>>>Ceconomy nears Russia deal, considers capital increase -sources - Reuters New

Ceconomy nears Russia deal, considers capital increase -sources - Reuters News

19-Jun-2018 10:05:21

By Alexander Hübner, Arno Schuetze and Matthias Inverardi

FRANKFURT/DUESSELDORF, June 19 (Reuters) - German consumer electronics group Ceconomy CECG.DE is expected to strike a deal within days to sell its loss-making Russian business to Safmar and take a 15 percent stake in Safmar's M.video MVID.MM, three people close to the matter said.

The group, which owns retail chain Media-Saturn, is considering a capital increase to finance the transaction and bolster capital cushions, the people said.

One of them said it was mulling a capital hike of roughly 10 percent, which would raise around 280 million euros at the company's current market value.

Ceconomy had no immediate comment.

Reuters - UK accounting watchdog says KPMG audits show 'unacceptable deteriorati

UK accounting watchdog says KPMG audits show 'unacceptable deterioration'

LONDON (Reuters) - KPMG, one of the world’s “Big Four” accounting firms, has shown an “unacceptable deterioration” in how it audits top British firms and will be first to undergo special supervision, Britain’s accounting watchdog said on Monday.

The Financial Reporting Council (FRC) said the Big Four auditors - which also include PwC, EY and Deloitte - must act swiftly to reverse the decline in this year’s audit inspection results if they are to hit targets set by the watchdog.

It singled out KPMG, however.

“There has been an unacceptable deterioration in quality at one firm, KPMG,” the FRC said in a statement. “Fifty percent of KPMG’s FTSE 350 audits required more than just limited improvements, compared to 35 percent in the previous year.”

The decline reflects badly on action taken by the previous leadership, which was replaced during 2017, and not just on the performance of front line teams, the FRC said.

“Our key concern is the extent of challenge of management and exercise of professional scepticism by audit teams ... and more generally the inconsistent execution of audits within the firm.”

Increased scrutiny of KPMG will involve the FRC inspecting 25 percent more audits done by the firm in the 2018/19 financial year, the first time the FRC has taken such action.

Michelle Hinchliffe, head of audit at KPMG since October 2017, said she was disappointed with the FRC findings and that steps taken in previous years have not resulted in improvements to audit quality.

She said the findings mainly cover the time before KPMG’s new audit quality transformation programme began last October.

“We cannot and will not be satisfied with these results and, as a firm, we are already working to put this right,” Hinchliffe said.

KPMG was already being investigated by the FRC over its audit of Carillion, the outsourcing company whose collapse has triggered a call from lawmakers to break up the Big Four accounting firms. They said the FRC was “timid”, piling pressure on the watchdog to crack the whip.

BANKING AUDITS
The FRC inspected a sample of audits from the eight leading accounting firms for the 2017/18 financial year.

They showed that 72 percent required no more than limited improvements, down from 78 percent in the previous period. Among the FTSE 350 leading listed companies, 73 percent required only limited improvements, down from 81 percent in the previous year.

“Across the Big Four, the fall in quality is due to a number of factors, including a failure to challenge management and show appropriate scepticism across their audits, poorer results for audits of banks,” the FRC said.

The FRC said the audits of the other four accounting firms examined, BDO, Grant Thornton, Mazars and Moore Stephens, showed general improvements in quality, the FRC said.

The green light given by auditors to accounts of banks just months before taxpayers had to rescue them in the financial crisis triggered a reform of the sector.

Two of the four key findings on EY related to bank audits. EY said it would focus on how banks account for souring loans and conduct provisions.

The FRC said Mazars should also continue to improve the audit of banks’ loan loss provisions. Mazars said it would focus on improving the quality of bank audits.

“At a time when public trust in business and in audit is in the spotlight, the Big Four must improve the quality of their audits and do so quickly,” FRC Chief Executive Stephen Haddrill said.

“They must address urgently several factors that are vital to audit, including the level of challenge and scepticism by auditors, in particular in their bank audits.”

A government-ordered review of the FRC is underway to see if it needs more powers to bring bad auditors to book.

Reuters - KKR close to signing deal for Altice's telecom towers - sources

KKR close to signing deal for Altice's telecom towers - sources


MADRID/LONDON (Reuters) - Private equity firm KKR (KKR.N) is close to buying a stake in the telecom towers business of Altice (ATCA.AS), three sources told Reuters, a deal that will help the telecoms and cable group to pay down debt and reshape its European operations.

Under the deal, which is being finalised, KKR will use its infrastructure fund to take a minority interest in Altice’s towers subsidiary in France, the sources said.

The U.S. buyout group has trumped rival bids from private equity firm Blackstone (BX.N) and a consortium led by the infrastructure investment arms of insurers Allianz (ALVG.DE) and Axa (AXAF.PA) which also made it to the final stages of the auction, the sources said.

KKR declined to comment while Altice and the other bidders were not immediately available for comment.

Altice, whose debt equals more than twice its annual revenues, is rushing to finalize a series of non-core disposals involving telecoms towers in France and Portugal and its entire operations in the Dominican Republic.

Its founder Patrick Drahi has pledged to shift the company’s focus from large acquisitions to sales growth and debt management.

The group’s French masts could be valued at about 4 billion euros, according to estimates by RBC analysts, representing a multiple of 20 times its core earnings.

Altice’s SFR division has around 20,000 tower sites in France although some of these assets belong to a joint venture platform with French mobile firm Bouygues (BOUY.PA).

The tower auction, which kicked off earlier this year, attracted interest from several heavyweight investors with Allianz and Axa joining a consortium with Digital Colony and Abu Dhabi Investment Authority, the sources said.

For KKR this is not the first minority deal in the telecom towers industry. Last year, it bought a 40 percent stake in Telefonica’s telecom masts subsidiary Telxius for 1.3 billion euros.

As part of the Telxius deal, KKR also gained significant exposure to an international network with approximately 65,000 kilometers of submarine fiber optic cables.

Altice’s reorganization, which involves the spin off of Altice’s U.S. arm, is expected to complete toward the end of June and proceeds from the various auctions will be used to cut debt which rose to around $60 billion following a series of big ticket deals.

In the United States, Drahi spent $28 billion in 2015 to buy cable companies Suddenlink and Cablevision, and even flirted with a $185 billion bid for cable giant Charter.

>>> What to look at today - 19th of June 2018

Stocks in Asia fell alongside U.S. equity futures and Treasuries jumped as the U.S. and China engaged in a new round of trade threats. Gold climbed and the yen surged.
The steepest slides were seen in Hong Kong and China -- where the Shanghai Composite Index headed for a two-year low -- after President Donald Trumpwarned the U.S. will slap tariffs on more Chinese goods, prompting the Asian nation to swiftly retaliate. Japanese and South Korean shares also retreated, S&P 500 Index futures extended a slide and European futures signaled losses. The Australian dollar tumbled to its lowest in a year as commodity currencies weakened, while steel and iron ore plunged the most since March amid renewed concern over trade protectionism.

Nikkei -1.77% HAng Seng -2.68% CSI -2.93% Shanghai -3.59% Shenzen -5.65%

Eur$ 1.1599 CNH 6.4652 CNY 6.4585 JPY 109.67 GBP 1.3231 CHF 0.9931 RUB 63.8740 WTI$ 65.30

S&P -1.22% EuroStoxx -1.21% Dax -1.27% FTSE -0.68% SMI -1.04%

Macro :
- Falling VIX Now Below MRA’s Model-Derived Value; Use ‘Seagulls’
- No Buying Opportunity in Emerging Markets Yet, Commerzbank Says
- Convertible Bonds Are Making a Comeback: Advent’s Maitland

Keep an eye on :
- ABN NA : ABN Amro May Sell Mortgage Service Unit Stater: Telegraaf
- AC FP : Accor to Accelerate Expansion in Europe, Gervais Tells Figaro
- ADP FP : France Sees Possible Legal Actions Over ADP Privatization
- AF FP : Air France Says Unions Suspend June Strike
- AH LN : Ashtead Full Year Adjusted Ebitda 1.1% Below Estimates
- BCP PL : Sonangol Chairman Says BCP Stake Is Strategic, Long Term: Lusa
- CPI LN : Capita to Sell Supplier Assessment Services for GBP160m Cash
- CSP LN : Countryside Signs Framework Agreement With Sigma Capital
- CYAD BB : Celyad Advances Think Trial to Third, Final Dose Level
- DB1 GY : Frankfurt Stock Exchange to Raise Listing Fees: Boersen-Zeitung
- DEB LN : Debenhams Warns on FY Profit as May, June Trading Below Plan
- ELE SM : Endesa to Make Binding Offer for Ceuta-based EAEC: Filing
- ERICB SS : Nokia, Ericsson May Climb After U.S. Reinstates ZTE Penalties
- FERG LN : Ferguson Third Quarter Revenue 2.7% Below Estimates
- FDSA LN : Ion Exceeds Acceptance Condition in Fidessa Offer
- FLYB LN : Flybe Full Year Adjusted Pretax Loss GBP19.2 Mln
- GALP PL : Galp Faces Potential Headwinds, Risk/Reward More Balanced: RBC
- GKP LN : Gulf Keystone Says $19.7m Received for Shaikan Sales in March
- ISAT LN : EchoStar Is Said to Weigh Raising Inmarsat Bid After Rejection
- MAS SM : Masmovil Completes Second Refinancing of Senior Loan
- MTGB SS : MTG Delays Split Process Until After Kinnevik Share Distribution
- NXI FP : Nexity Targets Annual Revenue Growth of 10% Through 2021
- NOKIA SS : Nokia, Ericsson May Climb After U.S. Reinstates ZTE Penalties
- OGN ID : Origin Sees Full Year Adjusted EPS EU0.475 To EU0.485
- UG FP : PSA Names Philippe de Rovira as CFO to Replace De Chatillon
- ROG SW : Roche Buys Foundation Medicine for $2.4b Transaction Value
- RKH LN : Rockhopper Continues to See Better Payment Situation in Egypt
- RYA LN : Ryanair Pilots Union Extends Vote on Industrial Action to July 3
- SAN FP : Sanofi Names PSA’s de Chatillon as CFO
- GLE FP : SocGen CIB Names Bitton, Giros Co-Heads Investment Bank. France
- TAP LN : Taptica Sees FY18 Adj. Ebitda Moderately Ahead of Market View
- TEP LN : Telecom Plus Full Year Adjusted Pretax Profit Matches Estimates
- VWS DC : Vestas Receives 228 Megawatt Order in Australia
- VNA GY : Vonovia Offer For Victoria Park Exceeds Acceptance Threshold
- WDI GY : Wirecard Growth Justifies Price Target of 190 Euros: Lampe

>>> US After Hours Summary: Cinema names NCMI +5% higher on Cinema

After Hours Summary: Cinema names NCMI +5% higher on Cinemark/Cineworld deal to buyout remaining AMC stake, PAGS / TELL / RYTM lower following offerings

After Hours Gainers:

Companies trading higher in after hours in reaction to news: VIVE +19.4% (reports positive six-month data from stress urinary incontinence feasibility study; to host call on June 19 at 8am ET), NCMI +5.3% and AMC +1.5% (Cinemark and Cineworld announce agreement to purchase remaining units of National CineMedia held by AMC Entertainment Holdings for $156.8 mln), NEW +4.2% and CLPS +2.7% (continued momentum in recent IPO), ACAD +2.2% (Point72 increases passive stake), CL +1.3% (authorized the repurchase of up to $5 billion under a new share repurchase program)

After Hours Losers:

Companies trading lower in after hours in reaction to news: PAGS -7.2% (files for 33 mln share common stock offering - including 11,550,000 Class A common shares to be sold by company), TELL -5.3% (to offer for sale 12 mln shares of its common stock in an underwritten public offering), DEA -3.8% (announces agreement to acquire 1,479,762 SF U.S. Government Leased Portfolio; commences public offering), RYTM -1.7% (files for $150 mln mixed securities shelf offering), NAT -1.5% (modestly pulling back after today's 21% move higher), FFIV -1.3% (downgraded to Neutral at Citigroup)


>>> Europe : Brokers Upgrades & Downgrades - 19th of June 2018

>>> Up
* Beiersdorf Upgraded to Neutral at JPMorgan; PT 101 Euros
* Ferrexpo Upgraded to Buy at HSBC; PT 2.75 Pounds
* Verbund Upgraded to Reduce at AlphaValue

>>> Down
* Edenred Downgraded to Neutral at MainFirst; PT 29 Euros
* Galp Downgraded to Sector Perform at RBC; Price Target 17 Euros
* Hornbach Baumarkt Cut to Reduce at Commerzbank; PT 26.50 Euros
* Indra Downgraded to Sell at Goldman; PT 9.50 Euros
* Informa Downgraded to Hold at Peel Hunt

>>> Initiation
* BCP Reinstated at BBVA With Market Perform; PT 26 Cents
* Epiroc Rated New Equal-weight at Barclays; PT 97 Kronor
* Hannover Re Rated New Hold at Berenberg
* Munich Re Rated New Buy at Berenberg
* SEB Resumed at Morgan Stanley With Equal-weight; PT 100 Kronor
* Scor Rated New Buy at Berenberg
* SEB Resumed at Equal-Weight, Top Pick Still DNB: Morgan Stanley
* Swiss Re Rated New Hold at Berenberg

>>> Call