>>> What to look at today - 8th of January 2015

Dow +1,23% S&P +1,16% Nasdaq +1,26% Russell +1,26% VIX @ 19.31 -8.57%
US Market Closed Higher with First gain in six sessions,started to be volatile and show some strenght after news of willingness of German officials to restructure Greek Debt (debt write-off is not being discussed, but repayment terms may be eased.), FOMC Dec. Minutes didn't added anyhting new ( Patient statement repated.)...Telco Services only decliner sector in the us (-1.4%)...volume were just below average @ 758mil shares...US After Hours MG +13.1%, EXFO +8.8%, RECN +4.9%, PODD -7.9%, WDFC -5.2% following earnings/guidance...During the Asian session, one of the FOMC's more dovish members, Chicago's Evans, added he'd like to see rates on hold until 2016. Evans also noted that inflation outlook is worrisome, growth would trend in 2.0-2.25% range, and the housing sector is yet to show evidence of required strength... Samsung Electronics rose about 2% at the open but pared some gains after reporting better than expected prelim Q4. Despite posting its 5th straight quarter of declining op profit y/y, KRW5.2T op profit was still better than KRW4.8T expected. Reports also suggest Samsung's mobile Division Q4 may be improving relative to Q3...Shanghai Composite has lost some momentum after a torrid end of 2014 and is also lagging other regional indices today. China Pres Xi stated the economy has entered a "new normal", expecting mid-high rate of economic growth...
Nikkei +1.67% Hang Seng +0.65% Shanghai -1.98%

RUB $61.41 RUB €73.02 WTI $48.93 Brent $51.27

Eur$ 1.1822 S&P +0.72% EuroStoxx +1.89% Dax +1.63% SMI +0.98%

Macro :
- German Factory Orders Fell in November Amid Uncertain Outlook
- Many on FOMC Saw Possible Spillover From Deterioration Overseas
- MSCI Top Holders Call for Breakup of Business, FT Says
- Greece Uncertainty Is Credit Negative for Banks, Moody’s Says
- Soros Says Ukraine Crisis Bigger Threat to EU Than Greece: FT

Keep an eye on :
- ACS SM : ACS to Press Ahead With Renewables Unit Sale, Confidencial Says
- AER LN : Aer Lingus CEO Christoph Mueller to Step Down Feb. 28
- BBVA SM : Bbva Says to Issue 53.6m New Shares for ‘Dividend Option’
- CDA FP : Compagnie Des Alpes to Sell 2 Leisure Parks to Aspro: Echos
- CGG FP : CGG Sees Net Debt Reduced to Around $2.43b at End 2014
- CRG IM : Italy’s Bonomi Interested in ‘Significant’ Carige Stake: Reuters {http://reut.rs/14vMWJv}
- DAI GY : Daimler Asks Hackers to Test Car Defense: Frankfurter Allgemeine
- GLPG NA : Galapagos Starts Phase 2 Trial of GLPG1205 in Ulcerative Colitis
- HAS LN : Hays Targets Tripling of China Staff in 4-5 Years, CEO Says
- NOVN VX : Novartis Biosimilar of Amgen’s Neupogen Wins FDA Panel Backing
- PTC PL : Portugal Telecom Naked Short-Selling Suspended by Regulator
- PTC PL : Portugal Telecom EGM to Take Place as Scheduled Jan. 12
- RB/ LN : Reckitt’s Planned K-Y Purchase Faces In-Depth Antitrust Probe
- RIGN VX : Transocean Inc. Ratings May be Cut to Junk by S&P
- SPD LN : Sports Direct Founder to Shut About Third USC Stores: Telegraph
- TIT IM : F2i CEO to Discuss Metroweb With Telecom Italia Today: Corriere
- VAN BB : Van de Velde 2014 Sales Rise 8.8% to EU198.5m Y/y

>>> Brokers Upgrades & Downgrades - 8th of January 2015

>>> Up
*AB INBEV RAISED TO BUY VS NEUTRAL AT NOMURA
*ALCATEL-LUCENT RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*AKZO NOBEL RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*BILFINGER RAISED TO BUY FROM HOLD AT BANKHAUS LAMPE
*RIO TINTO RAISED TO SECTOR PERFORMER AT CIBC
*SAP RAISED TO BUY VS HOLD AT EVERCORE ISI, PT $81
*SCHNEIDER RAISED FROM HOLD TO BUY AT SOCGEN
*TELEKOM AUSTRIA RAISED TO OUTPERFORM AT RBC CAPITAL

>>> Down
*ABB LTD CUT TO SELL VS HOLD AT SOCGEN
*AKZO NOBEL RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*DIAGEO CUT TO NEUTRAL VS BUY AT NOMURA
*ELISA CUT TO HOLD FROM BUY AT NORDEA
*ERICSSON CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*FOXTONS CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
*MILLICOM CUT TO SECTOR PERFORM AT RBC CAPITAL
*PERSIMMON CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
*SAGE CUT TO SELL VS NEUTRAL AT UBS
*SAP CUT TO NEUTRAL VS BUY AT UBS
*TUI AG CUT TO NEUTRAL VS BUY AT CITI

>>> PT Change


>>> Initiation
*ACERINOX RATED NEW HOLD AT JEFFERIES, PT EU13
*APERAM RATED NEW BUY AT JEFFERIES, PT EU30
*EUROCASH RATED NEW UNDERWEIGHT AT BARCLAYS
*INGENICO RATED NEW OVERWEIGHT AT HSBC, PT EU105
*NOSTRUM OIL & GAS RATED NEW BUY AT NUMIS, PT 800P
*OUTOKUMPU RATED NEW BUY AT JEFFERIES, PT EU6
*VIRGIN MONEY RATED NEW BUY AT CITI, PT 410P
*WIRECARD RATED NEW OVERWEIGHT AT HSBC, PT EU42
*WORLDLINE RATED NEW NEUTRAL AT HSBC, PT EU17.50

>>> Call
>> Stock
*BOLIDEN, WILLIAM DEMANT ADDED TO CITI EUROPE KEY BUYS LIST
*PANDORA, PADDY POWER REMOVED FROM CITI EUROPE KEY BUYS LIST
*SBERBANK ADDED TO GOLDMAN CEEMEA FOCUS LIST

FT : Save Ukraine to counter Russia, says Soros

Billionaire investor George Soros has accused western leaders of dangerously miscalculating their strategy towards Russia and Ukraine, arguing that the crisis there posed a lethal risk to the eurozone.
In an interview with the Financial Times, the Hungarian-born philanthropist complained that European leaders were treating Ukraine as “just another country” in need of financial assistance rather than realising that the crisis on the EU’s eastern border posed a greater danger to Europe’s economy, and even the survival of the EU, than the Greek election.
Mr Soros said sanctions on Moscow were having a far deeper effect than western leaders had ever imagined because of the collapse in oil prices and added that a Russian debt default would “not be surprising”.

“Sanctions against Russia reinforce the deflationary and recessionary pressures that were already present [in Europe] but have now become a reality,” Mr Soros said. “A default would be a big blow to European banks exposed to Russia.”
He added that Russia’s financial meltdown represented a strategic as well as an economic threat to Europe, with Moscow’s policy likely to become even more aggressively nationalist as the economy deteriorated.
Despite those dangers, Mr Soros stressed that he was not calling for the easing of sanctions, which were a “necessary evil” to push Russian forces out of Ukraine.
Instead, he said the US and EU were making a big mistake by failing to back up their sanctions with a massive financial support programme for Ukraine, which he estimated would have to run to $50bn and would need to be approved in the first quarter of 2015.
The 84-year-old hedge fund financier said Europe needed to “wake up” and accept that it was under attack from Russia. “Assisting Ukraine should be seen as a defence measure by European countries,” he said. “The US and the Europeans are determined to avoid a war but unless they balance sanctions with support for Ukraine, they may well have one.”

Mr Soros was speaking before the publication of an essay in The New York Review of Books where he lays out detailed proposals for how a $50bn support plan for Ukraine could be marshalled by international institutions, including the EU and International Monetary Fund.
This massively expanded financial firepower, he argued, was the only way Europe could counter Moscow’s nationalist expansionism and save Ukraine from a bankruptcy that would strengthen hardliners in Russia. “Hopefully, Russia’s troubles and Ukraine’s progress would persuade President Vladimir Putin to give up as a lost cause his attempts to destabilise Ukraine,” Mr Soros wrote in his essay.
However, EU leaders are reluctant to provide more funds and even struggled to raise €1bn for the fight against Ebola. Similarly, western nations are holding back on pumping fresh money into Ukraine until they see evidence of reform in Kiev. European officials balked last month at the idea of extra support for Ukraine when the IMF identified a $15bn funding gap.
For Mr Soros, this was evidence that western leaders had not understood Russia’s ambitions to undermine the EU itself, supporting anti-bloc politicians and using gas exports to play countries off against each other. “The EU itself is disintegrating,” he said. “Russia offers an alternative view of the world — force rather than rule of law”.
Mr Soros said an economic rescue of Ukraine would change Russian politics. While a Ukrainian bankruptcy would cement the power of hardliners, he said economic regeneration in the country, led by the EU and US, would bolster a more western-looking opposition in Russia.
Mr Soros, infamous for betting against the pound in 1992, made no attempt to disguise his bias for Ukraine where he established a foundation in 1990 and said the country was ripe for investment.
He said western companies looking for Ukraine’s growth areas should turn to its energy networks and the agricultural sector of the Soviet Union’s former breadbasket. The most lucrative area would be improving the efficiency of the country’s power and heating networks, which are 10 times more energy intensive than the average in the OECD, the Paris based group of countries that aims to promote sustainable growth.
“For investment, energy efficiency is tops and agriculture has great potential as number two,” Mr Soros said.

>>> Asian Update

Asian Mid-session Update: Markets recover as oil advances; Samsung Electronics rallies after prelim Q4

***Economic Data***
- (AU) AUSTRALIA NOV BUILDING APPROVALS M/M: +7.5% (2nd month of increase) V -3.0%E; Y/Y: 10.1% (3-month high) V 1.2%E
- (JP) Japan Dec Tokyo Average Office Vacancies: 5.5% v 5.6% prior

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +1.8%, S&P/ASX +0.3%, Kospi +1.0%, Shanghai Composite -1.8%, Hang Seng +0.5%, Mar S&P500 +0.6% at 2,032

***Commodities/Fixed Income***
- Feb gold -0.4% at $1,206, Feb crude oil +0.9% at $49.10/brl, Mar Copper +0.2% at $2.76/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 3.0 tonnes to 704.8 tonnes; Lowest level since Sept 2008
- (CN) China said to have imported record amount of crude oil of over 31M tonnes (or over 7M bpd) in Dec - financial press
- JGB: (JP) Japan MoF sells ¥500B in 0.1% 10-year CPI-linked Bonds; Bid-to-cover ratio: 2.97x v 2.11x prior
- (JP) Japan investors bought net ¥19.7B in foreign bonds v sold ¥1.36T in prior week; Foreign investors sold net ¥40.7B in Japan stocks v sold ¥387.1B in prior week
- (CN) PBoC won't conduct open market operations (OMO) in today's session (12th consecutive halt); Net zero position this week (4th week of neutral position)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1302 v 6.1269 prior setting (weakest Yuan setting since Dec 4th)

***Market Focal Points/Key Themes/FX***
- US equities broke a string of 5 consecutive losing sessions with robust gains, and S&P futures are pointing to another strong open on Thursday. Fed minutes clarified that participants thought the "reference to patience indicated that the Committee was unlikely to begin the normalization process for at least the next couple of meetings", potentially signaling that as long as "patience" remains in the statement, liftoff in rates is a couple meetings away. During the Asian session, one of the FOMC's more dovish members, Chicago's Evans, added he'd like to see rates on hold until 2016. Evans also noted that inflation outlook is worrisome, growth would trend in 2.0-2.25% range, and the housing sector is yet to show evidence of required strength. Despite the dovish remarks, USD is still a bit firmer in the key majors with USD/JPY up 60pips above 119.70 on risk appetite.

- South Korea's Samsung Electronics rose about 2% at the open but pared some gains after reporting better than expected prelim Q4. Despite posting its 5th straight quarter of declining op profit y/y, KRW5.2T op profit was still better than KRW4.8T expected. Reports also suggest Samsung's mobile Division Q4 may be improving relative to Q3.

- Down under, Australia Building Approvals were much stronger than expected, as y/y 10.1% increase was a 3-month high. Meanwhile, CBA and BNZ pushed back their respective expectations for tightening by RBA and RBNZ to Q1 of 2016 from late 2015. AUD/USD is up about 40pips from the lows above $0.8110 in late afternoon session.

- Shanghai Composite has lost some momentum after a torrid end of 2014 and is also lagging other regional indices today. China Pres Xi stated the economy has entered a "new normal", expecting mid-high rate of economic growth. Separately, NDRC planning agency announced the govt is promoting 7 large fiscal packages which would be different from projects planned in 2008. Researcher with China Academy of Social Sciences (CASS) noted PBoC may lower RRR again in 2015, while the deposit/lending rate cuts would be determined by continued retreat in CPI figures.

***Equities***
US markets:
- NRX: Announces that the European Medicines Agency Supports the Company's Study Design for Ongoing Trial in Diabetic Nephropathy; +18.8% afterhours
- EXFO: Board authroizes C$30M issuer bid (30% of market cap); +9.1% afterhours
- RECN: Reports Q2 $0.21 v $0.16e, R$151.5M v $148Me; +5.5% afterhours
- ZUMZ: Reports Dec SSS +8.0% v 6.3% m/m; Raises Q4 guidance to $0.75-0.76 v $0.73e, Rev $255-256M v $252Me (guided Q4 $0.69-0.72, R$249-251M prior); +3.3% afterhours
- ALXN: Phase 2 Clinical Trial with Eculizumab in Antibody Mediated Rejection (AMR) in Living-Donor Kidney Transplant Recipients did not meet primary composite endpoint; -5.3% afterhours
- WDFC: Reports Q1 $0.73 v $0.80e, R$96.4M v $98.8Me; -5.7% afterhours
- PODD: Guides Q4 lower to R$71-73M v $79.4Me; -7.9% afterhours

Notable movers by sector:
- Consumer Discretionary: Qantas Airways QAN.AU -2.3% (shareholder cuts stake)
- Financials: Evergrande Real Estate 3333.HK +0.9% (Dec sales result); Standard Chartered 2888.HK +2.1% (to close down cash equities business and cut jobs)
- Materials: Doray Minerals DRM.AU +4.2% (Q4 gold production)
- Energy: Xiangtan Electric Manufactruing [600416.CN] +1.6% (awarded major contract)
- Industrials: COSCO Shipping 600428.CN +0.6% (to issue shares to invest in shipbuilding projects)
- Technology: Samsung Electronics 005930.KR +0.5% (prelim Q4 results)
- Healthcare: Kyowa Hakko Kirin 4151.JP +3.7% (announces cooperation with Syndax)

FT : Scientists hail antibiotic to foil resistance



Scientists hail antibiotic to foil resistance


An international public-private collaboration has come up with a promising antibiotic, to which bacteria are unlikely to become resistant for several decades. The drug, called teixobactin, quickly cleared infections in animal tests without side effects.
Although it is at least two years from clinical trials and five years from commercial availability, microbiologists hailed teixobactin as an exciting discovery at a time when politicians and public health leaders worldwide are flagging up the urgent need for drugs to tackle the problem of antibiotic resistance. Details are published in the journal Nature.
Teixobactin comes from a research partnership involving Northeastern University in Boston, the University of Bonn and NovoBiotic Pharmaceuticals, one of several US biotechnology companies developing antibiotics.

“We estimate that the evolution of resistance [to teixobactin] will take more than 30 years,” said Kim Lewis of Northeastern, the project leader. “It rapidly clears infection, so we will not need a lengthy regimen of treatment, and it shows excellent activity against hard-to-treat bugs.”
Most antibiotics are derived from soil bacteria, which make the chemicals to kill competing microbes. NovoBiotic has extended this approach with technology that enables researchers to grow species that would not survive in traditional laboratory cultures.
The scientists used a special “diffusion chamber” within the soil to culture microbes that would not grow in normal lab conditions. Screening of these rare species identified a previously unknown species, Elephtheria terrae, which makes teixobactin.
Teixobactin quickly kills Gram-positive bacteria, which are prominent in discussions of antibiotic resistance, including Clostridium difficile, Mycobacterium tuberculosis and Staphylococcus aureus.
Neil Woodford, head of the antimicrobial resistance unit at Public Health England, commented:
“The rise in antibiotic resistance is a threat to modern healthcare as we know it, so this discovery could potentially help to bridge the ever increasing gap between infections and the medicines we have available to treat them.”
But Prof Woodford added: “Although it is a step forward, this new discovery would not be suitable for treating infections caused by E. coli, Klebsiella or other Gram-negative bacteria.”
Teixobactin kills bacteria by breaking down their cell walls, a mode of action similar to vancomycin, which doctors sometimes use as an antibiotic of last resort to treat drug-resistant infections.

They hope that their original approach to bacterial cultivation and screening will soon yield other promising antibiotics, including ones active against Gram-negative bacteria.
“The screening tool developed by these researchers could be a ‘game changer’ for discovering new antibiotics as it allows compounds to be isolated from soil-producing micro-organisms that do not grow under normal laboratory conditions,” commented Laura Piddock, microbiology professor at the University of Birmingham.
Gerard Wright, an antibiotics researcher at McMaster University in Canada, added: “In a field dominated by doom and gloom [the NovoBiotic collaboration] offers hope that innovation and creativity can combine to solve the antibiotics crisis.”

>>> US After Hours Summary: MG +13.1%, EXFO +8.8%, RECN +4.9%, PODD -7

After Hours Summary: MG +13.1%, EXFO +8.8%, RECN +4.9%, PODD -7.9%, WDFC -5.2% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: MG +13.1%, EXFO +8.8%, RECN +4.9%, ZUMZ +2.7%, XEL +1.4%

Companies trading higher in after hours in reaction to news: BIOD +29.7% (announced positive preliminary results from Study 3-151; data demonstrate That BIOD-531 provides superior glucose control compared to Humalog Mix 75/25 and Humulin R U-500), BIND +26.2% (provided clinical update for BIND-014 and 2015 strategic overview; co achieved development milestone as part of the Pfizer collaboration), NRX +19.3% (received positive Scientific Advice from the European Medicines Agency regarding their Phase 3 program with Pyridorin in diabetic nephropathy), VLCCF +14.5% (announced entry into an agreement with RWE Supply & Trading for chartering out a total of 15 Capesize vessels on long term contracts), RARE +7.3% (announced license of intellectual property related to the treatment of Huntington's Disease with Triheptanoin), MERU +3.1% (Vertex Special Opportunities Fund files amended 13D; believes retention of Deutsche Bank was a step in the right direction), BALT +1.4% (co entered into new $148 mln credit facility; co has taken delivery of the Baltic Wasp, a 64,000 dwt Ultramax newbuilding)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: PODD -7.9%, WDFC -5.2%

Companies trading lower in after hours in reaction to news: ALXN -4.8% (reported results from Phase 2 clinical trial to determine the safety and efficacy of eculizumab in the prevention of antibody mediated rejection; primary composite endpoint did not reach statistical significance), AFSI -3.7% (announced the commencement of public offering of 3 mln shares common stock), MPW -3.1% (announced that it has commenced an offering to sell 30 million shares of its common stock in an underwritten public offering), STML -2.1% (announced proposed public offering of common stock, size not disclosed)

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Portfolio Ticker Matches:  WRAPX



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RVBD Quick Background Summary




 

From November of 2013 through early January of 2014 prior to the receipt of Elliott’s proposal, Riverbed and representatives of its financial advisor received six unsolicited inbound inquiries from private equity firms, including Thoma Bravo, soliciting Riverbed’s interest in an acquisition transaction. Based on the Board of Directors’ determination to proceed with management’s standalone operating plan, however, Riverbed’s Board of Directors determined that Riverbed should not engage in substantive discussions with any of the parties at such time.

 

On February 25, 2014, Elliott announced that it was increasing its offer price for Riverbed to $21.00 per share.

 

Throughout October and November of 2014, at the request of the Board of Directors, representatives of Riverbed’s financial advisors began a strategic and financial alternatives review and solicitation process of potential acquirors for Riverbed, and contacted twenty-three parties (ten strategic parties and thirteen private equity firms). Such parties included all of the private equity firms and the strategic party which had previously contacted representatives of Riverbed or its financial advisors to express their interest in an acquisition of the entire company, including Thoma Bravo and Party A. On October 17, 2014, financial and legal advisors to Riverbed also contacted Elliott and its legal advisors, and provided Elliott with a form of non-disclosure agreement.

 

From that solicitation process, seven private equity firms entered into non-disclosure agreements, containing standstill provisions that permitted the making of confidential proposals and which automatically terminated upon Riverbed’s entry into a merger agreement. Such interested parties attended management presentations delivered by Riverbed management in the period of October 27, 2014 to November 7, 2014, including one delivered to Thoma Bravo on October 28, 2014, and were granted access to an electronic dataroom containing additional non-public information regarding Riverbed.

 

On November 18, 2014, Riverbed received preliminary indications of interest from Thoma Bravo at $21.75 per share and from two of the other participants in the process: Party A, at between $21.00 to $22.00 per share, and another bidder, hereinafter referred to as Party B, at $21.00 per share.

The other five parties who received process letters declined to participate further in the process.

 

On the afternoon of November 20, 2014, representatives of Riverbed’s financial advisors communicated to Thoma Bravo the Board of Directors’ $24.50 per share proposal. On the same day, Thoma Bravo declined to make a revised offer at $24.50 but requested to remain in the bid process at its bid of $21.75 per share.

 

On November 22, 2014, Party A made a request to Riverbed that it be permitted to partner with a third-party private equity firm. Riverbed granted the request, and the additional private equity firm, hereinafter referred to as Party C, joined the process as a potential co-bidder with Party A.

 

Also on December 5, 2014, one of Riverbed’s executive officers had a meeting with the Chief Executive Officer of Party D, in which the individuals discussed potential rationales for an acquisition of Riverbed by Party D. No pricing or other terms of an acquisition were discussed.

 

On December 12, 2014, Riverbed received final bids from three parties participating in the process — Thoma Bravo, Party A (without Party C) and Party B.

 

 

 

•

 

Thoma Bravo’s revised bid was at $20.50 per share, down from its initial indication of $21.75, which Thoma Bravo indicated was based on a variety of factors relating to its due diligence and updates to its financial model. The proposal was also accompanied by fully-executed equity and debt financing commitment letters, as well as a markup of the merger agreement that was substantially negotiated with WSGR.

 

 

•

 

Party B’s final bid maintained the same $21.00 per share price indicated in its original bid. In its bid letter, Party B indicated that it was continuing to have conversations with debt financing sources but did not yet have committed financing on hand. It further attached lists of supplemental due diligence requests, upon which its final bid would be contingent, as well as a markup of the merger agreement and indicated that it would require an additional three weeks to be in a position to sign a definitive merger agreement.

 

 

•

 

Party A’s revised bid was at an indicative range of $17.50 to $19.00 per share. Party A indicated that it did not have committed debt financing, and that it would require an additional four to six weeks to complete due diligence. Party A’s bid was not accompanied by any markup of the merger agreement.

Party D did not submit a bid. Party D indicated that, although it continued to have interest in acquiring Riverbed, it was unable to make a binding proposal or to provide an indication of value at this time, and that its internal processes would prevent Party D from entering into a binding agreement with Riverbed until well into January 2015, at the earliest.

On December 13, 2014, After discussion, the Board of Directors instructed representatives of Riverbed’s financial advisors to engage with Thoma Bravo to improve its bid in the following respects: (1) to improve the price per share of the offer, (2) to increase the termination fee payable to Riverbed in the event of a financing failure, (3) to strengthen the prohibitions on Thoma Bravo taking actions that would increase the regulatory risk that the transaction would not receive required regulatory clearances, and (4) to remove the requirement to deliver a voting agreement in support of the transaction from Elliott. The Board of Directors determined not to further engage with Party A, Party B or Party D pending resolution of negotiations with Thoma Bravo on the foregoing, as the Board of Directors placed significant value on the deal certainty offered by Thoma Bravo. 

Later in the day on December 13, 2014, Thoma Bravo contacted Mr. Kennelly, and indicated that it would be willing to raise the price per share to $21.00 in exchange for an informal commitment from Mr. Kennelly to remain with Riverbed for a minimum of two years post-closing, and to continue to take steps to improve Riverbed’s financial performance. Mr. Kennelly orally agreed to the Thoma Bravo requests. Thoma Bravo then communicated to representatives of Riverbed’s financial advisors that it was willing to offer $21.00 per share.

On December 14, 2014, the Board of Directors reconvened in a special meeting to consider the terms of the proposed transaction. Also participating were certain members of Riverbed’s management and representatives of Qatalyst Partners, Goldman Sachs and WSGR. The representatives of WSGR reviewed the terms of the draft merger agreement and described changes to the merger agreement which were finalized in the early morning with K&E, and reviewed certain other matters. The Board of Directors also discussed its view that the deal certainty of Thoma Bravo’s offer at a price of $21.00 per share made it superior to Party B’s bid and preferable to extending the process for Party B or Party D to complete further diligence.

 

 

 

 

 

 

 

 

 

>>> US Close Dow +1,23% S&P +1,16% Nasdaq +1,26% Russell +1,26%

Closing Market Summary: S&P 500 Logs First Advance In 2015

The major averages rebounded from their recent swoon with the S&P 500 (+1.2%) posting its first gain in six sessions. The benchmark index settled just behind the Nasdaq Composite (+1.3%) while the Dow Jones Industrial Average (+1.2%) and Russell 2000 (+1.2%) ended in-line with the S&P 500.

The midweek advance occurred in two stages with the market climbing out of the gate amid upbeat action overseas. The S&P 500 notched its morning high 30 minutes after the opening bell, but returned to its opening level two hours after the start of the session. Equity indices then charged to new highs after Bloomberg reported that German officials are expected to show willingness to restructure Greek debt. The report said that a debt write-off is not being discussed, but repayment terms may be eased.

Stocks caught a second wind following the Bloomberg report and spent the remainder of the session near their afternoon highs, all but ignoring the FOMC minutes from the December meeting. The lack of reaction was understandable, considering the document did not introduce anything ‘new' in particular.

According to the minutes, the Fed's intent to be ‘patient,' which was announced by Janet Yellen in the December press conference, means that a rate hike will not occur in the next couple of meetings.

Nine of ten sectors ended in the green with health care (+2.3%) spending the entire session in the lead. The countercyclical sector was underpinned by biotechnology with the iShares Nasdaq Biotechnology ETF (IBB 312.00, +11.19) surging 3.7%. The strong showing from the high-beta group kept the Nasdaq ahead of S&P 500 for the bulk of the session. Meanwhile, top-weighted technology names were not as strong. Apple (AAPL 107.75, +1.49) and Microsoft (MSFT 46.23, +0.58) posted solid gains while Google (GOOGL 505.15, -1.49) and IBM (IBM 155.05, -1.02) could not stay out of the red, resulting in daylong underperformance from the technology sector (+0.9%).

As for the remaining cyclical groups, consumer discretionary (+1.5%) was the only growth-sensitive sector able to finish ahead of the broader market thanks to broad support. Retailers climbed with the SPDR S&P Retail ETF (XRT 95.70, +2.44) adding 2.6% while homebuilders had an even stronger showing. The iShares Dow Jones US Home Construction ETF (ITB 25.93, +0.82) spiked 3.3%.

Elsewhere, the energy sector (+0.3%) was among the early leaders, but finished the day just north of its low. For its part, crude oil alternated between gains and losses before ending the pit session higher by 1.5% at $48.70/bbl.

On the downside, the telecom services sector (-1.4%) represented the lone decliner, spending the entire session in negative territory.

Treasuries ended the day in the middle of their range with the 10-yr yield up one basis point at 1.96% after marking an intraday high just above 2.00%. The benchmark note climbed after the release of the FOMC minutes, suggesting fixed income traders were not concerned with a possibility of a swift rate hike.

Participation was just short of recent averages with 758 million shares changing hands at the NYSE floor. Economic data released this morning was limited to ADP Employment, Trade Deficit, and the MBA Mortgage Index:
  • The ADP National Employment Report revealed that employment in the nonfarm private business sector rose 241K in December while the consensus expected an increase of 230K 
    • The November reading was revised up to 227,000 from 208,000 
  • The U.S. trade deficit declined to $39.00 billion in November from a downwardly revised $42.20 billion (from $43.40 billion) in October while the consensus expected a decline to $41.80 billion 
    • That was the smallest trade deficit since December 2013 (-$37.40 billion) 
    • Even though U.S. petroleum producers have increased their exports of petroleum-based products over the last few years, the U.S. is still a net importer of crude products. The fall in oil prices had a larger impact in lowering total imports than reducing exports, which led to the smaller trade deficit in November. 
  • The MBA Mortgage Index, which was not reported last week, rose 11.1%, but fell 9.1% over the two-week period since the last update 
Tomorrow, the Challenger Job Cuts report for December will be released at 7:30 ET while weekly Initial Claims will be reported at 8:30 ET (consensus 290K). The day's data will be topped off with the November Consumer Credit report (consensus $15.00 billion), which is slated for a 14:00 ET release.
  • Dow Jones Industrial Average -1.3% YTD 
  • S&P 500 -1.6% YTD 
  • Nasdaq Composite -1.8% YTD 
  • Russell 2000 -2.4% YTD

WSJ : Most of Money Raised by Bill Gross at Janus Originated From His Financial

Most of Money Raised by Bill Gross at Janus Originated From His Financial Advisers’ Brokerage
Brokerage Routed More Than $700 Million to Gross’s New Fund in October and November

A majority of money raised in recent months by Bill Gross for new employer Janus Capital Group Inc. came from the Southern California brokerage office where one of Mr. Gross’s personal financial advisers works, according to industry executives who have viewed confidential brokerage data.

The Morgan Stanley wealth-management office in La Jolla, Calif. routed more than $700 million to Mr. Gross’s Janus Global Unconstrained Bond fund in October and November, according to people familiar with the matter who viewed brokerage-firm client data from Albridge, a data company owned by Bank of New York Mellon Corp. The transfers, which were viewed by the industry executives, accounted for more than 60% of the roughly $1.1 billion raised by Mr. Gross in the first few months after he left Pacific Investment Management Co.

It isn’t clear whether the money originated from one investor or one financial adviser, or from more than one. But industry executives say it is extremely rare for one firm or office to account for such a large percentage of a fund’s incoming cash.

The investor inflows into the Janus Global Unconstrained Bond fund in October and November were critical because they helped push the fund past $1 billion in assets under management, a key threshold for large investors, according to investors and analysts. Despite Mr. Gross’s star power, some large pension funds and their consultants have said they couldn’t previously consider his fund because of its small size.

A spokesman for Denver-based Janus said the firm doesn’t comment on specific fund shareholders and their investments “as a matter of policy and out of respect for the privacy of the firms we serve and their mutual fund investors.” The spokesman also wouldn’t comment on how much of the fund is made up of Mr. Gross’s money. A spokeswoman for Morgan Stanley declined to comment.


After questions from The Wall Street Journal, Janus Capital on Wednesday tweeted a comment purportedly from Mr. Gross. The tweet read: “Thanks @KirstenGrind @WSJ for upcoming article – yes I do believe in and invest in Janus Global Unconstrained Bond Fund!”