>>> DMG Mori: Caution required now

DMG Mori Seiki Co for DMG Mori Seiki AG (GIL GY)

Excercise caution

DMG Mori (Bidder) says that they now control 38.52% of the total target share capital

They also say that they have achieved its primary objective of regaining a de facto majority based on the attendance rate in the 2014 Annual General Meeting of DMG MORI SEIKI AG going forward.

Target General Meeting results

2014

2013 *

Shares present represented at the target AGM

59.87%

46.55%

Bidder holding in target at AGM time

24.3%

24.3%

Bidder equivalent control percentage

41%

52%

The 2014 meeting was attended by 59.8% holders , add now the Elliott holding 5.6% for a likely 65.5% attendance.

At such attendance, the bidder’s current 38.5% holding would de-facto control the meeting with c59% equivalent voting control. It would require attendances over 76% to neutralise the defacto control.

We argued the bid was low. heck it is still low but chasing the stock now should be approached with care.

The minimum acceptance is for 50%+1 share. The bidder already has 38.5% of the target’s capital. A mere 11.5% have to be convinced to tender for the offer to be succesful but even if it is not succesful the bidder has achieved their objective - to regain General Meeting control in the target to be able to control synergies from the cooperation plan.

They have also said they do not want or need a domination agreement now. In time yes but not now.

The current €30 offer is expected to settle by mid-April so that accepting AG shareholders are not expected to receive a dividend for 2014

The trade perhaps is to buy the Japanese DMG line.

The bidder estimated in their original announcement that over the next 5 years "the integration effect expects to bring cash flow comparable to the investment amount". Meaning a benefit of €556m. In addition, the bidder expects more synergies (not quantified) if or shall we say when, a domination agreement is in place.

We argue that since the stock was trading at €25.6 before the bid was announced (01/21/15), the €30 offer aimed at buying a mere 18.5m shares to gain control offers a control premium of €4.4 per share equivalent to spending €81m.

The bidder wants to pay €81m premium (€4.4 x 18.5m shares) to gain control but such control allows the bidder to generate benefits of €556m?

The offer even at €30 looks low but the objective of the takeover has been satisfied, therefore a position could be entered for the subsequent domination agreement but buying now for a further bump may not prove profitable.

>>> US Gapping down

Gapping down

Gapping down In reaction to disappointing earnings/guidance: OPWR -19.2%, ACUR -9.1%, BALT -8.1%, TEDU -6.8%, CMLS -6.5%, CZR -5.6%, NBR -3.7%, NMFC -3.3%, HTGC -3.2%, CODI -2.6%, TPH -2.3%, GWRE -2.2%, BCS -2.2%, CKEC -1.9%, MLHR -1.7%, (also announces Greg Bylsma named Chief Operating Officer, Herman Miller N. Am.; Jeff Stutz promoted to CFO), SN -1.6%, MYL -1.5%, EVDY -1.2%, PANW -0.9%, KATE -0.7%

M&A news: PRIM -13.6% (acquires Otter Tail Corporation (OTTR) subsidiary Aevenia in transaction valued at ~$23 mln; also reported earnings)

Other news: PLUG -6.1% (files to delay its 10-K), SLW -4.3% (announces it has entered into an agreement with a syndicate of underwriters led by Scotiabank; whereby they will purchase 38,930,000 common shares of Silver Wheaton at a price of $20.55/share), AKRX -4.1% (announces filing extension for Form 10-K for YE 2014 ), LUX -3.9% (following earnings released AMC in Europe yday), OAK -3.4% (announces a public offering of 4,000,000 Class A units), NRF -2.8% (announces pricing of public offering of common stock with a forward component at $18.65/sharek), XOMA -2.4% (entered into a Loan and Security Agreement with Hercules Technology Growth Capital (HTGC) under which it borrowed $20 mln), RDS.A -2.2% (Announces Scrip Dividend Program in 2015)

Analyst comments: MNKD -8.1% (downgraded to Sell from Neutral at Goldman), AKS -3.2% (downgraded to Neutral from Buy at Nomura), MU -2.6% (downgraded to Neutral from Buy at Nomura),  X -2.2% (downgraded to Neutral from Buy at Nomura), SYT -1.9% (downgraded to Underperform at Exane BNP Paribas), PVH -1.6% (downgraded to Neutral at Goldman -- Removed from Conviction Buy List), OPK -1.5% (downgraded to Perform from Outperform at Oppenheimer), ESV -1.3% (downgraded to Hold from Buy at Societe Generale), AXP -0.7% (downgraded to Underperform from Neutral at Macquarie)

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: DRRX +21.4%, (also announced its Epigenomic Regulator Program, and the successful completion of a Phase 1 clinical trial with the program's lead product candidate DUR-928), MDR +18%, NTRI +13.4%, XON +6.8%, CISG +6.6%, EC +6.2%, CHUY +5.4%, AZO +4.5%, NAV +3.7%, DKS +3.5%, DTSI +3.3%, THLD +3%, PBYI +2.9%, GSAT +2.8%, BBY +2.8%, ASPS +2.6%, RIGL +2.3%, HALO +1.8%, JD +1.8%, INSY +1.8%, IG +1.3%, DPLO +1.3%, CNXR +1.2%, FSIC +1.1%, SSI +1.1%, MBI +0.8%

M&A news: DATE +9.9% (announces receipt of 'going private' proposal and departure of director; proposal includes an acquisition price of $5.37 per ADR), OCN +5.2% (provides various updates; anticipates that its fourth quarter results will be impacted by a $370--$420 mln non-cash charge to write-off goodwill; has hired Moelis & Company and Barclays Capital Inc. to support the Company and to advise regarding adjustments and help explore its strategic options), 

Select oil/gas related names showing strength: GDP +3.5%, PBR +2.5%, SDRL +1.9%, PWE +1.6%

Other news: ONCY +15.9% (confirms the FDA granted Orphan Drug Designation for its lead product candidate, REOLYSIN, for the treatment of primary peritoneal cancers), BIOC +8.8% (David Rimm, MD, Professor of Medicine in Medical Oncology at Yale University School of Medicine, will join the Company as a scientific advisor), TSEM +8.2% (has begun mass production of an IR sensor used by Intel (INTC)), PSTI +4% (PSTI and Hadassah Medical Center announce significant data showing PLX-R18 Cells improve bone marrow transplantation), WLT +3.4% (disclosed that it agreed to issue an aggregate of 8.65 mln shares of our common stock in exchange for $66.725 mln aggregate principal amount of 8.5% Senior Notes due 2021 held by a noteholder ), DTSI +3.3% (announced its Headphone:X technology will be available on select smartphone models from top Chinese brands Huawei, vivo, nubia and letv later this year; co also reported earnings), NBG +2.7% (cont vol surrounding Greece/EU), NSAM +2.7% (filed mixed shelf offering), ISRG +1.4% (awarded $430 mln Defense Logistics Agency contract), CBOE +1.4% (reported February 2015 average daily volume for options and futures contracts declined 22% yoy to 4.7 million), HAR +1.3% (filed for a ~839.7K share common stock shelf offering by selling stockholders), SHPG +1.3% (still checking), TASR +1.1% (announces undisclosed amount of large orders of its AXON body-worn video cameras and Evidence.com solution; notes the number of agencies on the Evidence.com platform recently surpassed 5,000), C +0.9% (announces definitive agreement to sell OneMain Financial Holdings to Springleaf Holdings (LEAF) for $4.25 billion), BBRY +0.8% (introduces BlackBerry Leap)

Analyst comments: DRRX +21.4% (upgraded to Buy from Hold at Cantor Fitzgerald), LL +3.2% (upgraded to Buy from Neutral at Janney), NXPI +1.6% (upgraded to Neutral from Sell at Goldman), GPS +1.4% (upgraded to Outperform from Mkt Perform at FBR Capital)

>>> LUXURY - > Hong Kong Retail Sales VERY POOR earlier this a.m....


LUXURY - > Hong Kong Retail Sales VERY POOR earlier this a.m.... HK Jan Retail Sales by Value -14.6% YoY vs est -6.1% within that Jewellery, Watches & Clocks -22.5% a big deterioration from Dec -16.1%, Nov +1.4% and Oct -11%... MACAU gaming revs also very weak again for Feb   KERING been struggling with new highs even on a weaker euro lately and MKT NO LONGER SHORT the name - see attached. 
Add LUXOTTICA had what we thought were decent numbers this a.m....shares now reversed significantly from the open..   
                                                                
NOTE 
1) Currency tailwind lower @ KER FP 
2) Gucci still flatlining 
3) Pinault recently stated that it 'will not dispose of PUMA, full stop'. The space been all about “PRICE x VOLUME"  is comes apart this year as US interest rates rise...   SELL

>>> Bolloré Group increases stake in Vivendi to 8.15% for EUR 852m

Bolloré Group increases stake in Vivendi to 8.15% for EUR 852m

The Bolloré Group announced it acquired an additional 40.5 million shares in Vivendi at a price of EUR 21 per share, bringing its ownership from 5.15% to 8.15%.

This investment amounts to EUR 852m, reflecting the confidence of Bolloré in the development capability of Vivendi.

Company Press Release

>>> Nord Gold continues to work on M&A market; interested in projects at early s

Nord Gold continues to work on M&A market; interested in projects at early stage, CEO says

Nord Gold (Nordgold), the London-listed, internationally diversified gold producer, continues to work actively on the M&A market, reported Vedomosti citing CEO Nikolai Zelenski.

Nord Gold is looking more at projects at an early stage, as they are cheap, according to Zelenski.

At present Nord Gold is not looking at any large players, the CEO said. Currently, Nord Gold has only small companies under consideration, and is conducting a number of projects. Nord Gold is looking at cheap projects that would not be burdensome for the company’s balance sheet.

Nord Gold looks to conduct transactions for real money, Zelenski noted. He said that the value of the company shares does not allow so far conducting transactions using its shares.

Nord Gold does not consider delisting from the stock exchange, the CEO also told Vedomosti.

Due to limited geological exploration, at present Nord Gold does not see new and interesting projects in Russia, but the company sees them abroad where it invests, according to Zelenski.

Nord Gold, in which the main shareholder is Alexey Mordashov, posted USD 1.2bn in revenues and USD 123m in net profit in 2014, Vedomosti reported. The company has a market capitalization of USD 1bn.


Source Vedomosti

>>> Smith & Nephew rises amid speculation of bid from Johnson & Johnson

Smith & Nephew rises amid speculation of bid from Johnson & Johnson
Shares in Smith & Nephew edged up 1.1% amid speculation that the rival medical-devices group Johnson & Johnson (J&J) might make a takeover bid, the Financial Times reported. The market report said deal speculation intensified after New Brunswick, New Jersey-based J&J sold its cardiology franchise Cordis yesterday, 2 March, boosting its estimated cash and equivalents to USD 35bn.

UK-based Smith & Nephew’s share price ended trading yesterday at 1199p, giving the London-listed business a market capitalisation of GBP 10.75bn (USD 16.53bn).

The Kalamazoo, Michigan-based medical-technologies company Stryker Corporation has previously been tipped as a prospective buyer of Smith & Nephew, the report noted. The Times reported chatter of a potential 1500p-per-share cash-and-shares offer from Stryker but was sceptical of the reheated rumour.

Financial Times, The Times

>>> Sika shareholder Threadneedle speaks out against takeover by Saint-Gobain

Sika shareholder Threadneedle speaks out against takeover by Saint-Gobain
Sika shareholder Threadneedle, the UK investor, is confident the takeover of Sika by Saint-Gobain will not happen, Basler Zeitung reported.

Threadneedle Manager Iain Richards said Saint-Gobain needs Sika but Sika does not need Saint-Gobain, and he is confident the deal will not be completed. The report said the deal would be a disaster for Threadneedle which has been a Sika shareholder for around 20 years. Threadneedle holds 1.7% and is part of a shareholder group which holds a total of 8.6%.

Synergies resulting from the deal are not equal for both sides and the savings of EUR 70m for Sika are an overestimate, the report stated, citing Richards.

Basler Zeitung