>>> BHP Billiton shareholders say comments cited by activist Elliott Advisors la

BHP Billiton shareholders say comments cited by activist Elliott Advisors lack context
15 JUN 2017
Some BHP Billiton [LSE:BLT] [ASX:BHP] shareholders have rejected the activist investment firm Elliott Advisors’ claim that it has their support for its campaign that demands a change in strategy and structure at the FTSE-100 mining group, The Daily Mail reported on Thursday (15 June).
Elliott on Wednesday, 14 June, claimed that BHP institutional investors such as AMP Capital, Aberdeen Asset Management, BT Investment Management, Escala, Schroders and Tribeca Global were calling for a change at BHP, the item said. The investors were quoted as critical of some aspects of BHP’s management.
However, it is thought that several shareholders named by Elliott are dismissive of the suggestion that they support the activist's campaign and believe that some of their comments have been used without context, the item continued.
One shareholder quoted in the report said they are quite confident with BHP’s direction overall, although some changes are necessary.
Elliott, which owns a 4.1% holding in BHP, is urging the company’s board to exit its US shale business and to “upgrade” its board, the article noted. Elliott also wants BHP to unify its listing - the company currently has listings in Australia and London - and a spin-off of BHP’s oil and gas business.
Elliott said shareholders have in recent weeks clearly indicated the need for meaningful and substantial change.
The activist investment firm quoted AMP Capital as saying that AMP had urged BHP to independently asses Elliott’s proposal regarding the dual listing and to demonstrate the value of its onshore US operations. However, AMP’s full letter to clients, seen by the newspaper, added that Elliott should allow BHP enough time to present its case for retaining the US onshore energy business and sufficient time to meet its targets.
Schroders Investment Management, according to Elliott, described BHP’s dual-listing as a hangover from the “diabolical” Billiton deal and that the company’s expansion into shale gas in the US was “more painful,” the item continued. However, the full quote, from Martin Conlon, BHP’s head of Australian equities, added that Elliott’s proposal raises further questions regarding outcomes and incentives. Conlon’s full quote also said there is “limited interest” in initiatives regarding changes of listing venues.
Elliott Advisors refused to comment, the report said.
BHP Billiton plc’s market capitalisation stood at GBP 69.28bn (EUR 78.69bn) at the close of trading in London on Wednesday

(GS) Europe REal Estate : Focusing more on rent growth less on LTV; add Entra (B

Focusing more on rent growth less on LTV; add Entra (Buy) to CL

Stronger continental office market rents, ahead of GDP growth
Prime office market rent growth was 7% for eight leading Euro area cities in 2016, a level not seen since 2007 and ahead of that implied by real GDP growth. The gap vs. GDP growth was even greater in Stockholm and Oslo, illustrating the benefits of urbanization, limited new supply, conversions to residential and more office tenants increasingly focused on finding the right space. London, for various reasons, has seen the opposite trends.

We make seven rating changes, including three new Buy ratings
We upgrade Castellum to Buy (from Neutral) consistent with its exposure to Swedish offices and an above average LTV. Above average LTVs vs. lower risk assets drives our upgrade of LEG (to Buy from Neutral) and Vonovia (from Sell to Neutral) and our downgrade of Shaftesbury (to Sell from Neutral). Share price performance also plays a role in upgrading particularly Intu to Buy (from Neutral) but also Eurocommercial to Neutral (from Sell) and downgrading Gecina to Neutral (from Buy).

>>> What to look at today - 15th of June 2017

Dow +0.22% S&P -0.10% Nasdaq -0.41% Russell -0.63%
US Market closed mixed after the FOMC voted to raise interest rates for the second time this year, as expected. The Fed's decision to raise the fed funds target range by 25 basis points to 1.00%-1.25% was nearly unanimous with Minneapolis Fed President Neel Kashkari being the lone dissenter. The rate hike was attributed to realized and expected labor market conditions. In other words, it sounds as if the Fed is still expecting tight labor market conditions to produce stronger wage inflation that will presumably drive broader price inflation. materials (-1.1%) and energy (-1.8%) groups never recovered, eventually settling the session at the bottom of the leaderboard. Crude oil weighed on the energy group, dropping 3.5% to $44.79/bbl, after the Energy Information Administration (EIA) reported a smaller than expected draw of 1.7 million barrels. financial sector (+0.2%) retraced its earlier loss of 1.3% following the FOMC decision, settling higher for the sixth-consecutive session. However, a flattening of the yield curve, which is seen as a negative for the financial industry's bottom line, didn't make things easy on the sector. US after hours  LAKE +8.9%, JBL +4% following earnings/guidance. Asian markets taking the latest FOMC rate hike mostly in stride, with the exception of Hong Kong property names coming under pressure from a matching rate increase by HKMA. Moderate USD strength weighing on precious metals, leading to losses among Australian gold producers. Risk-off flows materializing after a Washington Post report claimed Special Counsel Mueller is looking directly at President Trump for obstruction in relation to firing of FBI Dir Comey and pressure to end investigation of Michael Flynn. Mueller to interview Head of Intelligence Coats, NSA head Coats, and others as soon as next week.

Nikkei -0.17% HAng Seng -0.97% CSI -0.24% Shanghai +0.10%

Eur$ 1.1218 CNH 6.7849 CNY 6.7943 JPY 109.61 GBP 1.2745 CHF 0.9708 RUB$ 57.60 WTI$44.70 -0.02%

S&P -0.20% EuroStoxx -0.17% FTSE -0.25% DAX -0.13% SMI 0.07%

Macro :
- Yellen: Fed Could Start Balance Sheet Unwind ‘Relatively Soon’
- House Prepares to Move 2018 Budget Key to Tax Reform Next Week
- Investors Urge Dutch Govt to Abandon Takeover Proposals: FT

Keep an eye on :
- AC FP : InterContinental Rating Cut at Morgan Stanley, Accor Top Pick
- ATC NA : Altice’s SFR Plans to Sell Some French Media Assets
- BSLN SW : Basilea Licenses Antifungal Drug Cresemba to Pfizer in Europe
- COB LN : Cobham Confirms Notice of Appointment of Investigators From FCA
- DBK GY : Deutsche Bank Said to Restructure Corporate, Investment Banking
- ERICB SS : Cevian Capital Increased Ownership in Ericsson From 5.57% to 6,03%
- GS US : Goldman Said to Raise $7b for New Private Equity Fund: Reuters
- IHG LN : InterContinental Rating Cut at Morgan Stanley, Accor Top Pick
- IGY GY : Innogy Not Advancing Enough in UK Despite Cost Cut, CFO Tells BZ
- NOVN VX : Novartis’ Cosentyx Shows Improvement in AS, PsA Symptoms
- OCLR US : Oclaro Declines Comment on Report It Is Preparing for Sale
- PUB FP : Publicis Names Carla Serrano as Chief Strategy Officer
- ROTH FP : Rothschild & Co. FY Net Slips 20%; Co. Sees Active M&A Market
- SGO FP : Saint-Gobain in Talks to Lift Stake in Norway’s Glava
- SAN FP : Sanofi to Spend About 1 Billion Euros/Year on Plants, Equipment
- SFR FP : Altice’s SFR Plans to Sell Some French Media Assets
- SOI GY : Soitec Posts FY Profit; Sees Higher 2017-18 Electronics Margin
- SKY LN : Sky Gets Rights to Broadcast Champions League in Italy
- VOW3 GY : EU Says VW Agrees Extra Measures for Diesel Car Owners
- ZC FP : Zodiac Aerospace 9M Rev. EU3.79B; Confirms FY Outlook

>>> Europe : Brokers Upgrades & Downgrades - 25th of June 2017

>>> Up
*Castellum Raised to Buy at Goldman
*DNB Raised to Outperform at Macquarie, PT NOK165
*Eurocommercial Properties Raised to Neutral at Goldman
*ING Raised to Add at AlphaValue
*Innogy Raised to Hold at HSBC, PT EU36
*Intu Raised to Buy at Goldman
*LEG Immobilien Raised to Buy at Goldman
*Petrofac Raised to Buy at Jefferies, PT 500p
*RWE Raised to Buy at HSBC, PT EU22.50
*Thomson Reuters Raised to Outperform at Macquarie
*Vonovia Raised to Neutral at Goldman

>>> Down
*Ascential Cut to Hold at Deutsche Bank
*EDP Cut to Equal-weight at Morgan Stanley, PT EU3.40
*Gecina Cut to Neutral at Goldman
*Inditex Cut to Hold at Berenberg
- Intercontinental cut to underweight vs equalweight, PT from 4,300 to 3,800p
*ITV Cut to Neutral at Macquarie
*PGS Cut to Add at AlphaValue
*Philips Lighting Cut to Hold at ING
*Porr Cut to Hold at Berenberg
*Proximus Cut to Sell at Citi
*Shaftesbury Cut to Sell at Goldman
*Tullow Cut to Reduce at AlphaValue

>>> Initiation
*Aberdeen New Hold at Berenberg, PT 290p
*Ashmore New Buy at Berenberg, PT 400p
*DFDS New Equal-weight at Morgan Stanley, PT DKK425
*Ericsson New Hold at SocGen
*Jupiter New Hold at Berenberg, PT 500p
*Nokia New Buy at SocGen
*Petrofac New Overweight at JPMorgan, PT 570p
*Schroders New Buy at Berenberg, PT 3,580p

>>> Call
>> Sector
*ENTRA ADDED TO CONVICTION LIST AT GOLDMAN, BUY RATING UNCHANGED

>>> Gemalto/Atos rumours played down on strategic fit issues

MergerMarket

Gemalto/Atos rumours played down on strategic fit issues - sources
14 JUN 2017
Rumours that Gemalto [EPA:GTO] has been approached by Atos [EPA: ATO] lack foundation and are undermined by strategic fit issues, two sources following the situation and a person familiar said.

Speculation that Gemalto had been approached by Atos has been circulating in the market for over a month, the sources said. But, the companies’ usual external advisers have not been asked to look into a deal, they said. Atos management has also privately denied that there are deal talks when pressed by potential advisers, the first source added.

While the recent pitching of such a deal by bankers cannot be ruled out, Atos has not approached Gemalto, the person familiar said.

Atos declined to comment.

The takeover talk was likely stoked by a sharp drop in Gemalto's share price following a profit warning in March that warned 1Q revenues would be down year-on-year, the sources and sector bankers said.

The list of bidders for Gemalto is short, with Atosbeing the most likely strategic, sector bankers said. Even so, Atos would only be interested in certain parts of Gemalto, the bankers and sources said.

Atos’s payment division Worldline [EPA:WLN] would have synergies with Gemalto’s banking and payment division, bankers said. Specifically Worldline’s payment terminal services would complement Gemalto’s smart card chip business, the first banker said.

On paper a deal would therefore make sense, but in reality the extent of the overlaps between these two businesses could be problematic when it comes to integrating them, the second source said.

Gemalto’s security technology would also be of interest to Atos’s wider non-transactional business, the second source said. Atos, which provides cloud, data management and online platform solutions, claims it is the European ‘number one’ in cybersecurity.

But, Gemalto’s SIM card business would be of less interest to Atos, the first source and first banker said. Atos does have a smartphone business, which could be complementary, but concerns over the longevity of SIM cards has put pressure on Gemalto’s share price, the banker said. Gemalto’s 1Q results show 62% of its revenues come from payment and identity services, and 38% from mobile products. SIM sales were down 14% year-on-year.

Gemalto’s diverse collection of technologies means there are few strategic suitors who would want the whole business, this banker said.

A large-cap private equity firm such as KKR or Blackstone could be a better fit, a second sector banker said. PEs could be potential bidders but might need reassurance on the lifespan of some of Gemalto’s core business, such as contact payment cards, the first banker said.

Any bidder may have to take into account potential French government scrutiny for takeovers in ‘strategic’ sectors, bankers said. But this is unlikely to be a significant stumbling block, the second source said.

In any case, Gemalto is not expected to make any big M&A decisions at least until its strategic plan is announced in 4Q17, a second person familiar with the situation said. Gemalto is due to disclose a three-year plan, which could give details of its M&A strategy, such as expansion in the US, the person added.

The payments space generally has been the subject of several rumours recently. In March, Atos was forced to deny its Worldline division was preparing to bid for Ingenico [EPA:ING]. Bankers briefed have also said a tie-up between Ingenico and Wirecard [ETR:WDI] was being pitched, as reported.

Gemalto declined to comment.

FT : Large investors attack Dutch plans to curtail foreign takeovers

Large investors attack Dutch plans to curtail foreign takeovers
Leading asset managers decry new rules that threaten to damage shareholder interests

Ten of the world’s largest asset managers have decried new rules put forward by the Dutch government that would hinder takeover bids by foreign companies over fears that the proposals are “unduly harsh” and damaging to shareholder interests.

The investors, which include Fidelity International, Old Mutual Global Investors and Allianz Global Investors, have written to the Dutch minister of economic affairs urging him to abandon the “extreme” proposals that would put “the Dutch market in an unfavourable light”.

The proposals would force foreign companies to take a one-year “time out” period after submitting a hostile takeover bid in the Netherlands. During this period shareholders could be blocked from calling extraordinary general meetings to discuss sacking board members or executives.

“We believe the negative consequences would impact the efficiency of the financial markets, entrench ineffective company managers and disenfranchise institutional investors,” the asset managers said in the letter to Henk Kamp, who has been Dutch economics affairs minister since 2012.

“It is our view that this is an unduly harsh provision that damages shareholder protections to the detriment of good corporate governance, efficient markets and sustainable value creation,” the letter said.

“We further believe that this would carry economic disadvantages and put Dutch companies and the Dutch market in an unfavourable light from the perspective of the global institutional investment community.”

Foreign takeovers of Dutch companies have become a heated political issue after Dutch paintmaker Akzo Nobel successfully resisted a three-month hostile takeover attempt by US rival PPG earlier this year. Anglo-Dutch consumer goods giant Unilever also fended off a takeover bid from US conglomerate Kraft Heinz in February amid fears that the deal would lead to ruthless job cuts.

The takeover attempts prompted Dutch finance minister Jeroen Dijsselbloem to call for the government to have greater power to block foreign takeovers of domestic companies when they are considered against the national interest.

Mr Dijsselbloem said in March that a takeover of Akzo Nobel was not in Dutch interest. “This hostile takeover would lead to a split, sale and disappearance of knowledge and research in our country . . . and would be harmful to the long-term economic strength of the Netherlands,” he said at the time.

Mr Kamp added in a letter to parliament, which will discuss the anti-takeover provisions before the end of the month: “The Netherlands has an open economy and an attractive business climate. The Netherlands is the most competitive economy in the EU and the fourth most competitive in the world. Foreign acquisitions play a role. They contribute to the competitiveness of companies. But at the same time, our open attitude does not mean we should be naive.”

However, investors remain concerned that any attempt to block foreign takeovers would undermine the relationship between Dutch companies and their shareholders, deter foreign investment in the country and make it harder to oust underperforming executives.

The investors, which also include Standard Life, Columbia Threadneedle and Hermes, said in their letter: “We are sympathetic to your fundamental concerns about the potentially negative impact of hostile takeovers, particularly in cases when a hostile bidder might introduce short-term changes that do not support a company’s potential for long-term value creation.

“At the same time it is important to note that takeovers, including hostile takeovers, are neither intrinsically good nor bad. Done properly, takeovers can have a positive disciplining effect on companies and financial markets.”