TheChek News Flow

Safran Share Sale Orders Below EU62.60 Said to Risk Missing Out
2015-03-03 06:55:07.422 GMT


By Ruth David
(Bloomberg) -- Books covered at EU62.60, according to two
people familiar with offering.
* Initial guidance was between EU62.50 and market close of
EU63.76
* Books close at 7:15am GMT
* NOTE: French govt selling minimum 3.96% stake via BofAML

Link to Company News:{SAF FP <Equity> CN <GO>}

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To contact the reporter on this story:
Ruth David in London at +44-20-3525-8095 or
rdavid9@bloomberg.net

To contact the editor responsible for this story:
James Ludden at +44-20-3525-2645 or
jludden@bloomberg.net

Buffett Plan for More 3G Deals Sparks Kellogg Talk: Real M&A
2015-03-03 00:09:27.920 GMT


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

By Brooke Sutherland
(Bloomberg) -- What comes after ketchup and doughnuts?
Warren Buffett’s Berkshire Hathaway Inc. teamed up with 3G
Capital two years ago to acquire ketchup maker H.J. Heinz Co.
and then helped finance 3G-owned Burger King Worldwide Inc.’s
purchase of Canadian coffee-and-doughnut chain Tim Hortons Inc.
Ever since those deals, speculation has simmered about what
they’ll do next -- be it Kellogg Co., Kraft Foods Group Inc. or
Mondelez International Inc.
Buffett stoked the conversation with his annual letter to
Berkshire shareholders Saturday, saying he expects to “partner
with 3G in more activities.” That may put the billionaire on
track for another deal targeting one of America’s consumer
giants, such as $23 billion cereal maker Kellogg, said Edward
Jones & Co.’s Brian Yarbrough.
“Everyone knows that these guys are probably lining up,”
Yarbrough, a St. Louis-based analyst, said in a phone interview.
“You’ve got to think in the next 12 to 18 months, there’s
probably some kind of deal.”
Buffett looks for targets that have strong brands, simple
businesses and consistent earnings power. 3G, co-founded by
Brazilian billionaire Jorge Paulo Lemann, is known for its
ability to improve operations and cut costs.

Deal ‘Template’

Campbell Soup Co.’s vegetable procurement and processing
business would fit well with Heinz, and Kraft, the $38 billion
packaged-food company, offers strong cash flow, according to
analysts and investors. Mondelez, a $61 billion snack maker, may
also be appealing because of its strong international presence
and below-average margins that 3G could help improve, Yarbrough
said.
“There’s a certain template there,” Bill Smead, chief
executive officer of Berkshire shareholder Smead Capital
Management, said in a phone interview. “They need something of
merit that’s out of favor for one reason or another.”
Buffett’s recent major deals include an agreement in
October to take over Van Tuyl Group, the largest privately owned
U.S. auto dealer. The next month, Berkshire announced a plan to
buy Procter & Gamble Co.’s Duracell battery business.
His biggest acquisition of the last few years was the
buyout of Heinz with 3G for more than $23 billion. There will
probably be more like that, or ones similar to last year’s
Burger King transaction, Buffett said in his annual letter to
shareholders.
“Whatever the structure, we feel good when working with
Jorge Paulo,” he said.

Big Targets

Berkshire had $63 billion in cash at the end of December.
Whatever the company and 3G tackle next will be big, said Smead,
whose firm manages about $1.3 billion. With private-equity dry
powder at a high, the opportunities among small to medium-sized
U.S. companies have been picked over, he said.
“It puts you into that $20 billion to $40 billion or
greater type category,” Smead said. Food and beverage deals are
the most likely since that’s 3G’s area of expertise. The
investment firm also backs Anheuser-Busch InBev NV.
Yarbrough of Edward Jones puts Mondelez, Kellogg, General
Mills Inc. and potentially McCormick & Co., the $10 billion
salt-and-pepper maker, on his list of the most logical targets.
Mondelez split with Kraft in 2012 and offers Buffett and 3G
a stronger international foothold than the Velveeta-cheese
purveyor. Buffett used to be a large holder of the predecessor
company and criticized its 2010 takeover of Cadbury Plc as
“dumb.”

Some Complications

General Mills, the $32 billion seller of Cheerios and Lucky
Charms, has a joint venture with Nestle SA that may complicate a
Buffett buyout. McCormick could lose a major contract with Taco
Bell operator Yum! Brands Inc. if it’s controlled by the owners
of Burger King, Yarbrough said. So those may be less likely.
Yum! Brands itself has been cited as a potential target for
Buffett and for 3G. It has a market value of $35 billion.
One out-of-the-box and smaller idea is Mattel Inc., the $9
billion maker of Barbie dolls and Fisher-Price toys. The company
makes sense as a potential target because it’s a great brand
that has “had an awful lot go wrong,” said Smead of Smead
Capital. Mattel replaced its CEO in January after a sales slump
extended to five quarters.
Buffett also highlighted Mars Inc. and Leucadia National
Corp. as possible partners for deals in his letter. Berkshire
may provide financing or act as an equity partner in friendly
transactions, he said. That may spell an interest in chocolate
or financial takeovers.
Tootsie Roll Industries Inc., the $2 billion maker of
Junior Mints, became the subject of takeover speculation after
the death of long-time CEO Melvin Gordon. It may entice Buffett.

Still Pricey

While most of these targets are logical, Buffett likely
won’t pull the trigger on his “elephant gun” until he feels
they’re fairly priced, said Richard Cook, co-founder of Cook &
Bynum Capital Management, which invests in Berkshire. Consumer
staples companies on the Standard & Poor’s 500 have outperformed
the broader index over the last 12 months.
“Things are expensive right now and Berkshire’s cash
levels are rising because they’re having a hard time finding
things to do,” Cook said in a phone interview. But “clearly he
wants to do other deals with 3G” and “there is a huge range of
things that would fit within that.”

For Related News and Information:
Buffett Critiques Breakup Ideas Even as Spinoffs Surge: Real M&A
Buffett Search for Heinz Sequel Puts Kellogg in Sights: Real M&A
Campbell Seen as Next Course for Buffett After Heinz: Real M&A
Top deal news: DTOP <GO>
Real M&A columns: NI REALMNA <GO>

--With assistance from Noah Buhayar in Seattle.

To contact the reporter on this story:
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
Elizabeth Wollman

Vallourec Possible Target for Tenaris, NSSMC: Macquarie(Earlier)
2015-03-02 18:26:00.495 GMT


By Joshua Fineman
(Bloomberg) -- Vallourec may be potential takeover target
for Tenaris or Nippon Steel as its shrs touch near 10-yr lows,
Macquarie analyst Giacomo Romeo wrote in note earlier.
* One possible scenario may be Tenaris buying Vallourec with
subsequent sale of Vallourec’s NA assets to Nippon Steel to
avoid antitrust issues; see potential 40% premium (EU 29.70)
being paid for Vallourec
* Second scenario would be for Nippon Steel to purchase
Vallourec; would be a “simple” deal between two cos. that
are already partners in NA, Brazil; would also see a 40%
control premium
* NOTE: No indication any of the cos. actually considering
potential deals
* NOTE: No indication any of the cos. actually considering
potential deals</li></ul>
* Vallourec remains outperform at Macquarie; Tenaris neutral;
Nippon Steel neutral
* NOTE: Feb. 9, Vallourec May Be Vulnerable to M&A Approach,
Credit Suisse Says

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To contact the reporter on this story:
Joshua Fineman in New York at +1-212-617-8953 or
jfineman@bloomberg.net
To contact the editor responsible for this story:
Arie Shapira at +1-212-617-1488 or
ashapira3@bloomberg.net