FT : Mylan share price plunges after Teva abandons bid

Mylan share price plunges after Teva abandons bid

Shares in drugmaker Mylan plunged almost 14 per cent on Monday after Israeli group Teva Pharmaceutical abandoned its $40.1bn hostile takeover attempt and instead announced an agreed deal to buy part of Allergan.

Teva’s decision to dump its bid for Mylan in favour of Allergan ends one of the most acrimonious takeover tussles of the year and continues the frenetic pace of dealmaking in the pharmaceuticals sector.



It comes after Netherlands-incorporated Mylan, one of the world’s biggest makers of generic medicines, waged an aggressive defence including a complex “poison pill” arrangement and frequent mudslinging.

“We congratulate Teva on their agreement to acquire Allergan’s generics business. As Teva continues to move forward with their strategy, Mylan’s strategic focus remains unchanged,” Mylan said in a statement on Monday.

Mylan said it would press ahead with its own deal — an unsolicited $33bn attempt to acquire Perrigo of Ireland — which some investors had seen as a blocking tactic to repel Teva’s advances.

Mylan had been planning to fund roughly two-thirds of the Perrigo bid with its stock, however, meaning the value of its offer is much diminished following the sharp decline in its own share price on Monday.

Erez Vigodman, Teva’s chief executive, said the purchase of Allergan’s generics division for $40.5bn would provide an “even greater opportunity to create value for shareholders”.

He added that Teva had “preferred Allergan from the outset” and approached the company about a deal earlier this year. At the time, Allergan was unwilling to discuss a divestment, prompting Teva to begin its pursuit of Mylan, said Mr Vigodman.

Teva also said it was reviewing its 4.6 per cent position in Mylan, which it amassed recently to give it leverage in its takeover pursuit. It said it would come to a “clear view” on the stake in the next few weeks, and a decision to divest could put further pressure on Mylan’s shares.


Shares in Mylan were down 13.8 per cent in early trading in New York. Allergan was up 6.6 per cent and Perrigo was up 4.5 per cent.

Some Mylan investors have been privately critical over the group’s intransigence towards Teva’s offer, arguing that the company was putting its independence ahead of shareholder returns.

The shareholders are more likely to back its takeover bid for Perrigo now that the prospect of a Teva deal has faded, according to a person who has spoken to its largest investors. “A deal with Perrigo is the last thing left for them on the table,” said the person.

Robert Coury, chairman and chief executive of Mylan, is set to contact his counterpart at Perrigo this week in a final attempt to convince him to start friendly takeover talks rather than enter a full-blown hostile battle, said people familiar with the matter.

Perrigo is not opposed to being acquired, but the board is convinced that it can be bought for much more than Mylan has offered.

Brent Saunders, chief executive of Allergan, also suggested Mylan had made a tactical misstep. “Teva was offering a very nice premium for that company. I would have more seriously considered it,” he said in an interview with CNBC.

Ronny Gal, an analyst at Bernstein Research, said some investors in Mylan were now “arguing there is enough dissatisfaction to merit a shareholder revolt to change management”.

Abbott Laboratories, its largest shareholder, supports the Perrigo bid.

(CS) European Beverages - Rising Threat of US craft spirits

In this report, Sanjeet Aujla assumes primary coverage of Diageo and Pernod Ricard, providing a review of US craft spirits and its potential impact on the major players. We maintain our Outperform rating (€124 TP) for Pernod and our Neutral rating (1,800p TP) for Diageo.

We estimate craft spirits could reach 12% share over the next decade. Assuming super and ultra-premium brands replicate historical growth, this implies volume declines for premium and value brands.

Prefer Pernod over DGE: Whilst both companies could participate more in the craft segment, we believe they will likely see lower overall growth and share losses, as they are overindexed to large premium and value brands.
We believe DGE is most exposed, as i) it generates c40% of EBIT from the US v c25% for Pernod, ii) it has taken too much price on its large 'premium' brands in recent years, and iii) Pernod has more consistent growth in its
whiskey portfolio, a category with higher 'craft credentials'. The bear case is DGE could see limited profit growth in the US v c8% CAGR over the past decade (which has driven over 50% of group profit growth). Pernod trades at a 7% calendarised FY16E P/E discount to DGE, unjustified in our view.

(CS) Global Equity Strat. UK equities: What to do when rates rise

The market is pricing in an 80% probability of a first rate hike occurring by February 2016 and a 30% probability by November 2015. If anything, the chances are higher, in our view. Composite PMIs are consistent with 2.5% GDP growth and wage growth is accelerating to 3.2%, even before the introduction of the living wage (which could add 0.5% to wage growth).

We think interest rates could rise more than expected in the medium term (1.6% is priced in for end 2017) due to the fact that the UK consumer is now less rate sensitive than in the past (half of mortgages are now fixed-rate, up
from 30%), and there is a high chance of fiscal policy slippage.

Sterling/Dollar has been driven by rate differentials: On a 2 year view, US rates should rise more than those in the UK (less floating rate debt, lower household leverage), but near term Sterling/Dollar should remain range-bound.
The dilemma for us is Euro/Sterling, where sterling appears to be more overvalued against PPP than at any time in the last 20 years (combined with a record trade deficit with Europe). Thus, we still want to buy the European
recovery plays (e.g., Kingfisher, Vodafone, SThree, Hays).

We downgrade UK equities to benchmark, and take our year-end FTSE 100 target down to 7,000 (from 7,450), due to sterling resilience (only 21% of profits come from the UK); GEM exposure (26% of market cap); our negative view on oil (the UK has a larger exposure to oil than even GEM); UK equities modestly underperform when UK rates initially rise; they are not clearly cheap excluding resources; and the UK market is overweight bond proxies.

We are overweight UK banks as they are very closely correlated to two-year note yields, underperformed European banks by 46% since 2013, cheap on P/B vs RoE or P/PPP, buy unfunded pension deficits (BT, GKN, BAE) and employment agencies (who tend to outperform when wages rise). We stick with the benchmark of UK life companies, which are expensive and have ceased to be rate sensitive (we downgraded them in April).

>>> Sergio Rossi could be bought by Emerisque

Sergio Rossi could be bought by Emerisque 

Sergio Rossi, an Italian shoe label backed by the French luxury goods group Kering, is close to being bought by private equity firm Emerisque, reported MF Fashion. The report quoted sources close to the situation as saying that the deal could be worth between EUR 40m and EUR 50m. Emerisque's offer was preferred to the one made by Italian private equity fund Investindustrial, and Lion Capital, the owner of Jimmy Choo.

MF Fashion

>>> Zurich prepares GBP 5.5bn takeover offer for RSA Insurance

Zurich prepares GBP 5.5bn takeover offer for RSA Insurance 

Zurich Insurance of Switzerland is rumoured to be preparing a takeover offer for its UK-based counterpart RSA Insurance, the Financial Times reported. The offer is believed to value London-listed RSA at approximately GBP 5.5bn (USD 8.6bn), the report said.

A source familiar with the British insurer said no offer has been received, the item reported.

Zurich announced at the end of last year that it has more than USD 3bn (GBP 1.9bn) of available cash for M&A spending, the report said. It added that analysts noted the Swiss group recently outlined a target capital structure which could enable the business to issue subordinated debt totalling approximately USD 3bn during the imminent years to come.

RSA has a GBP 4.6bn market cap. Speculation that the company might be sold or broken up has been growing since activist fund Cevian Capital accumulated an almost 10% stake last year, the report said.

Source Financial Times

>>> What to look at today - 28th of July 2015

Dow-0.73% S&P-0.61% Nasdaq-0.96% Russell-0.93% VIX
US Market close lower, closing 200d MA...Chinese Market plunge 8.5%, biggest one day decline in more than 8y, Shanghai is down 28% from June highs. Europe followed also chinese market closing lower. Nine sectors finished the day in negative territory with all six cyclical groups ending in the red. energy sector (-1.4%) settled at the bottom of the leaderboard while crude oil fell to early April levels, ending lower by 1.6% at $47.39/bbl. Utilities was the only sector closing higher(+1.3%), healthacre was boosted by TEVA+16,4%. Volume were ahead of average @ 900mil shares...US after Hours KN +10.2%, GIG +7.2%, MSTR +6.6%, AMDA -40.6%, AMKR -12.6%, BIDU -7.0% following earnings/guidance...Shanghai Composite opened down by over 4% and extended those declines above 5% to new 2-week lows in the opening hour, but has pared most of those losses and entered midday break down just 1% but back in negative territory now down almost 3%. Policymakers are looking to relieve the concerns that sent the markets plummeting in the afternoon session overnight, with securities regulator CSRC insisting that its China Securities Finance (CSF) is still present in the market and prepared to increase stock purchases if necessary.PBoC also promised to do its part, reiterating it will maintain "prudent" monetary policy, keep moderate liquidy, and continue supporting economic development. To that end, the PBoC injected another CNY50B via its 7-day reverse repo open market operations. PBoC also maintained that economic indicators are showing some modest improvement. In contrast, the planning body NDRC warned the economy is facing downward pressure, promising to boost construction of key projects in H2. In equities, Baidu beat on the top and bottom lines, but shares traded down by over 6% in extended US session. Analysts remarked that markets are skeptical of China internet giant's continued aggressive spending plans.

Nikkei +0.03% Hang Seng +1% Shanghai -2.75%

Eur$1.1066 JPY 123.58 GBP 1.5570 EURCHF 1.0661 RUB $59.7475 WTI $$&.18 (-0.44%)

S&P +0.42% EuroStoxx +0.40% Dax +0.26% SMI +0.45%

Macro :
- China May Widen Yuan Trading Band ‘Soon’, UBS Wang Tao Says

Keep an eye on :
- ANA SM : Acciona Mulls Merging Renewables With KKR, Confidencial Says
- ALO FP : Alstom to Accept Lower Purchase Price From GE to Get EU Approval
- ALO FP : Alstom Offer to GE Equals EU1 Per Share for French Co.: JPMorgan
- AIXA GY : Aixtron 2Q Sales Miss, Net Loss Exceeds Ests.
- BP/ LN : BP Given 30 Days to Pay $1b in Gulf Coast Settlements: NYT
- DB1 GY : Deutsche Boerse 2Q Net Income Rises to EU583.1m vs EU491.2m y/y, Sees Net Rev. Increases of 5%-10% Annually
- DECB BB : Deceuninck Vice Chairman Van Eeckhout Buys EU820,058 of Stock
- DIA SM : Dia 2Q Adj. Ebitda Beats Ests.
- ELE SM : Endesa 1H Net EU870m, Beating Estimate of EU754.6m
- EIT IM : EI Towers Plans Small Acquisitions Through Unit: Repubblica
- FCA IM : Fiat Chrysler Offering Incentives to Participate in Recall
- GFT GY : GFT to Sell Emagine Unit, Reduces 2015 Forecasts to Reflect Sale
- KER FP : Kering 2Q Gucci, Luxury Unit Comp Sales, 1H Profit Beat Ests.
- LUX IM : Luxottica 2Q Adj. Oper. Income Beats Ests., Confirms Outlook
- MAIL LI : Sony Drops Lawsuit, Reaches Deal With Mail.ru’s VK: Vedomosti
- MAN GY : MAN Cuts FY Forecast, Takes EU170m Restructuring Charge
- MERY FP : Mercialys Raises 2015 FFO Growth Target to 3% From 2%
- ML FP : Michelin 1H Profit EU1.26b, Est. EU1.29b; FY Forecast Confirmed
- MXTV FP : NextRadioTV CEO Weill Offers to Quit Iliad Board: Les Echos
- ORA FP : Orange 2Q Sales, Ebitda Exceed Ests.; Keeps Outlook Unchanged
- ORA FP : Orange Will Be One of Europe’s Consolidators, CFO Says
- RSA LN : Zurich Evaluating Potential Offer for RSA Insurance Group
- SAGA LN : Saga Shares Offered at 205p to Market Price in Block Sale: Terms
- SAN FP : Sanofi Signs $2.2b Pact W/ Regeneron on Immuno Cancer Therapies
- SAN FP : Sanofi Will Recommend Dengue Vaccine For Older Children
- HO FP : Thales Close to Getting EU1B London Metro Contract: Tribune
- VOW3 GY : VW Passes Toyota to Lead Global Sales in First Half of 2015

>>> Europe : Brokers Upgrades & Downgrades - 28th of July 2015

>>> Up
*AVEVA RAISED TO NEUTRAL VS SELL AT GOLDMAN
*BWIN.PARTY RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
*PHILIPS RAISED TO BUY VS HOLD AT SOCGEN
*PHILIPS RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS

>>> Down
*DRAX CUT TO REDUCE VS HOLD AT HSBC
*EUTELSAT CUT TO HOLD VS BUY AT HSBC
*LAFARGEHOLCIM RATED REDUCE AT HSBC; WAS RESTRICTED

>>> PT Change


>>> Initiation
*BANKIA RATED NEUTRAL VS NOT RATED AT JPMORGAN
*CRH RATED HOLD AT HSBC; WAS RESTRICTED
*INWIT RATED NEW NEUTRAL AT UBS, PT EU4.30
*INWIT RATED NEW OUTPERFORM AT MEDIOBANCA; PT EU5.12
*INWIT RATED NEW OUTPERFORM AT MEDIOBANCA; PT EU5.12
*NORDAX GROUP RATED NEW EQUALWEIGHT AT MORGAN STANLEY, PT SK45.3

>>> Call
>> Country
*U.K. EQUITIES CUT TO BENCHMARK BY CREDIT SUISSE’S GARTHWAITE
>> Index
*FTSE 100 YR-END TGT CUT TO 7,000 VS 7,450 AT CREDIT SUISSE

(BFW) Zurich Evaluating Potential Offer for RSA Insurance Group

BFW 07/28 05:16 *ZURICH EVALUATING POTENTIAL OFFER FOR RSA INSURANCE GROUP
BN 07/28 05:16 *ZURICH SAYS NO ASSURANCE ANY OFFER WILL BE MADE
BN 07/28 05:16 *ZURICH SAYS NO FIRM INTENTION TO MAKE OFFER
BN 07/28 05:15 *ZURICH EVALUATING POTENTIAL OFFER FOR RSA INSURANCE GROUP
Zurich Evaluating Potential Offer for RSA Insurance Group
2015-07-28 05:18:56.149 GMT


By Chris Malpass
(Bloomberg) -- Zurich Insurance confirms it is evaluating a
possible offer for RSA Insurance, says no assurance an offer
will be made.

* Further announcement to be made as appropriate
* Statement

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Chris Malpass in Berlin at +49-30-70010-6234 or
cmalpass@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-3525-2645 or
jludden@bloomberg.net
Chris Malpass

>>> After Hours Summary: KN +10.2%, GIG +7.2%, MSTR +6.6%, AM

After Hours Summary: KN +10.2%, GIG +7.2%, MSTR +6.6%, AMDA -40.6%, AMKR -12.6%, BIDU -7.0% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: KN +10.2%, GIG +7.2%, MSTR +6.6%, MPWR +2.1%, EMN +1.7%, MSL +0.5%, VLRS +0.4%, HIG +0.2%, SWFT +0.2%, ARE +0.1%, AVB +0.1%, TMK +0.1%

Companies trading higher in after hours in reaction to news: SAEX +17.3% (awarded a contract for ocean-bottom marine seismic data acquisition services, valued at ~$47 million), MSTR+6.6% (announced the appointment of Phong Le as CFO effective on or about August 24, 2015; co also reported earnings), ASTI +3.4% (disclosed the mutual termination of its May agreement regarding the purchase and sale contract of its Thornton, Colorado headquarters building), ACI +1.4% (announced that for administrative purposes it is postponing the previously announced one-for-ten reverse stock split of common stock), HZNP +1.2% (announced a collaboration with Fox Chase Cancer Center to study ACTIMMUNE in combination with PD-1/PD-L1 inhibitors in various forms of cancer including advanced urothelial carcinoma and renal cell carcinoma), SPWR +1.2% (announced that it has acquired 1.5 gigawatts of U.S. solar power plant development assets from Australia-based Infigen Energy)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: AMDA -40.6%, AMKR -12.6%, CKEC -11.7%, BIDU -7.0%, TCPC -2.3%, CR -1.7%, PRAH -1.4%, TACO -1.4%, ALSN -1.3%, AGNC -0.8%, CDNS -0.1%, PCL -0.1%, MNK -0.1%

Companies trading lower in after hours in reaction to news: AMDA -40.6% (announced the FDA has requested co provide 24-month clinical performance data for pending 510(k) submission for the Valeo C Interbody with CsC Osteo-Conductive Scaffolding; co also provided in-line Q2 rev guidance), CARA -6.7% (commenced an underwritten public offering of shares of its common stock of up to $65 mln), EGLT -5.4% (to offer and sell shares of its common stock in an underwritten public offering; size not disclosed), ADPT -1.5% (announced an offering of 2.75 mln shares of common stock; ~1.91 mln shares to be sold by co, ~844K shares to be sold by Sterling Partners shareholder group)