TheChek News Flow

One day late last month, two big companies announced takeovers that had something in common: Neither Comcast Corp. nor AbbVie Inc. used a banker.

Comcast and AbbVie, both giants in corporate America, aren’t alone. More companies are deciding to do without bankers when they make acquisitions.

In 2015, the buyers in public-company deals valued at more than $1 billion didn’t use financial advisers in 70 instances, or 26% of the time, according to Dealogic. That is the second-highest total on record and far surpasses the 25 cases, or 13% share, in 2014.

In 2016, there have already been 23 examples, or 27% of deals in question. While merger volume has been surging, the rise in deals without a bank since 2014 is more pronounced.

That is bad news for Wall Street firms, which bring in enormous fees—sometimes measuring in the tens or even hundreds of millions of dollars—from takeover advice. The timing could hardly be worse for big banks as they lose market share to smaller upstarts known as boutiques and grapple with new regulations and low interest rates.

Boutique firms such as Moelis & Co. and Perella Weinberg Partners LP have steadily gained ground on their larger rivals in recent years, with the group’s market share based on fees recently at nearly 18% so far in 2016, more than double where it stood in 2008, according to Dealogic.

Corporate executives attribute the rise to a desire to keep transactions confidential, move quickly when needed and, of course, save money. There is also a view by some that all bankers don’t always have their best interests at heart.

In his 2014 letter to shareholders of Berkshire Hathaway Inc., Warren Buffett captured that view. He derided investment bankers, who, “being paid as they are for action, constantly urge acquirers to pay 20% to 50% premiums over market price for publicly-held businesses.” He went on: “A few years later, bankers—bearing straight faces—again appear and just as earnestly urge spinning off the earlier acquisition in order to ‘unlock shareholder value.’”

What has changed inside companies?

Some of them now have large internal teams capable of developing deal strategy, building out financial models and executing transactions without bankers’ help.

The trend has accelerated as companies again embrace M&A after years of sluggish activity. Meanwhile, restrictions on compensation and other regulations at big banks have created a steady supply of seasoned advisers willing to go in-house—even if the pay is lower.

Making such a move generally involves taking a pay cut. Senior internal deal makers at big companies often rake in more than $1 million a year, and such roles can be stepping stones to bigger jobs like finance chief. But in a good year, a senior M&A banker can make several million dollars.

In one previously unreported recent move, Goldman Sachs Group Inc. media banker Guy Nachtomi left to join Activision Blizzard Inc. as chief strategy officer, people familiar with the matter said.

Big Wall Street firms have armies of advisers with wide-ranging expertise and access to valuable information. Having bankers can also inoculate deals against legal challenges if they are botched or the price is questioned. And companies often need to borrow for takeovers, which frequently goes hand in hand with advice.

It is especially difficult for a company on the sell side of a transaction to go it alone, deal makers say. Coordinating a multilayered auction without a banker, for example, would be challenging and expose the company to legal risk.

None of that deterred Comcast or AbbVie, both of which recently hired ex-bankers.

Comcast brought on Bob Eatroff from Morgan Stanley as executive vice president of global corporate development and strategy.

When Comcast agreed to buy DreamWorks Animation SKG for $3.8 billion last month, the cable company handled the negotiations itself in part because it needed to move quickly, said people familiar with the matter. Over the course of two weeks, Comcast’s deal team and executives including Chief Financial Officer Mike Cavanagh—a former banker—hammered out an agreement with the film studio, the people said.

Toward the end of the talks, Comcast’s board had a few phone calls with Paul Taubman of boutique PJT Partners Inc. to get an outside opinion, some of the people said.

PJT will likely get less than the typical outside-adviser fee on such a deal of as much as $20 million, one of the people said.

AbbVie also eschewed an investment bank when it agreed that April day to buy cancer-drug developer Stemcentrx for $5.8 billion.

The drug company in December hired J.P. Morgan Chase & Co.’s Henry Gosebruch to be chief strategy officer.

Within Mr. Gosebruch’s first two weeks on the job, AbbVie set up a meeting with Stemcentrx’s chief executive and indicated interest in buying the company, said a person familiar with the matter. By the time an auction for Stemcentrx later began, AbbVie had already done a substantial amount of work and didn’t see the need to bring in a bank, the person said.

As AbbVie finalized the purchase, it tapped Bank of America Corp. —for a fairness opinion, which typically costs much less.

Neither PJT nor Bank of America was credited for advising in press releases announcing the two deals.

ML

* GALENICA - Sprint Investments 2 sells 320k shrs @ CHF 1,355; MS sole.......

PREMIER OIL - Small +ve on production although no update on financing.....+5%

MONCLER - Strong 1Q with rev 7% ahead. Confirms FY cons EBITDA of €334m.+3-5%

ARKEMA - Big beat. EBITDA 11% ahead at 302m v 272m cons. No guidance yet..+3%

LANXESS - Beat. EBITDA 4% ahead & upgrades guidance range. SI c.3.25%.....+2%

OMV - Beat across the board with Q1 net income a 20% beat, EBIT 39% beat..+2%

SBM - Sound update, no material issues. Co see no new orders in '16/'17...+2%

TUI - Good. EBIT seasonal loss of €237mn better than our €256mn forecast..+2%

BARRATTS - Private sales rate ran at 0.75/site/wk, flat on last yr in H2..+2%

COMPASS - EBIT 3% & EPS 4% ahead. North Am v strong but ROW still soft..+1-2%

EXPERIAN - FY solid. Inline with cons with EBITDA $1210m v cons $1210m....+1%

WIRECARD - German regulator sees mkt manipulation of shrs. Launches probe.+1%

MEDIASET - Q1 TV ad growth was +2.8% & +4.7% for the first 4 months.......+1%

LEG - Solid. FFO II €62.5m, EBITDA €49.6m, LTV 47.4%, Mgmt raise guidance.+1%

ALSTOM - EBIT 10% beat. Strong orders & margin but cash burn continues....+1%

CARLSBERG - Small beat. Org sales growth +2% v +1.3% cons. FY16 reit......+1%

HOCHTIEF - Slightly ahead with PBT €159mn v €153mn cons. FY16 guide reit..+1%

MARINE HARVEST - 1Q rev €805b v €775m cons & net income €128m v €78m est..+1%

POSTE ITALIANE - Q116 beat but underlying mail performance looks weak...+0.5%

EON - EBITDA €3,071bn +3.5% v bbg cons & Net Income €1,314bn +3.1% v cons.u/c

YARA - Sentiment -ve. OCI announces new CAN price for Germany of EUR162/t.u/c

NATIONAL EXPRESS - IMS inline with expectations, maintains FY guidance....u/c

LUNDIN - Mixed but svedrup production uplift likely to trump higher debt..u/c

DEUTSCHE POST - Inline. EBIT €835m v €837m cons. PEP EBIT 3% miss. FY reitu/c

MEDIOBANCA - 1Q top line 7% beat but capital a little light at 13.2%......u/c

ABN AMRO - Headline beat and capital strong but miss on NII and fees......u/c

BILFINGER - Soft but inline with BAML and indic given at AGM. Confirms FY.u/c

JRP - Ok update. DB de-risking sales up 58% for combined group. No cons...u/c

WOOD GROUP - Trading update inline with results release. Guidance inline..u/c

EDF - Declined to put # on the impact of carbon price floor. Revs inline..-1%

UBM - We DOWNGRADE to Underperform as has o/performed 20% this yr, PO 590p-1%

METRO - Q2 sales of €13,573m, 0.5% ahead & EBIT 200% beat. FY reiterated..-1%

LAGARDERE - We DOWNGRADE to Underperform, taking our PO €22.8 from €27.5..-1%

SWATCH - Fossil reported watch revs -8% and cut guidance by 28% overnight.-1%

WILLIAM HILL - Inline. Net rev growth in 1Q16 -3% driven by a weak online.-1%

RBI - Mixed to weak. Net income inline however both NII and fees declined-2%

NUMERICABLE - Miss with no guidance given for France. Revs 2.2% miss......-3%

JC DECAUX - Q1 org growth ahead of prev guidance but Q2 guide light.....-3-5%

Investec

UK

* ARROW GLOBAL-Q1.Rev +25.4%.Increase in core collections.FY on track.......+2%
* BARRETT DEVS-Update.Mkt conditions remain strong.FY remains on track......+1%
* BT/VODAFONE-Liberty Global Would Evaluate Telefonica’s 02 in U.K(CEO).....-1%
* CAPE-Update.To be H2 weighted.Margins across the board below exp's......-3-5%
* CENTAUR MEDIA-Q1. Rev +5%. Exhibitions ahead, Ad weak. No chg to FY......unch
* COMPASS GRP-H1. Numbers & div a beat. FY exp's remain unch..............+1-2%
* EXPERIAN-FY.Organic rev growth;FX headwinds remain,upbeat outlook........unch
* ITV/SKY-Negative read across from Disney's earnings miss last night.......-1%
* MEDICLININC-Appoints new group CFO.......................................unch
* MELROSE-Update. Trading remains in line.Continues to seek acq's..........unch
* NAT.EXPRESS-Update.All divisions performing well.FY remians on track......+1%
* OCADO-Vague bid spec in today press after ydays move (+9.26%)............unch
* ONESAVINGS-Update.Numbers ahead.Upbeat outlook stmnt....................+1-2%
* PREMIER OIL-Update.Prod.ahead.+ve Catcher.Covenant discussions ongoing..+3-4%
* PURPLEBRICKS-FY T/U on course to meet FY expect's, LFL up 445%............+2%
* RENISHAW-Q3 REV CA. 20% than Q315(large one-off orders).FY guid' unch....unch
* TAPTICA-Update.Strong H2 continues into H1.11.5% U/G to FY16 EPS.........3-5%
* TUI-H1 confirms FY est's,sees underlying EBITA growth of at least 10%.....+2%
* TT ELEC.-Update,inline.favourable FX.Cnfident outlook...................+2-3%
* VERTU-FY pre-tax +25%,March/April sales rise YOY,divi increase............+2%
* WILLIAM HILL-T/U Net rev -3%, on-line -11%, FY Op-prof' guid' UNCH........-1%
* WOOD GRP-T/U sees FY EBITDA in-line,committed to div increase in '16......+1%

EU

* ABN-Q1 net €474m Vs est €418m, CET1 15.8%, regulatory costs up.............+1%
* ALLIANZ-Q1 out, was pre released, more PIMCO outlfows, AUM -17%............-1%
* ALSTOM-2015/16 sales €6.88b v est €6.71bn, confirms 2020 targets...........U/C
* ALTICE-Q1 r
evs €4.26bn Vs est €4.27bn, maintains outlook...................U/C
* ARKEMA-Q1 ebitda ahead at €302m, margins 16%, confirms 2016 o'look.........+1%
* AXEL SPERINGER-Q1 rev, ebitda in line, guidance seems in line..............+1%
* BILFINGER-Q1 business development in line, confirms FY o'look............+0.5%
* CARLSBERG-Q1 org revs +2% Vs 1.3% est, better E Europe will be taken well..+1%
* CNP-Q1 revs +8.9% l4l,hurt by Brazil real fall(s/b expected).............+0.5%
* D POST-Q1 ebit 3.5% beat, rev small miss, reits f/casts,comment to follow..+2%
* EDF-Q1 rev 2% light, reits FY ebitda target, comment to follow.............U/C
* EON-Q1 net inc €1.31bn(est €1.28bn),no surprises aftr recent CMD...........+2%
* GENMAB-Q1 rev 15% light, cites one off effects, reaffirms FY f/casts.......U/C
* HOCHTIEF-Q1 sales 2% ahead,new orders +31%,margin +3.6%,confirms guidance..+2%
* JC DECAUX-Q1 org gth +10.5%(guided +9%),sees Q2 +3%(weak?),d/grades away...-3%
* LANXESS-Q1 ebitda 3% ahead of cons, raises FY ebitda guidance by 2%........+3%
* LEG IMMOB.-Q1 FFO I rises 22%, raises guidance by around 1%................+2%
* LEONI-Q1 ebit €24.4m vs est €23.4m, FY guidance towards low end............-1%
* LUNDBECK-Q1 rev 3% beat, raises FY rev and ebit guidance by 3%.............+3%
* MEDIASET-Q1 rev in line,ebit ahead,net looks worse, ad trends positive.....+1%
* MEDIOBANCA-Q3 net €121.3m(est €89.6m),CET1 13.2%(13.4% in Dec),weak into...+2%
* METRO-Q2 sales in line,Q2 lfl sales +0.6% overall,1.1% Ger,confirms FY.....+1%
* MONCLER-Q1 sales +17%(est 12.2%),retail & w/sale beat,further gth in 2016..+3%
* NH HOTELES-Q1 rev €301.8m vs est €299m (2 ests), net looks slightly worse..U/C
* NUMERICABLE-Q1 ebitda €851m vs est €878m, revs in line.....................-2%
* OMV-Q1 clean net inc 12% beat, cutting costs, capex unch...................+1%
* POSTE ITALIANE-Q1 rev 6% ahead, net €367m(est €323m), looks good...........+2%
* SCOUT24-Q1 rev +12.9%,looks in line,on track for FY,strong y’day...........-1%
* TU
I-current trading in line, reits outlook,to sell specialist division...+1.5%
* WOLTERS KLUWER-Q1 org rev +3%, repeats FY f/casts..........................U/C
Other news
* RAIFFEISEN-releases Q1, considers merger with parent company.
* GAMELOFT,UBISOFT may react to Electronic Arts (+7% a/hours in US on results)

CS:
ABN UNCH 1Q net EU474m est EU418m, CET1 15.8% vs 14.2%

Allianz -1% No's inline with pre-announced op profit and net income

Alstom +2-3% FY sales 2.5% beat, EBIT 3% beat, Confirms 2020 targets

Altice -1% Q1 Rev EU 4.26bln est EU 4.27bln. Re-iterates FY Outlook

Arkema +2% EBITDA €302m CSe €283m, 2016 outlook confirmed

Bekaert -3% Revs and sales slightly light, reaffirm margin tgt

Bilfinger -1-2% 2 board members withdraw from re-election

Barratt Dev +1-2% Says market conditions remains strong, reiterate outlook

Carlsberg UNCH 1Q organic sales growth beats ests, confirms forecast

CNP M/P EBIT €513m cons 563m, net €281m cons €214m

Compass M/P EBIT 2% ahead, company flag weakness in oil and gas

Deut Post +1% Sales light and EBIT beat, confirms guidance

E.ON -1-2% Q1 Net slightly ahead, Guidance is confirmed

Experian UNCH PBT 1% light vs cons, div as expected

Gas Nat -2% LNG trading disappointing

Hochteif +1-2% Sales inline but EBT €159m vs cons 151m

Jenoptik -1-2% 1Q Sales 158.2m vs cons 159.5m, confirms forecasts
JC Decaux -3-4% 1Q adj. revs rises 15% y/y, downgraded away from us

LEG Immo +1-2% Raises FFO I outlook for 2016/17

Lanxess +2% Q1 small beat, guidance raised, Beat in polymers spreads

Leoni M/P Q1 final sales and EBIT 3% beat, confirms FY guidance

Lundbeck +3-5% Q1 beat and raised guidance

Lundin Pet M/P Q1 revs and EBITDA inline with market expectations

Marine Har -1% Revs 4% beat, lwers 2016 harvest guidance

Mediobanca +2-3% Revs €502.7m cons €475m, net well ahead €121m cons €89m

Melrose M/P Brush performing satisfactorily, seeking an acquisition

Metro M/P Q2 Sales inline with estimates, confirms FY guidance

Miners +2% Copper +0.70%, Brent +0.20%, Iron Ore -0.15%, China +0.76%

Moleskine -1-2% 1Q net revs 25.03m vs bberg cons 25.867m, confirms 2016

Moncler +3-5% Q1 revs 7% beat, outlook confident

Nat Express +1% Revenues +4%, coach passenger volumes grew by 6%

NH Hotels M/P Q1 revs small beat, Net loss small miss

Numericable -2-3% Q1 revs inline, EBITDA 3% miss

Ocado +2% Mentioned in FT and Daily Mail re: M&A spec
OMV M/P Net income better, E&P had very low exploration expenses

Onesavings +1% NIM and loan growth fine, Confident in guidance

Poste Italy +2-3% EBIT 12% ahead, net profit 14% ahead

Renishaw +2% Margin at 18.4% vs FY exp of 18.2, Keeps FY outlook

Richemont -1-2% Peer Fossil -23% last night, having slashed FY forecasts

SBM M/P Revs in line with mgmt expectations and guidance maintained

Schibsted +1-2% Sales NOK3.88bn vs cons 3.85bn, EBITDA NOK421m vs cons 402m

Swatch -1-2% Peer Fossil -23% last night, having slashed FY forecasts

TUI +1% EBIT loss inline, reiterate guidance

Will Hill M/P Gross win margin lower, reiterate guidance

Wood Group M/P No's inline, Guidance in line with street


Numis:
* ARROW GLOBAL +1%; Core collections up 31%, revenue up 25%

* BARRATT DEVELOPMENTS +2%; TS, good perf, market remains strong, +ve outlook.

* CAPE +1%; AGM reports strong order book at £862m offset by weaker margins across the group. FY guidance remains unch with mkt conditions described 'robust'.

* CENTAUR +1%; TU good improvement in cash collection.

* COMPASS +1%; Encouraging interims, recovery in Europe gathering pace, Management says that “expectations for 2016 are positive and unchanged.”

* EXPERIAN -1%; Revenue in line, interim dividend small light.

* FUTURE unch; Acquisition of Blaze, no terms announced.

* MEDICLINIC mkt; New CFO announced. Wont move dial on strategy.

* MELROSE -2%; Trading in line but no real news on progress of acquisition.

* NATIONAL EXPRESS +2%; Strong Q1, rev + 11% yoy, top line growth across all divisions, North America especially strong, passenger growth +3%, confident o/look.

* OCADO +3%; Most papers citing a bid from Amazon as the reason for yday's rally.

* ONESAVINGSBANK +0.5%; Strong growth in Q1, net loans & advances grew by £460m during Q1.

* PREMIER OIL +5%; 'Strong' production on track to deliver 'at or above' upper end of 2016 expectations, 65-70kboepd. Catcher pre-first oil capex forecast to be -15% due to cost savings.

* PURPLEBRICKS +5%; TU H2 has seen continued strong gth, heady valuation though.

* RENISHAW +2%; O/look unch from March update. Rev 20% lower than Q3 2015. No surprises.

* RIVER & MERCANTILE +1%; Decent AuM growth, lower perf fees. Q3 AuM/NuM at £23.7bn was 3% ahead of the £23.1bn forecast.

* SEGRO mkt; Arranges bank facilities totalling €780m 11 May 2016.


ShoreCap:
MELROSE IND - current trading inline, eyes acquisitions....................UNCH

CAPE - Q1 trading mixed,margins pressured,oper.pft below expec,sees FY unch.-3%

ARROW GLOBAL - revs +25.4% £44.5m,EBITDA +57.6%,ontrack to deliver FY inline+2%

RENISHAW - Q3 revs at £308.1m vs £369.7m prev yr,PBT £20.2m.................-1%

CENTAUR MEDIA - revs +5%,sees some pressure on Ad and sponsorship revs......-1%

BARRATT DEVS - sees good demand,fwd sales +9.7%,market conditions strong....+2%

TT ELELCTRONICS - Made good start to year.Trading in line with forecasts...UNCH

PURPLEBRICKS - H2 trading strong.On course to meet fy views.................+1%

WILLIAM HILL - Q1 net revs -3%.Trading in line with prior fy views..........-1%

EXPERIAN - Fy revs in line.Expects another year of good growth.............UNCH

TUI - turnover +2.7%,EBITA +16.3%,summer trading inline,reits target g'dance+2%

WOOD GRP - mkt conditions remain challenging,sees FY EBITA 20% lower on '15.-1%

PREMIER OIL - strong production no's,on track to deliver at or above g'dance+2%

ONESAVINGS BANK - strong trading continues,loans grew by £460m..............+2%

JRP GROUP - quieter quarter in defined benefit sales........................-1%

NAT.EXPRESS - strong start to yr,revs +11%,passenger growth of 3%,PBT higher+1%


Mainfirst:
*DPW-Ebit 873m(844),Rev 13.9b(14.83),Reits FY Ebit 3.4-3.7(3.47).....+1%

*ALSTOM-Confirms 202 tgts,2015/16 Sales €6.88b(6.71b)................+1%

*LANXESS-Rev 1.92b(2.01),Ebitda 262m(253.6),Raises 2016 f/casts......+3%

*ARKEMA-Sales 1.89b(2),Net 98m(75.6),Ebitda 302m(271.6),o/l +ve......+1%

*CARLSBERG-Sales 13b(13.2),BV -2%(-1.1),NRG 2%(1.3),China -3 to 4%...+1%

*SCHIBSTED-OPG Rev 3.88b(3.85),Ebitda 421m(401),PT 219m(214).........+2%

*LUDIN PET-Rev 191.3m(190.6),Ebitda 124.9m(125),Prod 62.4............U/C

*MEDIOBANCA-Rev 502.7m(475.5),NI 121.3m(89.6),NII 301.4m(300.6)......+2%

*EON-NI 1.31b(1.28),Ebitda 3.07b(2.96),Sales 27.1b(27.53)............+1%

*SPRINGER-Rev 783.4m(790.8),Ebitda 125.9m(126.2),Margin 16.1%........-0.5%

*OMV-Rev 3.991b(4.09),Net Inc 174m(124.8),Ebit 167m(154.2)...........+1%

*POSTE ITALIANE-Rev €9.8b vs est €9.17b,Net Income €367m.............+1%

*POP MILANO-NII 206.5m(199.8),Rev 389m(395.8),NI 48.3m(47.8).........+1%

*JCDECAUX-Rev 748.5m(743),Organic Grth 10.5%,Q2 Org Grth 3%..........-5%

*MONCLER-Rev 237.3m(221.3),Sales at constant FX +17%(12.2)...........+4%

*MEDIASET-Rev 786.1m(792),Ebit 105.4m(94.9),H1 add Rev 2 stay +ve....2%

*EDF-Sales 21.4b(22.03),Reits FY Ebitda target 16.3-16.8(16.52)......+1%

*ALLIANZ-Finals Rev/Op Inc/NI known,P&C CoR 93.3%,Solvency 186%......-0.5%

*BILFINGER-Output 1.35b(1.34),Adj Net 1m(-1.7),Ebita 7m(7.7).........-1%

*C/ZEISS-H1 Sales known,Q2 Ebit 41.79m(38.4),FY Ebit 13-15%(13.37)...+1%

*HOCHTIEF-Sales 4.41b(4.455),OP 159m(153),Net 63m(60.1),FY ok........+1%

*LEG-FFO 62.6m(61.7),Ebitda 84.1m(80.7),Raises FY16/17 outlook.......+2%

*METRO-Sales 13.6b(13.5),Ebit 11m(-8),PT -72m(-96),Net -57m(-51).....+1%

*TIM TAILOR-Sales218.9m(216.7),NI -5.8M(-5.8),Confirms FY............-1%

*TUI-Rev 6.79b(7.23),Prepares sale of Specialist Grp Division........+1%

*ALTICE-Rev 4.26b(4.27),maintains outlook............................+1%