>>> AkzoNobel could eye large-scale takeover or series of smaller acquisitions -

AkzoNobel could eye large-scale takeover or series of smaller acquisitions - report (translated)

AkzoNobel [AMS: AKZA] could eye a large acquisition, or a series of smaller ones, De Telegraaf noted in an analysis after the company rejected an approach by PPG Industries (NYSE:PPG) last week.
The previously announced strategic review and separation of AkzoNobel's specialty chemicals division, could yield up to EUR 12 to EUR 14bn, which would provide a sizeable war chest. In addition, AkzoNobel could obtain EUR 7bn in the short term, by issuing up to 20% additional shares and using up its credit lines.
The article cited Exane BNP Paribas analysts, who see a 40% chance that a sale of the Specialty Chemicals division will be used for not one, but a series of acquisitions including a payout to shareholders.
Another option, given a 20% chance by the analysts, is for Akzo to float its Specialty Chemicals division, in which case AkzoNobel would retain a stake in the business, the report noted.
A third option, with a 30% chance of occurring according to the Exane BNP analysis, is a private sale of the division, with proceeds to be used for one large-scale acquisition. In this case, Akzo could use its war chest to acquire US-based Axalta Coatings which is rumoured to be valued at around USD 11bn, the item added.
A successful takeover of AkzoNobel by PPG was given a 10% chance, owing to Akzo's protective structure and earlier rejection of PPG's overtures, according to the Exane BNP analysts, cited in the item.

WSJ : Two Italian Banks Seek State Aid to Stay Afloat

Two Italian Banks Seek State Aid to Stay Afloat
Banca Popolare di Vicenza and Veneto Banca plan to access government rescue scheme

ROME—Two midtier Italian banks said late Friday they have requested state aid to remain afloat, a widely expected outcome for two lenders that have teetered on the edge of collapse for more than a year.

Banca Popolare di Vicenza SpA and Veneto Banca SpA said in two separate statements they have told Italy’s Economy Ministry, the Bank of Italy and the European Central Bank they plan to access the so-called precautionary recapitalization—a rescue scheme which under European rules implies losses for shareholders and junior bondholders before public money is injected in the ailing banks.

The fate of the two banks has been in doubt since last year, after Atlante, a government-orchestrated backstop fund for lenders, bailed them out and took effective control over them.

To be recapitalized with public money the two banks must prove they are viable and a restructuring plan they are completing, which includes the merger of the two banks, must be approved by the European Commission.

A solution to the two banks’ woes would be a major step toward the stabilization of Italy’s banking system, which is struggling under the weight of €360 billion ($387 billion) in problematic loans, rock-bottom interest rates and low profitability.

In December, the Italian government set up a €20 billion fund that can be tapped by struggling banks to replenish their capital buffers or to help them raise liquidity by guaranteeing the issuance of bonds.

Banca Monte dei Paschi di Siena SpA has already asked to use this fund to help it plug a capital shortfall of nearly €9 billion.

A major issue for Vicenza and Veneto is that they risk up to €5 billion in legal costs stemming from losses that shareholders suffered after Atlante bailed them out.

The two banks, which weren’t listed, had sold shares to more than 200,000 customers, mostly retail investors. The Atlante bailout wiped out most of the value of those shares, sparking lawsuits from furious shareholders.


The banks are offering to return about 15% of the value of the shares to most shareholders.

Vicenza and Veneto said Friday that shareholders owning roughly half of the shares for which redress can be sought accepted, while many more showed interest in the proposed settlement.

Both banks need a high take-up for the offer—they both target a settlement with shareholders owning 80% of the shares by next week—to obtain state aid.

>>> US Close Dow -0.10% S&P -0.13% Nasdaq +0.00% Russell +0.40%

Closing Market Summary: Stocks Close a 'Wee Bit' Lower on St. Patrick's Day

Defying the spirit of St. Patrick's Day, the major averages failed to turn shamrock green, closing just a 'wee bit' below their flat lines. The Nasdaq finished flat while the S&P 500 and the Dow closed with losses of 0.1% apiece.

The bulls swiped up the majority of sectors on Friday, but the ones they left behind--financials (-1.1%), health care (-0.5%), energy (-0.1%), and consumer staples (-0.2%)--proved to be influential. The financial sector saw some belated selling pressure in the wake of this week's FOMC meeting as investors tried to sort out how the Fed's future outlook for interest rates will bake into the industry's bottom line.

On the other hand, the health care group got tripped up this morning on news that biotech giant Amgen's (AMGN 168.41, -11.70) new cholesterol drug Repatha didn't live up to expectations in a clinical trail. AMGN shares lost 6.5% of their value, which influenced the iShares Nasdaq Biotechnology ETF (IBB 295.28, -3.31) lower by 1.1%.

The lightly-weighted utilities (+0.6%), telecom services (+0.6%), and materials (+0.5%) sectors made a valiant effort to counter the heavy blow from the bears, but received little help from its peers; the technology (+0.1%) and consumer discretionary (+0.1%) sectors just couldn't piece together a truly solid performance as their top components deferred a leadership role in the cause.

News flow was relatively light on Friday, but it's worth pointing out that Secretary of State Rex Tillerson said all options are on the table, including military action, in countering North Korea's threat to the United States and its allies. Mr. Tillerson emphasized that the U.S. aims to avoid a military conflict, but made it clear that the "policy of strategic patience has ended."

Aerospace & defense names like Boeing (BA 180.10, +1.91), Lockheed Martin (LMT 271.98, +4.04), and Raytheon (RTN 156.97, +3.31) did their part to push the industrial sector (+0.4%) higher, but the sector's advance ultimately proved to be modest.

In the Treasury market, U.S. sovereign debt extended its week-to-date gain on Friday, leaving the benchmark 10-yr yield four basis points lower at 2.50%. For the week, the 10-yr yield lost eight basis points as investors relished in the Fed's more dovish than expected rate projections.

Friday saw a handful of economic reports, including February Industrial Production, February Leading Indicators, and the University of Michigan Sentiment Index for March, but their influence was minimal:

  • Industrial Production held steady in February (consensus 0.2%) while Capacity Utilization declined to 75.4% (consensus 75.4%) from a revised reading of 75.5% (from 75.3%) in January.
    • The key takeaway from the report is that it is not as disappointing as the headline suggests. Nevertheless, total industrial production is still weak, up just 0.3% year-over-year. The overall capacity utilization rate of 75.4% is 4.5 percentage points below its long-run average, which suggests there is ample overhead space still until production bottlenecks occur.
  • The Conference Board's Leading Indicators report for February ticked up 0.6% (consensus 0.5%) after a 0.6% increase in January.
    • The key takeaway from the report is that the index is at its highest level in over a decade after six consecutive monthly gains, fueling the underlying belief that economic growth in 2017 should be improving.
  • The preliminary reading of the University of Michigan Consumer Sentiment Index for March rose to 97.6 (consensus 96.8) from 96.3 in the prior month's reading.
    • The key takeaway from the report is that consumers are feeling better about their current personal finances; however, there appears to be a sharp divide about the outlook that cuts sharply across political partisan lines.

Investors will not receive any economic data on Monday.

  • Nasdaq Composite +9.6% YTD
  • S&P 500 +6.2% YTD
  • Dow Jones Industrial Average +5.8% YTD
  • Russell 2000 +2.5% YTD

Sky news : Goodwin holds breath as RBS eyes cash call case settlement


Goodwin holds breath as RBS eyes cash call case settlement
Lawyers are in talks about a settlement that would avoid ex-RBS boss Fred Goodwin taking the stand, Sky News learns.

Royal Bank of Scotland (RBS) has accelerated talks about a legal settlement with thousands of former investors, weeks before a trial that would see former chief executive Fred Goodwin called to give evidence.

Sky News has learnt that RBS's lawyers have been in negotiations with the RBoS Shareholder Action Group during the last 48 hours in a bid to resolve the final remaining claim relating to a £12bn cash call in 2008.

Talks were understood to be continuing on Friday, although one source put the chances of a successful resolution before a trial at "no better than 50-50".

The development comes just days after the judge overseeing the case ordered the claimant group to disclose further details of its funding amid concerns that it would be unable to cover legal expenses if it loses.

Mr Goodwin, along with Sir Tom McKillop, the former RBS chairman, are named alongside the state-backed bank as defendants in the case.

If the case does go to trial - which is scheduled to start in May - it would represent the fullest account that Mr Goodwin and senior colleagues would have given about the precursor to a crisis which saw £45.5bn of taxpayers' money injected into RBS.

The Government continues to own more than 70% of the bank, and there appears to be little prospect of it ever recouping the money it paid to rescue RBS.

The terms of any agreement between the two sides were unclear on Friday, although sources said they were unlikely to see any improvement in RBS's existing offer, which would see only a fraction of the group's £1.2bn claim paid out in settlement.

A number of institutional investors participating in the RBoS Shareholder Action Group are nevertheless said to be keen to pursue a settlement, and have made their views clear to Signature Litigation, the law firm handling the case.

Prominent investors including Aberdeen Asset Management and AXA are members of the group, which in total has signed up 27,000 former RBS shareholders as participants.

Most of them were ordinary retail investors who lost money after subscribing to the bank's £12bn rights issue in the spring of 2008.

In December, RBS reached agreement with three of the five shareholder groups suing it for allegedly misrepresenting its financial health.

It said at the time that it was "willing to make available settlement sums of up to £800m assuming settlement of all claims, to be split among all five shareholder groups, subject to agreement and claim validation".

Since then, it has reached a deal with another group, represented by the law firm Leon Kaye, leaving the RBoS Shareholder Action Group as the only remaining litigant.

Vowing to press on towards a trial, the RBoS Group said in December that: "We had no option but to reject this inadequate offer and remain committed to seeking justice for our members through the courts."

RBS declined to comment on this week's talks, but said in a statement: "RBS has set aside £800 million assuming settlement of all claims in its 2008 Rights Issue litigation, to be split among all five shareholder groups.

"The bank has reached terms with four of these groups - representing almost 80% of the value of the claim - and agreed a full and final settlement without any admission of liability."

To date, more than £100m has been spent by the bank defending the claims, a bill which includes the legal costs of Mr Goodwin and other former directors.

Forbes : L’Arabie Saoudite A L’Aune De La Chute Des Cours De Pétrole


C’est une grande première dans l’histoire du pétrole ; l’Arabie Saoudite, par le biais de son ministre des pétroles, Khalid Al-Falih, déclare directement et sans intermédiaire que son pays est décidé à stabiliser le marché mondial du brut.

En effet, dans la grande tradition saoudienne d’ambiguïté quant aux véritables intentions de Ryad, souvent des annonces ayant trait à sa politique énergétique sont faites par des tiers experts liés au pouvoir. Or, l’urgence de l’annonce a coupé court à la tradition et amené directement dans la mêlée le gouvernement des Saouds. En effet, l’enjeu est de taille car le prix du brut a connu une chute de 10% en une seule semaine frôlant les 50 USD le baril. L’index américain du brut est même descendu de 11% pour descendre en deçà du seuil psychologique des 50 USD pour finir à 47 USD le baril. La remontée des cours depuis fin 2016 n’a donc pas duré.

Cette baisse des cours est d’autant plus préoccupante que l‘Arabie Saoudite est sur le point d’offrir jusqu’à 5% de son joyau national, la compagnie pétrolière ARAMCO aux marchés dans le cadre d’une introduction en bourse, probablement sur la bourse de New York. C’est du moins ce qui laisse présager la récente rencontre à Washington entre le Vice-Prince héritier Mohammad bin Salman et le Président américain. Une baisse soutenue des cours ne présage rien de bon pour la valorisation de cette société en bourse ni d’ailleurs pour le budget saoudien, fortement tributaire des recettes pétrolières. D’où la très grande inquiétude des Saoudiens.

Cette situation est principalement due à la facturation hydraulique des gisements de gaz de schiste. Les experts considèrent que la production américaine à horizon 2020 dépasserait la capacité maximale de la production saoudienne pour atteindre 11 millions de baril/jours soit 2 millions de baril de plus que la production actuelle et 1 million de baril de plus que la capacité maximale saoudienne se situant à un peu moins de 10 millions baril/jour. Triste ironie du sort que cette situation que Ryad avait essayé d’éviter en inondant le marché de son pétrole à bas cout d’extraction afin de pousser vers la faillite les producteurs de gaz et de pétrole de de schistes par manque de rentabilité. Or cette stratégie a eu l’effet inverse en incitant ces mêmes producteurs à améliorer leurs performances technologiques. Ainsi aujourd’hui le coût d’extraction de pétrole de schiste se situe à un seuil inférieur à 50 US le baril. Non seulement les Etats-Unis ne dépendent plus des importations pétrolières mais sont devenus de surcroit des exportateurs de brut. Ils disposent aujourd’hui dans le Bassin Permien qui s’étend sur l’ouest du Texas et le sud-est du Nouveau-Mexique d’un des gisements les plus importants d’hydrocarbures au monde.

La tragédie pour les Saoudiens réside aussi dans le fait que face à cette explosion de la production énergétique américaine, il n‘y a pas une augmentation de la demande mondiale en face. En effet, la demande de la part des pays importateurs ne saurait dépasser le million de baril/jour d’ici 2020 contraignant les Saoudiens a encore baisser leur production s’ils ne veulent pas voir les cours pétroliers s’écrouler. Ceci est sans compter sur le retour de la production iranienne qui a rajouté un peu moins d’un million de baril/jour à sa production depuis la fin des sanctions internationales frappant son secteur énergétique le 16 janvier 2016. Ce pays voudra surement augmenter sa production pour rattraper le temps perdu des années d’ostracisme dont il a fait l’objet. D’ailleurs le dernier accord des pays membres de l’organisation des pays exportateurs de pétrole (OPEP) n’a pas exigé une baisse de la production chez les Iraniens. Demain, il en ira de même pour l’Irak qui une fois Daech mis hors d’état de nuire voudra exporter encore davantage sa production afin de pouvoir mener à bien la reconstruction des infrastructures détruites du pays.

Cette situation de baisse des cours ne présage de rien de bon pur l’Arabie Saoudite qui a besoin d’un maximum de recettes pour maintenir la paix sociale sur un plan domestique et contrecarrer l’émergence inéluctable de l’Iran comme l’hyper puissance régionale au Moyen Orient. Avec la chute de ses réserves pétrolières, l’Arabie Saoudite avait déjà fait en 2015 l‘objet d’une alerte de la part du Fonds Monétaire International : faute de restriction budgétaire ce pays allait être dépourvu de réserves financières à horizon 2020 même si depuis la situation semble s’être améliorée avec la hausse des cours pétroliers.

Les Saoudiens vont vite comprendre que les jours noirs ne sont pas derrière mais devant eux.