HSBC analyst: Strong Swedish Q4 GDP will not stop Riksbank from further cuts of the Repo Rate - SEK currency (Krona) to continue to strengthen as a result of ECB QE
Altice on hunt for bigger acquisitions
Arash Massoudi in London and Adam Thomson in Paris
Altice, the European cable and mobile group, is on the hunt for bigger takeover targets even though it has already splashed more than €28bn on acquisitions in the past 12 months.
Dexter Goei, chief executive, told the Financial Times the group would press ahead with its rapid expansion by taking advantage of cheap borrowing to challenge the region’s established telecommunications companies.
“We believe the whole telecom market in Europe will go through accelerated phases of convergence of fixed and mobile services and consolidation, especially among mobile operators,” said Mr Goei.
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Altice saw “a pipeline of opportunities to continue doing what we have done in the last few years, just on a bigger scale”, he added.
The Amsterdam-listed company has emerged out of relative obscurity, becoming one of Europe’s most aggressive acquirers and a leading proponent of consolidation and convergence between cable, broadband, fixed-line and mobile services.
Last week, Altice made a €3.9bn offer to Vivendi of France to increase its 60 per cent stake in Numericable-SFR, the country’s second-biggest telecoms business, to 80 per cent. It has also expressed an interest in eventually acquiring Bouygues Telecom, France’s number three mobile operator.
Founded by Franco-Israeli entrepreneur Patrick Drahi, Altice has acquired a portfolio of telecom assets in France, Israel, Portugal, Belgium, Luxembourg and the Caribbean. Since its initial public offering in January 2014, it has amassed a market capitalisation of more than €20.5bn.
Mr Drahi owns nearly 60 per cent of the business, making him one of Europe’s wealthiest men. His shares are worth more than €12bn.
The company has hired a stable of investment bankers, such as Mr Goei, partly by offering them equity in the business.
“All of our employees, pushed three levels below CEO, are properly incentivised,” said Mr Goei, whose shares are worth €282m.
Altice’s push has coincided with greater political support for an easing of competition rules in Brussels after years of lobbying from industry heavyweights.
Companies such as Deutsche Telekom, Orange and Vodafone have argued that the region’s rules have hamstrung the industry, sapping investment in infrastructure and benefiting US and Asian rivals.
Altice has fashioned itself after Liberty Global, the world’s largest international cable company, which was founded by US mogul John Malone.
Mr Drahi once worked under Mr Malone after selling his small French cable business to UPC, which is now part of Liberty. Both companies operate with a higher amount of leverage than their peers to help fund their acquisitions.
In the past year Altice has bought Portugal Telecom for €7.4bn, adding the leading mobile operator to the two cable operators it owns in Portugal. Altice acquired Vivendi’s SFR, France’s number-two mobile operator, for €17bn and combined it with Numericable
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Salix Suitors May Yet Emerge to Challenge Valeant: Real M&A 2015-02-23 20:29:12.310 GMT
(For a Real M&A column news alert: {SALT REALMNA <GO>}.)
By Tara Lachapelle (Bloomberg) -- It might still be early for investors to rule out competing offers for Salix Pharmaceuticals Ltd. The drugmaker’s $14.5 billion deal with Valeant Pharmaceuticals International Inc. came together quickly, considering that Salix was essentially just put back in play after it restated financial results in late January. The maker of diarrhea medicine is now selling to Valeant for $158 a share, which falls short of what some analysts and shareholders were expecting given the long list of companies that were thought to be interested suitors, including Shire Plc and Actavis Plc. Valeant’s offer values Salix at 69 times trailing 12-month earnings before interest, taxes, depreciation and amortization, more than four times the median multiple for similar deals. Yet with Salix poised to win regulatory approval next quarter for a potentially lucrative new product, Valeant may be paying closer to 15 times Ebitda, based on analysts’ projections for next year’s profit. “It seems like Valeant worked very quickly to conclude their due diligence and decide whether to make a bid,” David Steinberg, a San Francisco-based analyst for Jefferies Group LLC, said in a phone interview. “It is lower than most would have expected. The question is, is that the high bid or will others come in?”
Reasonable Price
Credit Suisse Group AG’s Ronak Shah said a takeover price of $170-a-share or more would have been reasonable. That’s a 7.6 percent bump from what Valeant has agreed to pay. Salix shares fell 1.3 percent on Monday to $155.80 at 3:28 p.m. in New York, leaving a more than $2 arbitrage spread. The gap signals fading speculation of a counterbid. Even so, Shire, Takeda Pharmaceutical Co., AstraZeneca Plc, AbbVie Inc., Endo International Plc and Actavis are also considered logical buyers for Salix. Valeant’s speediness may be what complicated things, said Steinberg of Jefferies. Some potential counterbidders might have preferred to wait until May to see whether the U.S. Food and Drug Administration approves Salix’s Xifaxan for diarrhea caused by irritable bowel syndrome. But Valeant is planning to close its deal before that. “Hard to envision how another bidder would come in at a much higher price,” David Amsellem, a New York-based analyst for Piper Jaffray Cos., said in his note today. “The simple reality here is that we are still in front of an FDA decision.”
For Related News and Information: Valeant’s $10.1 Billion Salix Deal a Bet on FDA Decision Salix Fit for Bids as Accounting Issue Is Resolved: Real M&A Real M&A columns: NI REALMNA <GO> Top deal stories: DTOP <GO>
To contact the reporter on this story: Tara Lachapelle in New York at +1-212-617-8911 or tlachapelle@bloomberg.net To contact the editors responsible for this story: Beth Williams at +1-212-617-2307 or bewilliams@bloomberg.net Mohammed Hadi
Valeant Pharmaceuticals to Buy Salix for About $10 Billion
Deal will roughly double Quebec-based Valeant’s debt
Valeant Pharmaceuticals International Inc. said Sunday it would buy Salix Pharmaceuticals Ltd. for about $10 billion, a return to its big deal-making ways after a failed bid for Botox maker Allergan Inc. last year.
Quebec-based Valeant said it would pay $158 a share in cash for Salix. That is just above Friday’s closing price of $157.85 for the Raleigh, N.C., drug company’s shares, which had risen recently on reports of a potential deal.
The deal will take Valeant into a growing, multibillion-dollar market for drugs treating stomach disorders like traveler’s diarrhea. Valeant estimates the overall U.S. market for stomach-disorder treatments is $5 billion and growing 5% a year, while Salix’s sales are growing even faster than that.
Yet the deal will come at a cost for Valeant, roughly doubling its debt to $31 billion, according to Chief Executive Michael Pearson.
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Also, Salix is a tarnished asset. In November, Salix disclosed a revision to its wholesale-inventory levels that suggested demand for its drugs might not be as high as previously thought. In recent months, the company’s chief financial officer and chief executive have left.
Valeant expects to lose out on about $500 million in sales this year as distributors reduce drug inventory levels to adjust for the accounting issues, Mr. Pearson said.
Valeant sells eye and skin drugs. It had signaled in recent months that it would focus on growing its own businesses, after the company had failed to win Allergan. The Botox maker, which was bought by Actavis PLC for $66 billion, criticized Valeant as a deal machine.
Mr. Pearson said Valeant’s fourth-quarter results, released Sunday, showed that the company was growing its own business substantially. Valeant reported total revenue of $8.3 billion last year, up 43% over the prior year.
Valeant will report the results from recent acquisitions like Salix separately to show how the underlying business is doing, Mr. Pearson said. He said Valeant would “continue to focus on the small and midsize deals.”
In just in the past few weeks Valeant moved to buy prostate-cancer treatment Provenge and other assets from bankrupt Dendron Corp. for $495 million.
But Salix was too good to pass up, Mr. Pearson said.
He said Salix was especially attractive because its 300 sales representatives are well-respected by physicians and drugs are getting reimbursed. In addition, he said, Valeant reached a deal for Salix at an “attractive price” because the drug-inventory issues had scared away some suitors.
“This opportunity came up,” he said. “And we are very opportunistic.”
Valeant expects the transaction to close in the second quarter and to begin adding to company earnings this year. The company expects more than $500 million in cost savings from both companies within six months.
Salix’s bankers at Centerview Partners began reaching out to interested bidders late last year, according to people familiar with the matter. Five companies—Valeant, Shire PLC, Endo International PLC, Mylan Inc. and Japanese drug maker Takeda Pharmaceutical Co. —expressed interest, one of the people said.
Officials at Endo, Takeda, Mylan and Shire didn’t immediately respond to requests for comment.
Discussions with Valeant were never exclusive, and the process remained competitive until late last week, that person said. Valeant’s bid, which is to be financed with bonds and loans from Deutsche Bank AG and others, was the highest by several dollars per share, the person said.
The deal will be structured as a tender offer, with Valeant purchasing shares directly from Salix investors. Such deals typically move faster than mergers that require a shareholder vote, which can take months.
Salix’s top-selling product, an antibiotic called Xifaxan for traveler’s diarrhea, is up for Food and Drug Administration approval for treatment of diarrhea caused by irritable bowel syndrome. The expanded use could add $1 billion in yearly sales, Sterne Agee’s Shibani Malhotra estimates.
But it could face competition from an Actavis drug also up for approval, though patients could take both drugs at the same time. After lacking treatments for years, the stomach-disorder market has been heating up, with AstraZeneca PLC and Shire also major players.
Last year, Salix won approval for three drugs. The company, which was scheduled to report its 2014 earnings on March 2, said it had about $1.1 billion in total net product revenue during the first nine months of last year.
Apple Car Plans: Daimler CEO Zetsche has respect but no fear
Daimler CEO Dieter Zetsche wants Apple "good luck" with his iCar, but remains calm: "We have a lot of experience in the automotive industry," Apple "has not". Perhaps the Daimler CEO makes the bill without Magna.
Stuttgart / Berlin - speculation about an introduction of the computer giant Apple Show chartcan cold Daimler CEO Dieter Zetsche into the automobile business. "We have long experience in the automotive industry, we invented the car. And experience is in such a complex business like the automotive industry with critical. Those who now start there, has not," Zetsche said the "Welt am Sonntag".
"When we announced tomorrow that Daimler builds future smartphones, Apple would not worry or thrown off course. And the same goes for us. " If Apple enter into business with cars , Zetsche would therefore wish "good luck and new competitors welcome ".
Apple developed according to media reports, an electric car. For iPhone Group, this would be a radical advance in a completely different industry - but Apple wants this may be due to the auto supplier Magna International Show chartset.
"We have respect for any serious competitor," Zetsche said. "And if this is a company that has a strong economic background, which is undoubtedly a potential strength of a competitor."
However, the Daimler CEO made it clear that there is more than one hundred car brands in the world. "Some are in direct competition with us, others less so. Whether it is because a more or less, is irrelevant. We go our way."
Nevertheless, the Daimler CEO sees a growing area coverage between auto and IT industry, enables new potential. Problems but it could be data protection - such as the autonomous driving. "We need to look very closely, when data are generated for what purpose," Zetsche warned loudly "Handelsblatt". "The trust placed by a customer on us when it comes to security is particularly true for the security of its data."
New Cancer Technology Gives Investors a Shot in the Arm
Immunotherapy’s Promise Is Drawing Some Marquee Financiers
George Soros , Michael Milken and David Bonderman are among marquee investors benefiting from early bets on a red-hot sector: young companies developing drugs that fight cancer by using the body’s immune system.
Interest in the nascent approach, known as immunotherapy, has taken off following the success of Yervoy and Opdivo, a pair of drugs developed by giant Bristol-Myers Squibb Co. The treatments could generate $8.5 billion in annual revenue by 2020, Credit Suisse predicts, or more than half the New York company’s 2014 revenue of $15.9 billion.
Hopes that fledgling companies will repeat and extend upon those advances are behind the recent share-price gains in Juno Therapeutics Inc., Kite Pharma Inc. and bluebird bio Inc. Their treatments, which take a different approach than Bristol-Myers’s, haven’t yet reached the market.
“It’s clearly something new and it won’t be smooth sailing,” said Arie Belldegrun, Kite’s chairman and chief executive. “But if we can deliver what we promise, for the first time you won’t talk about remission, you can even talk about cure of cancer.”
Earlier this month, Standard & Poor’s released a report naming five cancer immunotherapy agents among its top 10 drug prospects for 2015, underscoring growing enthusiasm for the strategy. Drugs made the list for their likely blockbuster sales potential as well as their probable impact on individual companies. No such drugs were included on its previous list in 2009.
More companies are gaining “insights into underlying biology plus an understanding of biological systems that should transform the treatment of many extremely serious diseases,” said James E. Flynn, managing partner at Deerfield Management Co., an investment firm betting on the area.
Among companies fueling current interest, only Bristol-Myers and Merck & Co. have had immunotherapy drugs approved by the U.S. Food and Drug Administration. For many of the smaller-cap companies, it will be a year or more before studies help clarify the benefits, risks and market potential of their treatments.
Shares of Juno, which is developing therapies for leukemias and lymphomas, ended Friday’s trading at $45.52, following a December initial public offering at $24. Kite Pharma has soared to $62.80 from $28 since the beginning of October. Bluebird bio, driven more by advances by gene-therapy drugs than in immunotherapy, has climbed to $93.32 from $39 since early December.
The three companies’ treatments are complex, likely to be expensive and cause severe side effects for some patients; none has yet been approved. But the strategy has shown dramatic results in leukemia and other blood cancers in early trials and researchers are racing to find ways to extend their use to other cancers.
Indeed, researchers world-wide are working on various types of immunotherapy treatments, as well as strategies to combine them with existing treatments to tackle all kinds of cancer and extend their benefits to more patients.
Mr. Bonderman, a founder of TPG Capital, is Kite’s fourth-largest shareholder and a board member, with over 6% of the company’s stock from an early, personal investment, according to FactSet. He has seen his holdings soar to about $145 million in value.
Another early investor, hedge-fund veteran Donald Sussman, founder of Paloma Partners Management, holds a Kite stake worth about $100 million, according to regulatory filings. Representatives of Messrs. Bonderman and Sussman declined to comment.
George Soros’s Soros Fund Management owns about 1.7% of Kite Pharma Inc.’s shares. ENLARGE
George Soros’s Soros Fund Management owns about 1.7% of Kite Pharma Inc.’s shares. PHOTO: EUROPEAN PRESSPHOTO AGENCY
The firm that manages George’s Soros’s wealth, Soros Fund Management, is Kite’s 11th-largest holder. It owns about 1.7% of the company’s stock after purchasing the shares at less than $30 each last summer, according to filings. A spokesman declined to comment.
Michael Milken also was an early investor in the company, said Mr. Belldegrun. A spokesman for Mr. Milken, who declined to confirm the investment, said the former junk-bond king’s “more than four decades of philanthropic work in medical research and public health has given him a deep understanding of the potential for lifesaving advances.”
Deerfield Management owns about 4% of the shares of bluebird, according to the most recent filings, while Steve Cohen ’s Point72 Asset Management LP owns nearly 2% of the shares. A spokesman for Point72 didn’t comment.
Amazon.com Inc. founder Jeff Bezos and Microsoft Corp. co-founder Paul Allen are investors in Juno, says Robert Nelsen, co-founder of Seattle-based venture-capital firm Arch Venture Partners, which controls stakes worth about $1 billion in nearly a half dozen companies pursuing immunotherapy and other cancer treatments. Arch owns about $470 million in shares of Juno, a company Arch co-founded, as well as $78 million of bluebird.
“I have been creating biotech companies for 28 years and this is the first one where the jaded doctors who have seen everything and have lost hope are shaking their heads in amazement,” said Mr. Nelsen, a managing director at Arch, which manages more than $2 billion.
A spokesman for Mr. Allen confirmed his investment in Juno. A spokesman for Amazon.com declined to comment.
Pension funds and venture-capital funds also are among those riding immunotherapy investments higher. The Alaska Permanent Fund Corp. was an early investor in Juno and controls a nearly 30% stake in the company worth about $1.1 billion. The state investment fund has yet to cash out any shares.
Bristol and others working on immunotherapy drugs, including Merck, Roche Holding AG , AstraZeneca PLC and Novartis AG , are so large the financial impact of their immunotherapy drugs could be diluted by other businesses. That is why investors are bidding up smaller companies.
Not all the immunotherapy news has been upbeat, though: Dendreon Corp. , whose prostate cancer vaccine Provenge was hailed as the first immunotherapy at its approval in 2010, foundered amid limited efficacy, marketing gaffes, and better rival medicines. Dendreon is expected to be sold this month under bankruptcy court supervision to Valeant Pharmaceuticals International Inc. for $495 million.
The intense interest in immunotherapy, an idea that dates back to the 19th century, has emerged from a key discovery researcher James Allison made in the mid-1990s.
Dr. Allison, now the head of immunology at MD Anderson Cancer Center in Houston, discovered a way of releasing a natural brake on the immune system. Dr. Allison’s work paved the way for the development of Bristol-Myers’s Yervoy drug, which was approved in 2011 and was the first drug ever shown to improve survival in patients with advanced melanoma.
“Our understanding of the immune system, and how it interacts with cancer, has grown dramatically,” says Dr. Jill O’Donnell-Tormey, chief executive and director of scientific affairs at the Cancer Research Institute, which funds immunotherapy research.
The MacBook Air is getting serious competition from an unexpected source
Dell seems to have gotten a lot more innovative ever since going private. Both Ars Technica and AnandTech have just published reviews of Dell’s new XPS 13 ultrabook and they both came away very impressed.
RELATED: Dell’s decade of product flops shows the dangers of scrambling to follow Apple
AnandTech’s benchmarks, for instance, show that the FHD XPS 13 has insanely good battery life that bests the MacBook Air and every other laptop on the market in terms of both light and heavy usage. In its concluding remarks, AnandTech praised the XPS 13’s for having “high quality build materials, a good keyboard, a good trackpad, and the latest generation Intel Ultrabook processor all inside a chassis with a display that is two sizes too big stuffed into it.”
Ars, meanwhile, writes that the XPS 13 not only matches what Apple offers with the MacBook Air but actually beats it.
“It’s a 13-inch Ultrabook in the body of an 11-inch Ultrabook,” Ars writes. “This extraordinary size is paired with an attractive, high-resolution screen, nice keyboard, and a decent touchpad, and the whole unit feels solid and well-built.”
Dell first unveiled the XPS 13 at CES this year and at the time we were impressed by its display that’s as close to bezel-free as we’ve seen on an ultrabook. We can’t wait to try the machine out for ourselves to see if it matches up with the significant hype.
Ukraine military spokesperson Lysenko: Pro-Russia rebels building up forces and weapons in Ukraine's southeast; Potentially preparing to attack govt-controlled Mariupol - financial press
- Says: "They are sending out small sabotage groups out almost every night. We can see the activities of the enemy around Novoazovsk where military hardware, fighters and ammunition are being amassed."
Barrons Saturday summary: Positive on ANET, AAPL, HCA, SSP; Cautious on BNS
Cover story: Barrons annual list of the top 1,200 financial advisors and what they recommend; The average advisor and his or her team manages $2.42B this year, up from $2.16B in 2014 and $2.14B in 2013, with revenues rising accordingly.
Tech Trader: Positive on ANET: Company is emerging as a viable competitor to CSCO and could dent its dominance of the switching-equipment market; customers include MSFT and FB, and though shares are expensive, they may still be worth it if company doesnt make the mistakes JNPR did when it took on Cisco.
Trader: European stock markets have sharply outperformed the U.S. since the mid-correction last October in local currency terms, almost doubling up the S&P 500 indexs 13% rise; Cautious on BNS: By various metrics the shares appear cheap, and revenue should grow if firm can avoid any stumbles; The bottoms-up consensus of analysts anticipates a drop of 3.6% in Q1 earnings, according to Zacks, with energy-sector earnings likely to be down more than 60%.
Features: 1) Positive on Nasdaq: In 2000, the Nasdaq Composite traded at more than 100 times earnings, a far cry from 21 times earnings today; unlike during the dot-com era, strong profits now bolster it, and when the index tops 5000 again, it should stay there; 2) Positive on AAPL: Analysts are pushing shares up because they believe the iPhone has more upside, with only 15% or so of the user base having upgraded to the new model, and confidence in the Apple Watch is growing; shares could rise to more than $160 over the next year for a 25% return, including dividends; 3) Positive on HCA: Healthcare giants earnings could climb by 17% this year to reach a new high, and yet they trade in line with peers and the historical average.
Small Caps: Positive on SSP: Media company has a strong balance sheet and debt equal to two times annual cash flow once its merger with Journal Communications closes, and share buybacks are likely.
Profile: Interview with Peter Collery and David Hurwitz of SC Fundamental, which targets deeply undervalued securities that have low intrinsic volatility and which has generated net annualized returns of 12.2% since its founding; Interview with Tom Herzfeld of the Thomas J. Herzfeld Advisors (picks: KMF, FOFI, JQC, CCL, CX, CPA, LML, NCLH, RCL, SEB, VMC).
Follow-Up: Beijing has a tough job ahead as it seeks to balance pressure to further weaken the yuan with its desire to prevent a loss of confidence in the currency as a store of value; Positive on AAL: Company intends to raise profits and returns to shareholders, and isnt depending on lower jet fuel prices to do so.European
Trader: Positive on Ashtead Group (AHT.UK): Shares of British firm have dropped on fears about the U.K. economys exposure to the oil industry, but concerns could be overblown and shares could add 20% in the next 12 months.
Asian Trader: Chinese shares listed in Hong Kong could see a boost this year, the region could be the biggest beneficiary of easing by the Peoples Bank of China because it trailed other markets last year (Positive on FXI, GXC, CHL, PTR).
Emerging Markets: Positive on LTOUF, HDB, IBN, Bharti Infratel: Indian companies could do well if the countrys domestic-policy reforms proceed as planned.
Commodities: Arabica coffee prices are due for a rebound, but traders and analysts warn there are still risks to the current crop.
CEO Spotlight: PNRA chief Ron Shaich, who brought artisanal bread and pay-what-you-can cafes to the restaurant chains operations.
Streetwise: Columnist Ben Levisohn says discretionary stocks such as DIS, HD, and MCD could be headed for a drop, with valuation part of the problem. - Source TradeTheNews.com
Macro :
- Russia’s Ratings Cut to Junk by Moody’s
- Oettinger Says Greece Must Keep Consolidation Path: Handelsblatt
- Germany Declined to Sell Armoured Vehicles to Lithuania: Welt
- Draghi Aided Greek Talks W/ Warning on Finances, Pais Says
- Shared Sovereignty Means Greek Compromise, EU Schulz Tells Pais
- ECB Said to See No Need for Greek Capital Controls After Deal
Keep an eye on :
- ARL GY : Aareal Bank Group Buys Westdeutsche Immobilienbank for EU350m
- AERL LN : Aer Lingus Staff Support IAG Takeover Bid, Business Post Reports
- BPI IM : CaixaBank’s Offer for BPI Is ‘Very Generous,’ CEO Tells Expresso
- CNHI IM : Iveco to Boost Czech Bus Output by 37%, Add Over 450 Jobs: CTK
- DAI GY : Mercedes Recalls 147,224 Vehicles on Hood Seal Fire Risk: NHTSA
- DBK GY : Deutsche Bank Considers Chinese Hua Xia Bank Stake Sale: WiWo
- DTE GY : Deutsche Telekom Buys 64% of DSW to Offer Sport Bets: Morgenpost
- EVD GY : Eventim Probed by German Antitrust Regulator: Die Welt
- GTO NA : Deutsche Telekom Encrypted Gemalto SIM Cards Prior to Spy Report
- LAD LN : Ladbrokes to Close About 50 Betting Shops, Sunday Times Reports
- NESN VX : Nestle Doesn’t Plan Outsourcing, Cantarell Says: SaS
- NUO NA : Water Island Capital Reports 3.17% Stake in Nutreco: AFM Filing
- 1913 HK : Prada Preliminary Sales for FY Ended Jan 31 Fall 1% to EUR3.55b
- PMO LN : Premier Oil to Lower Spending, May Cut Dividend: Sunday Times
- ROG VX : Roche to Outsource Avastin Production to Samsung, SaS Reports
- SGO FP : Saint-Gobain CEO Doesn’t Plan Swiss Job Cuts: Neue Zuger
- SHP LN : Shire Completes Purchase of NPS Pharmaceuticals
- UHR VX : Swatch Won’t Reduce Prices, CEO Hayek Says: Sonntagszeitung
- TCG LN : Thomas Cook Held Talks With Potential Buyers of Airline: Times
- TTKOM TI : Turk Telekom Mobile Unit Avea 2014 Sales Rose 12% to 4.31b Liras
- FP FP : Total CEO Expects Rising Oil Prices: Frankfurter Allgemeine