FT : Telecoms watchdog warns on EU rules

Telecoms watchdog warns on EU rules
The British telecoms regulator has warned that proposed European rules safeguarding “net neutrality” could be damaging if they fail to recognise the need for internet management.
Last month, the European Commission agreed proposals to ensure “net neutrality”, the concept of unrestricted access to the internet. The plans would, for example, ban “business class” internet access for companies willing to pay more.

But support for a more flexible approach to internet management has emerged from the UK, where the regulator Ofcom has said that “well-intentioned but overprescriptive and detailed legislation may deliver the opposite of the intended effect”.
In a speech, Ed Richards, chief executive of Ofcom, expressed concern that such legislation would mean “not more certainty but less. Not the timely exercise of reasonable objective judgment, but the pursuit of time-consuming and self-interested litigation”.
Mr Richards has, as an alternative, outlined a view on legislation that allows both sustaining the quality and performance of the internet and the provision of managed services.
He said that blocking of any kind by internet access providers was “highly undesirable” but that companies should be allowed to apply traffic management to optimise the consumer experience.
He said: “This should not extend to outright blocking, throttling or practices such as the anti-competitive prioritisation of a network’s own content and services. However, it is important that framework of regulation should be fully capable of addressing areas of serious concern such as child safety.”
Mr Richards also supported the provision of managed services by network operators to help them make “a return for investment they have made in their networks” – adding that this should ultimately be beneficial for consumer.
His words are likely to be welcomed by companies in the telecoms industry, which want to develop specialised services and charge different prices.
Telecoms executives have also said that the rules failed to recognise the need to manage internet traffic in order to ensure that services are not degraded. However, the sector has less benevolent reasons to complain given internet services such as WhatsApp and Skype have seen their revenues hit by rival free services.
EU member states will be able to tweak the net neutrality law, although most are expected broadly to support the package that also includes proposals on cutting roaming charges.
The Department for Culture, Media and Sports said that the UK government supported a flexible approach.
“We are committed to an open, safe and secure internet that allows growth and innovation, delivering services and products that consumers want,” it said. “However, we believe that self-regulation and greater transparency of traffic management measures would be more effective ... Regulation risks being too prescriptive, inflexible and may have unintended consequences.”

>>> Barrons summary: positive on AMTD, PBI; cautious on AVP

Barrons summary: positive on AMTD, PBI; cautious on AVP

Cover story: Profile of Jana Partners Barry Rosenstein, whose Jana Nirvana fund has had a three-year annualized gain of 19.1%, topping the 16% return of the S&P 500 since the end of 2013 (+ WAG, OIS, EQIX); Barrons list of the Top 100 Hedge Funds, led by Glenview Offshore Opportunity, Hildene Opportunities LP, Chenavari-Toro Capital IA Class A, Childrens Investment Ltd., and Tiger Global. 

Features: Cautious on AVP: Company is doing well under turnaround led by CEO Sheri McCoy, and bulls argue shares could return to the low $20s in a couple of years, but key to success hinges on fixing North American operations; Positive on AMTD: Improving trading volumes could help shares appreciate by 35%, while rising interest rates could give entire sector a boost; Positive on PBI: Under CEO Marc Lautenbach the companys postage-meter business has stabilized and become profitable, while new digital businesses will continue to drive growth that could boost shares 60% in the next three years. 

Tech Trader: Cautious on CSCO: Despite beating expectations for fiscal third quarter, company still faces a major threat from software-defined networking, in which its equipment can be replaced by something like a general-purpose computer running switching software; Cautious on FB, AMZN: Tiernan Ray continues to question the metrics being used by analysts to trumpet shares of tech giants. 

Trader: Despite index highs, says Michael Marrale of ITC, theres an incredible amount of pessimism and negativity in equity markets; Cautious on TGI: Aerospace structure business is companys problem child, but if it can fix that, slowing growth may stabilize and it may win more contracts such as a recent one from Airbus; Negative on WWE: Stock price contains a lot, but not all, of the recent bad news for company that has overestimated its ability to attract new viewers. 

Follow-Up: Cautious on PFE: Pharma giant should stop pursuit of AZN, since deal doesnt make sense strategically and would shackle company to what is probably the worst-positioned major global drug company based on projected revenues and profits in the coming years; Cautious on R: Shares have outperformed the broader market, but at their current price the stocks valuation has caught up with its growth prospects. 

Mutual Funds: Interview with Andy Acker, Manager, Janus Global Life Sciences (top ten holdings: GILD, AET, ESRX, JNJ, CELG, BIIB, Roche Holding, VRX, AZN, NPSP). 

European Trader: Positive on Bankia: Spains so-called bad bank could be about to come good for investors, with shares climbing 20% in the next 12 months as management overhaul provides a solid foundation for future growth. 

Asian Trader: Positive on Softbank: Investors looking for a way to play Alibaba are better off with telecommunications giant than with YHOO, and its $57 possible profit on Alibaba IPO could set a record. 

Emerging Markets: Li Ka-shing, Asias richest man, has been selling Chinese real estate stocks, including large holdings in tier-one cities such as Shanghai and Guangzhou; for small investors, only those willing to wait for a correction should venture into the sector. 

Commodities: After two years of decline, titanium prices appear to have reached rock bottom. CEO Spotlight: Profile of KKRs Henry Kravis and George Roberts, who say if they were starting their firm today they would focus on smaller real-estate deals, not private equity. 

Streetwise: GS strategist David Kostin screened for companies that have spent less on capex relative to sales during they past five years than they did during the previous five (Positive on COP, SHW, ORCL); Some sectors are seeing capital spending opportunities that are simply too good to pass up.

RTR - Siemens seen making formal Alstom bid as early as this week

Siemens seen making formal Alstom bid as early as this week

(Reuters) - Germany's Siemens is working on a formal asset-swap offer for Alstom's power business that could come as early as this week and see France take a stake in a resulting rail-focused French group, sources close to the talks told Reuters.

Alstom is already in talks with U.S. conglomerate General Electric over a 12.35 billion euro ($16.9 billion) bid for its power arm, which it is due to review by June 2. However, under strong political pressure, it has opened its books to Siemens so it can propose its own deal if it wants to.

Some sources familiar with the talks cast doubt on whether Alstom would be interested in the new deal sketched out by Siemens. Still, a rival offer would give the French government more leverage with GE after it gave itself the power to block foreign takeovers in "strategic sectors".

The French government has repeatedly criticized GE's bid, favoring alliance between the companies rather than a straight sale of Alstom's power arm - which accounts for 70 percent of the group's revenue - that would leave the French group with just its smaller transport business.

Meanwhile it has advocated an alternative European tie-up between Alstom and Siemens. Initially though, it faced reluctance from both firms, long bitter rivals.

But after several trips to Paris by CEO Joe Kaeser and nearly two weeks of access to Alstom's data, Siemens has warmed to the idea and has been refining its bid to make it more attractive to Alstom and the French government, sources said.

"Siemens is presenting the following case: it will create national champions in trains and energy. Everything will be kept in Europe. It has offered some new elements, which sweeten its proposal," said a source familiar with the proposed deal.

SWEETENERS

In a short letter to Alstom late last month, Siemens had outlined a proposal worth $14.5 billion, offering to exchange part of its rail business plus cash in exchange for Alstom's power assets.

Two sources familiar with the talks said Siemens was now discussing handing over all of its rail business to Alstom and setting up a joint-venture in rail signaling.

To limit the German firm's influence in the resulting transport-focused Alstom group, Siemens is also discussing with Paris and Berlin the opportunity for France - which owns 0.9 percent of Alstom's capital via state fund CDC - to take a more sizeable stake, political and financial sources said.

One source said the French government could take a stake of over 10 percent in Alstom, as it seeks to secure the domestic roots of the engineering group which received a state bailout a decade ago and is a big private employer in the country.

On Friday, French Economy Minister Arnaud Montebourg said the government would not let domestic companies be "dismembered, chopped up into pieces and devoured" and did not rule out taking a stake in Alstom to help secure its future.

Meanwhile Siemens could offer to sell Alstom's wind and nuclear power assets to French state-controlled energy group Areva, thereby addressing government concerns over France's energy independence, said two sources familiar with the proposed deal.

As a further sweetener, Siemens is said to be offering to set up in France the headquarters of sub-units in Transmission and Distribution - the segment which makes gear to carry electricity from power plants to households - potentially strengthening the country as a hub for this technology.

Siemens declined to comment. It has previously said it plans to use the full four weeks allotted to it for due diligence, and then decide on whether to make a formal offer.

Alstom declined to comment beyond saying it was reviewing GE's bid and had received an expression of interest from Siemens, but no formal offer.

General Electric and Areva also declined to comment. Representatives for French state fund CDC could not be reached outside European business hours.

SCEPTICISM

Kaeser, vaulted into the top job at Siemens nine months ago after his predecessor Peter Loescher was ousted in a boardroom coup, unveiled a restructuring earlier this month that puts a premium on profitability over growth.

As a result, he has seemed lukewarm about a tie-up with Alstom, saying at a recent strategy presentation in Berlin that his firm would not be forced into a bid.

But the new French decree, which gives the government formal powers to overrule foreign takeovers in "strategic" sectors from energy, water and transport, to telecoms and health, underscored for Siemens the lengths Paris is willing to go to pave the way for a European-only deal.

"Let's just say that the landscape seems to have shifted to our advantage," one official close to Siemens told Reuters.

However, sources close to Alstom say it wants cash and backs GE's bid, and while it does want to expand in rail signaling it is not interested in taking on more rolling stock.

Other impediments to a Siemens deal include antitrust concerns and opposition from unions. A German-French deal would imply more industrial overlap, raising the risk of job cuts and forced asset sales - especially in trains.

After competing aggressively for decades, Siemens and Alstom would also have a deep cultural divide to overcome.

Alstom CEO Patrick Kron has been referred to as a "Siemens hater" in the German press. Kron has rebuffed the tag, but industry sources say he has never forgiven the German group for lobbying against a state bailout for Alstom a decade ago in the hope of buying some of its assets.

Overall, GE remains ahead in the race for Alstom's assets, said one source close to the talks: "We are not at the stage where we are negotiating with Siemens a contract that could be signed tomorrow." ($1 = 0.7297 Euros)

Deutsche Bank Plans EU8b Capital Increase, Handelsblatt Reports

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Deutsche Bank Plans EU8b Capital Increase, Handelsblatt Reports 2014-05-18 15:31:57.190 GMT

By Claudia Rach May 18 (Bloomberg) -- Deutsche Bank preparing a capital increase, aims to raise EU8b through new shrs by end of June, Handelsblatt says, citing unidentified people in the finance industry. The newspaper also reported: * Deutsche Bank likely to get new single investor * Deutsche Bank new investor may hold 5%-8% of shrs * Bank’s new shrs may be sold with 25%-30% discount * Negotiations ongoing, haven’t been made final * Deutsche Bank declined to comment: Handelsblatt

Link to Company News:DBK GR <Equity> CN <GO>

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To contact the reporter on this story: Claudia Rach in Berlin at +49-30-70010-6219 or crach1@bloomberg.net

To contact the editor responsible for this story: Mike Harrison at +44-20-7073-3564 or mharrison5@bloomberg.net

Swiss Reject $3.5B Buy of Saab Gripen Jets: SRF Projection

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BFW 05/18 11:02 Swiss Reject $25 Hourly National Minimum Wage: SRF Projection BFW 05/18 10:36 Swiss Seen Rejecting Minimum Wage, SRF Projections Show BFW 05/18 10:34 Swiss Vote on Gripen Purchase Still Too Close to Call: SRF BN 05/18 12:00 *SRF SAYS MARGIN OF ERROR IS PLUS/MINUS 2 PERCENTAGE POINTS BN 05/18 11:32 *SWISS VOTERS APPROVAL FOR MINIMUM WAGE WAS 19.2%: SRF PROJECTIO BN 05/18 11:32 *SWISS REJECT MINIMUM WAGE WITH 80.8% OF VOTES: SRF PROJECTIONS BN 05/18 11:31 *SRF SAYS MARGIN OF ERROR IS PLUS/MINUS 3 PERCENTAGE POINTS BN 05/18 11:30 *SWISS REJECT PURCHASE OF GRIPEN JETS WITH 51% OF VOTES: SRF BN 05/18 11:30 *SWISS BACK PURCHASE OF GRIPEN JETS WITH 49% OF VOTES: SRF BN 05/18 11:30 *SWISS REJECT PURCHASE OF GRIPEN JETS: SRF PROJECTIONS BN 05/18 11:00 *SWISS VOTERS APPROVAL FOR MINIMUM WAGE WAS 23%: SRF PROJECTION BN 05/18 11:00 *SWISS REJECT MINIMUM WAGE WITH 77% OF VOTES: SRF PROJECTIONS BN 05/18 10:33 *SWISS SEEN REJECTING MINIMUM WAGE, SRF PROJECTIONS SHOW BN 05/18 10:31 *SWISS VOTE ON GRIPEN PURCHASE STILL TOO CLOSE TO CALL: SRF

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Swiss Reject $3.5B Buy of Saab Gripen Jets: SRF Projection 2014-05-18 11:33:33.83 GMT

By Catherine Bosley and Jan Schwalbe May 18 (Bloomberg) -- 51% of voters reject acquisition of CHF3.1b purchase of Saab’s Gripen jets, according to projection by Swiss television SRF. * 49% in natl. referendum backed purchase: SRF * Projection has margin of error of plus/minus 3 percentage points * Next projection due at 2 p.m. local time * NOTE: Full results of vote due later today * NOTE: Poll by gfs.bern showed 51% of voters were likely to reject {NSN N57MYA6K50Y3<GO>} * NOTE: Saab’s $3.5 billion Gripen order in doubt as Swiss review deal {NSN N5J0T16JTSEY<GO>} * NOTE: Swiss vote last year to keep 165-Year-old military draft {NSN MTL3GD6JIJW4 <GO>} * NOTE: Government by referendum gathers speed in Switzerland {NSN N0W2LK1ANZJL <GO>}

Link to Company News:{SAABB SS <Equity> CN <GO>}

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To contact the reporter on this story: Catherine Bosley in Zurich at +41-44-2244134 or cbosley1@bloomberg.net

To contact the editor responsible for this story: Zoe Schneeweiss at +41-44-2244146 or zschneeweiss@bloomberg.net

Siemens Union Asks for Job Guarantee If Alstom Takeover: Spiegel

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Siemens Union Asks for Job Guarantee If Alstom Takeover: Spiegel 2014-05-18 13:51:17.2 GMT

By Claudia Rach May 18 (Bloomberg) -- Planned asset swap only makes sense if co. develops further, jobs are guaranteed, Der Spiegel says, citing Birgit Steinborn, head of Siemens works council. * IG Metall union official and Siemens board member Juergen Kerner calls for job security in both France and Germany and that Siemens stays in charge if Alstom bid successful * Article in German: http://tinyurl.com/nzqtmft * NOTE: Germany sees Alstom talks outcome a matter for cos

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To contact the reporter on this story: Claudia Rach in Berlin at +49-30-70010-6219 or crach1@bloomberg.net To contact the editors responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net Zoe Schneeweiss

WSJ : Johnson Controls to Spin Off Auto-Interiors Business U

Johnson Controls to Spin Off Auto-Interiors Business Unit to Be Put in Venture With an SAIC Subsidiary

Johnson Controls Inc. JCI +0.34% plans to spin off its automotive-interiors business into a new company majority-owned by a Chinese partner, in a major step for Chief Executive Alex Molinaroli's effort to refocus the company on higher-margin nonauto businesses.

JCI, based in Milwaukee, will create a new company, co-owned with a Chinese supplier, Yanfeng Automotive Trim Systems Co.

The U.S. company will retain a 30% interest in the new company, which will become the world's largest producer of things like instrument and door panels and other plastic and wood parts that equip the inside of cars. The business now generates $3 billion a year in revenue.

Already, Johnson Controls has sold its automotive-electronics business, a solid set of operations that nonetheless tied it too closely to the capital-intensive, up-and-down auto-supply sector. At the same time, it is in the midst of acquiring Air Distribution Technologies Inc. to bolster its building-efficiency business that makes heating, cooling, security and other systems for residential and commercial buildings.

"We had a business that was struggling to be profitable, struggling to grow. Now we have a partner that is profitable and is growing, and the joint venture will be profitable and growing," said Mr. Molinaroli.

Johnson Controls will retain its automotive-seating business. It is the world's largest seat maker, and Mr. Molinaroli considers the business a "core" asset. Margins for seating are better than for interiors.

"Our top line may shrink, but our bottom line will grow. When you dial forward five years, you will see a company that is more profitable, with higher margins and more balanced," Mr. Molinaroli said.

Mr. Molinaroli's goal is for investors to put Johnson Controls in the same category as diversified industrial companies such as Honeywell Inc., which tend to have higher valuations.

While the interiors of cars and sport-utility vehicles have steadily become more luxurious, the business of making many of the decorative parts that trim a car's passenger compartment offers stubbornly narrow profit margins.

Auto makers threw Johnson Controls and other interiors suppliers for a loop when they started bringing the engineering for the parts in-house and bidding for parts on an individual basis rather than as complete systems designed by the supplier.

The trend made it difficult for big companies to find any significant advantage over smaller competitors and had them fighting over piece-work contracts for everything from glare visors to door handles.

The one place in the world where auto makers purchase interiors as a system is China, where the new company will be dominant.

"It will be the largest, most profitable and fastest growing," Mr. Molinaroli said.

The new venture will be formed with a noncash contribution of 95% of Johnson Controls' interiors business--more than 20,000 employees--along with operations owned by Yanfeng, a parts subsidiary of Shanghai Automotive Industry Corp. (SAIC). SAIC also builds in cars in China in partnership with General Motors Co. GM -1.05% and Volkswagen AG VOW3.XE +0.21% .

Once it is formed, the operation will report only unconsolidated equity investment profit to Johnson Controls.

The spinoff comes only weeks after Visteon said it would sell its interiors business to an affiliate of Cerberus Capital Management LP, the private-equity investment group that once owned Chrysler LLC.

Visteon essentially gave the business to Cerberus and agreed to contribute $95 million toward it, additionally.

The Johnson Controls-Yanfeng venture will compete with French supplier, Faurecia SA, EO.FR -2.60% and International Automotive Components, Magna International Inc. and a host of smaller suppliers.

Mr. Molinaroli said the new company, which hasn't been named, would have 15% global market share.

>>> Valeant tells top Allergan shareholders that it might consider splitting its

Valeant Pharmaceuticals International Valeant tells top Allergan shareholders that it might consider splitting itself up if it got too large to continue pursuing its acquisition strategy - press
- The comments were in response to some analysts who suggested Valeant's proposed combination with Allergan would make it too large to find new acquisition targets that could add meaningfully to its growth.