(BFW) AbbVie May Not Be Done After Pharmacyclics Deal: Deutsche Bank

AbbVie May Not Be Done After Pharmacyclics Deal: Deutsche Bank
2015-03-05 10:06:21.808 GMT


By Allison Connolly
(Bloomberg) -- AbbVie’s purchase of PCYC won’t affect its
capability to do future deals as the co. will be generating
>$7b/yr free cash flow in coming years, Deutsche Bank (buy) says
in note.
* Notes co. was about to do Shire deal ($54b) and this deal
isn’t even 50% of that
* Says PCYC acquisition is positive for ABBV as it provides
co. w/ near-term top-line growth and diversifies the
business beyond Humira
* Says deal could add 18%-19% to ABBV EPS in 2020-2021
timeframe; increases est. 2014-2020 rev growth from 3% to 7%
& EPS growth from 8% to 11%
* NOTE: Earlier, Abbvie to Buy Pharmacyclics for $261.25/Share


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

>>> SPAIN DEBT AGENCY (TESORO) SELLS TOTAL €5.0B VS. €4.0-5.0B INDICATED RANGE I

SPAIN DEBT AGENCY (TESORO) SELLS TOTAL €5.0B VS. €4.0-5.0B INDICATED RANGE IN 2017, 2020 AND 2032 BONDS 
- Sells €1.08B in 0.50% Oct 2017 bono; Avg Yield: % v 0.384% prior; Bid-to-cover: 3.77x v 3.27x prior; Maximum Yield: 0.203% v 0.409% prior 
- Sells €2.388B in 1.40% Jan 2020 bono; Avg Yield % v 0.849% prior; Bid-to-cover:1.87 x v 2.39x prior; Maximum Yield: 0.543% v 0.869% 
- Sells €1.53B in 5.75% 2032 Bono; Avg Yield % v 3.503% prior; Bid-to-cover: 1.62x v 2.0x prior; Maximum Yield 1.941% v 3.529% prior

>>> Bankia sells 24.9% take in Realia to Slim's Grupo Carso; tender offer for re

Bankia sells 24.9% take in Realia to Slim's Grupo Carso; tender offer for remainder within nine months

Bankia on Wednesday disclosed that it would sell its 24.9% stake in Realia to Grupo Carso, a holding company controlled by Mexican billionaire Carlos Slim, according to two Spanish-language statements filed today with the Spanish securities regulator CNMV.

Carso will pay EUR 0.58 per share for a total of EUR 44.5m for the stake.

Completion of the transaction depends on authorizations from the Spanish Ministry of Finance and a satisfactory and independent valuation of the Carso offer.

Should the deal close, Carso will commit to launching a public tender for shares in Realia not already controlled by the Mexican holding company within nine months at a price of EUR 0.58 per share.

FCC, a company in which Carlos Slim recently became the single largest shareholder, announced last month that it would not be selling its c.25% in Realia, reversing a previous position held by FCC regarding its asset disposal strategy.

The complete statements in Spanish can be accessed here and here.

Spanish real estate trust Hispania is another potential bidder for Realia. Last month, it was reported that Hispania was not relinquishing its pursuit of Realia despite the emergence of Carlos Slim as a possible rival suitor and that it was considering raising its offer. The Spanish regulator (CNMV) is said to be currently studying a EUR 0.49 per share offer for 100% of Realia launched by Hispania in November 2014.

Source Stock Exchange Announcement (Translated), previously reported intelligence

(CS) Consumer Staples : Valuations Remain Elevated, Differentiation

Valuations Remain Elevated, Differentiation Increases

* At 21.3x NTM P/E, the aggregate valuation of large cap global staples stocks is up half a turn from the prior month and remains elevated since the sharp increase late last year. 
The standard deviation of NTM P/Es for consumer staples stocks is 1.6, its highest level since early 2009. It
is up from the ten-year low of 0.7 in June of 2013 and up compared to last month's average of 1.4. It is higher than the ten-year average of 1.5, and the max of 2.7. This indicates that differentiation between the growth potential of
individual stocks has been increasing over the past few months.

* US consumer staples stocks trade at a NTM P/E of 20.0x, over four turns above the 10-year average. 
The S&P consumer staples index relative premium vs. the S&P500 moved down slightly in February, but it is
still above the long term average. The consumer staples index now trades at a 16.2% premium, above the long-term average of 14.6%. Stocks with the highest relative premiums to the sector are MNST at 105% and EL at 32%.
Stocks with the largest discounts are CCE, K, and GIS with 13%, 13%, and 9% discounts to the sector, respectively.

* The European consumer staples index remained elevated at a NTM P/E of 20.2x after trading up sharply in January – setting a new 10 year high. 
The index has been above the +1SD level since March 2014 after climbing from -1SD in June 2012. Against the MSCI Europe, it is trading at a 29.7% premium, slightly below its long term average of 31.2%. The relative NTM P/E premium for European consumer staples is down slightly from last month, with the valuation remaining stable while the MSCI Europe index rerated one turn. Stocks with the highest relative premium to the European consumer staples sector are BEI at 37% and OR at 32%. Stocks with the largest discounts are IMT, CARL'B and BATS with 25%, 17%, and 13% discounts to the sector, respectively.

* In other markets, NTM P/E trends are less clear. 
Latin American staples valuation trends were mixed this month, while South African staples multiples moved lower off recent highs. Most Japanese staples multiples moved higher over the past month.

* In this monthly publication, we show the trends in the consumer staples sector for the U.S., Europe and a number of global stocks. We also trace 10- year historical, absolute, and relative NTM P/E multiples of global consumer
staples stocks.

(MS) European Equyity Strategy - Update of Screening to identify Value Idea

--> Interesting Read. see full note attached

We update a number of our preferred stock screens to identify Value ideas at the company level.

We recently raised our weight in Value sectors The disconnect in performance between Cyclicals vs Defensives and Value vs Growth has been unusual, Value has lagged the improvement in macro newsflow, and valuations of Value vs Growth have only been lower 10% of the time in the last 40Y. If fundamentals continue to improve, bond yields were to rise, or inflation expectations increase, Value is likely to outperform.

We update our Buyers’ Compendium to identify stocks that still offer Value There are 67 stocks that appear on more than one screen, including 11 OW rated stocks: Statoil, Subsea 7, Wood Group, AMEC, ENEL, Tesco, EDP, Mitchells & Butlers, Software AG, Technip and Total.

>>> Henkel planning large acquisition

Henkel planning large acquisition

Henkel, the listed German household goods company, is planning a large acquisition, Rheinische Post reported.

The German-language daily cited Chief Executive Kasper Rorsted who said he is not in a hurry as prices of potential takeover candidates have risen, and targets must fit the group strategy.

The report said Henkel is still planning a large acquisition and has EUR 4.5bn capital to achieve it.

Rheinische Post

(BofA-ML) Norsk Hydro - Double Downgrade to Underperform

* Premiums under pressure from flood of Chinese metal
Aluminium premiums “higher for longer” was a key part of (fairly recent!) upgrade thesis. Premiums have started to come under pressure driven by Chinese exports & the prospect of further LME warehousing rule changes. We note that European premiums are down $80/t (c. 20%) from a peak of US$430/t. Our Metals strategist, Michael Widmer, lowers his aluminium price & premium assumptions today. We downgrade earnings for Hydro. 2015E EBITDA –25% to NOK12bn. 2015E EPS - 36% to NOK2.12. We set a new price objective of NOK40 based on 0.9x our 2015E DCF. At our target shares would trade on about 9x EBITDA.

* China exports = Supply-Demand balance deteriorating
We previously forecast a supply demand deficit of c. 1 Mtpa for 2015 on the assumption that Chinese would not be a material net exporter of primary aluminium. As with steel, Chinese exports are surprising to the upside, with sellers apparently exploiting a loophole to achieve VAT rebates from exports. Current exports imply a market in closer to 1 Mt surplus. We lower 2015E aluminium price 8% to US$1818/t / US$0.82/lb. We also lower assumed premium by $85/t (-22%) for 2015 & $139/t (41%) in 2016. As a reminder, a “premium” is paid on top of the quoted LME price for prompt physical delivery. Historically, these figures reflected “convenience yield” and potentially delivery from the next closest delivery point. More recently premiums have been distorted by long queues at metal warehouses and warehousing deals.

* Upgrades to stall on prices, premium, NOK
Premiums: At a recent analyst meeting, Glencore’s head of aluminium suggested that it wasn’t inconceivable that aluminium premiums could halve on a 12 month view. Currency: A weaker/weakening NOK was another driver of our positive view on Hydro. While not strengthening (yet) the stability in the oil price has led to a stabilization of the NOK at around 7/USD. With these headwinds, we struggle to see the earnings upgrade momentum continuing for Hydro, Q1 could be peak earnings.

(BofA-ML) Basic Mat. Most/Least preferred

* Updating our Basic Materials Most /Least Preferred List
In this report, we publish our list of most/least preferred stocks in the Basic Materials sector. The list is consistent with our fundamental 12 month opinions, but is intended to appeal to investors with a shorter-term time horizon. The full rationale for our recommendations on each stock is contained in the most recent stand-alone research for each company, which you are advised to read.

* Replacing Norsk Hydro with cash
Following our double downgrade of Norsk Hydro to Underperform yesterday, we are removing Hydro (PO NOK40) from our Most Preferred List and replacing it with cash.

* Most Preferred List: Replacing Norsk Hydro with cash
Vedanta, Syngenta, and cash

* Least Preferred List: We make no changes
Rio Tinto, Voestalpine, Umicore.