>>> US Early premarket gappers

Early premarket gappers

Gapping up: PGH +5.9%, SHLD +2.8%, DATE +2.3%, SD +1.7%, NBG +1.6%, HMY +1.5%, BLOX +1.4%, X +1.4%, PANW +1.1%, WMT +0.8%, TSLA +0.7%

Gapping down: WLT -33.6%, TKC -8.6%, BUD -3.9%, MGM -3.2%, SHPG -2.7%, DEO -2.6%, NVO -2%, RIO -1.7%, SYT -1.6%, TOT -1.6%, SDRL -1.5%, RIG -1.5%, PNY -1.5%, AAL -1.4%, BCS -1.4%, BHP -1.3%, DAL -1.3%, RBS -1.2%, LVS -1.1%, ABB -1%, UN -1%, LYG -0.9%, RDS.A -0.8%

(BFW) Actelion Focused on Biotech, May Not Be Good Fit for Shire: UBS

Actelion Focused on Biotech, May Not Be Good Fit for Shire: UBS
2015-06-08 10:36:48.677 GMT


By Allison Connolly
(Bloomberg) -- Buying Actelion could be accretive to
earnings but may distract Shire from its ultimate goal of
becoming a biotech company, UBS says in note.

* Doesn’t see it as a strategic fit and says Shire is unlikely
to come back with a higher offer if Actelion refused to open
the books with an offer at CHF160
* Says given uncertainties around Opsumit pricing, Selexipag
label and pricing as well as volatility around Tracleer
generic impact, unwillingness to open books at CHF160/shr
may mean their expectations are far higher
* Rates Actelion neutral, PT CHF135
* NOTE: Earlier, Actelion Rises to Record After Report it
Rebuffed Shire Approach

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

To contact the reporter on this story:
Allison Connolly in London at +44-20-3525-7043 or
aconnolly4@bloomberg.net
To contact the editors responsible for this story:
James Ludden at +44-20-3525-2645 or
jludden@bloomberg.net
Gaurav Panchal

>>> Sears Hldg misses single estimate by $0.26, misses on revs (40.74)

--> +2.8% pre-open in very low volumes

Sears Hldg misses single estimate by $0.26, misses on revs

Reports Q1 (Apr) loss of $2.85 per share, $0.26 worse than the single estimate of ($2.59); revenues fell 25.3% year/year to $5.88 bln vs the $6.08 bln single est.
Comps:
  • Kmart and Sears Domestic comparable store sales declined 7.0% and 14.5%, respectively, in the first quarter of 2015 driven by more efficient and targeted promotional and marketing spend, and a focus on sizing certain categories, such as consumer electronics, to better fit member needs, that together generated higher margins and increased profitability year-over-year; revenues were also impacted by port issues on the West Coast
Other metrics:
  • Domestic Adjusted EBITDA of $(141) million in the first quarter of 2015 compared to $(178) million in the prior year first quarter, which is the third consecutive quarter of improved EBITDA performance on a year-over-year basis
  • Sales to Shop Your Way members in Sears Full-line and Kmart stores were 74% of eligible sales for the first quarter
Co's Commentary:
"We continue to make progress towards the formation of Seritage Growth Properties, a public real estate investment trust or REIT, and its subsequent purchase of properties from the Company. We expect that we will be declared effective by the SEC this week, and are targeting to launch the rights offering on Friday, June 12, 2015. The transaction will involve the sale and leaseback of approximately 235 Sears and Kmart stores, as well as the purchase of our interest in the joint ventures, with expected proceeds to Sears Holdings of $2.6 billion. This, when combined with the proceeds from the previously announced joint venture transactions, will result in proceeds in excess of $3.0 billion."

(PRN) Cypress Fails to Finalize Merger Agreement with ISSI

BN 06/08 10:01 *INTEGRATED SILICON SAYS CYPRESS RECEIVED DRAFT PACT ON JUNE 5
BFW 06/08 10:00 *CYPRESS FAILS TO FINALIZE MERGER PACT W/ ISSI
BN 06/08 10:00 *CYPRESS FAILS TO FINALIZE MERGER PACT W/ ISSI
Cypress Fails to Finalize Merger Agreement with ISSI
2015-06-08 10:00:09.954 GMT

Cypress Fails to Finalize Merger Agreement with ISSI

PR Newswire

MILPITAS, Calif., June 8, 2015

MILPITAS, Calif., June 8, 2015 /PRNewswire/ -- Integrated Silicon Solution,
Inc. (NASDAQ: ISSI) today announced that Cypress Semiconductor ("Cypress") has
failed to finalize a merger agreement by the deadline of June 7, 2015 imposed
by Cypress, even after Cypress received the negotiated draft agreement from
ISSI on Friday, June 5, 2015.

As a result of ISSI's full cooperation, Cypress was able to complete extensive
due diligence and hold numerous meetings with ISSI's management team.  Also, a
merger agreement has been nearly fully negotiated with the only remaining
point of difference being the treatment of the antitrust risks of the
transaction. ISSI filed an amendment to its proxy statement with the SEC on
Friday, June 5, 2015 which further describes the due diligence process with
Cypress and the deliberations of the ISSI board of directors.  While Cypress
has repeatedly downplayed antitrust concerns in its press releases, ISSI
believes a transaction with Cypress presents significant antitrust risks in
both the U.S. and Germany. As such, ISSI believes a transaction with Cypress
would be unlikely to close without substantial divestitures or other actions
required by antitrust authorities.

If Cypress had agreed to provide ISSI with protection against this antitrust
risk, ISSI would have been in a position to finalize a merger agreement with
Cypress this past weekend.

ISSI is disappointed that Cypress is not willing to agree to take all
necessary actions to ensure receipt of antitrust clearance.  Cypress has
consistently downplayed the antitrust risks in its public statements.  If
Cypress truly believes that the transaction does not present significant
antitrust concerns then it should be willing to provide the contractual
commitment that the ISSI Board believes is in the best interests of its
stockholders.  By refusing to agree to the ISSI language, Cypress is placing
ISSI's stockholders and the transaction closing at risk by creating an
opportunity for Cypress to walk away from the deal if it does not receive a
favorable antitrust decision. ISSI has made it clear to Cypress that the
objective of the ISSI Board is to obtain the highest price for ISSI
stockholders consistent with its fiduciary duties under applicable law.
 Therefore, ISSI would be prepared to immediately move forward with an
agreement in compliance with the Uphill merger agreement, if Cypress were to
commit to ensure a successful closing for ISSI stockholders.

Cypress Antitrust Issues

With respect to the anti-trust filings for a Cypress transaction, ISSI has
determined that filings would be required in the U.S. and Germany and possibly
other jurisdictions.  In the U.S., the anti-trust agencies (the Federal Trade
Commission (FTC) and the Department of Justice (DOJ)) have 30 days to review a
filing and determine whether to issue the parties a burdensome subpoena for
documents and information called a second request.  ISSI believes there is a
significant risk of a second request since Cypress and ISSI are head to head
competitors with significant market share in the SRAM market.  A second
request investigation could cost each party over $3 million, take up to 9
months to complete, and result in divestiture of at least a portion of the
SRAM business.  In the U.S., the anti-trust agencies will issue a second
request if there is any evidence that suggests that the acquisition may
substantially lessen competition in any relevant market and such agencies are
virtually certain to issue a second request for a transaction that reduces the
number of meaningful competitors in a market from 4 to 3 or 3 to 2.  ISSI
believes that the FTC/DOJ would likely issue a second request with respect to
a transaction with Cypress since Cypress and ISSI are the only full-suite
providers of SRAM in the world.  Other smaller competitors are limited in
scope and geography.  Specifically, Cypress and ISSI combined would have a
total market share in the U.S. of over 80%, have over 90% share at the largest
electronics distributor in the U.S., and would be the only supplier of SRAM to
the automotive industry.  The FTC/DOJ rarely close a second request
investigation without conditions.  For example, in the last fiscal year, the
FTC/DOJ issued 25 second requests and ordered remedies or challenged 23 of
those transactions.  If the parties have high market shares for certain
products and barriers to entry are significant, the FTC/DOJ would likely
require divestiture of certain products and customers. 

In Germany, ISSI believes the combined market share of Cypress and ISSI would
exceed 70% share and that the combined company would be the sole supplier of
SRAM to German automotive manufacturers.  The German antitrust agency, The
Bundeskartllamt, also has 30 days to review the proposed merger and, if it
determines further examination is necessary, a formal main examination is
initiated, which could take an additional three months.  ISSI believes there
is significant risk that The Bundeskartllamt would initiate a main examination
and that, similar to the FTC/DOJ, it would require divestiture of certain
products and customers.

Cypress has argued because the SRAM market has been moving to embedded SRAM
from standalone SRAM, and since Cypress and ISSI are not major suppliers of
embedded SRAM, the proposed transaction does not present any anti-trust risk. 
However, ISSI believes that there is a substantial chance that the agencies
would conclude otherwise.  First, sales of standalone SRAM are still several
hundred millions of dollars annually and the standalone SRAM market is
unlikely to disappear in the next 5 to 10 years; because there is substantial
demand for standalone SRAM, the agencies may conclude that it is in a market
distinct from a market for embedded SRAM.  Second, the antitrust agencies may
conclude that customers that require standalone SRAM cannot easily substitute
it with embedded SRAM without significant redesign costs, if even possible. 
As a result, it is likely that the FTC will closely investigate whether
standalone SRAM is in a market separate from embedded SRAM, and whether
embedded SRAM acts as a price constraint for standalone SRAM for all
customers, or whether for some customers, embedded SRAM does not constrain the
demand or price for standalone SRAM.  If the antitrust agencies do not agree
with Cypress, there is a high likelihood that they will demand a divestiture
of one of the parties' SRAM businesses.

The recent actions of Cypress illustrate their knowledge of the significant
risk of these anti-trust issues.  They have proposed the use of an ineffective
"side letter" and surprisingly settled a long running anti-trust lawsuit
against it by another SRAM competitor just one week before announcing its
non-binding offer for ISSI.  Due to the significant anti-trust risks, ISSI
proposed to Cypress that under any merger agreement Cypress must take "all
necessary actions" to comply with anti-trust rulings in order to close the
transaction.  This would eliminate antitrust matters as a condition for
closing.  However, despite their claims that anti-trust is not a significant
issue, Cypress would only agree to take "all reasonable actions," which would
mean that if Cypress did not like the decisions of the antitrust agencies they
could walk away from the deal.  Clearly, Cypress' position is not in the best
interest of ISSI's stockholders, and could not be accepted, since a merger
closing would be highly uncertain.

About ISSI

ISSI is a fabless semiconductor company that designs and markets high
performance integrated circuits for the following key markets: (i) automotive,
(ii) communications, (iii) industrial, and (iv) digital consumer. ISSI's
primary products are high speed and low power SRAM and low, and medium and
high density DRAM. ISSI also designs and markets NOR flash products and high
performance analog and mixed signal integrated circuits. ISSI is headquartered
in Silicon Valley with worldwide offices in Taiwan, Japan, Singapore, China,
Europe, Hong Kong, India, and Korea. Visit ISSI's web site at www.issi.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Statements concerning
ISSI's belief that a transaction with Cypress presents significant anti-trust
risks in both the U.S. and Germany and that a transaction with Cypress would
be unlikely to close without substantial divestitures or other actions
required by antitrust authorities, ISSI's belief that the FTC/DOJ would be
highly likely to issue a second request and ISSI's belief that there is
significant risk that The Bundeskartllamt would initiate a main examination
and that, similar to the FTC/DOJ, would require divestiture of certain
products and customers due to the high concentration of market share under the
proposed transaction are forward-looking statements that involve risks and
uncertainties that could cause actual results to differ materially from those
anticipated. Such risks and uncertainties include the outcome and timing of
any initial review and second request or further review or action by antitrust
agencies in the U.S. and Germany, the satisfaction of the other closing
conditions to any transaction, the outcome of any existing or future
litigation involving the acquisition transaction or other risks listed from
time to time in ISSI's filings with the SEC, including ISSI's Form 10-K for
the year ended September 30, 2014 and Form 10-Q for the quarter ended March
31, 2015. ISSI assumes no obligation to update or revise the forward-looking
statements in this press release because of new information, future events, or
otherwise.

Additional Information and Where to Find It

In connection with the Uphill Merger Agreement and the merger contemplated
thereunder, ISSI filed with the SEC a Schedule 14A containing a Proxy
Statement and other relevant materials. The Proxy Statement was mailed on or
about April 30, 2015 to ISSI's stockholders of record as of April 20, 2015. An
amendment to the proxy materials was filed with the SEC on June 5, 2015. 
Stockholders may obtain, free of charge, copies of the definitive proxy
statement, the amendment to the definitive proxy statement and any other
documents filed by ISSI with the SEC in connection with the Special Meeting at
the SEC's website (http://www.sec.gov), at ISSI's website
(http://www.issi.com) or by writing to Investor Relations, Integrated Silicon
Solution, Inc., 1623 Buckeye Drive, Milpitas, CA 95035.

 

To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/cypress-fails-to-finalize-merger-agreement-with-issi-300095329.html

SOURCE Integrated Silicon Solution, Inc.

Website: http://www.issi.com
Contact: John M. Cobb, Chief Financial Officer, Investor Relations, (408)
969-6600, ir@issi.com; Shelton Group, Leanne Sievers, EVP, P: 949-224-3874, E:
lsievers@sheltongroup.com; Matt Kreps, Managing Director, P: 214-272-0073, E:
mkreps@sheltongroup.com

-0- Jun/08/2015 10:00 GMT

WSJ : Calpers to Cut External Money Managers by Half

Calpers to Cut External Money Managers by Half
The largest U.S. public pension fund intends to sever ties with roughly half of the firms handling its money

The largest U.S. public pension fund intends to sever ties with roughly half of the firms handling its money, one of the most aggressive industry moves yet to reduce fees paid to Wall Street investment managers.

The California Public Employees’ Retirement System, or Calpers, will tell its investment board on June 15 of its plans to reduce the number of direct relationships it has with private-equity, real-estate and other external funds to about 100 from 212, said Chief Investment Officer Ted Eliopoulos. The action will be made public on Monday.

The dramatic move by the $305 billion Sacramento-based retirement system will create some big winners and losers in the investing world. The list of external money managers Calpers uses include some of the biggest names on Wall Street, including private-equity firms Carlyle Group LP, KKR & Co. and Blackstone Group LP.

The push by Calpers to downsize could have broader ramifications beyond its own portfolio. Calpers is considered an industry bellwether because of its size and history as an early adopter of alternatives to stocks and bonds, and the shift could prompt other U.S. pensions to scale back their ties to Wall Street.

“There really will be a significant amount of discussion at other pensions” about whether they should cut external managers in the wake of Calpers’s decision, said Allan Emkin, a managing director at Pension Consulting Alliance who has advised the fund since the 1980s.

The pullback would take place over the next five years and is expected to save Calpers hundreds of millions of dollars in management fees. It paid $1.6 billion to external managers last year.

The reduction in outside managers won’t fundamentally change Calpers’s investment strategy, or the percentage of assets managed in-house versus externally. The remaining 100 or so outside managers will simply get a bigger pool of funds varying from $350 million to more than $1 billion, Mr. Eliopoulos added.

The goal, Mr. Eliopoulos said, is “to gain the best deal on costs and fees that we can.”

The 50-year-old Mr. Eliopoulos became the pension fund’s top investment official last September after helping Calpers recover from severe losses sustained during the 2008 financial crisis as head of its real-estate portfolio. His first major move as chief was to shed a $4 billion investment in hedge funds, part of a movement to simplify the approach of a fund that in recent decades loaded up on assets such as real estate, private equity and commodities

Fees paid to outside managers have ballooned over the past decade as many public retirement systems followed Calpers into hedge funds and private equity in an attempt to boost long-term returns and meet their mounting obligations to retirees. But now some pension officials are tiring of the high expenses often charged by outside managers as state and local governments struggle to make up for losses incurred during the financial crisis. Many U.S. pensions, including Calpers, still don’t have enough assets to cover their future costs despite a run-up in the stock market in recent years.

“Fees are becoming an increasingly scrutinized area at public pensions,” said Jean-Pierre Aubry, an assistant director at the Center for Retirement Research at Boston College.

In New York City, outside money-management expenses are under review after an April report from Comptroller Scott M. Stringer said external investment firms have cost the city’s local retirement systems billions in the past decade. A similar discussion is under way in New Jersey, where state pensions have paid out $1.5 billion in fees over the past five years, according to a recent report presented to the state Senate last Thursday.

In Pennsylvania, where the state is grappling with a $50 billion pension hole, Gov. Tom Wolf declared in a March budget address that “we are going to stop excessive fees to Wall Street managers.”

California’s proposed reduction in outside managers is part of a larger effort to reduce risk and complexity at a fund that manages investments and benefits for 1.7 million current and retired workers. Calpers posted a total return of 18.4% for its most recent fiscal year ended June 30, beating its benchmark, but it only has enough assets to cover 77% of its future retirement payouts.

As recently as 2007, Calpers had about 300 external managers—a remnant of its pioneering foray into alternative investments such as real estate, hedge funds and private equity. Over the past eight years, it reduced that number to 212, but it is still difficult for the pension fund to effectively monitor all of its investments, according to Mr. Eliopoulos.

There are so many outside managers currently that Calpers doesn’t have the ability to make sure all those funds share the same objectives as the large California pension fund and are performing well, according to Calpers Chief Operating Investment Officer Wylie Tollette.
“We need to do a better job of keeping track of how those managers evolve, what strategies they’re good at, what they may not be good at to ensure they’re effectively earning their place at the table every year,” said Mr. Tollette, who currently gives Calpers a “B-minus” at doing those tasks.

“For an organization like Calpers we need to be an A, if not an A-plus,” Mr. Tollette said.

As a measure of overall assets, Calpers currently pays about 0.34% toward management fees, Mr. Tollette said. In 2014, the $1.6 billion spent on those expenses included a one-time incentive payment of $400 million to real-estate funds.

Mr. Tollette said that by 2020 he would like to see the amount drop “below” 0.25% of total assets, excluding performance fees. External funds charge management fees, plus a share of the investing profits.

Calpers doesn’t expect to immediately terminate outside firms or liquidate holdings, according to Mr. Eliopoulos, who pushed for the hedge-fund decision as well as the move to whittle the number of external funds. The fund’s evaluation of external managers is expected to begin next month. Calpers will consider investing performance, the length of the relationship and strategy, among other factors, Mr. Eliopoulos said.

The biggest cuts are expected to occur in Calpers’s private-equity portfolio, where the number of private-equity managers will slim to about 30 from roughly 100. Real estate will go to 15 outside managers from 51. Fixed income and global equity, which is largely managed in-house, will drop to roughly 30 from nearly 60 now.

Only the group that invests in timber and infrastructure projects like roadways is expected to rise, from about six managers to 10. Some 15 slots will go to upstart firms that Calpers plans to identify over the next several years.

Mr. Eliopoulos said the staff discussed a reduction higher or lower than roughly 100 but decided to land on a whole number. “There’s no science to this. This is a judgment,” he said.

(BFW) *CREDITOR PROPOSAL CAN’T BE ACCEPTED BY GREECE: GOVT SPOKESMAN

BFW 06/08 09:42 *GREEK DELEGATION IN BRUSSELS FOR POLITICAL TALKS: SPOKESMAN
BN 06/08 09:41 *CREDITOR PROPOSAL CAN'T BE ACCEPTED BY GREECE: GOVT SPOKESMAN
BN 06/08 09:40 *GREEK GOVT SPOKESMAN SAKELLARIDIS SPEAKS TO REPORTERS IN ATHENS
BN 06/08 09:40 *GREEK GOVT PROPOSAL REFLECTED PRODUCT OF TALKS: SPOKESMAN
*CREDITOR PROPOSAL CAN’T BE ACCEPTED BY GREECE: GOVT SPOKESMAN
2015-06-08 09:42:08.534 GMT

--BRIAN SWINT

-0- Jun/08/2015 09:42 GMT

(Berenberg : Actelion : Takeover rumours heating up

● The Sunday Times reported yesterday that Shire made an informal bid for Actelion several
weeks ago. While neither company has commented on these rumours, the reported bid was
for CHF160 per share, a 21% premium on Friday’s close price. If the rumours turn out to be
true, this would be Shire’s largest acquisition to date and comes only six months after its
$5.2bn acquisition of NPS Pharmaceuticals.
● We see synergies between the two companies and believe this acquisition would make
sense. Firstly, Actelion’s pulmonary arterial hypertension (PAH) franchise fits well within
Shire’s rare diseases portfolio and would be a key differentiator for the company. Secondly,
Actelion’s portfolio has been substantially de-risked in recent months, with Opsumit uptake
progressing strongly and a likely approval for Uptravi (selexipag) at the end of this year.
● We currently value Actelion at CHF135 per share. However, assuming an acquirer would
substantially cut R&D and G&A expenses, we see this valuation increase to CHF162 per share
and believe Shire’s initial offer is justified. However, as the offer was rejected, a serious offer
could come at a more substantial premium of between CHF180-200 per share.
● Actelion has long been viewed as a potential takeover target. This reported approach from
Shire will likely encourage other players to come forward with offers in the short term.
● Our valuation of Actelion is DCF-based.

(GS) Rocks & Ores : Iron ore rally living on borrowed time



Weak supply growth has supported prices in Q2 …

The iron ore industry continues to expand by building new mines and by operating existing mines more efficiently, but the increase in supply is not linear. Our analysis of weekly freight activity indicates that iron prices respond to variations in supply from the key export terminals in Brazil and Australia. After a strong start to the year, iron ore exports from these regions misfired in April partly as a result of weather disruption. The modest improvement in export volumes in recent weeks does not seem enough to replenish low inventory levels in China, and above-trend prices

should continue in the short term, in our view.

 

… but the current rally is self-defeating

The current rally provides some welcome breathing space to marginal producers; spot prices are currently trading slightly above our US$60/t estimate of marginal production cost (inclusive of sustaining capital and overheads), and some mines previously flagged for closure are restarting once again. However, the market outlook remains unchanged. In our view, prices must fall below the cash cost of marginal producers in order to force the mine closures required to balance the market. On that basis, high prices that partially reverse the process of slimming down the industry cost curve can only result in additional closures down the road. Therefore, we think this rally is living on borrowed time.