(BFW) Sika to Limit Burkard Family’s Votes to 5% at AGM, SamS Reports


Sika to Limit Burkard Family’s Votes to 5% at AGM, SamS Reports
2015-04-12 08:57:47.896 GMT


By Corinne Gretler
(Bloomberg) -- Sika will limit Burkard family’s votes to 5%
in all points regarding the Saint-Gobain takeover, Schweiz am
Sonntag reports, citing unidentified people familiar with the
matter.
* Limited votes could delay takeover by Saint-Gobain
* NOTE: April 7, Saint-Gobain Extends Pact With Sika’s Burkard
Family; Sika War to Rage On at AGM Even as St. Gobain
Takeover Rejected
* NOTE: April 2, Gates, Cascade Stay the Course in Fight to
Overturn Sika Deal


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Jurjen van de Pol

(BFW) PE Firms Set to Buy Stakes in Spun-Off Shell Assets: Telegraph


PE Firms Set to Buy Stakes in Spun-Off Shell Assets: Telegraph
2015-04-12 10:43:04.858 GMT


By Lukas Strobl
(Bloomberg) -- Private equity firms expected to buy assets
sold by Shell after its takeover of BG, Telegraph reports,
without saying where it got the information.
* Warburg Pincus, Blackstone “gearing up to get involved” in
deal
* Carlyle, Riverstone, KKR, Apollo expected to take interest
in disposed assets



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(BFW) Perrigo, Teva Surge to Record Highs in Tel Aviv Trading


Perrigo, Teva Surge to Record Highs in Tel Aviv Trading
2015-04-12 07:09:46.715 GMT


By Shoshanna Solomon
(Bloomberg) -- Perrigo surges 21%, most on record, to 786.1
shekels ($196.87), at 9:55am in Tel Aviv, tracking gains of US
traded shrs. which closed at $198.55 on April 10
* Teva +3.9% to 263.9 shekels ($66.09) highest on record;
U.S.-traded shrs close $66.37 on April 10.
* TA-25 benchmark index +2.2% to 1,686.64, highest level on
record
* NOTE: On April 8, Mylan Offers to Buy Drugmaker Perrigo for
$28.9 Billion
* NOTE: Teva Mulls Next Move as Mylan’s Perrigo Bid Jolts
Drugmakers
* NOTE: Israel markets were closed Thursday for Jewish holiday
of Passover

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Matthew Kalman, Dana El Baltaji

(BFW) Julius Baer CEO Denies Credit Suisse Merger Rumors, SamS Says


Julius Baer CEO Denies Credit Suisse Merger Rumors, SamS Says
2015-04-12 08:34:11.387 GMT


By Corinne Gretler
(Bloomberg) -- Julius Baer and Credit Suisse have not held
talks on merger, Baer CEO Boris Collardi tells Schweiz am
Sonntag.
* “It’s obvious that Julius Baer would be a strong asset for
a bank that wants to invest in asset management,” Baer
tells Schweiz am Sonntag. “I do not necessarily see what
the added value would be for our clients and our
employees.”
* Julius Baer is large enough to grow profitably on its own in
the future: Collardi
* NOTE April 8: Julius Baer Jumps on Credit Suisse Takeover
Speculation
* NOTE March 30: Julius Baer Tops European Bank Valuations,
Monte Paschi No. 2

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(BFW) International Paper Mulls GBP6b Bid for Smurfit Kappa, Sky Says


International Paper Mulls GBP6b Bid for Smurfit Kappa, Sky Says
2015-04-11 15:18:43.56 GMT


By Sarah Jones and Donal Griffin
(Bloomberg) -- International Paper being advised by
Deutsche Bank on possible bid for Smurfit, Sky News reports
without citing anyone.
* International Paper may offer ~EU36 per share: Sky
* No formal approach made to Smurfit’s board, bidder may not
pursue deal
* Melanie Farrell, a spokeswoman for Smurfit Kappa in Dublin,
didn’t immediately respond to phone calls, e-mails
requesting comment
* International Paper didn’t respond to request for comment:
Sky
* NOTE: Smurfit’s shares up ~11% this month; mkt value ~EU6.8b
* NOTE: Smurfit Kappa Would Be ‘Good Fit’ for Intl Paper:
Vertical


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Andrew Reierson

The CEO of America's biggest bank is worried about Silicon Valley

The CEO of America's biggest bank is worried about Silicon Valley and Bitcoin stealing his business


The man who runs America's biggest bank can't stop worrying about tech startups.

In his annual letter to shareholders this week, JP Morgan CEO Jamie Dimon warned investors and those in the banking industry that "Silicon Valley is coming."

"There are hundreds of startups with a lot of brains and money working on various alternatives to traditional banking," Dimon wrote in the letter. "The ones you read about most are in the lending business, whereby the firms can lend to individuals and small businesses very quickly and — these entities believe — effectively by using Big Data to enhance credit underwriting."

Dimon may have been alluding to businesses like Lending Club and Prosper, which enable lending between users and are both have valuations in the billions. There are also a growing number of financial startups like Stripe, which handle payment transactions online and investing portfolio services like Wealthfront and Betterment.

"They are very good at reducing the 'pain points' in that they can make loans in minutes, which might take banks weeks," Dimon added in his letter. "We are going to work hard to make our services as seamless and competitive as theirs. And we also are completely comfortable with partnering where it makes sense."

"They all want to eat our lunch"
It's not the first time Dimon has issued a warning about Silicon Valley businesses.

"They all want to eat our lunch," he told investors a year ago. "Every single one of them is going to try."

In the latest shareholder letter, Dimon even went so far as to acknowledge the competitive threat posed by Bitcoin and other payment alternatives.

"You all have read about Bitcoin, merchants building their own networks, PayPal and PayPal look-alikes. Payments are a critical business for us — and we are quite good at it," he said. "But there is much for us to learn in terms of real-time systems, better encryption techniques, and reduction of costs and 'pain points' for customers."

Bitcoin has yet to achieve mainstream adoption and its price continues to fluctuate wildly, but a growing number of big-name investors have backed these startups, including the New York Stock Exchange, which recently backed Coinbase, a Bitcoin wallet application.

Dimon appeared to express some annoyance about apps and other "free riders" that don't have pay fees to move money, as banks must do. "Some payments systems, particularly the ACH system controlled by NACHA, cannot function in real time and, worse, are continuously misused by free riders on the system. There is a true cost to allowing people to move money," Dimon groused.

JP Morgan won't go down without a fight, Dimon assured shareholders. "Rest assured, we analyze all of our competitors
in excruciating detail — so we can learn what they are doing and develop our own strategies accordingly."

Dimon also spared a few words for cybersecurity threats, an issue that has plagued JP Morgan and other financial institutions in the last year.

"Regarding privacy, I do not believe that most people fully understand what no longer is private and how their information is being bought, sold and used," he wrote. "As a bank, we are appropriately restricted in how we can use our data, but we have found many examples of our data being misused by a third party. We are going to be very aggressive in limiting and controlling how third parties can use JPMorgan Chase data."

>>> Telecom Italia to create newco to hold its 60% holding in Inwit after IPO an

Telecom Italia to create newco to hold its 60% holding in Inwit after IPO and then sell holding

Telecom Italia (TI) is to create a newco to contain the 60% of shares that it will not float in transmission tower company Inwit and then sell a stake in the vehicle. A report in Italian language daily Il Sole 24 Ore cited authoritative sources who said that the creation of the sub-holding, which would be initially 100%-owned by TI, would take place after the IPO, which is expected to be launched in June.

The report said that the newco would try to attract a minority investor, most likely either a sovereign wealth fund or an infrastructure fund.

The item added that in terms of chain of control, the newco would be placed between TI and Inwit.

The item added that Cleary Gottlieb and White & Case are acting as legal advisors in addition to d'Urso Gatti Bianchi. The report said that Deutsche Bank, Mediobanca and Banca Imi are acting as global coordinators and UBS as joint bookrunner.

The report added that Inwit could be valued at EUR 1.6bn-1.7bn.


Il Sole 24 Ore

>>> BG/Shell could be approved on fast track in Brazil,

Deal Reporter

BG/Shell could be approved on fast track in Brazil, source says
Royal Dutch Shell’s (LON:RDSA) acquisition of BG Group (LON:BG) is unlikely to trigger competition concerns large enough to derail the deal in Brazil, said a source close to the situation and several Brazilian antitrust lawyers.

The source close said a fast track process will be requested by the companies, and that he believed the Administrative Council for Economic Defense (CADE), Brazil’s antitrust authority, is likely to grant that request, though nothing is guaranteed.

A major factor cited by the attorneys was the market dominance of Petrobras (NYSE:PBR), Brazil’s state-owned oil and gas company.

Brazil market breakdown

According to a study released by the Brazilian National Agency of Petroleum, Natural Gas and Biofuels (ANP), Shell ranked third, trailing Petrobras and Statoil Brasil, in terms of February oil production per operator. Petrobras was overwhelmingly dominant, producing 91.3% of the oil generated by operators, while Statoil Brasil had 3.5%, Shell 3%, Chevron Frade 1.1%, and OGX 0.6%. BG Group did not show up on this list.

On another list produced by ANP, this one regarding production by concessionaires for the same month, Petrobras had 84.1%, BG Brasil had 4.5%, Statoil 2%, Shell 1.7%, and Repsol 1.6%.

In a conference call announcing the deal, Shell CEO Ben van Beurden said the company does not anticipate any “insurmountable” regulatory hurdles to completion.

The deal is conditional on antitrust approvals from CADE as well as China’s Ministry of Commerce (MOFCOM), the European Commission, and the Australian Competition and Consumer Commission (ACCC). The deal will also require approval from Australia’s Foreign Investment Review Board (FIRB).

CADE to go vertical

CADE will examine both the horizontal and vertical relationships between the two companies, the attorneys agreed. A horizontal deal is when a company is bought by a competitor, and a vertical deal is when one of the parties is a supplier to the other. BG and Shell are competitors, but BG is also a supplier to Shell, the source close and one of the attorneys said.

The most important aspect of CADE’s review will center around the vertical relationship between the two companies, the first attorney said. In Brazil, CADE considers 30% market concentration to be the trigger for examination in a vertical analysis.

Because BG is a supplier to Shell, the vertical relationship there may warrant “deeper analysis”, he said.

CADE timing

At CADE, a horizontal deal is generally fast-tracked and approved within 30 days if it would result in a less than 20% market concentration, the first antitrust attorney said. In a non-fast track situation, where there is a stronger causal link, the parties would see approval in a maximum of 330 days from notification.

While the complexity of CADE´s analysis will depend on just how the watchdog determines the sector´s relevant market, it should take around 40-50 days for CADE to announce its verdict on the subject after it receives the notification of the deal, estimated the second antitrust lawyer, adding that he does not expect it to be a “difficult analysis".

In the midst of the numerous corruption scandals playing out in Brazil, including those involving Petrobras, a third attorney noted that approvals are “more complicated than usual” these days. Despite that, CADE is very likely to approve the transaction, the attorney predicted.

Exploration and production

When examining the various business segments of the oil giants, horizontal market concentration is more likely to occur in the area of oil extraction, the first antitrust attorney said. However, because Petrobras is such a dominant participant in the market, it is unlikely that another company will have more than a 20% share, he said.

Transactions that result in horizontal overlap, but where the combined market share is less than 20%, can be fast-tracked.

The source familiar said the investigation will definitely be more focused on the exploration and production market. CADE could also look closely at gas sales, he added, noting that BG sells liquid natural gas (LNG) to Brazil. Shell also has interests in gas.

“They should have a discussion about it,” the source said, but reiterated that it was still not a deal breaker.

“The beautiful thing is that Petrobras’ concentration in Brazil is so great, that it won’t be an issue,” he said.

NYT : The Lessons for Finance in the GE Capital Retreat

The Lessons for Finance in the GE Capital Retreat

More than 10 years ago, the kinds of investors who seek out weak companies were circulating presentations on Wall Street that argued that General Electric’s enormous lending business was a ticking time bomb.

The financial crisis of 2008 proved those skeptics right, and on Friday, they appeared to have the final laugh. General Electric announced that it was selling most of the loans inside its financial division, GE Capital, leaving a G.E. that will be dominated by industrial businesses. The shift, to be completed by 2018, would end one of the riskiest experiments in finance. It also indicates that regulations intended to limit destabilizing financial practices are starting to bite.

In a statement on Friday, GE Capital mentioned the weakness that drew criticism all those years ago — and was behind the plan to shrink. “The business model for large, wholesale-funded financial companies has changed, making it increasingly difficult to generate acceptable returns going forward,” the company said.

The important term there is “wholesale funding.” That is industry parlance for borrowing in the markets, as opposed to raising money from deposits. Borrowing for short periods in the markets is tempting because it can be a cheaper source of funding for lenders than issuing longer-term debt. Lenders take the cheap, short-term money and lend it for higher rates to companies and individuals.

As profitable as that strategy might be for certain periods, it can be precarious. In the 2008 tumult, investors who lent in that short-term market fled, leaving the financial firms that borrowed there without funding. It was a Wall Street version of an old-fashioned bank run. As a result, the Federal Reserve had to step in and provide short-term loans to firms that could no longer get them.

GE Capital had short-term borrowings that were equivalent to nearly a third of its assets going into the crisis. That left it in a position where it had to rely on the government. It was a humbling moment for a company that had a triple-A credit rating at the time.

The weakness of GE Capital and others alerted regulators and Congress to the risks posed by large financial firms that were not regulated banks. The overhaul therefore gave the government the power to designate a large nonbank financial company as important to the system — and then regulate it like a bank.

As GE Capital adapted to the new regulatory regime, it began to operate with more capital and less short-term borrowing. Measures of profitability slumped. Its return on equity, for instance, was a meager 8.6 percent last year. By selling many of its loans, GE stands to avoid being designated as a “systemically important” institution, and it said on Friday that it would work with regulators to shed that title.

“G.E.’s decision today shows that some of the financial reform measures regulators have taken are working,” Dennis Kelleher, the president of Better Markets, a group that has often asserted that the overhaul is inadequate, said in a statement. “Firms that threaten America’s financial system — like Wall Street’s too-big-to-fail banks — have to be made to bear the costs of their risky business so taxpayers don’t have to pay the bill when their risks explode like in 2008.”

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GE Capital had $500 billion of assets at the end of last year, making it the seventh-largest financial firm in the country. It had $69 billion of short-term borrowings. That sum was substantially lower than before the crisis, but even that may be too high in the new regulatory environment. The Fed is preparing new rules that would mean extra constraints for companies that use a lot of wholesale funding.

“Since the crisis, we’ve been making GE Capital smaller and safer, and it’s a really strong business,” Seth Martin, a G.E. spokesman, said. One of GE Capital’s biggest businesses is lending to medium-size companies. Mr. Martin said that activity was not particularly risky.

One concern raised by GE Capital’s plans is that large amounts of financial assets might be moving from regulated entities into firms that the Fed and others have little power over. The Blackstone Group, the private equity firm, is buying some of GE Capital’s assets, for instance. But if Blackstone were to grow to a certain size, it, too, could come under the Fed’s regulation as a “systemically important” institution.

In many ways, GE Capital is a remnant of a heady, hubristic era in the markets that gave birth to entities like Long-Term Capital Management, the giant hedge fund that had to be rescued in 1998, and Lehman Brothers. GE Capital did not implode in the same spectacular manner as those two, but its game was more or less up.

NYT : New Sea Drilling Rule Planned, 5 Years After BP Oil Spill

WASHINGTON — The Obama administration is planning to impose a major new regulation on offshore oil and gas drilling to try to prevent the kind of explosions that caused the catastrophic BP oil spill in the Gulf of Mexico, administration officials said Friday.

The announcement of the Interior Department regulation, which could be made as soon as Monday, is timed to coincide with the five-year anniversary of the disaster, which killed 11 men and sent millions of barrels of oil spewing into the gulf. The regulation is being introduced as the Obama administration is taking steps to open up vast new areas of federal waters off the southeast Atlantic Coast to drilling, a decision that has infuriated environmentalists.

The rule is expected to tighten safety requirements on blowout preventers, the industry-standard devices that are the last line of protection to stop explosions in undersea oil and gas wells. The explosion of the Deepwater Horizon oil rig on April 20, 2010, was caused in part when the buckling of a section of drill pipe led to the malfunction of a supposedly fail-safe blowout preventer on a BP well called Macondo.

It will be the third and biggest new drilling-equipment regulation put forth by the Obama administration in response to the disaster. In 2010, the Interior Department announced new regulations on drilling well casings, and in 2012, it announced new regulations on the cementing of wells.

The latest regulation, a result of several years of study, will be imposed on all future offshore drilling equipment and will be used by the administration to make the case that it can prevent a BP-like disaster as oil exploration expands in the Atlantic. The Interior Department is also reviewing a proposal from Royal Dutch Shell to drill in the Arctic’s Chukchi Sea, off the coast of Alaska.

“We’re coming on five years, and we’ve been working tirelessly in the regulation division since it happened,” said Allyson Anderson, associate director of strategic engagement in the Interior Department’s Bureau of Safety and Environmental Enforcement. “We’ve doubled down on building a culture of safety,”

But environmentalists remained highly skeptical.

“Making sure the design, operation and maintenance of the blowout preventer is the best it can possibly be is imperative, no question,” said Bob Deans, a spokesman for the Natural Resources Defense Council and co-author of the book “In Deep Water,” an investigation of the cause of the spill. “Industry and government have taken measures over the past five years to reduce some of the risk in what is an inherently dangerous operation at sea. That’s a far cry from saying it’s safe. And the last thing we need is to expose Atlantic or Arctic waters to a BP-style blowout.”

Environmentalists also noted that a panel appointed by President Obama to investigate the spill concluded that the chief cause of the disaster, which left the Gulf Coast soaked in black tar, was not the blowout preventer but a broad systemic failure of oversight by the companies involved in drilling the well and the government regulators assigned to police them.

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Five years after the spill, the number of accidents and injuries per oil-producing well has increased, according to Interior Department statistics. Between 2009 and 2014, the overall number of oil- and gas-producing wells dropped about 20 percent, and accidents and incidents associated with drilling in the Gulf of Mexico dropped 14 percent. But during that period, accidents and injuries per producing well increased by about 7 percent.

A report last year by the Chemical Safety Board concluded that the blowout preventer’s blind shear ram, an emergency hydraulic device with two cutting blades, punctured the pipe and sent oil and gas gushing to the surface. The study found that the drill pipe had buckled under the tremendous pressure of the oil and gas rising from the well from the initial blowout.

That report warned that another disastrous offshore oil well blowout could happen despite regulatory improvements in the four years since the BP well explosion.

“The new regulation is important,” said William K. Reilly, a co-chairman of the presidential panel that investigated the spill, and the administrator of the Environmental Protection Agency under the first President George Bush. “The signal from the department that it is attending to each of the systems is more important. The blowout preventer is the last-ditch preventer. It was activated too late in Macondo. If you get to the point where it’s all you’ve got, it better be good. But the system process we identified — attention to management, process design, adherence to the system — those are really vital long before you ever get to the point where you have an emergency.”

Mr. Reilly blamed Congress for some of the continued systemic problems, saying that lawmakers should have appropriated funds to increase programs for safety training and inspection.

Administration officials say that since the spill, the Interior Department has initiated the most aggressive and comprehensive offshore oil and gas regulation and oversight in history. The agency has nearly doubled the number of safety inspectors in the Gulf of Mexico, from 55 at the time of the spill to 92 today. After the accident, the Interior Department was restructured, separating the agency charged with overseeing safety from the one charged with overseeing the collection of revenue.

The agency has also put in place a requirement that any company performing deep-water drilling in the Gulf of Mexico must have access to containment dome technology — essentially, a dome that can be put over an exploded well to contain gushing oil. At least two ports in the Gulf of Mexico now store containment domes that can be used in emergencies.

While the oil industry typically opposes regulations, it has followed some of the recommendations made by the presidential panel. The big oil companies created and funded the Center for Offshore Safety, an institute intended to promote and disseminate best practices in drilling.

“The industry’s overall safety record was strong before Macondo, and the co-chairs of President Obama’s national spill commission were absolutely right when they said that offshore drilling is now even safer,” said Jack N. Gerard, president of the American Petroleum Institute, which lobbies for the oil industry. “We will continue to build on these achievements because our goal is zero accidents and zero spills.”