Event Driven Morning Comments: EU & NA
MAKOR EVENT DRIVEN MORNING COMMENTS th June 8 2015 Stocks in the News: Europe EUROPE Lafarge Shareholder meeting nd SYNN/MON SYNN unmoved by Monsanto 2 letter SGO: Disposal of Verallia to Appolo Alliance Trust Actelion Shire: Potential Target NR AMRS: potential Higher Cash offer NORTH AMERICA ISSI: Update ODP: Shareholders complaints update BAX: Baxalta spin-off USA BRLI/OPK BRLI 2Q FY15 EPS - $0.44E ($0.40-$0.46, 3 analysts) a/o 6/4; CC @ 10:30am ET - www.bioreference.com, (Actual) CRRC/RRD Close Date (Expected) KRFT/H.J. Heinz HSR EXPIRES (Expected) Company POM/EXC POM dividend (Actual) VTR/Care Capital Properties, Inc. VTR dividend (Actual) OUR VIEW TODAY: Limited comments and quite a bit of catching up after coming back…. Clearly SYNN / MON is one of the main news today, and although people might see this as a commitment from Monsanto, I continue to beddlieve that the deal is extremely risky from a regulatory point of view and I would remain extremely careful. More comments tomorrow. Europe Spread % Spread Ann % BG GROUP PLC DOMINO PRINTING PIRELLI & C. TNT EXPRESS NV WORLD DUTY FREE SPA North-America BAKER HUGHES INC DRESSER RAND GROUP INC INFORMATICA CORP LORILLARD / REYNOLDS NORCRAFT / FORTUNE BRANDS PARTNER RE / EXOR April 15, 2015 1
MAKOR EVENT DRIVEN MORNING COMMENTS th June 8 2015 NEWS EUROPE: SYNGENTA MONSANTO: Syngenta AG, target of an unwanted $45 billion takeover approach by Monsanto Co., said its U.S. suitor has failed to convince it of the merits of a merger and is just repeating the “same indequate price” with the same flawed view of the execution risks. The only change in Monsanto’s proposal since the first offer tabled on April 18 is a “wholly inadequate” break fee of $2 billion, the Basel, Switzerland-based maker of agrochemicals and seeds said in a release. Frustration is creeping into Syngenta’s demeanor, faced with the detrimental effect on business a prolonged pursuit may have and amid widespread expectations among investors of a higher offer. Chief Executive Officer Mike Mack has trodden a careful path since the initial approach, acknowledging the need to do proper due diligence on Monsanto’s plan to create an agricultural-products powerhouse, while emphasizing the prospects the company has on its own. “It’s not the end of the takeover saga,” said Markus Mayer, an analyst at Baader Bank AG, who has a “buy” rating on Syngenta. “The second offer was not a big change -- just a breakup fee. It shows that Monsanto is still interested.” Monsanto is looking to jumpstart talks on combining its leading franchise for genetically modified seeds with the world’s largest maker of agricultural chemicals. The break-up fee would be payable if Monsanto is unable to obtain global regulatory approvals by selling all overlapping businesses. Syngenta rejected the 449 francs-a-share bid, with 45 percent in cash, saying it undervalued the company and doesn’t sufficiently compensate for antitrust risks. Syngenta would consider entering talks if Monsanto raises its offer and adds a multibillion-dollar termination fee in the ballpark of 10 percent of the purchase price, people with knowledge of the situation said last week. “The respective outside counsel of Syngenta and Monsanto met on three separate occasions, subsequent to our rejection letter, to discuss in good faith the regulatory challenges,” Syngenta said Monday. “These meetings have reinforced Syngenta’s assessment of the regulatory risks and Monsanto has made no attempt to seriously address these concerns. Monsanto continues to gloss over these fundamental transaction risks.” Baader’s Mayer said Monsanto will have to sweeten its bid to at least the 500-franc mark -- the analyst’s target price -- or change the equity or cash components of the deal. Monsanto, based in St. Louis, has pledged to sell Syngenta’s seed and genetically engineered traits as well as any overlapping crop chemicals to win regulatory approval. Chemicals that would be sold include Syngenta’s glyphosate and acetochlor herbicides, a person with knowledge of the matter said last week. Syngenta said it’s at the start of a “significant upturn in innovation” that will help margins climb to 24 percent to 26 percent by 2018. “It is disappointing that Syngenta has not engaged in substantive discussions about the many benefits of this combination,” Monsanto Chairman and Chief Executive Officer Hugh Grant said in the statement. Monsanto is committed to “pursuing constructive conversation with Syngenta’s management and board,” he said. Monsanto’s bid represented a 43 percent premium to Syngenta’s share price at the close on April 30, just before Bloomberg News reported the proposal. SAINT-GOBAIN Apollo Global Management LLC offered 2.945 billion euros ($3.3 billion) for Cie. de Saint-Gobain SA’s glass- packaging unit Verallia. Saint-Gobain is in exclusive talks with Apollo over a deal, the Courbevoie, France- based company said in a statement today. Saint-Gobain Chief Executive Officer Pierre-Andre de Chalendar said Thursday that Verallia attracted five bids. The company is selling the business as it refocuses on building materials. Saint-Gobain already sold the North American part of the unit to Ardagh Group SA for $1.7 billion. Saint-Gobain last year said it would seek to reach an agreement with a buyer before mid-2015. The company is also battling to take control of Swiss adhesives maker Sika AG. ALLIANCE TRUST Broker reluctantly tips Alliance as a 'buy' saying the 'discount is attractive'. Demand for crisis-hit Alliance Trust’s shares has sagged following a recent management U-turn, and they 0are now sufficiently attractively priced for one leading broker to cite them as a “buy”. But it is not a wholehearted recommendation. Canaccord Genuity said while “Alliance is sailing in uncharted waters”, the “discount is attractive”. It concluded the investment trust, one of the biggest in the UK, was a “quantitative more than qualitative” buy. The graph, below, shows how the gap between Alliance’s share price and the value of the underlying assets owned by the trust has widened. Underlying assets per share are now worth 13pc more than the shares themselves. Alliance’s troubles stem from years of lacklustre performance, encouraging one rebel shareholder – Elliott Advisors – to build a large holding in the hope of effecting management change. Earlier this year Elliott sought to place three new directors on the trust’s board. Alliance’s incumbent management, having April 15, 2015 2
MAKOR EVENT DRIVEN MORNING COMMENTS th June 8 2015 fought Elliott’s proposals, performed an 11th-hour U-turn and welcomed two of the proposed directors to the board. The episode resulted in further criticism and questions over the future management of the trust. ACTELION / SHIRE Actelion is a potentially logical target for Shire and a bid is plausible given Shire’s goal to pursue further significant M&A, JPMorgan says in note. Notes Actelion is a specialty pharma/rare disease pulmonary arterial hypertension (PAH) franchise that may see strong topline growth and progressive margin expansion until at least the mid 2020s. Sees potential for significant cost-cutting, particularly within Actelion’s R&D line. Sees low clinical risk, with Actelion’s Opsumit already approved and Selexipag likely to be approved in the U.S. by Oct. this yr . Says arguments against pursuing an acquisition include modest accretion (12% by 2020 at base case, 23% by 2020 at bull case) and Actelion having previously fought off activist investors looking for a sale NOTE: Yday, Shire Approached Actelion in Recent Weeks: Sunday Times NR / ARMS RESSOURCES NR said it will accept a “significantly increased” cash offer from Asia Coal Energy Ventures Limited for its 17.2% shareholding in Asia Resource Minerals plc. Co. says ACE agreed to raise their bid for ARMS from 41 pence to 56 pence per share, valuing the total equity of ARMS at over $200million . April 15, 2015 3
MAKOR EVENT DRIVEN MORNING COMMENTS th June 8 2015 NEWS NORTH AMERICA: ISSI / SUMMIVIEW ISSI/Summitview - Supplemental Proxy Materials From May 31 to June 4, 2015, ISSI and its representatives responded to questions and provided additional due diligence materials to Cypress and its representatives. During this time, representatives of WSGR and counsel to Cypress attempted to resolve the comments that Cypress had provided on the draft merger agreement. As required by the Merger Agreement, ISSI provided Parent with the additional due diligence materials that were provided to Cypress and not previously provided to Parent. https://www.sec.gov/Archives/edgar/data/854701/000119312515215099/d938934ddefr14a.htm ODP / SPLS ODP/SPLS – Supplemental disclosure relating to shareholder litigation https://www.sec.gov/Archives/edgar/data/791519/000110465915043722/a15-13648_18k.htm STCK / BUILDING MATERIALS CORPORATION STCK – Building Materials Corporation merger agreement https://www.sec.gov/Archives/edgar/data/791519/000110465915043722/a15-13648_18k.htm BAX BAX – Form 10/A#5 for Baxalta Spin-Off 1 for 1 Distribution Ratio Record date 6/17/15; Distribution Date 7/1/15 https://www.sec.gov/Archives/edgar/data/1620546/000119312515214952/d829725dex991.htm 10 D – Form 10/A#4 for Chemours Spin-Off 1 for 5 Distribution Ratio Record date 6/23/15; Distribution Date 7/1/15 https://www.sec.gov/Archives/edgar/data/1627223/000119312515215110/d832629dex991.htm Press Release http://www.baxter.com/press_room/press_releases/2015/06_05_15_baxalta_separation.html April 15, 2015 4
MAKOR EVENT DRIVEN MORNING COMMENTS th June 8 2015 Monday June 8th 2015 EUROPE Lafarge Shareholder Meeting USA BRLI/OPK BRLI 2Q FY15 EPS - $0.44E ($0.40-$0.46, 3 analysts) a/o 6/4; CC @ 10:30am ET - www.bioreference.com, (Actual) CRRC/RRD Close Date (Expected) KRFT/H.J. Heinz Company HSR EXPIRES (Expected) POM/EXC POM dividend (Actual) VTR/Care Capital Properties, Inc. VTR dividend (Actual) Tuesday June 9th 2015 EUROPE Lonmin Distribution transfer/payment USA BRDR/PBI TENDER EXPIRES – 12:00 midnight NYC (Actual) GEVA/ALXN ALXN PRESENTS @ WILLIAM BLAIR – 1:10pm ET – http://ir.alexionpharm.com (Actual) MRH/ENH ENH PRESENTS !ms-1:50pm ET; http://cc.talkpoint.com/morg007/060915aae/?entity=6 EIW07X2 (Actual) SFXE/Robert F.X. Sillerman HSR FILING DEADLINE – 10 business day (Actual) April 15, 2015 5
MAKOR EVENT DRIVEN MORNING COMMENTS th June 8 2015 Wednesday June 10th 2015 EUROPE XL Ex dividend USA BRDR/PBI Close Date (Expected) GCI/Gannett Publishing GCI dividend (Actual) GEVA/ALXN ALXN PRESENTS @ GS – 11:40 ET; http://ir.alexionpharm.com (Actual) HE/NEE RECONVENED HE S/H MEETING – 10:00am Honolulu time; extended from 5/12 (Actual) LTM/Leonard Green & Partners and Close Date (Expected) TPG LTM/Leonard Green & Partners and EFFECTIVE DATE – per nyse (5/27) (Expected) TPG LTM/Leonard Green & Partners and LTM DO BE REMOVED FROM S&P MIDCAP 400 – after the close; MANH replaces TPG (Actual) OCR/CVS OCR dividend (Actual) PLL/DHR PROXY FILING DEADLINE – 20 business days (Actual) PNK/GLPI GLPI dividend (Actual) RALY/CA TENDER COMMENCEMENT & HSR FILING DEADLINES – 10 business days (Expected) WPZ/WMB WMB dividend (Expected) Thursday June 11th 2015 EUROPE USA CKSW/Francisco Partners Management CKSW S/H VOTE DATE – 4:00pm Israel time (Actual) L.P. CTRX/UNH UNH dividend (Actual) IGTE/CAP FP COMPETITION CANADA EXPIRES (Actual) LO/RAI RAI dividend (Actual) MIG/656 HK MO DOI HEARING – 9:00am CT (Actual) REX LN/BLL BLL PRESENTS BARCLAYS – 5:25 et – webcast (Actual) RTI/AA EC PROVISIONAL DEADLINE (Expected) UIL/IBE SM UIL dividend (Actual) April 15, 2015 6
MAKOR EVENT DRIVEN MORNING COMMENTS th June 8 2015 Friday June 12th EUROPE USA ENR/Edgewell Personal Care NEW ENERGIZER WI TRADING TO BEGIN NYSE (Actual) ISSI/Summitview Capital Consortium ISSI RESCHEDULED S/H VOTE DATE – 2:00 pm local time (Actual) MRH/ENH ENH dividend (Actual) MRH/ENH MRH dividend (Actual) OMG/APO HSR FILING DEADLINE – 10 business days (Actual) TEG/WEC MN PUC COMMISSION MEETING – TEG/WEC on agenda (Actual) April 15, 2015 7
