>>> Evonik Industries said to have lined up multi-billion EURO debt financing pa


Evonik Industries said to have lined up multi-billion EURO debt financing package for acquisition deal; Clariant primary takeover target

Clariant's shares were down almost 5pc yesterday after Evonik's largest shareholder appeared to shoot down the likelihood of the German company making a move on the Swiss chemicals group.

Here is a link to the Bloomberg piece on the topic: http://www.bloomberg.com/news/articles/2015-06-02/clariant-drops-as-evonik-owner-shoots-down-deal-speculation

So, I have been doing a fair bit of digging around as the scenario is starting to do my head in a bit, with rampant speculation about a number deals or non-deals whipping round the market on a daily basis.

According to some of my best sources, it turns out that Evonik - the German chemicals company - has tapped up a number of banks, including Citigroup, Societe Generale and Barclays, for a multi-billion Euro/Swiss Franc billion debt financing package. Why? Because the German company has been considering a sizeable acquisition, with Clariant the number one takeover target for Evonik.

According to my people familiar with the matter, Evonik had been weighing a CHF 24 a share all cash offer for Clariant and even considered going hostile.

Indeed, followers of this situation will recall Clariant's public opposition to a takeover by Evonik, so I can understand why the German company may want to put an offer direct to Clariant's shareholders.

Now, I realise I got into this story/situation when I wrote a piece a few weeks about how Evonik had 'shifted its gaze' to Dutch chemicals company Royal DSM. Here is a link:

http://betaville123.blogspot.co.uk/2015/05/rare-alert-evonik-said-to-have.html

Although I reckon the story was accurate at the time of publication it was classified as RARE. For reader's that don't recall what RARE is, here is the definition:

Market gossip that hasn't been tested through all formal journalistic channels (public relations executives, lawyers, bankers, industry executives, board members etc). The rumour might be total codswallop but then again there may be something in it, so it's worth airing on Betaville.

This update, however, is not RARE.

I have asked an Evonik spokesperson for a comment on my latest update. The spokesperson politely declined to comment.

>>> OECD sees total OECD Economies GDP to Grow 1.9% in 2015, 2.5% in 2016

OECD sees total OECD Economies GDP to Grow 1.9% in 2015, 2.5% in 2016 
Cuts US 2015 GDP Growth Forecast to 2% v 3.1%
Cuts US 2016 GDP Growth Forecast to 2.8% v 3%

Cuts Global GDP Growth Forecast to 3.1% from 3.7%; Affirms 2016 GDP at 3.8%
Sees China 2015 GDP Growth Forecast at 6.8%; 2016 GDP at 6.7%

Comments: Recovery since the global financial crisis had been unusually weak, costing jobs, raising inequality and knocking living standards.Sees global growth gradually strengthening but not until late 2016 will it return to the average pace of pre-crisis years.

(UBS) Accor - Expecting a good summer (Note mentionned in Wansqaure article)

Good start to the financial year despite the challenges
Despite concerns about France, French Revpar for Q1 was up c4% on a LFL basis. NCEE
saw Revpar up 7.2%, MMEA saw Revpar up 3.6%, AsiaPac up 5.2% (despite China
c-5% for HotelInvest) and Americas up 1.3%. HotelInvest revenue was up c5% LFL and
c6% reported while HotelServices saw revenue up c8% LFL and reported growth was
c11%. Furthermore, c7k new rooms were added to the system.

And we expect more to come over summer
Although Accor remains vigilant to demand in Brazil, France and London (due to
currency) the company outlook was constructive at the time of the Q1 results. Recent
industry data from STR and MKG remains supportive with the 28 day moving average
for Europe at c8% while France is now showing YTD growth of c3%. We should next
hear from the company with their Q2 sales update in July (expect trends to continue).

With a strong restructuring story
The group continued to restructure with an additional 10 hotels being restructured (9
leased hotels and 1 owned). Accor intends to accelerate the restructuring (towards 100
hotels) during the course of the year given the guidance at the time of year end results.
Despite concerns that the company may be paying higher multiples to restructure than
a few years ago, financing costs remain low and the company has been able to drive
the margin upwards.

Valuation: Value on 2015E SOTP, raise price target to €57.75 from €52.75
We value using a SOTP methodology, valuing HotelServices on 12.5x (previous 11.5x)
2015E EV/EBITDAR and HotelInvest on 10x (previous 9.5x) 2015E EV/EBITDAR which we
think is at a discount to peers but also reflects recovery. At our price target, Accor
would trade at a 10.6x blended 2015E EV/EBITDAR multiple. We rate the shares Buy.

(Wansquare) Accor is about to announce a very big deal (yesterday)

According to market rumors, the hotel group led by Sébastien Bazin would have expected to make a major announcement tomorrow. This could be a very big acquisition like that of the American Starwood.

Accor has again received a favorable rating of UBS this morning, which raised € 5 its target price to 57.75 euros. The bank points out that in a difficult environment in the first quarter, the group managed to increase the average revenue per customer by 4% in France, on a comparable basis. Moreover, the income of the Hotelinvest division were up 5% and those of HotelServices 8%, while the group announced the opening of more than 7,000 rooms. The group also intends to accelerate the restructuring of its hotels, to 100 hotels in the year, and take advantage of low financing costs to improve margins. UBS therefore capitalize on these good performances for applying a multiple of 10 times the EBITDAR (against 9.5 times previously) for Hotelinvest and 12.5 times (against 11.5 times) for HotelServices and thus raise its price per share .

This note only confirms investors' appetite for the title Accor, which thanks to the strategy instilled by Sébastien Bazin and walking restructuring, gained 66% since its low point last October. But the market is abuzz now rumors about a big operation that Accor may announce tomorrow.

Now, among the hotel assets that would be sold face a major US group Starwood Hotels & Resorts Worldwide. The latter said in late April that it had commissioned Lazard "to explore strategic and financial alternatives and increase shareholder value", giving rise to speculation about a future sale. Rumors had actually started in February, when the CEO Frits van Paasschen had to resign due to the weak growth of the group. He was replaced by an interim boss.

Starwood is a nugget of upscale hotels, which under its brands Sheraton, W Hotels, Le Meridien and Westin, managed to develop large scale internationally. It thus has more than 350 000 rooms, of which nearly half are located outside the United States. Above all, the group is at the forefront in the field of digital account Accor develop niche with a plan of 225 million euros over five years announced last fall. A marriage with the American juggernaut would have much sense for three reasons: the high-end, where French only generates 15.2% of its revenues, geographically as North America, Latin America and the Caribbean do only 10% of its fleet, and digital.

Certainly, such a transaction would not be trivial. Starwood weighs 14.1 billion market capitalization, against 11.6 billion euros for Accor (nearly 13 billion). But it has serious means: the group that bears little net debt of 159 million euros and has € 4.3 billion of cash at the end of 2014. He also every latitude to take advantage of an optimal financing market. Last summer, he had issued EUR 900 million of perpetual hybrid bonds at a record rate of 4.125%, and may even get more favorable terms, since the launch of quantitative easing by the ECB in early . Besides the possibility of a payment in shares, thanks to the very good performance of course.

Finally, the group is still owned nearly 11% by Colony CapitalEurazeo concert, which was reduced by almost 10% in March and is currently in an exit strategy. A major operation would be the best opportunity to exit at term and very good account of the asset, which they hold shares for ten years now

Wansquare) Accor serait sur le point d’annoncer un très gros deal (hier)

Selon des rumeurs de marché, le groupe hôtelier dirigé par Sébastien Bazin aurait prévu de faire une importante annonce demain. Cela pourrait être une très grosse acquisition, comme celle de l’américain Starwood. 

Accor a à nouveau bénéficié d’une note favorable d’UBS ce matin, qui a relevé de 5 euros son objectif de cours, à 57,75 euros. La banque souligne que dans un contexte difficile au premier trimestre, le groupe a réussi à faire progresser le revenu moyen par client de 4% en France, à base comparable. Par ailleurs, les revenus de la division HotelInvest ont été en hausse de 5% et ceux d’HotelServices de 8%, tandis que le groupe a annoncé l’ouverture de plus de 7 000 chambres. Le groupe compte également accélérer la restructuration de ses hôtels, jusqu’à 100 hôtels dans l’année, et tirer parti des coûts de financement bas pour améliorer ses marges. UBS capitalise donc sur ces bonnes performances pour appliquer un multiple de 10 fois l’Ebitdar (contre 9,5 fois auparavant) pour HotelInvest, et 12,5 fois (contre 11,5 fois) pour HotelServices, et relever ainsi son prix par action. 

Cette note ne fait que confirmer l’appétit des investisseurs pour le titre Accor, qui grâce à la stratégie insufflée par Sébastien Bazin et à la restructuration en marche, a gagné 66% depuis son point bas d’octobre dernier. Mais le marché bruisse en ce moment de rumeurs sur une grosse opération que pourrait annoncer Accor dès demain. 

Or, parmi les actifs hôteliers qui seraient en vente figure un groupe américain de grande envergure : Starwood Hotel & Resorts Worldwide. Ce dernier a indiqué fin avril qu’il avait mandaté Lazard « afin d’explorer les alternatives stratégiques et financières et d’augmenter la valeur pour les actionnaires », donnant lieu à des spéculations sur une prochaine vente. Les rumeurs avaient en réalité démarré en février, lorsque le CEO Frits van Paasschen avait dû démissionner en raison de la faible croissance du groupe. Il a été remplacé par un patron provisoire. 

Starwood est une pépite de l’hôtellerie haut de gamme qui, sous ses marques Sheraton, W Hotels, le Méridien ou Westin, a réussi à se développer à grande échelle à l’international. Il exploite ainsi plus de 350 000 chambres, dont près de la moitié sont situées hors des Etats­Unis. Surtout, le groupe est à la pointe dans le domaine du numérique, un créneau qu’Accor compte développer avec un plan de 225 millions d’euros sur cinq ans annoncé à l’automne dernier. Un mariage avec le mastodonte américain aurait donc beaucoup de sens à trois titres : sur le haut de gamme, où le français ne génère que 15,2% de ses revenus, au niveau géographique puisque l’Amérique du Nord, Amérique Latine et Caraïbes ne représente que 10% de son parc, et sur le numérique. 

Certes, une telle opération ne serait pas anodine. Starwood pèse 14,1 milliards de dollars de capitalisation boursière, contre 11,6 milliards d’euros pour Accor (près de 13 milliards de dollars). Mais ce dernier a de sérieux moyens : le groupe ne porte qu’une petite dette nette de 159 millions d’euros et dispose de 4,3 milliards d’euros de liquidités à fin 2014. Il a également toutes les latitudes pour tirer parti d’un marché du financement optimal. L’été dernier, il avait émis 900 millions d’euros d’obligations hybrides perpétuelles à un taux record de 4,125%, et pourrait même obtenir des conditions encore plus avantageuses, depuis le lancement du quantitative easing de la BCE en début d’année. Sans compter la possibilité d'un paiement en titres, grâce à la très bonne tenue du cours. 

Enfin, le groupe reste détenu à près de 11% par le concert Colony Capital­Eurazeo, qui s’est allégé de près de 10% en mars dernier et est actuellement dans une stratégie de sortie. Une opération de grande envergure serait la meilleure opportunité pour sortir à terme et à très bon compte de cet actif, dont ils sont actionnaires depuis maintenant dix ans

>>> Orange eyes Telecom Italia, KPN, Belgacom as target for future consolidation

Gervais Pellissier, who heads the French group’s European operations, said it would be among the possible buyers of several of the continent’s smaller operators — a list that might include Telecom Italia, KPN of the Netherlands and Belgacom of Belgium.
Orange eyes Telecom Italia as target for future consolidation
2015-06-03 07:52:38.798 GMT


Adam Thomson in Paris
June 3 (Financial Times) -- Orange's senior management has
said that Telecom Italia could be among its targets in a future
round of consolidation in the European tele...

The full story is available on Bloomberg to Financial Times
corporate subscribers. <a href="entreq:43358">Click here</a> to receive details on pricing.

(FTI) Orange eyes Telecom Italia as target for future consolidation

Orange eyes Telecom Italia as target for future consolidation
2015-06-03 07:52:38.798 GMT


Adam Thomson in Paris
June 3 (Financial Times) -- Orange's senior management has
said that Telecom Italia could be among its targets in a future
round of consolidation in the European tele...

The full story is available on Bloomberg to Financial Times
corporate subscribers. <a href="entreq:43358">Click here</a> to receive details on pricing.

(Makor) Tech View CAC40 Index (4,996 last) - breaking lower ?



Summary

 

·         The Index is attempting to break down from a rising channel. The breakdown level is around 5,020 which is today's high

·         While below the channel the risk is for a move lower. Potential targets are the 38.2% & 50% retracement which stand at 4,765 and 4,605

 

 

Strategy: Short 0.5 unit from mkt price, target 4,765 with a stop loss on a close above 5,052 (yesterday's high)

 

 

 

Les Echos : Jean-Bernard Lévy: EDF and E.ON: electricians must be vigilant again

Faced with the crisis in the sector, the German energy company E.ON made a radical choice: he bets on renewable energy, electrical networks and services to customers, and is preparing to house its gas power plants, coal and nuclear structure called a "Uniper". A strategy opposite to that of EDF, which defends its current model and plans to take over the assets of Areva. However, the two European giants are facing the same challenges: fall in wholesale electricity prices, massive development of renewable, competitors arrive with Google ... While his predecessor at the head of EDF, Henri Proglio, sought not proximity to E.ON, historic ally of Engie (formerly GDF Suez), Jean-Bernard Lévy made common cause with its competitor. In Berlin, the two bosses engage their thoughts the "echoes" and the German business daily "Handelsblatt".
Jean-Bernard Lévy, E.ON will split into two. Can this strategy be a model for other groups?
J.-BL: This movement is followed closely by the entire industry, to analyze how E.ON will evolve, how the shareholders will benefit and how it will influence the market. Concerning EDF, the group's structure allows it to defend well in very difficult market conditions and will retain its integrated model.
Johannes Teyssen, would you be emulated?
JT: It matters little! If we are right, I hope that competitors do not imitate us because we retain and leadership. If the results are not at the rendezvous, why would they follow this approach? I think everyone has to find his own answers.
EDF wants to grow in renewable energy. Do you have a specific purpose?
J.-BL: We launched a strategic review, currently being finalized which is defining the future of EDF 2030. We are preparing for a significant development of renewable energy, particularly wind power.
JT: Let me "challenger" question. This is a very traditional way for an energy company to define numbers of megawatts of kilometers of power line or clients. But is not it more important to look at what assets you have developed and brought to maturity? Agility and flexibility are now much greater than these figures.
E.ON focuses on green energy, networks and services. Are these activities considered interesting by the markets?
JT: Absolutely. Look for example what happens in networks. The price of the Swedish network operator Fortum shows how this business is attractive. Like us, many investors see it as a low-risk activity and growing. Regarding renewables, the International Energy Agency anticipates it the strongest growth in the next ten years. Energy efficiency also has a promising future. You do not lose your money in these trades!
New players like Tesla and Google entering the energy market. Does it scare you?
J.-BL: We must be vigilant and above all innovate. Otherwise, we run the risk of becoming a commodity. This is a major priority for EDF. I come from the world of media and telecommunications, where during the last fifteen years, any additional value was captured by companies called "Gafa '(Google, Amazon, Facebook and Apple). They have the largest market capitalizations in the world while the infrastructure operators have destroyed an impressive value. That is why we are investing around € 600 million a year in R & D and innovate in the territories with partners.

JT: Our industry will not be very different. It will be digital and all aspects of Big Data arrive. Sure, some players like Google could have a starting advantage, but the beauty of our industry is also its complexity, and it is not easy to overcome. However, we have great respect for the challengers like Google.
Will you cooperate with them?
JT: A feature of the Internet is that you have more platforms. Customers do not want solutions from a single vendor. So cooperations will be something normal in the future. I do not rule out anything and do not believe that selling services 100% E.ON is dedicated to a great success. You must be open. In the past, energy companies have mainly focused on the growth and size. Those days are gone. We do not need to own or control but to be good.
This is also true for EDF?
J.-BL: We do have the reputation of not being very open to partnerships, and we must change that. But we are already active, for example in services. One of my projects is to accelerate this development in a very holistic view - with the idea of ​​doing everything ourselves - to something much more entrepreneurial and based on cooperation.
Your predecessor in EnBW, EDF sold but saw Germany as a strategic market. What is your view?
J.-BL: The group is guided by two strategic objectives. First: renewable. Second: the regions of the world where the macroeconomic environment is carrying. At this stage, Europe is not a growth economy, especially for demographic reasons. So, eventually, beyond its European bases, expect that EDF develops further in emerging countries, but selectively