>>> Volkswagen offer for outstanding MAN shares subject to special proceedings

Volkswagen offer for outstanding MAN shares subject to special proceedings

Volkswagen's offer for outstanding shares in MAN needs to be examined, according to the German investor protection agency DSW. A German-language press release from DSW said that the offer made by Volkswagen (VW), the listed German vehicle group, to other shareholders in the truck maker MAN is too low.

VW, which holds a 75% stake in MAN, offered EUR 80.89 per share for the outstanding shares, according to the release.

Marc Tuengler, chief of DSW, said his organization will initiate special proceedings to scrutinize the offer price. Investors interested in joining the initiative need to submit requests at the regional court of Munich by this coming Wednesday.

Source Company Press Release

>>> Brokers Ups & Downs

Up

*ASHTEAD GROUP RAISED TO OVERWEIGHT AT NEUTRAL AT JPMORGAN *BAUER RAISED TO BUY VS NEUTRAL AT GOLDMAN *BUZZI UNICEM RAISED TO NEUTRAL VS UNDERPERFORM AT MEDIOBANCA *CSR RAISED TO NEUTRAL VS SELL AT UBS *DAIMLER RAISED TO BUY VS REDUCE AT KEPLER CHEUVREUX *DEUTZ RAISED TO NEUTRAL VS SELL AT GOLDMAN *GPW RAISED TO BUY VS NEUTRAL AT CITI *KONECRANES RAISED TO BUY VS NEUTRAL AT GOLDMAN *PALFINGER RAISED TO NEUTRAL VS SELL AT GOLDMAN *STORA ENSO RAISED TO BUY VS NEUTRAL AT GOLDMAN *TREVI FINANZIARIA RAISED TO BUY VS NEUTRAL AT GOLDMAN *UPM-KYMMENE RAISED TO BUY VS NEUTRAL AT GOLDMAN *WACKER NEUSON RAISED TO NEUTRAL VS SELL AT GOLDMAN *ZURICH INSURANCE RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN

Down

*BREMBO CUT TO NEUTRAL VS OUTPERFORM AT MEDIOBANCA *DASSAULT SYSTEMES CUT TO UNDERWEIGHT VS NEUTRAL AT HSBC *DOMINO PRINTING SCIENCES CUT TO NEUTRAL VS BUY AT GOLDMAN *GEORG FISCHER CUT TO SELL VS NEUTRAL AT GOLDMAN *GRAFTON GROUP CUT TO SELL VS NEUTRAL AT GOLDMAN *INTESA CUT TO REDUCE VS HOLD AT BANCA AKROS *KIER GROUP CUT TO SELL VS NEUTRAL AT GOLDMAN *KINGSPAN GROUP CUT TO NEUTRAL VS BUY AT GOLDMAN *Konecranes Cut to Sell from Hold at Nordea *MONTE PASCHI CUT TO SELL VS REDUCE AT BANCA AKROS *NEOPOST CUT TO SELL VS NEUTRAL AT GOLDMAN *OXFORD INSTRUMENTS CUT FROM CONVICTION BUY AT GOLDMAN *POP. EMILIA CUT TO REDUCE VS HOLD AT BANCA AKROS *RENISHAW CUT TO NEUTRAL VS BUY AT GOLDMAN *ROCKWOOL INTERNATIONAL CUT TO NEUTRAL VS BUY AT GOLDMAN *ROYAL BOSKALIS WESTMINSTER CUT TO NEUTRAL VS BUY AT GOLDMAN *SARAS CUT TO UNDERPERFORM VS NEUTRAL AT MEDIOBANCA *SEVERN TRENT CUT TO SELL VS HOLD AT SOCGEN *SPIRENT CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS *UBI CUT TO REDUCE VS HOLD AT BANCA AKROS *UNICREDIT CUT TO HOLD VS ACCUMULATE AT BANCA AKROS *VISCOFAN CUT TO NEUTRAL VS BUY AT GOLDMAN *WILLIAM DEMANT CUT TO NEUTRAL VS BUY AT GOLDMAN

PT Changes

*BMW PT RAISED TO EU100 VS EU90 AT BERNSTEIN, STAYS OUTPERFORM *Buzzi Unicem PT Raised to EU13.2 vs EU12.7 at Deutsche Bank

Initiation

*NATIXIS RESTARTED NEUTRAL AT JPMORGAN, PT EU4 *SEAMLESS DISTRIBUTION RATED NEW BUY AT BERENBERG; PT SEK112

Country Sector Stock Call

*CGG ADDED AS A LEAST PREFERRED STOCK AT CITI *GIVAUDAN REMOVED FROM UBS’S MOST PREFERRED LIST *MAN GROUP ADDED TO UBS’S MOST PREFERRED LIST *SCHRODERS ADDED TO UBS’S LEAST PREFERRED LIST *TECHNIP ADDED AS A MOST PREFERRED STOCK AT CITI

>>> What to look at today :

US Market erased loses and finish higher on hopes of a debt ceiling deal very soon...evening reports from the hill cited "tremendous progress" made in negotiations between Reid and McConnell, but no final funding deal was yet in place. US fixed income markets will reopen tomorrow after Monday holiday...VIX Rises 2.2% to 16.07...Brazil+1,92%...RBA meeting minutes remaining squarely neutral, reiterating the Board is keeping the possibility of further cuts but any additional easing is not seen as imminent...se bonds outflows in Australia, Equities higher...Nikkei +0.3%...HS+0.33%...Shanghai-0.34%...no much action in Asia as markets are awaiting to the US

Eur$ 1.3565 European fut Indicated @ +45bps US Fut flat.

Keep an eye on : - AF FP : Air France-KLM Said to Resist Buying Shares in Alitalia Bailout - AHT LN : Overweight Ashtead, Recent Fall Overdone, JPMorgan Says - CO FP : Casino 3Q Total Rev., French Hypermarket LFL Sales Beat Ests - CLN VX : Clariant to Sell Detergents Unit to Investment Group: WSJ - EDF FP : France to Debate Extension for EDF in Amortizing Atomic Reactors - EI FP : Buy Essilor, Good entry point around 3Q sales Publication: UBS - F IM : The trial related to the price for a minority stake in Chrysler is expected to begin in Sept 2014,trail relates to the 41.5% stake held in Chrysler by the UAW's trust. - FLU AV : Flughafen Wien Still Interested in Operating Bratislava: WiBlatt - HMB SS : Hennes & Mauritz Sept. Same-Store Sales Meet Ests. - KNIN VX : Kuehne & Nagel 3Q Net Income Misses Estimate, Confirms Forecasts - ML FP : Michelin Sees 5% Rise In Sept. Europe Replacement Tire Market - Moncler Files Request for IPO With Milan Exchange Goldman, BofAML, Mediobanca are global coord., Banca IMI, JPMorgan, Nomura, UBS are joint bookrunners, BNP Paribas, Equita, HSBC are lead managers - RCS IM :has dissolved sharholder agreement - RIO LN : Reports Q3 Iron ore output 68.3M tons (record) v 52.6M y/y; 68M tons v 57M tons q/q, +4% y/y - SAN FP : Sanofi to Detail French R&D Job Cuts Today, Le Figaro Says - SCHP VX : Schindler 9M Orders Received Rises 7%, Rev Increases 6.2% - SREN VX : Swiss Re Said to Consider Sale of U.S. Life Insurance Assets

FT : Moscow launches probe of Uralkali chief

Moscow launches probe of Uralkali chief

The "Potash War" between Russia and Belarus took an unexpected turn on Monday when Russian police launched a probe into the financial dealings of Vladislav Baumgertner, CEO of Russian fertiliser group Uralkali, in a move that could result in his extradition to Russia. Mr Baumgertner is under house arrest in Minsk, the Belarusian capital, following the collapse of a price-fixing cartel between Uralkali and Belaruskali, the two largest world players in potash. He was arrested in Minsk when he flew in on the invitation of Belarus’s prime minister in August. In July, Uralkali pulled out of the cartel, sending the price of potash plummeting – which threatened Belarus with a payments crisis, as it relies on Belaruskali for one-quarter of export revenues. With an eye to renegotiating the deal between Uralkali and Belaruskali, which was in effect from 2010 to 2013, Alexander Lukashenko, Belarus’s president, has attempted to pressure Suleiman Kerimov, Uralkali’s main shareholder, into selling his 22 per cent stake. Some Uralkali shareholders have insisted that Mr Baumgertner be freed as a precondition of any negotiations or a sale by Mr Kerimov, people familiar with the situation said. The people added that if Mr Baumgertner were to be extradited to Moscow, it might help to end the stand-off, which could presage a sale by Mr Kerimov and an attempt to reinstate the cartel. Analysts said that it was not clear whether the Russian investigative committee intended to press charges against Mr Baumgertner – or whether the investigation is a means to get him back to Russia and offer Mr Lukashenko a face-saving way out of the crisis. "This is the fastest track to get him [Baumgertner] back to Russia," argued Konstantin Yuminov, analyst at Raiffeisenbank in Moscow. He added that the Russian prosecutor’s announcement was "a positive development for the company".  Vladimir Markin, a spokesman for the Investigative Committee – Russia’s version of the FBI – said that the committee had launched a criminal investigation into Mr Baumgertner’s conduct as CEO, as well as that of his deputy Konstantin Solodovnikov and "other figures", based on materials provided by Belarusian police on Friday. But he explained that the committee had not decided whether to charge him. "The materials show that the above named official [Mr Baumgertner] . . . misused his powers . . . for the benefit and profit of other figures, causing significant harm and serious consequences for Belaruskali," Mr Markin said. Mr Kerimov is understood to be in talks with two groups over the sale – one group led by billionaire Mikhail Prokhorov that is interested in acquiring half of Mr Kerimov’s stake, while another group, led by banker Vladimir Kogan, is interested in the whole stake. Time is on Mr Kerimov’s side in the stand-off with Mr Lukashenko because Uralkali has more export options than Belaruskali, which labours under US and EU sanctions against Belarus. "Belarus needs the Russian channel in order to interface with the rest of the world," said a person close to Uralkali.

FT : Icahn and Loeb cannot be shut out

Icahn and Loeb cannot be shut out

If "staying active" is the key to a long life, Carl Icahn will probably live for years. At 77, the US investor is on a concerted activist campaign. He has tried (unsuccessfully) to disrupt Michael Dell’s buyout of the computer maker he founded, dined with Apple’s chief executive and pressed him to return cash to shareholders, and last week planted board members – including his son Brett – at Nuance, the Boston technology company that gives Apple’s Siri his/her voice. But despite proclaiming in Forbes magazine in June that "What I Do Is Good for America", Mr Icahn will struggle to lose his "corporate raider" label. When he revealed his activist stance at Nuance, analysts wrote: "Let the fireworks begin." Board members and senior managers’ first reaction to an approach from Mr Icahn – or any hedge fund – is to take cover. To say activism has a bad name among operating executives is not, however, true. It has many names. Mr Icahn’s is the quintessential American brand, marked by public fisticuffs and proxy battles. In the same style, Daniel Loeb of hedge fund Third Point did not write to Sotheby’s chief executive William Ruprecht this month to laud his management skills. But what if, instead of attacking Mr Ruprecht’s "extravagant" taste for "farm-to-table" organic delicacies, Mr Loeb was sitting at the table advising him to follow a different diet? Until earlier this year, Mr Loeb was doing something similar as a director of Yahoo , proving that putting an engaged investor on the board can yield a positive outcome. It is human nature that if a stranger comes up behind you and points out, however politely, that you could be doing a better job, you will bristle. Executives have enough to worry about without having to wrestle with back-seat drivers. But as Peter Hill, chairman of Alent, the UK-listed performance materials group, points out: "Second-guessing and questioning the executive is what boards should be doing: for me, it is one of the key dynamics." Mr Hill was a director of Cookson, now called Vesuvius, when two activist funds took stakes. One, Cevian Capital, with 20 per cent, later nominated a director to the board. When Alent spun off from Vesuvius last year, Cevian took a board seat there, too. Mr Hill thinks there is room for "responsible activists". Advocates see them as "anchor shareholders" – a concept common in northern Europe – who encourage long-range stewardship of companies. Even in the US, funds such as ValueAct, which has a seat on the Microsoft board, are carving out a different style of activism. The problem for companies deciding whether to let the barbarians into the boardroom is working out which sort is waiting at the gate. Dionysia Katelouzou of King’s College London has studied the battlefield outside the US and identified three categories of activism, from gentle to aggressive, and 13 subgroups of tactics, from "quiet persuasion" to full takeover. Seeking board representation counts as "aggressive". But her conclusion is similar to that of an earlier paper about the US: many assumptions about hedge fund activists are myths. They are not necessarily short-termists (39 per cent of her sample held on for more than three years), they do not generally seek control, and their aggressiveness is often overstated because journalists would rather write about a punch-up than a love-in. (Many dislike being called hedge funds, too, but that is another story.) All investors act from self-interest. The question for the board is whether an activist’s interests are aligned with those of other shareholders, ensuring its director will speak for all investors, as non-executives should. Boards need to ask how such a director would behave if the activist’s strategy conflicted with the board’s collective will – in a bid, say. Finally, they need to know if they share the same definition of "long term". Executives often complain their institutional investors are uninformed, disengaged and swift to sell when the going gets tough. They should not ignore a knock on the door from investors that are well informed and committed. Mr Icahn purrs about his altruistic and patriotic motives. Based on his record (which spans most categories of activism), it would obviously be rash for boards to assume he is now domesticated. But it would be equally odd for them to shut out all activists just because a few like to use their claws.

>>> Asia Update

Asian Market Update: Equities in relief-rally mode on continued optimism over an impending US budget resolution; RBA meeting minutes maintaining neutral stance

***Observations/Insights*** - US equity markets reversed initial declines on renewed optimism that the setbacks experienced in both chambers of Congress over the weekend would be temporary. Press reports suggested Sen Majority leader Reid privately offered a deal to the GOP that would raise the debt ceiling for 6 to 9 months and also delay the medical device tax. Later in the day, White House statement that the 15:00ET<x-apple-data-detectors://2>meeting with Congressional leaders has been postponed so Senate leaders can continue "important progress" was also interpreted constructively. Finally, evening reports from the hill cited "tremendous progress" made in negotiations between Reid and McConnell, but no final funding deal was yet in place. US fixed income markets will reopen tomorrow after Monday holiday. - RBA meeting minutes remaining squarely neutral, reiterating the Board is keeping the possibility of further cuts but any additional easing is not seen as imminent. - Bond outflows in Australia sending 10-yr yield to 1-month high; S&P/ASX outperforms, rising to a 2-week high near 5,270. - China follows aggressive liquidity injections in the final week of Sept with a more modest operation; Note that China Sept lending data released overnight topped expectations with a 3-month high of CNY787.0B.

***Economic Data*** - (CN) CHINA SEPT NEW YUAN LOANS (CNY): 787.0B V 675.0BE (3-month high) - (CN) CHINA SEPT M2 MONEY SUPPLY Y/Y: 14.2% V 14.2%E; M1 MONEY SUPPLY YY: 8.9% V 9.7%E - (AU) AUSTRALIA SEPT NEW MOTOR VEHICLE SALES M/M: -0.1% V +0.7% PRIOR; Y/Y: -3.5% V +0.2% PRIOR - (SL) Sri Lanka Central Bank cuts Reverse Repo Rate by 50bps to 8.50% (not expected); First rate cut since May

***Fixed Income/Commodities/Currencies*** - (CN) PBoC to inject CNY10B in 7-day reverse repos - (CN) China Gold Association: China Aug gold output seen at 38.0T v 39.3T m/m - GLD: SPDR Gold Trust ETF daily holdings fall by 1.9 tonnes to 889.1 tonnes (lowest since Feb 2009) - SLV: iShares Silver Trust ETF daily holdings fall to 10,445 tonnes (lowest since 10,397 on Aug 13th) from 10,505 tonnes prior - (JP) Japan 10-yr govt bonds yields rise by 1.5bps to 0.67% (2-week high) - (AU) Yield on Australia 10-yr note rises over 7bps above 4.19%, 1-month high; 3-yr bond yield near 3.14, a 7-month high

- Investors are hedging the political uncertainty in Washington and the absence of a deal late on Monday with more USD selling, even as US equity futures are still modestly bid. AUD/USD and NZD/USD are up over 50pips respectively - AUD above $0.9530 (4-month high) and NZD above $0.84 (3-week high). USD/JPY is also under pressure, falling about 25pips from late US session highs below ¥98.50. EUR/USD and GBP/USD are up about 0.1% or some 15 pips from opening levels above $1.3560 and $1.5990 respectively.

***Speakers/Political/In the Papers*** - (CN) ANZ economist Zhou: China CPI likely to remain above 3% in Oct and Nov - Shanghai Daily - (CN) China may face greater inflation pressure in 2014 - Chinese press - (CN) German Chamber of Commerce in China: China wages growth may decelerate from 8.9% in 2013 to 8.2% in 2014 - Shanghai Daily - (NZ) New Zealand RBNZ Dep Gov Spencer: Domestic housing market requires supply boost, demand constraint; LVR restrictions may reduce extent of rate increases and reduce exchange rate pressure. - (PH) USGS: Magnitude 7.4 earthquake reported in southern Philippines

- (US) White House: 15:00ET<x-apple-data-detectors://11> meeting with Congressional leaders has been postponed so Senate leaders can continue "important progress" on deal - (US) US Senate leader Reid (D-NV): While tremendous progress has been made with Senate minority leader McConnell towards debt limit resolution and govt funding deal, we are not there yet - financial press

- (US) US Treasury Dept to delay the release of the Semi-Annual Currency report due to govt shutdown - (DE) German CDU/CSU party said to have agreed to hold a third round of discussions on forming a coalition with center-left SPD this Thursday; Still planning to hold 2nd round of talks with Greens on Tuesday. - press citing Merkel's party source

***Equities*** Market Snapshot (as of 03:30 GMT<x-apple-data-detectors://12>): - Nikkei225 +0.5%, S&P/ASX +1.0%, Kospi +0.8%, Shanghai Composite -0.3%, Hang Seng +0.6%, Dec S&P500 +0.1% at 1,706, Dec gold -0.3% at $1,272, Nov crude oil -0.2% at $102.22/brl

US markets: - CWTR: Lower Q3 guidance; to explore strategic alternatives; -28.6% afterhours - TDC: Guides Q3 EPS $0.69-0.70 v $0.81e, Rev around $665M v $700Me; Lowers 2013 guidance; Increases share repurchase authorization by $300M (3.5% of market cap); -11.6% afterhours - PKG: Reports Q3 $0.91 adj v $0.89e, R$845.4M v $831Me; +1.4% afterhours

Notable movers by sector: - Consumer discretionary: Huayi Brothers Media Corp 300027.CN +5.7% (provides Q3 guidance); Cochlear Ltd COH.AU -1.5% (provides FY14 outlook) - Industrials: Daewoo Shipbuilding & Marine 042660.KR +4.1% (awarded order); Fuji Heavy Industries 7270.JP +1.0% (may report1 profit, raise FY guidance) - Materials: Huaneng Renewable Corp 958.HK -1.0% (share placements); Perseus Mining Ltd PRU.AU +1.5% (provides production outlook); Sims Metal Management SGM.AU +1.3% (divests non-core assets); Inner Mongolia Baotou Steel Rare Earth 600111.CN +3.2%, China Minmetals Rare Earth Co Ltd 000831.CN +1.1% (China may start rare-earth stockpiling) - Technology: Mesoblast Ltd MSB.AU -1.6% (analyst action); Hiwin Technologies Corp 2049.TW +3.0% (to invest in China) - Energy: Linc Energy LNC.AU +8.3% (revalues oil fields); Yanzhou Coal Mining Co 1171.HK +2.7% (analyst action) - Financials: Ping An Insurance 2318.HK +1.4% (plans to enter elderly care industry); Zhejiang China Commodities City Group Co Ltd 600415.CN -2.6% (Q3 results) - Telecom: Telstra Corp TLS.AU +1.2% (provides guidance)

>>> US After Hours

After Hours Summary: TDC -12.0%, PKG +1.3%, CWTR -27.8% on earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: - PKG +1.3%

After Hours Losers: Companies trading lower in after hours in reaction to earnings: - CWTR -27.8%, - TDC -12.0% Companies trading lower in after hours in reaction to news: - RSO -2.4% (announced ~100 mln offering)