TheChek News Flow

The Federal Trade Commission is not budging from its move to block Staples from acquiring its rival Office Depot, The Post has learned.

Regulators have no interest in settling with Staples on the current terms, so Staples cannot complete its $6.3 billion merger, said three sources on different sides of the case being heard in US District Court in Washington, DC.

“Staples and the judge want a settlement. The government does not want one,” a source said.

FTC lead attorney Tara Reinhart told US District Court Judge Emmet Sullivan last week that talks were continuing with Staples, sparking hope and causing Office Depot’s shares to rise more than 5 percent on the day.

Still “the odds of a settlement are near zero,” the source said.

On Dec. 7, by a 4-0 margin, the FTC Commissioners filed suit to block Staples from acquiring Office Depot. Judge Sullivan said he expects to decide by May whether to allow the FTC to stop the merger.

Staples told regulators it is willing to sell corporate contracts to national companies that total $1.25 billion.

“The judge says that makes sense,” the source said.

Regulators believe that offer does not amount to much, since they are one-year contracts that Staples can win right back, the source said.

The FTC’s main concern is national corporate customers only buy office supplies through Staples or Office Depot, and eliminating one could cause prices to rise.

Meanwhile, the FTC on Monday told the court it was adding its attorney Joseph Neely to its team handling the case.

The FTC declined comment.

Office Depot’s shares fell less than 1 percent Monday, to $5.32.

SoundCloud is a streaming music service that allows anyone to upload music and share it with the world.

Big-name artists, including Prince, have used the service to debut tracks and promotions to its young audience.

An endorsement from Universal Music Group, led by Lucian Grainge, is believed to be imminent and would put SoundCloud into the big leagues of music streamers, alongside Spotify, Apple Music and YouTube, and give it some financial stability.

SoundCloud has about 175 million registered users globally, according to a source.

The firm, which is helping new artists get attention thanks to social media sharing, already has a deal with Warner Music and is negotiating with Sony Music.

It has complained about limited opportunities to make money from the service.

SoundCloud confirmed reports Monday that it had raised $32 million in debt funding from Tennenbaum Capital Partners.

DEBENHAMS - Q1 LFL sales +1.9% v -0.1% est, 1-2% cons u/gs, stock on 8x..+10%

UK MAIL - Solid performance in peak Xmas period, enough given weakness....+4%

MORRISONS - 9wk LFL ex-fuel +0.2% v -2% est, +ve comments on net debt...+3-4%

SIKA - Sales in line, increases longer term targets, all solid............+2%

BRUNELLO - Solid, revs a 2% beat, guides to DD growth in 2016 v 10.5% MLe.+2%

BIG YELLOW - good progress on occupancy and rent psf YoY................+1-2%

EDENRED - To form venture w/ Embratec in expense mgmt, 2% accretive in 16.+1%

AO WORLD - Trading in line with prior views, should see relief............+1%

SAP - Stronger revs in Q4 (5.6% beat) & guidance but margins light........+1%

GPOR - Strong lettings in 9 months YTD, and interest continues to build...+1%

GREGGS - Total sales +5.2%, FY expected to be in line w prev expectations.+1%

DIRECT LINE - Numbers re impact from strike in line, should see relief....+1%

RENTOKIL - Q4 in line with expectations, reassurance strategy on track....u/c

METRO - Q1 org topline +0.1% v +0.8% est,reits FY tgts but Q1 = 60% of FY.u/c

JUST EAT - Short order update, LFL 46% which is -1% on the quarter........u/c

CAP GEMINI - To record one off non-cash profit of EUR 520m in 2015........u/c

SCHAEFFLER - Press spec owners open to additional stock sales.............u/c

ASML - We roll over onto Europe 1, extending term by another 12m..........u/c

SAGA - Supportive IMS, tax gain and possible release of capital...........u/c

FERROVIAL - Wins EUR 324m high speed railway contract in California.......u/c

SHIRE - Weakness persisted slightly post US close, parity 3877p vs 3925p-0.5%

AIRBUS - Press says to deliver 45 A350s in 2016, may disappoint...........-1%

PETROFAC - news from Ithaca points to 6-12 wk delays at Greater Stella....-1%

HAYS - -ve read from very weak MPI LN Q4, HAS report tomorrow...........-1-2%

M. PAGE - Org growth 5.3% v 10.2% exp, extrapolate 16 implies 5-10% d/gs..-4%

Airbus +1% Delivered 14 A350s in 2015 Vs Target 15, La Tribune

AO World +2% UK business continued to grow, strong Black Friday

Autos -1% China Auto Sales 18% yoy for Dec, CS was on 20-21%

Cap Gem +1% Amendment to accounting

Cineworld +1% Anticipates 2015 profitability inline

Big Yellow +1-2% LFL revenue growth of 10%, earnings guidance inline

BMW -1-2% Biggest exposed to China, negative China autos sales

Brunello +1-2% Released last night, positive outlook for 2016

Bureau Ver +1% CS upgrade to OUTPERFORM (Trading at 13% discount)

Debenhams +5-10% 19-week LFL sales +1.9% vs est -0.1%

Direct Line +1-2% Update on 15 weather events, losses slightly less

Edenred +1% Combine their Expense Management assets in a joint-venture

Grafton UNCH Conditions were broadly positive, maintains guidance

Greggs M/P FY results inline with market expectations

Just Eat +1-2% FY total orders +57% and 46% on LFL basis

Ladbrokes +1% CS upgrade to NEUTRAL (Cost synergies)

Mcbride +2-3% Reads well, H1 trading will show further progress

Metro +1% Q1 sales EU 17.1b est EU 17.1b, confirms forecasts

Michael Page -5% Q4 135.6m cons 142m, growth 5.3% v cons 10%

Miners -1% Copper -0.35%, Brent -3.85%, Iron Ore -1.80%, China +1.02%

Morrison +5-7% LFL sales better, net debt guidance raised

Oils -1-2% Oil hit hard overnight, -3.85%, heading towards $30/barrel

Peugeot UNCH FY Global sales 2.973m vs CSe 2.921m

Rentokil M/P Announced a series of acquisitions

Rockwool +2-3% Sees upward adjustment of 2015 EBIT

SAP +1-2% Preannounced Q4, software rev's better E5.38b; est. E5.13b

SGS +1% CS upgrade to OUTPERFORM (Margin Opportunity)

Sika +1% Q4 earnings inline, expects EBIT margin of 12-14%, was >10%

Shire -1% ADR 1% weaker overnight, expect to see that in Europe

Will Hill +1% CS upgrade to OUTPERFORM (Balance sheet + cash return)

*AIRBUS-Delivered 14 A350's tgt 15,Zodiac supply issues.Press......-0.5%
*SAP-Rev 6.35b(6.04),OP 2.28b(2.26),Cloud Rev 5.38b(5.13)..........+1%
*PORSCHE-Predicts slower 2016 sales growth after Macan boost.......U/C
*VW-CEO says €6.7b provs for recalls will cover all costs..........+0.5%
*CBK-To shrink Financial Institutions Unit: Handelsblatt...........-0.5%
*SIKA-FY Sales grth CHF5.49B(5.47),co lifts 2018 targets...........+1.8%
*EDENRED-Accelerates development in exp mgmt,jv with Embratec......+0.5%
*METRO-Sales 17.1b(17.1),confirms 2015/16 f/casts,Christmas good...+1%
*TECHNIP-Agrees to buy minority stake in Vallourec's Serimax.......U/C
*CAPGEM-To record estimated €520m Non-Cash income in 2015..........+1%
*CROPENERGIES-Sales 558m,OP 63m,FY o/l +ve at Ebitda & OP level....+1%
*CONTI-no plans for major acq'S in '16,no hope for Brazil rebound..-0.75%
*CUCINELLI-2015 Rev €414m,spring/summer collection +ve,si 17%......+2%
*BOSSARD-FY Sales 656.3(648),Asia bizz looks good,China flat.......U/C
*SUEDZUCKER-Read across from Cropenergies owns 68.7%...............+0.5%

BT will consider joint ventures with Deutsche Telekom after the group becomes the UK company’s largest shareholder, according to the company’s chairman.

Strategic partnerships and more media deals to bolster the television channels that are shown over BT’s broadband network could be considered in future, according to Sir Mike Rake.

He also refused to rule out a bid for Channel 4, the publicly owned UK broadcaster, if it were privatised next year. People close to BT have told the Financial Times that the group has spoken about the broadcaster with shareholders at investor conferences.

“We continue to look [at] what is out there,” says Sir Mike. “The company’s covenant is much stronger than it was, our pension deficit is manageable, and we will be in a strong position to continue to look at the opportunities carefully.”

BT will complete its £12.5bn acquisition of EE next month. As part of the deal, Deutsche Telekom, which co-owns the mobile operator, will have a 12 per cent stake in the UK telecoms group.

BT will come close to completing its plans to extend its fibre network to meet government targets to cover 95 per cent of the UK with superfast broadband in the next two years.

However, there are challenges looming, in particular the prospect of regulatory restraints being placed on the business. Ofcom is conducting a once-in-a-decade review of the UK telecoms market that could result in the formal split of BT Openreach, the division that owns and operates the national fixed-line and broadband network.

Sir Mike warns that such a decision would lead to “huge practical issues” that would delay the rollout of superfast broadband for several years at a time when the government has promised to finish covering the rest of the UK with such services.

“Functional separation has been hugely successful. Why would you stop something that is successful?” he says. “And in practice, who is going to buy it? How long would it take? With that level of uncertainty we have a fiduciary duty over the level of investment we can make in that period.”

He describes BT’s fibre rollout as the most important decision taken in the last 10 years, adding that it has been critical “for the country and its competitiveness”.

The company needs to improve its customer service, however, with Sir Mike describing it as the company’s “Achilles heel”. He blamed the decision to offshore such functions, and says this is being corrected by bringing call centres back to the UK.

BT will also need to integrate EE, Sir Mike says, hoping that BT will “keep as much top level management as we can”.

As part of the deal, Deutsche Telekom, which co-owns EE with Orange of France, will get a 12 per cent stake in BT.

Sir Mike shrugs at suggestions that the German group could mount a takeover of its UK partner, despite analysts and investors in both groups widely discussing the issue.

“We live in a global world and the UK is one of the most open economies in the world. But who knows?,” he says. “There is no golden share and we will do the right thing by our shareholders. There is a three-year standstill. We will get on with integrating EE.”

Sir Mike is one of the best connected power brokers in the City, swinging between board positions at FTSE 100 companies and business and government advisory roles. The deputy chairman of Barclays is a former international chairman of KPMG, the professional services group, and previously led the CBI, the UK employers’ organisation.

So it is little surprise that the conversation alights on two key themes close to his heart: UK competitiveness, and specifically the City of London; and how important it is for Britain to remain in the EU in this context.

Sir Mike is a prominent Europhile and insists that the majority of businesses in the UK do not want Brexit.

“On the economic side it owns every argument,” he says. “About two-thirds of CBI members think we need to stay in, constructively engage and get it right. What we can’t do is keep quiet on that issue.”

At 67, Sir Mike acknowledged that he has only a few more years juggling his wide range of non-executive positions. A skiing accident ended his participation in polo, and he no longer breeds ponies for the sport in the UK.

But BT, he says, will keep him busy for some time to come.

Chief executives from Europe’s 10 largest telecoms groups have been summoned to a meeting by Brussels’ digital commissioner to speed up and implement a strategy to deploy next generation 5G mobile services. ‎

Regulators are worried that Asian countries such as China, Japan and South Korea will lead the development of a technology that will become essential to digital services, according to people familiar with the thinking of the commission.

In a letter to telecoms bosses seen by the Financial Times, Günther Oettinger, European commissioner for digital economy, wrote that “Europe must be a leader in this area”.

The letter says Mr Oettinger wants to create “closer EU co-ordination to achieve a timely deployment of 5G” and to create a “home market” in Europe for 5G products and services.

The meeting will discuss how to encourage “strategic investments infrastructure” and create an “action plan” to take 5G deployment beyond simply research.

The letter has been sent to the chief executives of BT, Deutsche Telekom, Telecom Italia, Orange, Vodafone, Nokia and Ericsson to arrange a meeting on Tuesday.

5G technology is being developed in research labs around the world but the term has already come to mean the creation of an almost instant mobile internet that will underpin services that require constant data links such as connected cars and homes.

Telecoms companies are in a global race to establish the standards that will enable 5G-based equipment, even if many countries are only just adapting to 4G systems that already allow fast internet connections over mobile devices.

Countries such as China and South Korea are investing heavily in 5G development work, with the latter expecting to have a service ready for the 2018 Winter Olympic Games. Most telecoms companies do not expect to have a commercial form of 5G available until after 2020.

Creating and owning the patents to a new global technology could be lucrative to regional telecoms groups, which could also generate sales of 5G-related devices and infrastructure equipment.

The commission confirmed that the meeting would not touch on its plans to liberalise the EU’s rules on spectrum, which are expected in February.

Brussels has made reform of telecoms rules one of its main aims for 2016, with a new package due by the end of the summer according to Mr Oettinger.

He believes the legal framework of the telecoms industry is more than a decade old, leaving it looking outdated.

“Back then we talked only of fixed and mobile telephony,” Mr Oettinger said.

“Now the telecoms sector has spread into other fields, data services and digital services. Modernisation of the telecom framework is something that is on the cards this year.”

During a press conference on Monday, Mr Oettinger hinted that regulation should be used to increase “fair competition” in both the broadcasting and telecoms sectors.

The commissioner has been critical of companies such as Google that have blurred the lines between internet, broadcasting and telecoms sectors, arguing that they benefit from lighter regulation than their traditional peers.

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CGG shareholders in their recent meeting have approved an EUR 350m capital increase project.

The shareholders’ meeting of CGG was held under the chairmanship of Mr. Remi Dorval, Chairman of the Board of directors.

Shareholders adopted all of the resolutions supported by the Board of directors, in particular the third resolution which, in accordance with the announcements made by CGG on 7 December 2015, delegated to the Board of directors the authority to decide to carry out a capital increase with preferential subscription rights in favour of holders of existing shares up to a maximum nominal amount of EUR 350m, as part of the implementation of the Transformation Plan (The third resolution was adopted by a majority of 99.60% of shareholders present or represented).

CGG intends to launch this capital increase as soon as possible, subject to market conditions and to granting of a visa by the Autorite des marches financiers on the corresponding prospectus.