>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: HOFT +6.8%, GBX +5.6%, MY +4.8%, ISCA +2.9%, .

M&A news: INFA +5.2% (confirms agreement to be acquired by the Permira Funds and Canada Pension Plan Investment Board; transaction valued at approx $5.3 billion or $48.75 per share), FDX +4.5% (FedEx and TNT Express (TNTEY) agree on recommended all-cash public offer for all TNT Express shares for $4.8 billion), .

Select oil/gas related names showing strength: SSL +3.6%, STO +1.6%, BP +1.2%, RDS.A +1.1%, SDRL +0.8%

Other news: VBIV +20% (announced collaboration with Sanofi Pasteur (SNY) to to apply VBI's Lipid Particle Vaccine formulation technology to further the development of Sanofi Pasteur vaccine candidate), ONVO +13.5% (disclosed it entered into a research collaboration agreement with L'Oreal (LRLCY) USA products), BLDP +10.2% (announced that the world's first hydrogen fuel cell powered fixed rail electric tram was successfully demonstrated; production and testing facility of CSR Qingdao Sifang Company), CLVS +8.9% (received breakthrough therapy designation for Rucaparib for monotherapy treatment of advanced ovarian cancer in patients with BRCA-mutated tumors), OCN +8% (co disclosed it amended its agreement with Home Loan Servicing Solutions (HLSS); New Residential Investment (NRZ) agreed to a multi-year extension of the servicing contracts with OCN), LSG +7.9% (announces record quarterly production in the first quarter of 2015), ARNA +7.8% (Arena Pharm and Eisai (ESALY) receives additional patent for Belviq), QEPM +7.2% (to be acquired in full by Tesoro Logistics LP (TLLP); consideration is valued at $17.09 per QEPM common unit), CYTX +5.3% (announces the European Commission has designated Cytori's ECCS-50 cellular therapeutic as an orphan medicinal product for the treatment of scleroderma), AXTA +3.5% (announces that an affiliate of Berkshire Hathaway (BRK.B) has entered into a definitive stock purchase agreement with certain affiliates of The Carlyle Group (CG) for the purchase of a total of 20 mln of Axalta's common stock at $28.00 per share), SHPG +2.7% (announces clear regulatory path forward for SHP465, an investigational treatment for adults with ADHD), CLDX +0.9% (announced that data from the Phase 2 EMERGE study of glembatumumab vedotin in metastatic breast cancer have been published in the Journal of Clinical Oncology)

Analyst comments: BIND +10.2% (initiated with an Outperform at Oppenheimer), CLDN +4.6% (initiated with a Buy at H.C. Wainwright), RYAAY +4% (upgraded to Overweight from Neutral at JP Morgan; also reported Mar traffic stats), SPLK +3.8% (upgraded to Overweight from Neutral at Piper Jaffray ), PAY +2.5% (upgraded to Buy from Hold at Stifel), DWRE +2.2% (added to Conviction Buy List at Goldman), CCL +1.1% (upgraded to Outperform from Market Perform at Wells Fargo ), TOT +1.1% ( upgraded to Outperform from Sector Perform at RBC Capital Mkts), JPM +0.8% (upgraded to Outperform from Mkt Perform at Bernstein), RL +0.7% (upgraded to Buy from Outperform at Credit Agricole)

WSJ : Starbucks’s Tax Practices Draw European Scrutiny

Starbucks’s Tax Practices Draw European Scrutiny
Coffee chain paid less than 1% in corporate tax last year in the Netherlands, where its regional head office was based

BRUSSELS—Starbucks Corp. is going through the grinder in Europe.

The world’s biggest coffee chain has raised suspicions among regulators and local governments by reporting losses in its biggest European markets for years despite recording hundreds of millions of dollars in annual sales.

Last year, as European Union regulators opened a formal investigation, a profit materialized: €407 million ($446.6 million), reported by the company’s European head office in Amsterdam. The coffee chain has since moved its headquarters to London.

The reason for the windfall: 502 million Swiss francs ($527.8 million) in dividends, transferred from the company’s coffee-buying unit in Switzerland, which has fewer than 40 employees, according to corporate filings.

The huge profit is likely to stoke concerns around Starbucks’s tax practices in Europe, which are under scrutiny for the second time in just over two years. EU antitrust chief Margrethe Vestager, who is running the bloc’s investigation of Starbucks’s tax affairs, has pledged to announce results by June, which could include sizable back-tax demands.

Starbucks has long insisted that its complex European structure—which until recently centered in the Netherlands rather than the U.K., by far its biggest market in the region—wasn’t designed to avoid tax. The structure, it said, was built around its Amsterdam-based coffee-roasting house and reflected that city’s rich history with coffee.

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Even so, the tax advantages are clear: The Amsterdam unit paid just €2.6 million in corporate tax on last year’s €407 million pretax profit in the Netherlands—or well under 1%—as part of a deal with the Dutch government that has drawn the attention of EU regulators.

All the coffee Starbucks uses world-wide is bought by the company’s Swiss unit, even though the coffee never actually transits through Switzerland. It is then sold to Starbucks operations around the world at a 20% markup, the company’s former chief financial officer, Troy Alstead, told British lawmakers in 2012, after Starbucks found itself at the center of a controversy over its tax bills.

That means the Swiss unit loads costs onto the coffee bought by Starbucks stores around the world and depresses their profits. British lawmakers have expressed skepticism that the 20% markup was “reasonable.”

Starbucks said that “profits generated by [its] companies are periodically paid as dividends,” and that it follows international guidelines in charging fees between business units in different countries.

On the same day the Swiss dividends arrived in Amsterdam last October, Starbucks transferred the bulk of them to a new U.K. holding company—one of three British entities it has created since June—corporate filings show. It subsequently dissolved another London-based shell company, Alki LP, which had become a focus of EU regulators’ inquiries because it received tens of millions of dollars annually in royalty payments from Amsterdam.


Starbucks is one of four multinational companies operating in Europe—along with Apple Inc.,Amazon.com Inc. and Fiat Chrysler Automobiles NV—whose tax affairs are being investigated by regulators in Brussels.

Above all, Starbucks stands out for its response: Rather than citing a duty to investors to minimize tax, as other companies like Google Inc. have done, Starbucks has repeatedly pleaded innocent.

“We do nothing—nothing—to avoid taxes,” Mr. Alstead told British lawmakers in 2012.

Now, that narrative is being challenged.

In a preliminary decision in November, EU regulators argued that Starbucks’s structure in the Netherlands had no economic rationale. Their probe could result in a back-tax bill running into tens of millions of dollars. Dutch regulators have said they believe Starbucks’s structure in the country is appropriate.

Tax avoidance isn’t illegal. Other companies like Google and Facebook Inc. minimize their taxes by moving foreign profits through countries such as Ireland, the Netherlands and Bermuda.

Starbucks said it complies “with all relevant tax rules, laws, and…guidelines” and pays “a global effective tax rate of 34 per cent.” The coffee chain gets about three-quarters of its revenue in the U.S., where the top marginal corporate tax rate is 35%, adding to state and local corporate taxes.

But the EU has found a new way to clamp down on corporate tax avoidance using a law that prohibits sweetheart deals that allowed some companies to pay less tax than others. This led it to also investigate the tax affairs of Apple, Amazon and Fiat. All three companies have denied receiving special treatment, and the national governments involved have denied giving it. The EU has said it plans to publish results of its probes by June.

At the center of the probe is a web of partnerships operated by Starbucks in the Netherlands and the U.K. Two of the partnerships—Rain City and Emerald City, nicknames for its Seattle hometown—are based in the Netherlands but aren’t subject to Dutch corporate tax, according to the EU’s report and corporate filings.

Emerald City owns a Hong Kong-based vehicle that controls Starbucks’s operations in Beijing and northern China and the company’s 50% stake in its Indian joint venture. It also owned a third, now-dissolved European partnership, Alki, which was based in London.

EU regulators have homed in on Alki, which held all of Starbucks’s intellectual-property rights for Europe, the Middle East and Africa—and received tens of millions of dollars in annual royalty payments from Amsterdam. Hefty royalty payments to units in lower-tax jurisdictions are another tool that multinationals can use to avoid tax.

In a preliminary decision in November, the European Commission questioned royalty payments made by Starbucks’s manufacturing unit to Alki, which didn’t pay Dutch corporate tax. It is unclear whether the holding company, which was based in the U.K. before it was dissolved, paid U.K. taxes.

Starbucks declined to comment on Alki’s tax treatment. In its report, the commission said royalty payments to Alki from Amsterdam were considered a direct payment to Starbucks’s U.S. operations from a Dutch tax perspective. The commission also said the royalty didn’t “reflect the value of the intellectual property” because it “fluctuates from year to year and is not in line with sales.”

The Dutch government said it was “convinced” that its tax deal with Starbucks didn’t constitute illegal state aid.

Alki was dissolved last December, shortly after its ownership was transferred to a new U.K. company, Starbucks EMEA Holdings Ltd., according to corporate filings. Starbucks announced last year it would move its regional headquarters to the U.K. from the Netherlands. “This structure [Alki] no longer exists,” it said in a statement.

Alki had no employees, a person familiar with the matter said. Its address in London was the U.K. headquarters of Baker & McKenzie, a law firm that advises Starbucks on tax matters. Starbucks and Baker & McKenzie declined to comment on the matter.

The EU investigation comes after a tax furor in Britain led to store boycotts and a 2012 parliamentary hearing. The company’s U.K. annual sales fell following the furor, its first decline since it set up shop in the country in 1998.

At the time, Starbucks had paid £8.6 million ($12.8 million) of British corporate tax over 15 years despite sales exceeding £3.5 billion in Britain. It has since voluntarily paid an additional £20 million by forgoing certain deductions.

At the hearing, Mr. Alstead, who previously served as a director of the U.K. business, blamed the company’s persistent losses in Britain on “strategic mistakes,” including expensive property leases. “We are not at all pleased about our financial performance here,” he said.

British lawmakers weren’t convinced. “If you have made losses in the U.K. over 15 years, which is what you are filing, why on earth are you doing business here?” said Margaret Hodge, who chaired the hearing. “It just doesn’t ring true.”

According to corporate filings, Starbucks’s British business started making large royalty and license-fee payments to Amsterdam in 2003, five years after it opened in the U.K. Mr. Alstead last month took unpaid leave after 23 years with the company “to spend more time with his family,” Starbucks said. It said his decision to take time off was a personal one, unrelated to the corporate structure.

British lawmakers are no longer investigating Starbucks.In Britain, Starbucks recently reported its first annual pretax profit: £1 million on sales of £409 million in the year to September. But after years of deep losses, the company has accumulated £35 million of deferred tax assets that can be used to offset future tax bills. That indicates it won’t have to pay any U.K. corporate tax for some time.

Starbucks said that the U.K. business “is now profitable and as our turnaround continues, our tax payments will increase in line with our profits.”

WSJ : Permira, CPPIB Poised to Take Informatica Private in $5 Billion Deal


Permira, CPPIB Poised to Take Informatica Private in $5 Billion Deal
Deal would be largest U.S. leverage buyout so far this year

Informatica Corp. is nearing a deal to be taken private by Permira Advisers LLC and the Canada Pension Plan Investment Board, according to people familiar with the matter, in what would be the largest U.S. leveraged buyout so far this year.

Permira and CPPIB would pay around $48 to $50 a share for the Redwood City, Calif., data-software company in a deal that could be announced as soon as Tuesday, the people said.

A buyout at that price would value Informatica at more than $5 billion. The company’s shares closed Monday at $45.83.

Informatica helps companies organize and analyze broad swaths of information, tapping the growing demand for help with managing what is known as big data. The company reported revenue of around $1 billion in 2014, up about 11%.

The Wall Street Journal reported in January that the company was working with investment bankers and had made contact with potential buyers.

Also in January, Elliott Management Corp. revealed that it owned about 8% of Informatica. The hedge fund said it sees the company as “significantly undervalued” and that it had initiated talks with Informatica’s management and board of directors regarding “steps to maximize shareholder value.” Elliott said in February that it has lifted its stake to 9.4%.

Software companies have been targeted in a string of private-equity buyouts in recent months. In December, Thoma Bravo LLC completed its acquisition of Compuware Corp. for about $2.5 billion and separately teamed up with an arm of the Ontario Teachers’ Pension Plan to buy Riverbed Technology Inc. for about $3.6 billion. Compuware and Riverbed were both put in play following separate takeover bids for each company by Elliott.

Smaller players are finding themselves in the cross hairs too. Last month, Insight Venture Partners completed its $273 million acquisition of cloud-based software maker E2open Inc., and Vector Capital completed its $268 million acquisition of Saba Software Inc.

>>> DuPont files new investor presentation opposing Trian break-up proposal

DuPont files new investor presentation opposing Trian break-up proposal
DuPont (NYSE:DD) on 6 April announced that it has filed a new investor presentation with the US Securities and Exchange Commission (SEC) in connection with the Company’s 13 May 2015 Annual Meeting of Shareholders. The presentation is available under the shareholder materials section of www.dupontdelivers.com and on the SEC's website at www.sec.gov.

The presentation highlights the growth of DuPont’s ongoing, post-spin business, demonstrating the strength of the next generation DuPont. The ongoing business has delivered 6% segment sales growth and a 19% adjusted operating EPS compound annual growth rate since 31 December 2008. In addition, the Company’s segment adjusted operating margin has improved 740 basis points.

The presentation also outlines DuPont’s strong and consistent track record of superior performance; its strategy to grow leading positions in three areas of strategic focus; and the qualifications of its world- class board of directors to drive higher growth and higher value for our shareholders.

In addition, the presentation illustrates in greater depth why DuPont’s board unanimously opposes Trian’s efforts to replace four highly accomplished directors in order to advance its high-risk, high-cost breakup agenda, which the board has unanimously determined would be value-destructive and not in the best interests of shareholders.
Presentation attached

Wansquare : Vivendi : Bollore passe à l'attaque (English & French)


Vivendi Bolloré goes on the attack
Google Translation
According to information from WanSquare, the man has a strong Vivendi new ally: Colette Neuville who believes that a company is for invest and not distribute dividends too generous likely weaken society. Bolloré shows that he has every intention to reinvest its cash by making an offer on Dailymotion.

With the approach of the meeting of April 17, Vivendi, opinions fuse on the folder Vincent Bolloré on the opponent PSAM activist funds. The latter calls essentially an upward revision of the amount of the special dividend paid to the shareholders of the French company. Claim in which the strong man of the media group and its supervisory board is not all ready to go, while PSAM now trying to place the subject on the legal ground in challenging the recent rapid rise in capital Vincent Bolloré.

Once is not custom, it has a protagonist here very influential circles financial, and regulatory beside him (the only intellectually) by Colette Neuville person who, as a proxy for the US group ISS mbelieves that the company does not have to be impoverished to please some of his shareholders. Certainly, Vivendi is now at the head of a pretty cash package after the different operations of disposals in recent months, but the liquidity should also and especially be used to develop the company to seize opportunities that will enable it to bounce back after being relieved of most of its assets. "The shareholders take risks by investing in a listed company, but it is primarily to help it grow and not to touch cash. Impose a very important special dividend is contrary to the spirit of company law. The purpose of a business is primarily to grow to satisfy all stakeholders, not just shareholders and especially not to hold too generous distributions or share buybacks rather destructive value than anything else "Colette Neuville launches.

For its part, the boss of the PSAM fund denies wanting to dismantle the group, as he said this weekend Reuters: "Bring out the value of Universal through a total or partial demerger is not a rollback. It could only relate to the 15%m society, with the remainder held by Vivendi, "reiterating that the ultimate objective of the fund was to create value for query actionnaires. This Query comes even as Vivendi has just made an offer of € 250 million to resume Dailymotion. Showing that the group is indeed the maneuver to reinvest their cash in the media, as stipulated from the beginning Vincent Bolloré. And, with the help of Bercy, Emmanuel macron having finally managed to dissuade the PCCW Hong Kong to bid on Dailymotion.


Vivendi : Bolloré passe à l'attaque

Selon les informations de WanSquare, l'homme fort de Vivendi compte un nouvel allié : Colette Neuville qui estime qu'une entreprise est faite pour investir et non pas distribuer des dividendes trop généreux susceptibles d'affaiblir la société. Bolloré démontre qu'il a bien l'intention de réinvestir son cash en faisant une offre sur Dailymotion.

A l'approche de l'assemblée du 17 avril de Vivendi, les avis fusent sur le dossier opposant Vincent Bolloré au fonds activiste PSAM. Ce dernier réclame essentiellement une révision à la hausse du montant du dividende exceptionnel versé aux actionnaires de l'entreprise française. Revendication à laquelle l'homme fort du groupe de médias et son conseil de surveillance n'est pas du tout prêt à accéder, alors que PSAM tente maintenant de placer le sujet sur le terrain judiciaire en remettant en cause la récente et rapide montée au capital de Vincent Bolloré.

Une fois n'est pas coutume, il a ici un protagoniste très écouté des milieux financiers et de régulation à ses côtés (sur le seul plan intellectuel) en la personne de Colette Neuville qui, comme le groupe de proxi américain ISS, estime que la société n'a pas à s'appauvrir pour faire plaisir à quelque uns de ses actionnaires. Certes, Vivendi est aujourd'hui à la tête d'un coquet paquet de cash après les différentes opérations de cessions réalisées ces derniers mois, mais ces liquidités doivent aussi et surtout servir au développement de l'entreprise, à saisir des opportunités qui lui permettront de rebondir après s'être délesté de l'essentiel de ses actifs."Les actionnaires prennent des
risques en investissant dans une société cotée mais c'est avant tout pour l'accompagner dans sa croissance et non pas pour toucher du cash. Imposer un très important dividende exceptionnel est contraire à l'esprit du droit des sociétés. L'objet d'une entreprise est avant tout de croître pour satisfaire l'ensemble des parties prenantes et pas uniquement les actionnaires et surtout pas d'organiser des distributions trop généreuses ou des rachats d'actions, plutôt destructeurs de valeur qu'autre chose" lance Colette Neuville.

De son côté, le patron du fonds PSAM se défend de vouloir démanteler le groupe, comme il l'a indiqué ce week­end à Reuters : "Faire ressortir la valeur d'Universal à travers une scission totale ou partielle ne constitue pas un démantèlement. Cela ne pourrait concerner que 15% de la société, le reste étant détenu par Vivendi", réaffirmant que l'objectif ultime du fonds était de créer de la valeur pour les actionnaires.Cette requête intervient alors même que Vivendi vient de faire une offre à 250 millions d'euros pour reprendre Dailymotion. Démontrant ainsi que le groupe est bel et bien à la manoeuvre pour réinvestir son cash dans les médias, comme le stipule depuis le début Vincent Bolloré. Et ce, avec l'aide de Bercy, Emmanuel macron ayant finalement réussi à dissuader le hongkongais PCCW de faire une offre sur Dailymotion.

(BFW) Glaxo CEO Rules Out Large Deals, Eyes Smaller Cos: Handelsblatt

Glaxo CEO Rules Out Large Deals, Eyes Smaller Cos: Handelsblatt
2015-04-07 06:33:00.783 GMT


By Alessandro Speciale
(Bloomberg) -- GlaxoSmithKline interested in buying small
tech cos up to $200m, rules out billion-dollar purchases,
Handelsblatt reports, citing interview with CEO Andrew Witty.
* Says prices in current pharma deals unjustified
* Glaxo to grow “faster than the market, which according to
our calculations should grow 3%-4%” after Novartis deal
* No plans to sell OTC unit, can’t rule out split in future
* Decision on selling stake in AIDS-drug joint venture with
Pfizer to come in June
* Glaxo has “great hopes” for respiratory system drugs

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Alessandro Speciale in Frankfurt at +49-69-9204-1201 or
aspeciale@bloomberg.net
To contact the editor responsible for this story:
Fergal O’Brien at +44-20-3525-7152 or
fobrien@bloomberg.net

>>> Euro Telco : Russian bil. Mikhail Fridman is drawing up plans for a $16bil

EURO TELCO
Russian billionaire Mikhail Fridman is drawing up plans for a $16bn investment spree in telecoms and technology businesses in Europe and the US boosted by the appointment of a heavyweight advisory board of industry entrepreneurs. 


FT : Telecoms must address technology disrupters, says LetterOne head

For someone overseeing more than $13bn of telecoms assets, Alexey Reznikovich does not seem to have much time for the industry.
Or at least, that is, for the parts of the telecoms industry stuck in the past — which form the majority in his view — and that are being disrupted by technology groups and so face an uncertain future.

Mr Reznikovich, pictured below, runs LetterOne Technology, the newly named holding group for the 48 per cent stake in VimpelCom and 13 per cent share of Turkcell controlled by Russian billionaire Mikhail Fridman and his Russian partners.
“The telecoms industry has become a victim of its inability to transform itself to address the new challenges. Many companies will go under or be merged. They will vanish one way or another,” says Mr Reznikovich.
VimpelCom is not spared in his assessment of the sector. The company — which serves 220m customers across 14 countries such as Russia, Italy, Ukraine, Bangladesh and Pakistan — needs a “complete revamp”, says Mr Reznikovich.
He sees an opportunity to substantially increase the company’s value by stripping as much as two-thirds off the costs of running the business by moving operations to a more digital platform.
Mr Reznikovich points out some of the absurdities of the old-fashioned telecoms business. “We have 10,000 tariffs in Russia,” he says, shaking his head at the expense of managing such complex arrangements. “It needs a complete revamp of the whole thing. That’s the only way to do it.”
He estimates that only a fifth of the industry will be able to change, however. “I am hopeful that VimpelCom will. The shareholders have a clear vision of where VimpelCom needs to go. We will start to do this in a number of business units this year.”
Mr Fridman and his partners battled Telenor to become the largest shareholder in VimpelCom more than two years ago. Telenor still owns 43 per cent of the listed Amsterdam-headquartered group compared with the 48 per cent controlled by LetterOne.
In five years, Mr Reznikovich says, VimpelCom could have scaled back its workforce from 60,000 to as low as 10,000, with a fourfold cut in IT spending.

“The idea is to make VimpelCom a much more valuable company — not to have a multiple of five or six times [earnings], but to have a multiple of 10 or 12. We need to do something different,” he says.
“The industry has not been able to pay for its cost of capital for the last five years. This is extremely inefficient from an investor standpoint. And it’s going to get worse.”
Alongside the cost-cutting, Mr Reznikovich wants to bring in a more entrepreneurial culture aimed at meeting specific customer needs.
He is appalled that the telecoms industry is not using its relationship with customers, pointing out the technology groups are light years ahead in knowing what people want and when.
“The telecoms industry is extremely inefficient in how they deliver services,” he says. And this is in spite of telecoms groups owning a vast amount of information about the people who use their services, he adds.
“Do you know how many email addresses we have of our 15m customers in Italy? Five thousand. This is a joke! But we have all the information about how they pay, use the internet, their profiles . . . We can use this to make tailored offers and charge more — and improve revenues.”

Mr Reznikovich has overseen Mr Fridman’s telecoms business at various holding groups since 2002, including Altimo and LetterOne Telecoms.
LetterOne Technology is the latest incarnation. The name was chosen to reflect the shift in strategy to more digital platforms, as well as the intention to make further major acquisitions in the telecoms and technology sectors.
The group will take over the activities of LetterOne Telecoms, with the name change and board appointments reflecting the focus outside traditional telecoms for the first time.
Mr Reznikovich says there is a cash pile of $16bn to invest from the 2013 sale of Russian oil producer TNK-BP.
The office has been set up in London to “better manage the deal flow”, he says. Two-thirds of the revenues of VimpelCom were generated outside the UK.
The decision to move the international businesses of Mr Fridman and his colleagues to London was made before the hostilities in Ukraine, which Mr Reznikovich admits has made being based in Russia more difficult.
$16bn
Amount of cash available to invest from the 2013 sale of Russian oil producer TNK-BP
The company wants to invest in struggling companies that need funds to succeed, as well as look at markets such as data centres and telecoms infrastructure, as well as technology groups that could add services for VimpelCom to use.
“Telecoms is a pipe,” Mr Reznikovich says. “If we execute the first part of our strategy, we will have much more information on customers and then use our digital companies to feed the system and help VimpelCom offer new things, almost as a distribution channel.”
There is also an opportunity to invest in companies that are in markets open to consolidation, he says, pointing to an easing of regulatory opinion about mergers in the sector.
Deals are already in the offing. “We are working on all fronts,” Mr Reznikovich says. “We hope to have a result on all three areas [of our strategy] this year.”