>>> Kraft Heinz may buy Unilever's food division

Kraft Heinz may buy Unilever's food division - report (translated)
22 FEB 2017
Kraft Heinz may buy Unilever's food division, according to a report by Dutch daily Het Financieele Dagblad that cited discussions with several industry analysts.

The report said that turnover in Unilever's food division is lagging behind other parts of the conglomerate and only brings in a quarter of Unilever's turnover. The food division brought in turnover of EUR 6.3bn out of a total of EUR 26.3bn in 1H16.

The report says a takeover of the food division might be leverage for acquiring the entire company.

Unilever's growth is mostly in domestic and personal care products and the company could gain in value if it chooses to move further into that business sector, the report said.

Unilever last weekend rejected a EUR 134bn takeover offer from Kraft Heinz.

>>> Europe : Brokers Upgrades & Downgrades - 22nd of February 20

>>> Up
*Cellnex Raised to Hold at Kepler Cheuvreux, PT EU15
*Euronext Raised to Buy at AlphaValue
*Flughafen Wien Raised to Accumulate at Erste Group, PT EU29.50
*Lukoil Raised to Buy at Deutsche Bank
*STMicroelectronics Raised to Overweight at Barclays

>>> Down
*Allianz Cut to Hold at Berenberg, PT EU175
*InterContinental Cut to Equal-Weight at Barclays
*Jyske Cut to Sell at ABG Sundal, PT DKK325
*Norwegian Air Cut to Sell at Citi, PT NOK225
*Salzgitter Cut to Hold at Bankhaus Lampe, PT EU40
*Swedish Match Cut to Hold at SocGen, PT SEK300

>>> Initiation
*IMI Rated New Buy at Liberum, PT 1460p
*Phoenix Reinstated Underweight at Barclays, PT 673p

>>> Call

>>> Parker Drilling Falls on Common Stock, Convertible Offerings

Parker Drilling Falls on Common Stock, Convertible Offerings
Parker Drilling offering 12m common shares, $50m convertible preferred stock via Barclays.
  • Proceeds intended for general corporate purposes, including working capital, capex, acquisitions or the repayment, redemption or refinancing of a portion of its debt
  • PKD down 6.4% post-mkt (vol. 15k)

>>> Asian Update

Asia Mid-Session Market Update: China property prices stabilize further; Aussie construction data unexpectedly declines

***US Session Highlights***
- (IR) Iran's Supreme Leader Ayatollah Ali Khamenei said to denounce the reconciliation plans with Israel and urge resistance to liberate the Palestinian territories
- OPEC Sec Gen Barkindo: Jan compliance was over 90%; looking to do better in coming months; compliance committee to meet on Wed, Feb 22nd; could issue statement afterwards
- (US) Fed's Kashkari: Fed has the unstated third mandate of financial stability; Difficult to see how the math would work on boosting US economic growth to 4%
- (US) FEB PRELIMINARY MARKIT MANUFACTURING PMI: 54.3 V 55.3E
- (US) Trump admin said to be readying executive action to lift coal mining ban on federal lands - press

***US markets on close: Dow +0.6%, S&P500 +0.6%, Nasdaq +0.5%***
- Best Sector in S&P500: Real Estate
- Worst Sector in S&P500: Materials
- Biggest gainers: SNI +7.2%, MDLZ +5.8%, FSLR +5.1%, SJM +4.4%, CNC +4.0%
- Biggest losers: FCX -5.2%, TSN -3.0%, GPC -3.0%, RRC -2.7%, VRTX -2.0%
- At the close: VIX 11.6 (+0.1pts); Treasuries: 2-yr 1.24% (+1bps), 10-yr 2.43% (flat), 30-yr 3.04% (+1bps)

***US movers afterhours***
- DEPO: Reports Q4 $0.48 v $0.32e, R$124M v $123Me; +6.5% afterhours
- XPO: Reports Q4 $0.24 v $0.20e, R$3.68B v $3.68Be; +3.7% afterhours
- RRGB Reports Q4 $0.35 v $0.29e, R$291.5M v $298Me; Guides initial FY17 EPS $2.70-3.00 v $2.96e; +3.2% afterhours
- AWK: Reports Q4 $0.57 v $0.56e, R$802M v $811Me; +1.8% afterhours
- FSLR: Reports Q4 $1.24 v $0.97e, R$480M v $392Me; +1.3% afterhours

- GBT: To sell $75M in common stock (7% of market cap); -9.7% afterhours
- FUEL: Reports Q4 -$0.09 adj v $0.10e, R$124.8M v $122Me (1 est); -9.8% afterhours
- TXRH: Reports Q4 $0.29 v $0.37e, R$484.7M v $497Me; raises dividend to $0.21 from $0.19 (implied 1.8% yield); -10.4% afterhours
- PKD: Offers 12M shares of Common Stock (9.5% of shares outstanding) and Series A Mandatory Convertible Preferred Stock; -12.8% afterhours
- SREV: Reports Q4 $0.02 v $0.03e, R$68.7M v $69.6Me; Guides Q1 R$55-58M v $62.5Me; -22.2% afterhours

***Asia Key economic data:***
- (CN) CHINA JAN PROPERTY PRICES M/M: RISE IN 45 OUT OF 70 CITIES VS 46 PRIOR; Y/Y: RISE IN 66 OUT OF 70 CITIES V 65 PRIOR
- (AU) AUSTRALIA Q4 CONSTRUCTION WORK DONE Q/Q: -0.2% V +0.5%E; 6th straight quarter of decline
- (AU) AUSTRALIA Q4 WAGE PRICE INDEX Q/Q: 0.5% V 0.5%E; Y/Y: 1.9% V 1.9%E
- (AU) AUSTRALIA JAN SKILLED VACANCIES M/M: 1.0% V 1.4% PRIOR
- (AU) AUSTRALIA JAN WESTPAC LEADING INDEX M/M: 0.0% V 0.4% PRIOR
- (NZ) NEW ZEALAND JAN CREDIT CARD SPENDING M/M: 0.2% V 3.2% PRIOR; Y/Y: 7.1% V 8.6% PRIOR
- (MY) Malaysia Jan CPI y/y: 3.2% v 2.7%e

***Asia Session Notable Observations, Speakers and Press***
- Asian equity markets are mixed amid muted volatility in spite of all US indices hitting fresh record highs after a 3-day weekend. Investors still await FOMC policy meeting minutes for cues on policy bias as they calibrate expectations for a tightening next month. During US hours, Fed's Harker reiterated the consideration of March tightening should be on the table, while comments from Fed's Mester during Asia session noted US being at full employment and inflation expectations moving higher. Probability of the March move is still below 20, though the odds for a 25bp move by May has risen to about 45%.
- In FX, USD was under the most pressure against JPY and GBP - USD/JPY fell to session lows in the wake of BOJ Gov Kuroda stating oil prices have likely stopped weighing on CPI, potentially diminishing the need for bolder easing. GBP/USD saw more pronounced gains above $1.25 after reports that the Brexit law passed the reading in the upper house of parliament without a vote.
- China developer names traded mixed and little changed after the latest property prices showed continued trend of moderating. Prices rose in 45 out of 70 cities v 46 in prior month, while avg price growth across the top cities slowed to 0.2% v 0.3% prior m/m and 12.2% v 12.4% prior y/y. China Stats Bureau said that data shows home prices stabilizing in lower tier cities and outright falling sequentially in top-tier cities.
- In Australia, Q4 construction work volume surprisingly contracted for the 6th straight quarter against expectation of a rise, though the decline was dominated by the Engineering component as others (Building, Residential, and non-Residential) were all positive. Some economists have already revised their expectations for Q4 growth based on the construction drop. Among notable earnings, Woolworths rose over 4% despite missing expectations after completing writedowns on home improvement unit, Fortescue fell over 2% on profit-taking despite the strong growth in profits, and Woodside Petroleum was up a marginal 0.1%.


China:
- (CN) NBS: China home prices have stabilized
- (CN) According to Nielsen, China Consumer Confidence in Q4 rose 2pts from Q3 to 108 - Shanghai Daily

Japan:
- (JP) Bank of Japan (BOJ) Gov Kuroda: More easing possible if needed to reach price target, but chances are small for a further negative rate cut
- (JP) Japan Fin Min Aso: no plan to issue negative yield JGB at this time

Australia/New Zealand:
- (AU) JPMorgan lowers Australia Q4 GDP forecast to 0.7% from 0.9% following latest construction data
- (AU) RBA Gov Lowe: Reiterates Australia growth expectations of about 3% GDP for next 2 years and gradual rise in inflation; Debt levels are impacting
- (NZ) AgriHQ dairy analyst: Today's decline in Dairy Trade Auction is a short term reaction to balanced market - NZ press

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.1%, Hang Seng +0.8%, Shanghai Composite -0.2%, ASX200 +0.2%, Kospi +0.1%
- Equity Futures: S&P500 +0.1%; Nasdaq +0.1%; Dax +0.1%; FTSE100 flat

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0530-1.0555; JPY 113.35-113.70; AUD 0.7665-0.7697; NZD 0.7155-0.7175
- Apr Gold -0.2% at $1,237/oz; Apr Crude Oil +0.3% at $54.48/brl; Mar Copper -0.2% at $2.74/lb
- (NZ) Fonterra Global Dairy Trade Auction: Dairy Trade price index: -3.2% v +1.3% prior (biggest decline since Jan 3rd)
- SLV: iShares Silver Trust ETF daily holdings rise to 10,428 tonnes from 10,410 tonnes prior; first rise since Jan 27th
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.8830 V 6.8790 PRIOR; 3rd straight weaker setting
- (CN) PBOC to inject combined CNY120B v CNY100B prior in 7-day, 14-day and 28-day reverse repos
- (AU) Australia sells A$11.0B in 2028 2.75% bonds; avg yield 3.005% (largest sale on record)

***Asia equities / Notables / movers by sector***
- Consumer discretionary: FXJ.AU Fairfax Media +8.6% (H1 result); APE.AU AP Eagers +1.3% (FY16 result); TGR.AU Tassal Group +5.2% (H1 result); CCL.AU Coca-Cola Amatil +5.7% (FY16 result); BGA.AU Bega Cheese +3.9% (H1 result)
- Consumer Staple: WOW.AU Woolworths +4.4% (H1 result)
- Financials: 1862.HK Jingrui Holdings +1.7% (profit warning); 1036.HK Vanke Property (Overseas) -0.8% (FY16 result); MNY.AU Money3 Corp -1.4% (H1 result); MMS.AU McMillan Shakespeare +8.3% (H1 result)
- Industrials: FBU.NZ Fletcher Building Limited -5.2% (H1 result); QUB.AU Qube Holdings -0.6% (H1 result)
- Technology: 6502.JP Toshiba Corporation +18.4% (said to raise expectations for chip unit sale); ISD.AU iSentia Group -34.9% (H1 result); WTC.AU Wise Tech +9.4% (H1 result); AGI.AU Ainsworth Game Technology +2.2% (H1 result)
- Materials: FMG.AU Fortescue Metals Group -2.8% (H1 result); BHP.AU BHP Billiton -0.6% (H1 result)
- Energy: 135.HK Kunlun Energy -0.6% (profit warning); WPL.AU Woodside Petroleum +0.1% (FY16 result)
- Healthcare: BKL.AU Blackmores -10.4% (H1 result); IFN.AU Infigen Energy -1.8% (H1 result); HSO.AU Healthscope +5.6% (H1 result)
- Telecom: SLC.AU Superloop +6.6% (signs contract)

>>> US After Hours Summary: WMGI +5%, DEPO +5%, RRGB +3%, FSLR +2% fo


After Hours Summary: WMGI +5%, DEPO +5%, RRGB +3%, FSLR +2% following earnings/guidance, NVDQ +25% continued strength following Cigna coverage news... SREV -25%, TXRH -10%, WLL -4.2% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: LNTH +7% (also the company and GE Healthcare sign a a term sheet relating to the continued Phase III development and worldwide commercialization of flurpiridaz F18), WMGI +5.4%, DEPO +4.6%, DL +4.3%, XPO +3.7%, SRT +3.4%, RRGB +3.3%, HCLP +3.2% (light volume), VMI +2.2%, EXR +2% (ticking higher), FSLR +1.8% (also secures syndicated financing arranged by Mizuho Bank for utility-scale solar project in Japan), UVE +1.7%, LZB +1.4%, WCN +1.1%

Companies trading higher in after hours in reaction to news: NVDQ +25.3% (continued strength after confirming Cigna now covers Dermacell for breast reconstruction surgery and Dermacell AWM for diabetic foot ulcers), TRCO +3% (Starboard Value discloses 6.6% active stake)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SREV -24.8%, TXRH -10.1%, FUEL -9.8%, DAC -7.4% (ticking lower), WLL -4.2%, PZZA -3.5%, FE -2.9%, KAR -2.5%, NEM -2.1% (also reports gold reserves of 68.5 mln oz for 2016 vs 71.1 mln oz in 2015; provides FY17 capex guidance), SAND -1.7% (light volume), NFX -1.2%

Companies trading lower in after hours in reaction to news: PKD -10.6% (commences 12 mln common stock offering and $50 mln public offering of Series A Mandatory Convertible Preferred Stock), GBT -10% (to sell $75 mln in shares of its common stock in a registered underwritten public offering), AGEN -6.2% (discloses that the Alliance for Clinical Trials in Oncology's Data and Safety Monitoring Board interim analysis for futility of the Phase II trial of Prophage G-200 vaccine in combination with bevacizumab suggested that the trial is unlikely to demonstrate that the vaccine will lead to a better survival than bevacizumab as a monotherapy), TLLP -2.5% (commences 5 mln common units offering), YUM -2% (following block trade pricing), CUZ -1.5% (commences public offering of 63,571,336 shares of its common stock -  includes 25 mln shares offered by the company)

WSJ : Carl Icahn Takes Stake in Bristol-Myers Squibb

Carl Icahn Takes Stake in Bristol-Myers Squibb
Sources say activist investor sees value in drugmaker’s pipeline

Carl Icahn has taken a stake in Bristol-Myers Squibb Co., making him the second big activist to pressure the company following disappointment in its cancer-treatment efforts.

Mr. Icahn owns a large stake and believes the New York drug giant has a good pipeline that would help make it an attractive takeover target, people familiar with the matter said. It isn’t clear how big the stake is.

On Tuesday, Bristol-Myers announced it would add three directors to its board and buy back $2 billion in stock in a pact with another activist, Jana Partners LLC.

Jana took a stake last year and began pushing for board changes after Bristol-Myers announced in January that a lung-cancer treatment wouldn’t get approval as fast as hoped, according to a person familiar with the matter. That warning increased investor fears Bristol-Myers would lose out to rivals in a crucial treatment sphere and contributed to a roughly 30% decline in the stock since July. The shares had fallen by nearly 2% Tuesday afternoon to $53.55 following news of the settlement with Jana. The drug company’s market value now stands at about $90 billion.

Mr. Icahn has a history of successfully pushing for deals among pharmaceutical companies, and his presence on Bristol-Myers’ shareholder register will likely add to recent speculation that a bidder could swoop in following the stock decline. Such a possibility has helped boost Bristol-Myers shares somewhat since January.

The famed investor, who just turned 81, has a history with Bristol-Myers. In 2008, he was a large shareholder in ImClone Systems Inc. and helped rebuff Bristol-Myers’ attempt to buy the company, its partner on an important cancer drug, for $4.7 billion. Instead, Mr. Icahn supported Eli Lilly & Co. when it swooped in to buy ImClone for $6.5 billion.

In 2012, Mr. Icahn took a stake in Amylin Pharmaceuticals Inc. and called on the company to explore a sale after it had rebuffed a bid from Bristol-Myers. After the diabetes-treatment maker ran a sales process, it agreed to a higher bid, valued at $5.3 billion, from Bristol-Myers.

Bristol-Myers pioneered cancer immunotherapy, which aims to fight the disease using the body’s immune system, but its recent missteps had critics wondering if it would be surpassed by competitors like Merck & Co. Management has sought to reassure investors that its immunotherapy treatments have a bright future.

On Tuesday, Bristol-Myers said it recruited former senior executives from Bausch & Lomb Inc. and Vertex Pharmaceuticals Inc.—Robert Bertolini and Matthew Emmens, respectively—to its board, effective immediately, along with Theodore Samuels, who currently sits on the boards Perrigo Company PLC and Stamps.com.


The Bristol-Myers board will be temporarily expanded to 14 seats, but only 11 directors will stand for election at the company’s annual meeting in May. Current Chairman Lamberto Andreotti will retire, as previously announced.