Reuters - Italy's Monte dei Paschi postpones capital plan to Tuesday -sources

Italy's Monte dei Paschi postpones capital plan to Tuesday -sources

MILAN, Oct 24 (Reuters) - Italy's Monte dei Paschi di Siena has postponed the release of a statement on a capital-boosting strategic plan and third-quarter results to Tuesday, sources close to the matter said, without giving a reason for the delay.
A board meeting which started at 0800 GMT on Monday to give the plan the go-ahead, was still underway 10 hours later.
The board approved the turnaround plan, meant to help the bank raise 5 billion euros ($5.44 billion) from investors, earlier in the day, one board member said, adding there was unanimous backing from all board directors.
"It's a very good plan, we are confident," he said as he left the meeting, while it was still going. He added a shareholder meeting to approve the capital measures would be held by the end of November.
A union representative said separately that the new plan envisages 1,600 layoffs, on top of another 1,400 previously announced by the lender, and would also include 300 new hires.
A meeting between chief executive Marco Morelli and union representatives which had been due to take place on Monday evening was also delayed, a labor official said.
Morelli, the former Italy head of Bank of America Merrill Lynch, took over as CEO of the country's third-largest bank in mid-September, charged with winning investor support for the fundraising plan.
Drawn up with the help of adviser JPMorgan, the plan also envisages the sale of 28 billion euros in bad loans to keep the bank afloat after it emerged as the weakest lender in Europe in the latest round of industry stress tests over the summer.
Shares in the troubled Tuscan lender rose more than 30 percent on Monday and closed up 28.3 percent.
The jump added to a week-long rally buoyed by the prospect of an alternative rescue scheme brokered by veteran Italian banker and former industry minister Corrado Passera, although the stock remains down more than 70 percent so far this year.
Some investors are skeptical over the Tuscan bank's ability to carry out a third share issue in as many years at a time when banking stocks trade at a fraction of their book value as negative interest rates eat into profits.
A source familiar with the matter said various Gulf-based sovereign wealth funds were looking at Monte dei Paschi, but have yet to make a commitment
"There needs to be a business plan before these funds are in a position to make up their mind on Monte dei Paschi," the person said. "After (the plan's) presentation it will become clearer whether they want to come onboard."

>>> SNB President Jordan: policy will have to normalize eventually; negative rat

SNB President Jordan: policy will have to normalize eventually; negative rates are indispensable for now given the significant overvaluation of the franc and low global rates 
- negative rates are having the desired effect; side effects increase the longer rates stay low
- "In Switzerland, the cost associated with the current negative interest rate is clearly lower than the cost of holding cash. Consequently, demand for cash has not yet risen substantially. So the effective lower bound for interest rates has not yet been reached, but we know that it exists."
- still have room to maneuver on rates if needed
- helicopter money does not fall within SNB's purview
- transaction tax is not a panacea, and could have side effects

>>> Fed's Evans (dove, non-voter): sees less headroom to raise rates; overshooti

Fed's Evans (dove, non-voter): sees less headroom to raise rates; overshooting inflation target might be appropriate - comments in Chicago 
- pickup in wage growth is only modest 
- because real interest rates are lower, it means real monetary policy is not as accommodative as it may appear
- sees relatively good near-term growth outlook
- good news is that inflation is closer to the target
- Expects 2-2.5% growth in H2 
- there's an arithmetic constraint on potential US gorwth; now sees growth at 1.75-2%
- Fed should be more explicit about what economic data it needs to raise rates further

Q&A: inflationary pressures are hard to find
- reiterates wants to get rates higher so Fed has room to cut rates in next recession

FT : AT&T chief at the reins for another big deal

AT&T chief at the reins for another big deal
Stephenson goes from Oklahoma to Hollywood red carpet with Time Warner deal

When Randall Stephenson took over as chief executive of AT&T in 2007, his predecessor gave him some advice.

“You are not here as a keeper of these assets,” Ed Whitacre told him, according to his memoir, American Turnaround. “There’s a lot to be done yet — so make sure you keep going, and keep growing.”
He took the words to heart.
Under Mr Stephenson's stewardship, AT&T has continued to engage in the perpetual dealmaking that became a hallmark of Mr Whitacre’s tenure, during which it went from a regional player to one of the world’s largest telecoms groups.
AT&T on the weekend announced its biggest deal to date, the $85.4bn purchase of Time Warner, the owner of HBO, CNN and Warner Brothers.
But not all of Mr Stephenson’s deals have been successful.

In 2011, the Department of Justice blocked the company’s bid to acquire rival network T-Mobile US for $49bn, arguing it would hurt competition in the wireless industry.
He also toyed with the idea of buyingVodafone, the London-listed mobile network, before deciding that the regulatory regime in Europe was prohibitively onerous.
Mr Stephenson’s ability to navigate the corridors of Washington had clearly improved by last year, when the company’s $49bn acquisition of DirecTV, the satellite group, was approved even as other large deals were blocked, such as the putative takeover of Time Warner Cable by Comcast.
The purchase of DirecTV took the company full square into the media business, catapulting it to become the world’s largest provider of pay-TV.
But DirecTV, like AT&T, is fundamentally a “dumb pipes” business — providing infrastructure for others to transmit their content, rather than making TV shows and movies itself.
With the planned acquisition of Time Warner, Mr Stephenson faces his biggest challenge so far, both in terms of convincing regulators to give a green light, but also in trying to marry the cultures of a telecoms group and a content producer.
The glitzy world of red carpets and star-studded parties is perhaps a strange fit for Mr Stephenson, a 56-year-old native of Oklahoma whose father worked in the cattle business.
“My favourite story about my father is they were contemplating bringing a lottery to Oklahoma,” he told an audience of journalists at a charity dinner last year. “Somebody asked my father what he’d do if he won a million dollars, and he said he’d put it in the cattle business until it was gone too.”

The world of movies and TV shows could not be further away from cow farming, but a person briefed on Mr Stephenson’s strategy says the Time Warner deal is not borne out of a hankering for razzmatazz.
An accountant by profession, Mr Stephenson has spent almost his career in the telecoms industry, and he would have preferred to grow the company’s core wireless and wireline assets instead, the person said.
But a string of unfavourable regulatory decisions has steadily convinced him to diversify.
Not only did the Obama administration block the T-Mobile US deal, it also reclassified the internet as a public utility, effectively stopping companies such as AT&T from boosting profits by selling “fast lanes” to content companies.
Such an environment has made Mr Stephenson more cautious about increasing the record amount that AT&T invests in its network, and more reticent when it comes to dealmaking in the telecoms sector.
Hence his decision to branch out, by buying DirecTV, but also by investing heavily in wireless telecoms in Mexico, where AT&T has bought roughly $4.5bn of assets and committed to spending a further $3bn to bring them up to scratch.
If regulators approve the Time Warner transaction, it would be the second time that Mr Stephenson has snapped up an asset once coveted by Rupert Murdoch.
Mr Murdoch’s entreaties to Time Warner were rebuffed last year, while he was also wrongfooted when trying to buy DirecTV in 2001.
Ironically, Mr Stephenson turned to Peter Chernin, an erstwhile Murdoch lieutenant, to help broker the deal with Time Warner. The pair had become close since 2014, when AT&T and the Chernin Group formed Otter, a joint venture focused on digital media.
“He is one of the most brilliant content people in the world,” Mr Stephenson said of Mr Chernin at the dinner last year.

>>> US Gapping up:

Gapping up:

In reaction to earnings/guidance:
  • PHG +4.9%
  • TMUS +1.6%,
M&A news:
  • BEAV +16.6% (to be acquire by Rockwell Collins (COL) for $62.00/share in cash & stock, or ~$8.3 bln),
  • JPEP +9.4% (to merge with American Midstream Partners (AMID) in $2 bln deal),
  • AMTD +1.3% (confirms deal to acquire Scottrade in a cash and stock transaction valued at $4 bln; also reports earnings),
European financials showing relative strength:
  • SAN +3.2% (Spanish stocks strong on political stability), CS +2.6%, DB +2.3%.
Select coal related names seeing strength:
  • MTL +14.1% (still checking for anything specific), YZC +5.7% (reports Q3 operational data),
Other news:
  • AAC +11.1% (announces that certain of its subsidiaries have reached a resolution with the Attorney General of the State of California),
  • AGEN +6.1% (seeing some relief after selling off for past two weeks),
  • LC +2.9% (schedules Q3 earnings release for Monday, November 7),
Analyst comments:
  • TRUE +3.7% (upgraded to Buy from Neutral at B. Riley & Co.),

>>> US Gapping Down:

Gapping Down:

In reaction to disappointing earnings/guidance:
  • VFC -4.7%, KMB -3.8%, GFI -2.3% (provides Q3 operating update, affirms FY16 outlook; gold produced was +1.5% q/q)
M&A Related:
  • SYT -7.2% (it and ChemChina failed to submit concessions to the EU by deadline),
  • COL -1.9% (to Acquire B/E Aerospace (BEAV) for $8.3 Billion in Total Consideration),
  • T -1.7%, TWX -1.0% (Time Warner (TWX) confirms deal to be acquired by AT&T (T) for $107.50/share in cash & stock, or ~$85.4 bln)
Other news:
  • BAS -25.6% (enters into a restructuring support agreement with its certain term loan lenders; under the terms, co must file chapter 11 cases to implement the Plan on or before October 25),
  • TDW -15.1% (receives limited waiver extensions from its lenders and noteholders until November 11, 2016),
Analyst comments:
  • EA -1.9% (downgraded to Neutral from Buy at BofA/Merrill),
  • LECO -1.8% (downgraded to Underperform at Longbow),