NY Post : Former Cablevision owners have gone from friends to foes: Altice


Well, how’s this for awkward.
Altice Group, the $34 billion Netherlands-based telecom behemoth that bought Cablevision in June from the Dolan family, is headed for its first programming fee fight — and sitting across the negotiating table will be none other than Dolan family-controlled AMC Networks.
When Cablevision and AMC were both owned by the Dolans, carriage disputes didn’t arise. But the ink is barely dry on Altice’s $17.7 billion acquisition of the Bethpage, LI-based cable company and already tempers are flaring.
AMC Networks airs the hugely popular “Walking Dead” series on its flagship network and owns other channels including IFC and WE. It has been running a crawl telling viewers they could lose access to the channels if it is not able to come to an agreement with Altice, which operates the Optimum-branded service.
Altice didn’t pull any punches in dealing with the family it just wooed in ordered to acquire Cablevision.
“We are working hard on behalf of our customers to negotiate an agreement with AMC Networks that is reasonable and reflects the best interests of all our customers,” an Altice rep said ahead of the Dec. 31 end of the AMC Networks programming deal.
“AMC Networks is using misleading scare tactics, threatening to black out its programming unless we agree to their excessive demands and pay significantly more to carry the same AMC channels our customers currently receive, all of which have declining viewership on our systems,” the rep added.
Altice called the behavior of the Dolan family’s AMC Networks “disappointing but not surprising given it has a history of using viewers as pawns to extract significantly higher fees from distributors.”
Stop trying to confuse viewers and instead focus on negotiating a deal that is fair, Altice chided AMC Networks CEO Josh Sapan.
This is not the first programming deal Altice executives have had to negotiate in the five months it has own the 2.6-million subscriber pay TV system — but it is the first with such vitriol.
Speaking on the firm’s third quarter earnings call, Altice USA CEO Dexter Goei said pay TV firms are “under siege by content providers.”
Programming costs are rising by about 10 percent but Altice only passes on costs of around 3.4 percent to consumers, Goei said.

Fast FT: Goldman turns bullish on commodities

The world economy is set to enter a period of rising inflation and higher growth, prompting the typically bearish US investment bank Goldman Sachs to turn overweight on commodities for next year.

Citing a “cyclically stronger environment” for commodities, Goldman said looming production cuts from Opec, the world’s oil cartel, and a reduction in supply for zinc and natural gas, should help support global commodity prices.
After a sharp climb in the US dollar in the wake of Donald Trump’s election, Goldman said its upbeat outlook on commodities should be able to withstand a stronger greenback.
“Commodity markets are entering a cyclically stronger environment after a mid-cycle pause as evidenced by the recent reacceleration in global Purchasing Managers’ Indices”, said Jeff Currie at the bank. He added that the world’s over-supplied oil markets should also move into deficit again in the second half of next year, on the back of rising demand and cutbacks in production from “high-cost countries in decline”.
This rebalancing should help support calls for a coordinated output cut from Opec, said Mr Currie:
Such a cut will likely help [producers] grow market share by sidelining higher-cost producers – as well as reduce oil price volatility.
Goldman upgraded its three, six and 12-month iron ore prices to $65, $63 and $55 per tonne respectively. It said its Goldman Sachs Return Index is now forecast to return 9 per cent on a three month basis (from -2 per cent), 11 per cent on a six-month basis (from 1.7 per cent) and 6 per cent on a 12-month basis from (8.3 per cent).
Despite warnings that higher inflation could hurt global growth by crimping consumer spending, Goldman argues:
Despite warnings by economists that high oil prices would slow growth, global economy surged ahead even as oil prices climbed above $100/bbl, and despite hopes of a growth tailwind due to lower oil prices since 2014, global growth slowed significantly when prices plunged toward $25/bbl earlier this year.
The experience from the 1970s created this deep rooted belief that, when oil prices increased, the wealth transfer from the low-saving developed markets to the high-saving emerging markets would slow growth due to the relatively lower marginal propensity to consume in the emerging markets and do the opposite as oil prices declined.

>>> EuroHEdge 2016 Nominees


The first round of nominations is based on 10 months of performance data, between January and October 2016. The second round of nominations will be announced in December.
EUROPEAN EQUITY (OVER $500M)
Nominees
AKOCovalis CapitalTT Mid-CapZebedee Focus
EQUITY MARKET NEUTRAL & QUANTITATIVE STRATEGIES
Nominees
CZ EnhancedLMRMW Market Neutral TOPS

Fast FT : Sherwood quits role as Goldman Sachs European co-head

Michael Sherwood, Goldman Sachs’s co-head of Europe, is quitting the investment bank after a three-decade career in which he became one of the industry’s highest earners but was embroiled in a recent spat over BHS, the failed UK retailer.

Often listed as one of the potential successors to Lloyd Blankfein for the top job at Goldman, Mr Sherwood joined the bank at the age of 20 and has overseen rapid growth in its European operations since taking joint charge of them 11 years ago.

Mr Sherwood — widely known as “Woody” — will remain at the bank as a senior director during a handover period of about six months. Richard Gnodde, the other co-head of Goldman Sachs International, will take full control of the European operation.

The departure removes one of Goldman’s longest serving European executives at a time when the bank is grappling with the uncertainty arising from the UK’s exit from the EU, triggering rumours that it may move activities out of London.

Mr Sherwood has faced questions internally from senior executives since being called to appear before a UK parliamentary committee about the bank’s role in advising Sir Philip Green over the retail magnate’s ill-fated sale of BHS, according to people familiar with the matter.

Mr Sherwood was among several senior executives who helped Sir Philip sell BHS to a consortium led by Dominic Chappell, a former bankrupt, about a year before the 88-year-old department store collapsed in April.

He denied his departure was linked to the BHS controversy. “I’ve been talking to Lloyd since well before that about what I want to do next,” he told the Financial Times. “He has spent most of his time trying to persuade me to stay.”

“I didn’t want to have anything out there before I left. On Philip Green, I wish we hadn’t been involved and I certainly don’t think we did anything much wrong,” he said. “It is one blip in a 30-year career and it really played no part in my decision.”

A former fixed income trader, Mr Sherwood has regularly been one of the highest paid employees at Goldman, earning $21m last year. He said his departure was “entirely amicable”, adding: “There are so many great people here and they are already picking over my job”.

Last week, Goldman disclosed that Mr Sherwood had sold $184,810 of shares in the bank, leaving him with 361,978 shares, worth $76.1m at Friday’s closing price.

His time as co-head of Europe has been peppered with controversy, including over Goldman’s role in advising the Greek government on swaps that were criticised for masking the size of the country’s debts.

The bank was last month cleared in a High Court ruling of allegations that it took advantage of the financial inexperience of Libya’s sovereign investment fund to sell it costly and complex financial products.

After leaving Goldman, Mr Sherwood plans to focus on his personal investments and philanthropic activities, particularly Greenhouse Sports, a charity that provides training in various sports to children in poorer parts of London. “I’m absolutely going to take some break before I decide to do anything.”

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: CMCM +7%, YY +4.3%, IGT +4.3%

M&A news:
  • HW +17.5% (to be acquired by Boral Limited for $24.25 per share)
  • MSTX +15.6% (announced it has received several written indications of interest from privately-held companies)
  • LOCK +14.6% (to be acquired for $24 per share by Symantec (SYMC))
  • AMCC +10.3% (to be acquired by MACOM Technology Solutions (MTSI) for approx. $8.36/share)
Select shipping related names showing continued strength: RLOG +13.8%, DRYS +8.4%, DCIX +6.7%, ATW +6%

Select metals/mining stocks trading higher:
  • VALE +4.3%, GFI +3.1%, FCX +3%, AU +2.6%, AUY +2.6%, BBL +2.3%, GOLD +2%, BHP +1.9%, RIO +1.9%, NEM+1.6%, KGC +1.5%, ABX +1.3%, GDX +1.2%
Select oil/gas related names showing strength: CHK +4.4%, PBR +3.8%, WLL +3.5%, OAS +3%, BP +2%, TOT +1.7%

Other news:
  • LVS +2.1% (still checking, but may be in sympathy with MPEL upgrade)
  • OMER +1.4% (announces 'successful' results from its post-marketing clinical trial of the effect of OMIDRIA 1% / 0.3% in pediatric patients undergoing cataract surgery)
  • FB +1.2% (discloses $6.0 billion stock buyback)
  • C +0.8% (will increase its common stock repurchase program by up to $1.75 billion)
Analyst comments:
  • ZTO +3.2% (initiated with a Overweight at Morgan Stanley)
  • MPEL +2.8% (upgraded to Outperform at Credit Suisse)
  • CNX +2% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • HSBC +1.5% (upgraded to Market Perform from Underperform at Bernstein)
  • MPWR +1.4% (upgraded to Strong Buy from Outperform at Raymond James)
  • NFLX +0.9% (initiated with a Buy at Brean Capital)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • TSN -9.2%, CSIQ -1.9%
M&A news:
  • AIXG -5.5% (CFIUS plans to recommend that the company's pending acquisition by Grand Chip Investment be prohibited)
Other news:
  • ACOR -13.1% (announces that the MILESTONE clinical study did not show sufficient efficacy to support further development of dalfampridine to improve post-stroke walking difficulties)
  • SAFM -5.4% (in sympathy with TSN)
  • PPC -4.4% (in sympathy with TSN)
  • IBN -1.5% (in tandem with Sensex, which closed -1.5% today)
Analyst comments:
  • CEMP -4.1% (downgraded to Market Perform from Outperform at Cowen)
  • AMFW -3% (downgraded to Underperform from Neutral at Exane BNP Paribas)
  • ANF -1.7% (downgraded to Underperform at RBC Capital Mkts)
  • MMM -1.2% (downgraded to Sell from Neutral at Goldman)

(BofA-ML) European Banks : Contingent Capital : Paint it black

Still like the dated cocos
We like dated contingent capital and take the opportunity to reiterate our Overweight recommendations on the Credit Agricole 8.125% and UBS 4.75%, and upgrade Barclays 7.75% to Overweight. With their 2018 calls, we find the short time to redemption attractive at this point. Relative value is also attractive, in our view. We like securities where the bank is heavily incentivised to redeem as here: there is no real spot for T2 cocos in the regulatory capital architecture today. Thus, these banks, all with pristine track records in terms of calls by the way, should we think replace either with cheaper T2 (Barclays, CredAg) or with senior TLAC (UBS). The proximity to the call should also anchor valuations, we think.

>>> Unicredit's Pioneer Investments may initiate exclusive talks on 22 November

Unicredit's Pioneer Investments may initiate exclusive talks on 22 November - reports


Unicredit’s [BIT:UCG] asset manager Pioneer Investments could enter into exclusive talks by tomorrow Tuesday (22 November), a newswire reported, citing a local press report.
According to Reuters, Amundi of France and PosteItaliane [BIT:PST], are the front-runners with offers amounting to EUR 3.2bn - EUR 3.5bn.
The report went on to say that Pioneer may share EUR 320m in extraordinary dividend prior to its sale.
Another newswire reported that Aberdeen Asset Management had withdrawn itself from UniCredit’s auction because it found the EUR 3.5bn price tag as too high. Aberdeen CEO Martin Gilbert told Bloomberg in an interview that the fund had gone into the second round before leaving the process.
Aberdeen is actively seeking a suitable target, Gilbert added.
Bidders for Pioneer, beside Amundi of France and Poste Italiane in alliance with Anima Holding [BIT:ANIM], and state-owned lender Cassa Depositi e Prestiti (Cdp), include the Australian financial conglomerate Macquarie [ASX: MQG] and Ameriprise Financial [NYSE: AMP] the report added, citing a source privy to the process.

(GS) How S&P500 firms will spend $2.6trillion of Cash in 2017 (pdf attached)

* S&P 500 firms will increase total cash use by 12% in 2017. 
We forecast S&P 500 firms will spend $2.6 trillion next year, allocating 52% to investing for growth (capex, R&D, and M&A) and 48% to returning cash to shareholders (buybacks and dividends). Cash balances currently stand at historical highs, totaling $1.6 trillion (ex-Financials) or 12% of assets compared with a long-term average of 7%.

* Share buybacks will rise by 30% to $780 billion in 2017.
Corporate tax reform will contribute to the sharp rise in share repurchases. We estimate $150 billion or 20% of total buybacks will be driven by repatriated overseas cash. Excluding the repatriation boost, buybacks will rise by 5%. We forecast dividend growth of 6%.

* Capex will rise by 6% to $710 billion as Energy capital spending stabilizes.
Energy accounts for 19% of S&P 500 capex following a 45% plunge in spending since 2014. We forecast 1% growth in Energy capex next year. S&P 500 ex- Energy capex will rise by 7% in 2017. R&D spending will grow by 7% to $290
billion led by Information Technology and Health Care. We expect cash spending on M&A will rise by 5% to $335 billion following a 20% plunge in 2016.