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DSM to spin off pharmaceutical arm

DSM, the world’s largest vitamin producer, is preparing to spin off its pharmaceuticals division in a deal that will create a $2.6bn drugmaking business. The Dutch cod-liver oil to petrochemical conglomerate will sell the division to JLL, a New York-based private equity group, which will merge it with Patheon, the drugmaker of which it is the majority shareholder. The deal is expected to close early next year. The combined company, with staff of 8,300, will hope to cash in on the trend among the world’s largest pharmaceutical groups of scaling back their in-house drug manufacturing capabilities. In exchange for its pharmaceutical division, valued at $670m, DSM will receive 49 per cent of the new company’s shares. JLL, which will buy the 44 per cent of Toronto-listed Patheon that it does not already own, is putting $500m of equity and $1.65bn of debt into the combined business. The combined company will manufacture and distribute drugs in the US, Europe and Latin America. The move to reduce its direct role in pharmaceuticals highlights DSM’s ambition to increase its dominant position in the vitamins and nutrients market. The Dutch company, which has annual revenues of €9bn and reported €342m of earnings before interest, tax, depreciation and amortisation in the third quarter, is the world’s largest vitamins maker by volume. It has been acquisitive during the past three years, buying producers of vitamins and proteins, such as fish-oil maker Ocean Nutrition Canada last year. It has also been developing biological methods for making plastics, fuels and chemicals. Originally founded as the Dutch state coal miner in 1902, DSM has moved from being a bulk chemicals business to specialising in nutrition and high-tech materials and chemicals, while expanding into emerging markets. JLL will fund the deal from its sixth fund, for which it has raised $1bn. The fund is relatively new and JLL is not expected to seek an exit from the investment early. It plans to build the new business – expected to be one of the largest such contract drug manufacturers – alongside DSM through modest acquisitions. Jim Mullen, chief executive of Patheon, will become CEO of the merged company. JPMorgan, UBS, Morgan Stanley and Jefferies provided the debt for the deal.

Euronext Attracts Potential Buyers

LSE, Nasdaq and Deutsche Börse Weigh Bids for the Exchange Group After It Was Acquired by ICE

Three exchange companies are considering individual bids for Euronext, the European exchange group set to be spun off after it was acquired last week by IntercontinentalExchange Group Inc., ICE +0.40% according to people familiar with the discussions.

London Stock Exchange Group LSE.LN +0.32% PLC, Nasdaq OMX Group Inc. NDAQ +1.40% and Deutsche Börse AG DB1.XE +0.26% each have discussed with advisers the possibility of making offers for Euronext, although none has hired bankers to launch a formal bid, the people said. It is possible the potential suitors won't move forward at all, given other priorities and challenges.

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IntercontinentalExchange Group's Jeffrey Sprecher gives the thumbs-up. Reuters

Focus is turning to Euronext now that ICE's $11 billion purchase of the European exchange group's owner, NYSE Euronext, was completed last week. ICE, the Atlanta-based commodities and derivatives trading giant, committed to separating Euronext after the deal in part to satisfy European policy makers' and regulators' concerns about the standing of European markets in the bigger U.S.-based company.

For the past several years, the exchange industry has lurched toward consolidation. But several potential deals didn't get done, either because regulators deemed them anticompetitive or nationalistic interests prevailed.

The Euronext situation could become the latest test. The Euronext group of exchanges includes bourses in Paris, Amsterdam, Brussels and Lisbon. ICE pledged to separate Euronext into an independent company as part of an effort to secure support from European regulators and policy makers for its purchase of NYSE Euronext. That deal included the New York Stock Exchange as well as Paris-based Euronext and created IntercontinentalExchange Group.

It is common for companies pursuing a public offering to also entertain approaches for a sale, which could deliver a quicker, cleaner payout. Rival exchanges are likely to hold their fire on Euronext until they see its financials and assets, to be detailed in IPO documents, said people close to the discussions.

For stock-market operators, Euronext could offer appeal. Euronext is the world's fifth-largest stock-exchange group in terms of companies listed. Together the exchanges list stocks worth about $2.8 trillion in market capitalization, according to year-end 2012 data from the World Federation of Exchanges.

But in recent years stock trading has become a less-attractive business, with margins pressured by regulatory changes that have opened incumbent exchanges to a new breed of all-electronic competitors. Commodities, futures and options trading have remained more lucrative.

And the Euronext markets have been hit by economic turmoil in the region. The value of shares traded on its markets dropped by 26% from 2011 to 2012, federation data showed.

It isn't clear how public investors might value an equities-focused exchange company amid highly diversified groups that clear and trade stocks, futures and options. But a takeover bid for Euronext could face opposition from France's government, which some see favoring an independent exchange company to help protect Paris's role as a European financial hub.

London Stock Exchange Chief Executive Xavier Rolet has spoken to bankers about the idea of mounting a bid for Euronext, evaluating potential advisers in case the LSE pursues the deal, people familiar with the matter say. Acquiring Euronext would cement LSE as the dominant player in European stock trading and listings at a time when Mr. Rolet has pushed to expand the exchange's profile beyond its roots trading London-listed securities.

Last year the LSE reached a deal to take control of LCH.Clearnet Group, which already processes stock trades on the Euronext markets and maintains some operations in Paris. That would allow the LSE to wring more efficiencies from a Euronext deal, said Diego Perfumo, an analyst with Equity Research Desk.

Nasdaq OMX also has discussed with banks the possibility of pursuing a deal for Euronext, people familiar with the matter said. But Nasdaq isn't likely to move soon, they said, because the company is focused on paying down debt associated with recent deals to acquire a bond-trading platform and investor-relations services, together valued at a total of $1.6 billion.

For Nasdaq, absorbing the Euronext markets would expand the New York-based company's European profile at a time when rivals such as ICE and the LSE have made deals to expand.

Robert Greifeld, CEO of Nasdaq, said in an interview last month that Nasdaq could be a "credible buyer," but that his staff wasn't focused on putting together a deal for Euronext.

Deutsche Börse executives are mixed on pursuing a deal for Euronext, given the relatively low profitability of stock trading and a general desire to build up Deutsche Börse's derivatives franchise, said people familiar with their thinking.

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BFW 11/19 03:55 *JAPAN 20-YEAR BOND BID-COVER RATIO OF 4.75 IS HIGHEST ON RECORD BN 11/19 03:55 *JAPAN 20-YEAR BOND BID-COVER RATIO OF 4.75 IS HIGHEST ON RECORD

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Japan 20-Year Bond Bid-Cover Ratio of 4.75 Is Highest on Record 2013-11-19 04:05:57.969 GMT

By Ken McCallum Nov. 19 (Bloomberg) -- Bid-cover ratio of 4.75 times is highest on record going back to September 1987, according to Ministry of Finance data released today. * Ministry sold 1.09t yen of the 1.7% JGBs at the lowest price of 102.75, exceeding the 102.70 median forecast of 14 traders surveyed by Bloomberg News * 20-year JGB yield is 1.5 bps higher than yesterday at 1.515% as of 1:01pm in Tokyo

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To contact the editor responsible for this story: Rocky Swift at +81-3-3201-2078 or rswift5@bloomberg.net

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BN 11/19 05:01 Dropbox Said to Be Seeking More Than $8 Billion Value in Funding

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Dropbox Said to Be Seeking More Than $8 Billion Value in Funding 2013-11-19 05:11:09.664 GMT

By Hari Govind Nov. 19 (Bloomberg) -- Dropbox is seeking to raise $250m in new funding, in a round that would value it at >$8b, two people with knowledge of co.’s plans told Bloomberg’s Ashlee Vance. * NOTE: Dropbox was valued at $4b in Oct. 2011 financing * NOTE: Co. already raised $257m in total funding over past 5 yrs; past investors include venture firms Sequoia Capital, Accel Partners, and startup incubator Y Combinator * To see story, click here

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--Editor: Jan Dahinten

To contact the reporter on this story: Hari Govind in Mumbai at +91-22-6120-3646 or hgovind@bloomberg.net

To contact the editor responsible for this story: Jan Dahinten at +65-6212-1164 or jdahinten@bloomberg.net

Rich foreigners targeted for property tax

Ministers are drawing up plans to target wealthy foreign property owners in a tax raid aimed at helping to pay for coalition giveaways including free school meals and a tax break for married couples. Nick Clegg on Monday became the first senior minister to admit the coalition was thinking of imposing capital gains tax on sales of British houses by foreign owners. Speaking at his monthly press conference, the deputy prime minister said: "We certainly need to make sure that people who invest very large amounts of money into property in central London locations . . . pay their fair share of tax on those transactions. "That is why we are looking at options like a differential application of capital gains tax to those kind of transactions." Britons pay capital gains tax – typically at 28 per cent – on any profit from selling property that is not considered their primary residence. Foreign property investors are currently exempt. Ministers have been looking for ways to target the high-end London property market, which has risen sharply in recent months, supported by waves of money from wealthy foreign buyers looking for secure assets. More than £7bn of international cash was spent on prime London homes last year, according to Savills, the estate agent. Meanwhile figures from the Nationwide show London prices have risen by 10 per cent year on year. George Osborne, the chancellor, has previously balked at imposing CGT on foreign property owners, which would bring their taxation in line with domestic sellers, because of worries that it might deter investors from coming to the UK. However, the Treasury has been encouraged by the way in which the London property market has continued to grow even after Mr Osborne imposed a new 7 per cent top rate of stamp duty on homes worth more than £2m. A senior coalition adviser said: "There are several ways to raise taxes on wealthy properties, but this is the only one under consideration at the moment." The government is looking for ways to fund giveaways to be announced in next month’s Autumn Statement, including an extension of free school meals to all infants and a tax break for married couples, costing about £600m a year each. The CGT plan would come nowhere near paying for these two policies, however, and is expected to raise only a little more than £10m a year, according to Treasury officials. But it would go some way to fulfilling the Liberal Democrat desire to shift the burden of taxation from income to wealth. As part of that shift, the Lib Dems have also called for the threshold for income tax to be raised from £10,000 to £10,500 in 2015 at a cost of £1bn. That idea has come under attack from backbench Conservative MPs who want to see tax breaks aimed at higher earners. Dominic Raab, the Tory backbencher, argued in The Times on Monday that ministers should raise the threshold for those paying higher-rate income tax, currently £34,371, rather than following Mr Clegg’s plan of raising the lower rate. He said: "Unlike the lowest paid, the middle classes face a rising tax burden." Mr Clegg was scathing in his response to Mr Raab on Monday, telling reporters: "It is simply not right to suggest [the increase in the minimum threshold] doesn’t benefit so-called middle-income earners . . . Over 20m taxpayers are benefiting from this." Mr Osborne, meanwhile, will be keen to shut down the row between coalition partners over possible future tax cuts. The chancellor fears that if Tory MPs suggest tax cuts are on the horizon, it will send a message to voters that the economic clouds are lifting – thus making it safer for them to make a change to Labour.

After Hours Summary: BRCD +5.3%, SMTC +4.4%, NOAH -9.1%, ACPW -4.1%, URBN -2.9%, CRM -0.9% following earnings/guidance

WRAPX After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: - BRCD +5.3%, SMTC +4.4%, DWCH +1.8%, HOLI +0.7%, UGI +0.2%

Companies trading higher in after hours in reaction to news: - IPCI +64.0% (to make immediate commercial launch of 15 and 30 mg generic Focalin XR), - OXGN +6.4% (announced preclinical data presentation on novel anticancer compounds, benzosuberenes, demonstrating potent anti-proliferative activity), - AMRN +5.2% (CEO bought ~50.8k shares at $1.52-1.57 on November 18), - EQU +5.0% (provided update on strategic process; said there is a 'suitable option for the company to consider'), - ISIS +1.0% (reported fifth positive Phase 2 data set for ISIS-APOCIII Rx showing significant reductions in triglyceride and ApoC-III levels)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: NOAH -9.1%, ACPW -4.1%, VISN -3.1%, URBN -2.9%, CRM -0.9%

Companies trading lower in after hours in reaction to news: - ATOS -6.6% (filed for $40 mln mixed securities shelf offering), - OILT -4.8% (announced public offering of 2.6 mln common units), - TLLP -4.2% (announced public offering of 6.3 mln common units), - MEMP -4.1% (announced secondary public offering of 7,061,294 common units representing limited partner interests owned by its sponsor, Memorial Resource Development), - ACPW -4.1% (named Jay Powers as CFO; co also reported earnings), - NCT -2.4% (announced public offering of 50 mln shares of common stock), - SFM -1.5% (announced commencement of public offering of 22.5 mln shares of common stock by selling shareholders), - SPSC -1.4% (filedmixed securities shelf offering), - NEE -1.2% (announced 11.1 mln share common stock offering),

Closing Market Summary: Key Indices End Mixed The major averages ended the first session of the week on a mixed note as the S&P 500 lost 0.4% while the Dow added 0.1%. The Nasdaq underperformed with a loss of 0.9% as momentum names lagged once again.

Not counting the first 30 minutes or the final hour, the S&P 500 spent the session inside of a two-point range just above its flat line. The benchmark index made a couple appearances above the 1,800 level, but was unable to end above that mark. Meanwhile, the Dow spent the bulk of the session north of 16,000, but settled almost 15 points below that level.

Stocks tumbled to fresh lows during the last hour of action amid comments from activist investor Carl Icahn who said he is ‘very cautious' with regard to equities and could see a ‘big drop.' Mr. Icahn cited earnings driven by low interest rates as the reason for his views.

The Dow ended just above its flat line after outperforming throughout the session. Boeing (BA 138.36, +2.28) provided support after the company received orders for new jets. In addition, Goldman Sachs (GS 165.68, +1.28) and JPMorgan Chase (JPM 55.74, +0.87) also underpinned the index. In turn, the outperformance of these names translated into relative strength for their respective sectors as financials (-0.1%) and industrials (+0.2%) were the only two cyclical groups to end ahead of the S&P. On the flip side, energy (-0.7%) and materials (-0.7%) were pressured by the underlying commodities. Crude oil tumbled 0.9% to $93.02/bbl after surrendering its slim morning advance. Meanwhile, gold (-1.2%, $1272.50/ozt) and copper (-0.7%, $3.149/lb) futures also ended on their lows.

Elsewhere, the Nasdaq was pressured by several momentum names as Facebook (FB 45.83, -3.18), LinkedIn (LNKD 222.07, -8.99), Priceline.com (PCLN 1127.93, -11.60), and Tesla (TSLA 121.58, -13.87) lost between 1.0% and 10.2%. A handful of top components also weighed as Apple (AAPL 518.63, -6.36) lost 1.2% and Microsoft (MSFT 37.20, -0.64) fell 1.7% after receiving a downgrade from Bank of America/Merrill Lynch. Treasuries settled on their highs with the 10-yr yield down four basis points at 2.66%. Today's participation was well below average as just over 650 million shares changed hands on the floor of the NYSE.

On the Fedspeak circuit, Philadelphia Fed President Charles Plosser said the FOMC missed an ‘excellent opportunity' to begin the tapering process by not reducing the size of its asset purchases in September. Mr. Plosser went on to say he would have preferred a fixed amount for quantitative easing instead of an open-ended program. While Mr. Plosser does not have a vote on the board this year, he will be a voting member in 2014.

Today's economic data was limited to just two items. The September net long-term TIC flows report indicated an $8.9 billion outflow of foreign capital from U.S. denominated assets. This followed the prior month's $8.9 billion outflow. Separately, the November NAHB Housing Market Index checked in at 54, which was below the consensus estimate of 55 and unchanged from the downwardly revised (from 55) October reading. Tomorrow, the third quarter employment cost index will be reported at 8:30 ET.

o Nasdaq +30.8% YTD o Russell 2000 +30.4% YTD o S&P 500 +25.6% YTD o DJIA +21.9% YTD

Software Deals Likely, MKM Says; Lists Potential Buyers, Targets

Software may see more deals as conditions are ripe for a new round of consolidation, MKM analyst Israel Hernandez says. Consolidation driven by weak organic growth facing cash-rich, large tech cos., need to address shifts to cloud computing, SaaS, big data, software-defined networking Expects most deals to fall in $1b-$5b market cap range, though cannot rule out larger deals Potential buyers in sector include IBM, Cisco, Oracle, SAP, Hewlett-Packard, Dell, Intel, Microsoft, Juniper Potential targets include Citrix, Red Hat, Informatica, Tibco, Qlik Technologies, Teradata, Check Point Software, F5 Networks, Fortinet Also sees recent security IPOs as potential targets, including Imperva, Palo Alto Networks, Proofpoint, Qualys, FireEye, Barracuda Networks

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BN 11/18 15:32 *RENAULT CEO CARLOS GHOSN SPOKE IN INTERVIEW: AFP BN 11/18 15:32 *RENAULT TO EXIT CRISIS `MUCH STRONGER' IN 2015-16: AFP

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Renault to Exit Crisis ‘Much Stronger’ in 2015-16: AFP 2013-11-18 15:36:28.944 GMT

By Steve Rhinds Nov. 18 (Bloomberg) -- The carmaker will emerge from the current economic crisis “very much stronger” in 2015-16, CEO Carlos Ghosn says in an interview with Agence France-Presse

Link to AFP story (in French):{NSN MWGT1I3H0JK0 <go>} Link to Company News:{RNO FP <Equity> CN <GO>}

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Leviathan oil well drilling postponed indefinitely

Sources inform ''Globes'' that investment in developing Leviathan's gas and oil field has ground almost to a complete halt. 18 November 13 16:57, Amiram Barkat

Drilling of the well to Leviathan's oil-bearing strata, which was supposed to begin in December, has been postponed indefinitely. The $250 million well will reportedly be delayed by at least six months. Sources at Leviathan's partners - Noble Energy Inc. (NYSE: NBL), Delek Group Ltd. (TASE: DLEKG), and Ratio Oil Exploration (1992) LP (TASE:RATI.L) - told "Globes" that no decision had been taken to postpone the drilling, but other sources informed ''Globes'' that investment in developing Leviathan's gas field has ground almost to a complete halt. These include the tender for choosing a floating production, storage and offloading (FPSO) ship. In addition, expensive equipment intended for developing the gas field has been sent out of Israel. "Israel's oil and gas exploration industry has ceased to exist," a major drilling equipment supplier told "Globes". Postponing Leviathan's development could have major repercussions on Israel's economy, which will face a natural gas shortage from 2015. At a recent electrical engineers conference Noble Energy VP Eastern Mediterranean Lawson Freeman said that regulatory uncertainty was the main reason delaying Leviathan's development, such as the lack of an approved outline plan for bringing gas from Leviathan, without which Noble Energy cannot obtain rights to develop the field. Leviathan's partners are waiting for Antitrust Authority director general David Gilo's decision on a suspected cartel in the licenses. The companies have invested over $800 million in Leviathan to date, mostly for drilling and planning the field's development. Postponing Leviathan's oil well is the latest development in the saga. The Atwood Advantage ultra deepwater drillship, which was scheduled to arrive in Israeli waters in October to drill the well, is still at the Daewoo shipyard in South Korea. The ship was built to order for Noble Energy, after the rig that tried to reach the oil-bearing strata was forced to stop drilling at a depth of 6,500 meters because of high pressure disparities at the great depth. Updated estimates give a 25% probability of finding 1.5 billion barrels of oil in various target strata beneath Leviathan's gas-bearing strata. Construction of the Atwood Advantage was completed in September. Noble Energy has committed to hiring the ship at a cost of $584,000 a day, and planned to first use the ship at Leviathan before moving it other deepwater fields offshore from West Africa and the Falklands. Noble Energy declined to comment on the report.