>>> Private equity firms targeting assets of Lafarge, Holcim following merger an

Private equity firms targeting assets of Lafarge, Holcim following merger announcement - financial press
- Following merger plans announced last week, Lafarge and Holcim are planning to sale assets of quarries, cement facilities valued at around £4.1B to address competition concerns. 
- Approx two thirds of assets being sold are in Europe; assets also located in India, China, Canada and Brazil. 
- Spinning off assets as listed businesses may also be a possibility. 
- Interest is likely to come from Cemex, Dangote, Votorantim, Argos, Semen Indonesia, Heidelberg Cement and CRH. 

**Note: Apr 6 HOLN.CH: Follow up: Holcim, Lafarge said to have agreed to the terms of a merger; estimated value of new business at $55B - financial press 
- Separately: The deal is expected to meet strict antitrust investigations; regulators in various countries may request significant assets sales, with British regulators possibly blocking the deal - FT 
- Official announcement regarding merger, as well as certain assets sales expected later today

(BFW) Glencore to Sell Its Stake in Las Bambas Copper Mine for $5.85b

Glencore to Sell Its Stake in Las Bambas Copper Mine for $5.85b
2014-04-13 17:24:25.45 GMT


By John Simpson
     April 13 (Bloomberg) -- Group 62.5%-owned by MMG, 22.5% by
Guoxin International Investment and 15% by Citic Metal to buy
stake, Glencore says in e-mail.
  * All capex and other costs in developing project from Jan. 1
    to closing of deal will be payable by the group
  * China Minmetals, which holds ~74% of MMG, irrevocably
    committed to vote in favor the deal, Glencore says
  * BMO Capital Markets, Credit Suisse acting as financial
    advisers to Glencore in sale

Link to Company News:CITIC CH <Equity> CN <GO>
Link to Company News:GUOXINVZ CH <Equity> CN <GO>
Link to Company News:GLEN 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:
John Simpson at +1-416-203-5726 or
jsimpson12@bloomberg.net

FT : Citi unveils pricing tool for block trades

Citi unveils pricing tool for block trades

Citigroup is launching an electronic pricing tool that will allow its institutional customers to see prices for equity block trades, as it seeks to simplify the trading process and draw more business.
It will allow hedge funds, asset managers and mutual funds to trade on prices shown on their screens rather than the more traditional methods used for large tailored block orders such as phone calls to and from banks for price quotes.

A block trade of shares is typically a parcel of 10,000 shares or above.
Trading electronically helps to limit information leakage as clients do not have to discuss their plans over the trading floor telephones.
Citi says that it will not receive information on a client’s inquiry unless it executes the trade.
“This is just the ability to price real time blocks,” Mani Singh, a director in global execution sales at Citi said. “It offers greater transparency to the client without information leakage and signalling.”
He added: “At the moment there’s nothing in the market to create – on demand – a price that’s actionable specific to their order size.”
In trading, an “actionable” price means that clients can trade at that price as opposed to an indicative price.
The product builds on the bank’s electronic block execution platform that offers clients access to Citi’s $22bn liquidity in asset classes from exchange traded funds to US stocks and Latin American equities.
Citi’s equity trading business grew its revenues to $539m in the fourth quarter of last year from $465m a year ago.
That is about half the size of Bank of America and a third of the size of Morgan Stanley. The latest addition will form part of the Bloomberg App portal, a platform on the terminal for third-party applications.
Claudio Storelli, global business manager for the Bloomberg App portal, said: “It’s a way for the user to do more with less clicks and less time, it’s a much more efficient, modern way of executive block trades.”
Citi’s move comes as block trading of equities has come under scrutiny from US regulators amid a crack down on proprietary trading with the implementation of the Volcker rule, under the 2010 Dodd-Frank Act.
A block trade usually involves the bank holding a parcel of securities for a period until it can find another client to buy that stock, raising the debate of whether this constitutes market-making or proprietary trading.
Citi’s efforts come as several of the world’s biggest asset managers discuss the creation of a joint equity trading venue, to attempt to stem the technological arms race sparked by high-frequency trading firms.
Fidelity, the Boston manager with $1.9tn under management, has consulted with rivals about putting equity trades through a central venue that would rival mainstream stock exchanges and so-called “dark pools” of liquidity.
Equity markets have experienced a pronounced reduction in order and transaction sizes and significant fragmentation of liquidity across numerous trading venues.

WSJ : Tech insiders unload shares ahead of slide

Tech insiders unload shares ahead of slide

Insiders at some of the hottest private and publicly traded internet companies unloaded substantial personal stakes ahead of the slump in tech stocks that started at the beginning of March.
The selling has stirred unease among some investors, who see the sales as opportunistic moves revealing a lack of confidence in their companies’ stock prices as shares in the fastest-growing internet companies soared in 2013.

Selling by founders and other insiders at private companies – taking advantage of a bubble in valuations in start-ups thought to be close to doing an IPO – raise some of the biggest concerns, according to investors.
“Individuals selling before going public is always a bad sign,” said Mr Sebastian Thomas, a portfolio manager at Allianz Global Investors. “If you believe in the business, why would you take out money at what is presumably a lower valuation in the private market?”
As the lock-ups which prevented insider sales after their 2012 IPOs expired, executives and directors at companies such as Workday, ServiceNow and Splunk have sold steadily, raising almost $750m between them over the past 12 months.
Shares in these so-called “software as a service” companies, which sell online access to software applications running in their own data centres, have fallen 30-45 per cent from peaks hit six weeks ago.
“It was a great deal for them – they took advantage of a big run-up,” said one tech investor.
Many of the sales were made through pre-arranged stock trading plans that spread disposals over a long period of time, so that corporate insiders have no discretion over the timing of individual transactions. Also, the slump in tech stocks has in many cases only wiped out the gains of the last six months, leaving share prices still above the levels insiders were selling for much of last year.
Among the biggest sellers, Jeff Bezos, chief executive of Amazon, raised $351m in February, taking his total sales to more than $1bn in just six months – more than three times the amount he had raised in the previous year.
Amazon shares have since fallen back 11 per cent, though Mr Bezos’ latest sale was still 14 per cent below the peak Amazon hit in January.
Sheryl Sandberg, chief operating officer of Facebook, has sold more than half her stake since the company’s IPO less than two years ago, benefiting from the steady rise in Facebook’s stock since the middle of last year. However, Ms Sandberg, whose disposals were made under a prearranged plan, began her sales when Facebook’s stock was at $21.08, well below the $58.53 it ended at last week.
Around 11 per cent of fundraising rounds for private companies last year included some level of selling by insiders, compared with fewer than 6 per cent three years before, according to research firm Privco.
“The old adage in Silicon Valley‎ used to be that founders didn’t get to cash out until all investors got to cash out,” said Sam, of Privco. Fierce competition among venture capitalists to back the hottest companies has made them more willing to countenance insider sales, he added.
Among insiders to take money out of their companies before going public, early backers of King Digital Entertainment, maker of the Candy Crush Saga game, were paid $504m in dividends in the months before their company went public. The company’s shares ended last week 22 per cent below their March IPO price.
“It’s a yellow flag with regard to what’s really going on with the company,” said Mr Thomas. “It makes you worry what they are trying to sell to investors.”
Three executives at Box, a cloud storage company which has posted big losses and raised questions about whether the recent tech stock rally has made it too easy for companies to become public entities, sold $11m of shares during private financings, according to the company’s prospectus.

WSJ : Givaudan's Quality Still Tastes Good

Givaudan's Quality Still Tastes Good

Givaudan is on a chemical high.

Shares in the Swiss maker of flavors and fragrances are valued at more than 19 times earnings, well ahead of the European chemical sector in the midteens.

Even at this level, though, investors shouldn't turn up their noses.

Givaudan arguably has more in common with its customers—consumer-goods and food makers such as Unilever, Nestlé or L'Oréal—than with traditional chemical companies. Its customers benefit from increasing demand in emerging markets for packaged food or household products. Like Givaudan, which makes about 45% of sales in emerging markets, they trade close to 20 times earnings, well above average valuations over the past five years.

And worries about ailing sales in emerging markets seem to be fading. Excluding currency fluctuations, Givaudan's sales rose 5.7% in the first quarter, it said Friday, above target. Developing-market revenue increased close to 10%.

Givaudan leads a sector dominated by four companies, with a 25% market share. In emerging markets, where it sells to multinational consumer groups as well as homegrown champions, its market share is higher still. Givaudan has one-third of the African flavoring market, for example.

Givaudan also can offer investors consistency and cash. The company has posted annual sales growth of 5.5% since 2008; its margin on earnings before interest, taxes, depreciation and amortization has stayed in a narrow range between 19% and 23% since 2000.

Given the importance of taste and smell as attributes in end products, the industry has proved adept at passing on price increases in more than 10,000 chemical and natural ingredients to its customers, notes Liberum. Givaudan's profit margin should improve this year from 22.2% in 2013 as cost savings from a new plant in Hungary materialize.

Meanwhile, the Swiss company already has hit its 2015 target to generate free cash flow equivalent to between 14% and 16% of sales. Its pledge to pay out a minimum of 60% to shareholders meant a 30% increase in the dividend last year and a yield of 3.5%, well above smaller rivals. The price may seem heady, but Givaudan should appeal to those with a taste for quality.

WSJ : Symrise Offers to Buy Diana Group From Ardian for €1.3 Billion

Symrise Offers to Buy Diana Group From Ardian for €1.3 Billion

Symrise Would Acquire All Shares in Diana's Kerisper; Deal Seen Closing in Third Quarter

BERLIN— Symrise AG SY1.XE -2.56% has offered to buy French food ingredient maker Diana Group from private-equity firm Ardian in a €1.3 billion ($1.8 billion) deal.

The transaction, which will see Symrise acquire all shares in Diana Group's holding entity Kerisper S.A.S., is expected to close in the third quarter of 2014, the Holzminden, Germany-based flavor and fragrance company said late Saturday. French investment firm Ardian used to be known as AXA Private Equity.

The purchase of the Vannes, France-based Diana Group will enable Symrise to accelerate growth and strengthen raw material supply, Chief Executive Heinz Jürgen Bertram said in a statement. The purchase values Diana at about 14 times its earnings before interest, taxes, depreciation and amortization.

Symrise said it has already secured the required bridge financing, which it plans to refinance with a mix of debt and equity financing subject to market conditions.

Symrise expects the acquisition to be accretive to earnings per share from 2015 onward, and generate pro forma sales of nearly €2.3 billion. Symrise had sales of €1.83 billion in 2013.

Diana Group has around 2,000 employees and sales were around €425 million in 2013.

FT : Mario Draghi steers European Central Bank towards negative rates

Mario Draghi steers European Central Bank towards negative rates

Mario Draghi...President of European Central Bank Mario Draghi speaks during a news conference in Frankfurt, Germany, Thursday, Nov. 7, 2013, following a meeting of the ECB governing council. The ECB lowered its key interest rate from 0.5 to 0.25 per cent. (AP Photo/Michael Probst)©AP
President of European Central Bank Mario Draghi speaks during a news conference in Frankfurt
Mario Draghi’s hint that the European Central Bank is readying more monetary easing suggests that eurozone policy makers’ next move will take them where no big central bank has gone before: cutting one of its key interest rates below zero.
The ECB president said on Saturday, following the spring meetings of the International Monetary Fund and World Bank, that a strengthening of the euro “requires further monetary stimulus”.

Several officials have said cutting the rate the central bank pays on deposits parked at the ECB below the current level of zero would be their preferred option to tackle the single currency’s appreciation.
Eurozone policy makers hope a decision to join the very select group of central banks that have imposed negative interest rates will make it less attractive for banks and investors to hold euros by, in effect, charging a levy on savings in the single currency.
Mr Draghi’s words came amid demands from the IMF, finance ministers and central bankers gathered in Washington that the eurozone do more to stave off a damaging bout of low inflation, running at just a quarter of the central bank’s target.
A big reason why inflation is so low is the euro’s strength, which makes imports from outside the region less expensive, in turn lowering price pressures across the bloc.
The single currency has risen 6 per cent against the dollar and 9 per cent against the yen in the past year, and remains close to multiyear highs. This appreciation has come despite increasingly dovish noises from the ECB this month, including its strongest hint yet that it could embark on mass purchases of government bonds – known as quantitative easing.
The ECB used the weekend’s meetings to press the message that if it takes further action, it will cut interest rates – possibly into negative territory – before embarking on quantitative easing.
Only a few central banks, including Sweden’s Riksbank and Denmark’s National Bank, have ever tried negative deposit rates. The results were inconclusive.
Some eurozone policy makers say taxing banks for holding euros will spur lenders in the bloc’s core to channel funds to their counterparts in the region’s periphery, as well as encouraging investors to buy other currencies. If the euro fell, then it would become easier for the region’s businesses to sell their goods and services at home and abroad.
But others say negative rates could have unintended consequences and that cutting much below minus 0.25 per cent might prompt investors to simply hold cash instead. With little precedent, there is also considerable uncertainty about the impact of such a move on a currency as important as the euro, which is held by investors around the world.
In comments to journalists on Saturday, Mr Draghi reiterated that the ECB did not have a target in mind for the euro, but stressed that its appreciation over the past year “was important for price stability”.
“The strengthening of the exchange rate would require – to make our monetary stance equally accommodative – further monetary policy accommodation,” Mr Draghi said, adding: “The strengthening of the exchange rate requires further monetary stimulus. That is an important dimension for us”.
The comments mark the latest attempt by Mr Draghi to talk down the euro.
Mr Draghi believes the euro’s strength is one of the most important reasons for the disinflationary trend in the currency bloc. The ECB president says that the euro’s appreciation has knocked between 0.4 and 0.5 percentage points off inflation since 2012.
Crucially, Jens Weidmann, Bundesbank president and the ECB governing council’s arch hawk, said last month negative rates were the best defence against a strong euro – signalling he would also support this approach ahead of quantitative easing.
The Bundesbank is unlikely to back further policy easing until the ECB announces a fresh forecast for inflation in June, however. Germany’s central bank wants to be convinced that Europe’s undershooting of its “below but close to 2 per cent” inflation target will be breached for a prolonged period. Still, a lower than expected reading for inflation this month could prompt the majority of the committee to vote for action before then.
Inflation is expected to bounce this month to about 0.9 per cent, after falling to 0.5 per cent in March – its lowest level in more than four years.
When interest rates go negative:
The idea of paying a bank to park your savings there, at first glance, appears bizarre.
But, crazy as it might seem, with interest rates close to zero around the globe and central bankers desperate for growth, some of the world’s monetary guardians have already resorted to this measure.
The ECB has now sent out a strong signal that it could be next, indicating it will turn interest rates negative to counter any further strengthening of the euro.
The negative rate would be applied on one of the ECB’s three key interest rates: the deposit rate. The deposit rate, now at zero, is the interest rate the ECB pays on the reserves that banks hold at the central bank.
If policy makers cut the rate below zero to, say, minus 0.1 per cent, then banks would have to pay the central bank an annual rate of 0.1 per cent on reserves parked overnight at the ECB.
The ECB is hoping that this fee would encourage banks to increase lending to credit-starved businesses.

FT : UBS to pay half of profits in dividends to shareholders

UBS to pay half of profits in dividends to shareholders

UBS will start paying out half of its profits to shareholders this year, its chief executive has said, and the Swiss bank looks set to become one of the highest dividend payers in a sector still grappling with the aftermath of the financial crisis.
Three years after joining UBS, Sergio Ermotti signalled in an FT interview that the bank will this year reach one of the prime goals of its radical restructuring by increasing the level of dividend payout from 30 to at least 50 per cent.

Such a payout ratio has been first flagged as a target in late 2012, when the investment bank’s history of outsized losses and a rogue trading incident prompted management to slash 10,000 jobs and wind down most bond trading businesses.
UBS has never given a timeframe for the target other than saying it would be contingent on the bank reaching a 13 per cent core tier one ratio – a crucial gauge for balance sheet health.
The target was narrowly missed with 12.8 per cent last year – still one of the highest ratios of large global banks – after the Swiss regulator Finma forced the bank to set aside more capital for future legal risks.
It comes as investors have shifted their focus away from the downsizing of the investment bank towards an expectation of higher dividends and better returns in its wealth management unit, the largest globally by assets under management.
“Ideally I hope over the next few years, the balance between managing legacy, managing today and managing tomorrow can be adjusted,” Mr Ermotti said.
Analysts at JPMorgan and Morgan Stanley forecast the bank to pay out 100 per cent of profits as dividends either from next year or 2016 as they say the business is generating far more cash than the bank can reasonably invest.
“This is where the bank sector is going,” said Kian Abouhossein, analyst at JPMorgan. “There is going to be lower returns and less growth so the way to keep your shareholders happy is to pay out a lot.”
Analysts liken UBS to the Nordic model, where some lenders including Swedbank and Nordea have either reached or are on their way towards a 75 per cent payout mark in a well-capitalised, low growth but high-return “utility” banking strategy.
Some of UBS’s largest European rivals are still at early stages of multiyear restructurings, impeding their ability to pay high dividends.
Deutsche Bank and Barclays are forecast by a consensus of analysts to pay out 25 and 33 per cent respectively this year according to Berenberg.
A number of US peers’ payout plans are still slowed down by their regulator with ratios often below 30 per cent.
UBS’s share price has no longer outperformed the sector in the past 12 months as investors still see risks in the wind-down of its legacy assets and the bank’s host of litigation issues such as the probe into alleged forex market rigging.
“Today, and for the foreseeable future, the biggest risk banks will continue to have are legacy issues related to operational and conduct topics,” Mr Ermotti said.

>>> Barron’s summary: cautious on CACQ, CZR, LE, LOCK, DLLR

Barron’s summary: cautious on CACQ, CZR, LE, LOCK, DLLR

Cover story: Highflying stocks, led by Internet and biotech firms, are falling (Cautious on FB, LNKD, NFLX, N, NDLS, PBPB, CRM, NOW, TWTR, WDAY, Z), and with the exception of a nicely profitable FB, most look richly priced; overall the stock market seems healthy, with reasonably priced stocks doing well (Positive on AAPL, T, CAT, CVX, CSCO, DE, XOM, GOOG, JPM, MS, SPG, SO, WFC), a sign the market may be in the midst of a correction. 

- Features: 
1) Cautious on CZR, CACQ: Shares are down amid several concerns, including bondholder move to void asset sales and the possibility a debt restructuring could dilute equity holders, a situation pitting private equity firms APO and TPG against Oaktree Capital and Appaloosa Management; 
2) Cautious on LE: Clothing retailer has spun off from parent SHLD, but shares arent cheap, company carries a lot of debt, and growth could be hampered because of close ties to its former parent. 

- Tech Trader: Amid a drop in tech stocks, there may be opportunities for investors; Tony Ursillo of Loomis Sayles suggests buying selectively, as the promise for tech shares has not completely fallen apart (Positive on CRM, WDAY, PANW, CVT); Fred Hickey, publisher of the High-Tech Strategist, reduced put options on FB, YELP, TSLA, and CNQR, but is buying longer-dated put contracts on LRCX and XLNX. 

- Trader: Its been 18 months since investors have experienced this kind of volatility, and many view the pain as a healthy corrective after a huge run-up; Cautious on LOCK: Identity theft is a major concern, fueling bullish expectations, but a close look at results and a sober view of future customer uptake suggests the shares are overpriced; Cautious on DLLR: Shares of payday lender, the largest in the U.K., have suffered, but investors say terms of buyout offer from private equity firm Lone Star Funds could be better. 

- Small Caps: Positive on POST: Food giant continues to thrive under leadership of CEO William Stiritz, who has taken it into private-label and popular active nutrition products, and his strong track records bodes well for the future. 

- Follow-Up: Negative on DDD, XONE, SSYS, VJET: 3-D printing shares, facing a highly competitive market, still have farther to fall; the technology may one day upend manufacturing, but the current crop of public stocks wont necessarily be the beneficiaries. 

- Special Report: Retirement: Barrons looks at several strategies to help investors navigate a changing interest-rate landscape, including buying individual bonds of different maturities and holding them all to maturity; using ETFs to track various bond indexes; and opting for active management to take advantage of market swings; For people planning retirement, managing Social Security benefits is as important as managing investments. 

- Mutual Funds: Interview with Christopher Towle and Steven Rocco, Portfolio Managers, Lord Abbett High Yield (top ten issuers: Sprint, First Data, T-Mobile, Intelsat, Dish, Energy Future Intermediate Holding, Clear Channel, Alliance Data, Seven Generations Energy, CHS/Community Health); Interview with Mike Avery and Ryan Caldwell, Co-Managers, Ivy Asset Strategy Fund, who say their main worry is what management should do with all the return on equity central banks have gifted them. 

- European Trader: Greece is making progress toward a recovery, but opportunities for investors arent for the faint-hearted, though banks and a few other equities offer potential (Positive on Piraeus Bank, Hellenic Telecommunications, Coca-Cola HBC); Any weakness in Lafarge and Holcim shares following merger announcement could be a buying opportunity. 

- Asian Trader: Malaysia, which exports electronics components, oil, gas, and palm oil, is more leveraged to global growth than many neighbors. 

- Emerging Markets: Frontier markets have been on a tear, benefiting in part from investor worries about major emerging market countries like Brazil and China, but the star turn may be brief amid ongoing pressures. 

- Commodities: Canola futures have rebounded from 3-1/2 year lows, and increasing demand is likely to push prices even higher. 

- Streetwise: Though utilities remain hated on Wall Street, its still possible to find growth in those with large, non-regulated businesses such as SRE.