(GS STrat) GOAL : 2015 Outlook : Long grind higher in risky assets, lower bond r

Long grind higher in risky assets, lower bond returns

>>> A broadening recovery with low inflation and easier policy
We expect the growth recovery to broaden as global growth picks up to
3.4% in 2015 from 3% in 2014. Inflation is likely to remain low, in part due
to declines in commodity prices, and as a result monetary policy should
remain easy. We think this backdrop supports a pro-risk asset allocation.

>>> Views across asset classes
* Equities: We remain overweight. We expect the long grind higher in
equities to continue, but at lower returns than in recent years as earnings
growth takes over as the key driver. We think there is potential for further
multiple expansion in Europe as a result of central bank easing.
* Government bonds: We remain underweight on both a 3- and 12-month
horizon. After another year of falling bond yields, we believe the return
potential for bonds is increasingly limited. We think term premia are too
low with the start of a Fed hiking cycle moving closer and that yields will
increase. However, in the near-term global central bank easing and low
inflation are likely to limit increases in bond yields.
* Credit: Underweight for credit on a 12-month basis, neutral on 3-month.
We expect further spread compression as investors move up the risk curve
in the low volatility environment. On a 12-month basis we see total return
potential as limited with the increase in bond yields. But, near-term credit
is likely to be supported by central bank easing, so we are neutral.
* Commodities: We stay neutral after the recent large declines in oil prices.
We expect oil prices to stabilize, but uncertainty remains high in the nearterm.
Outside of oil we expect increased dispersion in performance, mainly
driven by supply, with downside for copper and upside for nickel.

RTR - Israel tax evasion probe at UBS leads to 28 arrests

Dec 8 (Reuters) - Israel has arrested 28 people so far as part of an investigation into Israelis allegedly holding undisclosed bank accounts with Swiss bank UBS, the Tax Authority said on Monday.

"The investigation continues and more arrests are expected," the authority said in a statement, noting that the suspects had been released on bail.

"During the investigation it was revealed ... that at UBS in Switzerland thousands of accounts held by Israelis are being managed, and it is suspected that the vast majority of money held in the accounts is not reported to the tax authority," it said.

There have been no indictments yet as the investigation is ongoing.

A UBS spokesman in Zurich said the bank as well as its Israel office are not part of the investigation and would not comment further.

Israel is starting to crack down on foreign bank accounts held by its citizens after a similar move by the United States to track accounts held by Americans abroad.

Last month, Israel's Tax Authority said the allegedly undisclosed bank accounts at UBS were worth millions of euros.

>>> DRIV - Shares trading down 23%; no new information on its pending takeover

Shares trading down 23%; no new information on its pending takeover by Siris Capital 
- Earlier in a filing DRIV gave an update on its agreement with Microsoft: "Digital River, Inc. (the Company) today announced that it has granted Microsoft Corporation (Microsoft) an extension from December 1, 2014 to December 19, 2014 as the deadline by which Microsoft is required to provide prior notice to the Company of its decision as to whether to elect to extend the expiration date of the Microsoft Operations Digital Distribution Agreement between the Company and Microsoft, dated September 1, 2006, as amended to date."

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: MYCC -13.5% (also says REIT conversion not a viable option today), MCD -2.7% (November comps -2.2%), BTU -0.6% (ticking lower; reaffirms its prior guidance regarding 2014 coal sales volumes, U.S. revenues per ton, operating costs and expenses per ton and capital spending).

M&A news: VRSK -0.9% (Verisk Analytics announced the acquisition of Maplecroft.Net Limited; The net purchase price is GBP 20.25 million; expected to be neutral to adjusted EPS in 2015).

Oil/gas related names showing early weakness: E -2.6%, OXY -2.4%, REXX -2.4%, STO -2.2%, BP -2%, EOG -1.9%, COP -1.8%, BHI -1.7%, PBR -1.4%, RIG -1.2%, RDS.A -1%, CVX -1% (target lowered to $130 at Oppenheimer on lower oil ), SDRL -0.8%.

Other news: LQDT -12.1% (disclosed Wal-Mart provided written notice terminating Agreement, effective December 8, 2014), INFY -5.0% (Infosys founders plan to sell $1 bln of stock, according to reports), JCP -4.4% (still checking for anything specific), PSEC -2.7% (Prospect Capital has suspended at-the-market equity issuances for the indefinite future; reduced monthly cash dividends to shareholders, updates 5.1% energy industry exposure, updates credit statistics), SNN -2.2% (still checking), DGLY -2% (NYTimes discusses comments from experts questioning how useful body cameras will be on police ), TTM -1.5% (still checking), AAL -1.2% (reports November traffic results; RPMs for the month were 16.2 bln, down 0.5% versus Nov 2013, ASMs, up 0.9% versus Nov 2013. Total passenger load factor was 77.7% for the month of Nov, down 1.1 points versus Nov 2013), PFE -1.2% (announced two strategic decisions to expand the company's rare disease research and development activities through the establishment of a gene therapy platform to investigate potential treatments for patients ), ERJ -0.8% (Envoy Air and unions reach agreement to allow Envoy Air to upgrade to ERJ jets, according to reports), BABA -0.6% (Bloomberg details Alibaba's (BABA) plans to expand mobile OS in China).

Analyst comments: TASR -2.9% (downgraded to Neutral from Buy at Ladenburg Thalmann ), QIWI -2.3% (downgraded to Neutral from Buy at UBS), RHT -1.1% (downgraded to Market Perform from Outperform at Wells Fargo ), NKE -1.1% (downgraded to Market Perform at Telsey Advisory Group on valuation ahead of earnings next Thursday), YNDX -1% (downgraded to Neutral from Buy at UBS), WFC -0.8% (downgraded to Mkt Perform from Outperform at Bernstein), HSBC -0.6% (downgraded to Mkt Perform from Outperform at Keefe Bruyette)

>>> US Gapping up

Gapping up

M&A related: CBST +22.7% (Cubist to be acquired by MRK for $102/share), ACY +7.6% (following late spike higher after Lee Beaumont disclosed 9.5% stake in 13D; proposes to enter into a merger agreement for $12.50 per share in cash), IACI +0.2% (planning to sell College Humor, according to reports ).

Select metals/mining stocks trading higher: CDE +3.1% GOLD +3% (upgraded to Buy from Hold at Deutsche Bank) GLD +0.4%.

Airline names trading higher (pulled back premkt since AAL update): LUV +1.4% VA +1.3% ALK +0.4%

Other news: BLRX +19.6% (reports positive data from ongoing Phase 2a Study for AML treatment; Data show six-fold increase in mobilization of AML cells from bone marrow ), GALE +10.7% (presents GALE-401 (Anagrelide Controlled Release) clinical trial data; phase 1 results demonstrate GALE-401 reduces platelet counts with tolerable safety profile), AGIO +8.7% (Agios Pharma announces Celgene decision to extend discovery phase of global strategic collaboration to April 2016; Agios to receive a $20 mln payment), ISR +6.8% (still checking), DVAX +6.7% (Dynavax Technologies and AstraZeneca to advance TLR9 agonist for treatment of asthma into Phase 2a clinical study), NVAX +4.4% (still checking), CTIC +3.4% (announced that an analysis of kinase inhibition by pacritinib demonstrated a unique kinome profile among agents in development for myelofibrosis and suggests potential therapeutic benefit across a spectrum of blood-related cancers ), NOAH +2.8% (continued strength), IDRA +2% (biotech news / M&A sympathy), BBRY +1.9% (BlackBerry and NantHealth Launch Breakthrough NantOmics Cancer Genome Browser), CANF +1.5% (Empery Asset Management discloses 8.43% passive stake in 13G filing), CELG +1.2% (announced that results were presented from multiple post-hoc analyses of its pivotal phase III First; PDUFA date Feb 22 2015), ABBV +0.8% (presents results from Phase 2 study of investigational compound Venetoclax; study evaluated preliminary ffficacy of Venetoclax in 32 patients with relapsed/refractory acute Myelogenous Leukemia), IDXX +0.5% (favorable commentary on Friday's Mad Money), AXS +0.4% (authorized the repurchase up to $750 mln of the Company's common shares; also declared a quarterly dividend of $0.29 per common share, which represents an increase of 7.4%), SHPG +0.4% (favorable commentary on Friday's Mad Money).

Analyst comments: LHO +1% (upgraded to Overweight from Equal Weight at Morgan Stanley ), AMAT +0.8% (upgraded to Buy from Hold at Deutsche Bank), EBAY +0.7% (upgraded to Buy from Hold at Stifel), ORAN +0.6% (upgraded to Buy from Neutral at Goldman; added to Conviction Buy List ), TSM +0.5% (upgraded to Buy from Neutral at BofA/Merrill)

(GS) Orange : Upgraded to Conviction Buy Neutral

Price squeeze easing, self-help just starting; up to CL Buy

* Source of opportunity
Iliad’s mobile launch in 2012 has driven Orange France’s EBITDA -19% and
Orange shares to de-rate by 25%. We argue that the pain is largely over: ARPU
pressure seems to have stabilised and we believe it has created a cost-cutting
culture at Orange. Labour cost flexibility remains limited, but we model Orange
delivering c.50% of the non-labour efficiencies achieved by BT and TEF after
similar profit slumps. This drives French/group EBITDA growth in 2015 and a
3% group EBITDA CAGR for 2014-18E (vs. -2% for 2011-14E). With growth
returning, a discount valuation and our assumption of a 60% probability of
French consolidation, we upgrade to Buy and add to our Conviction List.

* Catalyst
We expect consensus upgrades to drive a re-rating. In this report, we show
how two of the sector’s most impressive efficiency programmes – at BT and
TEF – have followed intense profit declines. In our base case, Orange maintains
the non-labour efficiency gains run-rate it has achieved over the last 18 months
for the next 3-4 years. This drives our 2015/16E EBITDA +4%/+8% vs. companycompiled
consensus. In a bull case, if Orange could achieve 60% of BT’s
savings, the implied share price upside would be 57% on our estimates. We
see French consolidation as likely over the next two years given that all French
operators would benefit and the French authorities are supportive. However,
the benefits to Orange would be partly offset by the loss of wholesale revenues.

*Valuation
We raise our estimates mainly to reflect French top-line stabilisation and
cost cutting. Our new ROIC-based 12-month target price is €21.1 (from
€14.0; 43% upside). Orange trades on 11% 2016E FCF yield, a 25% discount
to the sector. At our target price, its 2017E FCF yield and EV/NOPAT would
be 7% below and in line with the sector, respectively, reflecting Orange’s
similar growth outlook. It would trade at a c.10% discount to large-cap peers
Vodafone and DT on 2016 EV/NOPAT reflecting its lower revenue growth.

Key risks
Poor cost-cutting execution, competition, French consolidation delays.

>>> Apax Partners makes recommended offer of NOK 16 per share for Evry

Apax Partners makes recommended offer of NOK 16 per share for Evry

EVRY ASA ("EVRY" or the "Company") has entered into a transaction agreement (the "Transaction Agreement") with Lyngen Bidco AS (the "Offeror"), a company indirectly owned by private equity funds advised by Apax Partners LLP (the "Apax Funds"), pursuant to which the Offeror will put forward a recommended voluntary cash offer at a price of NOK 16.00 (EUR 1.82) per share (the "Offer Price") for all of the issued and outstanding shares of EVRY (the "Offer"). This is according to a stock exchange announcement.

Posten Norge AS and Telenor Business Partner Invest AS, together representing 70.24% of the EVRY shares, have, on certain conditions, undertaken to accept the Offer for their shares in the Company. Folketrygdfondet, representing 3.15% of the EVRY shares have also, on certain conditions, undertaken to accept the Offer for its shares in the Company.

The Offer Price represents a premium of 31% to the closing price on 26 August 2014, the last trading day prior to the announcement by EVRY of its structured process to explore strategic opportunities, and a premium of 44% and 53% respectively to the volume weighted average share prices in the three and six month periods ending on 26 August 2014. The Offer values the total share capital of EVRY at approximately NOK 4.27bn (EUR 486m) (excluding treasury stock).

The Board of Directors of EVRY (the "Board") has unanimously decided to recommend to the Company's shareholders to accept the Offer. In addition, members of the Board and the Executive Management Team who hold shares directly or through investment companies have undertaken to accept the Offer in respect of the shares they hold.

The Offer is the result of the structured process to explore various strategic opportunities initiated by the Board and announced in a stock exchange release on 27 August 2014. After careful consideration of available alternatives and interests received, the Board believes that the Offer provides the best solution to the Company and its shareholders.

Strategic rationale

Apax is one of the world's leading private equity firms. It operates globally and has more than 30 years of investment experience. Apax has advised funds that total over EUR30 billion in aggregate. Funds advised by Apax invest in companies across four global sectors of Consumer, Healthcare, Services and Technology & Telecommunications. These funds provide long-term equity financing to build and strengthen world-class companies.

Apax's considerable international IT services expertise will help EVRY to accelerate its strategy to develop the strong aspects of the business, including the bank and finance solutions portfolio, scaling up its focus on industry verticals in the Nordic countries and at the same time continue to strengthen its regional footprint. The Apax Funds will support EVRY's strategy for its transformation to offer competitive next generation cloud-based IT operations and to pursue accretive M&A opportunities.

The Apax Funds will provide EVRY with financial backing, expertise and support for investments and acquisitions in accordance with EVRY's long-term strategy for profitable growth.

EVRY will remain headquartered in Norway and preserve its Nordic heritage while adding scale and state of the art technology in order to compete efficiently in an increasingly global industry. EVRY's strong brand recognition in the Nordics is a key component in the further growth of the Company.

Arve Johansen, Chairman of the Board of EVRY stated: "On the basis of an evaluation of how EVRY can improve deliveries for its customers even further and create greater value through strategic actions, the Board of Directors decided to initiate a structured process to explore various strategic opportunities, including a sale of the Company. Following this decision, the Board has completed thorough analyses and entertained discussions with a number of parties. It has been concluded that EVRY and its shareholders will benefit from the Offer from the Apax Funds. The Board believe that the Offer safeguards the interests of all of EVRY's stakeholders and are confident that the Apax Funds is a solid new owner for EVRY. The Offer delivers a considerable cash premium to our shareholders and the Board considers the Offer Price to recognize the strategic value of EVRY. The Board has therefore unanimously resolved to fully support the Offer and unanimously recommend it to the shareholders."

Salim Nathoo, Partner in the Technology & Telecommunications team at Apax, said, "EVRY is a leading Norwegian provider of IT Services with a well-established customer base, broad service offering and leading technical expertise. We fully support the vision and strategy outlined by EVRY`s management to further develop its leading competitive position and to execute on the strategy. We are excited to support EVRY`s journey to become the pan-Nordic IT Services champion."

Rohan Haldea, Partner in the Technology & Telecommunications team at Apax, added, "We are impressed by the leading position of EVRY in Norway and Sweden and look forward to working with the management team and the employees to position EVRY to deliver accelerated growth and increased competitiveness. We support EVRY's transformation plans to cement its leadership position through offering good customer service, operating competitive end-to-end solutions and investing in organic initiatives and accretive acquisitions."

Terje Mjøs, CEO EVRY commented: "Technology is a strong contributor to economic growth, creating sizeable growth opportunities for the IT industry. Apax's interest in EVRY confirms and emphasizes our growth prospects and the opportunities in our market space. I am confident that private ownership will benefit our next phase of profitable growth, and we are looking forward to accelerate and expand our strategy together with Apax to fulfil our ambitions."

Indicative timetable for the Offer

The Offeror is in the process of preparing an offer document setting out the complete terms of the Offer (the "Offer Document"). The Offer Document will be sent to EVRY's shareholders as soon as it has been reviewed and approved by Oslo Børs pursuant to Chapter 6 of the Norwegian Securities Trading Act. The Board's recommendation will be included in the Offer Document. Conditions to completion of the Offer

The Offer will not be subject to any financing or due diligence conditions. As will be further detailed and specified in the Offer Document, the completion of the Offer will be subject to the following conditions being satisfied or waived by the Offeror at its sole discretion, in whole or part:

(i) the Offer shall have been accepted by shareholders of EVRY representing (together with any shares acquired or agreed to be acquired by the Offeror other than through the Offer) more than 90 percent of the issued and outstanding share capital of EVRY,
all approvals required from regulatory authorities for completion of the Offer shall have been obtained,
there having occurred no material adverse change, as outlined in theTransaction Agreement, with respect to the Company and its subsidiaries, taken as a whole,
the written information provided by the Company to the Offeror, taken as a whole, was not materially inaccurate or materially misleading,
the Board of EVRY shall not have amended or withdrawn its recommendation of the Offer,
no intervention shall have taken place by any court or other governmental or regulatory authority which restrains or prohibits the completion of the Offer, and
there shall have been no material breach by EVRY of the Transaction Agreement.
As part of the agreement with the Offeror, the Board has entered into certain undertakings not to solicit offers from third parties. Pursuant to the terms of the Transaction Agreement, the Board may however amend or withdraw its recommendation of the Offer in the event a superior competing offer is made and is not matched by the Offeror within five days of being provided with notice thereof. The superior competing offer must include an improvement of at least 10% on the Offer Price and be made on terms that the Board considers, in aggregate to be more favourable than the terms of the Offer. The same right to withdraw in the event of a superior competing offer is afforded individually to the pre-accepting shareholders. Any such amendment or withdrawal will permit the Offeror to withdraw from the Offer. The Transaction Agreement also provides for payment of cost compensation to the Offeror equal to EUR 9m in the event the Offer should lapse e.g. following a successful superior competing offer.


Compulsory acquisition and delisting

Upon the Offeror completing the Offer, it will proceed with a mandatory offer for the remaining shares in EVRY pursuant to the provisions of the Norwegian Securities Trading Act.

As soon as possible following the acquisition of shares representing 90% or more of the shares in EVRY, the Offeror will initiate compulsory acquisition of the remaining shares in EVRY. In connection hereto, the Offeror will seek to have the EVRY shares delisted from Oslo Børs.

Recommendation from independent competent advisor

The recommendation by the Board referred to herein and which will be included in full in the Offer Document is not a formal statement made pursuant to sections 6-16 and 6-19 of the Norwegian Securities Trading Act. As the Offer will be made in understanding with the Board pursuant to the Transaction Agreement, the Company has in consultation with Oslo Børs appointed SEB to provide an independent statement on the Offer in accordance with section 6-16 (4) of the Norwegian Securities Trading Act. The statement by SEB is expected to be issued in due course upon formal launch of the Offer, and no later than one week prior to expiry of the acceptance period for the Offer.

Advisors

ABG Sundal Collier is acting as financial advisor to EVRY and has provided a fairness opinion to the Board. Schjodt is acting as legal advisor to EVRY.

Bank of America Merrill Lynch and DNB Markets are acting as financial advisors and Clifford Chance and Wiersholm are acting as legal advisors to the Offeror