(CS) Italian Banks

■ Ahead of their business plans and with BOI's stake revaluation helping to
absorb AQR provisions in Q4, we upgrade ISP to OP (new TP of €2.8) and
maintain Neutral on UCG (new TP of €6.4). Following strong performance
YTD, we see ISP's structural advantages reflected in the current c.25%
relative valuation gap, but would need to see UCG announcing
measures to at least narrow the efficiency gap, with the bank lacking
ISP's materially larger capital buffer/dividend flexibility.

■ We upgrade UBI to OP (new TP of €7.7) given its inexpensive, low-risk
exposure to rising profitability (8% RoTBV in 2016E), and with material
leverage to LT catalysts (eg, loan growth, IR hikes). We remain UP on
BMPS (€0.13 TP) given its relatively weak profitability and, in particular,
solvency terms (6.2% FL B3 CET1 post the targeted €3bn capital increase).

(BFW) Record $3 Billion of U.K. Supermarket Property Acquired in 2013

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

Record $3 Billion of U.K. Supermarket Property Acquired in 2013 2014-03-05 08:36:00.239 GMT

By Neil Callanan March 5 (Bloomberg) -- Property leased to supermarket operators such as Wm Morrison Supermarket Plc and J Sainsbury Plc gave investors a total return of 11% last year, researcher IPD and broker Colliers said in a report today. * Supermarket operator difficulties “did not deter investors” and “it is the perceived security of income that is of greatest attraction to investors”: statement * GBP1.8b of supermarket property investments sold in 2013, up 50% yoy; 11% bought by overseas buyers NOTE: British Grocer Land Spinoffs Seen Fraught With Risk: Real Estate NSN N1IG956JIJV0 <GO> NOTE: Morrison Gains on Report Activist Investors Pressing for Changes NSN MZC0SG6VDKI2 <GO> For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

To contact the reporter on this story: Neil Callanan in London at +44-20-3525-8274 or ncallanan@bloomberg.net

To contact the editor responsible for this story: Andrew Blackman at +49-30-70010-6223 or ablackman@bloomberg.net

(Les Echos) Numericable and Bouygues will make an offer for SFR

Numericable and Bouygues will make an offer for SFR {http://bit.ly/1jQG9MX} {http://bit.ly/MMEGLn}

The financial structure of a possible Bouygues, SFR operation remains unknown. Bouygues, who wants to stay in telecoms, is willing to give its mobile network and frequencies.

Wednesday night, 20 hours, applicants redemption SFR must have filed their preliminary offers from Vivendi, its parent company. The file Altice and its subsidiary Numericable is completed, banks are willing to finance. To look good with the public authorities, the group led by Patrick Drahi has provided guarantees in terms of employment and investment, Tuesday, in the columns of "Figaro."
Bouygues is almost done too. The construction group, trapped by deflation rates in Mobile, trying to come out on top. If possible without rushing into the arms of Free, who broke the price and business model for operators. It therefore has no alternative but to marry Numericable - who loves another - or with SFR - he knows well, since their teams work together for months to share their mobile networks.
Having extensively studied the issue since 2012, the third mobile operator so will file an offer on SFR. "Bouygues Numericable knew was going to say, and had time to prepare in recent months, says it at Vivendi. It will file an outline of the project, then there will be a return trip with the candidates to refine. "According to another source at Vivendi, the deadline of March 5, displayed to force everyone to write down his offer is not a cleaver.
So far, Bouygues has nothing leaked from the offer. It would, a priori, an absorption SFR Bouygues and not a merger of equals. "Vivendi has made ​​it clear that he wanted out of telecoms. The opposite of Bouygues, who just wants to stay and grow in the industry, "says does one side Bouygues. Another certainty to pass the test of competition, the construction group will make significant sacrifices. He seems prepared to sell all its mobile network to Free and frequencies and shops - but not subscribers.
The conglomerate 's financial profile would be transformed. To make an offer around 15 billion euros, the group, which is worth 9.2 billion euros traded over 4.4 billion of debt, will borrow and eventually realize a capital increase . "Given the current enterprise value of Bouygues, which amounted to 13.6 billion Euros, this transaction would be a radical change in the strategic and financial times, and may significantly increase the Group's debt "said Frederic Boulan, at Nomura. Currently, the group has a healthy financial profile, with an estimated 1.6 times the EBITDA net debt. This ratio could double.
Two complex structures
Mounting the operation Numericable is no less complex. The debt of the new entity will amount to € 10.4 billion, or 3.4 times the EBITDA. Her mother Altice reach € 16.4 billion in consolidated, or 4.1 times Ebitda. Even if it is less than the pan lever cable operator LibertyGlobal (5 times Ebitda) is a lot. "The financial plan is tight. We'll have the new group emerges savings quickly to repay the debt, "near critical Bouygues. The argument shock side Bouygues, is the reduction in the number of mobile operators from April to March, says the same source: "This will restore oxygen to Orange, SFR and Bouygues Telecom, n 'have more, and this will help to perpetuate Free Mobile ".
The Numericable operation, it does not change the market structure and isolates a little more Bouygues. But in the SFR Bouygues-project, the competitive risk is very strong "Drahi is easy but there is a funding problem;. Bouygues, it solves the problem of the sector, but there are issues of employment and competition, "said one close to Vivendi. Nobody is perfect.

(BFW) Tele2 Hires ABG Sundal Collier to Advise on Norway Unit Options

Tele2 Hires ABG Sundal Collier to Advise on Norway Unit Options
2014-03-05 08:04:41.208 GMT


By Sam Chambers
     March 5 (Bloomberg) -- Tele2 says options being considered
include entering strategic partnership, selling the unit to one
or several parties, or continuing to grow business organically.
  * Says no decision taken, will update as and when appropriate.
    Statement
  * NOTE: Tele2 shrs up as much as 1.4% in early trading
  * NOTE: Yday, Bloomberg News reported Tele2 said to be
    considering a sale of its Norwegian unit


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

To contact the reporter on this story:
Sam Chambers in London at +44-20-7673-2021 or
schambers7@bloomberg.net

To contact the editor responsible for this story:
James Ludden at +44-20-7673-2645 or
jludden@bloomberg.net

(BN) *ORCO RAISING EU36M AND SEEKS ADDED EU36M THROUGH CAP INCREASE

 BN 03/05 08:07 *ORCO RAISING EU36M AND SEEKS ADDED EU36M THROUGH CAP INCREASE
 BN 03/05 08:07 *ORCO PROPERTY GROUP RAISING EU36M AND SEEKS ADDED EU36M
Orco Property Group: Reference to ORCO Germany press release regarding capital increase
2014-03-05 08:06:45.93 GMT

Orco Property Group: Reference to ORCO Germany press release regarding capital
                                   increase

                                       

Reference to ORCO Germany press release regarding capital increase

 

Paris, 5 March 2014 - Orco Property Group S.A. refers its shareholders to  the 
press release  "ORCO  GERMANY  S.A.  raising  EUR  36  million  and  seeks  an 
additional EUR 36M  through capital  increase" issued by  its subsidiary  ORCO 
Germany S.A. on 5 March  2014 that can be  found at www.orcogermany.de and  is 
set forth in its entirety below:

ORCO GERMANY  S.A. raising  EUR 36  million and  seeks an  additional EUR  36M 
through capital increase

On 3 March  2014, ORCO  Germany S.A.  ("OG") resolved to  raise EUR  36M in  a 
reserved  capital  increase   in  favor  of   Stationway  Properties   Limited 
("Stationway"), an entity affiliated  with Mr. Jean-François Ott.   Stationway 
is subscribing to 76,600,000  new ordinary shares at  a subscription price  of 
EUR 0.47/share and these shares will be issued on or around 5 March 2014.

This capital increase follows the 29 November 2013 decision of the OG Board of
Directors to raise up to EUR 100M pursuant to the authorization granted to  it 
by its  shareholders during  the  extraordinary general  meeting of  26  April 
2012.  In addition to the EUR 54M that was raised on 29 November 2013 and paid
up by Tandis, a.s., an  entity affiliated with Mr.  Radovan Vitek, a total  of 
EUR 90M have now been raised.

On 3 March  2014, the  OG Board  of Directors  reviewed unaudited  preliminary 
consolidated financial information as of 31 December 2013 reflecting  revenues 
of EUR 60M (EUR 63M in 2012). The gross asset value of the real estate  assets 
amounts to EUR 540M (EUR  512M end of 2012) and  unaudited the NAV amounts  to 
EUR 0.96 per share before contemplated  capital increases (EUR 1.05 per  share 
as at 31 December 2012).

On 3 March  2014, the  OG Board  of Directors  also resolved  to increase  its 
capital raising goal  from EUR  100M to  EUR 126M so  that it  could raise  an 
additional EUR  36M  pursuant  to  the authorization  granted  to  it  by  its 
shareholders during the extraordinary general  meeting of 26 April 2012.   The 
primary uses of  the proceeds raised  in these capital  increases will be  the 
investment and financing of various  projects within the ORCO Property  Group, 
S.A. ("OPG") and OG group.

This offer to subscribe  to an additional  EUR 36M can be  subscribed to at  a 
price of EUR 0.47/share for a total of 76,600,000 new ordinary shares.    This 
offer will be open  to all shareholders  of OPG holding at  least 0.5% of  the 
total outstanding  OPG shares  at 23:59  on 4  March 2014,  including but  not 
limited to the following shareholders:    

  o Alchemy Special Opportunities Fund II
  o Delta Alternative Management
  o Gamala Limited
  o Jardenne Corporation Sarl
  o JP Morgan
  o Kingstown Partners Master LTD, Ktown LP, Kingstown Partners II, LP, and
    Forum Funds - Absolute Opportunities Fund
  o LCE Company Limited
  o Leandro Sarl
  o Levos Limited
  o State Street Global Advisors/George McCormack
  o Structured Credit Opportunities Fund II
  o Tricadia Credit Strategies Master Fund LTD

Participation in the  additional OG  capital increase will  be on  a pro  rata 
basis according to  the number  of OPG shares  held by  the participating  OPG 
shareholders at 23:59  on 4  March 2014.  In the event  that some  of the  OPG 
shareholders decide not to participate, the  remaining number of shares to  be 
subscribed up to a total of 76,600,000 will be offered in the second round  to 
participating subscribers pro rata to their participation in the first  round. 
 OG reserves the right to  issue fewer than 76,600,000  in the event that  not 
all shares are subscribed.  The OG shares will not be listed upon their issue,
but OG will seek to list them, subject to legal and regulatory requirements.  

The calendar of  the operation  with timeline  for the  additional OG  capital 
increase will be announced by OG at a later time.

The implementation of this additional reserved capital increase tranche is
subject to legal and regulatory requirements.
Reference to ORCO Germany press release regarding capital increase

(LA Times) White House seeks halt to military spending cuts

Budget hikes of about 3% annually are needed to carry out strategy calling for shifting forces to the Pacific, increasing cyber-operations and deterring terror attacks, Pentagon officials say

WASHINGTON — The Obama administration called for a halt in reducing military spending, arguing that further cuts would result in a significantly smaller Army and Marine Corps, the mothballing of airplanes and an aircraft carrier, and the purchase of fewer ships and advanced fighter jets in coming years.
Without Pentagon budget hikes averaging about 3% annually, it might be unable to carry out President Obama's military strategy, which calls for shifting forces to the Pacific, increasing cyber-operations and deterring terror attacks from Africa and the Middle East, senior Pentagon officials said Tuesday.
"A strategy must have the resources for its implementation," Defense Secretary Chuck Hagel said in a statement released along with the details of the Pentagon's $496-billion proposed budget for 2015. Future cuts "would result in unacceptable risks to our national security."
Proposed weapon spending calls for the retirement of aging Cold War weapon systems, such as the entire fleet of the Air Force's A-10 Warthog ground attack jets and U-2 spy planes.
Funding instead would continue to flow to newer, big-ticket programs such as Lockheed Martin Corp.'s F-35 Joint Strike Fighter jets and Northrop Grumman Corp.'s RQ-4 Global Hawk drones, both of which are largely made in Palmdale.
Still, military contractors recognize there is a long road before the budget becomes law.
"This is just the beginning of a long budget process," said Meghan McCormick, spokeswoman for aerospace giant Boeing Co. "It is too early for us to speculate on what it may ultimately mean for our programs and the facilities and employees supporting them."
The call for raising spending on the military — even as the Defense Department shifts from a wartime to a peacetime footing after more than a decade of fighting in Iraq and Afghanistan — comes the same week as a flare-up of tensions in Ukraine over Russia's decision to send troops into the Crimean Peninsula.
Though the U.S. military is not engaged in the region, the crisis "shows the different kinds of threats we're seeing in Europe" and the need for "military options for a range of situations," said Christine Wormuth, the deputy undersecretary of defense for strategy.
But the White House faces a contentious fight with Congress over lifting the automatic cuts in future military spending levels, set in law last year. Though lawmakers and Obama reached a budget deal that eased them in 2015, the cuts are still in effect from 2016 to 2021.
"I think it'll be an uphill battle to try to get Congress to go along with appropriating more for defense" after this year, said Todd Harrison, a military budget expert at the Center for Strategic and Budgetary Assessments, a Washington policy analysis organization.
The administration's five-year plan calls for increasing the Pentagon budget $115 billion over the mandated budget levels, along with a separate $26-billion hike in 2015.
Rep. Howard P. "Buck" McKeon (R-Santa Clarita), chairman of the House Armed Services Committee, indicated support for reversing the Pentagon cuts.
"While we cut nearly one-fifth of our defense resources, Russia and China are arming at an alarming rate. Russia's military spending is up roughly 30%, and China's has more than doubled in recent years," he said.
Along with the budget, the Pentagon released a strategy document, called the 2014 Quadrennial Defense Review. Though written before Russia's military moves in Crimea, it says the U.S. will "continue to work to achieve a Europe that is peaceful and prosperous" and "will engage Russia constructively in support of that objective."
The Pentagon outlined the cutbacks it will have to make in future years if the automatic cuts remain in effect. The Navy said it would have to mothball one of its 10 aircraft carriers after the Ford enters service next year.
Unless the cuts are reversed, the Army would have to shrink to around 420,000 soldiers, officials said. With the war in Afghanistan ending, the number is expected to fall to a range of 440,000 to 450,000, the smallest it has been since before World War II. The Marine Corps would need to contract to 175,000 from 197,000. It had planned to drop to 182,000.
The Air Force said it would have to get rid of 80 additional airplanes, including all of its Boeing KC-135 refueling tankers and its Global Hawk surveillance drones made by Northrop. Instead of 343 of the radar-evading F-35 fighters made by Lockheed, it could afford only 326, Pentagon officials said.
The Navy would be able to buy only 36 ships, instead of the 44 it had planned, officials said.
If required to make such cutbacks, senior Pentagon officials said Monday, they would have to scale down radically the U.S. military commitments and missions at home and abroad.
The Pentagon made similar warnings last year when military spending was slashed by $45 billion.
Lockheed spokesman Gordon Johndroe said the company is reviewing the president's budget and will continue to assess it as Congress begins the appropriations process
"Over the next few weeks, we will review the budget in detail to understand the specific impacts to our business," he said.