(BFW) Baxalta Recommends Holders Reject ‘Mini-Tender’ Offer From TRC

BFW 08/06 20:01 *BAXALTA RECOMMENDS HOLDERS REJECT “MINI-TENDER” OFFER BY TRC
Baxalta Recommends Holders Reject ‘Mini-Tender’ Offer From TRC
2015-08-06 20:10:35.210 GMT


By Catherine Larkin
(Bloomberg) -- Baxalta says it recently became aware of
unsolicited offer by TRC Capital to purchase up to 3m shrs
(~0.44%) of BXLT at price of $35.45.

* Says offer price is 4.45% below closing price on Aug. 4, day
before offer
* NOTE: BXLT said Aug. 4 that it rejected unsolicited takeover
offer from Shire Link
Statement:Link

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To contact the reporter on this story:
Catherine Larkin in Chicago at +1-312-443-5968 or
clarkin4@bloomberg.net
To contact the editors responsible for this story:
Arie Shapira at +1-212-617-1488 or
ashapira3@bloomberg.net
Catherine Larkin

>>> US Close Dow -0.69% S&P -0.77% Nasdaq-1.62% Russell -1.29%

Closing Market Summary: Stocks Slide Amid Continued Weakness in Media Names

The stock market endured a broad-based retreat on Thursday that was paced by the Nasdaq Composite. The tech-heavy index lost 1.6% while the Dow Jones Industrial Average and S&P 500 surrendered 0.7% and 0.8%, respectively, ahead of Friday's Nonfarm Payrolls report for July.

Equities opened just above their flat lines, but the S&P 500 dipped into the red and slid below its 100-day moving average (2,098) during the opening hour. Eight of ten sectors settled in the red with the consumer discretionary space (-1.3%) showing notable weakness for the second day in a row.

Specifically, media names weighed on discretionary shares once again with Viacom (VIAB 44.10, -7.31) tumbling 14.2% after reporting in-line results on light revenue. Similarly, Viacom's peer 21st Century Fox (FOXA 29.87, -2.05) sank 6.4% despite reporting a bottom-line beat while Disney (DIS 108.55, -1.98) lost 1.8% after plunging 9.2% yesterday.

The battered industry group was able to climb off its low ahead of the close, but losses in other influential areas kept the market pressured into the afternoon.

Elsewhere among cyclical sectors, technology (-1.0%) also settled behind the broader market amid notable weakness in high-beta chipmaker names. SunEdison (SUNE 17.08, -5.79) dove 25.3% after missing earnings estimates while the PHLX Semiconductor Index lost 1.8% with all but three components ending in the red.

In other earnings of note, Tesla (TSLA 246.13, -24.00) tumbled 8.9% after lowered delivery guidance overshadowed better than expected results for the past quarter. Tesla's loss contributed to the underperformance in the Nasdaq, but the index also had to contend with notable weakness in biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 370.08, -16.64) slumped 4.3% while the broader health care sector (-2.1%) ended behind the remaining nine groups.

On the upside, energy (+1.6%) and utilities (+0.5%) settled in the green with the energy sector overcoming a 1.0% decline in crude oil, which settled at $44.66/bbl. As for utilities, the rate-sensitive sector benefited from lower rates as Treasuries ended on their highs with the 10-yr yield lower by five basis points at 2.22%.

Today's participation was ahead of recent averages with more than 930 million shares changing hands at the NYSE floor.

Economic data was limited to weekly Initial Claims, which increased to 270,000 from an unrevised 267,000 while the consensus expected a reading of 271,000. Since reaching a 40-year low (255,000) two weeks ago, the initial claims level has slowly inched back into the bottom of its previous 270,000 - 290,000 range. These are levels that support the theory that the labor market has returned to full employment.

Tomorrow, the Nonfarm Payrolls report for July (consensus 229K) will be released at 8:30 ET while June Consumer Credit (expected $17.00 billion) will be reported at 15:00 ET.
  • Nasdaq Composite +6.8% YTD 
  • S&P 500 +1.2% YTD 
  • Russell 2000 +0.9% YTD 
  • Dow Jones Industrial Average -2.3% YTD

(BFW) EON Sells Hydroelectric Plants in Italy to ERG for EU950m

BN 08/06 19:28 *ERG: E.ON PLANTS IN UMBRIA, MARCHE, LAZIO
BN 08/06 19:27 *ERG: E.ON PURCHASE PARTLY FINANCED BY EU700M LOAN
BN 08/06 19:25 *ERG: 40% OF PLANTS FROM E.ON ELIGIBLE FOR GREEN CERT. INCENTIVE
BN 08/06 19:24 *ERG SAYS PAYING E.ON EU950M FOR 16 ITALY ELECTRIC PLANTS
MORE: EON Sells Hydroelectric Plants in Italy to ERG for EU950m
2015-08-06 19:35:43.445 GMT


By Jim Silver
(Bloomberg) -- Price ~EU950m on debt-free, cash-free basis,
ERG says in statement.

* ERG to finance acquisition with cash available and loan of
EU700m signed with pool of seven banks
* Asset portfolio consists of entire hydroelectric assets of
E.ON Produzione, expected to generate Ebitda ~EU110m/yr in
next few yrs, co. says
* NOTE: Jan 12, EON Agrees to Sell Coal, Gas Generation
Business in Italy to EPH

Story Link:NSN NSOD176JTSED<GO>

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To contact the reporter on this story:
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jsilver@bloomberg.net
To contact the editors responsible for this story:
Andrea Snyder at +1-202-624-1831 or
asnyder5@bloomberg.net
John Simpson

WSJ : Mylan’s Perrigo Backup Plan

Mylan’s Perrigo Backup Plan
Mylan investors are focused on a possible deal for Perrigo, but guidance for the existing business is encouraging.

The possibility of acquiring Perrigo continues to occupy Mylan shareholders. But the generic-drug maker’s stand-alone portfolio deserves a little more attention.

In reporting second-quarter results Thursday, Mylan bumped its full-year adjusted earnings guidance to a range of $4.15 to $4.35 a share from $4 to $4.30. Perhaps what is most interesting is what isn’t included in that figure.

Mylan said its full-year guidance assumes that generic competition for its top selling EpiPen treatment will begin in the year’s second half. That is obviously bad news: The specialty drug segment, comprised primarily of EpiPen, accounted for $302 million in second-quarter revenue, or about 13% of the total.

That guidance, though, didn’t include a new product that could drive the top line higher. This is a generic version of the multiple sclerosis treatment Copaxone that Mylan is planning.

While it is unclear when Mylan’s product will launch, there is clearly a big opportunity here. Teva Pharmaceutical Industries reported second-quarter Copaxone sales in excess of $1 billion.

So management is possibly being overly conservative in its guidance, should the new product take market share. That is especially good news seeing as the possibility of a Perrigo deal falling through is a very real one.

“We like Perrigo, but we don’t have to have Perrigo.” Mylan chief Heather Bresch said on the earnings call. Ms. Bresch also reiterated that Mylan is committed to maintaining its investment-grade rating, suggesting it is unlikely to increase its offer of $75 in cash and 2.3 Mylan shares for each share of Perrigo.

After the sharp selloff in the wake of Teva dropping its bid for Mylan last month, Mylan’s debt adjusted market value is about 10.9 times forward estimates of earnings before interest, taxes, depreciation and amortization. That is above Mylan’s five-year average. It is, though, well below that of Perrigo and on par with Teva.

At the lower price, Mylan’s risk-reward equation is improving. That is something investors should be able to deal with.

(BN) 3G Effect Makes Mondelez a Target as Activists Circle: Real M&A

3G Effect Makes Mondelez a Target as Activists Circle: Real M&A
2015-08-06 18:20:22.539 GMT


(For a Real M&A column news alert: {SALT REALMNA <GO>}.)

By Brooke Sutherland
(Bloomberg) -- Aggressive cost cuts aren’t enough to
save food companies from scrutiny after 3G Capital set the
industry bar for just how deep they can go.
Activist investor Bill Ackman revealed late Wednesday that
he has built a 7.5 percent stake in Mondelez International Inc.
That holding could be used to push the maker of Oreo cookies and
Ritz crackers to go beyond the $3 billion in cost cuts that
Chief Executive Officer Irene Rosenfeld has already pledged amid
pressure from Nelson Peltz’s Trian Fund Management.
That plan was impressive when Rosenfeld first announced
cuts in 2013. But compared to what 3G Capital has been able to
achieve with a more-efficient H.J. Heinz Co., Mondelez’s
reductions now seem paltry, said Alexia Howard of Sanford C.
Bernstein & Co. 3G also will trim expenses through Heinz’s
purchase of Kraft Foods Group Inc., which was backed by Warren
Buffett and closed in July.
“3G is turning the food industry upside-down,” Brian
Yarbrough, an analyst at Edward Jones & Co., said by phone.
“Activists are seeing the opportunity that, ‘Wow, if 3G can do
this, why don’t we go in and put pressure on management?’”
Ackman’s $5.6 billion stake in Mondelez is a bet that the
company can get its margins more in line with those of 3G’s
targets -- one way or another. If Mondelez can’t make sufficient
cuts on its own, then maybe 3G could, through a takeover of the
company. Mondelez has long ranked at the top of the list of
speculated targets for the investment firm co-founded by
Brazilian billionaire Jorge Paulo Lemann.

Not Obvious

Mondelez wasn’t the most obvious candidate for more
activism. The shares had climbed 27 percent so far this year
before Ackman disclosed his stake, for the third-best
performance on the Standard & Poor’s 500 Consumer Staples Index.
Peltz has been involved with Mondelez since at least 2013,
at one point pushing for a deal with PepsiCo Inc. before
settling for a seat on the board and cost cuts. As part of
Rosenfeld’s cost-cutting plan, she is implementing zero-based
budgeting, an accounting approach favored by Peltz’s Trian and
made famous by 3G in which companies start with a budget of zero
and have to justify each expense.
In a post-3G world, that may not be enough.
Mondelez had a margin of about 12.5 percent on earnings
before interest, taxes, depreciation and amortization at the end
of June. It mainly operates in snack categories that should have
higher margins than ketchup. Yet 3G set a goal of boosting
Ebitda margins at Heinz to about 30 percent and has essentially
already achieved that in just two years. That’s not far off from
profitability at Google Inc. and Apple Inc., technology
companies with much lower operating expenses.

Margin Laggard

Comparing Mondelez to the newly formed Kraft Heinz Co. is
not exactly apples-to-apples, said Ken Shea, an analyst at
Bloomberg Intelligence. Mondelez gets almost 80 percent of its
revenue from overseas and as such, is more subject to currency
pressures from the strong U.S. dollar. Still, that doesn t
change the fact that its margins lag behind most large global
packaged-food peers, according to data compiled by Bloomberg.
“There’s not a lot to complain about,” Shea said. But
“for a company with such strong brands, why isn’t it performing
the best? Is it good enough for the Yankees to come in third?”

In-House

Mondelez’s best bet for boosting margins substantially in a
hurry is to make the changes on its own.
While 3G will continue to roll up the food industry with
more deals, the Kraft takeover was massive at about $46 billion
before net debt. It’s going to take time to integrate the
acquisition with Heinz and to pay down borrowings. And Mondelez
is no small undertaking with a market value of $75 billion.
“It’s later rather than sooner,” Yarbrough of Edward
Jones said. “It’s too early for 3G or Buffett to do anything
and there’s no one else really big enough to buy these guys.”
The only alternative may be PepsiCo, and Chief Executive
Officer Indra Nooyi has shown no interest in Mondelez after
multiple calls for a deal from Peltz.
The more cost cuts that Mondelez makes though, the less
appealing it is for 3G because there’s less to do.
There are other packaged-food targets that could be easier
to digest with more room for improvement, such as Kellogg Co.,
General Mills Inc. or salt-and-pepper maker McCormick & Co. All
have market values under $40 billion. Or 3G could return to the
beverage industry: The investors helped orchestrate InBev NV’s
takeover of Anheuser-Busch in 2008. Diageo Plc is one that could
hold appeal.
That’s not to say 3G couldn’t still pounce on Mondelez in a
few years. That could be Ackman’s plan: try to be 3G on his own
and if that doesn’t work, hand the reins over to the masters.

For Related News and Information:
Kraft Deal Puts More Pressure on Low-Growth Foodmakers: Real M&A
Buffett, 3G Transform Kraft From Laggard to Best Stock: Real M&A
Buffett Plan for More 3G Deals Sparks Kellogg Talk: Real M&A
MegaBrew Is Left to Ferment After 3G Focuses on Food: Real M&A
Deal top: DTOP <GO>
Real M&A columns: NI REALMNA <GO>

--With assistance from Craig Giammona in New York.

To contact the reporter on this story:
Brooke Sutherland in New York at +1-212-617-0448 or
bsutherland7@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Elizabeth Wollman

CNBC : Russia hacks Pentagon computers: NBC, citing sources

U.S. officials tell NBC News that Russia launched a "sophisticated cyberattack" against the Pentagon's Joint Staff unclassified email system, which has been shut down and taken off line for nearly two weeks. According to the officials, the "sophisticated cyber intrusion" occurred sometime around July 25 and affected some 4,000 military and civilian personnel work for the Joint Chiefs of Staff.
Sources tell NBC News that it appears the cyberattack relied on some kind of automated system that rapidly gathered massive amounts of data and within a minute distributed all the information to thousands of accounts on the Internet cloud. The officials also report the suspected Russian hackers coordinated the sophisticated cyberassault via encrypted accounts on social media.

While the officials say its not clear whether the attack was sanctioned by the Russian government or conducted by individuals given the scope of the attack, "It was clearly the work of a state actor."

>>> Beiersdorf has EUR 8.6bn for acquisitions

Beiersdorf has EUR 8.6bn for acquisitions 

Beiersdorf, the listed German personal care producer, is well equipped for acquisitions, Lebensmittel Zeitung reported.

The German weekly said the company has resources of EUR 8.6bn for acquisitions, including cash, shares and a possible capital raise. The article quoted Beiersdorf Chief Financial Officer Ulrich Schmidt as stating he expects attractive companies to be expensive when they become available.

Lebensmittel Zeitung

WSJ : Patrick Drahi to Move Altice to the Netherlands

Patrick Drahi to Move Altice to the Netherlands

Shareholders voted in favor of acquisition of Luxembourg-based telecom by Dutch subsidiary; Netherlands allows a dual-class share structure

European telecom magnate Patrick Drahi prevailed Thursday in his effort to redomicile his Altice SA company in the Netherlands, part of an attempt to cement control even as he pursues potentially dilutive acquisitions across the globe.

Shareholders overwhelmingly voted in favor of an acquisition that would see Altice, the Luxembourg-based telecommunications company controlled by Mr. Drahi, taken over by a Dutch subsidiary, according to people familiar with the matter.

Although Mr. Drahi’s success in securing his power was assured, the move highlights how companies are flocking to the Netherlands to take advantage of one of Europe’s most flexible corporate codes.

Italy’s Agnelli family was able to maintain control of Fiat Chrysler Automobiles NV when it switched its domicile to the Netherlands last year. Pharmaceutical firm Mylan N.V. fended off a bid by Israeli rival Teva Pharmaceutical Industries Ltd. last month after it moved to the Netherlands, where it instituted a poison-pill-like takeover device, along with other management-friendly ploys.

For Mr. Drahi’s purposes, the Netherlands is one of the few spots in Europe where companies can set up a dual-class share structure, assigning different voting rights to different classes of shares. The resulting structure means that the billionaire, who owns 58.5% of the stock of his company, would have 92% of the company’s voting power.

Altice has grown rapidly since its public offering in January 2014 as Mr. Drahi has amassed cable companies and combined them with mobile operators, undercutting rivals that sell them separately. It has spent more than $40 billion on acquisitions in France, Portugal and the U.S. over the past 18 months, according to Dealogic. So far, the strategy has been popular with investors, with Altice shares up some 427% in Amsterdam since the IPO.

But some minority shareholders are concerned about Mr. Drahi’s power grab.

“We do not want to create situations where companies are indeed put into a position that they are not accountable for their actions,” said Rogier Snijdewind, an adviser at Dutch pension fund manager PGGM who attended the shareholder meeting on Thursday. “That is what we fear will happen to Altice.”

A regulatory filing by Altice explained that the new share structure will “provide greater flexibility for financing and corporate transactions.” It allows Mr. Drahi and other major shareholders to “put in place appropriate tools to pursue a value-enhancing strategy without diluting voting control.” In practice, Altice can now fund takeovers with equity without diluting Mr. Drahi’s voting power.

A spokesman for Altice said Patrick Drahi’s track record as a successful telecoms investor over the past 20 years is a key part of the company’s story. He said the new structure would reinforce corporate governance as it applied equally to all shareholders and not just the management.

Some investors in the Netherlands are particularly concerned about the influx of foreign companies seeking to take advantage of lax corporate governance rules, where companies aren't legally required to comply but must explain to shareholders why they are deviating from the country’s corporate governance code. The system, known as “comply or explain,” is popular in several European countries, including the U.K.

For example, of its eight board members, only two will be independent. The rest will be Altice executives, including Mr. Drahi, who will serve as president. The Dutch corporate governance code requires a majority of board members to be independent.

The chairman of Altice’s board, Jurgen van Breukelen, will also chair its audit committee, another deviation from the code.

Mr. Drahi also has an agreement with each of the shareholding board members, and some other shareholders, that they must vote in favor of all his proposals for a period of 30 years. He is also entitled to what is known as “negative control” over the board, which means that he is allowed to cast a number of votes equal to all other board members.

Paul Cronheim, an Amsterdam-based lawyer with the Dutch law firm De Brauw Blackstone Westbroek, said that “in general, some of these newcomers are very creative, and introduce innovative governance structures. It remains to be seen if they will stand up in court if challenged.”