(BFW) Automotive M&A Becoming Bigger Priority, Exane Says

Automotive M&A Becoming Bigger Priority, Exane Says
2015-03-11 13:05:52.209 GMT


By Brian Lysaght
(Bloomberg) -- There was more merger & acquisition talk at
last week’s Geneva auto show than in past years, says Exane in
note, citing mgmt and investor meetings at show.
* Suppliers are targeting bolt-on acquisitions for growth,
balance sheets have improved
* Peugeot mgmt said it’s open minded about a future merger,
didn’t comment on speculation regarding Fiat Chrysler tieup
* Peugeot-Fiat Chrysler would be good potential fit: Exane
* NOTE March 4, Marchionne: My Ideal Partner May Be Among ACEA
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To contact the reporter on this story:
Brian Lysaght in London at +44-20-3525-7908 or
blysaght@bloomberg.net

To contact the editor responsible for this story:
Gaurav Panchal at +44-20-3525-0511 or
gpanchal2@bloomberg.net

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: SURG +7.1%, EXPR +7%, CVTI +6.8%, SUPN +5.7%, PME +5.3%, (thinly traded), SYX +5%, FCEL +4.7%, NVTA +3.5%, TCRD +3.1%, EOX +2.8%, SCON +2.7%, GCA +1.9%, TXMD +1.8%, (thinly traded), TSM +1.7%, (reported Feb revs yday) STV +1.6%, PAY +0.9%, NCS +0.9%, SINA +0.6%, T +0.5%, (reiterates 2015 outlook; Provides Q1 update on metric trends ), LOGI +0.5% (reaffirmed FY15), VPG +0.5%, BLT +0.5%

Select Bio/pharma related names showing strength: SUPN +5.7%, GERN +3.4%, CYTX +3%, BIOC +2.4%, ONVO +2.3%, SNY +1.4%, ACAD +0.9%

Other news: MELA +54.8% ( disclosed tha on March 9, 2015, the February 2015 CPT Editorial Summary of Panel Actions was posted to the website of the American Medical Association), BLRX +6.3% (announces positive pre-clinical results for BL-9020 for the treatment of Type 1 diabetes), ARCP +5.1% (announced that the Board has named Glenn J. Rufrano CEO effective April 1, 2015; announced plans to reconstitute the Board of Directors), PTX +5% (Zogenix confirms agreement of sale of Zohydro ER Business to Pernix for $100 million at closing plus potential milestones of $283.5 million), NATH +4.7% (announced a special cash dividend of $25 per share), LL +4% (cont strength from yday), AKRX +4% (provides update on recent product launches), MMI+2.7% ( announces public offering of 4.0 million shares of common stock by selling stockholders; co will not receive any proceeds from the sale of the stock ), GNC +2.6% (GNC Holdings issues statement in response to New York Attorney General; says testing showed that the GNC Herbal Plus products meet all requirements for safety, quality, purity and proper labeling ), TSEM +2.1% (still checking), SUNE +1.9% (CEO bought 32k shares of stock on the open market), NOR +1.7% (announced rate design agreement with the Missouri Public Service Commission), HOV +1.7% (still checking, but did host annual meeting yday and report earnings tomorrow), MBLY +1.5% (Mobileye and Valeo (VLEEY) sign a unique technology cooperation agreement), KYTH +1.3% (prices 2,604,168 shares of its common stock at $48.00 per share), HCC +0.9% (announced new strategic alliance with Weather Analytics, a provider of precision climate and weather data and analytics), SWKS +0.9% (favorable commentary on Tuesday's Mad Money), XONE +0.9% (has appointed Hans J. Sack to serve as President)

Analyst comments: SNDK +3.2% (target raised to $106 from $100 at Goldman -- Added to Conviction Buy List), RRGB +1.5% (upgraded to Buy from Neutral at Longbow), CMG +0.8% (initiated with a Outperform at Credit Suisse)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: VRA -17%, ZGNX -10.2%, (also Zogenix confirms agreement of sale of Zohydro ER Business to Pernix (PTX) for $100 million at closing plus potential milestones of $283.5 million), ERA -6.7%, HABT -6.4%, ONTY -5.1%, WB -4.8%, KOPN -3.4%, SPHS -2.8%, ALOG -0.5%, FGP -0.5%

Select metals/mining stocks trading lower: BHP -3.1%, MT -1.1%, HMY -1.1%, SSRI -0.7%

Select oil/gas related names showing early weakness: STO -1.2%, HAL -1.1%, BP -1.1%, HAL -1.0%

Other news: HDY -28.6% (announces that its common stock began trading today on OTCQX under the symbol HDYN), SXL -5.8% ( announces public offering of 13.5 mln common units ), NBG -3% (cont vol due to Greece/EU bailot), SYN -1.7% (announces that preclinical results supporting the development of SYN-004 will be presented during Digestive Disease Week 2015 in Washington DC on May 16-19), MA -1.3% (attributed to pricing/offering)

Analyst comments: WEN -2.2% (initiated with a Underperform at Credit Suisse), EMC -1.1% (downgraded to Market Perform from Outperform at Wells Fargo), BRFS -0.9% (downgraded to Neutral from Outperform at Credit Suisse)
.

NYT : Hedge Funds Recorded Strong Recovery in 2014

The number of hedge funds hit new heights last year, and the amount of money flowing into the funds was the highest since before the financial crisis. Even so, hedge funds’ performance lagged the broader stock market.

Last year, the number of hedge funds climbed to 8,377, according to an estimate compiled by Hedge Fund Research, a firm in Chicago that tracks the industry. That was a strong recovery for the industry. After the financial crisis, some hedge funds went out of business, and the estimated number of funds dropped to 6,845 in 2009 from 7,634 in 2007.

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More important, according to bankers at Wall Street securities firms that cater to the industry, 2014 was a strong year in terms of new money flowing into hedge funds. Hedge Fund Research said that $76 billion of new capital poured into hedge funds, the highest level since 2007 when $195 billion in new capital came into funds. All that money and more flowed out in 2008 and 2009 as the financial crisis and the Ponzi scheme involving Bernard L. Madoff made investors, particularly European ones, skittish.

Since the financial crisis, there has been a big swing in the geographic base of investors in hedge funds. “Precrisis, the biggest investors in hedge funds were European, and postcrisis, the biggest investors in hedge funds are American,” said Will Smith, head of capital introductions for Europe and the Middle East at Morgan Stanley in London.

Although money resumed flowing into hedge funds in 2010, the pace has been patchy. After rising to $70.6 billion in 2011, inflows fell to $34.4 billion in 2012, according to Hedge Fund Research. But now, some stability appears to be emerging.

“The class of 2014 leading into 2015 was a standout year since the financial crisis in terms of launch size and quality of managers,” said Dean Backer, Goldman Sachs’s global head of prime brokerage, a division at investment banks thathelps hedge funds raise money. “Overall assets under management raised was significantly higher than the previous three years.”

Among the hedge funds started last year was one called Darsana Capital Partners by Anand Desai, a former manager at Eton Park Capital Management, with more than $1 billion in assets. (Perhaps a sign of the times, Darsana’s debut was a shadow of Eton Park’s a decade earlier by a former Goldman Sachs whiz kid Eric Mindich. Mr. Mindich succeeded in raising $3.5 billion despite requiring a strict lockup period for investors’ money.)

There is no question that the heady era of the late 1990s, when a couple of traders could quit an investment bank and start a hedge fund in a small office with a few computers, are for the most part history.

“There are a lot of headwinds to start up a hedge fund,” said Robert Leonard, global head of capital services at Credit Suisse in New York. Some of it is the result of increased regulatory requirements, which are making it more expensive to start a hedge fund. In addition, investors are doing extra due diligence before they pour money into funds. They are also requiring asset managers to follow certain practices,including that investment managers have different people for different functions like overseeing risk or being in charge of compliance.

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“The days of starting with $25 million and growing from $25 to $50 million and $50 million to $100 million, which was the norm 10 to 15 years ago, don’t happen as much anymore,” Mr. Leonard said.

What is increasingly happening, particularly in Europe, is that young traders seeking to start a hedge fund are joining a larger hedge fund group. “We have seen over 100 portfolio managers join the large, predominantly U.S. multi-manager groups in the last two years to run a new book on their platform,” Mr. Smith of Morgan Stanley said.

One hedge fund that brought on new traders last year is Millennium Management, a New York firm run by the industry titan Israel A. Englander. Millennium has long operated a platform model, which means that it allocates money to portfolio managers to deploy in a variety of trading strategies. In 2014, it increased its portfolio management teams by 26. And last year in Europe, BlueCrest Capital Management, based in London, hired 40 portfolio managers, traders and analysts for its BlueCrest Equity Strategy Fund, a hedge fund that uses a variety of long-short trading strategies. The fund was started internally in the summer of 2013 with BlueCrest partners’ capital.

Nadeem Walji, who ran his own hedge fund, Duma Capital Partners, with about $500 million in assets from 2005 to 2009 and another hedge fund until late 2011, is sitting on the sidelines for now. “We really are deep into the maturation phase of the hedge fund industry that accelerated post 2008,” he said. “Hedge funds are now institutions. After the financial crisis, everyone wants to place their money with established hedge funds.”

Mr. Walji pointed to another factor that was dulling the gloss of hedge funds: poor performance. HFRI’s Fund Weighted Composite Index, which tracks more than 2,000 funds, was up 3 percent last year compared with a gain of 13.7percent for the Standard & Poor’s 500-stock index with dividends. Unlike investing in an index, which is a low-cost way of playing the stock market, investors in hedge funds typically pay a 2percent management fee and a 20percent performance fee.

“Too many hedge funds are more concerned with gathering and keeping assets than generating performance,” Mr. Walji said. “The 2percent has become more important than the 20percent.” He said that one of the reasons he was managing his own money was that “from an equity side, it is more effective for me to buy indices than invest in most hedge funds.”

NY Post : Gas producer Samson Resources to break loan covenants

KKR-owned Samson Resources — one of the country’s biggest privately held natural gas producers — is expected within weeks to break its loan covenants, three sources close to the situation told The Post.
Samson — hit hard by falling oil prices — last month hired restructuring advisers to help get it out from under a heavy debt load.
The energy company is in talks with a JPMorgan-led group that holds a $1 billion revolving line of credit.
“The question is: Will JPMorgan give them a break?” a source said.
Last year, Samson broke the covenant in the same revolving line of credit, and JPMorgan gave the energy company a waiver while lowering the line of credit to $1 billion — from $1.8 billion — the source said.
“They will have a fully drawn revolver in 2015,” the source noted.
Samson needs to keep its consolidated total first lien debt to EBITDA ratio to not more than 1.5 to 1.0 at the end of the quarter, according to public filings.
Henry Kravis has much riding on Samson.
His firm led the biggest buyout in history — the $44 billion 2007 buyout of Energy Future Holdings — and EFH last year filed for bankruptcy.
KKR and the other equity sponsors could see their positions largely wiped out.
Kravis in 2011 doubled down on the energy space, leading the $7.2 billion buyout of Samson, and now it is trying to avoid a similar fate.
A Samson spokesman declined comment.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: MELA +49%, PME +9.4%, NATH +7.5%, SURG +7.1%, EXPR +7%, CVTI +6.8%, ARCP +5%, SYX +5%, GERN +3.9%, SUPN +3.9%, NVTA +3.5%, PBR +3.2%, LL +3.1%, TCRD +3.1%, BIOC +3%, EOX +2.8%, MMI +2.7%, SCON +2.7%, FCEL +2.3%, SINA +2.2%, TSEM +2%, TXMD +1.8%, GNC +1.7%, NOR +1.7%, SNDK +1.7%, HOV +1.7%, STV +1.6%,BUD +1.3%, ARMH +1.2%, SNY +1.1%, PSO +1.1%, UN +1%, HCC +0.9%, NCS +0.9%

Gapping down: ZGNX -13.2%, HABT -8.6%, ERA -6.7%, HTBX -6%, SXL -5.5%, ONTY -5.1%, WB -4.6%, NBG -3%, BHP -3%, SPHS -2.8%, WEN -2.3%, STO -2%, SFUN -1.9%, MT -1.9%, EMC -1.3%, HAL -1.2%, HAL -1.2%, BP -1.2%, HMY -1.1%, SSRI -0.9%, MA -0.8%, GG -0.7%