(KEP-CHEU) Orange Upgraded from Reduce to Hold PT €11 (+9.5% upside)

In its prime or over the hill?

We adjust our numbers and views after the Q4 2013 results and recent M&A activity in France. Consolidation in France implies long-term churn reduction and some market repair. But Orange also seems more acquisitive, guidance is challenging and the stock is trading at a premium to our top picks. We see better opportunities elsewhere in the sector. Rating upgraded from Reduce to Hold, TP raised from EUR10 to EUR11.

* Domestic consolidation provides upside
Irrespective of the final outcome of the two bids for SFR we think the
market will eventually consolidate, probably with two deals rather than just
one. In the long term, we expect Orange to benefit from lower churn and
some market repair, while not facing management distraction, execution
risk or overpayment.

* But expensive foreign acquisitions looming
Nevertheless, we do see a growing risk of Orange playing an active role in
M&A in other European countries, some of which may be quite expensive
(particularly Spain). The company may have created a war chest with the
DPS cut and the EUR2.8bn hybrid.

* Guidance challenging, estimates below consensus in 2015
We see 2014 EBITDA guidance as challenging, as revenues continue to slide
(price pressure in France, enterprise, Belgium, lower roaming fees) and costcutting
potential is lower. Our estimate for 2014 restated EBITDA is
EUR11.94bn (excluding Dominican Republic) with a 0.4pp margin loss versus
guidance of EUR12.1-12.6bn and stable margin, only 1% below consensus
and 0.5% below the low end of guidance. On 2015E EBITDA, we are 2%
below consensus. Orange gave an informal indication of flat to slightly
increasing capex in 2014. Assuming flat capex, we estimate EUR6.32bn of
op/FCF in 2014E, -10%. We also see another 6.5% op/FCF decline in 2015E
but we raise our 2014-15 DPS estimate from EUR0.5 to EUR0.6.

* TP raised from EUR10 to EUR11, rating up from Reduce to Hold
Adjusted for roaming revenues and tax credits, Orange would trade at a
2014E EV/EBITDA of 5.3x, a P/E of 12.5x and a FCF yield of 8.2%. These
multiples still reflect a modest discount to peers (somewhat deserved by its
lower growth profile; in fact, on 2015E multiples the discount narrows), but
a modest premium to our top picks Telefónica and Telecom Italia. Orange
has enjoyed an M&A-driven rerating. We believe investors may now focus
on the next stocks to benefit from the upcoming round of consolidation
(mainly in Spain and Italy). We see 7.5% upside, limited downside and a good
dividend yield, but we also see better opportunities elsewhere.

Fwd:>>> Orange prepares bid for Jazztel with adviser Bank of America

JAZ SM +3.39%, already decent volume today - we have been buyer since this morning.

----- Original Message -----
From: LAURENT CHEKROUN ()
At: Mar 25 2014 08:14:02

Orange prepares bid for Jazztel with adviser Bank of America Merrill Lynch; deal could be worth EUR 2.7bn
French teleco Orange has appointed Bank of America Merrill Lynch to prepare an offer for the Spanish cable company Jazztel (JAZ:SM), El Confidencial reported citing financial sources. Orange has been working with the bank for several weeks to analyse an offer worth almost EUR 2.7bn, according to the report.

Other sources said that talks have been on and off for some time without the parties having reached any agreements, the Spanish-language report said.

Jazztel reported EUR 1.044bn revenue in 2013 up 15% on the previous year, EBITDA of EUR 184m (up 7%) and net profit of EUR 67.6m (up 9%), the report noted.


Source El Confidencial

(NY Post) IPO could value GrubHub at $1.7B

GrubHub said it expects to price its initial public offering of 7.03 million shares at $20 to $22 per share, valuing the largest US online food-delivery services provider at up to $1.72 billion.
The Chicago-based company said the IPO is expected to raise about $155 million, based on the top end of the price range.
GrubHub, which handles pickup and delivery orders for restaurants online and via the phone, said it would sell 4 million shares in the offering. The rest are being offered by stockholders.
The company is seeking capital to extend its network to more cities across the United States to sustain growth.
GrubHub had about 28,800 restaurants and 3.4 million active users in its network as of Dec. 31, and processed an average of 135,000 orders daily in 2013.
The company’s revenue jumped 67 percent to $137.1 million in 2013, while net profit slid to $6.8 million from $7.9 in 2012.
GrubHub is the latest consumer dotcom name to tap public markets in 2014. China’s Twitter-like messaging service Weibo Corp. and Chinese e-commerce company JD.com have filed for IPOs in the US.
Others expected to try to go public this year include cloud storage provider DropBox and its more enterprise-focused rival Box.
GrubHub, backed by Spectrum Equity, Benchmark Capital and Warburg Pincus, among others, said it expects to list its common stock on the New York Stock Exchange under the symbol “GRUB.”
The company, created through a merger of GrubHub and Seamless last August, named Citigroup and Morgan Stanley as lead underwriters to the offering.

(NY Post) London authorities probe two mysterious banker deaths

Police and coroner officials in London have launched probes into the mysterious deaths of two bankers.
Investigators began Monday investigating the death of William Broeksmit, 58, a retired Deutsche Bank executive found hanged in his London home on Jan. 26.
At the time of his death, a company memo said, “He was considered by many of his peers to be among the finest minds in the fields of risk and capital management,” Deutsche Bank co-CEO Anshu Jain wrote.
Broeksmit was “instrumental as a founder of our investment bank” and Jain’s memo called him “a dear friend and colleague to many of us who benefited from his intellect and wisdom.”
In 2012, Broeksmit was named by Jain and co-CEO Juergen Fitschen to become Deutsche Bank’s chief risk officer, but German financial authorities said he lacked the needed managerial experience to oversee the office.
The other banker inquest — set to begin in late May — is looking into the mysterious death of Gabriel Magee, the 39-year-old vice president of technology at JPMorgan, whose body was discovered on the ninth-floor roof of a building connected to the firm’s 33-story London headquarters.
Modal Trigger

There were no eyewitnesses to Magee’s fall. His body was discovered at 8 a.m. Jan. 28 by workers coming into work in the adjacent building, who called authorities.
Police reports at the time said the death was non-suspicious.
Magee — an American banker working in the European headquarters of JPMorgan in the Canary Wharf section of London — reportedly emailed his girlfriend the night before his body was found to say he was on his way home from the office.
When he did not return, his girlfriend contacted police to make a missing person report.
Meanwhile, detectives in Stamford, Conn., are still awaiting toxicology reports in the death of Ryan Crane, the JPMorgan executive director.
Crane, 37, was found dead in his Stamford home on Feb. 3.
A JPMorgan spokesperson at that time said there was no apparent connection between the two deaths. Police officials expect the lab results in late April.
Last week, Kenneth Bellando, 28, who previously worked at JPMorgan, was found dead after an apparent leap from his East Side home, police said.
Bellando’s brother John is a top chief investment officer with JPMorgan, whose work focuses on risk exposure valuations and is cited in Senate Finance Committee testimony on the London Whale trade.

>>> Scania union close to agreement with Volkswagen

Scania union close to agreement with Volkswagen 

Scania’s (STO:SCV-B) union is close to an agreement with German auto giant Volkswagen (FRA:VOW)regarding union rights in the event of a full takeover of the Swedish truck maker, according to Dagens industri.

The Swedish business daily reported that it has been speculated that the deal between Scania and Volkswagen may fail partly due to discontent of Scania’s unions. However, vice-chairman at the union Verkstadklubben Scania, Michael Gustafsson, said that the involved parties agree on most matters and he believes an agreement will be concluded even though he could not specify when. The paper wrote, citing unnamed sources, that an agreement between Verkstadsklubben Scania and Volkswagen is expected within days.

Gustafsson declined to disclose details of the potential agreement but said that it mainly concerns the possibility to influence employment issues and factory locations. He also pointed out that the potential agreement will not be put in place unless Volkswagen’s full takeover of Scania succeeds.


Source Dagens Industri

>>> Dixons: 'nothing happening' with BC Partners

Dixons: 'nothing happening' with BC Partners

Talk of a counter-bid for the listed UK-based electrical goods retailer Dixons Retail from BC Partners was downplayed yesterday, 24 March, the Financial Times reported. The newspaper’s market report section cited people familiar with the companies who said there was nothing happening.

The article noted a report yesterday that the buyout group BC Partners had approached Dixons about a counter offer to the proposed merger with Carphone Warehouse.

BC Partners had planned to list its Phones4U mobile phone retailing business, but those plans are on hold, the item said. Investors said it was therefore unsurprising that BC Partners would look to reverse Phones4U into Dixons, according to the newspaper.

A Daily Telegraph report said Phones4U is believed to have sounded out Dixons about expanding their commercial relationship, under which Phones4U has retail outlets in Dixons' Currys and PC World stores. The newspaper did not cite a source for the claim. However, it is understood that Phones4U and Dixons are not in discussions regarding a merger or takeover, the article added.

BC Partners owns Mergermarket Group, publisher of this news service.

Dixons Retail’s share price closed 0.11p down at 50.00p in London yesterday, giving the company a market capitalisation of GBP 1.83bn.


Source Financial Times, Daily Telegraph

(Les Echos) SFR: Minority Vivendi want more transparency

Link to google Translation : {http://bit.ly/1kZQCWX}
Link to Original French Article : { http://bit.ly/1gwuZOC}

SFR: Minority Vivendi want more transparency

Colette Neuville asked Jean-René Fourtou more transparency on both offers.
She also wants Vivendi shareholders can express their opinion in general meeting.

New episode in the series from the sale of SFR by Vivendi. Colette Neuville, president of Adam (Association of Defence of minority shareholders ) up to the plate. It was commissioned by Jean-Charles Mériaux, Chief Manager DNCA Finance, which has invested its customers 300 million euros. The latter, which has suddenly, a little over 1% of the capital, "Vivendi wants to take the best decision for the shareholders."
Perplexity of shareholders
March 20, Colette Neuville wrote to Jean-René Fourtou, Chairman of the Supervisory Board of Vivendi asking for more transparency on both offers. "Shareholders are puzzled by the fact that the Council has made ​​its decision at the end of a meeting just three hours, two days after the submission of tenders. And even though, it is easy to see that the part payment in cash provided by Numericable is slightly higher than (the first offer of Bouygues, Ed) Bouygues, the party titles is very difficult to assess " , she says in her letter.
She asked not only to be communicated elements relating to the valuation of the two offers, but also to submit to a general meeting . This application is not running. French law does not require such a device (unlike Anglo-Saxon law, which provides that whenever there was a cessation of essential assets, shareholders vote). Colette Neuville protested against the way the dichotomy in treatment between the shareholders of a controlled more than 40% (which in this case can be a company buyout offer ) and those of a non-company controlled (which do not have that exit). A great opportunity for her to develop the securities laws.
Strong pressure from the president of the Adam
If she does not get the required transparency, the president of the Adam plans to enter the commercial court to request the appointment of an expert. Nobody knows if Colette Neuville go that far. It is clear in any case it puts pressure on the chairman of the Supervisory Board of Vivendi and other members, who may fear that their subsequent responsibilities are implicated. Especially since Bouygues has since put on the table an offer even better bidder.

(BFW) Hornbach Family to Buy Back Kingfisher Stake, Free Float to Rise

DBF 03/25 07:05 DGAP-News: HORNBACH Familien-Treuhandgesellschaft mbH: Hornbach family to buy back ordinary shares in Hornbach Holding AG from
 BN 03/25 07:11 *HORNBACH BAUMARKT FREE FLOAT SET TO RISE TO 23.6% FROM 18.4%
 BN 03/25 07:10 *HORNBACH HLDG PREF SHR FREE FLOAT SET TO INCREASE TO 100%
 BN 03/25 07:08 *HORNBACH FAMILY TO BUY BACK HORNBACH STAKE HELD BY KINGFISHER
 BN 03/25 07:06 *HORNBACH FAMILY TO BUY BACK SHRS IN HORNBACH FROM KINGFISHER
 BN 03/25 07:05 *HORNBACH FAMILY TO BUY BACK ORDINARY SHRS IN HORNBACH HOLDING
 BN 03/25 07:05 * HORNBACH FAMILIEN-TREUHANDGESELLSCHAFT MBH: HORNBACH FAMILY TO
Hornbach Family to Buy Back Kingfisher Stake, Free Float to Rise
2014-03-25 07:17:43.434 GMT


By Gaurav Panchal
     March 25 (Bloomberg) -- Hornbach family to buy back
minority stake held by Kingfisher in unlisted ordinary shares in
Hornbach Holding (25% plus two shares).
  * Albrecht Hornbach expects sale of listed Hornbach shares
    from Kingfisher’s holdings to impact positively on share’s
    stock market tradability.
  * For 8m preference shares in Hornbach Holding listed in SDAX,
    free float to increase to 100% from 82.6%
  * Baumarkt free float to rise to 23.6% from 18.4% of total of
    31.8m listed ordinary shares
  * Statement:{NSN N2ZD0R3PR6RL <GO>}
  * Earlier: Kingfisher to dispose entire 21.2% stake in
    Hornbach for ~GBP195m {NSN N2ZD0G6TTDSB <go>}


Link to Company News:{HBH3 GR <Equity> CN <GO>}
Link to Company News:{KGF LN <Equity> CN <GO>}
Link to Company News:{HBM GR <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

(Les Echos) SFR Bouygues Vivendi wants to reassure the competitive risks of the

Link to Google Translation : {http://bit.ly/1oYcGD9}
Link to Original French article : {http://bit.ly/1fdtvU8}

SFR Bouygues Vivendi wants to reassure the competitive risks of the operation

Bouygues remains very confident in the success of its bid for SFR. Evidenced by the non-performance that would have been included in the new proposal was made Thursday night at Vivendi for the redemption of the second French telecom operator. The information revealed by the website "La Tribune" yesterday, confirmed the "Echos" by a source. The amount of this clause approaching 500 million euros, according to our information. The construction group has undertaken to pay this amount if the merger between SFR and Bouygues Telecom would be blocked by the Competition Authority, or if requested by counterparties it proved too large relative to synergies announced (10 billion euros). Asked Bouygues did not wish to comment on the information.
"This is an argument for saying that their operation does not include contingencies," considered an expert in the sector. Competitive problem is thus considered as one of the main risks in the context of a marriage Bouygues, SFR, because the mobile market is dominated by two giants (with Orange), totaling nearly 90% market share. Bouygues estimates have already made strong guarantees sealing an agreement with him for Free resell its network and part of the spectrum for $ 1.8 billion.
"No excitement"
Nothing says that a clause of the same type has not been shown in the tender Numericable. Competitive risks were lower, but they exist as part of a rapprochement with the cable operator, including the distribution of TV content. If this were the case, the amount would probably be less. In the environment of Numericable entered into exclusive negotiations with Vivendi since March 14 until April 4, it is not moved by these revelations. "Teams normally work without any excitement," says a source close to society. So far, no increase in supply is the order of the day in the clan Patrick Drahi, founder of Numericable. The increase in the share of the cash offer would not necessarily be a decisive argument, according to its supporters. "What's important for Vivendi, is to be fluid and can quickly get out," one trusts of them. That Numericable, already listed, expects to make by offering a 32% stake in the new entity.
R. G. and S. G., Les Echos