(BFW) Monsanto, Syngenta Deal Likelihood Is Less Than 60/40: Bernstein

Monsanto, Syngenta Deal Likelihood Is Less Than 60/40: Bernstein
2015-06-23 09:33:19.942 GMT


By Chiara Remondini
(Bloomberg) -- Bernstein comments in note on possibility of
deal closing after Syngenta’s remarks earlier today.

* Bernstein (market perform on Syngenta) says Syngenta seems
to be asking for “significantly” higher offer, higher
breakup fee
*
* Says this isn’t impossible, notes co. keeps referring to
“complex, vertical” antitrust issues which reduce
likelihood of a deal
* May be using antitrust issues as “defence mechanism”
* Vontobel (buy on Syngenta): Syngenta reconfirms previous
position
*
* Overall situation unchanged, next move up to Monsanto
* A deal remains “more likely to happen than not”
* Syngenta shares rise as much as 1.8%, volume at 20% of 3-
month daily avg
* Earlier: Monsanto offer undervalues Syngenta significantly,
Syngenta board is committed to review new proposals to come,
Chairman Demare says in video
* NOTE June 20: Syngenta Managers to Address Shareholders Amid
Discontent: FuW


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

To contact the reporter on this story:
Chiara Remondini in Milan at +39-02-8064-4241 or
cremondini@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-3525-2645 or
jludden@bloomberg.net
Jurjen van de Pol

>>> DJ Monsanto's CEO Isn't Deterred by Syngenta's Rebuffs

DJ Monsanto's CEO Isn't Deterred by Syngenta's Rebuffs
By Jacob Bunge
In Hugh Grant's 34 years at Monsanto Co., his soft-spoken persistence has won over business rivals and even some critics of the company that pioneered genetically modified crops.
Now, the Monsanto Chief Executive's persuasiveness and penchant for bold moves are being tested as he woos rival Syngenta AG with a roughly $45 billion takeover offer that the Swiss pesticide maker repeatedly has rejected.
A deal would represent a sweeping revamp by Mr. Grant of the world's biggest seller of seeds. Buying Syngenta would shift St. Louis-based Monsanto sharply back into the pesticide business where Mr. Grant spent much of his career--and potentially involve moving Monsanto's corporate base overseas and changing its name, which dates to its establishment in 1901.
The 57-year-old Scotsman, who views the discussions as "a long game," says he isn't deterred by Syngenta's rebuffs.
"Despite the pace and the speed and the lack of engagement, I always tell the team I'm the exception because I'm the Scottish optimist," Mr. Grant said in his first interview since Monsanto and Syngenta disclosed the talks in May. "I'm going to be putting energy into putting this over the line."
Mr. Grant personally pitched a combination to senior Syngenta officials in April, and Monsanto now is lobbying shareholders of both companies. He aims to reduce Monsanto's reliance on the genetically modified seeds that it introduced nearly two decades ago--a once-booming business that also has made Monsanto a favorite target of environmental activists and other critics. A deal would be "transformative," Mr. Grant said. "We'd reinvent ourselves one more time."
Syngenta has argued that Monsanto's bid is too low and that antitrust regulators would block a combination between the global leader in seed sales and the No. 1 seller of pesticides.
Mr. Grant, CEO for 12 years, has coveted Syngenta since at least 2011. Failure to strike a deal would be a black eye, and mean missing out on what Monsanto has described as its best chance to vault ahead in the pesticide market that it says is critical to the future of agriculture. Sales in Monsanto's seeds and genetic traits division--which accounts for more than two-thirds of its revenue--grew by just 4% last year, compared with a 21% increase in 2004. Its herbicide division grew 13% last year.
Mr. Grant joined Monsanto in 1981 after earning a degree in molecular biology and agricultural zoology at Glasgow University. His first job was arranging field tests of Roundup, Monsanto's trademark weedkiller, for Scottish barley farmers.
Roundup provided Monsanto's path into the seed business, with the company in the 1990s introducing soybean, corn and cotton plants that could withstand the herbicide. Roundup also was Mr. Grant's ticket up the ladder: After marketing it for years in Europe, he became Monsanto's U.S.-based strategy director overseeing Roundup in 1991.
Managing Roundup tested Mr. Grant's negotiating mettle. With Monsanto's U.S. patent on glyphosate, Roundup's key ingredient, set to expire in 2000 and rivals planning their own versions, Mr. Grant broke ground on a massive new plant in Brazil. He pitched competitors a deal: Rather than construct their own plants, Monsanto would provide them a steady supply of glyphosate at a small premium. It worked, and Monsanto retained much of the market for the world's top weedkiller for another decade.
"We had better quality and we were supplying them on their doorstep," Mr. Grant said.
After becoming CEO in 2003, Mr. Grant focused on seeds, buying up small companies and driving the development of new genetic traits that enabled crops to ward off harmful insects and thrive in dry conditions.
Mr. Grant also deployed his Scottish brogue and self-effacing humor in defense of biotechnology as Monsanto increasingly drew fire from groups opposing genetically modified crops and the large-scale agricultural methods they enabled.
Larry Brilliant, then head of Google Inc.'s philanthropy arm, met Mr. Grant in 2008 when the two men leapt from a National Geographic ship for a swim in the Arctic Ocean during a VIP expedition to view melting polar ice.
They bonded, and Mr. Brilliant later invited Mr. Grant to participate in a 2008 panel discussion at Google on feeding the expanding global population.
Though Mr. Brilliant said some attendees--including himself--deemed some of Monsanto's business practices "indefensible," Mr. Grant was engaging and made a compelling case for biotechnology's ability to improve food security.
"There was a moderate shift in the direction of Hugh Grant's argument," Mr. Brilliant said. "He had data, and he never exaggerated."
Monsanto still faces many detractors. Neil Young next week will release an album called "The Monsanto Years" that rails against agribusiness. Pope Francis, while not naming companies, warned in his encyclical on the environment this month of "an expansion of oligopolies" in farming. In January, Mr. Grant spent nearly two hours at Monsanto's annual shareholder meeting engaging critics who accused its products of driving increases in diabetes and autism.
Some see acquiring Syngenta's pesticide portfolio as a backward step for Monsanto, which has argued in the past that genetically modifying seeds allows farmers to spray fewer chemicals on their fields.
"Re-integrating into this outdated model I think is the wrong direction to travel in," said Mark Lynas, an environmental writer and visiting fellow at Cornell University's Office of International Programs. "I'm quite concerned with Hugh Grant's vision for the company in that sense."
Mr. Grant describes himself as a patient person who fully commits, at Monsanto placing large bets on data-powered planting technology and microbe-based farm products. He also occasionally leads rounds of karaoke with farmers on trips to foreign markets.
Charles Bunch, chief executive of paint maker PPG Industries Inc., where Mr. Grant is a director, said Mr. Grant in the boardroom is a quiet consensus-builder who favors bold moves.
"This is not a guy who's pounding the table or has an overpowering personality, but he is persuasive with his arguments," Mr. Bunch said.
Mr. Grant said Monsanto's pursuit of Syngenta could play out over several months. If no deal materializes--though Mr. Grant said he's confident it will--Monsanto remains committed to expanding in pesticides.
"We'll figure out another way of doing that," Mr. Grant said. "This isn't one where you fold up the tent and go back to how things were."

(TWT) Dominic Walsh: Is IHG eyeing up $1bn+ Fairmont Raffles auction alongside l

Dominic Walsh: Is IHG eyeing up $1bn+ Fairmont Raffles auction alongside likes of Accor and Hyatt? @TimesBusiness @harrynwilson
2015-06-23 08:13:54.908 GMT

Is IHG eyeing up $1bn+ Fairmont Raffles auction
alongside likes of Accor and Hyatt? @TimesBusiness
@harrynwilson thetimes.co.uk/tto/business/c…
Dominic Walsh @walshdominic
 
Sent With: Twitter for iPhone
  Original tweet on
Twitter.com found here.

Twitter profile information as of June 23, 2015

Description: Business reporter on The Times covering leisure, tobacco and
drinks industries

Tweets: 5,625  Following: 1,141  Followers: 5,547  Tweeting Since: 9/9/2010

-0- Jun/23/2015 07:58 GMT -0- Jun/23/2015 08:13 GMT

FT : Takeover activity in the oil industry shows signs of revival

Takeover activity in the oil industry shows signs of revival

Equity valuations are falling as financing becomes more difficult and hedges are used up

It’s known as “Drilling on Wall Street”: building up oil and gas assets not by pushing a drill-bit into rock, but by buying companies. At times it has been a very cost-effective way to acquire reserves. It served T Boone Pickens very well, for example: he became a billionaire by acting as a combination of oil wildcatter and corporate raider.

That’s not true at the moment. Right now, the oil you can find on Wall Street is some of the most expensive in the world. But it has been getting cheaper.

Equity valuations for the US exploration and production sector imply an expected price of about $65 per barrel for benchmark US West Texas Intermediate crude, says Pearce Hammond, an analyst at Simmons & Company. That compares with required average break-even prices of $29 per barrel for reserves onshore in the Middle East, $57 per barrel in ultra-deep water and $62 per barrel in North American shale, according to Rystad Energy.

Add on the 28 per cent premium that has been the average for acquisitions announced so far this year, according to Dealogic, and you get to a price of about $83 per barrel: higher even than the average break-even price of $74 in the Canadian oil sands.

Those valuations explain the sluggish pace of takeover activity in the oil industry this year, in spite of the spur provided by the oil price rout. The one big deal has been Royal Dutch Shell’s $85bn cash and stock offer for BG Group, and it is easy to find people in the industry who think its offer — worth about 27 times BG’s expected earnings this year — is at a very full price.

The markets do not seem to be in much of a mood to reward acquisitive exploration and production companies.

The largest recent deal among US exploration and production companies has been Noble Energy’s $3.7bn acquisition of Rosetta Resources, and since it was announced in May, Noble’s shares have lagged behind the sector average. It’s no surprise that the biggest bids in the US oil and gas industry have been in infrastructure rather than production, including Williams’ $13.9bn offer for the 40 per cent of its affiliate Williams Partners that it does not already own, Energy Transfer Partners’ $17bn bid for its affiliate Regency Energy Partners, and Energy Transfer Equity’s $51bn offer for Williams, which was rejected over the weekend.

The bargains that some investors hoped for at the start of the year have failed to materialise. The number of exploration and production companies in financial distress has turned out to be smaller than many had expected.

When in March and April banks reset the borrowing bases, reflecting estimated values of reserves that are used to determine the credit extended to E&P companies, they were more forgiving than they could have been. WTI had fallen about 50 per cent since June 2014, but borrowing bases were typically cut by only about 15 per cent.

There is still new financing available for E&P companies in the debt markets, too. Halcon Resources and Goodrich Petroleum are among those that have arranged “second lien” debt financing, subordinated to the senior debt but still secured on assets and ranking ahead of unsecured lending.

US E&Ps raised $16.6bn from bond issues in the first five months of this year, compared with $13.1bn in the equivalent period of 2014, again on Dealogic data. As a result, the number of E&P companies facing immediate financial distress has remained relatively low. There are just not all that many forced sellers out there yet.

However, there are reasons to think that will start to change. Another round of borrowing base redeterminations in September and October will again ratchet down available liquidity for the industry.

More than 30 companies have already raised new equity finance so far this year and they will find it hard to go back to their shareholders to ask for more. Hedges that have sustained revenues for many companies, protecting them from the worst effects of the commodity price fall, will start to be used up. Put all that together, and the number of companies putting themselves up for sale is clearly likely to rise.

There are already tentative signs that activity is picking up. May was the most active month for oil and gas M&A since December, excluding the Shell-BG deal, according to GlobalData, thanks to the bids launched by Williams and Noble, among others.

At today’s equity market valuations, it will remain tricky for CEOs to justify acquisitions to their boards. But the US exploration and production sector index has already dropped almost 12 per cent since the start of May, while US crude has remained roughly unchanged at about $60. If oil equities carry on like this, sinking a few more wells into Wall Street might start to look quite attractive again.

(Wansquare) M&A: les fonds souverains et les chinois à la manoeuvre en Europe

M&A: les fonds souverains et les chinois à la manoeuvre en Europe 

Le premier semestre a été marqué par le retour des grosses opérations en Europe, mais aussi la montée en puissance de deux types d’acteurs : fonds souverains et groupes chinois, qui interviennent désormais en direct dans les deals.

L’année 2015 a confirmé le renouveau des méga deals, comme en témoignent encore ce matin les gros titres concernant l’offre de Numericable­SFR sur Bouygues Telecom. Entre la vente des actifs de Lafarge et Holcim à CRH dans le cadre de leur fusion, ou la cession de Verallia par Saint­Gobain à Apollo, les opérations d’envergure parviennent à se boucler. En particulier grâce à l’intervention de plus en plus marquée de deux types d’acteurs.

D’une part, les fonds souverains et de pension, traditionnels pourvoyeurs de capitaux pour les fonds de LBO, qui se positionnent de plus en plus en direct à leurs côtés. « Les fonds souverains ont beaucoup d’argent à déployer, ils sont capables de mettre de gros tickets et d’agir rapidement, d’autant qu’ils n’ont pas les mêmes objectifs de rendement que les fonds de private equity », analyse Stéphane Bensoussan, co­head du M&A de la zone EMEA chez HSBC. Ces acteurs s’invitent soit à la table des négociations pour permettre au deal de se réaliser, ou bien en aval, afin d’alléger l’engagement de l’acheteur.

GIC, le fonds de Singapour très actif en Europe, avait déjà ouvert la marche en 2013 lorsqu'il s'était allié à l'italien Snam et à EDF pour reprendre TIGF à Total. Les fonds sont aujourd'hui capables de se regrouper pour intervenir, comme cela s'est produit récemment lors du rachat de l’opérateur télécoms britannique O2 par Hutchison Whampoa, le groupe du milliardaire Li­Ka Shing. Alors que le chinois s'était engagé sur l'intégralité du prix de vente, il a ensuite syndiqué 33% des fonds propres auprès de cinq fonds souverains et de pension.

Les fonds souverains et de pension agissent souvent comme co­investisseurs aux côtés des fonds de private equity qu’ils sponsorisent, leur apportent davantage de surface financière et surtout un engagement sur le long terme. De leur côté, ils peuvent ainsi diversifier leurs poches d’investissement pour un profil de risque plus lisse, tout en misant sur les synergies d’opérations transformantes. Même si, en tant qu’investisseur financier, ils n’ont pas encore la réactivité de certains de leurs concurrents.

En parallèle, un autre type d’acteur émerge depuis plusieurs années maintenant : les investisseurs chinois. Mais désormais, leurs objectifs sont plus précis. "Les investisseurs chinois cherchent des actifs réels en Europe et commencent à investir seuls en direct, notamment dans l'immobilier. Ils vont progressivement sophistiquer leurs interventions", décrypte Stéphane Bensoussan. L’exemple le plus prégnant a été le rachat récent d’un
portefeuille d’immobilier commercial en France et en Belgique de CBRE par le fonds souverain CIC. C’est le premier exemple de ce type en France, alors que le fonds chinois Safe avait déposé une offre sur le centre commercial Beaugrenelle début 2014 mais n’avait pas remporté l’affaire. Ces derniers cherchent eux aussi à contrebalancer des rendements obligataires au plus bas à travers des actifs tangibles, à l’instar de ce
qu’a fait le Qatar dans l’immobilier en Europe. Sans compter que cette classe d’actifs correspond parfaitement à leur logique de long terme et moins axée sur le TRI que d’autres investisseurs.

(BFW) Vodafone, Liberty Have ‘Golden Opportunity’ in Merger: Nomura

Vodafone, Liberty Have ‘Golden Opportunity’ in Merger: Nomura
2015-06-23 07:04:05.965 GMT


By Kasper Viita
(Bloomberg) -- Vodafone, Liberty Global discussions around
asset swaps will help to establish valuations, help weigh these
sub-optimal scenarios against “far more attractive” scenario
of combining all European assets under one roof, Nomura says,
raises Vodafone to buy.

* Cos. have potential to create “an unrivaled integrated
communications provider across Europe,” total cost
synergies seen at $32.6b
* Exchange of assets will be “a difficult negotiation” given
mismatch of asset valuations, synergy value
*
* Regulatory scrutiny will be tougher under this scenario,
appeal of entities left behind compromised by associated
constraints on regional scale
* Vodafone PT raised to 290p assuming 10% associated increase
in Liberty Global’s equity on announcement, discounted by
one year for regulatory scrutiny
* June 5: Vodafone said it’s in talks with Liberty regarding
possible exchange of selected assets; not currently
negotiating full merger


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

To contact the reporter on this story:
Kasper Viita in London at +44-203-525-9219 or
kviita1@bloomberg.net
To contact the editor responsible for this story:
James Ludden at +44-20-3525-2645 or
jludden@bloomberg.net

(BFW) Credit Suisse New CEO May Do CHF4b Capital Increase, KBW Says

Credit Suisse New CEO May Do CHF4b Capital Increase, KBW Says
2015-06-23 06:50:27.309 GMT


By Chris Malpass
(Bloomberg) -- Credit Suisse’s new CEO Tidjane Thiam may
make changes including a CHF4b capital increase in 3Q that will
boost CET1 ratio by more than 200bps to 12%, Keefe, Bruyette &
Woods says in note.

* Capital increase would immediately reassure investors,
clients; would also provide “fire power” for any asset
management M&A
* Says CS needs a multi-year revamp plan to de-risk IB, boost
ROE to 11.3%
* New rules could see ROE drop to 9.9%
* Says revamp should focus on IB fixed-income products and on
shedding CHF44b in gross RWAs, CHF171b in leveraged assets
* IB businesses that need deleveraging are macro,
securitization, credit and prime services
* Says changes should take place over 4 years
* Reiterates outperform, raisees PT to CHF30 vs CHF28
* 11 buys, 20 holds, 7 sells: Bloomberg data
* EARLIER: Credit Suisse sets sights on UBS in battle over
private banking
* NOTE: Stock up 6.2% YTD vs UBS up 20%, SX7P up 17%
* NOTE: Barclays says capital gap priced in at CS, not at BNP,
SocGen
* NOTE: RBC prefers Credit Suisse, Nordea most SocGen least


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

--With assistance from Jeffrey Vögeli in Zurich.

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

(BFW) Vallourec Ratings Cut to Junk by S&P

BN 06/22 15:51 *S&P DOWNGRADES VALLOUREC TO 'BB+/B'; OUTLOOK STABLE
Vallourec Ratings Cut to Junk by S&P
2015-06-22 15:53:49.826 GMT


By Karen Mielcarek
(Bloomberg) -- The downgrade reflects view that Vallourec’s
EBITDA and profitability will weaken and not be commensurate
with a BBB- rating in 2015-2016, S&P says.

* Vallourec’s core oil and gas end market will remain subdued
for several quarters: S&P
* Ratings cut to BB+/B from BBB-/A-3 with stable outlook


Link to Statement:Link

Link to Company News:{VK FP <Equity> CN <GO>}

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

To contact the editor responsible for this story:
Karen Mielcarek at +1-302-661-7609 or
kmielcarek@bloomberg.net