>>> The Major Labels Are Trying to Sell Spotify for $10 Billion, Sources Say

The Major Labels Are Trying to Sell Spotify for $10 Billion, Sources Say {http://bit.ly/SNJkMF}

In the wake of the highly-successful acquisition of Beats by Apple, major labels Warner Music Group, Sony Music Entertainment, and Universal Music Group are now focusing on the next prize: a massive Spotify acquisition or liquidity event. According to several sources inside and outside of the major label system who have agreed to speak with Digital Music News, the Beats sale is ‘simply small potatoes’ compared to the juicy prize that Spotify could represent, and labels are pulling as many strings as possible to make a ‘giant liquidation event’ happen.

A major factor in this push is equity, a lot of equity.

According to multiple sources, the major labels now carry a collective ownership share in Spotify of roughy 20%, a multiple of the percentage held in Beats.
The shift is a result of some re-engineering by the major labels on how they profit from streaming services. In the older model, labels focused more on large, upfront guarantees in exchange for the rights to use their valuable catalogs. Rhapsody, for example, has bitterly complained about that approach in the past, but according to a pair of sources close to those deals, that has shifted considerably over the past few years. “[The big recording labels] decided they want equity more than payments, because there’s a market [for acquisition] now,” one source relayed.

“You’re talking about the difference between making millions right now, or billions in a few years.”
On that note, one source pointed to Spotify as a very, very juicy prize, with one target sale price pushing past $10 billion (you know, WhatsApp money).

One label attorney, who spoke on the condition of anonymity, pointed to massive telecommunications and mobile companies as targeted buyers. “The Verizons, the NTT DoCoMos, the Oranges, that group,” the source noted. “Spotify is a nice package for customers.”

Separately, sources also noted that Spotify’s investors are also getting more antsy for a sale, and pushing the agenda towards and initial public offering (IPO), acquisition, or other ‘liquidity event’. But an IPO could represent a difficult bet: just recently, VC superstar Fred Wilson questioned whether the prodigious Wall Street wellspring has already ended, and whether companies like Pandora were the last to cash in. “The combination of sky high valuations, equally high burn rates, and a disappearing IPO market is not a pleasant one,” Wilson blogged last month.

That may be better judged by Goldman Sachs, a massive Spotify investor and a shrewd Wall Street manipulator. It’s unclear exactly how much Goldman has sunk into Spotify, though overall investment in the streaming service is roughly $540 million.

FT : IMF sounds global housing alarm

IMF sounds global housing alarm

The world must act to contain the risk of another devastating housing crash, the International Monetary Fund warned on Wednesday as it published new data showing house prices are well above their historical average in many countries.

The warning from the IMF shows how an acceleration in global house prices from already high levels has emerged as one of the major threats to economic stability, with countries making limited progress in keeping them under controls.
Min Zhu, the IMF’s deputy managing director, said the tools for containing housing booms were “still being developed” but that “this should not be an excuse for inaction”.

House prices “remain well above the historical averages for a majority of countries” in relation to incomes and rents, Mr Zhu said in a speech to the Bundesbank last week, which was only released on Wednesday because it clashed with a European Central Bank announcement.
“This is true for instance for Australia, Belgium, Canada, Norway and Sweden,” he said.
In the wake of the global recession central bankers have cut interest rates to record lows, pushing house prices to a level that the IMF regards as a significant risk to economies as diverse as Hong Kong and Israel.

In Canada, for example, house prices are 33 per cent above their long-run average in relation to incomes and 87 per cent above their long-run average compared with rents. The figures for the UK are 27 per cent relative to incomes and 38 per cent relative to rents.
The IMF’s new global house price index shows a fresh acceleration, with prices up by 3.1 per cent on a year ago. House prices are rising fastest in emerging markets, with prices up more than 10 per cent on a year ago in the Philippines, 9 per cent in China and 7 per cent in Brazil.
“In some cases house prices are recovering from a sharp correction during the Great Recession,” Mr Zhu said. “In other cases, house prices have continued an upward march with only a bit of moderation during the Great Recession.”
House prices fell most heavily in peripheral European countries, down by 7 per cent on a year ago in Greece, 6.6 per cent in Italy and 5 per cent in Spain.

Mr Zhu said that even though the tools for controlling house prices are new, countries must start using them immediately. He pointed to options including limits on mortgage lending relative to house values and incomes; higher capital requirements for banks making risky loans; and stamp duties to damp foreign demand for investment properties.
“We need to move from ‘benign neglect’ to an ‘all of the above’ approach when it comes to policy choices,” said Mr Zhu, adding that policy makers could combat the shortcomings of different approaches with “the interlocking use of multiple tools”.
In the US, house prices are rising fast but not overvalued, coming in at 13.4 per cent below their long-run average relative to incomes, and 2.6 per cent above their long-run average relative to rents, according to the IMF’s numbers.

The world’s cheapest housing market is Japan, where housing is 41 per cent below its long-run average relative to incomes and 38 per cent relative to rents. Germany and Estonia also appear cheap, with prices in both more than 10 per cent below their long-run average compared with incomes and rents.

(MergerMarket) Louvre Hotels lined up for jumbo 3Q sale with Deutsche Bank and G

Louvre Hotels lined up for jumbo 3Q sale with Deutsche Bank and Goldman Sachs advising

The auction pipeline for the second half of the year just got a large addition out of France. Starwood Capital is bringing to market its portfolio company Louvre Hotels Group, which could be one of the largest deals during 2H14, according to sources familiar with the situation.

The French budget hotel chain has mandated Deutsche Bank and Goldman Sachs to advise on the upcoming sale, which is expected to kick-off in September. Louvre Hotels’ annual EBITDA is in the region of EUR 125m, said the sources.

“Around EUR 125m EBITDA is the figure given but a lot of people are questioning that number since the company generated EUR 95m-105m over the last few years,” commented one of the sources.

Valuation is likely to come in the 8x to 9x multiple range.

Louvre Hotels operates 1100 hotels in 43 countries through six brands – Kyriad and Kyriad Prestrige, Campanile, Premiere Classe, Golden Tulip, Tulip Inn and Royal Tulip. Starwood acquired the group in 2007.

Louvre Hotels is particularly strong in France but less so in other regions, said the sources. Most of the group’s hotels are based in Europe (964), with the remainder in the Middle East (41), North and South America (35), Africa (34) and Asia-Pacific (39).

All large private equity firms such as the likes of Advent International, Apollo, CVC, Cinven, TPG and PAI Partners are expected to look at the asset when it hits the market. Trade players could also participate. Chinese groups looking to get a foothold in Europe such as HNA, which acquired a stake in Spain’s NH Hotels, or French group Fonciere des Murs could also show an interest, said the sources and a sector banker.

It is not clear how many of its properties Louvre Hotel still owns as it has already done some sale and leasebacks, noted the first source.

“I also wonder if there are any pension liabilities in the group,” added the sector banker.

WSJ : N.Y. Regulator Pushes BNP Paribas to Remove Senior Adviser

N.Y. Regulator Pushes BNP Paribas to Remove Senior Adviser
Justice Department Hoping for Over $10 Billion Settlement for Violating Sanctions

New York's top financial regulator has asked BNP Paribas SA BNP.FR -1.55% to oust a senior adviser at the French bank as part of a proposed settlement of BNP's alleged violations of U.S. sanctions, according to a person familiar with the matter.

Benjamin M. Lawsky, who runs New York's Department of Financial Services, is pushing the bank to remove Vivien Levy-Garboua, this person said. Mr. Levy-Garboua has served as head of compliance and internal controls for BNP in North America and currently acts as an adviser to senior bank officials.

Mr. Levy-Garboua, who joined a BNP predecessor in 1980 and is believed to be in his mid-60s, was in charge of compliance in North America from 2005 to 2008, a period during which BNP allegedly conducted transactions with Sudan, Iran and other countries subject to U.S. sanctions. Those transactions are now under investigation by New York and U.S. authorities.

The U.S. Justice Department is pushing BNP to pay more than $10 billion and plead guilty to settle the probe, according to people familiar with the negotiations. BNP has said it is cooperating with the investigations.

Mr. Lawsky's office has told BNP representatives that it wants the bank to remove at least a dozen executives, according to people familiar with the matter. In addition to Mr. Levy-Garboua, the New York regulator also has asked BNP to let go George Chodron de Courcel, a chief operating officer of the bank, people familiar with the negotiations said last week. Mr. Chodron de Courcel, 64, already was planning to retire from the bank, one of these people said.

Mr. Lawsky's office has a key role in the wide-reaching probe of BNP because his office oversees BNP's New York branch, which handled transactions under investigation. Mr. Lawsky's office provides BNP with a license to operate in the state.

Mr. Lawsky also wants to suspend BNP's ability to transfer money through its New York branch — which it does for clients in a business known as dollar-clearing — as part of a settlement. BNP is staunchly resisting this punishment, which executives fear could hurt the bank's operations with clients that want to transact in U.S. dollars, according to people close to the bank.

Inside BNP, the prospect of huge penalties has fanned tensions among executives, who have debated whether Chairman Baudouin Prot should step down, people familiar with the matter said last week. Mr. Prot hasn't commented.

(BFW) GE Said to Plan More Alstom Lobbying as Siemens, Mitsubishi Talk

GE Said to Plan More Alstom Lobbying as Siemens, Mitsubishi Talk
2014-06-11 17:21:43.262 GMT


By Libby Sallaberry McGowan
     June 11 (Bloomberg) -- GE plans another round of lobbying
meetings w/ French officials on $17b offer for Alstom’s energy
assets as Siemens weighs bid w/ Mitsubishi Heavy, a person
familiar tells Bloomberg’s Richard Clough, Alex Webb and
Jacqueline Simmons.
  * Steve Bolze, CEO of GE’s power and water unit, and lead
    negotiator John Flannery are in France for discussions this
    week and next
  * GE’s strategy said to be unchanged after Siemens disclosed
    talks w/ Mitsubishi today
  * NOTE: French President Francois Hollande will meet tomorrow
    w/ Prime Minister Manuel Valls, Industry Minister Arnaud
    Montebourg and David Azema, head of the agency that manages
    the government’s stakes in companies to discuss Alstom
  * NOTE: Earlier, Siemens Said in Talks With Mitsubishi on
    Joint Bid for Alstom

Story:NSN N70LID6TTECE <GO>


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To contact the reporter on this story:
Libby Sallaberry McGowan in New York at +1-212-617-8044 or
lsallaberry@bloomberg.net
To contact the editors responsible for this story:
Brad Skillman at +1-212-617-2763 or
bskillman1@bloomberg.net
Libby Sallaberry McGowan