>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • CCUR +11.3%, CHS +5.8%, VEEV +4.5%, TRR +3.5%, OOMA +1.9%, BOBE +1.8%, SFL +0.9%
M&A news:
  • ININ +5.6% (to be acquired by Genesys for $60.50/share in cash, or approximately $1.4 bln)
Select EU financial related names showing strength:
  • CS +3.8%, BCS +2.6%, RBS +2.1%, HSBC +2%, BBVA +1.5%, LYG +1.3%
Other news:
  • FELP +8.5% (Completed its out-of-court restructuring of more than $1.4 bln in indebtedness)
  • RXDX +7.3% (announces FDA approval of an investigational device exemption for its RNA-based companion diagnostic, next-generation sequencing assay)
  • GSAT +5.9% (Signed a strategic agreement with Carmanah Technologies)
  • AEG +4.3% (still checking)
  • DB +3.1% (Reports Deutsche Bank was in discussions with Commerzbank (CRZBY) over possible merger, according to Manager Magazine, but CEO dismissed report on CNBC)
  • ORAN +3.1% (in sympathy with peer Bouygues SA which reported better than expected earnings overnight), CLVS +2.4% (Amended its license agreement with Pfizer (PFE))
  • WB +2% (Weibo shareholder SINA Corp (SINA) Board authorizes the distribution of Weibo shares on a pro rata basis; SINA decreases stake in co to 51% from 54%)
  • PSG +1.5% (Announced that it has executed amendments with its lenders, extending the deadline for filing its annual report on Form 10-K; also disclosed that it had hired Centerview Partners to review and evaluate strategic alternatives)
Analyst comments:
  • APPS +5.6% (upgraded to Buy from Neutral at Ladenburg Thalmann)
  • PSTG +2.7% (upgraded to Outperform from Perform at Oppenheimer)
  • MOMO +2.6% (initiated with a Overweight at JP Morgan)
  • SAN +2.3% (upgraded to Buy from Hold at Deutsche Bank)
  • BITA +2.2% (resumed with a Overweight from Neutral at JP Morgan)
  • YY +1.9% (initiated with a Overweight at JP Morgan)

FT : Blow to telecoms companies as EU outlaws network-wide ad blocking

Blow to telecoms companies as EU outlaws network-wide ad blocking

Plans by European mobile phone companies to block advertisements across their networks have been dealt a heavy blow after new EU telecoms rules outlawed the process.
Software that blocks adverts from appearing on smartphones has proved a hit with consumers who have flocked to the technology. That has led some mobile phone companies to consider implementing a network-wide block on adverts to appeal to customers sick of invasive marketing that eats into their data allowance.

Yet guidelines published by the Body of European Regulators for Electronic Communications on Tuesday advised local telecoms regulators that while consumers should be allowed to install “ad blocking” apps on their phones, network-level blocking should be prohibited.
A clause buried in Berec’s “net neutrality” guidelines stated that telecoms companies “should not block, slow down, alter, restrict, interfere with, degrade or discriminate advertising when providing an IAS (internet access service)”.
The guidelines will now be passed on to local regulators, including Ofcom in the UK, to apply.
Three, the mobile network, has been blocking adverts in network-wide trials in recent months in the UK and Italy and has expressed confidence that it would not breach net neutrality regulations being drawn up in Europe. The telecoms company declined to comment ahead of a formal launch of its ad-blocking product. It is understood to still believe that its strategy to require its customers to opt into the service should override rules related to network-level ad blocking.
Shine Technologies, the Israeli company that is working with Three and a handful of other mobile companies on ad blocking trials, was highly critical of Berec’s position.
“European citizens have a right to protect themselves from being tracked, profiled and targeted by AdTech. Lobbying efforts by the advertising industry were successful in obfuscating these fundamental rights,” said Roi Carthy, chief marketing officer of Shine.
“We are confident that paragraph 78, that bars AdTech protection technology to be provided as a service, will be challenged and fail, as it infringes on the rights of European citizens to defend their private communications from unlawful tracking and profiling,” Mr Carthy said.
Shine counts Li Ka-shing — Asia’s richest man and head of Three’s parent company CK Hutchison — as an investor. It has also signed deals with Digicel in the Caribbean and Econet in Africa.
The advent of ad-blocking technology has set the telecoms and publishing worlds apart. The technology threatens to erode the revenue of media businesses that spend billions on mobile advertising.
Matthew Howett, an analyst with Ovum, said: “Publishers and advertisers may be breathing a sigh of relief after reading Berec’s net neutrality guidelines, since the wording suggests that network-level ad blocking would go against the principles that make up the EU’s net neutrality regulation. Network-level ad blocking, which operators such as Three in the UK have been considering, would be prohibited unless the volume of ad-related traffic was so great that it was hampering the performance of the network for everyone else.”

>>> US Early premarket gappers

Early premarket gappers

Gapping up: CCUR +9.1%, CLVS +8.8%, FELP +8.5%, GSAT +7.2%, VEEV +5.2%, BZUN +4.2%, AEG +4%, WLL +3.6%, CS+3.3%, MTL +3.1%, MTL +3.1%, SAN +3%, BCS +2.9%, DB +2.8%, NCS +2.8%, HSBC +2.2%, OOMA +1.9%, CHS +1.9%,PSG +1.5%, PSO +1.5%, BBVA +1.5%, GPRO +1.3%, VRX +1%, SLV +1%, AG +0.7%

Gapping down: AVAV -12.7%, MDCO -6.9%, CAL -6.8%, PANW -6.1%, SAEX -6%, FRO -5.7%, HRB -5%, DRD -3.4%, HAIN-3.4%, PRXL -3.3%, CYCC -3.2%, SBGL -3%, BHP -2.4%, BBL -2.1%, RIGL -1.8%, RIO -1.4%, PRCP -1.2%, AZN -1.1%, SSL-1.1%, FCX -0.9%, BOBE -0.5%

>>> Trina Solar bid group specifically allocated three months to obtain SAFE cle

Trina Solar bid group specifically allocated three months to obtain SAFE clearance - Merger MArket

The decision by the parties involved in the USD 1.1bn take-private offer for Trina Solar [NYSE: TSL] to allocate three months specifically to obtain the required foreign exchange approvals after all other major conditions have been satisfied, highlights the fact that moving money out of China has become a major issue for Chinese acquirers.

One lawyer, not involved but familiar with previous ADR deals, said he has not seen this kind of clause in a go-private context before.

This newswire has previously reported that the parties involved in the Trina Solar transaction have allocated a longer-than-usual eight months to complete the deal from the time it became binding, to take into account that the foreign exchange approvals process has become quite lengthy for some applicants this year.

The addition of the three-month period was proposed by members of the bid group, but if approval from the State Administration of Foreign Exchange (SAFE) hasn’t come through after three months, Trina Solar has the option to terminate the transaction, assuming all other conditions – except for those to be fulfilled at the time of closing – have been met or waived, the company’s preliminary 13E3 filing shows.

The document further notes that the chairman-led bid group will have to pay a reduced termination fee of USD 5m (or the renminbi equivalent) if Trina terminates the USD 11.60 per ADS deal on those grounds, assuming the bidders have used their “reasonable best effort to effect the currency settlement”. Otherwise, the termination fee for the bidders, referred to as the “parent termination fee” is USD 43.8m, while the company termination fee is USD 21.9m.

“Basically the company is reserving the right to move on after three months, if both parties have fulfilled their obligations and the regulator is holding up the deal,” said the lawyer, based on the information available in the 13E3 document.

Meanwhile, the chairman-led bid group does not have a right to terminate the merger agreement even after the 1 August, 2017 long-stop date if the sole reason the transaction has not been completed by then is a failure to convert the required amount of renminbi into US dollars, the deal documents show.

According to the deal background section of the 13E3, the special committee determined that “in light of, among other things, the foreign exchange process in recent similar transactions” the committee “might be willing to consider the requests” to allocate three months specifically to complete the currency conversion process and close the transaction.

Since the three months refer to the period after all other major conditions, including the shareholder vote, have been fulfilled and the deal parties have said they expect the deal to close in 1Q 2017, a reasonable deduction would be that they envisage holding an EGM before the end of this year or very early next year. And that in turn would suggest there is scope for the expected timetable to be shortened if the SAFE process turns out to be quicker than three months.

The Qihoo 360 effect

In all likelihood, the additional clause has come about because a number of other Chinese take-private transactions that rely on on-shore funding have got stuck waiting for SAFE approval in recent months. The most high-profile was Qihoo 360 Technology, where the prolonged SAFE process meant the bidders weren’t able to complete the USD 9.4bn transaction until July 16, even though shareholders had cleared the deal on March 30 and all other conditions were fulfilled by late April.

The USD 390.9m offer for iDreamSky [NASDAQ: DSKY] was also held up waiting for SAFE, but this news service reported today (31 August) that the approval has finally come through – three-and-a-half months after the EGM approval.

Meanwhile, China Grand Automotive Services [SHA: 600297] decided in late May to use offshore funding sources for its partial acquisition of Baoxin Auto [HKG: 1293] after the hoped-for SAFE approval dragged out. The USD 1.48bn tender offer was declared unconditional less than a week later.

The take-private of Trina Solar will be funded entirely with equity provided by the six sponsors, including a USD 576.2m contribution by Chairman and CEO Jifan Gao that will be funded by a renminbi-denominated USD 665m bank loan. All the funds will be contributed in renminbi, the 13E3 shows, and hence will need SAFE approval for conversion into dollars.

This news service has previously reported that the chairman will increase his current 5.5% stake in the solar power company quite significantly as part of the take-private exercise and 13E3 shows that he will end up owning 45% once the deal is completed. Shanghai Xingjing Investment Management Co and Shanghai Xingsheng Equity Investment & Management Co, which are both subsidiaries of Industrial Bank, will hold 20% and 15% respectively, while Great Zhongou Asset Management will hold another 15% and Liuan Xinshi Asset Management 5%.

Their combined equity contributions will amount to the renminbi-equivalent of approximately USD 1.35bn. According to the 13E3, those proceeds will cover the USD 1.1bn needed to complete the take-private, including related transactions, fees and expenses (assuming there are no dissenting shareholders), as well as a further USD 320m to repurchase Trina Solar’s two outstanding convertible bonds that have an aggregated nominal value of USD 288m.

Trina Solar’s share price hasn’t moved much since the 13E3 filing was made before opening on 26 August and on 30 August closed at USD 10.53 – a 10.2% spread versus the offer price.

A Trina spokesperson said the company considers itself neutral with regard to the take-private offer and will not make any comments.

>>> Restaurant Brands International enters JV in Great Britain to launch Tim Hor

Restaurant Brands International enters JV in Great Britain to launch Tim Hortons brand

Restaurant Brands International Inc. ("RBI") (TSX/NYSE: QSR, TSX: QSP) has announced the establishment of a master franchise joint venture with an investor in Great Britain. The joint venture company will be the master franchisee of the TIM HORTONS® brand in England, Scotland and Wales, responsible for developing and growing the brand in the market.

"This deal is part of our growth plan to take the iconic TIM HORTONS® brand around the world," said Daniel Schwartz, CEO of Restaurant Brands International. "Great Britain is an attractive QSR market with a strong and growing coffee culture so it is a natural fit for the brand."

"This is an incredibly proud moment for the TIM HORTONS® brand as we enter this dynamic market," said Elías Díaz Sesé, President of Tim Hortons. "We look forward to bringing some of our signature products to Great Britain and helping our partners build brand awareness and open restaurants to welcome new Guests."

"We are thrilled to introduce the iconic TIM HORTONS® brand and Canada's favourite coffee to Great Britain," said Gurprit Dhaliwal, CEO of the joint venture company. "Our Guests in England, Scotland and Wales are sure to be delighted with our focus on delivering great products and an exceptional Guest experience."

This announcement is the most recent by RBI regarding its plans to develop and grow the TIM HORTONS® brand around the world. Last month, RBI announced a master franchise joint venture agreement to develop the TIM HORTONS® brand in the Philippines. Today, the brand has restaurants across Canada, the U.S. and the Middle East.

(9to5) Corning unveils Gorilla Glass SR+ offering for wearables, possibly headed

APPLE WATCH

Just a month after introducing Gorilla Glass 5 for smartphones, Corning today has introduced Gorilla Glass SR+, its new cover glass for smartwatches. In 2015, Corning announced “Project Phire,” which was said to be its efforts to create a material for wearables that combines the durability of Gorilla Glass with the scratch-resistance level of sapphire. A year later, we have Gorilla Glass SR+ and it’s ready to hit the market now…

Corning says that Gorilla Glass SR+ is an entirely new glass composite that, like teased, combines the toughness, optical clarity, and touch sensitivity of Gorilla Glass with the “superior scratch resistance approaching that of luxury watch cover materials.”
According to the company, Gorilla Glass SR+ delivers 70 percent better damage resistance than alternative display cover materials. Additionally, Corning’s offering is said to offer improved optical performance that lends itself to longer battery life and improved readability in situations like direct sunlight thanks to 25 percent better surface reflection.
While it remains to be seen which companies will adopt Gorilla Glass SR+, the product is commercially available now and is expected to be on consumer devices from “leading global brands later this year.”
Currently, the Apple Watch uses Ion-X glass for the Sport variants and sapphire glass on the stainless steel and Edition offerings. It remains to be seen if Corning’s Gorilla Glass SR+ product is significantly better than Apple’s current offering. As we’ve pointed out in the past, though, sapphire Watch displays are still prone to cracks, so perhaps the combination of sapphire and Gorilla Glass will offer improvement.
Nevertheless, we’ll have to wait and see if Apple adopts Gorilla Glass SR+ with the Apple Watch. Apple’s agreement with Corning has been interesting throughout the life of the iPhone. The two companies are said to have an agreement that does not allow Corning to list Apple or the iPhone on its website, though they are working together and Gorilla Glass 5 seems destined for the upcoming new iPhones.


Corning Unveils Corning® Gorilla® Glass SR+, Designed to Overcome the Unique Challenges of Wearable Devices
Breakthrough glass composite delivers an unparalleled combination of toughness, scratch resistance and optical clarity for today’s wearable devices
CORNING, N.Y., August 30, 2016 — Corning Incorporated (NYSE:GLW) today announced its groundbreaking innovation – Corning® Gorilla® Glass SR+. Specifically designed for wearable devices, this new glass composite significantly reduces visible scratches while delivering the toughness, optical clarity and touch sensitivity that make Gorilla Glass famous.
With rigorous daily activity, consumers put their wearable devices to the test, leaving them exposed to damage. To overcome the challenges facing the screens on these devices, Corning scientists developed a new glass composite engineered to better endure the bumps, knocks and scrapes wearables encounter while maintaining the optical clarity and touch sensitivity required for on-the-go connectivity.
In a league of its own In lab tests, Corning Gorilla Glass SR+ demonstrated superior scratch resistance approaching that of alternative luxury cover materials, while delivering up to 70 percent better damage resistance against impacts and 25 percent better surface reflection than those alternative materials. Such step improvements in optical performance enable longer battery life and improved outdoor readability.
“In early 2015, Corning launched Project Phire with the goal of engineering glass-based solutions with the scratch resistance approaching luxury cover materials, combined with the superior damage resistance of Gorilla Glass,” said Scott Forester, director, innovation products, Corning Gorilla Glass. “Corning Gorilla Glass SR+ delivers a superior combination of properties that is not available in any other material today – it is in a class of its own.”
Leveraging its strengths in glass science and fusion manufacturing, Corning leads the cover glass industry it created nearly 10 years ago. Corning Gorilla Glass has been used on more than 4.5 billion devices worldwide, including more than 1,800 product models across 40 major brands. With the introduction of Corning Gorilla Glass SR+, the one company that has been innovating with glass for 165 years offers manufacturers of wearable devices a clear alternative to luxury cover materials.
Corning Gorilla Glass SR+ is commercially available and is expected to be on product models from leading global brands later this year.
Forward-Looking and Cautionary Statements This press release contains “forward-looking statements” (within the meaning of the Private Securities Litigation Reform Act of 1995), which are based on current expectations and assumptions about Corning’s financial results and business operations, that involve substantial risks and uncertainties that could cause actual results to differ materially. These risks and uncertainties include: the effect of global political, economic and business conditions; conditions in the financial and credit markets; currency fluctuations; tax rates; product demand and industry capacity; competition; reliance on a concentrated customer base; manufacturing efficiencies; cost reductions; availability of critical components and materials; new product commercialization; pricing fluctuations and changes in the mix of sales between premium and non-premium products; new plant start-up or restructuring costs; possible disruption in commercial activities due to terrorist activity, armed conflict, political or financial instability, natural disasters, adverse weather conditions, or major health concerns; adequacy of insurance; equity company activities; acquisition and divestiture activities; the level of excess or obsolete inventory; the rate of technology change; the ability to enforce patents; product and components performance issues; retention of key personnel; stock price fluctuations; and adverse litigation or regulatory developments. These and other risk factors are detailed in Corning’s filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the day that they are made, and Corning undertakes no obligation to update them in light of new information or future events.
Digital Media Disclosure In accordance with guidance provided by the SEC regarding the use of company websites and social media channels to disclose material information, Corning Incorporated (“Corning”) wishes to notify investors, media, and other interested parties that it intends to use its website (http://www.corning.com/worldwide/en/about-us/news-events.html) to publish important information about the company, including information that may be deemed material to investors. The list of websites and social media channels that the company uses may be updated on Corning’s media and website from time to time. Corning encourages investors, media, and other interested parties to review the information Corning may publish through its website and social media channels as described above, in addition to the company’s SEC filings, press releases, conference calls, and webcasts.
About Corning Incorporated Corning (www.corning.com) is one of the world’s leading innovators in materials science. For more than 160 years, Corning has applied its unparalleled expertise in specialty glass, ceramics, and optical physics to develop products that have created new industries and transformed people’s lives. Corning succeeds through sustained investment in R&D, a unique combination of material and process innovation, and close collaboration with customers to solve tough technology challenges. Corning’s businesses and markets are constantly evolving. Today, Corning’s products enable diverse industries such as consumer electronics, telecommunications, transportation, and life sciences. They include damage-resistant cover glass for smartphones and tablets; precision glass for advanced displays; optical fiber, wireless technologies, and connectivity solutions for high-speed communications networks; trusted products that accelerate drug discovery and manufacturing; and emissions-control products for cars, trucks, and off-road vehicles.