TheChek News Flow

The deal would make the combined entity the third-largest station group owner in the US, behind Fox and CBS.

The agreement, when announced, is expected to be put on hold because Media General has already pledged itself to Meredith Corp., one source said.

Still, Media General hopes the deal will put pressure on Meredith to settle the $60 million termination fee it negotiated with the company, sources said.

If Meredith doesn’t settle, in February it can force a Media General vote on its previously signed merger deal.

While Media General shareholders may reject the deal, it would delay the Nexstar sale — and Nexstar wants to close its deal in a New York minute.

The flurry of deals — first between Meredith and Media General and then between Nexstar and Media General — comes as station groups believe they need to get bigger to increase their bargaining position with cable providers.

Cable companies have been bulking up, and gaining the negotiating upper hand, through mergers.

Nexstar Chief Executive Perry Sook in 1996 founded the Dallas-based company that, if it buys Media General, will own and operate 114 TV stations.

As a poignant backdrop, the last scion of Media General’s founding family, J. Stewart Bryan III, died Saturday.

The 77-year-old was Media General’s chief executive from 1990 through 2005, and remained chairman until his death. Richmond, Va.-based Media General was founded in 1850.

Bryan’s death resulted from complications related to neck injuries sustained from a Jan. 15 fall, Media General said.

Media General’s shares on Monday closed down 1.8 percent, to $15.58.

Nexstar and Media General spokespersons declined to comment.

French telecoms billionaire Xavier Niel is exploring a move into the fiercely competitive British mobile market on the back of the proposed acquisition of O2 by rival Three.

Iliad, the French telecoms group controlled by Mr Niel, has approached Ofcom, the UK telecoms regulator, to express a “preliminary” interest in entering the market, according to people familiar with the situation.

A move to create a new UK mobile network operator would depend on acquiring telecoms infrastructure as a result of the £10.5bn the O2-Three merger, according to a person with knowledge of the situation.

The person added that antitrust authorities in Brussels were expected to force the combined group to sell or open its network to rivals as the market consolidates from four to three operators.

Iliad declined to comment.

Ofcom said that it did not discuss whether it had held meetings with companies.

Interest from Mr Niel’s telecoms group in the British market will worry rivals, given its record of offering low prices that deeply undercut existing offers.

The launch four years ago of Free, Iliad’s mobile offering in France, disrupted the market, leading to an intense price war that slashed profits among the existing three operators. Orange’s proposed acquisition of Bouygues Telecom is an attempt to reverse the effects of the introduction of the low-cost rival.

A similar deal is being proposed in the UK with the purchase of O2 by Three, the UK’s smallest mobile group, which is owned by Hong Kong’s CK Hutchison. If the deal were to go through, it would reduce the number of competitors from four to three.

However, the deal is set to be challenged in the next week by the European competition regulator, which will set out a range of objections given the potential loss of competition for customers as well as third-party mobile providers that use the two networks under wholesale contracts.

Margrethe Vestager, Brussels competition chief, has already raised strong objections to similar deals elsewhere on the continent.

Ms Vestager is likely to seek remedies that in effect lay the ground for the creation of another mobile operator by carving off parts, or guaranteeing access to, the network of the combined group, according to people familiar with the thinking at the EU regulator.

Iliad is not alone in positioning itself to take advantage of any changes, which would need to be volunteered by Hutchison to meet concerns that will be laid out in a statement of objections due in the next week.

British rivals such as Sky and TalkTalk are also hoping to be able to acquire the infrastructure in a forced sale, or at least the rights to use a defined share of the network owned by Three/O2 under agreed terms, as a means to launch more fully fledged mobile services.

However, Hutchison is unlikely to agree to creating a rival mobile network that would remove the consolidation benefits of acquiring O2, which is likely to mean weeks of negotiations between the two sides to find common ground.

The failure to agree terms forced a similar deal in Denmark to fall through last year.

Mr Niel’s interest in the UK is the latest sign of his ambition to expand beyond France. Iliad last year made a surprise offer to acquire a majority stake in T-Mobile US, the US telecoms business controlled by Deutsche Telekom. Mr Niel has more recently taken a stake in Telecom Italia.

CS

Airbus M/P Sale of Airbus’s defense assets approved, Handelsblatt

Card Factory UNCH LFL store sales growth of +2.8%, outlook unchanged

Crest Nic UNCH Revs 804.8mln vs cons 795mln, commentary upbeat

De Longhi M/P Q4 revenues 1% light

Deut Post -3% CS double downgrade to UNDERPERFORM (Currency & Amazon)

Dixons +1-2% Reports Q3 LFL sales +5% (est +3), record Black Friday

Easyjet -1-2% 1Q Rev. Misses Est.; Sees FY Profit In Line W/Mkt View

Gea Group M/P NZ milk powder price dropped 1%, second decline in a row

Gerry Weber +1% Sales and EBITDA slightly better

Greencore M/P LFL in convenience foods +7.7%, good start to the year

Huber&Suhner M/P FY revenues inline, orders inline, confirms guidance

ICP M/P 9M inflows of Eu4.7b (H1 Eu3.2b), AuM increased by 5%

Marstons UNCH 16 week LFL +3%, Christmas was good

Miners -2-3% Copper +0.50%, Brent -4.90%, Iron Ore +0.30%, China -6.50%

Morphosys UNCH Payment from Bayer for initiation of a global phase 2 study

Oils +1% Brent -4.9% to $29.45, WTI -4.25% to $29.45

Philips +1-2% 6% EBITA beat, Margin guidance inline

PZ Cussons -1% Revs 385.9mln vs cons 387.6mln, Nigeria tough, Europe ok

Richemont UNCH Swiss watch export data looks better, Dec -3.8%, Nov -6%

SFS M/P Sales slightly light, EBIT margin guidance inline

Siemens +2-3% Orders 7% beat, revenues 3% beat, EBITA 7% beat

S Immo +1-2% Sees "significantly" higher 2015 EBIT and Net Income

Swatch UNCH Swiss watch export data looks better, Dec -3.8%, Nov -6%

Tornos M/P FY sales slightly light CHF164m vs cons 165m

Mainfirst:
*SIEMENS-Raises EPS guidance,Orders,Sales and Inds Bizz better.....+0.25%

*PHILIPS-Rev 7.1b(7.07),FCF 740m,lighting separation on track......+3%

*AIRBUS-Carlyle,KKR favoured for acq of defense elec unit-H/B......+0.5%

*RENAULT-Nissan to look for cost savings says Ghosen - Nikkei......+0.5%

*DPW-To expand parcel service to confront Amazon says CEO - Bild...-1%

*REPSOL-To sell part of piped Gas Unit for €136m,gain of €76m......U/C

*ACTELION-Gets Health Canada approval for Uptravi(selexipag).......+0.25%

*BAYER-Would look at acquisitions in Agro-Chemicals to grow bizz...+0.25%

*G/WEBER-Rev 920m(911),Ebit 79m(79),Margin 8.6%(8.7),looks ok......+1.3%

*ADP/BOUYGUES-May build new Tehran Airport Terminal says WSJ.......+0.5%

*MICHELIN-Tyre data out last night Europe and NA strong............+0.5%


Commerz:
BAYN –1.4% Would look at acquisitions on agro-chemicals

BMW –1.6% Recalls about 58,000 vehicles in Japan for air bag inflators

1COV –1.6% Baader starts with Sell – PT €27

DB1 -1.2% CEO says seize low rates to spur growth

DPW –2.7% To expand parcel service to confront Amazon

GWI1 +3.2% Prelims and biz re-organisation as reaction on disappointing results

HNR1 –1.8% Mediobanca raises to Outperform (Underperform) – PT €117

JEN –2.8% Sees 2016 moderate organic sales, results growth

MOR +2.5% Gets milestone payment (est. €2-3mn) from Bayer Anetumab

MTX +1.4% GS raises to Buy (Neutral) – PT €105 (102)

RHM –1.9% Airbus electronic price rumored at €1.3bn

SIE +3.3% Strong Q1 results and increased FY guidance slightly

SRT3 +0.2% Berenberg raises to Buy (Hold) – PT €250 (200)

TEG -1.2% Good 2015 with vacancy down (7.5% after 9%) and rental up 3.3%

TKA –1.5% Cut to Hold (Buy) at Lampe – PT €16 (23)

VNA –1.5% Cuts shareholder acceptance threshold to 50% in bid for DWNI

In this note we are cutting our earnings estimates by 6-7% for ISP and 10-

12% for UCG in 2016-17 as we incorporate lower interest rates, an increasingly

competitive environment and, in the case of UCG, lower currencies, the Polish

levy and generally more conservative Turkish, Polish and Russian earnings.

We expect a rather weak set of Q4 results, with the quarter impacted by the

contribution to the bail out of the 4 small banks (€380n for ISP, €200mn for

UCG), seasonally higher costs and provisions and, in the case of UCG the c.

€200mn loss on the sale of Ukraine, c. €0.8bn of restructuring charges and the

unwinding of the Austrian pension funds (capital neutral).

■ We maintain our Outperform stance on ISP - with a new TP of €3.3/sh

(from €3.7/sh) we are still expecting the bank to overdeliver on its dividend

commitments for the year (we estimate €2.5bn payment (€0.15 DPS) vs. the

€2bn (€0.12 DPS) commitment) and maintain a 12.5-12.8% FL CET 1 ratio.

Earnings wise, we remain below management's guidance on fees (5%YoY

in 2016 vs. double digit guidance), assume NII declines for 2016E (-1%YoY)

and incorporate no additional cost efforts into 2016-17E (+2% CAGR) – with

the gradual reduction of LLPs (to 65bps from 85bps in 2015) standing as the

main driver of improving profitability levels (9% in 2016 from 8% in 2015).

■ On UCG, we maintain our Neutral stance - We see the bank's valuation

penalized by the comparatively lower FL CET 1 levels (10.5% as of Q3), the

volatility of its CEE exposures and by management's lack of credibility in the

market. We await for signs of "execution" and delivery of the business plan

targets, but do not anticipate anything tangible before Q1 results (10th of

May). Our new TP of €4.6/sh (from €5.8/sh) is based on the capital adjusted

RoTBV levels (7.2% in 2017E) and incorporates a capital shortfall of €2.7bn

(€0.45/sh) which is partly offset by the dividend forecasts for 2015-16

(€0.26/sh). Earnings wise, our numbers stand c. €1bn below 2018's targets

(on lower revenues) – with a stable NII, 6%YoY fee growth and with the

gradual implementation of cost strategies (-3%YoY in 2016E) and LLP

declines (from 76bps in 15E to 67 in 16E) explaining most of the profitability

uplift (from 5% to 6% in 2016E).

US automotive production is approaching the peak and questions about the timing of an end to

Chinese tax incentives will continue to build; we therefore downgrade GKN to Underperform

from Outperform. We upgrade IMI to Neutral from Underperform. For the past two years, we have

consistently forecast IMI earnings to come in materially below Consensus. As we enter 2016 we no

longer forecast a significant earnings disappointment. While IMI’s valuation still looks expensive,

the lack of an earnings catalyst to drive further underperformance leads us to upgrade the name.

POP MILANO / BMPS Reuters reports that the CEO of Pop Milano Mr Castagna has ruled out a three way merger involving BMPS.

POP MILANO / BCO POPOLARE MF reports that the banks are continuing discussions concerning an eventual exchange ratio and that a merger would be framed as a merger of equals. Idea is to have a board of 19 members (9 nominated by Bco Pop and 7 by Pop Milano with 3 independents).

BCA POP EMILIA ROMAGNIA Il Messagero reports that BPER could have made an offer to buy assets of the small local banks currently under administration.

BAD BANK Il Sole reports that the main issue (to be discussed at the meeting today between the Italian Economy minister and European Competition commissioner) is the provision of guarantees and that a hypothesis that could be discussed is the conferral of NPL’s to a SPV that in turn would issue a category of bonds.

Our top picks remain Total (CL-Buy) and ENI (Buy), for which we see attractive volume and cash flow growth, combined with restructuring at ENI and further cost cutting potential at Total. We remain more negative on Statoil (CL-Sell) owing to its high exposure to oil prices/European gas prices and high leverage, which leaves the dividend at risk, in our view. We are also Sell-rated on OMV after recent strong outperformance, as we see risks around downstream earnings, high leverage and a relatively high decline upstream portfolio.

Our strategists have recently reinforced the defensive bias in the equity portfolio. Sector allocation

is skewed to the most obvious beneficiaries of ECB policy and low euro-area yields. Our top picks

offer 1) high exposure to Europe with some self-help (Europcar), 2) a play on the improvement in

the French construction sector (Eiffage), 3) a haven with a boost from collapsing oil prices (Rubis),

4) a secular growth story (Showroomprive) and 5) a value play that has re-based market

expectations and benefits from speculative appeal (Saft). On the negative side, we would avoid

Gemalto and Vallourec.

Safran (CL-Buy) remains our top pick in European A&D. We remove Thales from the Conviction List and downgrade it from Buy to Neutral following outperformance. We upgrade MTU Aero Engines to Buy and downgrade Qinetiq to Sell (both from Neutral). We reiterate our Buy ratings on BAE Systems, Dassault Aviation and Rolls-Royce, and remain Neutral-rated on Airbus, Cobham, Finmeccanica, Meggitt, Saab and Ultra Electronics. We update our estimates and price targets across our coverage to reflect FX moves and recent company developments. Our price targets are flat on average, falling by 3% for the aerospace stocks and rising by 3% for the defence stocks.

Dow-1.29% S&P-1.56% Nasdaq-1.58% Russell-2.28% VIX 24.11 (+7.88%)

Nikkei-2.35% Hang Seng -2.33% Shanghai -6.31%

Eur$ 1.0856 CNH 6.6196 CNY 6.5797 JPY 117.83 GBP 1.4214 CHF1.0127 RUB $81.38 WTI $29.48 (-2.82%)

S&P-0.48% EuroStoxx-1.54% Dax-1.38% SMI-0.81%

Macro :

- EU Regulators Said to Fine Japan Car Accelerator Cartel: Reuters

- Nexstar Said to Be Close to $2.3b Deal for Media General: NYP

Keep an eye on :

- ATLN VX : Actelion Gets Health Canada Approval for Uptravi

- AIR FP : Carlyle, KKR Favored for Acquisition Airbus Unit: Handelsblatt

- AIR FP : Airbus Defense Unit Sale Gets Green Light: Handelsblatt

- MT NA : ArcelorMittal Mothballs Steel Plant in Sestao, Spain: Telegraph

- BPE IM : Pop. Emilia Romagna Made Expression of Interest for Ferrara: MF

- BAYN GY : Bayer Would Look at Acquisitions in Agro-Chemicals: Handelsblatt

- BMW GY : BMW Recalls About 58,000 Vehicles in Japan for Air Bag Inflators

- EN FP : ADP, Bouygues May Build New Tehran Airport Terminal, WSJ Says

- DLG IM : De’Longhi 2015 Rev. Up About 9.5% to EU1.89b

- DB1 GY : Deutsche Boerse CEO Says Seize Low Rates to Spur Growth

- GWI1 GY : Gerry Weber FY15 Sales Rise 8%; Launches Program to Realign Co.

- GSK LN : Glaxo Studying Use of Vaccine Technology for Zika: Reuters

- HOME LN : Qatar May Back 170p Sainsbury Bid For Home Retail, Guardian Says

- ILD FP : Iliad Said to Approach Ofcom About Potential U.K. Entry: FT

- ITP FP : Interparfums Says 4Q Trading Slightly Above Expectations

- PHIA NA : Philips Sees Lumileds Valuation Concerns, Deal May Happen in 2H

- RNO FP : Nissan, Renault to Look for Cost Savings, Ghosn Says: Nikkei

- REP SM : Repsol to Sell Piped Gas Assets for EU136M

- SBRY LN : Qatar May Back 170p Sainsbury Bid For Home Retail, Guardian Says

- SIE GY : Siemens 1Q Order Rise 27% to EU22.8b

- SIE GY : Siemens 1Q Beat, Guidance Pleasant Surprise, Morgan Stanley Says

- SUNE US : SunEdison Holder Greenlight Held Talks; Reports 6.8% Stake 13D

- VOW3 GY : VW CEO Says Industry Must Rework Emission Tests Procedures