(Natixis) Iliad - Downgrade from buy to neutral ( in french )

The rally of the past few days now puts the title at a level that does not leave a lot of upside potential (+6%) to justify our opinion Buy . We therefore turn to Neutral .
* The soaring title yesterday ( 11.1 % or € 21 ) after the announcement of an agreement in principle on the mobile network and frequencies Bouygues in merger - SFR Bouygues , we seem to have been somewhat exaggerated compared to what is now a possibility, and that this agreement could relate to Free ( € 5, in first approach). Today we value Iliad 223 € without this perspective , ( against € 197 before) , the upside potential is limited ( 6.2 % ), and therefore we adopt a Neutral recommendation .
* However , it seems difficult to consider today this scenario incorporating the remains of Bouygues since Vivendi may well choose not to opt for a merger with Bouygues Telecom, and most importantly, the competition authorities may well oppose consolidation in the mobile, as they have elsewhere suggested in the past.
* To simply simulate what would , all things being equal , the purchase of Bouygues network and frequencies for € 1.8 billion , we simply simulated absence of Capex (over network to build) , and roaming costs over the period 2015/2020 , which would generate savings for Free Mobile approximately € 1.2 billion . For frequencies , it seems mandatory that we Bouygues sold at minimum , its 800 MHz spectrum , bought for € 683 million. If we assume then that Free Mobile recovers in addition , the spectrum in other bands ( 1800 and 2100 MHz ) for a value of approximately € 200 million impact for Free Mobile would be , roughly, a profit of € 2.1 billion at a cost of € 1.8 billion , representing a profit of around € 300 million (approximately € 5 per share) .
* EBITDA published S2 was slightly better than expected by the consensus in both the fixed and in the mobile . The group that were to achieve a 50% margin in the fixed ( against 44 % today) , we mainly revised upward earnings capacity fixed . For the consolidated group , the goal is now over 40 %. In our sum of the parts , these revisions have pushed our target price to € 223 ( vs € 197 ) . In the fixed , the group said they had not suffered from the DSL offering discount launched by B & You in early November , which seems reassuring face to the new offensive launched by Bouygues there fifteen days.

(BFW) Numericable in Weaker Position Than Bouygues on SFR, Kepler Says

Numericable in Weaker Position Than Bouygues on SFR, Kepler Says
2014-03-11 08:26:31.44 GMT


By Blanche Gatt
     March 11 (Bloomberg) -- Numericable may be in a “lose-lose
situation” on its SFR bid, as raising bid to match Bouygues’
offer would mean eroding value given EU4b difference in est.
synergies, Kepler Cheuvreux says in note.
  * Numericable drops as much as 4.2% on 4th straight day of
    losses; vol. 76% of 3-mo. daily avg. at 9:25am CET
  * Kepler Cheuvreux says losing out on SFR suggests risk of
    marginalization
    * Sale of assets to Iliad removed the possibility of
      becoming a mobile network operator through spectrum/base
      station acquisitions from the new co.
    * Bouygues deal likely to have more political backing;
      Altice is Luxembourg-based co.
    * Regulatory approval is key, Kepler Cheuvreux says
  * NOTE today: Vivendi SFR French Deal Preferred; New Bidder
    Unlikely: Liberum
  * NOTE today: Altice Confirms Its Made Cash/Stock Offer for
    Vivendi’s SFR
  * NOTE yday: Numericable Drops; Should Boost SFR Cash Bid to
    EU13b: Jefferies


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To contact the reporter on this story:
Blanche Gatt in London at +44-20-7392-0351 or
bgatt@bloomberg.net
To contact the editors responsible for this story:
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Chris Malpass

WSJ / NYT : Blackstone, TPG Prepare $5.5 Billion Bid for Gates Global --> Read

--> Auto/Parts - Autoimotive appear to be a new hot sector for Private Equity and technology firm as Apple Deal and Google involvement in Home and auto appliance, we should see more deal to come with these tech companies trying to have more vertical integration...they will move to take advantage on all aspects fo electronic in the car...we could also see some autoparts trying to make some move on bad performers in the tech sector with technology they could integrate to their business...I will keep an eye on Continental, Valeo...Tom Tom...

>>> WSJ : Blackstone, TPG Prepare $5.5 Billion Bid for Gates Global

As Deadline Approaches, Owners of Denver-Based Manufacturer Also Consider IPO

A consortium including Blackstone Group BX +1.18% LP and TPG is preparing to bid roughly $5.5 billion for manufacturing company Gates Global Inc., said people familiar with the matter, in what would be one of the largest private-equity buyouts of late.

The buyout group plans to make an offer for Gates by a Wednesday bid deadline, the people said. No other bidders are expected to put in offers, they said, though that could change. The owners of Denver-based Gates are separately contemplating an initial public offering of shares in the business.

The Canada Pension Plan Investment Board is weighing keeping an ownership stake in Gates and rolling it into the Blackstone-led group's proposed deal, the people said. CPPIB's current stake is 41.5%. Gates's other major owner is Canadian private-equity firm Onex Corp. OCX.T -0.27% , which holds 55.9%. The exact makeup of the proposed deal remained fluid on Monday.

Gates, which employs more than 14,000 people in 29 countries, manufactures power transmission belts and fluid hoses for automotive companies, and whirlpools for hotels and resorts, among other products.

If a deal is struck, it would be the second-largest private-equity buyout of the year after Cerberus Capital Management LP's agreement last week to purchase grocery-store company Safeway Inc. SWY +0.73% for $9.4 billion. That Blackstone and TPG have teamed up to buy Gates is a testament to the size of the potential deal. It is unusual for private-equity firms to collaborate on takeovers these days, after many so-called club deals from the buyout boom between 2006 and 2008 foundered.

Onex and CPPIB about a year ago started exploring a sale of Gates while also laying the groundwork for an IPO. They enlisted Goldman Sachs Group Inc. to run the sale process. Bank of America Merrill Lynch, Citigroup Inc. and Goldman are advising on the potential IPO and were working late last week to formulate a value that Gates could expect should it trade on a public exchange, one of the people said.

Private-equity firms often engage in such "dual track" sales processes in an effort to maximize the return on their investment. A full sale at a lofty price is their preference, but the alternative of an IPO can put pressure on takeover bidders, especially in situations like this one where there doesn't appear to be much competitive tension.

Onex and CPPIB in 2010 acquired London-based manufacturer Tomkins Ltd., the owner of Gates, in a buyout valued at around $5 billion. The pair invested about $2.2 billion as part of the deal and borrowed the rest. Since acquiring Tomkins, its owners have recouped much of their original cash investment by selling off certain businesses for a total of more than $2.5 billion, according to Onex.

Gates reported adjusted earnings before interest, taxes, depreciation and amortization of roughly $536 million on sales of about $2.9 billion for the 12 months ending in September 2013, according to a regulatory filing.

>>> NYT : Blackstone and TPG Said to Plan $5.5 Billion Bid for Gates Global
The Blackstone Group and TPG Capital are teaming up in a planned bid for Gates Global, a maker of industrial and automotive parts, a person briefed on the matter said on Monday.

The firms are offering roughly $5.5 billion, according to this person, which would make the deal one of the largest private equity buyouts of the year so far, second only to the buyout last week of Safeway, which was worth more than $9 billion.

The deadline to bid for Gates Global is Wednesday, the person said. No other bidders are expected, though the situation remains fluid.

The Canada Pension Plan Investment Board, one of the owners of Gates Global, may contribute its stake to the Blackstone-TPG deal, according to the person, who spoke on condition of anonymity.

The owners of Gates Global, which include the private equity firm Onex, have also contemplated taking the company public, filing a prospectus for an initial public offering in December. A so-called dual-track process — in which owners pursue both a sale and an I.P.O. — is a popular method of trying to get the best possible price.

Onex and the Canadian pension plan bought Gates Global in 2010. The company, which is based in Denver, makes parts like power transmission belts, engine hoses and hose fittings.

(BFW) Daimler Has 20% Upside, Initiated Buy, Berenberg Says

+------------------------------------------------------------------------------+

Daimler Has 20% Upside, Initiated Buy, Berenberg Says 2014-03-11 08:00:22.951 GMT

By Brian Lysaght March 11 (Bloomberg) -- Daimler current valuation, including 2015 est. P/E of 10.1x, undervalues margin potential of Mercedes cars and truck unit’s future Ebit growth, Berenberg says. Initiated buy, PT EU80 * Mercedes cars Ebit margin may reach 9% in 2016, truck margin 8% in 2016: Berenberg * NOTE: Mercedes 2013 ongoing Ebit margin 6.5%; trucks 5.6% * Daimler has 27 buys, 10 holds, 4 sells; avg PT EU72, implies 8% upside * Shares up 5.8% ytd vs SXAP index up 3.8%: Bloomberg data

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To contact the editor responsible for this story: Brian Lysaght at +44-20-7330-7908 or blysaght@bloomberg.net

>>> BOJ Gov Kuroda: Moving steadily to 2% CPI target; No need to adjust policy a


BOJ Gov Kuroda: Moving steadily to 2% CPI target; No need to adjust policy at this time but will not hesitate to do so if necessary - post rate decision press conference
- Reiterates view to see 2% CPI from late FY14 toward FY15
- Initially the yen weakening was a large factor in price gains; now tight labor market having an inflationary effect
- Economy is near full employment, pushing up prices and wages
- Inflation expectations are rising
- Temporary factors such as cold weather in US and lunar new year are behind weaknesses in exports
- Japan growth to continue to exceed potential
- CAPEX to continue to rise moderately
- Exports likely to rise moderately
- No change in price outlook
- Reitrates Govt view that Bitcoin is not qualified to be a currency

(BFW) Vivendi SFR French Deal Preferred; New Bidder Unlikely: Liberum

+------------------------------------------------------------------------------+

Vivendi SFR French Deal Preferred; New Bidder Unlikely: Liberum 2014-03-11 07:36:59.696 GMT

By Blanche Gatt March 11 (Bloomberg) -- Vivendi sale of SFR unit to Bouygues favored by Industry Minister Arnaud Montebourg makes increasingly clear that regulatory/govt prefer a “French solution,” Liberum says in note. * Liberum reiterates buy, PT EU27; says newsflow on sale negotiations, bids all positive * Numericable, Bouygues have till tomorrow to raise their “already high” bids * In theory, a new bidder could enter; this is unlikely * NOTE yday: Bouygues Negotiates $2.5 Billion Mobile-Asset Sale to Iliad * NOTE yday: Numericable Should Boost SFR Cash Bid to EU13b: Jefferies

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

To contact the reporter on this story: Blanche Gatt in London at +44-20-7392-0351 or bgatt@bloomberg.net To contact the editors responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net Tim Barwell

>>> SFR/Numericable: Vivendi granted put option on 50% of shareholding

SFR/Numericable: Vivendi granted put option on 50% of shareholding 

Listed French cable operator Numericable is understood to have granted listed French media group Vivendi a put option as part of the proposed merger with mobile phone operator SFR, French daily Le Figaro reported. Numericable is offering EUR 11bn cash and a 32% stake in the merged Numericable/SFR entity. The report claimed that Vivendi could have requested and obtained an option to sell about half of its 32% stake to Numericable. The report also added that Vivendi could get the cash from Numericable by July or August 2014, as the Competition Authority would take little time to review the deal

The report added that the supervisory board of Vivendi scheduled a meeting on 14 March to examine the offers from Numericable and from Bouygues Telecom. The Bouygues Telecom bid includes EUR 10.5bn cash and a 46% stake in a merged Bouygues Telecom/SFR entity, with an option for Vivendi to sell 15% of the shares once the entity has been listed.

The report also cited comments made by Xavier Niel, head and owner of French ISP and mobile phone operator Iliad-Free, who said that the offer for Bouygues was good for competition, for the market, and for France. He added that in both situations, the French mobile phone market would end up with three operators, the only difference is that it would be attained via the slow death of Bouygues Telecom with the Numericable/SFR deal.

Iliad just announced an agreement for exclusive negotiations with Bouygues and Bouygues Telecom with a view to purchasing both a portfolio of 2G/3G/4G frequencies and Bouygues Telecom’s mobile telephony network for a sum that could go up to EUR 1.8bn. This transaction will only go through if the takeover of SFR by Bouygues is complete, and the necessary authorisations have been obtained.

The report noted that after several announcements were made this weekend, shares in Bouygues SA rose by 8.66% and shares in Iliad-Free by 11.14% yesterday Monday, while the shares in Numericable fell by 12.39% in the same day and by 17% since the offer for SFR was announced last week.


Source Le Figaro

>>> What to look at today

US Market Closed Lower, Japan econ min Amari sought to soothe concerns after the downward Q4 GDP adjustments this week, noting investors should avoid turning pessimistic on the economy. Separately, a survey in local media predicted some 55% of Japan shoppers will reduce spending levels once the sales tax hike goes into effect....- PBoC Gov Zhou hinted interest rate may be pushed higher amid more prevalent "market forces", with rate liberalization coming in 1-2 years. Zhou also discussed increasing internationalization of yuan and a hands-off approach by the PBoC, even as the central bank continued to drive down the value with another 3-month low setting. Separately, CSRC chairman said China will continue to expand (Qualified Foreign Institutional Investor) QFII quota this year, and the head of FX regulator SAFE Yi Gang pointed to increased risks in cross-border capital flows. Nikkei +0.69% HS +0.19% Shanghai +0.10%

EUR$ 1.3857 S&P fut Unch European Fut +0.52%

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- AH NA : Ahold Agrees to Buy Spar Business in Czech Republic
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- NESN VX : Nestle’s Brabeck Sees Little Effect From Minder Initiative: NZZ
- NK FP : Imerys Confirms Termination of Merger Plan by Amcol
- NUM FP : SFR/Numericable: Vivendi granted put option on 50% of shareholding - LeFigaro
- SAABA SS : Saab Hires Submarine Engineers From ThyssenKrupp’s Kockums: SvD
- SAN FP : Sanofi, UCB Pact to Discover Anti-Inflammatory Small Molecules
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(BFW) Altice Confirms Its Made Cash/Stock Offer for Vivendi’s SFR

Altice Confirms Its Made Cash/Stock Offer for Vivendi’s SFR
2014-03-11 07:20:35.964 GMT


By Vidya Root
     March 11 (Bloomberg) -- Altice confirms bid for SFR in a
statement
  * Altice says it made SFR bid on March 5
  * Altice says its offer includes a cash payment of 10.9
    billion euros.
  * Additionally, Vivendi would have 32% of new Numericable-SFR
    group
  * Altice says offer is valid unitl March 14


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Link to Company News:{ILD FP <Equity> CN <GO>}
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Link to Company News:{VIV FP <Equity> CN <GO>}

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