>>> Ubisoft requests Vivendi support for key resolutions

Ubisoft requests Vivendi support for key resolutions
22 SEP 2017
Ubisoft [EPA:UBI] has requested that Vivendi [EPA:VIV] vote to approve resolutions regarding employees ownership of shares at Friday’s AGM, the Financial Times reported (21 September).
Ubisoft CEO Yves Guillemot said that the proposed resolution is essential to attracting, incentivizing and retaining its staff as it faces competition from Electronic Arts, Facebook, Activision and Google.
Vivendi, as Ubisoft’s largest investor with a 27% stake in the company and 24.5% of the voting rights, is reported to be positioning itself for a hostile takeover of the French video game maker. On 20 November, Vivendi can opt to benefit from France’s Florange law under which registered shareholders who have owned stock for two years or more can have two votes for each of their shares. Doubling of its voting rights would take it beyond the 30% mandatory bid threshold, requiring it to launch a bid for the rest of Ubisoft.
Ubisoft's founding Guillemot family wants the company to keep its independence and earlier this month in response to Vivendi's advances the family increased its stake in the company to 15.35% and now holds 20.02% of the company's voting rights.

>>> Uniper says Fortum has not consulted management about acquisition – report (

Uniper says Fortum has not consulted management about acquisition – report (translated)
22 SEP 2017
Uniper [ETR: UN01], the German energy company claims that Finnish Fortum [HEL: FORTUM] has not been in touch with the company management about the takeover, according to Kauppalehti.
The Finnish-language piece cited the representative of the Uniper management Georg Oppermann who said that Fortum's management has not had any connection with the management of Uniper in the negotiations concerning the possible acquisition of a stake in Uniper.
He said that the takeover attempt is hostile and that Uniper does not see any benefit from Fortum becoming a minority or main shareholder in the company. He added that Uniper management was only notified of the takeover after it was reported in the press.
The item also said, without citing anyone, that Uniper's attack on Fortum's top management may have been spurred due to rumors about Fortum's plans to sell parts of Uniper after the acquisition was completed.
The potential sale of Uniper's parts would help finance the purchase of the company, the item said. Fortum announced its plans to acquire a stake in Uniper on Wednesday at EUR 22 per share from the German E.ON [ETR: EOAN].

FT : Liliane Bettencourt’s death could transform L’Oréal and Nestlé

Liliane Bettencourt’s death could transform L’Oréal and Nestlé

L'Oréal heiress Liliane Bettencourt passed away at the age of 94 on Wednesday and almost instantly speculation about the French company's future began.


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Before we explain why, do read the FT obituary of her life here. It is both important background but also an extraordinary tale about a person who ranked as the world's richest woman at the time of her death. Her fortune is worth roughly $40bn.

Key graphs: 

Liliane Henriette Charlotte Schueller was born on October 21 1922, the only child of Louise Madeleine Berthe and Eugene Schueller, the brilliant entrepreneur who founded what was to become the world’s largest cosmetics, shampoo and beauty group after developing a revolutionary hair dye in the family kitchen. Her mother died when she was just five years old and she formed a close bond with her father whom she adored. At 15 she joined her father’s company as an apprentice and in 1950 married André Bettencourt, a politician. He was a close friend of her father, served as a minister under Charles de Gaulle and became deputy chairman of L’Oréal.

. . .

After the death of her father in 1957, Liliane inherited the L’Oréal fortune. The company went public in 1963 with Liliane maintaining a majority stake. In 1974, fearing the company might be nationalised after the election, she exchanged almost half her holding (nearly 30 per cent) for a 3 per cent stake in Nestlé, the food multinational. She developed a strong partnership with the Swiss group, entering into a controlling shareholders pact that expired in 2014.
And that brings us to the present situation. Check out the chart below courtesy of Google Finance to see the sharp move in L'Oréal's US-traded shares in the hours after the news of her death. 


That's because speculation has been rife for years that Bettencourt's death would be a catalyst for changes in the company's shareholder base. See the breakdown here, with just over 33 per cent in the hands of the Bettencourt family and 23 per cent in the hands of Nestlé. L'Oréal has a market value of €98.9bn. 


One scenario could see Nestlé make a move for L'Oréal, though under the terms of their arrangement the Swiss food and beverage company cannot purchase more shares in L'Oréal until six months after the death of Bettencourt. It also has the right of first refusal in any situation where the Bettencourt family decide to dispose of their holding. 

Analysts at Olivetree Securities said: "The market has always speculated that her death would be the catalyst for Nestlé to finally make a move on L'Oréal. There is a limited overlap between the two companies, so although a full purchase of L'Oréal by Nestlé would be huge, the antitrust hurdles are straightforward." 

That's probably not a prospect that would excite L'Oréal's management. Moreover, activist investor Dan Loeb's Third Point Management has only recently taken a stake in Nestlé, and among other things, called on the company to dispose of its L'Oréal stake.



And that brings us back to the life story of Bettencourt, whose troubled but crucially important relationship with her daughter is explained in the FT obituary. 

Here's what Françoise Bettencourt Meyers, her daughter, said on Wednesday: “In this painful moment for us, I would like to reiterate, on behalf of our family, our entire commitment and loyalty to L'Oréal and to renew my confidence in its president Jean-Paul Agon and his teams worldwide.”

So, under another scenario, L'Oréal itself could buy back some or all of the stake. How might the company find the funds to do that quickly? It owns a 9.4 per cent stake in French pharmaceutical group Sanofi, which is worth about €10bn.

>>> What to look at today -22nd of Sept. 2017

Dow -0.24% S&P -0.30% Nasdaq -0.52% Russell -0.09%
US Market Closed lower in a quiet session due to Rosh Hachana holiday. Nine of the eleven sectors settled Thursday's session in negative territory, but losses were modest for the most part. The consumer staples sector was the weakest group (-1.0%), extending its week-to-date loss to 2.1%. The telecom services sector also finished with a sizable decline (-0.8%), but the remaining laggards lost no more than 0.6%.  Technology space held a loss of 1.0% shortly after the opening bell, but strengthened a bit as the day wore on; the tech group eventually settled lower by 0.6%. Apple -1.7%. NVIDIA -2.7%, following a CNBC that TSLA which uses NVIDIA hardware for its auto-pilot functionality, is working withAMD to develop a self-driving chip. AMD later denied the report.  financials (+0.2%) and industrials (+0.3%) groups managed to escape Thursday's session with modest victories. WTI crude dropped 0.3% to $50.55/bbl. US After Hours  VSAR -84% drops after Phase 3 trial fails to meet primary endpoint, PSDO -8.2% following earnings/guidance. Asian equity markets opened mixed, in line with Thursday’s NY trading session. Rio Tinto opened higher by over 1%, after announcing an additional $2.5B stock buyback. Shares of Taiwan’s HTC have risen over 9% following the transaction with Google. Trump announced an executive order for additional US sanctions on North Korea, which may include shipping and trade networks. North Korea later responded and said it would consider the ‘highest level of countermeasure. S&P also issued its Banking Industry Country Risk Assessment (BIRCA) on Japan, in which it revised the trend for the country’s economic risk to stable from negative. It also revised the view of the trend for banking industry risk to negative from stable.

Nikkei -0.21% Hang Seng -0.77% CSI -0.20% Shanghai -0.26% Shenzen -0.12%

Eur$ 1.1964 CNH 6.5774 CNY 6.5878 JPY 111.97 GBP 1.3586 CHF 0.9682 RUB 57.9244 WTI$ 50.66 +0.22%

S&P -0.25% EuroStoxx -0.23% Dax -0.31% FTSE -0.32% SMI -0.03%

Macro :
- May to Reboot Brexit Strategy by Requesting Transition Period

Keep an eye on :
- AIR FP : Boeing Lands $11 Billion 787 Deal From Resurgent Turkish Air
- AIR FP : Airbus Cut at Jefferies, More Prolonged Transition to A320neo
- AB1 GY : Air Berlin Confirms Selected Bidders Are Lufthansa, EasyJet
- ADEN VX : Adecco July/Aug. Rev Up 6%; to Maintain Progressive Dividend
- AGL IM : Autogrill Agrees to Continue NJ Turnpike, GSP Services to 2044
- ALIV SS : Autoliv Rises as Jefferies Boosts Price Target to Street High
- ASM NA : *ASM WILL START A SHR BUYBACK PROGRAM OF ASMI'S SHRS UP TO €250M
- BLT LN : BHP Spent Total $2.9b Repurchasing Euro, GBP, U.S. Bonds
- DAI GY : Mercedes Plots Tesla Attack With $1 Billion U.S. Electric Push
- EDF FP : EDF, Engie to Face Household Competition From Butagaz: Echos
- EOAN GY : EON Wants Teyssen Contract Extension Until End of 2021: HB
- IPN FP : Ipsen Transformation Priced In, Initiated Hold at Berenberg
- BAER VX : Julius Baer Names UBS’s Bartholet Chief Risk Officer
- OR FP : L’Oreal May Buy Back Nestle Stake After Bettencourt’s Death: BI
- LHA GY : Lufthansa Is Said to Be Exclusive Bidder for Niki, More Aircraft
- MRL SM : Merlin First Half Net Income EU421.4 Mln
- NESN VX : L'Oreal Heiress Death May Prompt Nestle Decoupling, Boost EPS
- RIO LN : Rio Tinto Will Start Added $2.5B Share Buy-Back Program
- ROG VX : Roche’s Actemra/RoActemra Gets EU Approval for Cell Arteritis
- SAN FP : Sanofi’s Patent on Jevtana Kit Invalidated in Mylan IPR Bid
- SNH GY : Steinhoff Intl. Expects Court Decision Within Next Two Months
- TKA GY : Thyssenkrupp German Steelworkers Go on Strike: WAZ
- FP FP : Total Exploration Permit in Guiana Extended to June 2019: Echos
- UCB BB : UCB Says Epilepsy Drug Vimpat Gets EU Approval for Pediatric Use
- UCG IM : UniCredit Splits Risk Management Structure, Fossati to Leave
- UCG IM : UniCredit Board Proposes Mandatory Savings Shrs Conversion

>>> Europe : Brokers Upgrades & Downgrades - 22nd of Sept 2017

>>> Up
* AstraZeneca Raised to Outperform at Bernstein, PT $39
* Coca-Cola HBC Raised to Equal-weight at Morgan Stanley, PT GBP24
* Corbion Raised to Buy at Berenberg
* Ericsson Raised to Outperform at Exane, PT SEK70
* Fortum Raised to Reduce at AlphaValue
* Lonmin Raised to Hold at Peel Hunt
* Naturex Raised to Buy at Berenberg

>>> Down
* Airbus Cut to Hold at Jefferies, PT EU75
* Alimak Cut to Hold at SEB Equities
* BioMerieux Cut to Reduce at AlphaValue
* Bob Evans Cut to Market Perform at William Blair
* FF Group Cut to Neutral at Piraeus Securities, PT EU22.50
* Grenke Cut to Hold at Bankhaus Lampe
* KAZ Minerals Cut to Hold at Peel Hunt
* KPN Cut to Underperform at Macquarie, PT EU2.50
* Marie Brizard Wine & Spirits Cut to Reduce at Kepler Cheuvreux
* Nokia Cut to Underperform at Exane, PT EU4.20
* Tecnicas Reunidas Cut to Hold at Kepler Cheuvreux, PT EU29

>>> Initiation
* Alibaba New Buy at Citic Securities, PT $225
* DFS Furniture New Reduce at Peel Hunt
* Ipsen New Hold at Berenberg, PT EU125
* John Laing Group New Buy at HSBC, PT 340p

>>> Call

>>> Asian Update

Asia Mid-Session Market Update: North Korea rhetoric again weighs; Hong Kong loses final AAA rating amid recent China downgrade; JPY trades firmer

***Asia Summary***
-Asian equity markets opened mixed, in line with Thursday’s NY trading session. Rio Tinto opened higher by over 1%, after announcing an additional $2.5B stock buyback. Shares of Taiwan’s HTC have risen over 9% following the transaction with Google.
- On the geopolitical front, President Trump announced an executive order for additional US sanctions on North Korea, which may include shipping and trade networks. North Korea later responded and said it would consider the ‘highest level of countermeasure.’
-Later, a South Korean press report (citing North Korea’s Foreign Minister) suggesting that North Korea could conduct an H-bomb test has since weighed on markets.
-Amid the North Korea headline, AUD/JPY has declined over 0.4%. Also, China’s metals, including iron ore, have traded lower by over 2%, following reports that the Shanghai Metals Exchange raised trading fees.
-South Korean steelmakers have traded sharply lower (Posco -4.1%) amid press speculation that the US could increase tariffs.
- In corporate issuance, China Postal Savings Bank announced plans to issue $7.25B in perpetual preference shares in order to strengthen additional Tier 1 capital. On the sovereign front, S&P downgraded Hong Kong from AAA, while China criticized its own recent downgrade by the ratings agency.
-S&P also issued its Banking Industry Country Risk Assessment (BIRCA) on Japan, in which it revised the trend for the country’s economic risk to stable from negative. It also revised the view of the trend for banking industry risk to negative from stable.
-Looking ahead, comments are expected out of ECB (Draghi, Coeure, Constancio) and Fed officials (Williams, Kaplan)
- In US corporate news, there has been press speculation that Hewlett Packard Enterprise is said to be planning to cut ~5,000 jobs, which equals about 10% of its total workforce.

***Speakers and Press***
China
- (HK) S&P downgrades Hong Kong sovereign rating to AA+ from AAA (follows recent downgrade of China); Outlook revised to Stable from Negative; cites potential for spillover risks.
- (CN) China MOF: S&P sovereign rating cut of China is 'wrong decision'; The ratings agency's inclusion of local government debt financing vehicles into local government debt does not have legal foundation.
-(CN) S&P Tan: Says local government financing vehicles (LGFVs) still a key source of China credit growth.

Other
-(KR) North Korea countermeasure may mean H-bomb test in Pacific - South Korean Press; Cites North Korea Foreign Minister.
-(KR) North Korea leader Kim Jong Un: President Trump's UN speech was rude nonsense, he is mentally unstable; Trump should select his words prudently; Says to mull highest level of countermeasure.
-(JP) S&P publishes latest Banking Industry Country Risk Assessment (BIRCA) on Japan; revised 'trend for Japan's economic risk to stable from negative'; revised view of trend for banking industry risk to negative from stable
-(JP) Japan Defense Min: North Korea Foreign Min comments about hydrogen bomb test in Pacific Ocean are 'absolutely unacceptable'; Says North Korea Foreign Minister remarks are personal, but should take them seriously.
-(JP) Japan Chief Cabinet Spokesman Suga: Plans to hold extraordinary Diet session on Sept 28th
-(JP) Japan Finance Min Aso: Government has not decided to delay budget balancing; not yet sure if 2020 primary surplus target can be hit
-(JP) Japan Economic Revitalization Min Motegi: Maintains primary balance surplus target; will reassess target in next years mid-term review
-(JP) Japan PM Abe to speak to press on Monday afternoon – US financial press
-(KR) US Dept of Commerce said to have included South Korea on list for sanctions of steel imports - South Korea Press; The report says an announcement could come at the end Sept.

***Asian Equity Indices/Futures (00:30ET)***
- Nikkei -0.3%, Hang Seng -0.9%, Shanghai Composite -0.5%, ASX200 +0.3%, Kospi -0.7%
- Equity Futures: S&P500 -0.3% ; Nasdaq -0.5% , Dax -0.2% , FTSE100 -0.2%

***FX ranges/Commodities/Fixed Income (00:30ET)***
- EUR 1.1938-1.1959; JPY 111.66-112.56; AUD 0.7909-0.7934; NZD 0.7282-0.7313
- Aug Gold +0.5% at 1,300/oz; Aug Crude Oil +0.1% at $50.62/brl; Sept Copper -0.9% at $2.911/lb
- GLD SPDR Gold Trust ETF daily holdings up 6.21 tons to 852.2 tons
-(CN) China PBOC sets yuan reference rate at 6.5861 v 6.5867 prior
-(CN) PBOC OMO: To inject CNY120B in 7 and 28-day reverse repos v injected CNY60B in 7 and 28-day reverse repo prior; Weekly net injection CNY450B v CNY260B injection prior
-(AU) Australia sells A$800M in 2.25% May 2028 bonds, avg yield 2.8368, bid to cover: 3.7X

***Equities notable movers***
Australia
-Seven West Media, SWM.AU Did not reach merger agreement with Prime Media; +1.7%
-Tatts Group, TTS.AU Received gambling regulatory approvals for planned merger with Tabcorp ; +2.7%

Hong Kong/China
-Logan Property Holdings, 3380.HK Denied that it was planning share placement ; -7%

***US markets on close: Dow -0.2%, S&P500 -0.3%, Nasdaq -0.5%, Russell flat ***
- Best Sector in S&P500: Industrials +0.3%
- Worst Sector in S&P500: Consumer Staples -1%
- At the close: VIX 9.67 (-0.11pts); Treasuries: 2-yr 1.44% (flat), 10-yr 2.278% (flat), 30-yr 2.805% (-2bps)

***US Market Summary***
- US equity markets drifted lower despite some better than expected data in the August Leading Indicators and the September Philly Fed. Heads of state continued consultations in NY and President Trump emerged with an announcement that the US, Japan and South Korea would further tighten sanctions on the regime in Pyongyang. WTI crude managed to rally off of early lows to close up 0.1%, while natural gas tanked 4.3% after the EIA posted a larger than expected build in gas inventories. Bond yields continued to creep higher, with the 10-year stretching above 2.8%.

>>> US After Hours Summary: VSAR -84% drops after Phase 3 trial fails

After Hours Summary: VSAR -84% drops after Phase 3 trial fails to meet primary endpoint, PSDO -8.2% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to news: APC +1.9% (continued strength following today's 8%+ move higher), ICPT +1.1% and JUNO +0.9% (modestly rebounding), TXN +0.8% (authorizes the repurchase of additional $6.0 bln of common stock; to raise quarterly cash dividend), HPE +0.7% (ticking higher - to reduce headcount by approx 10%, according to Bloomberg sources)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: PSDO -8.2%

Companies trading lower in after hours in reaction to news: VSAR -84% (announces Phase 3 VELOCITY trial of somavaratan in pediatric growth hormone deficiency did not meet primary endpoint; plan to provide a corporate update later this year ), FALC -24.4% (Nasdaq will suspend trading on September 25; shares will be quoted on OTCQB), RUN -1.1% (extending late move lower)