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After Hours Summary: VMEM +9.5%, DY +5.7%, NUAN +3.9%, GOMO -8.6%, WDAY -7.7%, PANW -1.8%, BRCD -1.6%, QIHU -0.5% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: VMEM +9.5%, DY +5.7%, NUAN +3.9%, ANW +0.2%

Companies trading higher in after hours in reaction to news: ROYT +5.1% (announced a cash distribution to the holders of its units of beneficial interest of $0.07291 per unit, payable on December 12, 2014; 17% lower than the previous month), CCIH +1.9% (announced that it has formed a strategic partnership with Aspera, an IBM company, to provide high-speed data transmission services for large files), LXU +1.7% (Starboard Value discloses 7.2% active stake in 13D filing), HTZ +1.0% (New President/CEO John Tague disclosed purchase of 84,200 shares of common stock at $24.11 per share; holds 1 mln of options with $22.75 exercise price)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: GOMO -8.6%, WDAY -7.7%, ANFI -6.9%, POST -5.9%, PANW -1.8%, BRCD -1.6%, QIHU -0.5%

Companies trading lower in after hours in reaction to news: WTSL -7.9% (announced that it has assembled a team to identify and analyze potential strategic and financial alternatives), CASY -1.2% (co announced it will revise financial results due to error in ethanol excise tax reporting; aggregate impact of the unrecorded excise taxes for the period from Jan 1, 2012 through Jul 31, 2014 fully diluted EPS is ~4.5 cents in each of the affected quarters), 

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BT’s Wireless Castoff Is Now Target of Its Ambitions: Real M&A 2014-11-24 23:07:56.663 GMT

(For a Real M&A column news alert: {SALT REALMNA <GO>}.)

By Amy Thomson and Brooke Sutherland Nov. 25 (Bloomberg) -- Thirteen years ago, BT Group Plc moved away from the wireless market. Now, it needs to get back in, and it could take more than $15 billion to do it. The $50 billion phone company said it’s in very preliminary talks with two mobile carriers, including Telefonica SA’s O2 -- the wireless business that BT spun off in 2001 -- about an acquisition. EE, the joint venture owned by Deutsche Telekom AG and Orange SA, is the other provider, a person familiar with the talks said. Either company would give BT the customer base and network of one of the top two U.K. wireless providers. Phone carriers across the U.K. and Europe are turning to bundled packages, which combine TV, Internet, mobile and wireline service, to increase revenue and discourage customers from defecting. Almost two-thirds of U.K. households buy at least some of their telecommunications services together, up from 29 percent in 2005, when Telefonica agreed to buy O2, according to data from regulator Ofcom. While BT already struck a mobile partnership with EE, buying a network would give it more flexibility on pricing and make it a more formidable competitor. BT is “the market leader in broadband. Strengthening that with mobile can really give them a competitive edge,” Erhan Gurses, an analyst at Bloomberg Intelligence, said in a phone interview. Bundling is “increasingly becoming the case across Europe so they don’t want to miss the train.” EE and O2 are each valued at more than $15 billion by Macquarie Group Ltd.

Wireless Slowdown

When BT spun off O2 in 2001, the industry was in the process of spending billions for the rights to newer, faster third-generation wireless networks. Rather than bear that burden itself, BT decided to separate from the wireless unit and let it finance its expansion with its own stock. In the years that followed, the industry was hit by competition that held down prices for those faster networks, regulation that limited cash sources like roaming charges and the emergence of cheaper new services, such as the WhatsApp Inc. messaging application. “We used to make reasonably good revenue growth each year, and that’s why Telefonica bought us, and the market has just slowed to a crawl,” said Charlotte Patrick, a former O2 manager who now works for researcher Gartner Inc. “Revenues have just gone out of the market.”

Combining Services

The emphasis has since shifted to retaining customers. One way to do that is by bundling phone, Internet and TV into one package, and that means providers need to buy whichever of the three they don’t have. Deals for European telecommunications and cable-TV companies have already totaled more than $95 billion this year. That’s the most since 2005, when Telefonica’s purchase of O2 was the industry’s top announced transaction of the year. BT will need to join in if it wants to remain competitive. Mobile partnerships, such as its deal with EE, will only get it so far. Owning its own mobile network will give BT access to stores, branding, and deals with phone makers such as Apple Inc. and Samsung Electronics Co. to sell the most popular devices. “You need the networks to actually deliver,” said Steven Hartley, an analyst at London-based Ovum research. “It makes sense that between fixed and mobile you’ll start to see more of these things coming together.” Investors like the idea of an acquisition. BT jumped 3.7 percent in London trading after the company said it was in “highly preliminary” talks about buying a wireless operator. That’s the biggest gain in more than 14 months. The question is whether BT will take back O2 or strike a deal for EE. Strategically, EE may offer better assets.

EE Appeal

EE, the U.K.’s biggest mobile operator by customers, was the first to roll out high-speed fourth-generation networks in the country and RootMetrics says it has the highest quality service. EE also has large spectrum holdings and is already transitioning to a converged model on its own. “EE is bigger from a customer perspective and has more spectrum,” Guy Peddy, an analyst at Macquarie in London, said. “Spectrum is your long-term determinate” of success in mobile as demand for data continues to rise. On the other hand, O2 still offers scale as the No. 2 mobile carrier by customers in the U.K. and is probably cheaper. EE’s shareholders are discussing selling the company, which may be valued at as much as $19 billion, people familiar with the matter have said. Peddy valued EE closer to $17 billion, and said O2 could command about $16 billion. Citigroup Inc. analyst Simon Weeden estimated O2 had an enterprise value of 9.4 billion pounds, or $15 billion. “In terms of which acquisition would be better for BT, I think the primary factor is price,” Michael Knott, a managing director at FTI Consulting Inc., said in a note. “Essentially, this is a good thing for BT, the market and, ultimately, customers.”

For Related News and Information: BT in Talks to Buy EE or O2 in U.K. to Add Wireless Service Orange Chief Looks for Alliance to Broaden Reach in U.K Deutsche Telekom, Orange Said to Revive Talks to Sell EE Today’s top technology news: TTOP <GO> Mergers and Acquisitions: MA <GO>

To contact the reporters on this story: Amy Thomson in London at +44-20-7392-0662 or athomson6@bloomberg.net; Brooke Sutherland in New York at +1-212-617-0448 or bsutherland7@bloomberg.net To contact the editors responsible for this story: Beth Williams at +1-212-617-2307 or bewilliams@bloomberg.net; Kenneth Wong at +49-30-70010-6215 or kwong11@bloomberg.net Elizabeth Wollman