Casino Guichard Said to Seek Stake in Chile Retailer SMU: DF
Our top picks are BG/Royal Dutch Shell, Eni and GALP. Although not a top pick we are upgrading Total to Buy after the sell-off. Our absolute driven recommendations are now heavily weighted to Buy as we approach the bottom of the cycle. We are cutting OMV to Sell after its strong relative run places it on a stretched valuation.
Cutting oil price and gas price forecasts
We have cut our oil price forecast for the period 2016-19 and our LT normalised view to $75/bbl from $80/bbl. Near term forecasts reflect the sharp drop in prices in late 2015/early 2016 meaning recovery, which we expect to begin in 1H 2016, is formed from a lower base. The cut to the long-term price reflects more cost reduction than previously expected, pushing the cost curve down, but is mirrored in our company forecasts and hence has a negligible earnings effect. Our forecasts also include a lower Henry Hub view, reduced international gas pricing (primarily oil linked) but continued robust refining margins. The ferocity of this cycle will dissuade any company management from attempting to finesse their response and we anticipate another round of material cost cutting and capex reductions at 4Q which ultimately will address many of the performance and strategic issues which dogged the sector at >$100/bbl.
Summary of UBS Macro Forecasts
The tech giant is among a handful of companies, all possible suitors of the entertainment company, which has recently come under pressure from activists to sell itself or spin off assets, sources familiar with the situation said Tuesday.
With Time Warner shares closing at $71.06 on Tuesday — well below the $85 offer from 21st Century Fox that its board rejected 18 months ago — the New York company is seen as a sitting duck among media companies because it, unlike its peers, doesn’t have a dual-class shareholder structure.
In addition to Apple, AT&T, which now owns DirecTV, is also seen as a possible Time Warner suitor, as is Fox, which Bloomberg noted would still make a good partner for the Jeff Bewkes-led company.
A Fox spokesperson declined to comment.
Apple is eyeing Time Warner’s assets to ease the launch of a stand-alone streaming TV service, a senior tech insider suggested on Tuesday.
Cupertino, Calif.-based Apple has struggled to create a skinny bundle of programming from existing content partners. A deal with Time Warner would give Apple most of what it needs: CNN news, Turner Sports and such hugely popular shows as “Game of Thrones” and “Sesame Street” from HBO — not to mention Warner Bros. movies and TV shows.
Eddy Cue, one of Apple Chief Executive Tim Cook’s top lieutenants, in charge of content deals, has been keeping tabs on proceedings at Time Warner, a source close to Apple said.
In May, Apple partnered with HBO to help it launch HBO Now, an Internet-delivered TV service, on Apple TV, a box that connects TVs to Web programming.
Reps for Apple and Time Warner declined comment.
Meanwhile, the pressure is growing on Bewkes to agree to a sale — or tame antsy shareholders and activist investors threatening a proxy fight.
Bewkes met investors in a series of closed-door meetings on Monday and Tuesday, telling them, according to sources familiar with the talks, that he’s against a sale or a spinoff of HBO — although he hinted a sale of his media giant could be entertained.
Splitting off HBO or the company’s Turner Broadcasting cable-TV division doesn’t make sense in a media world where, increasingly, scale matters, Bewkes said, according to people briefed on the meetings.
“Splitting up can destroy value,” he told an investor in one meeting, citing the breakup of Viacom as an example. Viacom shares have struggled since Chairman Sumner Redstone divided up his media empire a decade ago.
The Post reported Sunday that two of the media giant’s largest longtime investors are running out of patience and would support a sale or a breakup of the company.
Time Warner is worth $100 a share broken up — 40 percent more than its Tuesday close, according to one analyst.
As for Fox, BTIG analyst Rich Greenfield told The Post: “I continue to believe that a merger of the two is in both their best interests — no matter what management says.”
He added: “They would have the finance to do it. It would involve selling down satellite TV service BSkyB in the UK and may require other spinoffs.”
Early premarket gappers
Gapping up: ARNA +19.1%, CYBR +12.1%, BIOL +10.9%, QUNR +8.4%, ICLD+6.2%, MET +5%, EURN +4.5%, TREE +4.5%, ACST +4.5%, ETE +3.6%, RIO+3%, HMY +3%, FEYE +2.9%, AA +2.3%, FCX +2.2%, YUM +2.1%, IRG +2%,DKS +1.9%, PBR +1.7%, BHP +1.6%, MSFT +1.6%, SHPG +1.5%, BP +1.5%,TWTR +1.4%, RDS.A +1.4%, TEX +1.3%, MT +1.2%, QCOM +1.2%, RBS+1.1%, CTCM +1.1%, PRGS +1.1%, AZN +1%, XOM +0.9%
Gapping down: FXCM -12.6%, TSCO -4.3%, F -3%, LYG -2.7%, CONN -2.3%,CSX -1.9%, EQY -1.6%, GDX -1.4%, ABX -1.3%, RACE -1.2%
Gapping down: FXCM -12.6%, TSCO -4.3%, F -3%, LYG -2.7%, CONN -2.3%,CSX -1.9%, EQY -1.6%, GDX -1.4%, ABX -1.3%, RACE -1.2%
RTRS - PREMIER OIL TO BUY EON'S OIL AND GAS ASSETS IN THE UK NORTH SEA - SOURCES
German Industry Lobby BDI: Sees German 2016 GDP of almost 2%, sees increased geopolitical risks and lack of clarity
- Economic upturn largely dependent on special factors such as low oil prices, low interest rates and weak Euro
January 13, 2016
Makor - Orange / Bouygues
Our thoughts in a nutshell:
•Wethinkdeal Orange / Bouygues Tel cango through although there are still a lot of obstacles to meet
•Valuation
•Political support from Orange shareholder (French State) in the wake of a major election–presidential election in 2017
•Antitrust (EU or France)
•At 10bnE valuation for Bouygues Tel, we estimate Bouygues trades«only» at 9,2% discount to its NAV
•We need to discount this discount (!) by 5% at least on execution risks, so real discount to NAV is more like 4,2% we think
•Also, future company will be a hold co. A 15/20% discount to NAV more likely
Risks to our case:
•Price tag of Bouygues Telecom
•We estimate 10bnE is a max price for Bouygues Telecom
•Any increase in price tag would obviously be a negative to the Chinese of the discount
•Every 1bnE variation of priceof Bouygues Tel represents roughly 3E of NAV per share
•If deal takes place, Bouygues will get circa 3bnE of cash in (1bnE from Alstom share buyback and 2bnE from Bouygues Tel according to market rumours)
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subsidiary of Makor Holdings Pte Ltd incorporated in Singapore.
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and is also a 100% held subsidiary of Makor Holdings Pte Ltd.
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