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.

DuPont publishes a quarterly profit nearly tripled thanks to a double digit growth in sales in its five main business segments.

The number three of the chemistry in the United States has achieved during April-June net profit of 1.17 billion (900 million euros), or $ 1.26 per share, against 417 million (41 cents / share) on the corresponding period last year.

Excluding items, earnings were $ 1.17 per share.

Financial analysts had expected earnings of 93 cents per share according to Thomson Reuters I / B / E / S.It was not clear immediately that this consensus is comparable to published results.

The quarterly revenue rose 25.6% to $ 8.62 billion against 8.27 billion expected by the market.

DuPont revised upwards its forecast range for the full year, saying it now expects earnings per share (EPS) of 2.90 to 3.05 dollars excluding special items, against 2.50 to 2.70 far.

The market consensus gives an annual EPS of 2.64 dollars.

The action DuPont, one of the 30 stocks in the Dow Jones gained 2.1% in pre-market transactions, to 39.80 dollars.

The World Trade Organisation has postponed the publication of a report on an action by the EU against the United States regarding subsidies granted to Boeing.

The progress report was published as a confidential WTO panel on the cons-procedure initiated by the Europeans was due July 16, two weeks after the decision of the international institution holding illegal subsidies received by Airbus from European governments.

"I can confirm that the president did speak with the parties concerned and said that because of the complexities of the case, there would be a delay in publishing the report," said Keith Rockwell, spokesman for the WTO.

The United States and Europe accused each other of illegally subsidizing their respective aircraft manufacturers.

Airbus said it was pursuing "greater good" talks with European states on the financing of the A350, its new long-haul, saying the talks were in no way affected by the opinion issued Wednesday by WTO on subsidies to the aviation industry.

"(…) The A350 is not affected by the outcome of the WTO. Together with the four states, we are moving at full speed, "said Rainer Ohler, communications director of Airbus, a subsidiary EADS, in an e-mail.

"The completion and timing of the announcements are the responsibility of States.Thus, we can not make any comment on that, "he added.

Justices of the World Trade Organization have inflicted a blow Wednesday to scathing EU ordering him to remove certain export subsidies provided to Airbus.

In his report of more than 1,000 pages, the "special" WTO believes that Airbus could launch a series of civilian aircraft thanks to subsidies from the EU and member states that are France, Germany, Spain and the United Kingdom. Without this aid, Airbus has been a society very different and much less powerful, the report said.

Spanish Grifols announced Monday the launch of a friendly takeover bid of 3.4 billion dollars (2.8 billion euros) over the U.S. Talecris Biotherapeutics specializes in the treatment of plasma in order to develop in the blood products.

For each action Talecris, Grifols offers $ 19 cash and 0.641 new share without voting rights.

A bid that shows a 53% premium over the average of thirty days of share price of U.S. laboratory.

There is also a good transaction for Cerberus, which owns, through a subsidiary, nearly 49% stake in Talecris.

"They pay a high premium over the market price that the market may not wish to reward short term," said Dirk Schnittke, analyst at CM Capital Markets.

"But it is a good strategic choice for medium-long term and they would not have achieved without preparing their project."

Around 10:30 GMT, Grifols fell nearly 5% to 8.81 euros, while the Madrid Stock Exchange was at equilibrium at the same time.

Including debt, the total redemption amounts to four billion dollars.To finance part of the transaction, Grifols will issue up to 84,000,000 new shares for 900 million dollars.

The Spanish group said Monday he hoped for about $ 230 million of annual synergies of the transaction, unanimously approved by directors of both companies and recommended to their respective shareholders.

The transaction should be accretive from the first year and increase earnings per share of 30% during the second year.

Grifols has given finance its deal, expected to close in the second half, to a syndicate of banks including Deutsche Bank, Nomura, BBVA, BNP Paribas, HSBC and Morgan Stanley.