FT : Shareholders urge Nutreco to open books to Cargill and Permira


Shareholders in Nutreco have called on the Dutch fish and animal feed group to open its books to Cargill and Permira, the potential contenders to a recommended €3bn bid by SHV Holdings.
The absence of a competitive auction for Nutreco has frustrated investors, many of whom were taken by surprise when the group announced last month a recommended offer from Dutch conglomerate SHV at €40 a share, valuing the company at €2.7bn.

SHV, owned by the Fentener van Vlissingen family, only increased its cash offer for Nutreco to €44.50 a share after the fish and animal feed company’s board rejected an informal joint approach by US commodities trading group Cargill and private equity firm Permira at €43.20 a share.
Nutreco objected to Cargill and Permira’s plans to break the group into two, adding there was a lack of detail on matters including funding.
However, two of Nutreco’s top-five shareholders have called for the group to allow Cargill and Permira to conduct due diligence, in order to put them in a position to make a binding offer.
APG, a leading Dutch pension fund manager, with a near 10 per cent stake, said: “All shareholders would benefit for management to offer a level playing field [to Cargill and Permira],” adding: “If the end result is a sale of the company, of course we would like to have as good a price as possible.”
APG’s view was supported by Hengistbury, a London-based hedge fund, with about a 3.5 per cent stake in Nutreco. “As with any situation like this, we think it’s important that there is a level playing field,” said the firm’s partner Daragh Horgan.
The VEB, the Dutch retail shareholders’ association, also said Cargill should be allowed the opportunity to make a “serious indicative offer” by conducting due diligence.
The association represents shareholders with a stake of less than 1 per cent in Nutreco, but has an influential role in swaying public opinion. Jasper Jansen, the VEB’s senior economist, said the association was unconvinced SHV’s €44.50 offer was adequate, adding: “We believe it is inappropriate that Nutreco runs into the arms of SHV.”
Both VEB and Hengistbury said SHV’s latest offer undervalued Nutreco.
Nutreco dismissed the shareholders’ calls for it to open its books to Cargill and Permira. It highlighted how it had an agreement with SHV under which it would only consider an indicative offer that is 8 per cent higher than the current bid by the Dutch conglomerate.
Nutreco also highlighted how SHV’s bid terms include not breaking up the company, maintaining the corporate culture and keeping the headquarters in the Netherlands.
Cargill and Permira declined to comment on whether they would take the step of making an offer worth €48.06 a share, or 8 per cent more than SHV’s bid. Cargill’s acquisitions to date have always been agreed with the targets.
SHV has been buying Nutreco shares on the open market, and last week announced it owned a 15 per cent stake, making it the largest shareholder.

WSJ : AstraZeneca’s Shaky Bridge to Pipeline’s Promise

AstraZeneca’s Shaky Bridge to Pipeline’s Promise
Company’s Pipeline Is Full But It Still Faces a Tricky Couple of Years

AstraZeneca ’s pipeline has plenty of ballast. But the U.K. pharmaceutical company could still use extra buoyancy for the next couple of years.

Astra essentially faces a timing issue. Its pipeline looks better than ever: Astra said Tuesday it should submit up to 16 new molecules or major extensions to existing treatments to regulators in 2015 and 2016. The strength of Astra’s oncology business is becoming clear: by 2020, it aims to bring six new cancer treatments to market; it has an increasingly impressive position in immuno-oncology.

This, in time, will reshape Astra’s business. Half its pipeline is biologic medicines, which tend to be more durable than easily copied pills. More specialty medicines, which command higher prices, should mean better profitability.

But this won’t really be felt until after 2017. Leave aside the ambitious sales target of $45 billion by 2023, made while Astra was defending itself from Pfizer ’s takeover approach. Astra aims to hold 2017 revenues flat with 2013. That is despite the drag from drugs losing patent protection and a more competitive U.S. pricing environment in diabetes and respiratory. Even assuming total pipeline success, Barclays puts Astra $2 billion short of its 2017 target.

At 17.5 times forecast earnings, Astra still trades at a slight premium to the sector. But support from takeover talk should be waning. Pfizer could return in a week’s time under U.K. rules. But its alliance with Merck KGaA to develop the latter’s immuno-oncology prospect suggests the U.S. company has moved on.

It would be foolhardy for Pfizer to have another tilt at Astra without a good chance of success. AbbVie ’s abrupt ditching of Shire confirmed the worst suspicions about tax-motivated deals. And Astra’s promising pipeline could make agreement on valuation more challenging than ever.

In the near term, cost cutting as well as one-off income from deals could support earnings. But Astra may need additional help: results are expected early next year for use of blood-thinner Brilinta in non-acute patients who have suffered a heart attack within the past three years. Success could shore up confidence in Brilinta’s efficacy, encouraging physicians to prescribe the drug for longer. More important, it could potentially double the patient population for Brilinta, which Astra thinks could sell a risk-adjusted $3.5 billion in 2023.

Astra’s pipeline could translate into a more robust business geared around specialized, biologic medicines. But it is still a mass-market pill that could make for smoother sailing toward that goal.

(Les Echos) Nuclear Areva will not hold its financial objectives

The nuclear group will announce after the close of trading suspension of its financial outlook.

The situation worsens in Areva. According to our information, the nuclear group will communicate this evening after the close of trading to share new information about its financial situation. Technically, the group will suspend its financial outlook and announce that he started work to revise these goals. For 2014, the group expected a drop in turnover of 10% and a cash flow free operating at equilibrium, depending on the year-end receipts. For 2015 and 2016, Areva was counting on "organic growth in turnover of around 4 to 5% per year on average" and "free operating cash flow before taxes of close to balance in 2015 and clearly positive in 2016, "the group said.
The nuclear group is under severe financial pressure. In early October, the Supervisory Board has already announced a reduction in investment of € 200 million over the period 2015 to 2016, sales of assets for a minimum amount of EUR 450 million by the end of 2016 and preparation, "as soon as possible," an issue of hybrid securities, to avert the threat of a downgrade of its credit rating by Standard & Poor's. But in early November, the group could not place this hybrid issue, citing poor market conditions. This issue was, according to our information, a few hundred million. Agency credit rating indicated in stride but it retained its rating reiterated that the lack of building equity in the short term or support of the state could lead to the fall of Areva rating owned 87% by the public sector a notch. The group now has a BBB- rating, but the S & P together with a negative outlook last month.
The magazine "Challenges" stated this morning that the group would announce "in the coming days," a "significant profit warning", with a net loss in fiscal 2014 of EUR 1 billion. In the first half, the group has already lost 694 million euros and has already revised down its business objectives, to EBITDA and free cash flow. According to "Challenges", two measures are also under consideration by the government, "the state could inject 2 billion euros in Areva, through proceeds from the sale of assets in other companies of the nuclear industry. " Moreover, "the creation of a hive society is envisaged to house and outsource the ultra-making activities at the same time unpredictable."
These new ads on the situation Areva came as the group is full overhaul of its governance, and should happen in the next month a business status to management board and supervisory board of a company in administration with a separation of the roles of chairman and CEO. The prime minister said last week in Pierre Blayau, current Chairman of the Supervisory Board appointed by François Hollande barely there eighteen months, he did not become chairman. The position should accrue to the former head of PSA, Philippe Varin, said Minister of Economy.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: OME -19.9%, URBN -6.1%, AMCN -3.8%, DKS -3.7%, A -3%, HD -1.1%, NWL -0.6%, JEC -0.5%

Select iron ore stocks lower on Chinese property data (iron ore futures fell sharply Dalian Exchange in China):: CLF -3.4%, RIO -1%, VALE -0.9%, X -0.8%, BHP -0.7%

Other news: NBS -27.3% (announced initial data from Phase 2 PreSERVE AMI clinical trial; some of three primary endpoints appear to have not been met), CYTR -11.2% ( announces partial clinical hold affecting Aldoxorubicin clinical trials; company expects trial timelines to remain materially unchanged), GSAT -5.4% (negative mention on Mad Money and following CEO appearnce on show), RMTI -4.5% (announced $55 mln proposed public offering of common stock), PF -4.2% (announced secondary offering of 20 mln shares by selling stockholders; announces concurrent repurchase of 1 mln shares of common stock), FOLD -3.1% (commenced $75 mln common stock offering), LQ -2.4% (announced that certain selling stockholders affiliated with The Blackstone Group (BX) have commenced a secondary offering of 20 mln shares of La Quinta common stock), XIN -2.2% (weak property data out of China), RCPT -1.4% (announced proposed underwritten public offering of common stock), CPA -0.7% (reports Oct Monthly Traffic rose 12% YoY)

Analyst comments: HIMX -2.9% (downgraded to Perform at Oppenheimer), WAC -1.5% (downgraded to Hold from Buy at Evercore ISI), M -1% (downgraded to Neutral from Buy at BofA/Merrill), WFC -0.5% (downgraded to Mkt Perform from Outperform at BMO Capital )

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: CCM +11%, AFMD +9.6%, JASO +6.8%, SNE +5.4%, (FY15 guidance) MANU +1.9%, MDT +1.1%

M&A news: CST +4.4% (mentioned as acquisition target on Mad Money), PT +1.7% (cont spec on M&A deal), ACT +0.9% (cont momentum higher following yday's merger announcement with AGN)

Select solar related names showing strength after JASO earnings: JKS +2.2%, CSIQ +1.6%, TSL +1.3%, FSLR +1.1%, SPWR +0.4%, SCTY +0.4%

Select mining stocks trading higher: SVM +5.4%, IAG +4.8%, AUY +4.5%, AUY +4.5%, FSM +4.3%, AEM +3.3%, ABX +3%, GDX +2.5%, SLW +2.4%, GG +2.1%, EGO +2.1%, KGC +1.8%, GFI +1.2%

Select oil/gas related names showing strength: SDRL +2%, STO +1.8%, TOT +1.7%, RIG +1.4%, RDS.A +1.3%

Other news: UEC +7.9% (reports a 77% increase in estimated uranium resource at Burke Hollow project in South Texas), SUNE +7.5% (co and TerraForm Power (TERP) signed an agreement to acquire First Wind for $2.4 bln), FST +5.6% (entered into definitive agreement to sell its natural gas properties located in the Arkoma Basin for after-tax cash proceeds of ~$185 mln), TRVN +5.1% (announced positive top-line results from Phase 2a/b study of TRV130 in acute postoperative pain), PLUG +4.8% (installs first GenFuel site with outdoor hydrogen dispensers), LULU +4% (favorable commentary on Monday's Mad Money), XLNX +2.5% (Board authorized a repurchase of up to $800 mln of the Co's outstanding common stock), NOK +2.5% (announces N1 Android Tablet, also may soon partner with Foxconn (FXCNY) for new tablet, according to reports), ARCP +1.5% (receives expected NASDAQ notice related to delay in Form 10-Q filing), NVAX +1.4% (announced that enrollment has begun in a Phase 2 clinical trial of its recombinant quadrivalent seasonal influenza virus-like particle vaccine candidate), FCAU +1.4% (automobiles sales in Europe rose 8% in Oct),TERP +1.2% (co and SunEdison (SUNE) signed an agreement to acquire First Wind for $2.4 bln; transaction immediately accretive to TerrForm), TLM +0.9% (reports of potential pipeline sale to Regency (RGP))

Analyst comments: MTW +5.1% (upgraded to Buy from Hold at Jefferies ), NOR +1.6% (initiated with an Outperform at BMO Capital Mkts), SWC +0.5% (initiated with an Outperform at BMO Capital Mkts)

>>> Areva may need to separate underperforming activities from main operations;

Areva may need to separate underperforming activities from main operations; government could inject EUR 2bn

French Prime Minister Manuel Valls and French Economy Minister Emmanuel Macron are understood to have tasked Philippe Varin to head Areva, the state-owned nuclear power specialist, weekly Challenges reported. The report added that Varin, in charge of rescuing Areva, could consider creating a holding company where all the worst performing and heavily loss-making operations of the company, would be transferred to and sold at a later date. Such assets would include the EPR nuclear power plant construction project in Finland, where the estimated additional costs could amount to EUR 10bn+.

The report went on to say that the French government could also inject into Areva EUR 2bn of fresh money from the sale of companies operating in the nuclear power sector.

Varin would also be in charge of re-creating a “united” French team for the sale of nuclear power plants internationally, with the help of Alstom for the turbines, Bouygues for heavy construction, Areva for the boilers, and EDF as the project manager.

The report also noted that China is a strategic market for nuclear power plants and Varin, who developed strong relationships in China as the former head of listed French carmaker PSA Peugeot-Citroen, would push hard to sell contracts for providing nuclear fuel to the Chinese power plants.


Source Challenges