>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • ADBE +4.9%, CPRT +4.1%, FDX +3.8%, NUS +1.9%, ( reaches resolution with the SEC, which fully resolves the previously disclosed SEC investigation in its entirety; sees Q3 revs at high end or above prior guidance), GTN+0.6%, DEO +0.5%, (issues trading update ahead of its AGM)
M&A news:
  • ABB +0.7% (to sell its Cable Business to NKT Cables for EUR836 mln)
  • SPWR +0.5% (8point3 Energy Partners LP to acquire Sunpower's 49% stake in its 102-MW Henrietta Solar Project for about $134 mln)
Select financial related names showing strength: BCS +3.9%, ING +3.7%, SAN +2.5%, CS +2.1%

Select metals/mining stocks trading higher: AU +4.6%, DRD +4.6%, VALE +3.7%, AG +3.5%, GFI +2.9%, GDX+2.5%, ABX +2.3%

Select oil/gas related names showing strength: CHK +3.4%, OAS +2.5%, MRO +2.4%, SSL +2.2%, RIG +1.9%,RDS.A +1.3%, BP +1.2%

Other news:
  • EBIO +12.8% (announces deal to acquire privately-held Viventia )
  • USEG +10.1% (thinly traded, entered into an Earnings & Participation Agreement on a previously announced project with IronHorse Resources)
  • ADMS +9.7% (announces results of EASE LID 3, says the improvement in LID was statistically significant and confirmed safety and efficacy data from earlier pivotal trials),
  • CLVS +9.1% (continued strength following today's M&A chatter)
  • SPSC +4.9% (to join S&P SmallCap 600)
  • FOXF +4.9% (light volume - to join S&P SmallCap 600)
  • FATE +4.7% (granted orphan designation by the FDA for ProTmune )
  • EXEL +4.3% (will provide update on CABOzantinib in clinical data oral presentation at the ESMO Congress on Oct 10)
  • SRPT +3.2% (announces favorable USPTO decisions in Exon 51 and Exon 53 composition of matter patent interference cases against BioMarin Pharmaceutical)
  • AGTC +2.4% (CFO disclosed purchase of 10000 shares, worth total of $87.5K )
  • KITE +1.6% ( enters an exclusive, worldwide license with the NIH for intellectual property related to multiple T-cell receptor based product candidates for the treatment of tumors expressing mutated KRAS antigens)
  • AXAS +1.3% (sells its Portilla field and associated surface acreage for net proceeds of approximately $13 million and its 12,178 acre surface ranch and ½ of the Company's minerals on the property for gross proceeds of $6.7 million)
  • TGT +1.3% (announces new $5 billion share repurchase program)
  • MSFT +1.1% (dividend increased 8 percent; $40 billion authorized for share repurchase)
  • COO +1.1% (to join the S&P 500)
  • UPS +1% (following FDX earnings)
Analyst comments:
  • CONN +7.3% (upgraded to Buy from Hold at Stifel)
  • ANFI +6.5% (initiated with a Buy at Jefferies)
  • ESV +5.7% (upgraded to Buy from Neutral at Goldman )
  • PBYI +4.1% (upgraded to Buy at Stifel)
  • BCS +3.9% (upgraded to Buy from Hold at HSBC)
  • SYRG +2.6% (initiated with a Outperform at Credit Suisse)
  • NE +2.5% (upgraded to Neutral from Sell at Goldman)

>>> Vale board rumoured to approve today sale of 66% stake in Vale Fertilizantes

Vale board rumoured to approve today sale of 66% stake in Vale Fertilizantes to Mosaic for USD 3bn

The board of Brazilian mining company Vale will approve today the sale of 66% of its fertilizer unit, Vale Fertilizantes, toMosaic for USD 3bn, a Brazilian journalist Lauro Jardim wrote in his blog, without citing any source. The blogpost was published on the website of local newspaper O Globo.
Vale decided to divide the sale of its fertilizer unit in two in order to get a better total value for the deal, the Portuguese-language article noted. The company is in negotiations to sell a minority stake in the chemicals business of the unit for USD 1bn. However, this deal will not be announced on 21 September, the item added.
The item did not provide any other information on the deal.
As previously reported, US-based Mosaic hired JPMorgan as advisor for this deal.

Bilan.ch : Les propriétaires de Chanel encaissent 1,6 milliard de dividende

Après des années de croissance, la maison de luxe a vu ses ventes baisser de 17% en 2015. L'enseigne indépendante semble se diriger vers un tournant stratégique.


Chanel n’a pas été épargnée par les vents contraires qui soufflent sur le marché mondial du luxe. Cet empire n’est pas coté en Bourse et ses uniques propriétaires, les frères Alain et Gérard Wertheimer, ne donnent jamais de chiffres. Mais les comptes 2015 de Chanel International B.V., l’entité néerlandaise qui contrôle la maison de luxe et ses filiales, révèlent que ses résultats ont ralenti l’an dernier, en ligne avec le secteur.

Selon ce document de 92 pages, en notre possession, le groupe a réalisé un chiffre d’affaires de 6,24 milliards de dollars, en chute de 17% par rapport à 2014 alors que le résultat net a reculé de 6,8% à 1,34 milliard. Le résultat opérationnel a plongé de 23% à 1,6 milliard, engendrant une rentabilité en baisse à 25,7%, contre 27,6% un an plus tôt.

Le groupe a subi la chute du tourisme en France et en Belgique, suite aux attentats, ainsi que la baisse des ventes en Chine et la récession au Brésil et en Russie. Comme les comptes de Chanel sont consolidés en dollars, ces résultats sont aussi la conséquence de la hausse de la monnaie américaine face à l’euro et aux autres monnaies mondiales. Pour l’année en cours, la société s’attend à une performance stable. Conséquence, l’agence Bloomberg a revu à la baisse son estimation de la valeur du groupe à environ 19 milliards de francs.

Mais il n’y a pas que des mauvaises nouvelles dans les comptes de Chanel. Sous la rubrique «dividendes payés aux actionnaires», on découvre que les frères Wertheimer se sont octroyés 1,64 milliard de dollars, nettement plus que les 69 millions versés en 2014. Et la société dispose encore de 1,3 milliard en cash à la banque.

Préparer la transition
Reste que cette société emblématique semble être à un tournant de son existence. C’est aujourd’hui l’une des rares griffes encore indépendantes. Sa notoriété n’a cessé de croître notamment grâce à Karl Lagerfeld. Mais, à 82 ans, le directeur artistique du groupe, qui est entré chez Chanel en 1982, n’est pas éternel. Il va falloir préparer sa succession et la transition à la tête de la maison.

Début janvier, Chanel a remercié sa directrice générale Maureen Chiquet pour «divergences stratégiques». Elle officiait dans le groupe depuis près de dix ans. C’est Alain Wertheimer, 67 ans, qui a repris directement les rênes. Il vit à New York, alors que Gérard, 65 ans, supervise la division montres depuis Genève. A moyen terme, c’est l’un des fils d’Alain qui pourrait prendre les commandes de Chanel.

Enfin, pour relancer son célèbre N°5, détrôné du podium des parfums les plus vendus dans le monde, Chanel a revisité sa mythique fragrance dont la première version date de 1921. Elle vient de dévoiler une nouvelle version, baptisée «No5 L’Eau», qui vise à conquérir un public plus jeune.

Le Monde : Chez Chanel, les résultats baissent, les dividendes explosent


Au moins les propriétaires de Chanel, les frères Alain et Gérard Wertheimer, n’auront pas été affectés par la crise que traverse tout le secteur du luxe. Les actionnaires de cet empire non coté ont touché à eux deux 1,64 milliard de dollars (1,47 milliard d’euros) de dividendes en 2015. Une somme infiniment plus coquette que les 69 millions de dollars qu’ils avaient perçus au cours de l’exercice précédent.

C’est l’une des révélations des 92 pages du rapport annuel 2015 de Chanel International BV – l’entité néerlandaise qui chapeaute le groupe et ses filiales – que le magazine suisse Bilan et Le Monde se sont procuré. Ce document ratifié par le cabinet d’audit Deloitte a été déposé à la chambre de commerce d’Amsterdam.

Comme l’avait déjà révélé l’agence Reuters fin août, Chanel n’a pas été épargné par le retournement du marché. Ce groupe, qui met un point d’honneur à ne jamais diffuser le moindre chiffre, a vu ses ventes plonger de 17 % par rapport à 2014, à 6,24 milliards de dollars. Son résultat net a également reculé de 6,8 %, à 1,34 milliard de dollars. La rentabilité du groupe s’en est seulement un petit peu ressentie puisqu’elle est restée à un niveau extrêmement enviable de 25,7 % (contre 27,6 % un an plus tôt).

« Environnement économique difficile »
A la faveur de la cession de sa filiale Chanel Limited UK (qui représente 11 % de ses ventes) à une autre entité toujours sous son contrôle, le groupe veut faire de Londres un nouveau « centre de management et de direction ». Sans pour autant parler de transfert...

>>> US Early premarket gappers

Early premarket gappers

Gapping up: CLVS +10.5%, USEG +10.1%, ARIA +7.8%, ADMS +7.7%, CONN +6.4%, EXEL +6.2%, SPSC +5.3%,ADBE +4.8%, AU +4.4%, BCS +4.2%, FDX +4.2%, CPRT +4.1%, IDRA +3.9%, GFI +3.8%, VALE +3.7%, DRD+3.4%, SRPT +3.4%, ING +3.3%, MRO +3.2%, AG +2.8%, CHK +2.7%, RIG +2.6%, OAS +2.6%, FOXF +2.5%, KBH+2.5%, SAN +2.1%, SSL +2.1%, CS +2%, NUS +1.9%, KITE +1.6%, ABX +1.6%, GDX +1.5%, RDS.A +1.4%, BP+1.4%, AXAS +1.3%, MSFT +1.3%, XOM +1.3%, PBR +1.2%, GIS +1.2%, AGTC +1.1%, GPRO +1%, UPS +0.9%

Gapping down: MSTX -82.2%, MIRN -26.8%, AERI -5.1%, CDNA -3.5%, SKX -3.2%, JKS -1.9%, LEI -1.4%, AIRG-1.1%, COMM -0.9%

(Manager-Mag) ABB holds power systems division and firmly resists breaking

ABB holds power systems division and firmly resists breaking

ABB maintains its current network division. The Swiss Siemens competitor wants to convince investors in the Capital Markets Day on 4 October with a growth agenda.

The Swiss ABB Group wants the demands of activists around major shareholder Cevian Capital parry with a growth agenda. The strategic review of the current systems division had brought the result that their whereabouts in the Group creates value for shareholders. The reported manager magazin in its new edition, which is available on Friday (September 23) in trade, citing the business community.

The management at ABB CEO Ulrich Spiesshofer will therefore hold on the division. Sells hand was the global system business for high voltage cables NKT Cables as ABB announced on Wednesday.

Instead cleave the power grid technology, ABB is planning to enter a transformation program for the division with sales $ 11.6 billion and 37,000 employees, writes manager magazin. It is primarily a question of identifying areas of growth and to leverage synergies with other businesses of the Group, such as digitization.

The aim is also to increase the cost efficiency, mm, citing the business community. In the medium term could the operating result of the division be increased by a mean hundreds of millions per year, so an internal ABB default.

As the manager magazine further reported that ABB top support of the largest shareholder Investor AB has it (10.5 percent). An ABB spokesman declined to comment on the information.

(Makor) SPECIAL SITUATION: MEDIASET (MS: IM) in light of the Vivendi deal di

SPECIAL SITUATION: MEDIASET (MS: IM) in light of the Vivendi deal dispute - risk/reward skewed to the upside

 

In this note we present four potential scenarios for Mediaset and their valuation implication given the uncertain situation with Vivendi regarding the sale of Mediaset Premium (“Premium”).

On April 2016 Vivendi offered to acquire 100% of Premium but in July pulled back from its original offer and asked to renegotiate. Vivendi proposed a revised offer of which Mediaset rejected and filed for damages in Italian courts. At the same time there have been rumors in the French press that the two parties are trying to reach a new deal/settlement.

 

In the report attached we draw four potential scenarios for Mediaset, in order to assess valuation implications of a range of potential alternatives and what could be the upside/downside of each. We believe the market is now pricing a low probability of a future deal and has significantly marked down the valuation of Mediaset Premium. We note that any other outcome and especially an announcement of a revised deal (or even just renewed talks between the parties) could unlock upside in Mediaset shares. We see the downside risk mainly if Premium losses are higher than market expectations and at the same time Vivendi completely abandons the idea of the acquisition.

 

Below we present a summary of the 4 scenarios and the implied weighted average PT:

 

 

 

Given the attractive risk/reward ratio we would start to build a position of Long MS: IM /Short Mediaset Espana TL5: SM (pro rata of the capital structure) + hedge the rest with short Vivendi.

 

Full report and analysis attached!

 

FT : Drugmaker raises price of acne cream to $10,000 a tube

A US drugmaker producing skin creams for common conditions such as acne and eczema has raised the price of two of its treatments to almost $10,000 a tube in the latest instance of “gouging” in the world’s largest healthcare market, according to figures seen by the Financial Times.
Novum Pharma, a Chicago-based group, last week more than doubled the price of the ointments, even after similar increases by other drugmakers prompted outcry and propelled the topic of high healthcare costs into the US presidential campaign.

Martin Shkreli became an international pariah last year after he increased the price of a drug given to Aids patients from $13.50 to $750 a pill while Mylan, the maker of EpiPen, recently came under fire for a sharp rise in the price of its life-saving allergy injection.
Novum last week raised the price of a 60g tube of Aloquin, which is used to treat conditions such as eczema and acne, by 128 per cent to $9,561.
The ointment contains two inexpensive main ingredients: iodoquinol, a decades-old antibiotic that prevents fungal growth, and aloe polysaccharides, derived from the aloe vera plant. A similar cream containing iodoquinol is readily available as a generic and costs less than $30, while a tube of aloe vera can be bought for a few dollars.
Aloquin’s label says it is “possibly effective”, meaning the US Food and Drug Administration has decided there is only limited clinical evidence suggesting it is safe and works as intended.
“From a clinical standpoint, a drug listed as ‘possibly effective’ by the FDA, shouldn’t be a likely treatment choice by doctors — especially not with a $10,000 price tag,” said Michael Rea, chief executive of Rx Savings Solutions, which sells software designed to help employers and their workers reduce the cost of prescription medicines.
Novum also increased the price of Alcortin A, another skin cream, by the same amount, while a third ointment, Novacort, went from $4,186 for a 29g tube to $7,142.

The high price of medicines in the US has become a central issue in the presidential campaign, with Hillary Clinton, the Democratic nominee, launching attacks on several companies, including Turing Pharmaceuticals, which Mr Shkreli used to run, and Valeant, a Canadian drugmaker.
Most recently, Mylan came under the spotlight for raising the price of its EpiPen by more than 500 per cent since 2007 to roughly $600 for a pack of two. The company has raised the price roughly 30 per cent this year.
Heather Bresch, Mylan’s chief executive, is due to be grilled on the price increases by US policymakers at a congressional hearing on Wednesday.
Novum’s price rises far outstrip Mylan’s — and rival Mr Shkreli’s in size.
As recently as May 2015, a tube of Aloquin cost $241.50, but shortly after acquiring the drug from its previous owner, Primus Pharmaceuticals, Novum raised its price overnight by 1,100 per cent. In January it again increased the price before raising it a third time last week, according to the figures seen by the FT.
Overall, the price of Aloquin has increased by nearly 3,900 per cent since May of last year.
The strategy of acquiring drugs and then implementing sharp price increases — known as “buy and raise” — has become so controversial that many pharmaceutical executives have pledged to abstain from the tactic.
Novum is a privately held company that does not report its sales or revenues. It was launched in 2015 by “a group of like-minded investors who believe in the firm’s focus of providing therapeutic innovations that are affordable for patients”, according to a company spokesperson.
The company said it would invest the revenues generated by raising prices in schemes that ensured more patients could access the medicine.

WSJ : AB InBev Warns of Thousands of Merger-Related Job Losses

AB InBev Warns of Thousands of Merger-Related Job Losses
Beer giant talks of shedding 3% of workforce over coming years in integrating SABMiller


Anheuser-Busch InBev NV on Friday said its beer megamerger withSABMiller PLC could lead to thousands of job losses in coming years, according to disclosures related to the transaction.
Based on integration planning, the Belgian-based brewer expects to cut at least 5,500 jobs after the merger. An AB InBev spokeswoman said that number could change as the integration of the two businesses proceeds.
AB InBev said the “job reductions will be implemented gradually, in phases, over a three-year period” and would equate to about 3% of the workforce of the combined companies. The estimate at this point doesn’t include possible reductions in sales and front-office supply staff; the company said “regulatory restrictions” prevent it from evaluating those functions during integration planning.

AB InBev currently employs about 150,000 people, while SABMiller puts its workforce at roughly 70,000. However, SABMiller is due to shed most of its European assets under the deal.
The cuts will contribute to AB InBev’s expected $1.4 billion in annual cost savings by the end of the fourth year after the transaction. Additional savings will come from raw-material procurement and other improvements.
The documents disclosed to shareholders show AB InBev and SABMiller combined will spend nearly $2 billion on closing costs and fees related to the transaction, amounting to a big payday for bankers, lawyers and consultants.
AB InBev will spend almost $1.74 billion, including $725 million in financing arrangements; $475 million in transaction taxes and other costs; $135 million for financial advice to Lazard Ltd. and others; $185 million on legal advice; $180 million on management consultants and other services; $20 million on public-relations advice; and $15 million on accounting advice.
SABMiller will spend $202 million in closing fees, including $113 million on financial advice to Robey Warshaw LLP and others; $76 million on legal advice; $9 million on public-relations advice; and $4 million on accounting advice and other costs.
AB InBev and SABMiller expect to close the $100 billion-plus mergeron Oct. 10. The transaction would create a global beer giant with more than 400 brands and a roughly 26.8% share of the world’s beer market, according to industry tracker Plato Logic.
OTHER BUSINESS NEWS

Friday’s filings also disclose for the first time that AB InBev approached some SAB Miller board members about a combination much earlier than previously thought—about 10 months before news of it broke. In December 2014, one of the Belgian brewer’s major shareholders—who wasn’t identified—approached representatives of the Santo Domingo family, which owns roughly 14% of SABMiller, about a merger. An AB InBev representative later broached the possibility with Altria Group Inc., the tobacco company that has an approximately 27% stake in SABMiller.
After months of talks, AB InBev shared a nonbinding term sheet with Altria and the Santo Domingos in August 2015, setting in motion a deal that would combine the world’s two largest brewers. They announced their agreement on Nov. 11, 2015.

Acquiring SABMiller would give AB InBev access to the fast-growing African beer market and reduce its reliance on the U.S. AB InBev said Africa is expected to represent 8.1% of global beer volumes by 2025, up from 6.5% in 2014. Beer volumes on the continent are expected to grow three times faster than global industry volumes, according to the documents. The deal also gives AB InBev new territory to expand sales of its global beer brands Budweiser, Corona and Stella Artois.
AB InBev has set a target of raising revenue to $100 billion by as early as 2020. The brewers stated combined annual revenue of $55.46 billion in the documents released Friday.
The documents said the combined company’s business model will focus on “organic revenue growth ahead of the industry, coupled with tight management costs.” Key to that will be AB InBev strategies such as “zero-based budgeting,” a system that requires managers to plan each year’s budget as if no money existed the previous year. It forces them to justify costs and has helped foster AB InBev’s reputation as a cost-cutter.