>>> Sanef 15% stake auction enters first round

Sanef 15% stake auction enters first round – report (translated)

The first round of the auction for a 15% stake in French motorways operator Societe des Autoroutes du Nord et de l'Est de la France (Sanef) takes place this week, French daily Les Echos reported.

The unsourced article said the deadline for submitting first round bids expires today, Tuesday.

According to the report, the shareholding, being sold by French state-owned financial services group Caisse des Depots et Consignations (CDC), could be valued at between EUR 700m and EUR 800m.

The report claimed that interested bidders include Groupe Eurotunnel [EPA:GET], which operates the two rail tunnels between France and England, and major infrastructure funds from Australia and Canada.

The report went on to say that the current shareholders of Sanef, including majority shareholder Abertis [BME: ABE] from Spain, French insurer Predica, investment fund Ardian, and FFP, the investment holding from the Peugeot family, could also have the right to enter the fray if they match the market value of the shares.

>>> Asahi favorite in tender for AB Inbev's eastern European beer brands; KKR, M

Asahi favorite in tender for AB Inbev's eastern European beer brands; KKR, Mid Europa Partners no longer in game

The Japanese brewery Asahi is the favourite for the takeover of AB InBev's Eastern European beer brands, reported Hospodarske Noviny, citing undisclosed sources close to the sale tender.

The Czech language item noted that there are five remaining suitors for AB InBev's beer assets in Central and Eastern Europe. According to Hospodarske Noviny, the remaining five suitors, that now will be asked to submit binding offers, are: the brewery group China Resources, consortium of funds Bain Capital and Advent International, consortium of Jacobs Holding, PSP Investments and Czech investment group R2G, and Czech investment group PPF.

The item noted , without citing the source of the information , that a consortium of KKR and Mid Europa Partners, which was previously reported to be in the tender finale, is most likely no longer in the game.

The sale of the brands is part of the divestment program with which AB InBev had to agree in order to get permission for its takeover of SABMiller.

The selling price of the portfolio, including the Czech Plzensky Prazdroj (Pilsen Urquell) and Polish Kompania Piwowarska, can reach as high as USD 7bn, the item added, without citing the source of the information.

>>> Asian Update


Back to the civilisation but not yet to the office
Asia Mid-Session Market Update: PBoC Yuan fix at new multi-year lows; RBA minutes cautious on China outlook and uncertain labor despite signs of improvement

***US Session Highlights***
- (US) NY Fed Consumer Expectations survey: 1-year US inflation expectations edged higher in Oct; 3-year inflation expectations unchanged
- (US) S&P cuts New Jersey GO bonds one notch to A- from A; outlook Negative
- (US) Fed's Kaplan (moderate, non-voter): we need to find opportunities to raise rates; the time for monetary policy in the US is coming to an end
- MENT: To be acquired by Siemen's for $37.25/shr in cash; valued at $4.5B
- HAR: To be acquired by Samsung Electronics for $112/shr cash; deal valued at $8.0B
- UPS: Airline maintenance technicians represented by Teamsters authorize a strike at UPS

***US markets on close: Dow +0.1%, S&P500 flat, Nasdaq -0.4%***
- Best Sector in S&P500: Financials
- Worst Sector in S&P500: Technology
- Biggest gainers: HAR +25.2%, SWN +9.3%, SNI +7.6%, DISCAN +7.2%, RF +6.7%
- Biggest losers: TDG -7.1%, PVH -5.7%, KORS -5.1%, NVDA -4.9%, EW -4.8%
- At the close: VIX 14.5 (+0.3pts); Treasuries: 2-yr 1.00% (+9bp), 10-yr 2.22% (+10bps), 30-yr 2.98% (+5bps)

***US movers afterhours***
- AAP: Reports Q3 $1.73 v $1.72e, R$2.25B v $2.20Be; +12.6% afterhours
- EGLE: Announces Acquisition of SDARI-64 Ultramax Newbuilding Vessel; +8.2% afterhours
- ALRM: Reports Q3 $0.19 v $0.11e, R$67.8M v $59.8Me; names Steve Valenzuela new CFO, effective Nov 15th; +5.0% afterhours
- PIR: Guides Q3 at high end of previously guided ranges for sales and earnings (implies high end of EPS $0.09-0.15 v $0.10e, SSS -3% to -1%); +4.6% afterhours
- ZOES: Reports Q3 $0.04 v $0.04e, R$67.3M v $68.1Me; -4.8% afterhours
- BETR: Reports Q3 $0.12 v $0.15e, R$68.0M v $64.7Me; -11.2% afterhours

***Asia Session Notable Observations, Speakers and Press***
- USD consolidates week-long gains as expectations for December rate hike approach 90% and those for at least 2 more hikes next year reach about 25%.
- Oil under more pressure with reports of OPEC remaining divided on output cuts.
- US Pres Obama holds first press conference since the elections; Committed to ensuring a smooth transition for President-elect Trump; Says Trump is committed to NATO relationship; Amid speculation over Trump cabinet appointments, Giuliani said to be in the running for State Sec and not interested in AG post.
- PBoC sets Yuan midpoint at weakest level since late 2008; Offshore Yuan falls through CNY6.87 - a multi-year low.
- RBA meeting minutes reiterate the risks around inflation forecast are broadly balanced; Acknowledging improving trade conditions but still sees uncertainty about outlook due to China; Uncertainty around labor market conditions also remains going into this weeks employment data.

***Asia Key economic data:***
- (NZ) NEW ZEALAND OCT PERFORMANCE OF SERVICES INDEX: 56.3 V 54.2 PRIOR
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 118.2 v 117.8 prior
- (ID) Indonesia Oct Trade Balance: $1.2B v $1.1Be
- (SG) SINGAPORE SEPT RETAIL SALES M/M: -0.7% V +0.3%E; Y/Y: 2.0% V 2.0%E
- (TH) Thailand Oct Unemployment Rate y/y: 1.2% v 0.9% prior

***Asian Equity Markets (00:00ET)***
- Nikkei flat, Hang Seng +0.4%, Shanghai Composite -0.3%, ASX200 -0.3%, Kospi flat

***FX ranges/Commodities/Futures/Fixed Income (00:00ET):***
- EUR 1.0735-1.0770; JPY 107.80-108.40; AUD 0.7550-0.7580; NZD 0.7100-0.7140
- Dec Gold +0.2% at 1,224/oz; Dec Crude Oil +2.0% at $44.20/brl; Copper +0.5% at $2.53/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 5.7 tonnes to 928.9 tonnes; lowest since June
- SLV: iShares Silver Trust ETF daily holdings fall to 11,080 tonnes from 11,095 tonnes prior; lowest since Aug 21st
- Equity Futures: S&P e-mini +0.2%, Dax +0.3%, FTSE100 +0.2%
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.8495 V 6.8291 PRIOR; weakest Yuan setting since Dec 2008
- JGB: (JP) Japan MoF sells ¥2.17T in 0.1% 5-year JGB bonds; avg yield -0.160% v -0.201% prior; bid-to-cover 3.56x v 4.31x prior

Notable movers by sector:
- Consumer discretionary: Mantra Group MTR.AU +4.8% (new CFO); Dentsu Inc 4324.JP -7.0% (9-month result); Hokuetsu Kishu Paper Co 3865.JP -7.9% (H1 result)
- Financials: OzForex Group OFX.AU -15.9% (H1 result); Sumitomo Mitsui Trust Holdings 8309.JP +3.6% (H1 result); Mitsubishi UFJ Financial Group 8306.JP +4.9% (H1 result); Sumitomo Mitsui Financial Group 8316.JP +3.8% (H1 result)
- Industrials: Takeuchi Manufacturing Co 6432.JP +3.5%
- Technology: Sun King Power Electronics Group 580.HK +3.4% (guidance)
- Materials: OZ Minerals OZL.AU +5.3% (to extend Prominent Hill mine life); Zhejiang Dongliang New Building Materials Co 002082.CN +10.0% (shareholder to increase stake); New Hope Corporation NHC.AU -3.0% (guidance); Yokohama Rubber Co 5101.JP +3.7% (9-month result)

>>> After Hours Summary: AAP +12%, ALRM +5%, PIR +5% following

After Hours Summary: AAP +12%, ALRM +5%, PIR +5% following earnings/guidance, RPRX +17% on trial results, EQY +15% on merger news... AIMT -6%, ZOES -5% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: AAP +12%, KGJI +8.9%, ALRM +5% (also names Steve Valenzuela as new CFO effective November 15), PIR +4.6% (Sept-October comps up low single digits, early Nov impacted by election but expects improvement), NOAH +2.5% (ticking higher), NWL +2.2% (ticking higher; reaffirms FY16 & FY17 guidance ahead of its presentation at the Morgan Stanley Global Consumer & Retail Conference)

Companies trading higher in after hours in reaction to news: RPRX +17% (reports topline results for both its pooled oral and vaginal delivery Phase 2 studies in the treatment of uterine fibroids; primary endpoint of induction of amenorrhea met for both pooled oral and vaginal delivery compared to placebo), EQY +14.8% (Equity One and Regency Centers Corporation confirm merger in $15.6 bln transaction), EGLE +9.2% (following 40%+ move higher today; acquires a resale 2017-built 64,000 deadweight SDARI-64 Ultramax dry bulk vessel constructed at Chengxi Shipyard Co; financial details not disclosed; scheduled to be delivered in January 2017), LOCK +4.1% (Symantec said to also be considering a potential acquisition of LifeLock, according to Bloomberg), CAKE +2.5% (light volume; enters into strategic relationship with Fox Restaurant Concepts), PRGO +1.7% (Starboard Value increases active stake to 6.2%), HCA +1.5% (authorizes $2 bln share repurchase program), CAFD +1.2% (enters into agreement to acquire 34 percent stake in 300-mw stateline solar project for $329.5 million), GEO +1.2% (Greenlight disclosed new stake), PTLA +0.9% (announces results from three substudies of the pivotal Phase 3 APEX Study of betrixaban at the AHA Scientific Sessions), EXPE +0.5% (Trivago files registration statement relating to a proposed initial public offering of American depositary shares representing Class A shares of its affiliate, travel B.V.)

Airlines lifting on Berkshire Hathaway / Warren Buffett stake disclosures:  AAL +3.9%, UAL +2%, DAL +2.8% (Berkshire confirmed new stakes in quarterly filing), LUV +3.4% (reports out that Buffett's Berkshire also bought stake in Southwest)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: BETR -11.7% (also files for $100 mln mixed securities shelf offering and 45,232,632 share common stock for resale by selling stockholders), GEVO -8.7%, AIMT -6.4%, ZOES -5.1%, GLOB -3.5%, SYNC -1.8% (light volume; also files shelf registration statement under which it may from time to time issue common stock up to an aggregate amount of $40 mln), HOLI -1.2% (light volume)

Companies trading lower in after hours in reaction to news: SYN -18.9% (commences an underwritten public offering of shares of its common stock and warrants to purchase shares of its common stock), TSRO -6% (commences 1.75 mln common stock offering), STAY -3.3% (announces an underwritten secondary offering of 12,750,000 Paired Shares), ANGO -2.1% (commences 2.5 mln common stock offering by selling stockholders), TTMI -1.8% (TTM Tech's largest shareholder commences secondary offering of 12,000,000 shares of its common stock), GLNG -1.2% (commences 5.7 mln common stock offering)

FT : Samsung targets pole position in auto-tech sector

Samsung targets pole position in auto-tech sector
Takeover of Harman highlights battle to colonise the inside of the
The relationship between Silicon Valley and Detroit got complicated quickly. Some carmakers see Uber, Apple and Google as allies, adopting their smartphone software into their cars’ dashboards. Others see them as existential threats that will do to them what the iPhone did to Nokia.

Young Sohn, Samsung’s president and chief strategy officer, sees ample opportunity for disruption, saying on Monday that the “car of tomorrow” will be transformed by technology “in the same way simple feature phones have become sophisticated smart devices over the last decade”.

But unlike Samsung’s rivals in Silicon Valley, Mr Sohn made it clear which side of the “frenemy” line his company wanted to be, as it announced the $8bn acquisition of automotive supplier Harman.

“We are not interested in building cars,” says Mr Sohn.

Harman’s relationship with car manufacturers over the world was “as important” as the technology that it offers, he says. “The question is, how do you integrate the technology that can compute the future of the car experience? You can’t do that without having significant relationship with the customer.”

That approach is “a big difference to the Googles and Apples of the world”, says Carolina Milanesi, tech industry analyst at Creative Strategies.

Samsung’s decision to buy rather than build its way into the car industry is the latest in a wave of multibillion-dollar auto-tech acquisitions in recent months.

Softbank’s $32bn purchase of UK-based chip designer Arm Holdings in September was driven in large part by its chairman Masayoshi Son’s conviction that connected vehicles will be the “next big thing”. Last month, mobile chipmaker Qualcomm bid $47bn for NXP, which has a leading position in automotive processors.

Samsung believes its purchase of Harman — which makes a wide range of audio, connectivity and security technology, with two-thirds of revenues coming from the car sector — will open up a market worth $100bn a year by 2025.

The Korean electronics company has been considering how to seize that opportunity for almost a year, after setting up an automotive electronics team last December and making more than a dozen investments in start-ups in the field.

Meanwhile, the smartphone market has declined and Samsung’s position has become more precarious following the costly and embarrassing recall of the Galaxy Note 7 after dozens of its flagship handsets burst into flames. That may have accelerated their efforts to diversify, Ms Milanesi says.

“If you look at Samsung, the key problem is the lack of organic growth. But with this acquisition, they have made a quantum change,” says Hwang Min Seong, an analyst with Samsung Securities.

“And it is not a big-ticket deal. If it was a big-ticket deal, I would be concerned, but this is just $8bn … that is what I like,” says Mr Hwang, comparing the buyout price with the company’s $60bn cash pile.

Samsung’s automotive division accounts for less than 1 per cent of its revenues. Now, it is in pole position in the race to colonise the inside of the car, providing an array of technology services from vehicle internet access to data analytics.

Mr Sohn says the Harman acquisition will also help it with the machine learning technology that is key to making self-driving cars learn from the environment around them.

As well as the speakers and other audio technology for which its brand is best known to consumers, Harman’s portfolio also includes over-the-air software updates — something future cars will use to upgrade their performance or fix bugs while on the road.

What it does not include, however, are things such as thermal systems and powertrains that other “tier 1” automotive components suppliers provide. That makes the pair a good fit, says Mark Boyadjis, analyst at IHS Markit, a research group.

“Harman connects very well to Samsung because there is not much overlap between the two companies yet. There are no other areas that Harman services that Samsung wouldn’t be interested in,” as there might have been with larger suppliers such as Continental, Bosch or Delphi, he says. Shares in auto suppliers such as Delphi, Visteon and Lear all rose on Monday following the deal.

IHS had previously predicted that Harman would gain about 10 per cent of the $60bn vehicle electronics market by 2022, putting it among the top three in the sector, but Mr Boyadjis believes that could increase as Samsung’s scale helps it drive down costs and prices. Samsung also sees opportunities to combine its display technology with Harman’s audio expertise.

Even as Uber, Google, Baidu and Apple all continue to work on self-driving cars, Dinesh Paliwal, Harman’s chief executive, believes Silicon Valley companies “underestimate the complexity of the industry”.

“Long-term relationships are vital to success in the auto business,” he said on a recent conference call. “This is a big move. This will shake the industry.”

>>> Farallon Capital discloses updated portfolio positions in 13F f


Farallon Capital discloses updated portfolio positions in 13F filing: new HLF CTXS positions

Highlights from 2016 Q3 filing as compared to 2016 Q2 filing:
  • New positions: AMRN (~2.11 mln shares), HLF (~2.1 mln), ISIL (~1.75 mln), CTXS (~1.28 mln), ACAS (~1.28 mln), TWTR (~0.67 mln)
  • Increased positions in: RAD (to ~5.2 mln shares from ~0.47 mln shares), HDS (to ~5.79 mln from ~3.93 mln), VIP (to ~5.79 mln from ~1.67 mln), STJ (to ~9.13 mln from ~4.6 mln)
  • Decreased positions in: SSNC (to ~3.37 mln shares from ~4.97 mln shares), ALSN (to ~3.63 mln from ~5.08 mln), KLXI (to ~2.82 mln from ~4.1 mln)
  • Closed positions in: FOXA (from ~5.09 mln shares) BEAV (from ~1.36 mln), ZFGN (from ~0.84 mln), TEX (from ~0.5 mln)

>>> Soroban Capital (Eric Mandelblatt) discloses updated portfolio


Soroban Capital (Eric Mandelblatt) discloses updated portfolio positions in 13F filing:

Highlights from 2016 Q3 filing as compared to 2016 Q2 filing:
  • New positions in: LYB (~5.52 mln shares), CRC (~2.05 mln), WLK (~2.02 mln), MAR (~1.3 mln), AXTA (~0.8 mln), AAP (~0.6 mln), PCLN (~0.15 mln)
  • Maintained positions in: WMB (~21 mln shares), MPC (~10.74 mln shares), ADSK (~10.04 mln shares), LBRDK (~8.89 mln shares), NXPI (~5.24 mln shares), UNP (~4.37 mln shares), CHTR (~4.2 mln shares), SBAC (~2.05 mln shares)
  • Decreased positions in: FLT (to ~0.97 mln shares from ~1.46 mln shares), AVGO (to ~2.03 mln from ~2.5 mln)
  • Closed positions in: PF (from ~2.55 mln shares)