TheChek News Flow

- Metso will supply altogether hundreds of valves for Stora Enso'sconversion of the Varkaus Mill fine paper machine in Finland tolight-weight containerboard. In addition, Metso has carried out aninstalled base audit of its valves in the recycled fiber plant. Theanalysis ensures applicability and future performance of the valves inthe rebuild.

- Metso also takes care of the spare part inventory servicesto the mill.

 

The frenzy that gripped the European telecom market does not calm down, quite the contrary. Reportedly, Altice, the troublemaker of the sector which has announced a major acquisition in the United States would, at the same time, decided not to bid on ... KPN, the Dutch incumbent of unknown that it could be on display. According to a source close to the case, the operation would have been studied extensively but Patrick Drahi would finally given, finding the price too high. Note that the group was studying simultaneously folder as Suddenlink, the US cable that has just bought for $ 9.1 billion. The choice to abandon KPN would have no connection with this transaction, the remaining group clearly ready to pounce on attractive assets in Europe.

On the side of Altice, we will not comment on information even if the word unofficial order is clear: the group looks at all the files.

KPN, the denial is categorical: "There is no meeting or written exchanges between Altice and KPN," said Duco Sickinghe, Chairman of the Board of Directors of KPN. "Altice has already publicly indicated his interest in KPN in the past but have never had access to our accounts and have not made the request."

Carlos Slim wants out

The information falls while the telecom titan Carlos Slim announced the massive sale of bonds convertible into KPN shares. As a reminder, the Mexican giant still not digested the failure of his attempt to buy the Dutch operator, blocked at the last minute by an internal foundation. Rose to 28% stake, Slim has since reduced its stake, to just over 20%. A critical threshold "since if it goes below that, it will no longer qualify for a seat on the board," said one analyst.

Others would like to go

Altice was not the only group to have considered a takeover of KPN: at the beginning of the year, Reuters and Deutsche Telekom had announced that he, too, study the option before giving up. "Given the political sensitivities that have worked against Carlos Slim, the scenario of a European buyer is the most credible," added the analyst, who wished to remain anonymous. In the opinion of all, Deutsche Telekom is the natural candidate, with the advantage that the management of KPN least fear for his position (Altice reputation scares more than one).

Remains an operation of this scale might sting Stéphane Richard (Orange, also present in the Netherlands) to the quick and encourage them to bid or to buy assets in other markets.

Note also that the world's No. 1 mobile, Vodafone, too, has a presence in the Netherlands and could be interested in the asset. An operation that would make following the acquisition of the Spanish cable Ono, and could easily be financed through cash mattress obtained from the sale of its stake in Verizon Wireless. Unless the Group decides to keep its funds to directly afford Liberty Global, that its CEO, John Malone, also seems to appeal his wishes.

Negotiated at the same time as the acquisition of the US Suddenlink cable, the operation was finally aborted, Altice who considered asset prices too high.

KPN claims not to have had any formal contacts with Altice.

If KPN is not officially for sale, the Mexican Carlos Slim shareholder seeks to reduce its participation.

Deutsche Telekom has already approached KPN earlier this year for redemption.

La frénésie qui s'est emparée du marché européen des télécoms ne se calme pas, bien au contraire. Selon nos informations, Altice, le trublion du secteur qui vient d'annoncer une importante acquisition aux États-Unis, aurait, dans le même temps, décidé de ne pas faire offre sur... KPN, opérateur historique néerlandais dont on ignorait qu'il pouvait être à l'étalage. D'après une source proche du dossier, l'opération aurait été étudiée en profondeur mais Patrick Drahi aurait finalement renoncé, trouvant le prix trop élevé. À noter que le groupe étudiait le dossier en même temps que celui de Suddenlink, le câblo américain qu'il vient de racheter pour 9,1 milliards de dollars. Le choix de renoncer à KPN n'aurait pas de rapport avec cette opération, le groupe restant clairement prêt à se jeter sur des actifs intéressants en Europe.

Du côté d'Altice, on ne souhaite pas commenter l'information même si le mot d'ordre officieux est clair: le groupe regarde tous les dossiers.

Chez KPN, le démenti est formel : "il n'y a pas eu de rencontre ou d'échanges écrits entre Altice et KPN", affirme Duco Sickinghe, président du conseil d'administration de KPN. "Altice a déjà publiquement signalé son intérêt pour KPN dans le passé mais ils n'ont jamais eu accès à nos comptes et n'en ont pas fait la requête".

Carlos Slim veut sortir

L'information tombe alors que le titan des télécoms Carlos Slim a annoncé la mise en vente massive d'obligations convertibles en actions KPN. Pour rappel, le géant mexicain ne digère toujours pas l'échec de sa tentative de rachat de l'opérateur néerlandais, bloquée en dernière minute par une fondation interne. Monté jusqu'à 28% du capital, Slim a depuis réduit sa participation, pour atteindre un peu plus de 20%. Un seuil critique "puisque s'il passe sous cette barre, il ne pourra plus prétendre à un siège au conseil d'administration", explique un analyste.

D'autres aimeraient rentrer

Altice ne serait pas le seul groupe à avoir envisagé un rachat de KPN: au début de l'année, Reuters annonçait ainsi que Deutsche Telekom avait, lui aussi, étudé l'option avant d'abandonner. "Au vu des sensibilités politiques qui ont joué en la défaveur de Carlos Slim, le scénario d'un acheteur européen est le plus crédible", ajoute cet analyste, qui a souhaité rester anonyme. De l'avis de tous, Deutsche Telekom est le candidat naturel, avec cet avantage que le management de KPN craindrait moins pour son poste (la réputation d'Altice en effraie plus d'un).

Reste qu'une opération de cette envergure pourrait piquer Stéphane Richard (Orange, aussi présent aux Pays-Bas) au vif et l'inciter à surenchérir, voire à acheter des actifs sur d'autres marchés.

À noter aussi que le n°1 mondial du mobile, Vodafone, dispose lui aussi d'une présence aux Pays-Bas et pourrait être intéressé par l'actif. Une opération qui ferait suite au rachat du câblo espagnol Ono, et qui pourrait être aisément financée grâce au matelas de cash obtenu lors de la vente de ses parts dans Verizon Wireless. À moins que le groupe ne décide de conserver ses deniers pour directement s'offrir Liberty Global, ce que son CEO, John Malone, semble d'ailleurs appeler de ses voeux.

Négociée en même temps que le rachat du câblo américain Suddenlink, l'opération a finalement été avortée, Altice ayant jugé le prix de l'actif trop élevé.

KPN affirme ne pas avoir eu de contacts formels avec Altice.

Si KPN n'est pas officiellement à vendre, l'actionnaire mexicain Carlos Slim cherche à réduire sa participation.

Deutsche Telekom aurait déjà approché KPN au début de l'année en vue d'un rachat.

The steering group advising the Irish government on International Consolidated Airlines Group's takeover of Aer Lingus has submitted its report, the Irish Examiner reported. A Department of Transport spokesperson confirmed the report had been received, although the sale of the government’s 25% Aer Lingus stake was not scheduled to be discussed at a weekly meeting of the Irish cabinet tomorrow, 26 May, the representative said. The report noted that issues could in principle still be added to the meeting’s agenda.

The Sunday Business Post had reported that following the meeting the government would reveal it is supporting the stake sale, the item stated.

The advisory group’s report may help persuade Aer Lingus unions and sceptical members of parliament to back the deal, the report said.

The board of Aer Lingus recommended IAG’s EUR 1.36bn offer at the beginning of the year but the deal is dependent on securing the support of the Irish government and Ryanair, the rival Irish airline which owns a stake of almost 30% in Aer Lingus, the report said. It added that Ryanair, which will publish its annual financials tomorrow, has said it will not consider any sale until IAG has tabled a formal bid.

Link to original source (Irish Examiner). http://bit.ly/1KgyS5q

Source Irish Examiner

We initiate coverage of SKG with a Buy rating and add it to the Conviction List. SKG is a pure play integrated packaging company with 76% sales exposure to Europe, 24% to Americas and is active in M&A. A multi-year consolidation (and rerating) across the packaging industry started in 2012 and should continue to support higher FCF, returns and multiples. SKG lags key peers and the market on multiples which we think is unjustified given forecast growth in EPS and FCF/share. A healthier balance sheet gives scope for more M&A or shareholder returns. Potential M&A is not limited to bolt-ons in our view and we incorporate a 30% probability of M&A in our 12m target price.

2Q15 results on July 29 (peers start reporting earlier; DS Smith, June 26). Other events that could drive the stock are: more M&A activity, downstream demand indications from global FMCG companies, movements in key raw materials prices (OCC) and container board pricing. New capacity additions across the industry could also change future utilisation expectations. Our 2015/16 EBITDA estimates are 2%/10% ahead of Bloomberg consensus.

To derive our 12m price target of €36 (26% potential upside), we value SKG on 7.5x 2016E EV/EBITDA, to which we add a 25% M&A premium (at a 30% probability) of c.€2.5/share. Our target multiple is higher than the long-run median as we think the stock should trade higher based on growth/FCF metrics relative to the market and key peers (Mondi/DS Smith). Stocks with similar 3-year average growth/returns across our pan-Euro coverage trade on a 34% higher EV/EBITDA multiple on 2016E. SKG trades on 2016E P/E of 10.0x, with EPS growth of 19% vs. the STOXX 600 P/E of 16.0x with lower

EPS growth of 12.5%.

The key risks to our view and price target are: meaningful capacity additions; adverse FX moves; weaker than expected LatAm demand.

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