>>> US Gapping up

Gapping up
M&A news: IRM +3.3% (Iron Mountain reports that it will undertake efforts to address UK CMA concerns over the proposed acquisition of Recall Holdings Limited; Transaction closure is expected in 2Q16), FCS +3% (Fairchild Semi confirms receipt of a revised, unsolicited $21.70/share proposal).

Other news: OHGI +37.3% (upgrades its China mobile VoIP telco Aishuo, due to growth in excess of 12 mln downloads in the past 9 months), ATNM +5.8% (continued strength), SUNE +5% (SunEdison acquires a 33% ownership interest in a 336 megawatt DC portfolio of operating solar power plants from Dominion, transfers interest to Terra Nova Renewable Partners), BLDP +4.4% (continued strength),LPL +3.8% (report indicates LG Display as an iPhone OLED screens supplier), MT +3.3% (modest rebound), GDP +3.2% (continued strength), PLUG +2.7% (light volume, likely BLDP sympathy), HMY +1.8% and GOLD +0.6% (bucking the trend - looking around), SRPT +1.1% (still checking), CCL +0.7% (continued strength), (still checking), RDY +0.5% (announced the re-launch of its Esomeprazole Magnesium Delayed-Release Capsules), LUV +0.4% (light volume, reaches tentative agreement with Transport Workers Union Local 555).

Analyst comments: SKUL +2.5% (initiated with an Outperform at Oppenheimer; $8 tgt)

(La Tribune) Orange veut-il vraiment s’inviter chez TF1 ?

D’après le Canard Enchaîné, l’Etat pousserait l’opérateur historique à prendre une participation de 10% dans TF1 dans le cadre d’un possible mariage entre Orange et Bouygues Telecom. Selon des sources proches du dossier, il s’agirait d’une hypothèse « fantaisiste ».

La possibilité d'un mariage entre Bouygues Telecom et Orange ne cesse d'alimenter les rumeurs. D'après le Canard Enchaîné du jour, ce serait ni plus ni moins que François Hollande qui « tire les ficelles » de cette vaste opération. Pour l'hebdomadaire, l'opérateur historique, dont l'Etat détient 23%, « étudie la possibilité de prendre une participation de 10% dans la chaîne de Martin Bouygues », dans le scénario d'un rapprochement entre Orange et Bouygues Telecom.

A en croire « un des acteurs du feuilleton télécoms » cité par le journal satirique, « les politiques se contrefichent de l'accord sur les télécoms. Tout ce qui les intéresse, c'est TF1. [...] Dès qu'on parle du 20 heures, ils ont les yeux qui brillent ». En d'autres termes, François Hollande favoriserait ce montage pour avoir, via Orange, une influence sur TF1, « le Graal pour tout candidat à la présidentielle », lâche le Canard Enchaîné.

« Aucun commentaire »

Contactés par La Tribune, Orange et Bouygues ne font « aucun commentaire » sur ces informations. Bercy n'a pas, ce mercredi matin, répondu à nos sollicitations. Toutefois, une source proche du dossier affirme que l'hypothèse est « complètement fantaisiste ».


« On a affaire à une sorte de théorie du complot très étonnante, nous dit-on. En plus, si l'Etat veut monter au capital de TF1, il n'a pas besoin d'une telle opération : il peut monter au capital directement sachant que Bouygues en possède 43%. En outre, peut-on vraiment croire qu'on peut prendre le contrôle d'une chaîne avec seulement 10% des parts ? »



TF1 n'est « pas un point de discussion »

D'après une autre source proche du dossier, « si la partie TF1 a été abordée au début [des négociations, Ndlr], ce n'est pas un point de discussion aujourd'hui ». Sur ce point, début décembre, l'agence Bloomberg - qui a révélé que des discussions préliminaires avaient débuté entre Orange et Bouygues pour la cession de la filiale télécoms de ce dernier -, avait évoqué l'intérêt de l'opérateur historique pour TF1. Devant le CSA, Nonce Paolini, le PDG de la chaîne, avait dans la foulée déclaré devant le CSA que son bébé n'était pas concerné par un possible deal Orange-Bouygues Télécom.
Concernant l'implication de l'Etat dans les négociations, beaucoup d'observateurs jugent qu'il souhaite d'abord disposer de garanties industrielles ainsi qu'en matière d'investissements et d'emploi. Sous ce prisme, un mariage de Bouygues Télécom avec Orange aurait davantage la cote auprès des autorités qu'un rapprochement avec le Numericable-SFR de Patrick Drahi, dont la réputation de « cost killer » n'est plus à faire. Le fait qu'Emmanuel Macron, le ministre de l'Economie, a déclaré il y a deux semaines ne pas avoir « de position de principe » contre un retour à trois opérateurs dans l'Hexagone a ainsi pu être perçu comme un feu vert de Bercy.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: BLDP +4.4%, SUNE +3.6%, MT +3.3%, GDP +3.2%, FCS +3%, HMY +1.8%, CCL +0.7%, GOLD +0.6%, RDY +0.5%, LUV +0.4%

Gapping down: INVT -5.1%, PBY -3.9%, AU -2.9%, FCX -2.4%, CENX -2.1%, CLIR -2%, SLB -1.8%, NE -1.7%, HES -1.5%, CVX -1.4%, XOM -1.2%, BHP -1.2%, BP -1%, RIG -0.8%, BBL -0.7%

(FBR) Fairchild Semi: The saga continues . . . believe ON may raise its offer

Fairchild Semi: The saga continues . . . believe ON may raise its offer

FBR Capital notes FCS received a revised bid from its Chinese suitor "Party G Group." Firm has steadily believed that there were numerous paths to a higher bid for shareholders. While the Chinese suitor's original $21.70 cash offer remains unchanged, new terms have sweetened the deal. First, "Party G Group" offers to reimburse Fairchild for the ~$70 mln termination fee with ON Semi. Secondly, Chinese "Party G Group" would absorb the regulatory risk, shouldering a reverse termination fee to co of $108 mln if the deal were to fail CFIUS. While many details may yet to be revealed, on the surface, firm believes the elimination of the ON termination fee and the transfer of potential regulatory liability limits downside and makes the $21.70 offer superior. With another step in the right direction, firm is once again at Outperform on co, as they believe there is a meaningful probability that ON will raise its bid to $22 and perhaps higher. (They can rationalize $24.)

>>> SunEdison acquires a 33% ownership interest in a 336 megawatt DC portfolio o

SunEdison acquires a 33% ownership interest in a 336 megawatt DC portfolio of operating solar power plants from Dominion (D), transfers interest to Terra Nova Renewable Partners
The co announced that it has acquired a 33% ownership interest in a 336 megawatt DC portfolio of operating solar power plants from Dominion (D) for an equity purchase price of $180 million plus a working capital adjustment. Terra Nova Renewable Partners, the strategic equity partnership formed between SunEdison and institutional investors advised by J.P. Morgan Asset Management -- Global Real Assets, simultaneously acquired SunEdison's interest in the transaction.
  • This acquisition is the first of two phases of a deal announced in September of 2015. The entire solar portfolio consists of 24 projects, with a total capacity of 567 megawatts DC, located in Indiana, Georgia, Connecticut, California, Tennessee, and Utah. This first phase of the transaction is for 15 projects that generate 336 megawatts DC, and the second acquisition is for the remainder of the aggregate 567-megawatt DC portfolio. The second phase of the transaction is expected to close in early 2016.
  • The solar portfolio's power output has been contracted with industry leading utilities and power offtakers with a weighted remaining contract term of 19.8 years. The partnership, through an indirect subsidiary, has the option to buy the remaining 67 percent of the portfolio upon the occurrence of certain triggering events.
SunEdison has the option to repurchase the projects from the partnership for a period of five years and may assign TerraForm Power (TERP) call rights to the projects should they be repurchased. Any projects not repurchased by SunEdison would continue to be owned by the partnership.
S

FT : Activists take aim at muddling midsized banks

Activists take aim at muddling midsized banks

Dozens of regional lenders in the US, from People’s United of Bridgeport, Connecticut to Umpqua Holdings of Portland, Oregon, are at present making less than a 10 per cent return on equity. All should listen out for a knock on the door from PL Capital Advisors, a New Jersey-based activist determined to shake up a flabby and fragmented part of the banking sector.
PL, which made its name forcing change at small, community-focused banks, is about to launch a new fund to go after bigger targets, seeking to exploit disenchantment with feeble profits among institutional investors and a friendlier regulatory attitude toward mergers.
Other activists are preparing for battle, from Basswood Capital Management and Stillwell Value, both New York hedge funds, to Seidman & Associates of New Jersey.
Now that banks have steadied themselves after the crisis, there is a sense of “back to basics,” says Rich Lashley, one of PL’s two principals. “More and more [merger] discussions are going on behind the scenes. Everyone is trying to figure out if they are a buyer or a seller.”
Years of low growth, ultra-easy monetary policy and post-crisis regulations have squeezed profits for hundreds of American banks, forcing them to rely on cutting costs to improve margins. But many of the 1,156 publicly listed lenders are still posting returns well below their cost of capital, despite running down expenses as far as they will go. The obvious solution? Merge — or at least find very good reasons not to.
“Banks need to stop kidding themselves that [higher interest] rates are going to save them,” says Nathan Stovall, an analyst at SNL Financial. “Hope is not a strategy.”
Observers note that the backdrop for the activists has improved. Seven years on from the depths of the Lehman crisis, regulators still seem opposed to deals involving JPMorgan Chase, Citigroup or Bank of America, which remain under pressure to shrink and become less complex. But the banks beneath them appear to have a green light to get bigger.
One Wall Street dealmaker notes that BB&T of Winston-Salem, North Carolina, has done three chunky acquisitions in a little over a year. He concludes that the US Federal Reserve wants to see more “super-regional” lenders challenging US Bancorp, PNC Financial Services and Capital One beneath the top tier.
“If I’m [Daniel] Tarullo, I want ten of these guys, not three,” he says, referring to the Fed’s lead banking supervisor.
In one successful strike for activism, New York Community Bancorp agreed a $2bn deal in October with New York-based Astoria Financial. Astoria had been targeted by Basswood, which disclosed a 9.22 per cent stake in July and said it had requested a board seat. In its filing to the Securities and Exchange Commission, Basswood argued that Astoria had “substantial opportunities . . . to take steps to enhance shareholder value.”
More deals are beginning to flow. Since the end of September, New York’s M&T Bank was cleared to complete a $3.7bn merger with Hudson City, a regional rival, after a three-year wait, while KeyCorp of Cleveland announced a $4bn tie-up with Buffalo-based First Niagara.

First Niagara, a $39bn-in-assets bank which had achieved a double-digit ROE in just one of the past 20 years, is a “classic example” of the kind of subpar performer PL is planning to go after, according to Mr Lashley of PL. He says he aims to raise about $200m from rich individuals, and is ready to team up with other activist funds to increase his negotiating power.
Others on PL’s potential hit-list — between $5bn and $75bn in assets, and a single-digit ROE — include Comerica, a Dallas-based lender getting to grips with the oil slump, and Zions Bancorp, a Salt Lake City-based bank which the Fed judged to be short of capital last year. All told, that group of 79 lenders accounts for $1.18tn of assets, or about one-tenth of the listed US banking sector.
Activism in bank stocks poses particular challenges. Under the Bank Holding Company Act, no investor can accrue a stake of more than 10 per cent in a bank without first becoming a bank itself. That has encouraged fund managers to take small stakes in their targets, often appealing to managers behind closed doors rather than shaking fists in public.
“If you want to get honey you can’t kick over the beehive,” says Christopher Marinac, co-founder of FIG Partners, an Atlanta-based research and advisory boutique.
That is the modus operandi of Larry Seidman of Seidman & Associates, a Parsippany, New Jersey-based firm which has challenged dozens of bank management teams over the years.
Now that regulatory requirements have “dramatically increased,” he says, it is easier to make the case that executives need to consider radical action.
At these kind of size levels, in this kind of environment, “you’ve got to be really, really good to earn a decent ROE. And if you can’t, you have an obligation as a director to do something about it.”