Business News & Financial News

Safran will decide in the coming days to make a bid on Zodiac and, where appropriate, offer a significant premium to shareholders of the aerospace supplier, said Monday the Tribune, citing inside sources.

No hostile bid will be made, the newspaper said, while the offensive Saffron comes a month after an initial rejection of the leaders of the Zodiac.

"Considering that we have more than one in two chance, we'll go, if it has less than one in two chance, wait. This folder will always feel in six months a year," told the newspaper an internal source of saffron.

A spokesman declined to comment Safran information immediately.A spokesman declined to comment Zodiac.

Around 11:25, the action was progressing Zodiac 13.01% to 49 euros on the Paris Stock Exchange after reaching a high of 53.4 euros earlier in the morning.At the same time, Saffron retreated 1.66% to 19.01 euros.

Saffron is able to offer a premium of 30-40% compared to the current course, says the Tribune, the equivalent of the highest historic title in 2007, to 58 euros.

Safran is ready to bring the family shareholders of Zodiac in its capital, the newspaper said, which would dilute the share of the state, now a shareholder group to 30%.

Citing "multiple sources," the newspaper wrote that the family Domange shareholder Zodiac up 9.28%, is not ready to sell, unlike the Peugeot family (5% of capital) who would be willing to cede Units.

Safran will do this for an offer to allow shareholders to retain the family tax benefit they have obtained by signing a pact Dutreil "six years ago and through which they receive a tax exemption on capital of 75%.

In prior postings to the families, Safran said his project is an acquisition of Zodiac, but that it could be achieved by exchange of securities and merger in order to preserve the fiscal pact, The Tribune wrote.

The Japanese consumer prices fell in July for the 17th consecutive month on an annual basis, a sign that deflation remains entrenched in the archipelago and Nippon will be difficult to fight for the government.

Tokyo seeks the method that will curb the rising yen, which this week hit a high of 15 years against the dollar and a high of nine against the euro, threatening to bring down a recovery that based on exports.

But the strong yen is likely to complicate efforts by the Japanese government to fight deflation.

Japanese Prime Minister, Naoto Kan, said Friday that reporters would act when necessary on the issue of the strong yen and he would meet the Governor of the Bank of Japan Masaaki Shirakawa on his return from a trip to the abroad.

Naoto Kan also said that excessive currency fluctuations could threaten financial stability and hoped that the BoJ would take the appropriate measures in terms of monetary policy.

Decisions will be made August 31 on these issues.

The Interior Ministry announced Friday that consumer prices, which include fuel costs but not those of fresh products, fell 1.1% yoy in July according to the median forecast of the market. In June, they were down 1%.

"TWO OR THREE YEARS OF DEFLATION"

"Given the appreciation of the yen, exports will plunge and temporarily slow the economic recovery in Japan.Japan will remain in deflation for the next two or three years, "said Takeshi Minami, chief economist at Norinchukin Research Institue.

Investors are betting on an intervention by the Bank of Japan to ease monetary policy in the country.

"The BoJ could expand its refinancing tools next month, but the effect on interest rates in the short term will be limited.She needs to take bolder decisions to fight deflation and the rising yen, as increasing outright purchases of government bonds, although it is very unlikely to happen, "said Takeshi Minami.

Two other indicators released Friday offers a contrasting vision of the Japanese recovery.

The unemployment rate adjusted for seasonal variations fell 5.2% in July against 5.3% in June while the median forecast was 5.3%, according to figures from the Ministry of Internal Affairs.

Household spending has in turn increased by 1.1% in July over a year in real terms, less than the market forecast of an increase of 1.3%.

For a chart comparing the evolution of consumer prices in Japan, the United States and the euro area, click on link.reuters.com/pum57n

The spectacular mergers and acquisitions announced in recent weeks nourish hopes of a general resumption of trading but the French bankers polled by Reuters remain cautious optimism for the fall.

The hostile bid of nearly $ 40 billion launched the world's leading fertilizer Potash or the stock market battle for control of the data storage company 3PAR have been seen by some analysts as a sign announcing a possible new cycle.

"Such operations raise a little mercato" judge a banker, a comparison of sports in the same vein as the one launched during the World Cup soccer player Cristiano Ronaldo by: "The goals is like ketchup: when they arrive, they all come together. "

Announcements and takeover rumors are linked together with a consistent and disturbing intended target size in almost all sectors: automobiles Alfa Romeo, the Australian brewer Foster's with the bank with Nedbank of South Africa, insurance with the UK's Aviva or energy with Polish ENEA.

Figures gathered by Thomson Reuters for the French market is also impressive, even excluding the approximately $ 20 billion Sanofi-Aventis would be willing to spend on the U.S. Genzyme.

THE CONTEXT IS BEST

Transactions involving at least one French company are, at August 25, two times larger in value than in 2009 although it remains far from achieving the speculative frenzy in 2006.

On August 25, 2006, volumes amounted to 239 billion dollars, against 105 billion reached Wednesday.

"Generally, we can say that the context is better than the last two years and the probability of operations is improving, although significant uncertainties remain," Thierry J. Silver, Global Head of 'M & A activity at Societe Generale.

"There is no reason to believe that the major cross-border operations will slow.They are now once again well received by shareholders when the companies have demonstrated their ability to cope with the crisis, "said the banker.

The poor market performance since the beginning of the year is still a risk factor and observers recall that many transactions or IPOs had to be canceled after the crash loosened markets in the first quarter .

MOTION FRAGILE

"We are seeing a recovery in 2010, but this movement will remain fragile until the current uncertainty about valuations persist," the judge for his part in a research note Rivalland Jean-Claude, a lawyer with Allen & Overy in Paris.

The degradation of the sovereign rating of Ireland by Standard & Poor's has also recalled Tuesday that the euro zone was not yet out of the rut and the specter of a relapse of the U.S. economy is also a source of concern.

"The problems on the sovereign credit may resurface, CFOs remain cautious because they do not want to take full credit crunch, they must restructure their debts after a major operation," noted for its share Philip Caraman, a banker from UBS to Paris.

"As long as there is no more visible on sovereign risk, the volumes remain as low as three or four years," Judge said.

For Monique Cohen, managing partner of private equity firm Apax, one of the keys to continued activity is the continued financing of transactions by banks, a vital issue for the private equity industry.

"We can not consider access to the debt as an asset of the moment," she said, noting however that "no new restrictions on debt, many LBO (leveraged transactions) should be provided be in September.

To some bankers, corporate strategic imperatives also explain that they go ahead even if the timing is not ideal.

Some major transactions announced or expected to emerge this logic rather than a genuine recovery in overall mergers and acquisitions, they believe.

"In pharma we got to a point where the economy is good or bad, the problems must be addressed," said a banker based in London.

Large groups such as Sanofi-Aventis and not have enough new molecules for activity in the coming years and must grow through acquisitions.

Similarly, some companies must gain control of new technologies or new markets and therefore have to attack even when conditions are not ideal.

"It's a matter of life or death," Judge the same banker.

The Paris stock exchange resumed on Tuesday the path of decline, concerns about slowing global growth had returned to second place the ads on mergers and acquisitions cause a rebound in European equities Monday.

Around 9:10, the CAC 40 lost 0.95% to 3519.44 points.

Accor (+1.5%) is the only value of the CAC 40 in the green after the group announced the sale of walls 48 of its hotels in Europe, allowing it to exceed its debt reduction targets for 2010.

Lafarge (-3.9%) shows the largest decreases of ACC. Bank of America-Merrill Lynch lowered its recommendation from neutral to underperform.

London fell by 0.7% and Frankfurt 0.63%.The European indices, EuroStoxx 50 and 300 Eurofirst yield more than 0.9%.

The dollar is trading around 1.2642 per euro against 1.2635 late Monday.

A barrel of U.S. light crude lost 88 cents to 72.22 dollars.

The Canadian group called Potash Monday its shareholders to reject hostile takeover bid from mining giant BHP Billiton and said he was discussing with other possible suitors for an alternative giving it a better value.

The world's largest producer of potash added in a statement expected to bring proposals have higher than 39 billion dollars (30.7 billion euros) made by BHP or other strategic options.

Discussions were held with several parties in order to generate higher offers, he said.

According to Bloomberg, Potash has been contacted by the Chinese and Brazilian Vale Sinochem.

The action Potash gained 1% in pre-market transactions on the New York Stock Exchange, to $ 151.

The action BHP gained about 2% in London, to 1858.5 pence.

Violent protests in tens of thousands of textile workers in Bangladesh have led to the closure Tuesday of 700 plants supplying most major brands of western clothing.

The riot police fired rubber bullets and tear gas on the workers in the industrial area of Ashulia, north of the capital Dhaka.In this sector, workers, requiring a higher minimum wage of 25-70 dollars, have erected barricades of old tires, set fire to trucks for delivery and launched missiles at the police for fourth consecutive day.

Some 800,000 workers spend many factories closed down 700, but "tens of thousands" more are on the streets, forcing shops to close, "said deputy chief of police in Dhaka Monowar Hosain.

Plants that have been forced to close their doors provide Western chains such as Wal-Mart, H & M, Tesco, Carrefour and Metro, as well as major brands like Tommy Hilfiger, GAP and Levi Strauss. The workers demanded wage of at least 5,000 taka (70 dollars) per month.The current minimum wage set in 2006 is only $ 25.

Read also: Foxconn increases wages by 70% in China

Under the patronage of manufacturers and exporters of textiles (BGMEA), the violent protests, which began Saturday, has created a climate of "panic and anarchy, forcing factories to close until further notice. "More than 50 factories were ransacked by protesters who prevented and deliver orders on time, resulting in losses totaling millions of dollars," said Vice-President of the BGMEA, M. Mohiuddin Shafiul Islam.

Labour Minister Mosharraf Hossain promised after an emergency meeting with the management of textile wage increases, but has threatened "strong action" demonstrators.Textiles account for 80% of annual exports of Bangladesh and its factories employing 40% of the workforce of the industrial countries, most of them women.

Royal Bank of Scotland (RBS) has agreed to sell nearly 2.4 billion euros of its majority stake in its subsidiary WorldPay payment systems to two private equity funds, the latest step in its restructuring plan .

After Friday increased its quarterly results, RBS said it would sell 80% of its business Global Merchant Services, which oversees WorldPay to Advent International and Bain Capital in a transaction valuing the company up to 2.03 billion pounds (2.4 billion euros).

Advent and Bain were in exclusive talks for this operation since late July, had said last month a source close to the matter.Analysts had estimated the amount of the transaction between two and 2.5 billion pounds.

The two companies capital that they are looking to develop activities WorldPay and added that they could conclude other acquisitions.

RBS will however keep a stake of about 20% in WorldPay.The added value generated by this transaction would be approximately 850 million pounds and increase the solvency ratio "core Tier 1" bank by about 30 basis points, the bank said.

"A NEW IMPORTANT STEP"

RBS will receive an initial cash payment of £ 1.7 billion once the deal is finalized and could obtain additional 200 million depending on performance WorldPay.

"The sale of Global Merchant Services is a new milestone in the restructuring program the company," said chief financial officer, Bruce Van Saun, in a statement.

Around 4:45 p.m. GMT, RBS yielded 0.38%, to 51.8 pence in London Stock Exchange, outperforming the Stoxx 600 index, however, brings together the main European banking stocks, which retreated at the same time by 0.74%.

This occurs after the Wednesday of the sale of 318 branches RBS UK counterpart Santander for about 1.65 billion pounds.

Before announcing the sale of WorldPay, the bank reported Friday in an increased profit in the second quarter due to recovery of its loan portfolio and improved its net interest margin, while bad debts Ireland remain problematic.

Several European banks such as HSBC, BNP Paribas and Barclays, have reported strong results this week in favor of a reduction in expenses related to bad debts, but some investors are questioning their prospects.

"THE PERFORMANCE IS A LITTLE LIGHT GBM"

RBS, for its part reported an operating profit of 869 million pounds for the quarter ended June 30, after a profit of 713 million in the first quarter.

The retail banking and commercial banking at RBS have seen their net banking income increased during the quarter but the division of investment bank GBM has had difficult times with a 31% drop in GDP over the first quarter.

"The performance of the GBM is a bit light, but the plus side, the British retail banking seems to be doing well," said Joseph Dickerson, an analyst at London brokerage firm Execution.

RBS said it had seen no return of the investment bank in July, which is fueling fears that the sector does not meet the expectations throughout the year if the soft trend in May and June is confirmed.

"July is generally consistent with the trend of the previous two months," said Stephen Hester. "If customers, uncertain, remain on the sidelines, there is less money in the investment bank."

Impairment losses accounted for 2.49 billion pounds in the second quarter, against 2.68 billion in the first.Excluding the gain on the recovery of its own debt, the bank posted a net income of 250 million pounds, down from the first three months of the year.

News Corp. has been beneficial in the fourth fiscal quarter thanks to strong performance of its cable networks and advertising revenue growth of its newspapers.

The media company posted a profit of 875 million, or 33 cents per share for the quarter ended June 30, against a loss of 203 million (eight cents per share) a year ago when News Corp recorded a asset impairment charge.

Turnover rose 5% to 8.11 billion dollars. The Thomson Reuters consensus I / B / E / S gave a turnover of 8.05 billion.

Action News Corp. gained 2.9% to 14.25 dollars after the close of Wall Street, in response to these results.It grew by 12% since the beginning of the year, while the S & P movies and entertainment took 8% in the same time.

Rebound in advertising revenue and lower costs led to a growth in operating income by 20% in the press in the U.S. and internationally. The operating profit of its cable division has increased 31%.

In contrast, there was decline results from the satellite television and commercial services, and loss of the digital divide, including social network MySpace.

In attempting to seize the biotech Genzyme, Sanofi-Aventis hopes to enter a segment long ignored by major pharmaceutical companies, one of rare diseases.

It would appear that the giants of the industry think that investing in this field can be a good way to increase margins, complete the range of products and at least partially offset the impact of competition from generic.

Pfizer and GlaxoSmithKline have already tried the adventure but the offer from Sanofi on Genzyme – which could turn around 14.3 billion euros – would be by far the most advanced.

Genzyme is the world leader in treatments for rare diseases.He realized in 2009 a turnover of around 4.5 billion dollars from drug dealing rare inherited disorders such as Gaucher and Fabry disease.

"Genzyme has demonstrated to all that the market for rare diseases can be quite profitable," said Gary Pisano, a professor at Harvard Business School and a specialist in biotechnology.

These drugs for rare diseases, so-called "orphan" can reach astronomical prices and yet are rarely rejected by insurance companies.Cerezyme, blockbuster treating Gaucher disease developed by Genzyme, is an annual treatment cost of over $ 200,000.

This is one of the drugs most expensive in the world and represented the last year a turnover of 1.2 billion dollars.

NEW PERSPECTIVES

They are new opportunities opening up for big pharmaceutical companies that are themselves, most often, little to offer in terms of experimental medicines.

"The era of 'blockbuster' seems gone," says Kevin Gorman (Putnam Associates). "In rare diseases needs to look far the greatest."

Gaucher disease and Fabry disease are characterized by an enzyme deficiency that can cause irreparable damage or even lethal to the organs.Treating such diseases is not accessible to all laboratories and even the big pharmaceutical companies are not equipped to start from scratch in this field.

Design in this field of rare diseases, clinical trials, control of complex manufacturing processes and finally market drugs in highly targeted markets, this requires a special skill mastery that Genzyme to perfection.

Yet, one case of infection occurred at the site last year Genzyme Allston Landing in Boston, led to a shortage of two key drugs and led to a sharp drop in results and a diving action.

Sanofi hopes to capitalize on woes Genzyme to buy cheap.It offers 69 dollars per share, according to sources familiar with the matter, much less than the $ 80 where work is changing before disorders occur manufacturing end of 2008.

According to sources, it is unlikely that Genzyme accepts less than 80 dollars per share. This can be explained by the fact that Genzyme is an asset as rare as the diseases it treats.

It is not likely to be subject to generic competition soon.It has also more than 20 years of experience in the relationship with patient groups in the organization of clinical trials and reimbursement management and regulatory issues.

NOT EASY TO COPY

"The reasons why large groups are eyeing this segment reduced threat of generic products, products that can be expanded to other areas and prices," said Dominic Valder, an analyst at Evolution Securities.

Traditionally, the big pharmaceutical companies focus on drugs prescribed by GPs in a large population of patients with chronic conditions like diabetes, depression, ulcers or cholesterol is too high.

These medicines are made from molecules that can easily replicate génériquiers.

The biotech drugs are on the contrary from protein complex. They are prescribed by specialists for patients in small numbers. They are not easy to copy.

Some heavyweights pharmacy try their luck but so timidly.For Patrick Vallance, head of research at Glaxo, the strategy aims to improve the returns to research and development focusing on areas where the probability of success are greatest.

Glaxo has taken a stake in the Japanese and JCR Pharmaceuticals has entered into an alliance with privately held Prosensa, leading to the launch of a Phase III clinical trial in the second half and bearing on Duchenne muscular dystrophy.

Pfizer has acquired worldwide rights to an experimental treatment for Gaucher disease developed by Protalix BioTherapeutics, which if approved, would compete with Genzyme's Cerezyme.