EasyJet shares gain on talk of possible 1600p per share takeover offer; AerCap in the frame
EasyJet [LON:EZJ] shares gained 2.96% yesterday, 18 August on market gossip that the UK-based budget airline might have attracted takeover interest from North America, The Times reported.
The newspaper’s market report section said the Netherlands-based aircraft leasing company AerCap [NYSE:AER] was mentioned as a potential bidder for easyJet, but did not cite a source for the rumour.
AerCap could offer 1600p per share for easyJet, according to the speculation.
The item also mentioned talk that private equity firms might consider bidding for easyJet.
The article noted the family of easyJet founder and chairman Stelios Haji-Ioannou owns 34% of the airline.
An easyGroup spokesperson said the company does not comment on market rumours, the report added.
A market report in the Daily Express also mentioned talk that a buyout group is interested in buying easyJet, but did not cite a source for the information.
EasyJet’s share price closed 31p up at 1078p in London on Thursday, valuing the company at GBP 4.28bn (EUR 4.95bn).
Link to original source (The Times)
The Daily Express report appeared on page 47 of the print edition of the newspaper on Friday, 19 August.
The Times (London), Daily Express
Paul Singer Says "Everyone Is In The Dark"; Warns Of "Sudden, Intense Market Breakdown"
While there have been some very prominent recent entrants into the billionbear club, such as BIll Gross, Jeff Gundlach, Carl Icahn and George Soros, who only recently switched from being bullish on the market to predicting gloom, one name has been a staple when it comes to warnings about the disastrous consequences of the new normal's monetary policy: Elliott Management's Paul Singer.
And, sure enough, in his latest letter he does not disappoint, dispensing with his usual dose of what Kate Kelly calls "bleakness", warning that the bond market is "broken", and when the unprecedented central bank actions of recent years can no longer prevent a market decline - which considering that both the BOJ and ECB are running out of monetizable bonds may be sooner than many expected - "the subsequent loss of confidence could be severe."
As Singer admits in Elliott's Q2 letter to investors, what the fund, up 6% YTD, is seeing, is "the most peculiar period we have faced in 39 years." The details are familiar to those who have read Singer's previous laments (most recently here) on central planning: too much central bank power, too much monetary debasement, inevitable inflation, and "when it happens it could be swift and impossible to tamp down."
Not surprisingly, Singer touches on a very popular topic in a world of nearly $14 trillion in negative yielding bonds, namely the scramble for safety, and surprised by the "continued stampede" to buy such bonds, he says that today's environment marks "the biggest bond bubble in world history", leading him to declare that "the global bond market is broken."
Singer is stumped by the "mentality that flies to an asset class regarded as a "safe haven" even when there are low or nonexistent returns attached to it and no guarantee that current conditions will persist", and warns buyer of negative yielding debt to "hold such instruments at your own risk; danger of serious injury or death to your capital!"
Actually, it is far less complicated than that: bonds are no longer being bought for current yield purposes (which does not exist in NIRP world) - an honor instead delegated to dividend yielding stocks, which can wipe out several years of dividends in an instant, as happened earlier today to CXW - but simply for capital appreciation, as demonstrated last week by the failed BOE QE buyback operation, where the central bank would literally pay anything to a willing seller, and yet was unable to find one in an offerless market. Of course, the culprit behind this irrational scramble is well-known: central banks.
Which leads us to Singer's next point, namely that "trading in this market is particularly difficult", something hedge funds which haven't generated any collective alpha in 5 years know too well.
"Everyone is in the dark," Elliott notes. "Experience doesn't count for much, and extreme confidence may be fatal."
Singer's gloomy conclusion is almost as apocalyptic as that of Carl Icahn from his latest Bloomberg TV interview: "the ultimate breakdown (or series of breakdowns) from this environment is likely to be surprising, sudden, intense, and large."
End of the investing world aside, the hedge funder says he is seeing opportunity in the distressed-energy sector despite the rebound of oil and gas prices from their lows. The fund also has been building up its gold position "in a conditional format," to ebb losses "should prices fall back from their recent strength."
Finally, Singer says that "it seems to us that investments and trading strategies which make money in a value-added way, in a different manner than the returns obtainable from the passive ownership of stocks and bonds, are especially good additions to institutional portfolios in the world going forward," the letter states. As Kelly adds, that may be a more challenging argument for the average hedge fund competitor, which according to the HFR composite is up just 3 percent through July versus an S&P 500 that's up more than 6 percent. Furthermore, considering Steve Eisman's latest "big bet", this time against the hedge fund industry's well-known "2 and 20" compensation model, many active managers may not be in business long enough to see the "ultimate sudden, intense breakdown" predicted by Singer.
One person, however, who will be there is fellow billionaire Carl Icahn, ready and waiting for the apocalypse, as per his comments we noted yesterday:
"I have hedges on, I'm more hedged than I ever was. I will tell you there's certainly good companies. [The market] is way overvalued at 20 times the S&P and I'll tell you why: a lot of it is a result of zero interest rates. It's just what I said. You have zero interest and a lot of buybacks. ... I think the market is at literally very high levels because of zero interest rates. There's going to be a day of reckoning here. I've seen it many times in my life. When things look good, they look great. You go into the sky. But that's when you have to really pull down and really stop buying. That being said, I'm not going to tell you it's going to happen tomorrow, next week, even next month, even next year possibly. But it's going to happen, and you have to change the direction of our economy. I can't say it plainer than that. "
And while we await the moment it all comes crashing down, we are starting a database of memorable quotes by billionaires who are predicting both the end of the world, and also believing they can somehow hedge for it. We hope to present it to readers just as soon as the world's central planners finally decide they have had enough of propping up the "market."
Shire said to have submitted USD 3.6bn formal offer for Radius Health - market report
Shire [NASDAQ:SHPG], an Anglo-Irish pharmaceuticals company, was rumoured to have submitted a formal offer for rival Radius Health [NASDAQ:RDUS], the Financial Times reported. The newspaper’s market report section said the offer values the Waltham, Massachusetts-based osteoporosis drug company at about USD 3.6bn (EUR 3.17bn), but did not cite a source for the speculation.
The offer represents a premium of close to 50% on Radius’ undisturbed share price, the item said.
The report noted persistent talk that Radius could attract offers from rivals Amgen [NASDAQ:AMGN], Pfizer [NYSE:PFE] or Roche [VTX: ROG].
Radius Health’s share price closed USD 1.09 up at USD 65.40 in New York yesterday, 18 August, giving the company a market capitalisation of USD 2.43bn.
Financial Times
FT
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cent higher, up 9.81 points to 6,868.96.
Shire, unchanged at £50.30, was once again being linked with Radius Health, US-listed osteoporosis drugmaker.
According to traders, Shire was rumoured to have submitted a formal offer for Radius that valued the group at around $3.6bn, a near 50 per cent premium to its undisturbed price. Persistent speculation has also linked Roche, Pfizer and Amgen with Radius, which is due to release the first results from human trials of its osteoporosis patch next month...."
Dow +0.13% S&P +0.22% Nasdaq +0.22% Russell +0.75%
US Market closed slightly higher but still trying to evaluate what will be FED Decision. New York Fed President and FOMC voter William Dudley, however, maintained a somewhat hawkish tone. The Fed President stated that a rate hike remains in the cards at the September FOMC meeting. Mr. Dudley also indicated that two strong employment reports helped offset his prior concerns regarding U.S. labor markets. Participants shrugged off the commentary as it mirrored comments from earlier in the week. Investors will hear from San Francisco Fed President Williams (non-FOMC voter) and Dallas Fed President Kaplan (non-FOMC voter) at 16:00 ET and 20:00 ET, respectively. Seven sectors ended in the green with materials (+0.7%), utilities (+1.2%), and energy (+1.8%) leading the advance. Conversely, consumer discretionary (-0.1%) and telecom services (-0.8%) lagged the broader market. Ccommodity-sensitive energy space (+1.8%) buttressed the broader market as the energy component finished higher by 3.0% ($48.21/bbl; +$1.40). Volume were in line with average at 737mil shares. US After Hours NWY +24%, AMAT +6%, MENT +6% following earnings/guidance, CXW +7% / GEO +5% modestly rebounding... GPS -2.4% following earnings/guidance. sian equity markets started the session out slightly to the upside before sliding to unchanged levels, heading into the latter half of the session, Shanghai and Hong Kong declined. Focus remains on forex markets with the USD gaining against A$ (0.7%); JPY (0.6%); NZ$ (0.5) as well as the Euro, Pound and Swiss Franc. Oil names benefited from the higher oil prices, Woodside +2.2% and BHP +1.7 despite weaker results. After the US close, Fed's Williams called for a rate hike sooner rather than later, indicating a rising interest rate is what makes sense. Later in the session Fed's Kaplan declined to comment on rate changes any time soon. He did say US election irrelevant to when Fed will act. China Commerce Ministry (MOFCOM) Official said that foreign trade faces very large downward pressure; Exports may slow even more this year. Reminder in July China reported a surplus of $52.3B, a 6-month high, while exports were -4.4%.
Nikkei +0.29% Hang Seng -0.32% CSI -0.36% Shanghai -0.33%
Eur$ 1.1335 CNH 6.6486 CNY 6.6451 JPY 100.21 GBP 1.3143 CHF 0.9557 RUB 63.6285 WTI$48.59 (+0.77%)
S&P -0.01% EuroStoxx +0.03% Dax +0.13% SMI -0.06%
Macro :
- U.K. Said to Seek Specific Financial Services EU Trade Deal: FT
Keep an eye on :
- ABI BB : Kirin Looks to Double U.S. Beer Sales Volume by 2021: Nikkei
- BP IM : BPM/Banco Popolare merger approval decision by ECB expected in mid-September - Il Sole 24 Ore
- BAYN GY : U.K.’s NICE Says Bayer’s Liver Cancer Drug Not Cost-Effective
- BKIR LN : Bank of Ireland to Charge for Large Deposits, Irish Times Says
- BRNL NA : Brunel 2Q Revenue Drops as Oil & Gas Market Continues to Decline
- DBK GY : CFTC Charges Deutsche Bank w/ Multiple Swap Reporting Violations
- EDP PL : EDP Says Capital Group Cuts Stake to 14.989%
- EZJ LN : Rumor founder SIr Stelios Haji-Ioannou could team up qith AerCap to take the Co. private - telegraph
- ERICB SS : Ericsson Owners Said to Seek to Replace Chairman: SVD
- XOM US : Exxon, Chevron, Hess Said to Form Mexico Deepwater Bidding Group
- HUE SW : Huegli Sees Full Year Ebit Slightly Below 2015 Level
- JEN BB : Jensen-Group 1H Ebit Rises 2.6% to EU13.9m, Backlog Up 34% Y/Y
- MERSKB DC : Maersk Says Still Considering Many Options in Strategic Review
- NDA SS : Nordea Is Least Popular Bank in Danish Customer Survey, JP Says
- OHL SM : OHL Has Acquired 32% of Share Buy-Back Plan’s Maximum Target
- PSPN SW : PSP Swiss 1H Net Income Ex Investment Gains/Losses CHF89M
- ROG VX : Roche Moves India Court to Block Breast Cancer Drug From Mkt: ET
- RDSA NA : Said to have hired JPM to sell its New Zealand oil portfolio worth ~A$1B - Australian
- SZG GY : Salzgitter Spokesman Denies Platts Report On Thyssenkrupp Talks
- SQ US : Square Gains 1.6% After Point72 Takes New 5.4% Passive Stake
- TEL NO : Telenor CEO Still Planning How to Sell Vimpelcom Stake: Reuters
- UCB BB : UCB Says Wellington Management Group Raises UCB Stake to 3.02%
- VPK NA : Vopak 1H Ebitda, Net Ex-Items Rise Y/y; Revenue, Cash Flow Fall
- WMH US : William Hill to Focus on Strategy to Deliver Value to Holders
- ZAL GY : Zalando to Open Warehouse Near Paris, Le Figaro Says
>>> Up
*KAZ MINERALS RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*ROSNEFT RAISED TO BUY AT HSBC
>>> Down
*ABB CUT TO HOLD AT HSBC
*ADMIRAL CUT TO MARKET PERFORM VS OUTPERFORM AT BERNSTEIN
*BMW CUT TO NEUTRAL VS OVERWEIGHT AT GOLDMAN SACHS
*CNH INDUSTRIAL CUT TO SELL VS REDUCE AT ALPHAVALUE
*GEM DIAMONDS CUT TO SECTOR PERFORM AT RBC CAPITAL
*METRO CUT TO UNDERPERFORM VS MARKET PERFORM AT BERNSTEIN
*NESTE CUT TO NEUTRAL AT CITI
*SANDVIK CUT TO HOLD AT HSBC
*SCHRODERS CUT TO HOLD VS BUY AT LIBERUM
*ZURICH INS. CUT TO REDUCE AT KEPLER CHEUVREUX
>>> PT Change
>>> Initiation
*ALTICE NV REINSTATED EQUALWEIGHT AT BARCLAYS, PT EU15
*BOLIDEN RATED NEW HOLD AT BERENBERG, PT SEK180
*DONG ENERGY RATED NEW BUY AT HSBC
*NYRSTAR RATED NEW HOLD AT BERENBERG, PT EU8
>>> Call
Salzgitter denies rumors of planned merger with ThyssenKrupp's steel operations
Salzgitter [ETR:SZG], the German steelmaker, said there is no truth to rumors of a merger with ThyssenKrupp's [ETR:TKA] steel operations, Boersen-Zeitung reported.
The German-language daily cited a Salzgitter spokesperson as saying that the merger speculation is false.
The daily added that ThyssenKrupp, the German technology company, declined to comment beyond saying that the company is already on the record as calling for sector consolidation.
According to the unconfirmed information, the two companies are in talks, initiated by the German government, on fusing their steelmaking operations.
Boersen-Zeitung
AP Moller-Maersk will likely be split into separate companies
AP Moller-Maersk, the Danish conglomerate, will likely split the group into two independent entities, according to Berlingske Tidende.
The Danish daily reported that the Danish conglomerate is currently evaluating its future strategy and there has been speculation that several units within the group may be sold. The paper wrote, however, citing unnamed sources, that the most likely scenario now is that the group will be split into a transport company and an energy company. Several sources said that a final decision is yet to be made and the group is investigating several options but that the split is seen as likely.
Meanwhile, the paper also wrote that there is speculation that Maersk Oil may be listed separately and some sources said that the oil company has attracted takeover interest. The item noted though that any possible interest in Maersk Oil is in the early stages and it is unlikely that these options will be realized before late September when AP Moller's strategic plan is reportedly to be announced.
Berlingske Tidende
CariChieti may attract bid from Banca Popolare di Bari
CariChieti, one of the four Italian 'good banks' being sold off following a restructuring as part of a government-sponsored bailout, has attracted renewed interest from Italian lender Banca Popolare di Bari (BPB), Italian-language daily Milano Finanza reported.
BPB could be about to present an offer, the unsourced report noted. BPB presented a manifestation of interest for CariChieti last year, the report also noted.
The other three “good banks” are Banca Marche, Banca Etruria and Cassa di Risparmio di Ferrara (CariFe).
As previously reported, private equity firms Apollo and Lonestar have made offers for all four banks with the total value of the bids being EUR 500m-EUR 600m. This valuation was well below the target of EUR 1.4bn sought by the vendors, the report said.
PE firm Apax is believed to have made a separate offer for BAP, the insurance arm of Banca Etruria.
Milano Finanza daily edition