Vodafone/Liberty Global UK-only combination within reach – bankers
- BT acquisition of EE adds pressure for UK combination
- UK only deal less complicated than UK/German asset swap
- Valuation differences remain key obstacle
There is increasing impetus for a combination of Vodafone [LON:VOD] and Liberty Global’s [NASDAQ:LBYTA] UK businesses, two bankers familiar with the companies’ strategies said.
The strategic rationale for Liberty’s Virgin Media and Vodafone’s mobile-focused businesses to combine is more pressing now than when a UK deal was mooted in early 2016, the bankers said.
Last year, Vodafone and Liberty discussed deals in Germany and the UK but could not agree on price, a source close to the situation said.
While Vodafone has had a consumer broadband offering since 2015, the acquisition of EE by BT Group [LON:BT.A] has given the latter a head-start in the fixed-mobile bundle market, the bankers said.
The prospect of Vodafone exiting or having a minority stake in its home market is no longer a controversial idea, as it is seen as one of Vodafone’s least attractive prospects, the bankers said.
Vodafone’s results for the six months to end-September 2016 showed it made a loss in the UK but grew in Europe overall.
Investors would not take issue with Vodafone exiting the UK, a top 10 shareholder in the company said. The business is understandably expected to be valued at a discount to other European markets, the shareholder said.
However, catalysts that encouraged a Liberty-Vodafone joint venture (JV) in the Netherlands are unlikely to have the same impact in the UK, the bankers said. The T-Mobile Netherlands sale process, which forced Liberty to consider its options in the country, provided the backdrop for its JV with Vodafone there, the bankers noted.
O2 UK – whose sale to Hutchison Whampoa [HKG:0013] lapsed last year - provides an alternative mobile target for Liberty, the bankers said. But, the network is not as attractive to Liberty as Vodafone’s, the bankers said.
The launch of Sky Mobile was also anticipated to further increase competition in the UK market and add to the strategic rationale for a Liberty/Vodafone UK deal, the bankers said. While it may be a consideration, the launch this month has not been met with as much fanfare as expected, the bankers noted.
Additionally, the risk of Sky [LON:SKY] acquiring O2 and creating a rival multi-play provider has subsided for now with the satellite company’s sale to 21st Century Fox [NASDAQ:FOXA], the bankers said.
The latest message from Vodafone to its shareholders is that deals with Liberty in the UK and Germany continue to make good sense but that the difficulty lies in agreeing a price, the shareholder said.
Advisers can also be expected to pitch a UK-German asset swap, the first banker said. In this scenario Liberty would sell its German business, Unitymedia, to Vodafone in exchange for Vodafone UK, the banker said.
However, greater valuation disparities in Germany and regulatory concerns there make this much more complex than a UK-only deal, the bankers agreed.
Vodafone has indicated, however, that it thinks merger control issues in Germany are surmountable, the shareholder said.
Even in the UK, which the bankers believed is the most likely national deal, there will likely be some disparity in Vodafone’s valuation, the shareholder said. Vodafone will be looking for an offer valuing the company at 6x EV/EBITDA, while Liberty can be expected to offer from 5x, the shareholder thought.
Liberty Global and Vodafone declined to comment.
Fed's Harker (hawk, voter): reiterates support for three 'modest' hikes in 2017 - does not expect participation trend to reverse
Premier Oil failed to publish the full terms of a refinancing deal in a trading statement on Thursday but insisted it would be agreed within weeks.
The company, which is one of the biggest independent producers in the North Sea, has been in negotiations with its lenders for nine months to refinance its debt, which stood at $2.8bn at the end of December. The talks are aimed at securing a new arrangement until at least 2021.
Premier said in November it hoped to lock up the terms of a deal by the end of 2016 but full details of the proposed refinancing — which will need to be approved by 75 per cent of lenders — were not contained in its latest trading update on Thursday.
Tony Durrant, chief executive of Premier Oil, said discussions were sufficiently advanced with lending banks that the company should be able to announce a final agreement in a “few short weeks’ time”. A group of 40 banks account for about 85 per cent of the company’s borrowings.
“It really is, I believe, a formality,” he added. “The basic terms we announced in November, they still hold true.”
Premier Oil is the latest independent oil explorer and producer to refinance as companies have pressed ahead with capital-intensive projects in a climate of weak oil prices over the past two years. Rival North Sea developer EnQuest struck a $400m debt restructuring and equity fundraising package in October.
However, Mr Durrant stressed Premier would not be forced to issue new equity as a condition of the fundraising, although the company did say equity warrants would be included as part of the package.
“It wasn’t ever the case we needed new money,” he said on Thursday, adding that the company was seeking to extend some maturities that were coming up on its debts this year and next until 2021.
Premier has been forging ahead with the development of its new Catcher oilfield in the central North Sea, which is due to start up later this year. Total capital expenditure on Catcher is expected to be $1.6bn, the company said on Thursday, 29 per cent lower than original estimates.
Total production last year from Premier’s assets reached a record 71,400 barrels of oil equivalent a day, a 24 per cent increase on the previous year and in line with the company’s most recent guidance of 68,000-73,000 barrels a day, which was raised last year.
The group is guiding towards 75,000 barrels a day of production in 2017, before any contribution from the Catcher field.
Stephane Foucaud, analyst at First Energy, called the progress with the refinancing and lower than estimated costs for developing the Catcher field “encouraging”.
Billionaire George Soros Lost Nearly $1 Billion in Weeks After Trump Election
Hedge-fund manager’s ex-deputy, Stanley Druckenmiller, profited by bet on market rally
Billionaire hedge-fund manager George Soros lost nearly $1 billion as a result of the stock-market rally spurred by Donald Trump’s surprise presidential election.
But Stanley Druckenmiller, Mr. Soros’s former deputy who helped Mr. Soros score $1 billion of profits betting against the British pound in 1992, anticipated the market’s recent climb and racked up sizable gains, according to people close to the matter.
The divergent bets of the two traders are a stark reminder of the challenges even acclaimed investors have faced following Mr. Trump’s unexpected victory. Many experts had predicted a tumble for stocks in the wake of the election, but instead the Dow Jones Industrial Average has climbed 9.3%.
Last year, Mr. Soros returned to trading at Soros Fund Management LLC, which manages about $30 billion for Mr. Soros and his family. Mr. Soros was lured back by the opportunities to profit from what he saw as coming economic troubles.
Mr. Soros was cautious about the market going into November and became more bearish immediately after Mr. Trump’s election, according to people close to the matter. The stance proved a mistake—the stock market has rallied on expectations that Mr. Trump’s policies will boost corporate earnings and the overall economy.
As a result, some of Mr. Soros’s trading positions incurred losses approaching $1 billion, the people say. Mr. Soros adjusted his positions and exited many of his bearish bets late last year, avoiding further losses, the people added.
The broader portfolio held by Mr. Soros’s firm performed better, posting profits before and after the election from long-held investments in sectors including financials and industrials, according to people familiar with the firm. Those gains helped Soros Fund Management gain about 5% on the year.
Mr. Soros, chairman of the firm, continues to trade a portion of Soros Fund’s cash and his positions often are quite volatile, the people said. The firm is currently interviewing candidates for a vacant chief investment officer position. Some close to the firm say Mr. Soros could play a reduced trading role when someone is hired to fill the role. In recent years, the 86-year-old billionaire has focused on public policy and philanthropy. He was a large contributor to the super PAC backing Democratic presidential nominee Hillary Clinton and has donated to other groups supporting Democrats.
Mr. Druckenmiller, who left Mr. Soros’s firm in 2000 and now invests his own money, took a very different stance on the presidential election.
Days before the election, Mr. Druckenmiller predicted to an investor that if Mrs. Clinton emerged victorious the stock market likely would rally initially but then would fall. Mr. Druckenmiller said if Mr. Trump won the election, the opposite result likely would occur—stocks first would tumble and then soar.
Mr. Druckenmiller’s call was prescient.
Stock futures fell sharply on the evening of Mr. Trump’s victory, but the market has since surged. Mr. Druckenmiller has publicly said on television that he exited bearish positions on the night of the election, for example, selling long-held gold. He also became bullish on certain sectors of the stock market, and said he was shorting bonds globally and expected the dollar to rally against the euro.
These trades have paid off as Mr. Druckenmiller’s firm, Duquesne Family Office LLC, scored gains of more than 10% in 2016, the people say. As a private office, the firm doesn’t have to disclose its assets under management.
Mr. Druckenmiller also was politically active during the campaign, donating to Ohio Gov. John Kasich. Overall, Mr. Druckenmiller gave about $3.5 million to Republican candidates, according to the Center for Responsive Politics, while Mr. Soros gave more than $20 million to Democratic candidates during the 2016 election cycle.
In October, Mr. Druckenmiller told Reuters that he backed Republican candidates for Congress in the hope of creating a “firewall” against Mrs. Clinton’s likely economic policies, including more government control of health care. He also said Mr. Trump had an “unstable personality,” and Mr. Druckenmiller added that he might not vote in the presidential election.
Early premarket gappers
Gapping up: HSGX +41.4%, AAOI +19.7%, LTRX +13.6%, KGC +6.5%, VISI +5.2%, ALIOY +4.9%,GFI +4.6%, SBGL +4.4%, AG +4.3%, OCLR +3.9%, HMY +3.7%, CDE +3.6%, GPAC +3.4%, ABX+3.4%, ASIX +3.2%, MUX +3.2%, AUY +3.1%, SLW +3.1%, AGI +3%, NEM +3%, LITE +2.9%, RIO+2.9%, PAAS +2.8%, BW +2.7%, GDX +2.6%, BBL +2.4%, BHP +2.3%, ACIA +1.7%, PBR +1.7%,ELY +1.4%, VALE +1.4%, SDRL +1.4%, AA +1.3%, SLV +1.1%
Gapping down: MYOS -19.4%, ETRM -18.2%, DRWI -15.5%, NAK -9.5%, DXTR -5.8%, KOS -5.2%,ABIO -3.6%, RBS -2%, NVO -1.8%, SNN -1.6%, MT -1.6%, STM -1.1%, KBH -1.1%, TWTR -1%, SAR-0.9%, VFC -0.8%, AAPL -0.6%
Gapping down: MYOS -19.4%, ETRM -18.2%, DRWI -15.5%, NAK -9.5%, DXTR -5.8%, KOS -5.2%,ABIO -3.6%, RBS -2%, NVO -1.8%, SNN -1.6%, MT -1.6%, STM -1.1%, KBH -1.1%, TWTR -1%, SAR-0.9%, VFC -0.8%, AAPL -0.6%
Link : http://bit.ly/2j48XY4
The coalition partner also calls for tax reductions. "With his reimbursement fetish, Mr. Schäuble has strangled urgently needed investments in the future of our country," said SPD General Secretary Katarina Barley. Schäuble was to provide money to rehabilitate bizarre schools and bridging bridges as well as expand the fast Internet in the country. "It is completely insane to grow the rehabilitation and investment stagnation," said Barley. This course of Schäuble and the Union would cost the citizens dearly.
In fact, the surplus would have to flow into the already established reserve of almost 13 billion euros for the financing of the refugee costs. At the end of 2015, Schäuble had a budget surplus of 12.8 billion euros reserved to use 2016 and 2017 around 6.1 billion and 6.7 billion euros respectively for the integration of the refugees. Most of the reserves did not have to be used - also because of the markedly reduced number of refugees.
A lot of money flows back from the refugee costs reserve
In view of the still higher financial pressure, budgetists of the coalition are also likely to make the effort to speed up the repayment of old debts. Especially after 2017 some billions of holes have to be stuffed in the Federal Council. Union and the SPD had already prevailed that a portion of the Bundesbank's profits could again be used to repay debts and no longer flow into the refugee reserve.
SPD budget politician Johannes Kahrs called for tax reductions in the "Stuttgarter Zeitung" and "Stuttgarter Nachrichten" as well as more funds for investments. The Union's budgetary spokesman, Eckhardt Rehberg (CDU), said that the refugee reserve should not be too high, "and we should also pay off debt as much as possible".
SPD and FDP demand tax cuts
Left-chef Katja Kipping spoke out to invest the surplus in the fight against child poverty. The 6.2 million kitas and school children in Germany would be fed up too often with inferior food or would not get anything to eat. The Green Budget expert Sven-Christian Kindler sees additional room for investment in climate protection, social housing and good education. From the perspective of taxpayers, citizens and businesses must be relieved. An important signal would therefore be the immediate entry into the exit from the solidarity surcharge.
At the end of November, the Cabinet had adopted a supplementary budget for 2016, which is still in the parliamentary deliberations. In this way, the Confederation is halving the restructuring program for poor schools in financially disadvantaged municipalities by a further EUR 3.5 billion. This is financed through savings in interest costs for previous loans. Total expenditures in the federal budget of 2016 should remain constant at EUR 316.9 billion.
Old debts have already been eradicated, such as the investment and redemption fund launched in the global financial and economic crisis (ITF). At the end of November 2016, this fund had a debt of EUR 18.738 billion, compared to EUR 21.022 billion at the end of 2015. The Bundeshaushalt was not impacted by this limited-term special fund. He was financed through new debts and received his own credit authorization.
*SCHAEUBLE FAVORS GRADUAL EXIT FROM `UNUSUAL' MONETARY POLICY
*SCHAEUBLE SAYS BREXIT NEEDS TO BE WAKEUP CALL FOR EUROPE
This Swiss watch would power, and be powered by, a heartbeat
Swiss researchers have given a literal twist to the proverbial ticker, designing a clock-like device that could help power pacemakers by harvesting energy from the heart itself — just like an automatic watch harvests movement from the motion of the wrist.
Pacemakers and other implanted devices require a source of power, and providing that power is usually a battery; but batteries run out and need to be replaced — not a simple task when it’s an inch or two beneath your skin.
Andreas Haeberlin, from the University of Bern, and Adrian Zurbuchen, from the University of Michigan, have proposed an alternative that relies on actual clockwork — as in, salvaged from a (naturally, Swiss-made) wristwatch.
“The continuous and powerful contractions of a human heart ideally qualify as a battery substitute,” they write in the abstract of their paper, published in IEEE Transactions on Biomedical Circuits and Systems. For although a pacemaker helps keep the heart beating in time, the body itself provides abundant energy to move the actual cardiac muscles.
How to capture and store that kinetic energy, though? If only the researchers were from a country that for centuries has famously built and refined mechanisms that do exactly that. Realizing that this was in fact the case, they took apart a Swatch wristwatch and began repurposing it for internal use.
Ordinarily the watch would be on a wrist, and as that wrist moved, a weight inside would swing back and forth, its motion stored in a spring. Put near the heart, the weight would instead be moved by the heartbeat itself, and modifications were made to the mechanism to accommodate this. Initial tests in pigs found that the setup yielded about 6 microwatts, which is enough to power a pacemaker.
A small backup battery would likely be necessary in case both tickers wind down at the same time — but it too could be kept charged by the motion of the heart during periods of healthy cardiac action.
More studies are being put in place for the next few years to further test the device, which might make replacement pacemaker batteries a thing of the past.