*TELECOM ITALIA : Both Vivendi and Xavier Niel will probably put their respective stake-building on hold in the post-conversion transitional phase ,and may rather consider coordinating their approach ahead of the hypothetical arrival of Orange
Facts
TI experienced a quick and radical ownership reshuffle
• Vivendi has built up its 20.12% stake in Telecom Italia (TI) -representing about 11.5% of its €27Bn market cap- in just 6 months :
- starting with a 8.24% stake delivered on 06/24/15 by Telefonica in payment of the GVT transaction
- subsequently purchasing 11.88% ,directly on the market and from a financial institution
• X. Niel disclosed :
- on 10/29/15 a long optional position on 11.21% of TI ORD shares
- on the following day an increase to 15.14%
TI is facing 2 critical EGMs
• 15 December : it will be asked to validate
- the conversion of saving shares (SAV) into ordinary (ORD) ones
- the expansion to 17 from 13 of the number of directorships requested by Vivendi, provided that current board accepts to submit this resolution to vote
• 17 December : SAV shareholders meeting will also vote on conversion
Main themes
• The success of the conversion proposal looks well-engaged as Vivendi ,which could theoretically be in position to block the deal ,seems less likely to provoke disagreement with TI management (and with the Italian establishment)
• For reciprocal reasons ,TI board has probably no interest in blocking an EGM referendum on Vivendi through a refusal ,which :
- would eliminate any commercial synergies upside
- could fuel anticipations of the future withdrawal of the French
• Regardless of the referendum outcome -if any- ,Vivendi should logically abstain from reloading shares in coming weeks ,after having stressed that it will “give the priority to the long-term development of the international media and content production and distribution group” in a 2016-17 phase of “potentially heavy investments”
• In parallel Xavier Niel ,who is intervening through his personal holding and a leveraged optional structure ,has probably a limited capacity to increase this essentially-financial investment
• Vivendi and Niel’s interests may end up fully converging due to :
- strict financial alignment
- lack of operational conflicts
- possible harmony on Brazil issue
• It has been muted that eventually Vivendi may wish to sell to Orange.
Gapping down
In reaction to disappointing earnings/guidance: SPHS -18.5%, DKS -15.3%, URBN -14.7%, CADC -7.7%, MDR -2.9%, (released presentation for today's Investor conference with FY16 outlook), A -2.2%, NWL -0.8%
M&A news: ANGI -9.8% (Board unanimously determines not to pursue the unsolicited proposal from IAC/InterActiveCorp)
Select metals/mining stocks trading lower: VALE -3.8%, KGC -2.7%, GFI -2.2%, RIO -1.2%, AUY -1%, GOLD -0.7%
Other news: KBIO -17.4% (cont volatility pre-mkt), VIRT -14.1% (still checking), ANBG -9.3% (cont weakness), INFY -2.8% (still checking), SYF -2.5% (GE says offer to exchange shares of GE common stock for shares of Synchrony Financial (SYF) was 3.2x oversubscribed; Completion reduces ENI by $65 bln), SUNE -1.5% (cont pre-mkt volatility), BHP -1.1% (confirms that Samarco signed a Preliminary Commitment with Brazilian prosecutors in connection with the State of Minas Gerais), EQIX -0.8% ( to offer ~$750 mln of its common stock in a public offering)
Analyst comments: OSIR -10.7% (downgraded to Sell from Hold at Brean Capital), CLVS -6.9% (downgraded to Neutral at Goldman; tgt to $23 from $123), ATHN -2.8% (downgraded to Underweight at Barclays), CHK -2.5% (downgraded to Neutral from Buy at Sterne Agee CRT), COO -2.1% (downgraded to Market Perform from Outperform at Wells Fargo)
In reaction to disappointing earnings/guidance: SPHS -18.5%, DKS -15.3%, URBN -14.7%, CADC -7.7%, MDR -2.9%, (released presentation for today's Investor conference with FY16 outlook), A -2.2%, NWL -0.8%
M&A news: ANGI -9.8% (Board unanimously determines not to pursue the unsolicited proposal from IAC/InterActiveCorp)
Select metals/mining stocks trading lower: VALE -3.8%, KGC -2.7%, GFI -2.2%, RIO -1.2%, AUY -1%, GOLD -0.7%
Other news: KBIO -17.4% (cont volatility pre-mkt), VIRT -14.1% (still checking), ANBG -9.3% (cont weakness), INFY -2.8% (still checking), SYF -2.5% (GE says offer to exchange shares of GE common stock for shares of Synchrony Financial (SYF) was 3.2x oversubscribed; Completion reduces ENI by $65 bln), SUNE -1.5% (cont pre-mkt volatility), BHP -1.1% (confirms that Samarco signed a Preliminary Commitment with Brazilian prosecutors in connection with the State of Minas Gerais), EQIX -0.8% ( to offer ~$750 mln of its common stock in a public offering)
Analyst comments: OSIR -10.7% (downgraded to Sell from Hold at Brean Capital), CLVS -6.9% (downgraded to Neutral at Goldman; tgt to $23 from $123), ATHN -2.8% (downgraded to Underweight at Barclays), CHK -2.5% (downgraded to Neutral from Buy at Sterne Agee CRT), COO -2.1% (downgraded to Market Perform from Outperform at Wells Fargo)
Gapping up
In reaction to strong earnings/guidance: IDI +16.2%, HOTR +11.5%, EROS +10.8%, NUAN +9.4%, CMCM +7.2%, SOL +4.5%, TGLS +4.1%, MBT +4%, JASO +3.3%, MY +2.8%, HD +2.8%, WMT +2.2%, RLGT +1.1%
M&A news: IDI +16.2% (will acquire Fluent for $100 mln in cash and 15 mln shares in stock), BUD +1.8% (cont volatility surrounding merger with SABMiller), P +1.2% (confirms agreement to acquire several key assets from Rdio for $75 mln)
Select large pharma related names showing strength: GSK +1.2%, SNY +1.1%, AZN +0.9%, NVO +0.6%
Other news: OCRX +18% (Announces Positive Phase 1 Results for Oral OCR-002 in Development for the Prevention of Chronic Hepatic Encephalopathy), VIPS +4.8% (cont strength), JKS +3.6% (in sympathy with solar peers reporting today), GOV +2.6% (announced the declaration of a pro rata distribution of approximately half of the shares of Class A Common Stock of The RMR Group Inc), HERO +2% (Soros Fund Management discloses 7.02% passive stake in 13G filing), JD +1.9% (cont strength), GE +1.6% (says offer to exchange shares of GE common stock for shares of Synchrony Financial (SYF) was 3.2x oversubscribed; Completion reduces ENI by $65 bln), SAVE +1.6% (favorable commentary on Monday's Mad Money), OHI +0.9% (filed for offering of common stock for selling stockholders), XCO+0.9% (shareholders approved amendment to effect reverse split; Board has deferred decision after regaining NYSE compliance for continued listing standards), JCP +0.8% (expanded revolving line of credit; plans to retire outstanding principal amount of its $500 mln Term Loan)
Analyst comments: PRAA +3.8% ( upgraded to Strong Buy from Mkt Perform at Raymond James), SHPG +1.0% (upgraded to Outperform from Mkt Perform at Leerink Partners)
In reaction to strong earnings/guidance: IDI +16.2%, HOTR +11.5%, EROS +10.8%, NUAN +9.4%, CMCM +7.2%, SOL +4.5%, TGLS +4.1%, MBT +4%, JASO +3.3%, MY +2.8%, HD +2.8%, WMT +2.2%, RLGT +1.1%
M&A news: IDI +16.2% (will acquire Fluent for $100 mln in cash and 15 mln shares in stock), BUD +1.8% (cont volatility surrounding merger with SABMiller), P +1.2% (confirms agreement to acquire several key assets from Rdio for $75 mln)
Select large pharma related names showing strength: GSK +1.2%, SNY +1.1%, AZN +0.9%, NVO +0.6%
Other news: OCRX +18% (Announces Positive Phase 1 Results for Oral OCR-002 in Development for the Prevention of Chronic Hepatic Encephalopathy), VIPS +4.8% (cont strength), JKS +3.6% (in sympathy with solar peers reporting today), GOV +2.6% (announced the declaration of a pro rata distribution of approximately half of the shares of Class A Common Stock of The RMR Group Inc), HERO +2% (Soros Fund Management discloses 7.02% passive stake in 13G filing), JD +1.9% (cont strength), GE +1.6% (says offer to exchange shares of GE common stock for shares of Synchrony Financial (SYF) was 3.2x oversubscribed; Completion reduces ENI by $65 bln), SAVE +1.6% (favorable commentary on Monday's Mad Money), OHI +0.9% (filed for offering of common stock for selling stockholders), XCO+0.9% (shareholders approved amendment to effect reverse split; Board has deferred decision after regaining NYSE compliance for continued listing standards), JCP +0.8% (expanded revolving line of credit; plans to retire outstanding principal amount of its $500 mln Term Loan)
Analyst comments: PRAA +3.8% ( upgraded to Strong Buy from Mkt Perform at Raymond James), SHPG +1.0% (upgraded to Outperform from Mkt Perform at Leerink Partners)
Early premarket gappers
Gapping up: OCRX +18.3%, HOTR +11.5%, NUAN +9.1%, CMCM +7.5%, GOV +5.1%, VIPS +4.8%, TGLS +4.1%, FIT +4%, JKS +3.2%, SUNE +2.9%, HD +2.4%, WMT +2.4%, GE +2.1%, HERO +2%, BUD +1.6%, SAN +1.5%, GSK +1.5%, SNN +1.5%, MT +1.4%, SNY +1.3%, NVO +1.1%, RLGT +1.1%, SHPG +1%, AZN +1%, OHI +0.9%, JD +0.9%
Gapping down: VIRT -14.1%, URBN -11.6%, SPHS -9%, CHK -3.9%, CLVS -3.8%, W -3%, A -2.2%, XCO -1.8%, SYF -1.5%, INFY -1.4%, HAL -1.3%, ABX -1%, GDX -1%, EQIX -0.8%, BHP -0.8%, SBRA -0.8%
Gapping down: VIRT -14.1%, URBN -11.6%, SPHS -9%, CHK -3.9%, CLVS -3.8%, W -3%, A -2.2%, XCO -1.8%, SYF -1.5%, INFY -1.4%, HAL -1.3%, ABX -1%, GDX -1%, EQIX -0.8%, BHP -0.8%, SBRA -0.8%