FT : EasyJet launches £1.2bn cash call after rejecting approach

EasyJet launches £1.2bn cash call after rejecting approach
Plus, EY’s $2bn plan to improve audit quality and how hedge funds are muscling their way into Silicon Valley

EasyJet has rejected a takeover approach and confirmed plans to raise £1.2bn in a rights issue to take advantage of post-pandemic opportunities.

The low-cost carrier said it had received an approach from a bidder it did not name. It said that the approach was “a low premium and highly conditional all-share transaction” which undervalued the company and that the bidder was no longer considering an offer.

Alongside the rights issue, EasyJet said it had secured a new $400m revolving credit facility from its banks. It said that the proceeds of the equity issue would be used to strengthen its balance sheet, invest in growth opportunities in its core western European markets and bolster its easyJet Holidays business.

EasyJet, which lost more than £2bn during the pandemic, still only expects to fly about 60 per cent of its 2019 schedule between July and September.

>>> Europe : Brokers Upgrades & Downgrades - 9th of September 2021 V2(+)

>>> Up
* Adyen Raised to Outperform at Exane; PT 3,600 euros
* Banco Santander Raised to Hold at Jefferies; PT 3.10 euros
* Beiersdorf Raised to Buy at Goldman; PT 122 euros
* Boohoo Raised to Outperform at Credit Suisse; PT 350 pence
* CONVATEC RAISED TO OVERWEIGHT AT JPMORGAN, PT 272P
* Genus Cut to Hold at Peel Hunt; PT 5,500 pence (+)
* Grainger Raised to Buy at Peel Hunt; PT 370 pence
* *HAYS RAISED TO OVERWEIGHT AT BARCLAYS, PT 195P (+)
* Holcim Raised to Outperform at Exane; PT 63.50 Swiss francs
* IQE Raised to Speculative Buy at Canaccord; PT 65 pence (+)
* ISS Raised to Hold at Handelsbanken; PT 145 kroner
* Pernod Ricard Raised to Overweight at JPMorgan; PT 225 euros
* SyntheticMR Raised to Buy at Pareto Securities; PT 90 kronor (+)

>>> Down
* Buzzi Unicem Cut to Neutral at Exane; PT 24.50 euros
* Draper Esprit Cut to Hold at Jefferies; PT 1,200 pence
* Henkel Cut to Neutral at Goldman; PT 84 euros
* Norsk Hydro Raised to Buy at SpareBank; PT 75 kroner
* Novatek GDRs Cut to Hold at Renaissance Capital; PT $282.50
* Red Electrica Cut to Sell at UBS
* UBS Group Cut to Market Perform at KBW; PT 16.14 Swiss francs

>>> Initiation
* Aston Martin Rated New Neutral at Oddo BHF; PT 2,000 pence (+)
* Befesa Resumed Neutral at Citi; PT 78 euros
* Carrefour Resumed Buy at SocGen; PT 19.50 euros
* Essity Rated New Reduce at HSBC; PT 235 kronor
* Ferrari Rated New Outperform at Oddo BHF; PT 221 euros (+)
* IntegraFin Rated New Sector Perform at RBC; PT 610 pence
* INWIT Rated New Overweight at JPMorgan; PT 12.50 euros
* Ontex Rated New Hold at HSBC; PT 9 euros
* Vossloh Rated New Hold at Jefferies; PT 53 euros

>>> Call
* Beiersdorf Raised on Turnaround Outlook, Henkel Cut: Goldman (+)
* Boohoo Upgraded at Credit Suisse; Shein Threat Set to Moderate (+)
* Carrefour Investment Case ‘Compelling,’ SocGen Resumes With Buy (+)
* ConvaTec Potential Not Priced In, Raise to Overweight: JPMorgan
* Tower Stocks Still Offer Upside, Cellnex Top Pick: JPMorgan
* Draper Esprit Cut to Hold at Jefferies Following Surge in Shares
* E.On has Long Growth Potential, Key to Green Future: Berenberg
* Genus’s Sales Outlook Hit By Chinese Pork Price Slump: Liberum (+)
* Grainger a Compelling Story With Dividend Upside, Peel Hunt Says
* Pernod Momentum Good and Stock at Discount, JPMorgan Upgrades (+)
* Richemont Regains Shine in Watches, AGM Message Strong: Vontobel (+)
* RWE Is Set for Profitable Future Not Seen in Valuation: Metzler (+)
* Santander Raised at Jefferies With FY21 Expectations Achievable
* Tecan at Start of ‘Growth Offensive,’ Berenberg Hikes PT
* Tod’s 2Q Shows Improvement in Some Channels, Regions: Jefferies
* Wind’s Long-Term Fundamentals Underlined by U.S. Report: Citi

>>> TradeGate Pre-Market Indications

DAX:
  • Merck KGaA (MRK TH) +0.3%
    • *MERCK KGAA TARGETS SALES OF ABOUT EU25B IN 2025
    • Company holds capital markets day today
  • Adidas (ADS TH) flat
    • Lululemon Rises as Yogawear Maker Reports Accelerating Sales
  • Linde (LIN TH) -1%
  • Deutsche Bank (DBK TH) -1.2%
  • Henkel (HEN3 TH) -1.2%
    • Beiersdorf Raised on Turnaround Outlook, Henkel Cut: Goldman
  • Covestro (1COV TH) -1.4%
MDAX:
  • Beiersdorf (BEI TH) +0.7%
    • Beiersdorf Raised to Buy at Goldman; PT 122 euros
  • Aixtron (AIXA TH) -1%
  • Lufthansa (LHA TH) -1.2%
  • Freenet (FNTN TH) -1.5%
  • Thyssenkrupp (TKA TH) -1.6%
  • Bechtle (BC8 TH) -1.9%
SDAX:
  • Deutz (DEZ TH) +1.2%
  • Metro (B4B TH) -1.1%
  • 1&1 (DRI TH) -1.3%
  • SGL (SGL TH) -1.8%

>>> Stoxx 600 Pre-Market Indications

  • InPost (669 TH) +3.1%
    • Shares fell 6.7% yesterday
  • Beiersdorf (BEI TH) +0.5%
    • Beiersdorf Raised on Turnaround Outlook, Henkel Cut: Goldman
  • Deutsche Bank (DBK TH) -1.1%
  • Covestro (1COV TH) -1.2%
  • Henkel (HEN3 TH) -1.2%
    • Beiersdorf Raised on Turnaround Outlook, Henkel Cut: Goldman
  • Lufthansa (LHA TH) -1.3%
  • Nordic Semiconductor (N0S TH) -1.4%
  • TUI (TUI1 TH) -1.6%
  • Bechtle (BC8 TH) -1.6%
  • Freenet (FNTN TH) -1.7%
  • Thyssenkrupp (TKA TH) -2.3%
    • Cash-Generation Trends May Drive Thyssenkrupp, Webuild Spreads
  • Prosus (1TY TH) -3.1%
    • China Tells Tencent, Netease to End Focus on Profit in Gaming

>>> Europe : Brokers Upgrades & Downgrades - 9th of September 2021

>>> Up
* Adyen Raised to Outperform at Exane; PT 3,600 euros
* Banco Santander Raised to Hold at Jefferies; PT 3.10 euros
* Beiersdorf Raised to Buy at Goldman; PT 122 euros
* Boohoo Raised to Outperform at Credit Suisse; PT 350 pence
* CONVATEC RAISED TO OVERWEIGHT AT JPMORGAN, PT 272P
* Grainger Raised to Buy at Peel Hunt; PT 370 pence
* Holcim Raised to Outperform at Exane; PT 63.50 Swiss francs
* ISS Raised to Hold at Handelsbanken; PT 145 kroner
* Pernod Ricard Raised to Overweight at JPMorgan; PT 225 euros


>>> Down
* Buzzi Unicem Cut to Neutral at Exane; PT 24.50 euros
* Draper Esprit Cut to Hold at Jefferies; PT 1,200 pence
* Henkel Cut to Neutral at Goldman; PT 84 euros
* Norsk Hydro Raised to Buy at SpareBank; PT 75 kroner
* Novatek GDRs Cut to Hold at Renaissance Capital; PT $282.50
* Red Electrica Cut to Sell at UBS
* UBS Group Cut to Market Perform at KBW; PT 16.14 Swiss francs

>>> Initiation
* Befesa Resumed Neutral at Citi; PT 78 euros
* Carrefour Resumed Buy at SocGen; PT 19.50 euros
* Essity Rated New Reduce at HSBC; PT 235 kronor
* IntegraFin Rated New Sector Perform at RBC; PT 610 pence
* INWIT Rated New Overweight at JPMorgan; PT 12.50 euros
* Ontex Rated New Hold at HSBC; PT 9 euros
* Vossloh Rated New Hold at Jefferies; PT 53 euros

>>> Call
* ConvaTec Potential Not Priced In, Raise to Overweight: JPMorgan
* Tower Stocks Still Offer Upside, Cellnex Top Pick: JPMorgan
* Draper Esprit Cut to Hold at Jefferies Following Surge in Shares
* Grainger a Compelling Story With Dividend Upside, Peel Hunt Says
* Santander Raised at Jefferies With FY21 Expectations Achievable
* Tecan at Start of ‘Growth Offensive,’ Berenberg Hikes PT
* Tod’s 2Q Shows Improvement in Some Channels, Regions: Jefferies
* Wind’s Long-Term Fundamentals Underlined by U.S. Report: Citi

>>> What to look at today - 9th of September 2021

Stocks declined along with U.S. and European equity futures Thursday as investors continued to fret over a slower economic recovery and the prospect of reduced central bank stimulus. The dollar advanced.
MSCI Inc.’s Asia-Pacific gauge was on track for the biggest decline in three weeks as Japan ended a prolonged winning streak, sapped by a plan to extend a virus emergency for Tokyo and other areas. 
China’s technology stocks slid after officials told firms including Tencent Holdings Ltd. and Netease Inc. to end their focus on profit in gaming, again highlighting Beijing’s regulatory crackdown. Indebted developer China Evergrande Group plunged to the lowest since 2015. Australian equities tumbled as the nation grapples with a delta-strain outbreak.
The S&P 500 retreated for a third day overnight and the Nasdaq 100 posted the biggest drop in two weeks. A Federal Reserve surveysignaled a moderation in economic growth due to the delta virus strain. Treasury yields retreated. 
US After Hours LULU +13.7%, CURV +13.3%, RH +2.2% higher on earnings; SAM warns again, but trading flat; BASE -12.8%, GME -7% fall on earnings

Nikkei -0.75% Hang Seng -1.83% CSI -0.64% Shanghai +0.11% Shenzen -0.58%

Eur$ 1.1816 CNH 6.4608 CNY 6.4622 JPY 110.11 GBP 1.3759 CHF 0.9204 RUB 73.2379 TRY 8.4712 WTI$ 69.32 +0.03% Gold 1,787,39 -0.10% BTC 46,270 +200 ETH 3,500 +30

S&P -0.44% Nasdaq -0.36% EuroStoxx -0.72% FTSE -0.79% Dax -0.65% SMI -0.48%

Macro :
- Euronext to Add Frontline, Golden Ocean, Kahoot!, MPC to OBX

Keep an eye on :
- 888 LN : 888 Plans Equity Raise for William Hill Deal: Times (Earlier)
- ABI BB : Watch Drinks Stocks as Boston Beer Flags Hard Seltzer Slowdown
- ADDVA SS : ADDvise Group Offering of Shares Prices at SEK4.92/Share
- AUG LN : MSIP Agrees to Increased Cash Offer for Augean at 340p Per Share
- BKW SW : BKW Shares Post Worst Day Since March 2020 After ‘Mixed’ Results
- CERV IM : Cerved Investors Tender 31.8% Shares in Ion Bid: Borsa Filing
- DANSKE DC : Danske Bank Loses More Customers, Poll Shows: Jyllands-Posten
- DTE GY : T-Mobile US Falls as $1.67b Block Trade Is Said Offered (1)
- EZJ LN : EasyJet Said to Plan $1.4 Billion Stock Sale for Travel Rebound
- EDPR PL : EDPR Sells Additional 12% Stake in Wind Portfolio to Greencoat
- ELABS NO : Elliptic Laboratories Offering Prices at NOK223/Share
- EMMN SW : Emmi Nominates Urs Riedener as Successor to Chairman Graber
- ERA FP : Eramet Says Meridiam, Gabonese State Buy Setrag Stakes
- ERICB SS : U.S. Charges Ericsson Ex-Employee for Role in Bribery Scheme
- FGA FP : Figeac Aero Agreed to Ace Capital Taking Stake At EU5.60/SHr
- DATA LN : GlobalData Agrees to Buy IHS Markit’s Life Sciences Ops
- GVOLT PL : Greenvolt to Join Portugal’s PSI 20 Stock Index, Euronext Says
- ILD FP : Iliad Public Offer to Run From Sept. 9 Until Sept. 24: AMF
- JD/ LN : JD Sports Considering Bid for Online Retailer Missguided: Sky
- MKS LN : Marks & Spencer Revives St Michael Brand After 21-year Absence
- RNO FP : Renault Could Give Up Commercial Vehicles in China: Echos
- ROG SW : Roche Agrees to Buy TIB Molbiol; No Terms
- ROTH FP : Rothschild, Jefferies Outmuscle Big Banks in U.K. Deals Bonanza
- RWE GY : Activist Investor Urges Germany’s RWE to Exit Lignite Quicker
- SAN FP : Sanofi Pegasus Didn’t Meet Primary or Key Secondary Endpoints
- SF SS : Stillfront Offers Up to SEK1b Shares, Stillfront Offering of 15.7m Shares Prices at SEK63.6/Share
- SOL SM : Soltec Forecasts Industrial Unit’s 2021 Revenue at EU395m-EU440m
- SO FP : Somfy 1H Current Operating Income EU213.8M Vs. EU102.6M Y/y
- TSLA US : Tesla Obtains Patent for Lasers as Windshield Wipers: Electrek
- TOD IM : Tod's 1H Ebitda Beats Estimates

>>> US Close


Closing Stock Market Summary

The major indices closed lower on Wednesday, as investors digested another negative-sounding news cycle. The S&P 500 (-0.1%) and Dow Jones Industrial Average (-0.2%) finished slightly lower, the Nasdaq Composite lost 0.6%, and the Russell 2000 struggled with a 1.1% decline. 

Briefly, several companies provided cautious outlooks, Axios reported that Senator Manchin (D-WV) would only support $1.5 trillion for any human infrastructure plan, Treasury Secretary Yellen warned about the economic consequences if lawmakers don't resolve the debt-ceiling issue, and ECB policymaker Holzmann said the central bank could tighten policy sooner than expected. 

Looking more closely at the corporate influence, the S&P 500 materials sector (-1.0%) was one of the weakest sectors after Sherwin-Williams (SHW 296.69, -6.15, -2.0%) lowered its Q3 sales guidance due to raw material issues. Homebuilding stocks underperformed after Pulte Group (PHM 49.53, -3.19, -6.1%) said supply chain issues have increased during the second half of the year. 

Apple (AAPL 155.11, -1.58, -1.0%), however, was one of the more influential laggards amid profit-taking interest after a record-setting run. AAPL's 1% decline was felt in all three large-cap indices and the information technology sector (-0.4%). The Philadelphia Semiconductor Index (-1.2%) was another weak spot. 

Despite all that, the S&P 500 was down just 0.6% at its low, and buyers gradually eased their way back into the large-caps throughout the afternoon. 

Five of the 11 S&P 500 sectors closed higher, with the utilities sector (+1.8%) rising nearly 2.0% as yesterday's defensive bias carried over to today. The consumer staples (+0.8%) and real estate (+0.6%) sectors followed suit with more modest gains. 

In the same vein, longer-dated Treasuries saw increased demand amid the negative bias in the major indices and a decent $38 billion 10-yr note auction. The 10-yr yield decreased four basis points to 1.33%, while the 2-yr yield increased one basis point to 0.22%. The U.S. Dollar Index increased 0.2% to 92.71. WTI crude futures rose 1.4%, or $0.92, to $69.32/bbl. 

Separately, the Fed's Beige Book indicated that economic growth downshifted slightly to a moderate pace in early July through August due to the Delta variant. Businesses in most Districts remained optimistic about near-term prospects, though. The report was a non-event for the market. 

Reviewing Wednesday's economic data:

  • Consumer credit increased by $17.0 bln in July (consensus $28.0B) after increasing an upwardly revised $37.9 bln (from $37.6 bln) in June.
    • The key takeaway from the report is that the expansion in consumer credit in July was the sixth straight increase in total outstanding credit and it followed on the heels of the largest increase since December 2010 seen in June.
  • Job openings increased to a record-high of 10.934 million in July from a revised 10.185 million (from 10.073 million) in June.
  • The weekly MBA Mortgage Applications Index decreased 1.9% following a 2.4% decline in the prior week.

Looking ahead, investors will receive the weekly Initial and Continuing Claims report on Thursday. 

  • S&P 500 +20.2% YTD
  • Nasdaq Composite +18.6% YTD
  • Russell 2000 +13.9% YTD
  • Dow Jones Industrial Average +14.5% YTD

>>> US After Hours Summary: LULU +13.7%, CURV +13.3%, RH +2.2% higher on earnings; SAM warns again, but trading flat; BASE -12.8%, GME -7% fall on earnings


After Hours Summary: LULU +13.7%, CURV +13.3%, RH +2.2% higher on earnings; SAM warns again, but trading flat; BASE -12.8%, GME -7% fall on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: LULU +13.7%, CURV +13.3%, INTA +7.5%, RKLB +4.6% (also awarded multi-launch deal to deploy IoT satellite constellation for Kinéis), RH +2.2%, SAM +0.1% (withdraws guidance; expects EPS to fall below prior guidance)

Companies trading higher in after hours in reaction to news: CRDF +20% (announces Phase 1b/2 trial data showing robust objective response rate and progression free survival), PRQR +17% (announces licensing and research collaboration with LLY for Axiomer RNA editing), RKLY +5.7% (expands application of non-invasive biomarker sensing technology), RIOT +0.9% (reports August production and operation updates), LOGI +0.1% (increases dividend), DDD +0.1% (to acquire Oqton for $180 mln in cash and stock), CVE +0.1% (announces restructuring plan for Atlantic assets)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: BASE -12.8%, GME -7%, DSGX -1.1%, S -0.8%, ANTM -0.1%

Companies trading lower in after hours in reaction to news: SKIN -5.4% (convertible notes offering), FTAI -2.8% (stock offering), BIGC -1.8% (convertible notes offering), PAA -0.8% (files mixed securities shelf offering), LICY -0.5% (to build fourth commercial lithium-ion battery recycling facility in Alabama), KWR -0.2% (names new CEO), CAT -0.1% (CAT and CVX form collaboration agreement to develop hydrogen projects in transpiration and power applications), CVX -0.1% (CAT and CVX form collaboration agreement to develop hydrogen projects in transpiration and power applications), DLR -0.1% (stock offering), AL -0.1% (reports lease placements for ten new aircraft and sale and lease-backs of five new aircraft with Spirit Airlines)