LSE LN/DB1 GY - CONFIRMATION OF ICE PUSU DEADLINE - We just spoke to the Takeover Panel who confirmed that there is no firm PUSU deadline for ICE at the moment. We mistakenly reported in our morning note that the ICE PUSU deadline was today. We have obtained confirmation from the Takeover Panel that the PUSU deadline for ICE will be 7 calendar days before the LSE meeting to vote on the Scheme (in accordance with Appendix 7 of the Takeover Code which states “When an offeror has announced a firm intention to make an offer to be implemented by means of a scheme of arrangement and it has been announced that a potential competing offeror might make an offer (see Rules 2.6(d) and (e)), the Panel will normally require the potential offeror to clarify its position by no later than 5.00 pm on the seventh day prior to the date of the shareholder meetings.” As the Scheme timetable for the LSE/DB offer has yet to be published, there is currently no firm PUSU deadline for ICE.
Orange and Boygues boards plan to meet separtely on Wednesday to discuss potential sale - press
* Source of opportunity
With this note we update our estimates for the LEAP learning curve and cost
assumptions communicated at the recent Capital Markets Day (CMD). We
arrive at meaningfully lower losses than implied in margin guidance (midto-
high teens in the Propulsion division). We estimate 19%/19%/20%
margins in 2016/17/18E in the Propulsion division, but this does not include
the deconsolidation of ASL; building this into our estimates would result in
margins of 21%/21%/23% in 2016/17/18E. We therefore expect margins to
beat guidance over the next three years, putting upside pressure on
consensus margin forecasts. We reiterate our CL-Buy.
* Catalyst
Safran will report 1Q revenues on the April 26; we believe positive
commentary around the progress of LEAP development could act as a
positive catalyst. 1H results in July should point to lower-than-expected
margin dilution.
* Valuation
Our EBIT estimates change by 0%/-3%/-6% in 2016/17/178E, reflecting a
higher-than-expected headwind from the decline in CFM56 OE revenue. Our
12-month price target decreases by 3% to €76 reflecting the revised
earnings estimates. Safran currently trades at 7.5x 2018E EV/EBIT (a 20%
discount to the sector) and 11x 2018E P/E despite offering a 2016-20E
EBIT/EPS CAGR of 11%/18% vs. the sector average of 11%/15%.
* Key risks
Key risks to our view and price target include: 1) a weakening US$, 2)
program delays or charges relating to LEAP, 3) slower-than-expected
margin improvement in Defence, Security and Equipment divisions.
Fed's Williams (moderate, non-voter): Recent inflation developments 'very encouraging'; US inflation on track to rise 2% over next several years - comments from Singapore
- Maintains view that 2016 GDP growth a bit above 2%
- Rate hikes to be gradual and thoughtful
- Will need at least 6 years to reduce balance sheet back to normal
- China slowdown not a mark of impending hard landing; global crisis distorted and not looming
President of Gameloft "With Vivendi, we will return back twenty years"
On 21 March, Vivendi launched a takeover bid for the games publisher Gameloft for mobile phones, which has already acquired 30%. The group chaired by Vincent Bolloré passed by the Guillemot family, which owns 21% of shares. President of Gameloft, Michel Guillemot explains why shareholders have no incentive to bring their shares to the offer of the Breton businessman.
What do you say to shareholders who might be tempted by the offer of Vincent Bolloré?
Vivendi arrived in October, at a time when spending because major investments were high and quite low results. This enabled them to develop a rhetoric that Gameloft reported nothing. I say to shareholders to opt for the business plan that we presented on 22 March, in order to transform their investments in income. The takeover would deprive them of the added value that Gameloft will create.
Where is the development of Gameloft, which has experienced significant losses in 2015?
In 2013, mobile gaming has emerged the "freemium": the game is free, the purchase of additional paid content. This method of financing is based on only a small percentage of defaulters. So I chose in 2014-2015 to create our own advertising agency "programmatic" (automated) to complete. This board may generate 150 million euros in additional revenue per year.
Have you been in contact with Vincent Bolloré or Arnaud de Puyfontaine, chief executive of Vivendi?
Arnaud de Puyfontaine contacted me once in December, a week after having issued an ultimatum. You do not argue with a gun to his head and, anyway, I have no right to go and negotiate in secret with a shareholder to give it advantages which do not necessarily go in the direction of other shareholders.
But should not you listen to all shareholders?
I must promote neither one nor the other. Vivendi says it will help us grow internationally, it is already 96% of our revenue! They want to give us cash, we already have. All that society needs is to leave as much freedom as possible to its developers. This does not work in a conglomerate. We would move from a company that works for the major platforms, Google, Apple, Facebook, an editor who creates games for operators such as Telecom Italia [which Vivendi is a shareholder]. The Italian operator only represents 0.3% of our turnover.
Vivendi says not want any question ...
Vivendi says he will ask. But look what happened at Canal +, Dailymotion, Telecom Italia. What remains of the management? For twenty years, the method of Vincent Bolloré is always the same. We are not naive. Turn the founder of a technology company, which requires a very high level of trust between employees and management, is a good way to kill her.
Could you bring new shareholders to the capital of Gameloft?
We have many partners in Asia, where we conducted a major restructuring. We closed our studios in Korea, Japan and China to work with local partners. These actors have the resources to invest. But we do not canvass, though Gameloft's reputation is high.
Your competitor King was acquired by Activision, Supercell by SoftBank. Can a mobile publisher remain independent?
These companies continue to have their autonomy. None has been absorbed. If Gameloft was acquired and passed to a management terror, there are chances that creative, who have only to cross the street to work elsewhere, leaving the company. The potential loss in value is considerable.
Analysts said Vivendi would aim to compel Gameloft Ubisoft, which he owns 15%, to negotiate, creating divisions in your family ...
My brothers, we are not divided. But both companies are managed independently and in the interests of their respective shareholders. Ubisoft has been criticized for not protecting Gameloft, but if one day Gameloft Ubisoft redeemed, it would be in the interest of shareholders of both companies. This scenario is not under consideration today.
Yves [the boss of Ubisoft], we agree that inconsistency. Gameloft exploit the service of a media group has no meaning. I would not be pleased that Gameloft stops creating its games cartonnent for extensions of films. We would back twenty years. Nobody makes games for films, except for permanent universe like Star Wars or The Minions. Vivendi's ideas are not dreaming.
Will you continue to strengthen you to the capital?
My four brothers and I own 20% each of the holding company Guillemot Brothers, which has a stake in Gameloft and Ubisoft. Through our banking partners, we went from 22% to 29% by Gameloft voting rights. We could continue. We are very little debt.
Have you been attacked by Electronic Arts, why not have better protected the capital from Gameloft?
We chose to reinvest all profits in the company, so that we could buy back shares to strengthen our capital. I could have stopped investing. But Gameloft would have earned half as much in three years.
Le président de Gameloft : « Avec Vivendi, nous reviendrions vingt ans en arrière »
Le 21 mars, Vivendi a lancé une OPA sur le capital de l’éditeur de jeux pour téléphones mobiles Gameloft, dont il a déjà acquis 30 %. Le groupe présidé par Vincent Bolloré est passé devant la famille Guillemot, qui détient 21 % des actions. Le président de Gameloft, Michel Guillemot, explique pourquoi ses actionnaires n’ont pas intérêt à apporter leurs titres à l’offre de l’homme d’affaires breton.
Que dites-vous aux actionnaires qui pourraient être tentés par l’offre de Vincent Bolloré ?
Vivendi est arrivé en octobre, à un moment où les dépenses, du fait d’importants investissements, étaient élevées, et les résultats assez bas. Cela leur a permis de développer une rhétorique selon laquelle Gameloft ne rapportait rien. Je dis aux actionnaires d’opter pour le plan d’affaires que nous avons présenté le 22 mars, afin de pouvoir transformer leurs investissements en résultat. L’OPA les priverait de la plus-value que Gameloft va créer.
Où en est le développement de Gameloft, qui a connu d’importantes pertes en 2015 ?
En 2013, le jeu mobile a vu émerger le « freemium » : le jeu est gratuit, l’achat de contenus supplémentaires payant. Ce mode de financement ne repose que sur un petit pourcentage de payeurs. J’ai donc choisi en 2014-2015 de créer notre propre régie publicitaire « programmatique » (automatisée) pour le compléter. Cette régie peut générer 150 millions d’euros de revenus supplémentaires par an.
Avez-vous été en contact avec Vincent Bolloré ou Arnaud de Puyfontaine, le président du directoire de Vivendi ?
Arnaud de Puyfontaine m’a contacté une seule fois en décembre, une semaine après m’avoir lancé un ultimatum. On ne discute pas avec un pistolet sur la tempe et, de toute façon, je n’ai pas le droit d’aller négocier en catimini avec un actionnaire pour lui donner des avantages qui n’iraient pas forcément dans le sens des autres actionnaires.
Mais ne devez-vous pas écouter tous les actionnaires ?
Je ne dois favoriser ni les uns ni les autres. Vivendi explique qu’il va nous aider à nous développer à l’international, c’est déjà 96 % de notre chiffre d’affaires ! Ils veulent nous donner du cash, nous en avons déjà. Tout ce dont la société a besoin, c’est de laisser le plus de liberté possible à ses développeurs. Cela ne fonctionne pas dans un conglomérat. On passerait d’une société qui travaille pour les grandes plateformes, Google, Apple, Facebook, à un éditeur qui crée des jeux pour des opérateurs comme Telecom Italia [dont Vivendi est actionnaire]. L’opérateur italien ne représente que 0,3 % de notre chiffre d’affaires.
Vivendi ne dit pas vouloir tout remettre en cause…
Vivendi dit qu’il ne veut rien demander. Mais regardez ce qui s’est passé chez Canal+, Dailymotion, Telecom Italia. Que reste-t-il du management ? Depuis vingt ans, la méthode de Vincent Bolloré est toujours la même. Nous ne sommes pas naïfs. Virer le fondateur d’une société de technologies, qui nécessite un très haut niveau de confiance entre ses salariés et son management, est un bon moyen de la tuer.
Pourriez-vous faire entrer de nouveaux actionnaires au capital de Gameloft ?
Nous avons beaucoup de partenaires en Asie, où nous avons mené une importante restructuration. Nous avons fermé nos studios en Corée, au Japon et en Chine pour travailler avec des partenaires locaux. Ces acteurs ont les moyens d’investir. Mais nous ne les démarchons pas, même si la réputation de Gameloft est élevée.
Votre concurrent King a été racheté par Activision, Supercell par SoftBank. Un éditeur mobile peut-il conserver son indépendance ?
Ces sociétés continuent d’avoir leur autonomie. Aucune n’a été absorbée. Si Gameloft était rachetée et passait à un management de la terreur, il y a des chances que les créatifs, qui n’ont que la rue à traverser pour aller travailler ailleurs, quittent l’entreprise. La perte de valeur potentielle est considérable.
Selon des analystes, Vivendi viserait Gameloft pour obliger Ubisoft, dont il détient 15 %, à négocier, en créant des divisions dans votre famille…
Avec mes frères, nous ne sommes pas du tout divisés. Mais nos deux sociétés sont gérées de façon indépendante et dans l’intérêt de leurs actionnaires respectifs. On a reproché à Ubisoft de ne pas protéger Gameloft, mais si un jour Ubisoft rachetait Gameloft, ce serait uniquement dans l’intérêt des actionnaires des deux sociétés. Ce scénario n’est pas à l’étude aujourd’hui.
Avec Yves [le patron d’Ubisoft], nous sommes d’accord pour dire qu’il y a incompatibilité. Instrumentaliser Gameloft au service d’un groupe de médias n’a aucun sens. Je ne serais pas ravi que Gameloft arrête de créer ses jeux qui cartonnent pour faire des extensions de films. On reviendrait vingt ans en arrière. Plus personne ne fait de jeux pour les films, à part pour des univers permanents comme Star Wars ou Les Minions. Les idées de Vivendi ne font pas rêver.
Allez-vous continuer de vous renforcer au capital ?
Mes quatre frères et moi possédons 20 % chacun du holding Guillemot Brothers, qui a une participation dans Gameloft et dans Ubisoft. Grâce à nos partenaires bancaires, nous sommes montés de 22 % à 29 % en droits de vote de Gameloft. Nous pourrions continuer. Nous sommes très peu endettés.
Vous avez déjà été attaqués par Electronic Arts, pourquoi ne pas avoir mieux protégé le capital de Gameloft ?
Nous avons choisi de réinvestir tous les bénéfices dans la société, alors que nous aurions pu racheter des actions pour nous renforcer au capital. J’aurais pu arrêter d’investir. Mais Gameloft aurait valu deux fois moins cher dans trois ans.
Musk viewed demonstrations of technologies Mobileye is developing for Tesla's self-driving vehicle system.
{http://www.globes.co.il/en/article-elon-musk-visits-mobileye-in-israel-1001113286}
Sources inform "Globes" that a few weeks ago billionaire Elon Musk, owner of electric car maker Tesla and promoter of various energy and space ventures, secretly visited Israel. Musk flew to Israel in a private plane to visit Mobileye (NYSE: MBLY), which is developing key components for Tesla's automatic driving system Autopilot, which the company intends to launch commercially within the next few years.
Automotive industry sources say the aim of the visit was to view a demonstration of several breakthrough developments by Mobileye in this field installed on a trial Tesla Model S vehicle. Two vehicles of this type have been in Israel for some time and are being used in the development of the automated system.
The system Mobileye is developing for Tesla is the first of its kind in the world, and it combines several advanced technologies that enable the vehicle to identify its environment, avoid obstacles, and move without driver intervention. Among the technologies are a system called DNN (digital neural network), which enables the vehicle to "learn" by gathering data on the move, and even to identify different kinds of road surface; free-space, which enables the automatic vehicle's systems to identify areas without defined objects such as hard shoulders of roads, sidewalks, and so on, and avoid collisions and deviations from the road; a "holistic path prediction", which enables a vehicle to select the correct path - on an open road, for example – even when there are no visual hints in the environment; and a sign identification system that can identify over 1,000 signs and road markings in use around the world.
As far as is known, Mobileye's system, which will be installed on the electric Tesla S and other Tesla models, will be modular, with some of its built-in capabilities being dormant initially, and ready to come into operation when regulatory barriers to automatic vehicles are removed. Mobileye declined to comment on the report.
General Motors has also recently started recruiting people in Israel in order to expand its research and development center in Herzliya. Among other things, the company intends to develop key parts of its future automated driving system in Israel.
Staples could be on the brink of winning its case against the Federal Trade Commission — possibly clearing the way for it to acquire Office Depot, sources told The Post.
The judge overseeing the FTC suit against the office supply chain said he will entertain a motion from Staples’ legal team to dismiss the case once the regulator concludes its arguments this week.
When a judge agrees to hear such a move — a judgment as a matter of law — he or she believes the plaintiff or prosecutor has failed to make its case, a lawyer not involved in the case told The Post on Monday.
“I’ve seen such motions, but never when the plaintiff is the government,” the lawyer said.
Judge Emmet Sullivan is not fan of the tactics of Edith Ramirez’s FTC. He ordered a transcript unsealed last week in which Amazon claimed the FTC coached it to lie.
“The judge is either playing games,” in the way he is taking the FTC to task, the lawyer said, “or the FTC is really in big trouble.”
The FTC and Department of Justice have won 9 of their last 10 merger challenges making this even more surprising, the source said.
The FTC in December voted 4-to-0 to block Staples from completing its $6.3 billion acquisition of Office Depot, arguing that the combo would leave no competition and result in higher prices.
The FTC has still not called its star witness Carl Shapiro, the former Deputy Assistant Attorney General for the Antitrust Division of the US Department of Justice.
Staples at present trading levels would be paying about $10 a share for Office Depot if the merger clears, and shares will fall to near $4.50 if the block holds.
Office Depot shares rose 7.7 percent Monday to $7.44.