TheChek News Flow

Banco Sabadell's profit warning on 22 July could trigger a capital increase, El Confidencial reported citing a Societe Generale (SocGen) analyst report.

Sources from Sabadell denied any discussions at board level about a possible capital increase for the time being, the Spanish-language report said.

Other sources close to the bank said that rather than dilute the shareholders' stakes, the group could sell an asset such as its unit in the US, the report said.

The SocGen report places Sabadell's value at a record low, indicating that investors are noting its financial results rather than considering the real value of the bank. In analyst Carlos Garcia's opinion, taking into account Sabadell's estimated revenue and annual losses of EUR 100m on treasury shares deals, the book value of Sabadell would be EUR 1.97 per share.

But if the two major risks Sabadell faces are taken into account, the bank's book value would stand at somewhere between EUR 1.13 and EUR 1.51 per share. The variation depends on increasing the coverage of its portfolio of failed real estate assets and the final impact of the so-called floor clauses on mortgages.

For SocGen, Sabadell should increase to 55% from 54.1% the percentage of provisions on non-performing assets to be in line with the rest of the sector. The Catalan bank has EUR.9bn in problem assets, despite the efforts to sell EUR 1.039bn worth of non-performing portfolios between January and June this year.

According to SocGen, on ly increasing the coverage of non-performing loans would lead Sabadell to increase capital by EUR 1.6bn. After adding the cost of covering against Brexit - Sabadell obtains about a third of its revenue in the UK following its acquisition of TSB Lloyds - the analyst puts the value of Sabadell's stock at EUR 0.9, below the current market valuation of EUR 1.18.

El Confidencial

*MTU SAYS BOND ISSUED ALLOWS ENOUGH FLEXIBILITY FOR NEXT 5 YEARS

AB InBev ups SABMiller offer to £79bn after sterling drop

Anheuser-Busch InBev, the world’s biggest brewer, has raised its takeover offer for rival SABMiller to £79bn after investors raised concerns about the terms of the deal following a steep drop in the value of sterling.

In a statement on Tuesday, AB InBev said each SABMiller shareholder will be entitled to £45 a share in cash — or a mostly stock alternative now worth £51.14 which will not be tradeable for five years.

SABMiller shares rose 0.6 per cent to £44.67 in the opening hour of trading in London, while AB InBev edged up 0.3 per cent.

The new terms represent an increase of £1 a share on the cash offer and an increase of around 88p a share on the stock alternative that were agreed in principle between the two global brewing giants in November last year.

AB InBev declared its revised offer “final”, a critical term in UK takeovers meaning it will not be able to raise its offer again.

SABMiller said in a separate statement on Tuesday that its chairman, Jan du Plessis, spoke with his counterpart at AB InBev, Olivier Goudet, last Friday about the takeover “in light of recent exchange rate volatility and market movements”. However, it said that they did not discuss or agree the terms of the new offer.

SABMiller added that it had brought on Centerview Partners, an advisory firm, to provide additional financial advice. The company said it would consult with shareholders to review the revised offer, and that a further announcement would be made thereafter.

AB InBev’s decision to alter its offer follows weeks of complaints from investors over the original terms of the complex agreement.

Hedge fund managers including Elliott Management, TCI and Davidson Kempner had been arguing that the mostly stock alternative — which will consist of shares in AB InBev’s that will not trade publicly for five years — was designed to appeal to SABMiller’s large shareholders Altria, the US tobacco company, and BevCo, the investment vehicle of the Santo Domingo brewing family.

Altria and BevCo own about 40 per cent of SABMiller, and the share alternative was created to encourage them to support a deal as it would minimise their tax liability from an AB InBev takeover.

Meanwhile, the fall in sterling following the UK’s vote to leave the EU has widened the gap in value between the two choices, with the cash option more than 16 per cent lower in value for shareholders as of Monday.

The Financial Times first reported last week that Elliott had written to the board of SABMiller to raise its concerns.

On Monday, Martin Gilbert, chief executive of one of SABMiller’s shareholders, Aberdeen Asset Management, said his company was “leading the charge” in putting pressure on the brewers to revise the terms of the deal.

On Tuesday, however, Aberdeen said the revised deal “remains unacceptable as it both undervalues the company and continues to favour SABMiller’s two major shareholders”.

AB In Bev’s revised offer comes earlier than many investors had expected.

Last week, Mr du Plessis told SABMiller investors that the South African brewer would review the terms of AB InBev’s bid and “take into consideration all relevant facts and circumstances” — but only after the proposed takeover was cleared by Chinese authorities.

Speaking at the company’s annual shareholder meeting in London, Mr du Plessis said that SABMiller was “still waiting for the precondition in relation to China” and would “look at the transaction as a whole” once those approvals were received.

AB InBev’s takeover of SABMiller has already been given the greenlight in more than 20 jurisdictions, including the EU, which cleared the merger in May but stipulated that AB InBev must sell SABMiller’s entire beer business in Europe.

Last week, US antitrust regulators also approved the deal, after AB InBev agreed to divest SABMiller’s entire US business, including its stake in MillerCoors

- No merger talks between Mediaset and Telecom Italia

- There is a proposal for minimal fine for Spain that is yet to be agreed by all members

* COM HEM - BC Partners to sell 15m shrs via Morgan Stanley & Nordea.........

* ENAV IM - Trading Day 1. €759m pre shoe, €834m post shoe. Priced @ €3.30...

VIRGIN MONEY - Clean 15% beat on costs of £5m and bad debts by £9m.......+10%

FAURECIA - Beat. Op income 9% ahead of cons. Raises FY16 op margin guide..+3%

GKN - Solid. Sales +2% org, op profit +7% beat. Announce new cost savings.+3%

MONDI - Beat. Preannounce op profit expected to be above the prior year...+3%

COVESTRO - EBITDA 8% beat on margin. Mix ok with beat across all 3 divs.+2-3%

MTU - Beat & raise. Net sales €1,201.3m v €1,122mn & op profit +7% YoY..+2-3%

INMARSAT - Spec US DoD gives goahead on contract that was prev protested+2-3%

MICHELIN - Solid. EBIT 9% & EBIT margin 13.7% beat. Implies c.5% upgrades.+2%

MANGROUP - Inline. EPS 10% ahead on small absolute nos, flows in Q2 decent+2%

RANDSTAD - Mixed but gd enough. Topline miss but decent margin & trends...+2%

ICADE - NNNAV EU74.2 a share +1.5% since Dec 31st. Increasing CF guide..+1-2%

SEGRO - Solid. NAV +2.6% after adj for stamp duty & transaction taxes...+1-2%

UNITE - 1H looks strong with NAV +7%, EPRA EPS +15%, interim divi +9%.....+1%

TI - Positive. Brazilian sub TSU reports revs +1.3% and EBITDA +6% v BAML.+1%

BT - Ofcom announces next steps on its Strategic Review of Digital Comms..+1%

PZ CUSSONS - Inline with exps, divi inline, cont challenges in Nigeria....+1%

UPM - Sales 2.5% light bit EBITDA +4% v cons. Cost-efficiency delivering..+1%

MINERS - Iron Ore +0.8%, Copper -0.44% with BHP OZ -0.3%, RIO OZ +0.9%..+0.5%

CAPCO - Mixed. Covent Garden good perf, lettings above ERV in the period..u/c

PFG - Revs light, PBT up 17.6% looks inline. Vanquis bank looks inline....u/c

DRAX - EBITDA below but EPS inline on FX. Miss guidance but CFD delay exp.u/c

BP - Miss at bottom line, $720m v $840m cons on weaker prodn/upstream...-1-2%

STRAUMANN - We DOWNGRADE to Underperform. See risks in dental implants..-1-2%

ORANGE - Rev 0.9% & EBITDA 0.3% miss, Spain better, AMEA and ICSS worse.-1-2%

LUXOTTICA - EBIT 8% light, net sales weak and guidance cut. We reit U/P...-2%

LAMPRELL - Rig delivery delay exposes to a liquidated damages claims......-2%

CRODA - Mixed update with H1 PBT 148.5m v 146m cons. Stock had gd run.....-2%

VICTREX - Inline with cautious comments. Q3 vols -10% YoY, sales -6% YoY..-2%

COMMERZBANK - Prerelease inline but capital 50bps worse on pension deficit-3%

AMS +2-3% Revenues €132.4m vs cons 131.8m, net €19.6m vs cons 16.4m

Anglos +1% Spec BHP bidding for Anglo American's coal assets

Applus +2% Numbers inline, Organic growth better

Autoneum +1-2% Sales CHF1.09b vs cons 1.08b, EBIT around 2-3% ahead

BP -1-2% 2Q ADJ net income $720M, est $819M

BNP -1% Negative read from Commerzbank numbers

BT -1-2% Openreach Should Be Separate Co. Within BT Group, Ofcom

Cap & Count -2% CFO to leave, NAV 344p vs CS at 362p

Commerzbank -3% Q2 Net miss, CET1 at 11.5%, backwards from 12%

Covestro +2-3% Q2 EBITDA 542m, Cons 503m, Outlook Increase in Core vols

Croda -1-2% organic growth -2% in first half vs -1 in Q1

Deut Bank -1% Negative read from Commerzbank numbers

Drax +1-2% Underlying business performing in line with expectations

Elis +1% Revenues €730m vs cons €725m, confirms FY outlook

Faurecia +5% H1 sales 2% miss, net income 15% beat, op income 8% beat

Fevertree +1-2% H1 revs and dividend inline, commentary positive

Genmab +0.5% Positive drug update from U.S. Food and Drug Admin

GKN +3-4% 8% EBIT beat, sales 1% miss, little impact from Brexit

Hibernia M/P No's inline with market expectations

Icade M/P No's inline with market expectations

Infineon +1% US peer Texas Instruments up 5.7% a/h on Q3 rev/EPS beat

Inwit +1-2% Revenues around 1.3% ahead, EBITDA around 3.5% ahead

Ladbrokes +1% CMA final decision on Gala Coral merger inline

Luxottica -2-3% Op profit inline, guidance for FY16 adjusted down

Man Group +1-2% Mgmt fees slightly better $90m cons $89m, inflow better

Michelin +1% H1 recurring op profit 8% beat, sales 3% miss

Miners M/P Copper -0.45%, Brent +0.15%, Iron Ore +0.70%, China +0.45%

Mondi M/P H1 trading statement inline, EPS 73 – 77c

MTU Aero +2-3% 2Q sales EU1.20b; est. EU1.14b

Orange -1% 2Q Sales, EBITDA Inline with estimates

Provident Fin M/P Adj pbt ahead at £148.9m vs cons 146.3m

PZ Cussons +1% FY revs 821.2m vs cons 823.16m, PTP 103m vs cons 101.83m

Randstad UNCH EBITDA: 240m VS 238m, Q1 growth rate was 5%; Q2 3%

Refresco +3-5% Bought Whitlock Packaging for $129m

Renault +1% Positive read from Faurecia numbers

Segro UNCH Strong F/H reflecting the continuing occupier demand

SFS -1-2% CS downgrade to NEUTRAL (Muted growth)

STM +1% US peer Texas Instruments up 5.7% a/h on Q3 rev/EPS beat

Sulzer +1% Orders higher driven by Pumps Equipment division

Umicore M/P UMI & Sinochem are looking at Atotech, Reuters

Virgin Money +1-2% Underlying PBT £96.5m, CS ests 90.2m, outlook softer

Vontobel -1% Better costs, assets down to CHF179.3bn from 187.2b

*VW-US Judge to consider prelim approval of VW accord...............+1%

*ORANGE-Rev 10.1b(10.1),Ebitda 3.34b(3.34),Debt 24.5b as of 30/6....-1%

*COVESTRO-Sales 2.99b(3.04),Ebit 364m(326),Ebitda 542m(499).........+2%

*CBK-NI 209m(219),OP 342m(343.5),Cet1 11.5%,ADR closes -3.8%........-4%

*LUXOTTICA-Sales 4.72b(4.75),Op Inc 857m(855),Net 532m(514).........-2%

*MICHELIN-Net 769m(769),Sales 10.29b(10.6),150m b/b,China mkt ok....+2%

*RANDSTAD-Rev 5.11b(5.18),Ebita 240m,OG Europe ok,US stable.........+1%

*FAURECIA-Sales 9.532b(9.699),Ebit 490m(452),NI 245m(213),OM 5%.....+3%

*PHILIPS-CEO says some Medtech acquistions possible-Boersen.........-0.5%

*AMS-Rev 132.4m(131.4),Ebit 24.4m(18.8),Net 19.6m(13.3),o/l weak....-4%

*SULZER-Sales 1.38b(1.35),Net 50.4m(30),Orders 1.42b(1.37)..........+1.5%

*AUTONEUM-Sales 1.09b(1.07),Ebitda 123.8m(118),Ebit 89.9m(85).......+1%

*VONTOBEL-Pft 105.7m(84.4),NNM 3.1b,Op Inc 496.8m(492),Reits o/l....+2%

*EDP RENOVAVEIS-Net 59m,Ebitda €648m,Fin Expenses +20%..............-2%


Macquarie:
Capital Counties CAPC- Writes down Earls Court value by 14% post Brexit. MD & CFO Soumen Das leaves to join Segro. -2%

Croda CRDA– on track to deliver FY results, benefitting from weaker sterling, cautious given economic uncertainty; +2-3%

Drax DRX- EBITDA down £50m to £70m, low end of consensus. 2015 a tough year, 2016 to be as challenging.-2%

GKN – H1 Sales & EPS both ahead of forecasts, sees 16 as year of growth; +2-3%

Jardine JLT- Revenue growth 5% to £619m, remain confident. +1%

Lamprell LAM- Delay of delivery of jack-up rig until mid-August. Mkt conditions remain challenging, guiding 2017 Revenues lower. -10/15%

Provident Financial PFG- Revenues & Margins up, start to H2 Strong. But dividend misses due to Bank Corporation Tax surcharge. -3%

SAB- AB INbev raises offer to £45 from £44, closed £44.40. Says offer is Final. +0.5%

Virgin Money VM/- Good set of no’s with a 10% beat across board. Brexit not affected customers demand . +5%


ShoreCap:
PROVIDENT-H1 ptp 148.9m.Divi 43.2p(Est47.7p).Confident forward statement...-2%

CRODA-H1 adj op pft 152.6m.On track to deliver forecasts for fy.............+1%

BP-Expect Q3 reported prod lower than Q2.Q2 prod 2090 MBOE.Q2 divi 10c......-1%

GREENCORE-Revs 360.4m.Confident to perform in line with mkt expectations...UNCH

SEGRO-H1 adj eps +6.5%.H1 ptp 74.2m.NAV/Share +2.6% to 475p.................+1%

VIRGIN MONEY-Says customer demand strong after Brexit vote..................+2%

CHARLES TAYLOR-Buys Cega for 29.8m.........................................UNCH

SABMILLER-AB Inbev increases offer to £45 from £44..........................+3%

CROSSRIDER-H1 revs $29m.Expects ebitda between $3.3m&3.5m.Net cash $70.....UNCH

VICTREX-Says on track for H2 improvement.Q3 in line wth forecasts...........+1%

FEVERTREE-H1 revs +69%.Strong growth across all regions.....................+2%

BT-Ofcom says Openreach should be separate company within BT Group..........+2%

GKN-a beat EPS 15.5p v est 13.6p outlook statement positive ................+2%

JARDINE LLOYD- Ptax -46% on exceptional costs outlook challenging...........-2%

PZ CUSSONS-in line Nigeria beginning to improve ............................+1%

LADBROKES/CORAL-must sell 350/400 shops for clearance says CMA .............-1%

UNITE-H1 strong despite Brexit outlook positive ............................+1%

MAN-FUM$76.4 vs $78.7 div better outlook cautious ..........................-1%


RBC:
*ANGLO: +1% COAL CEO MKHANAZI to replace KUMBA CEO MBAZIMA from SEPT.

*BP: -1% lowering capex guidance, numbers touch light.

*BT: +2% OFCOM review, not proposing to split.

*CASINO: 0% CNOVA numbers in line.

*COMHEM: -1% ABB 15M shares @ 73.25 SEK.

*COMMERZBANK: -5% preliminary Q2 update weak, -50bps CET1 ratio.

*CRODA: 0% H1 sales in line, cautious but reiterates guidance.

*DEUTSCHE BANK: -1% read through from higher pension liabilities at COMMERZBANK.

*DRAX GROUP: -2% H1 results guiding to low end of range on delay of CfD.

*EDPR: -1% H1 EBITDA small beat, net miss.

*GKN: +2% H1 profit ahead, FOKKER integration on track.

*INWIT: +5% Q2 net income +18% YOY, board approves acceleration plan.

*JLT: +1% PBT ahead, dividend and revenue in line.

*LUXOTTICA: -3% H1 adjusted operating prodit -2.5%, reduces FY guidance.

*MAN GROUP: 0% total fees light, adjusted PBT ahead, AUM in line.

*MICHELIN: +1% H1 profit +11% beats estimates, FY guidance confirmed.

*MTU-AERO: +3% Q2 adjusted EBIT ahead, raises 2016 outlook.

*ORANGE: -1% Q2 revenue slightly light, EBITDA in line, confirm outlook.

*PFG: +1% results small beat versus consensus, dividend small miss.

*RANDSTAD: +2% Q2 EBITDA in line, growth a touch light, margins better.

*SULZER: +2% Q2 4% beat on orders, raising full year order guidance.

*TELECOM ITALIA: +1% read through from Q2 INWIT numbers.

*VIRGIN MONEY: +2% H1 underlying net interest margin ahead, no BREXIT effect.

Capital & Counties, the £2.5bn London property company, has slashed £200m off the value of its land holdings at Earls Court in a further sign of the fall in the value of central London residential land.

The 14 per cent writedown on Capital & Counties’ share of the 77-acre development — a joint venture with Transport for London — follows a similar cut to the valuation of land at Nine Elms south of the Thames by its fellow property company St Modwen, writes Judith Evans, property correspondent.

St Modwen wrote down the value of its interest in the New Covent Garden Market site by 10 per cent, or £21m, this month.

Both sites are slated for mainly residential development, but prices for newly built luxury homes in the centre of the capital are expected to fall this year.

Capital & Counties also said it had decided not to sell the Olympia exhibition centre after an attempt to dispose of the venue.

Ian Hawksworth, chief executive, said: “At Earls Court, we continue to make positive progress on site. Whilst the last quarter has been characterised by uncertainty in the London market as a whole, the value of this estate will increasingly be realised in the years ahead.”

The London-listed group also owns £2.1bn of properties in Covent Garden.