une prime de 42 % par rapport au cours du titre fin 2013, avant les premières rumeurs de fusion avec Sprint.
De même, une source proche de Free, contactée hier après le retrait de Sprint, assurait qu'Iliad n'était pas à la recherche de partenaires pour l'aider à améliorer son offre. Xavier Niel avait pourtant ouvert grand la porte à de tels partenaires, vendredi soir dans une interview accordée au « Wall Street Journal ». Et Reuters évoquait mardi soir des discussions entre Iliad et des opérateurs câble ou satellite américains (Dish Networks, Cox Communications et Charter Communications), ou des fonds comme l'Ontario Teachers Pension Plan ou le singapourien GIC.
« Iliad peut trouver des sociétés d'investissement intéressées, mais cela risque d'être plus compliqué auprès de partenaires industriels locaux du câble ou du satellite, estimait hier un analyste. Du point de vue de la gouvernance et de la participation capitalistique, avoir comme partenaire une société comme Iliad, qu'il faudra probablement suivre dans une stratégie très agressive, n'est pas évident du tout ». Avant d'ajouter : « Soit Iliad trouve des partenaires d'ici un ou deux mois, soit le dossier est clos ».
Iliad campant sur ses positions, c'est Deutsche Telekom qui pourrait désormais avoir la main. L'opérateur allemand présente ses résultats semestriels ce matin. A priori, les Amériques devraient être à l'ordre du jour

WSJ : Obama Says Treasury Department to Act to Curb Tax Inversions

--> Means we are going to see some deals coming faster or no deals anymore....look at Shire & Glaxo

Obama Says Treasury Department to Act to Curb Tax Inversions
President Doesn't Want Trend of U.S. Firms Incorporating Overseas to Avoid U.S. Taxes to Grow

WASHINGTON—President Barack Obama on Wednesday said the U.S. Treasury Department would work "as quickly as possible" to curb moves by some U.S. firms to incorporate overseas in a way that allows them to avoid U.S. taxes, blasting a "herd" mentality among such companies.

Mr. Obama's comments, at a news conference concluding a summit with African leaders, came as the Treasury begins a review of existing rules and regulations to assess potential moves to halt or limit so-called inversions. A number of U.S. companies have taken advantage of the tax structure in recent months, and the Obama administration has called on Congress to prohibit such behavior. Congress appears unlikely to act on the matter soon, and Mr. Obama said the Treasury would have to act instead.

"We don't want to see this trend grow," Mr. Obama said.

In his remarks, Mr. Obama said companies that don't use inversions are "proud to be American," are "responsible actors," and are "proud to pay their fair share."

He said the Treasury was examining existing laws and rules to see what changes "can at least discourage" these inversions.

Several tax attorneys have said a number of companies are weighing options in response to the new stance by the White House. Firms could decide to expedite their tax restructuring before new rules are in place, or they could pause to avoid becoming a political punching bag.

"It's not fair," Mr. Obama said. "It's not right. The lost revenue to Treasury means it has to be made up" by other taxpayers.

A number of Republicans have also criticized the spate of inversions, but they have said the best way to address the practice is through a comprehensive overhaul of the tax code instead of a piecemeal change.

House Budget Committee Chairman Paul Ryan (R., Wis.) has said that some of the legislative changes the White House has proposed to address inversions could have the unintended consequence of leading more foreign companies to take over U.S. firms.