>>> FNAC /Darty : paid up to 170

Fnac announces that it has acquired from a number of institutional investors, in aggregate, 48,732,648 Darty Shares for 170 pence per share, representing approximately 9.20 per cent. of the ordinary share capital of Darty in issue on the date of this announcement.

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: LH +1%

M&A news: TPUB +60.9% (Gannett (GCI) proposes to acquire Tribune Publishing for $12.25/share in cash), BCS +1.3% (WSJ details that Carlyle Group (CG) might be among bidders for Barclays (BCS) Africa stake)

Other news: AVXL +17.9% (news special on a patient participating in Anavex's Azlheimer's trial taking place in Melbourne, Australia), SRPT +7% (shares currently halted - in conjunction with today's meeting with the FDA's Peripheral and Central Nervous System Drugs Advisory Committee), VRX +5.3% (receives additional notices of default under indentures due to delayed 10-K filing; notices do not accelerate any of the company's indebtedness), CPXX +3.3% (announces that patients treated in a Phase 2 clinical study with Vyxeos Liposome for Injection with newly diagnosed AML demonstrated 'reduced' healthcare resource use compared to conventional chemotherapy), SCWX +1.1% (still checking)

Analyst comments: JOY +1.5% (upgraded to Neutral from Sell at Goldman), CRH +1.2% (upgraded to Neutral from Underperform at BofA/Merrill), CAT +0.6% (upgraded to Neutral from Sell at Goldman)

Bettaville : NeXT Ftse100 bid : impérial Tobacco?

Deal watchers looking for the next big FTSE 100 deal should read Ian King's excellent column in today's The Times.

According to the Sky News business supremo, high-level investment bankers have told the former The Times business editor that the next FTSE 100 takeover bid could be carried out by a Chinese bidder.

I can't provide you with the link to Ian's article because The Times appears to have changed its website as part of a re-design, so if you want to understand why a Chinese bidder might buy a FTSE 100 company I would advise you to buy today's newspaper.

However, I'm sure Ian's insight will trigger all sorts of speculation about which FTSE 100 company the Chinese might buy, with Imperial Tobacco already named as one potential target.

In case you don't recall, last December Bank of America Merrill Lynch argued China National Tobacco Corporation was/is the most likely buyer of Imperial Tobacco. Here is a link to a piece I wrote with Bank of America Merrill Lynch's note:

http://betaville123.blogspot.co.uk/2015/12/flag-pole-alert-part-5.html

>>> UK Telecom look interesting as French Telco won't move...good to refocus on

with the collapse of French Consolidation, UK appears to be a good opportunity to invest in telcos, the Hutch/O2 deal still look at risk but can create some opportunities, we can even see some French players look at the market....have a look to this Barcap Note.
- Iliad’s Niel Met With EU’s Vestager on U.K. Market: L’Express (31/03)
- Hutchison Deal Remedies May Leave U.K. Door Open for New Entrant (07/04)
- CK Hutchison Said to Offer New Concessions on O2 Deal in U.K. (07/04)
- Liberty Global's O2 Deal in U.K. Would Shift BT, Vodafone Status (19/04)

(BarCap) UK Telecom Services : Positive on the Future of UK pricing

We see the UK Telco market continuing to offer sector-leading growth in the coming years, potentially a somewhat contentious view given Ofcom/Government desire to make the structure of UK pricing more transparent, and the likely failure of the 3UK/O2 deal (per press reports). We argue that although pricing changes could somewhat reduce the opportunity for price increases, they could actually reduce competitive pressure and churn, as could the move towards convergence – boosting profitability. We see BT best placed, with Fibre continuing to drive material upside.

Future of UK post Hutch/O2 deal. In our recent note, Looking at life beyond O2/3UK, we argued that Hutchison faces an increasing battle to get the UK deal approved. With a standalone Hutchison running out of spectrum, O2 historically underinvested and Vodafone currently appearing to lack a convergence presence, we would see BT as very well placed to execute on a converged Fixed-Mobile-TV strategy. For TalkTalk and Sky, both already have routes to entering mobile via their O2 wholesale contracts, and as such have routes to offering converged services (albeit on “old” MVNO economics).

See Full note attached

(TechCrunch) Retail giant Central Group is buying Zalora’s businesses in Thailan

Zalora, the fashion-focused e-commerce site backed by Rocket Internet, is selling its businesses in Thailand and Vietnam to retailer Central Group, according to multiple sources close to the deal.

We reported the planned sale earlier this month and have since confirmed that Bangkok-headquartered Central Group is the buyer. The deal is said to be agreed in principle and currently subject to paperwork and red tape.

A Zalora spokesperson declined to comment. Central Group did not respond to multiple requests for comment.

Central Group may not be a name well known outside of Southeast Asia, but it is one of the region’s largest retail players with a huge footprint in Thailand and forays into Vietnam, Malaysia, Indonesia and other countries. The group’s assets, which include multiple shopping malls and national department store chains, are worth close to $10 billion and it employs some 70,000 people across its operations.

The group has been tipped to enter the online commerce space for some time, and our sources say that it has struck a deal to buy the country businesses from Zalora for around $10 million each. Online is estimated to account for around three percent of all commerce in Southeast Asia and, while that figure has grown in recent years and stands to increase as the internet becomes more widely accessible throughout the region, it remains a nascent segment that few offline retailers have stepped into.

The low level of online commerce has been a challenge for Rocket Internet’s e-commerce startups, which started out with overly-ambitious targets, missed their projections for profitability, and have required significant capital to continue. Lazada received a $500 million investment from Alibaba this month after running out of cash, while Zalora remains unprofitable. Rocket Internet’s latest financial results show Zalora’s revenue rose 78 percent to €208 million ($234 million) in 2015, but its net loss increased 36 percent to €93.5 million ($105 million.)

One comparison to Central Group’s move comes by way of Indonesia’s Lippo Group, a conglomerate with $15 billion in assets across a range of sectors that include retail. The group created MatahariMall, an online version of its department store, with its first move into online commerce last year. There are also parallels in China, where Alibaba has invested in physical retailers InTime and Sunning to explore the potential of combining offline and online commerce.

While Lippo Group pledged to invest hundreds of millions in its e-commerce venture, it is unclear what sum Central Group has set aside. What’s more certain is that the Thailand-based group is getting a running start with the acquisition of assets from four-year-old Zalora. Zalora doesn’t publish business figures per country, but it claims 10 million downloads of its mobile apps and 1.4 million transactions per year across 10 countries in Asia Pacific.

Sources close to Zalora suggest that the company is selling the businesses in an effort to streamline its costs and move towards becoming profitable. Last week we reported that two of the companies managing directors have left the firm over apparent fallings out with Global Fashion Group, the $3.5 billion-valued entity that manages Rocket Internet’s five emerging market fashion brands. Tension apparently circles around GFG’s prioritization of investment in more developed markets, like the Middle East, over parts of Southeast Asia which it deems to be less capable of returning value.

Zalora raised over $200 million from investors prior to becoming a GFG business unit in November 2014. Now its money comes from GFG, which raises capital centrally for all of Rocket Internet’s fashion sites.

(BofA-ML) European Food Retail P/E Valuation at a high level

Chart of the week: Expensive European food retailers
With most food retailers having reported their FY results and entering into the Q1 reporting season, we question the valuation of the European sector. It currently trades at a very high absolute P/E and, although the relative valuation looks more in line with its 10-year average, we think the sector is expensive. We remain selective and focus on
strong free cash flow yield at a reasonable price. We like Buy-rated Ahold and Delhaize, at 15.2x 2016E P/E excluding synergies (14.6x incl.) and c.8% free cash flow yield.

Share price moves and news flow
Last week in General Retail, OVS SpA (+7%) was the top performer, while N Brown (-14%) underperformed. In Food Retail, Carrefour (+5%) was the top performer, while Ahold (-5%) performed the worst. Jeronimo Martins has been downgraded to Underperform and its PO has been reduced to €13, as the high valuation is not supported by its profit growth profile. We have raised our PO for OVS SpA to €7.4 and our FY17 EPS forecasts by 8%. N Brown reported decent FY16 results, but its FY17 outlook remains bleak, due to tough market conditions. Zalando reported its 1Q16
results and Pets at Home reported its FY16 trading statement last week.

>>> Yoigo suitor MasMovil tables EUR 550m final offer as Zegona misses deadline

Yoigo suitor MasMovil tables EUR 550m final offer as Zegona misses deadline

MasMovil has tabled an offer for Yoigo after Zegona, the UK fund that was in exclusive talks to acquire TeliaSonera’s Spanish operator, failed to present an offer within the allotted period, El Confidencial reported, citing sources close to the transaction.

As reported, Zegona had announced a preliminary offer of up to EUR 630m for Yoigo. However, the UK-listed firm was unable to table a final binding offer before the deadline due to difficulties in finding financing.

Meanwhile, Masmovil presented a final offer of EUR 550m, the report said.

TeliaSonera, the Swedish group that owns 75% of Yoigo, must now decide whether to sell to Masmovil or give more time to Zegona in the Deutsche bank organized transaction, the report said.

Should TeliaSonera accept the MasMovil offer, the owner would then have to negotiate with ACS, FCC and Abengoa, the acquisition of the remaining 25% of Yoigo, the report added. ACS holds 17%, and books the stake at EUR 198.4m, which would value Yoigo at EUR 1.166bn. FCC has a far lower valuation of its 3.44%, booking the stake at EUR 11.2m.

According to the El Confidencial report, both MasMovil and Zegona have offered ACS special terms on its stake should it sell at a later date, allowing the company to avoid provisioning its holding in the near term.

At the end of last year Yoigo reported revenues of EUR 854m, up 5% compared to 2014 and EBITDA o f 77m, up 12%, El Confidencial added.

El Confidencial

(GS) EDF - First Take: €4 bn capital increase plan announced

First Take: €4 bn capital increase plan announced

News
EDF announced measures to strengthen its capital: EDF said it proposes a
€4 bn capital increase via a market operation by the closure date of the
2016 accounts and subject to market conditions and it will propose an
option to pay the dividend related to fiscal years 2016 and 2017 in shares.
The French government (which owns an 85% stake in EDF) said it will
subscribe to €3 bn of this capital increase and that it will take its 2016/17
dividend in shares. In addition EDF said that capex will average €12.5-
13.5 bn pa over the next 3 years and that a €10 bn disposals programme is
targeted by 2020. Finally, the cost-cutting programme will be increased to
at least €1 bn by 2019 (vs. 2015) from previous target of €700 mn by 2018.
Analysis
EDF’s announced measures would strengthen EDF’s balance sheet but at
the expense of dilution for EDF’s current shareholders as we believe the
cash would be needed to reduce leverage: a €4 bn capital increase is
equivalent to 17% of the current market cap of EDF. As a sensitivity, EDF
would trade on 11.7x 2018E P/E post-capital increase (based on Reuters
cons forecasts) vs. 9.8x pre-capital increase. We estimate these measures
would help in the medium term to reduce EDF’s leverage towards the
targeted net debt/EBITDA range of 2-2.5x. As a sensitivity, we estimate
that, assuming mark-to market of current French power prices (€28-
29/MWh), post €4 bn capital increase and €10 bn disposals, net
debt/EBITDA would be c.€2.2x in 2018E.
Implications
We have a Neutral rating on EDF. Our 12-month price target of €12.7 is
based on 50% SOTP (€9.8), 50% P/E relative value (€15.6). Our P/E valuation
is based on a 13.5 multiple in line with the 2004-14 sector average applied
25%/75% to our 2016/17 forecasts. Risks include higher/lower price level on
regulated tariffs; higher/lower nuclear output; higher/lower power prices.