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Disney execs in a panic over upcoming ‘Star Wars’ film
The first “Star Wars” spinoff, “Rogue One: A Star Wars Story,” is in crisis, and the movie will have to go into expensive reshoots over the summer, sources exclusively confirmed to Page Six.
The much-anticipated “Rogue One” is due for release on Dec. 16, but we’re told bosses at Disney are not fully satisfied with the first cut from director Gareth Edwards.
One Hollywood source told us, “The execs at Disney are not happy with the movie, and ‘Rogue One’ will have to go back into four weeks of expensive reshoots in July.”
The movie stars Felicity Jones, Mads Mikkelsen, Ben Mendelsohn, Forest Whitaker and Diego Luna. The “Star Wars” franchise’s first spinoff film will take us back in time to a point between Episodes III and IV. The plot reportedly sees resistance fighters embark on a daring mission to steal the plans for the Death Star before it can be used to enforce the Emperor’s cruel rule.
There has been much speculation that the movie will take a darker turn and Darth Vader will appear as the Emperor’s chief enforcer. It is also believed that a young Han Solo will make a cameo appearance. Page Six exclusively revealed earlier this month that Alden Ehrenreich has landed the coveted part to play the young Solo, a role made famous by Harrison Ford.
It was announced earlier this month that Edwards would not direct “Godzilla 2” later this year, and would instead “focus on smaller films.” But the movie insider told us, “Gareth’s work on the first ‘Godzilla’ [which came out in 2014] shows he can handle a big studio blockbuster. But ‘Rogue One’ has fallen short of what J.J. Abrams did with ‘Star Wars: Episode VII — The Force Awakens.’ So Disney has ordered reshoots.”
Edwards is well-known as a risk-taking director, but has also been reported to prefer to keep studio influence at a minimum. The source added, “Disney won’t take a back seat, and is demanding changes, as the movie isn’t testing well.”
Reps for Edwards didn’t get back to us last night.
A Disney source added, “The filmmaking team and the studio always anticipated additional shooting and second unit work to make the film the absolute best it can be, and the actors were aware there would be additional shooting. Coming off ‘The Force Awakens,’ there’s an incredibly high bar for this movie and we have a responsibility to the franchise and to the fans to deliver the best possible movie we can.”
Rogue One trailer :
Gapping up
In reaction to strong earnings/guidance: TTM +12.8%, NPD +11.5%, AMSC +5.3%, FRO +3.5%, LPG +3.2%, YY +2.3%
M&A news: CPXX +71.4% (to be acquired by Jazz Pharmaceuticals (JAZZ) for $30.25 per share in cash), WR +9.1% (to be acquired by Great Plains Energy (GXP) for $51/share in cash & $9/share in Great Plains Energy common stock), SANW +4.5% (announces acquisition of SV Genetics for $1 mln in cash and $1 mln in stock), DANG +4.1% (to be acquired by its parent co in a going-private transaction for cash consideration of $6.70/ADR), MON +1% (Bayer (BAYRY) might increase bid for MON, according to Sunday Times)
Other news: CBAY +13.2% (announces top line efficacy and safety data from its Phase 2 Study of Mbx-8025 in Patients With Primary Biliary Cholangitis (PBC); study stopped early after meeting its objective), SODA +10.1% (announced the release of its new home beer system), CBYL +8.5% (continued volatility in pre-mkt trading), ICPT +6.5% (receives accelerated approval grant from FDA for Ocaliva), NVCR +6.2% (receives IDE approval to initiate METIS trial), FOLD +5.5% (announces European Commission approval for Galafold (Migalastat) in patients with Fabry Disease in European Union), MT +4.4% (CLF enters into a long-term agreement with ArcelorMittal), LC +3.1% (continued momentum from last week), TNXP +3.1% (will present 'positive' results from its Phase 2 AtEase Study of TNX-102 SL on May 31 and June 1 at the 2016 ASCO), LXRX +3.1% ( The FDA has accepted for filing the New Drug Application for telotristat etiprate), BRCD +2.4% (to replace MDC Holdings (MDC) in the S&P MidCap 400), JD +1.9% (Shanghai +3% overnight), ACAD +1.9% (announces that NUPLAZID is now available for prescription in the US), PRGO +1.7% (receives FDA approval for launch of generic equivalent to Flonase), ARIA +1.7% (initiates Phase 1/2 clinical trial of AP32788), ODP +1.7% (announces $100 mln stock repurchase program), VRX +1.1% (continued momentum from last week), BUD +1.1% (Barron's profiles positive views on BUD)
Analyst comments: MU +4.2% (upgraded to Outperform from Neutral at Robert W. Baird), DE +2% (upgraded to Buy from Neutral at UBS), MRO +1.4% (upgraded to Overweight from Neutral at Piper Jaffray)
Gapping down
In reaction to disappointing earnings/guidance: N/A.
M&A news: GXP -5.6% (acquires WR for $51 per share & $9/share in Great Plains Energy common stock)
Select metals/mining stocks trading lower: AG -2.4%, HL -2.1%, AUY -1.4%, BBL -1.2%, BHP -0.9%, RIO -0.6%
Select oil/gas related names showing early weakness: SDRL -1.8%, SDLP -1.6%, BP -1.1%, ENB -1.1%, RDS.A -0.5%
Other news: OSIR -25.4% (discloses investigation by the United States Attorney's Office), TEVA -2.1% (receives complete response letter from the FDA related to an NDA for SD-809)
Analyst comments: MOS -2.1% (downgraded to Hold from Buy at Stifel), STO -1.5% (downgraded to Underperform at RBC Capital Mkts)
European Bank Returns Aren’t as Bad as You Think
The miserably low returns to shareholders reflect the banking system's lower leverage
Good news stories are few and far between for Europe’s bruised banking system, but there’s a little-noticed bright spot in recent bank earnings.
Banks’ return on assets — one measure of profitability — just reached a postcrisis high-water mark. The average return on assets for banks in the Euro Stoxx banking index was 0.34% in the first quarter. It touched that level in 2011 but has otherwise been below it since 2008. The median return on assets for those banks is even better, at 0.44%.
That’s still around 30% below the average level for the years immediately before the financial crisis. But it’s considerably better than returns on equity, which are still less than 50% of their pre-crash level.
ROA itself is rising because of three factors, according to the latest financial stability review from the European Central Bank: net interest income, writedowns of bad loans and non-interest income. Simply put, banks are making more money–somewhat surprisingly, given low and negative rates– and getting rid of bad assets that don’t generate much income.
They’re also making new loans, which adds to assets, but those loans are producing income that keeps the ratio from getting depressed.
It’s another story with return on equity. Despite higher returns, bank equity has been growing, thanks to a heavy push in Europe to raise capital.
For measuring profitability, it’s easy to see why ROE is the most relevant measure for shareholders, especially in the short term. Understandably, they want to know the profit they’re making on their investment most of all. But ROA is in some ways the more relevant figure for everyone else.
The last time ROA reached its current level was in 2011, around the time that European Central Bank hiked interest rates twice, and the bloc’s economy fell back into recession. ROA had declined to practically nothing by the middle of 2013, when the sluggish economic recovery began.
The gap between the two measures of returns is simple: leverage. Return on equity is net income divided by the amount of equity issued. A company that raises its debt levels can generate more income, lifting ROE with it.
Returns on assets, on the other hand, can’t be boosted by simply raising debt. The fact that ROA seems to have outperformed ROE in recent quarters can be explained by the lower leverage of European banks.
During the quarters before the financial crisis, total debt was regularly over 1,000% of total equity for Euro Stoxx banks. Over the last year, it’s fallen below 500%.
Because it can be increased simply by leveraging up, ROE is not always a good indicator of underlying profitability. During the 2002-2007 period, the ROA for European banks barely rose at all, according to the ECB, but higher leverage meant great returns for the owners of equity. Shareholders were predictably happy enough: the Euro Stoxx banks offered a total return of well over 200% from their 2002 low to their 2007 high.
The current divergence between ROE and ROA that seems to be opening up in Europe might also look familiar to American bankers. In the U.S, returns on assets are now 76% of what they were between 2004 and 2007, while returns on equity are just 56% of their former levels.
“Equity-holders often have risk-taking incentives out of line with the interests of other bank stakeholders, much less society” said Mr. Haldane, who is now the central bank’s chief economist.
To be sure, the return-on-asset data is not nearly enough for a bullish take on European banks. In the U.S, the banking recovery benefited from stronger economic growth than Europe is likely to see over the next few years. Earnings growth in Europe is expected to be weak, so there’s no promise that ROA will continue to grow at all.
Nonetheless, ROA presents a slightly less grim picture of the European banking system than ROE. The inability of the eurozone’s banks to return growing profits to their shareholders may be bad news for them, but if it’s because of less debt, it may not be a bad thing for Europe as a whole.
Deutsche Börse CEO Braced for Regulatory Scrutiny Over LSE Deal
Carsten Kengeter criticizes French government after country’s finance minister and central bank chief raise concerns over the tie-up
FRANKFURT—The chief executive of Deutsche Börse AG said his planned merger with the London Stock Exchange Group PLC wouldn’t close before the first quarter of next year because of intense regulatory scrutiny and that U.S. rivals could potentially still torpedo the deal to create Europe’s biggest stock-market operator.
“We don’t expect the deal to close before next year’s first quarter because regulators have to give their OK following shareholder approval,” Carsten Kengeter told journalists in Frankfurt Monday.
Mr. Kengeter, who is poised to become chief executive of the combined group, also criticized the French government, which he said had a vested interest in undermining the deal. He noted that the French state holds a 6% stake in Euronext NV, a rival to Deutsche Börse and LSE Group.
His comments came in response to statements by French Finance Minister Michel Sapin and the head of the country’s central bank, François Villeroy de Galhau, who earlier Monday raised concerns about the tie-up of Deutsche Börse and LSE.
Mr. Sapin said such a move risked curtailing competition and increasing market risk. He reiterated a call for European authorities and other local supervisors to scrutinize the British-German deal.
“We’ve been in a process of decreasing risk,” Mr. Sapin said. “If there is too much concentration, risks would increase.”
Mr. Villeroy de Galhau said the creation of a large stock clearing house “could create an operator that is too big to fail.”
Mr. Kengeter said Deutsche Börse and LSE would keep their clearing houses separate but that customers and financial stability could still benefit.
He also said that U.S. competitors such as Intercontinental Exchange Inc. and CME Group Inc. could potentially bid for LSE or Deutsche Börse. ICE in March said it was considering a bid for LSE to rival Deutsche Börse, but said earlier this month that it would not place a bid.
Mr. Kengeter said ICE could potentially make a new approach for the LSE in November, when a standstill period ends. He speculated that CME might also be interested in bidding for Deutsche Börse should its LSE merger fall apart.