>>> Vilmorin rumoured to be possible KWS Saat target - report (translated)

Vilmorin rumoured to be possible KWS Saat target - report (translated)
06 OCT 2018
Vilmorin [FRA: 4HL] the French seed producer, is rumoured to be a potential target for German peer KWS Saat [KWS:ETR], Euro am Sonntag reported. The German weekly cited unsourced rumours that Vilmorin is a takeover candidate for KWS Saat which previously missed out on buying Bayer's [ETR: BAYN] seeds business.
Vilmorin has a market cap of EUR 1.26bn.

(BN) Saudi Arabia Doubles SoftBank Bet With Extra $45 Billion (1)

Saudi Arabia Doubles SoftBank Bet With Extra $45 Billion (1)
2018-10-06 07:21:17.828 GMT


By Riad Hamade, Matthew Martin and Archana Narayanan
(Bloomberg) -- Saudi Arabia is preparing to double-down on
its bet that Masayoshi Son can pick the technology giants of the
future. The country’s sovereign fund will make another $45
billion investment in Son’s second massive Vision Fund.
The Public Investment Fund, or PIF, is set to make the
investment as it looks for ways to deploy a $170 billion
windfall it’s expecting over the next three-to-four years. That
money would come from the sale of a stake in Saudi Basic
Industries Corp. and the initial public offering of state oil
company Saudi Aramco, according to PIF Chairman Mohammed Bin
Salman -- who is also Saudi Arabia’s Crown Prince.
The PIF wants to be a key investor in the second $100
billion investment fund that SoftBank Group Corp. Chief
Executive Officer Son plans to raise, Prince Mohammed said in an
interview with Bloomberg. That would bring the PIF’s
contribution to the two funds to $90 billion, he said.
“We have a huge benefit from the first one,” he said. “We
would not put, as PIF, another $45 billion if we didn’t see huge
income in the first year with the first $45 billion.”
Calls to SoftBank by Bloomberg News outside business hours
went unanswered.
Since unveiling a strategy in 2016 to transform the PIF
from a sleepy domestic holding company into the world’s largest
sovereign fund, it has made a series of bold investments. Many
have focused on technology companies yet to make a profit. In
addition to its commitment to the first Vision Fund, the PIF
made a $3.5 billion investment in Uber Technologies Inc., built
up an almost 5 percent stake in Tesla Inc. and then put $1
billion into its rival, Lucid Inc. The PIF also agreed to put
$20 billion into a U.S. infrastructure fund run by Blackstone
Group LP.

Big Returns

Speaking at an event in Riyadh last year, Son said that
investments made by the first Vision Fund were already paying
off. The fund had made a return of over 20 percent in its first
five months, he said.
That fund, which also raised money from one of Abu Dhabi’s
sovereign funds and Apple Inc., is about four times the size of
the largest venture capital fund ever created and bigger than
any private equity fund in history. Son told Bloomberg
Businessweek in September that he plans to raise a new $100
billion fund every two or three years, and will spend around $50
billion annually.
In less than a year since the fund first began making
investments, it has already committed $65 billion to acquire big
stakes in Uber, WeWork Cos., Slack Technologies Inc. and GM
Cruise LLC.

Raising Money

Making another significant investment in SoftBank’s next
Vision Fund would help the PIF boost its assets, which have
already risen to more than $300 billion, Prince Mohammed said.
Currently the fund’s biggest assets are mostly local equities,
including the stake in Sabic and holdings in Saudi Telecom Co.
and National Commercial Bank.
“We are now above $300 billion, we’re getting close to $400
billion,” he said. “Our target in 2020 is around $600 billion. I
believe we will surpass that target in 2020.”
That’s even higher than the target the PIF announced last
year, when it said it wanted to grow its assets to $400 billion
by 2020. At the end of 2015, the fund had $152 billion of
assets, according to a document published last October outlining
its 2020 plan. That document also said the PIF aimed to generate
annualized nominal returns of 4 percent to 5 percent in the
years to 2020, up from 3 percent in 2014 to 2016.
The PIF raised $11 billion in its first ever borrowing
earlier this year as it looks to use leverage to boost its
returns. The fund is also set to receive around $70 billion to
$80 billion from the sale of its 70 percent stake in Saudi Basic
Industries Corp. to Saudi Aramco in 2019, Prince Mohammed said.
That would then be followed by proceeds from the initial public
offering of Aramco, which could raise another $100 billion, he
said.

--With assistance from Alaa Shahine, Donna Abu-Nasr, Vivian
Nereim and Sophie Jackman.

To contact the reporters on this story:
Riad Hamade in Dubai at rhamade@bloomberg.net;
Matthew Martin in Dubai at mmartin128@bloomberg.net;
Archana Narayanan in Dubai at anarayanan16@bloomberg.net
To contact the editors responsible for this story:
Stefania Bianchi at sbianchi10@bloomberg.net
Andrew Blackman, Riad Hamade

(BFW) Lannett to Take Charge for Full Impairment of Company’s Goodwill


BN 10/05 21:08 *LANNETT TO RECORD $339.6M GOODWILL IMPAIRMENT CHARGE
Lannett to Take Charge for Full Impairment of Company’s Goodwill
2018-10-05 21:12:31.870 GMT


By Lauren Berry
(Bloomberg) -- Lannett says it will report an impairment
charge of approximately $339.6 million in the first quarter.

To contact the reporter on this story:
Lauren Berry in New York at lberry4@bloomberg.net
To contact the editor responsible for this story:
Sonali Pathirana at spathirana@bloomberg.net

(BFW) Lumentum May Be Relatively Unharmed by IPG Issue: Raymond James


Lumentum May Be Relatively Unharmed by IPG Issue: Raymond James
2018-10-05 21:38:18.169 GMT


By Jeran Wittenstein
(Bloomberg) -- Lumentum’s laser business is smaller and
more concentrated in selective markets and the company said
previously that its exposure was "outside the weakness" cited by
IPG Photonics in Friday’s disappointing preliminary earnings
report, Raymond James analyst Simon Leopold (strong buy, PT $85)
wrote in a note.
* Lumentum’s laser capacity remains constrained and revenue from
the business is expected to double in the next 2-3 years, said
Leopold
* "We continue to like Lumentum’s diversified portfolio outside
of the laser business," Leopold said
* Lumentum fell 7.5% on Friday, the biggest decline since July;
IPG fell 14%
* NOTE: Earlier, Laser Stocks Are Latest Victim of the U.S.
Trade War With China


To contact the reporter on this story:
Jeran Wittenstein in San Francisco at jwittenstei1@bloomberg.net
To contact the editors responsible for this story:
Catherine Larkin at clarkin4@bloomberg.net
Scott Schnipper

(BN) Italy Says European Union Hasn’t Rejected Budget Plan


BN 10/06 05:56 *CONTE'S OFFICE SAYS ITALY WANTS CONSTRUCTIVE DIALOGUE WITH EU
BN 10/06 05:55 *CONTE'S OFFICE: EU HASN'T REJECTED ITALY BUDGET PLAN
Italy Says European Union Hasn’t Rejected Budget Plan
2018-10-06 06:47:05.38 GMT


By John Follain
(Bloomberg) -- The Italian government has denied that the
European Commission had rejected its budget outline, according
to an official in Prime Minister Giuseppe Conte’s office.
The official was referring to the European Commission’s
letter sent to Italian Finance Minister Giovanni Tria. The
wording in the letter had pointed to an outright rejection by
the EU of Italy’s plans to loosen its fiscal policy next year,
as the populist coalition seeks to make good on its campaign
promises.
Italy’s draft budget will be sent to Brussels by October 15
and will be the basis of the EU commission’s assessment, the
official said late on Friday. Italy has the “strong will to
start a constructive dialogue” with Brussels, the official
added.

To contact the reporter on this story:
John Follain in Rome at jfollain2@bloomberg.net
To contact the editor responsible for this story:
Niluksi Koswanage at nkoswanage@bloomberg.net

(BN) Einhorn Assails Tesla, Saying Carmaker's Woes Echo Lehman's (2)


Einhorn Assails Tesla, Saying Carmaker's Woes Echo Lehman's (2)
2018-10-05 18:07:39.691 GMT


By Simone Foxman
(Bloomberg) -- David Einhorn, a prominent critic of Tesla
Inc., bashed the electric-car maker, saying its woes resemble
those of Lehman Brothers Holdings Inc. before the bank failed.
“Like Lehman, we think the deception is about to catch up
to TSLA,” Greenlight Capital said in a quarterly letter Friday
seen by Bloomberg. “Elon Musk’s erratic behavior suggests that
he sees it the same way.”
Einhorn, who rose to prominence with his wager against
Lehman, pointed to parallels by saying the bank “threatened
short sellers, refused to raise capital (it even bought back
stock), and management publicly suggested it would go private”
in the months leading up to its collapse.
The Greenlight letter argues that Musk thought he could
lower the cost of producing the Tesla Model 3 -- long billed
with a starting price of $35,000 -- by cutting manufacturing
expenses and automating its factories.
But he said Tesla’s costs ended up exceeding expectations,
leading the company to charge much higher prices. This
predicament, Einhorn believes, has been the source of the Tesla
CEO’s “erratic behavior.” Customers are unhappy because the car
is more expensive than what Musk promoted when taking their
deposits, Einhorn said.
“He can’t make the car without losing too much money and he
can’t bring himself to cancel the program and refund everyone’s
deposits,” Einhorn wrote.
Elon Musk
@elonmusk
@ivanovi_ivaylo With production, 1st you need achieve
target rate & then smooth out flow to achieve target cost.
Shipping min cost Model 3 right away wd cause Tesla to lose
money & die. Need 3 to 6 months after 5k/wk to ship $35k Tesla &
live.
Sent via Twitter for iPhone.
View original tweet.
The upshot: Musk is trying to get himself fired, Einhorn
said. “Quitting isn’t an option because it prevents Mr. Musk
from claiming he could have fixed the problem if he stayed.”
Short sellers like Einhorn have been a long-running target
of Musk’s ire, and the feud continued on Thursday after he
mocked the U.S. Securities Exchange Commission as the
“Shortseller Enrichment Commission.” The CEO sent the tweet just
days after settling a fraud lawsuit with the agency over his
questionable tweets claiming to have the funding and investor
support secured to take Tesla private.
Read more on Musk’s recent Tweet storm
Musk and a Tesla representative didn’t respond to a request
for comment. The CEO has insisted that the company won’t need to
raise capital, citing his expectation that higher output of
Model 3 sedans will generate profit and positive cash flow in
the third and fourth quarters.
In his letter Friday, Einhorn said his short position on
Tesla was his second-biggest winner in the third quarter.
But this year is shaping up to be Greenlight’s worst ever.
Its main fund has lost 26 percent through September.
As critical as Musk has been of shorts, he and Einhorn have
engaged in some playful banter recently. After the hedge fund
manager wrote in a letter to clients months ago that he was
happy that his lease on a Tesla had ended, citing problems with
its touch screen and power windows, Musk responded on Twitter.
Elon Musk
@elonmusk
@tictoc Tragic. Will send Einhorn a box of short shorts to
comfort him through this difficult time.
Sent via Twitter for iPhone.
View original tweet.
Read more: Einhorn thanks Musk after receiving a box of
shorts
Einhorn said in his letter that after a two-day offsite
review of the firm’s positions last month, he and his team think
they have a “deep understanding" of their portfolio. Some
changes were made, but Greenlight is mostly sticking with their
ideas.
“Most of our company theses are intact,” the letter said.
Read more about Einhorn’s fund here
Outlining his firm’s other holdings, Einhorn said the firm
exited Apple Inc. in the third quarter at $228 a share after
first buying it in 2010. It made more than $1 billion on its
position, the letter said.
Einhorn said Greenlight’s efforts helped move Apple to
aggressively repurchase stock, driving up earnings-per-share.
But the manager sold his position, saying the company’s
valuation is now less enticing and he has concerns about the
U.S. trade war with China, where iPhones are assembled.
The firm is “somewhat worried about Chinese retaliation
against America’s trade policies,” the letter said.
Other highlights from the letter:
* The biggest winner during the quarter was Brighthouse
Financial Inc., which announced a share buyback during the
quarter.
* Greenlight added a position in Altice USA Inc., which should
benefit from rebuilding its network with fiber in the next few
years.
* The firm exited Micron Technology Inc. when his team sensed
that DRAM prices could fall.
* Regulatory risks around social media companies caused the
hedge fund to exit its stake in Twitter Inc. after a 78 percent
gain in eight months.
* Greenlight’s largest disclosed long positions at the end of
the third quarter were AerCap Holdings NV, Brighthouse, General
Motors Co., Green Brick Partners Inc. and gold.


--With assistance from Joshua Fineman.

To contact the reporter on this story:
Simone Foxman in New York at sfoxman4@bloomberg.net
To contact the editors responsible for this story:
Margaret Collins at mcollins45@bloomberg.net
Alan Mirabella, Josh Friedman

>>> Disney readies divest package for Twenty-First Century Fox deal, sources say

Disney readies divest package for Twenty-First Century Fox deal, sources say
05 OCT 2018
The Walt Disney Company’s [NYSE:DIS] sale of 22 regional sports networks to secure antitrust approval to acquire much of Twenty-First Century Fox [NASDAQ:FOX] is still at an early stage, three sources briefed on the situation.
While the process is yet to launch formally, at least a handful of financial sponsors have started conversations about financing with banks given the size of the asset, two of the sources said. One of the sources briefed said the deal size is around USD 25bn in enterprise value.
In June, the Burbank, California-based media and entertainment company reached a settlement with the Department of Justice for its USD 71.3bn deal to acquire most of New York-based peer Fox. Last month, this news service reported that JPMorgan, Disney's advisor on the Fox deal, along with Allen & Co were advising Disney on the disposals.
Comcast [NASDAQ:CMCSA] is among the suitors eyeing some of the RSN assets, two of the sources briefed said.
One of the sources, however, cautioned that Comcast and Fox may have overlaps in a few RSN markets and, therefore, Comcast is unlikely to acquire the whole portfolio.
Last month, Comcast outbid Fox to acquire 61% of UK television company Sky for around USD 39bn after a few rounds of bidding. This week, Fox announced it was selling its 39% stake in Sky to Comcast for over USD 15bn, paving the way for Comcast to own 100% of Sky.
Financial sponsors are expected to compete heavily with a limited number of strategics for these prized assets, the sources noted. The RSNs hold the rights to attractive sports content at a time when such content is considered key to holding together the traditional TV ecosystem.
This news service previously reported that Apollo Global Management [NYSE:APO] is taking a look at the divestitures, and that local broadcasters like Sinclair Broadcast Group [NASDAQ:SBGI] could also be suitors, either alone or in partnership with sponsors.
Financial sponsors CVC Capital Partners and The Blackstone Group [NYSE:BX], as well as technology companies like Amazon [NASDAQ:AMZN] and Alphabet’s [NASDAQ:GOOG] YouTube, are also evaluating the RSNs, according to a report by Bloomberg.
The Information further reported that the part of Fox not involved in the merger could be interested in buying the networks back, while James Dolan, head of MSG Networks [NYSE:MSGN], told NBC News that he could also take a look.
Private equity could look to pitch cable companies like Charter Communications [NASDAQ:CHTR] on a joint bid, as reported.
Guggenheim Partners is also advising Disney along with JPMorgan, while Cleary Gottlieb, Covington & Burling and Cravath, Swaine & Moore are its legal advisors on the overall Fox deal.
Comcast declined comment. Disney did not respond to requests for comment.

>>> US Close Dow -0,68% S&P -0,55% Nasdaq -1,16% Russell -0,90%

Closing Market Summary: Rising Rates Drive Falling Stock Prices

The stock market fell on Friday as bond yields continued to climb following the release of the Employment Situation report for September. The S&P 500 and the Dow lost 0.6% and 0.7%, respectively. The tech-heavy Nasdaq dropped 1.1%.

At its session low, the S&P 500 was down 1.1%, falling below its 50-day moving average for the first time since July. The market eventually gathered its footing though, closing near the middle of the day's trading range.

The Employment Situation report for September was mixed from a headline standpoint, as nonfarm payrolls showed a below-consensus increase of 134,000 (consensus 184K), but the August increase was revised upward to 270,000 (from 201K). Average hourly earnings rose 0.3%, as expected, and the unemployment rate fell to from 3.9% to 3.7%, marking its lowest level since 1969.

U.S. Treasuries extended their weekly losses following the release of the jobs report, pushing yields higher across the curve. The 2-yr yield advanced one basis point to 2.88%, and the benchmark 10-yr yield jumped three basis points to 3.23%, extending its weekly gain to 16 basis points and marking its highest close since 2011.

In corporate news, Costco (COST 218.82, -12.86) lost 5.6% despite reporting above-consensus earnings, and Tesla (TSLA 261.95, -19.88) dropped 7.1% after CEO Elon Musk seemingly mocked the SEC in a late Thursday tweet, just days after agreeing to a settlement with the agency over securities fraud allegations stemming from his failed bid to take the company private.

Reviewing all of Friday's economic data, which, in addition to the September Employment Situation report, included the August Trade Balance and the August Consumer Credit report:

  • September nonfarm payrolls increased by 134,000 while the consensus expected an increase of 184,000. The prior month's increase was revised to 270,000 from 201,000. Nonfarm private payrolls rose by 121,000 while the consensus expected an increase of 180,000. The previous month's increase was revised to 254,000 from 204,000. Average hourly earnings increased 0.3% (consensus +0.3%), while the previous month's increase was revised to 0.3% from 0.4%. The average workweek was reported at 34.5 (consensus 34.5). The unemployment rate fell to 3.7% from 3.9% in August (consensus 3.8%).
    • The key takeaway from the report is that the labor market is solid and still simmering with the prospect of pent-up wage pressures being unleashed at any point as employers encounter difficulty in finding qualified workers.
  • The August trade balance report showed a deficit of $53.2 billion (consensus -$52.6 billion). The July deficit was revised to $50.0 billion from $50.1 billion.
    • The key takeaway from the report is that it has yet to confirm the tariff actions are succeeding in cutting the trade deficit in a big way; moreover, with the third quarter real average trade deficit 8.9% higher than the second quarter average, trade will be accounted for as a negative input in Q3 GDP forecasts.
  • The Consumer Credit report for August showed an increase of $20.1 billion, and July credit growth was unrevised at $16.6 billion.
    • The key takeaway from the report is that it reflects a pickup in credit demand that should be construed as an offshoot of a strengthening economy led by a solid labor market.

Looking ahead, investors won't receive any notable economic data on Monday.


FT : EU warns of ‘serious’ budget concerns in letter to Rome

Brussels has written to Italy’s populist government warning of “serious” concerns that the country’s draft budget plan will break eurozone spending rules — a development that is likely to fuel fears of a full-blown showdown between Rome and the EU later this month.

In a letter to Giovanni Tria, Italy’s finance minister, the EU’s two commissioners in charge of budgetary rules urged Rome to take heed of rules requiring Italy to shrink its budget deficit next year.

It is the first formal communication the commission has sent to Rome since the Italian government unveiled a rules-busting budget plan last week.

The letter reiterates that Italy is required to consolidate its budget deficit by 0.6 per of GDP cent next year. Instead, draft spending plans unveiled by Mr Tria point to an deficit expansion of 0.8 per cent — leading the deficit to swell to 2.4 per cent of GDP in 2019. The figure is three times higher than the 0.8 per cent target mandated by EU rules.

“Italy’s revised budgetary targets appear prima facie to point to a significant deviation from the fiscal path recommended by the Council. This is therefore a source of serious concern”, says the letter sent on Friday.

Earlier this week, Mr Tria — a relative moderate in the government — told his fellow eurozone finance ministers that Rome’s spending ambitions were still up for debate and his government was ready to listen to recommendations from Brussels once the budget is formally submitted in mid-October.

The letter from Brussels is the first formal warning shot sent to Italy — the eurozone’s third-largest economy. It points to growing fears inside the EU that despite Mr Tria’s reassurances, hardliners in the populist coalition are determined to rip up spending rules and force a confrontation with Brussels in less than two weeks time.

The commission has said it will wait until it has received a final draft budget plan from Italy due by October 16 and then make its own assessment about the state of the deficit and debt ratio.

Friday’s letter was sent in response to growth projections for the Italian economy that Mr Tria sent to the commission earlier this week. Italy’s forecasts for growth are more optimistic than those from Brussels, leading to concern that any final estimate of the 2019 deficit will be higher than 2.4 per cent.

The letter adds: “We call on the Italian authorities to ensure that the Draft Budgetary Plan will be in compliance with the common fiscal rules and look forward to seeing the details of the measures it may contain. In the meantime, as in past years and months, we remain available for constructive dialogue”.