Deals of the day- Mergers and acquisitions

The following bids, mergers, acquisitions and disposals were reported by 2000 GMT on Friday:

** Spain will sell up to 49 percent of heavily indebted AENA, the world's biggest airports operator valued at around 16 billion euros ($22 billion), Public Works Minister Ana Pastor said on Friday.

** Germany's Siemens and Japan's Mitsubishi Heavy Industries are putting the finishing touches on a joint offer for Alstom's turbine businesses that includes a cash element of roughly 9 billion euros ($12.25 billion), sources close to the bidders said.

As part of the deal, Mitsubishi and the French government would take equal stakes in Alstom, union representative said after a meeting with Economy Minister Arnaud Montebourg. The offer would counter an existing $17 billion offer from General Electric.

** Travel website operator Priceline Group Inc said it would buy OpenTable Inc for $2.6 billion in cash as it looks to add restaurant bookings to its services.

** The board of Italy's troubled airline Alitalia on Friday voted to accept Etihad Airways' offer of an investment of up to 1.25 billion euros over the next four years and said it would move quickly to conclude the tie-up, the company's chief executive said.

** Lottery operator GTECH SpA and billionaire Ron Perelman's MacAndrews & Forbes Holdings are competing to buy Las Vegas slot machine maker International Game Technology, people familiar with the matter said on Friday.

Private equity firm Apollo Global Management LLC APO.N, a seasoned investor in the U.S. gaming sector and a co-owner of Caesars Entertainment Corp CZR.O, is also pursuing a bid, as is buyout firm Carlyle Group LP CG.O, the people said.

** Alpha Bank SA, Greece's fourth biggest lender by assets, said it agreed to buy Citibank Inc's retail banking operations in Greece for 2 million euros ($2.72 million).

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** A TPG Capital Management led consortium agreed to buy the property arm of Australian engineering services firm UGL Ltd for A$1.215 billion ($1.14 billion), a source told Reuters.

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** German premium auto maker BMW said its managers had met with executives from U.S.-based electric car maker Tesla Motors Inc to talk about potential cooperation on electric mobility.

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** Canada's Amaya Gaming Group Inc said it will buy Rational Group for $4.9 billion. Rational owns and operates the world's biggest online poker company PokerStars.

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** Two of Merlin Entertainments' private equity backers sold 100 million shares in the British theme park owner for 366 million pounds ($615 million), according to Deutsche Bank, one of the banks handling the sale.

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** China's Baosteel Resources and Aurizon Holdings said they had no intention of increasing a joint A$1.4 billion ($1.32 billion) offer for Australian iron ore miner Aquila Resources.

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** Canada's Talisman Energy Inc is reviewing its Asian oil and gas portfolio, valued at about $4 billion, which could lead to a partial or full sale, people familiar with the matter said.

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** Philippine supermarket operator Puregold Price Club Inc said it has signed a deal with Japanese retailer Lawson Inc to establish a chain of convenience stores in the Philippines.

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** A consortium of Philippine conglomerate Ayala Corp and a unit of Aboitiz Equity Ventures Inc is likely to win a 35.4-billion peso ($809 million) tollway tender after it offered the highest bid for the biggest road project so far under a public-private partnership scheme.

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** Portugal's government will sell its remaining 11 percent stake in power grid operator REN at 2.68 euros a share.

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** British independent oil producer EnQuest Plc agreed to take over ExxonMobil Corp's share in the Malaysian Seligi oil field and the associated production sharing contract.

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** Malaysia's AirAsia Bhd has dropped a plan to acquire Indonesian low-cost carrier Tigerair Mandala and will instead grow its business organically in Southeast Asia's biggest economy with planned investment of $300 million a year.

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** Thai telecommunications firm Samart Corporation Pcl has entered talks to buy a minority stake in its Samart I Mobile Pcl business from Malaysia's Axiata Group Bhd, a Samart Corp source told Reuters.

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** The owner of Univision Communications Inc have recently held preliminary talks about selling the Spanish-language broadcaster with CBS Corp, Time Warner Inc and other media companies, the Wall Street Journal reported, citing people familiar with the matter.

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** John Malone's Liberty Global Plc and Discovery Communications Inc are in discussions with the owners of Formula One to bridge a $1 billion gap in the valuation of the motor-racing series as they seek to buy a 49 percent stake, according to Bloomberg.

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** Private equity firm Apollo Global Management LLC is in talks to buy Encana Corp's Bighorn Properties in Alberta, Canada in a deal expected to be worth about $1.8 billion, the Wall Street Journal reported.

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** Private equity firm Sycamore Partners said it was interested in acquiring apparel retailer Express Inc, after disclosing a 9.9 percent stake that made it the largest shareholder in the company.

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** Canadian oil and gas producer Long Run Exploration Ltd said it would buy Crocotta Energy Inc for about C$357 million ($329 million), including debt.

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** Norwegian telecoms group Telenor said it has sought the Indian government's approval to invest 7.8 billion Indian rupees ($131.03 million) to acquire 100 percent stake in its Indian mobile services unit, Uninor.

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** Moroccan insurance company Saham Finances has bought a 66 percent stake in Corar-AG Ltd, the third-largest insurance provider in the Rwandan market, for an undisclosed sum, the company said.

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($1 = 0.7345 Euros) ($1 = 1.0648 Australian Dollars) ($1 = 0.5956 British Pounds) ($1 = 1.0858 Canadian Dollars) ($1 = 59.7500 Indian Rupees) (Compiled by Amrutha Gayathri and Ankit Ajmera in Bangalore)

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PRESS DIGEST- Financial Times - June 13

The following are the top stories in the Financial Times. Reuters has not verified these stories and does not vouch for their accuracy.

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Headlines

BNP TOP EXECUTIVE CHODRON DE COURCEL TO RETIRE AMID U.S. PROBE

(link.reuters.com/dew99v)

RETURN OF CORPORATE PC DEMAND BOOSTS INTEL

(link.reuters.com/bew99v)

TWITTER PARTS WAYS WITH CHIEF OPERATING OFFICER

(link.reuters.com/few99v)

TESLA MOTORS OPENS DOOR TO ELECTRIC VEHICLES' TECHNOLOGY SECRETS

(link.reuters.com/cew99v)

FRANCE DELIBERATES AFTER SIEMENS CHANGES TACK IN ALSTOM BID

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(link.reuters.com/gew99v)

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Overview

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Georges Chodron de Courcel, one of the most senior figures at BNP Paribas, has announced his retirement amid an escalating probe by U.S regulators in alleged sanctions violations at the French bank.

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Strong demand for business PCs drove U.S. chipmaker Intel to raise its second-quarter profit guidance, pushing shares up by more than 5 percent in after-hours trading.

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Twitter's Chief Operating Officer Ali Rowghani has stepped down following a boardroom disagreement, as he pushed for the company to make a large acquisition of a music company to get more users, according to people familiar with the matter.

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U.S. electric carmaker Tesla Motors has made an unexpected move in revealing its technology secrets to its rivals as Chief Executive Elon Musk aims to boost interest in the low-emission vehicles.

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French president Francois Hollande met senior ministers on Thursday to consider an expected joint bid for national industrial champion Alstom by Siemens and Mitsubishi Heavy Industries. (Compiled by Richa Naidu in Bangalore)

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Liberty Global, Discovery in talks regarding F1 stake -report

John Malone's Liberty Global Plc and Discovery Communications Inc are in discussions with the owners of Formula One to bridge a $1 billion gap in the valuation of the motor-racing series as they seek to buy a 49 percent stake, according to Bloomberg.

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CVC Capital Partners, a London-based private equity firm, and Lehman Brothers Holdings want about $500 million more for the stake, the report said, citing people with knowledge of the matter. (link.reuters.com/sew99v)

Discussions with CVC Capital Partners Ltd and Lehman Brothers are ongoing although a deal may not be reached, the report added.

CVC remains the largest shareholder in Formula One with a stake of around 35 percent.

CVC may also contemplate an initial public offering of Formula One, according to Bloomberg, although the sources added that it is unlikely to occur before the conclusion of a trial involving Chief Executive Officer Bernie Ecclestone.

Discovery Communications and Liberty Global were not immediately available for comment. CVC Capital Partners and Lehman Brothers were also unavailable for comment.

(Reporting by Narottam Medhora and Tanvi Mehta in Bangalore; Editing by Lisa Shumaker)

UPDATE 2-Mexico's telecom regulator delays TV channel tender until September

Mexico's telecom regulator said on Thursday it would postpone the first stage of a tender for two new national TV channels from June to September, citing a delay in laws that should set out details of a sector overhaul approved in 2013.

The Federal Telecommunications Institute (IFT) pushed back the start date for the bid process to Sept. 2 and 3. Bidders were originally asked to seek competition clearance from the new watchdog by June 16 and 17.

The reform aims to boost competition in the phone business dominated by tycoon Carlos Slim's America Movil, as well as broadcasting, where Televisa is by far the biggest player.

So-called secondary laws hashing out the fine print of the reform were due to be approved by December 2013, but political bickering and a heavy legislative agenda have delayed passage.

Given the lag, "there is no certainty about some issues that may affect stakeholders' business plans, which could create a disincentive for investment," the board said in a statement.

The delay means the Institute will not announce a final decision until June 10, 2015 though it had previously foreseen a March 25 announcement, IFT commissioner Maria Elena Estavillo told local radio following the statement.

The IFT set an 830 million peso ($63.92 million) minimum price in April for the two stations, whose tender was announced in March.

America Movil has about 80 percent of Mexico's fixed-line business via its Telmex unit and some 70 percent of the mobile sector through its Telcel subsidiary.

Televisa has more than 60 percent of the TV market and has long been accused of wielding too much political power. ($1 = 12.9850 Mexican Pesos) (Reporting by Alexandra Alper and Adriana Barrera; Editing by Lisa Shumaker and by Michael Perry)

UPDATE 1-Talisman reviewing $4 bln Asia assets for possible sale-sources

Canada's Talisman Energy Inc is reviewing its Asian oil and gas portfolio, valued at about $4 billion, which could lead to a partial or full sale, people familiar with the matter said.

Talisman, Canada's No. 5 independent oil producer, has been slimming its operations and cutting debt in an effort to boost its share price to satisfy disgruntled and activist investors such as Carl Icahn.

The review marks a major shift in business strategy for a company that classifies its Asian portfolio as a core asset, and the review will force Talisman to make some tough choices.

It is unclear whether it will opt to sell the entire portfolio or retain some assets, the people added. A partial listing of the assets is one of the options being discussed, they added.

Talisman plans to put $2 billion worth of assets on the market in the next 12-18 months, after raising $6.6 billion through asset disposals since 2011, according the company website. The company does not disclose the names of the projects it plans to sell as part of its restructure.

Talisman owns oil and gas assets in Indonesia, Malaysia, Vietnam, and the Asia-Pacific region is expected to generate about $1.2 billion, or nearly half, of Talisman's 2014 estimated cash flow, according to company presentations.

Talisman joins a list of other independent oil and gas producers such as Hess Corp and Newfield Exploration Co in divesting Asian assets in an effort to focus on their core home markets.

The company, which has a $10.8 billion market value, is working with Goldman Sachs on the review, the people added.

Talisman and Goldman Sachs declined to comment. Sources declined to be identified as the review is confidential. (Reporting by Denny Thomas and Saeed Azhar; Additional reporting by Mike Stone in NEW YORK; Editing by Stephen Coates)

Market Chatter- Corporate finance press digest

The following corporate finance-related stories were reported by media:

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* Private equity firm American Securities LLC is looking to merge three of its auto parts manufacturing companies and take the combined company public at a valuation of around $4 billion, including debt, according to people familiar with the matter.

* Indonesia's Pertamina aims to sell several cargoes of liquefied natural gas (LNG) in July, and is currently in discussion over exact loading dates, a person familiar with the matter said.

* Siemens and Mitsubishi Heavy Industries are trying to beat a bid by U.S. conglomerate General Electric for Alstom with an offer that would focus on alliances with the French engineering group, sources said on Thursday.

* Canada's Talisman Energy Inc is reviewing its Asian oil and gas portfolio, valued at about $4 billion, which could lead to a partial or full sale, people familiar with the matter said.

* The initial public offering of Michaels Cos Inc, which has been planned for the last two years, will finally take place this summer, according to people familiar with the matter.

* Canada's Amaya Gaming Group, is near a deal to buy the parent of PokerStars, the world's largest poker website, Bloomberg said, citing two people with knowledge of the situation.

* Greece's fourth-biggest lender Alpha Bank is close to clinching a deal to buy Citibank's retail operations in Greece, two Greek banking sources told Reuters on Thursday.

* The U.S. Federal Bureau of Investigation and the Securities and Exchange Commission are investigating possible insider trading involving billionaire investor Carl Icahn, golfer Phil Mickelson and Las Vegas gambler William Walters, a source familiar with the matter said.

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* The owner of Univision Communications Inc has recently held preliminary talks about selling the Spanish-language broadcaster with CBS Corp, Time Warner Inc and other media companies, the Wall Street Journal reported, citing people familiar with the matter.

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* Private equity firm Apollo Global Management LLC is in talks to buy Encana Corp's Bighorn Properties in Alberta, Canada in a deal expected to be worth about $1.8 billion, the Wall Street Journal reported.

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* John Malone's Liberty Global Plc and Discovery Communications Inc are in discussions with the owners of Formula One to bridge a $1 billion gap in the valuation of the motor-racing series as they seek to buy a 49 percent stake, according to Bloomberg.

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For the deals of the day click on

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For the Morning News Call-EMEA newsletter click on (Compiled by Esha Vaish in Bangalore)

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INSIGHT-China port fraud probe prompted by corruption inquiry

The trail that led investigators to a suspected metal financing scam at China's Qingdao port which has spooked Western banks and hit global metals prices began with a Communist Party corruption probe 1,000 miles away in the old Silk Road city of Xining.

The Central Commission for Discipline Inspection (CCDI) said in late April that it was investigating the city's Party secretary, Mao Xiaobing, for suspected "serious discipline violations" - a term generally used to denote graft.

What was not made public at the time was that the authorities were also investigating Mao's business associate Chen Jihong, a veteran aluminium and alumina trader and chairman of Qingdao-based Dezheng Resources Holding Co. Ltd.

Dezheng's trading unit, Decheng Mining, is now at the centre of a separate probe into the alleged duplication of warehouse receipts to obtain multiple loans secured against a single cargo of metal, according to police sources with direct knowledge of the matter.

The use of commodities as collateral to raise finance is common practice in China and is not illegal. But duplicating receipts to repeatedly mortgage the full value of an asset is fraud and could leave more than one creditor holding claims to the same collateral.

Industrial metals prices have fallen since authorities at Qingdao, the world's seventh largest port, announced the probe last week, amid concerns it could prompt Western banks to tighten controls over commodity financing.

It has also played on Western investors' fears that lifting the lid on even a seemingly isolated case of fraud may uncover more landmines lurking within China's opaque "shadow" financial system, and sent global banks and trading houses scrambling to check their exposure.

"Like anything, the more you dig, the deeper you get," said Jeremy Goldwyn, a director in charge of Asia business at commodity broker Sucden. "They have uncovered something unwittingly and to some extent it fuels the argument, held by some, that 'who knows what other problems are out there, it's all going to end in tears'... I don't think there's any evidence of that at all."

POLITICAL CONNECTIONS

China's President Xi Jinping has launched a purge against corrupt officials after warning that endemic graft threatens the very survival of the Communist Party.

While the CCDI has revealed no details of the investigation into Xining Party boss Mao beyond a terse one-line statement on its website, such political probes are typically wide-ranging and often involve investigators trawling through the affairs of dozens of the target's business associates and allies.

That's how Chen first came to the attention of the corruption watchdog, according to six people who have done business with him.

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A native of southern China's Guangdong province who has since taken Singapore citizenship, Chen has been trading metals since the 1990s, and is a well-known figure in Qingdao, a major metals hub on the eastern seaboard, according to industry sources.

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His business ties to Mao were through Western Mining Co Ltd , a Shanghai-listed subsidiary of state-controlled Western Mining Group. Mao was chairman of the parent group from 2000-09, and of the listed company from 2004-09, according to its 2007 IPO documentation. Chen was an executive at Western Mining Co until 2006. One of Chen's companies, Hubei Hong Jun Investment, was also a shareholder of Western Mining Co between 2004-06.

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Trading company sources and bankers who have previously dealt with Decheng said Chen has been detained by authorities since late April, having initially been investigated as part of the Mao inquiry that was unrelated to Qingdao port.

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Western Mining Co did not respond to phone or email requests for comment.

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Industry sources say Decheng had initially tried to keep operating as normal, but by May some Chinese banks had learned of Chen's detention and started cutting credit to the firm and asking for outstanding payments. By late May, Chinese and foreign banks and traders scrambling to check their Decheng-linked metal stocks found that single cargoes appeared to have been used for multiple financing, said a source at a bank with knowledge of the investigations in Qingdao.

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Calls to Decheng Mining went unanswered, and a staff member at the firm's Qingdao office, who would only give his surname as Liu, would not comment on the police investigation or Chen's whereabouts. Calls to Chen's cellphone went to voicemail.

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Singapore-registered Zhong Jun Resources, an associate company of Decheng, did not respond to a series of calls requesting comment. Chen is a director of Zhong Jun.

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A woman, who said she was Chen's wife, said by phone from his home number in Singapore that she had not heard from her husband in many weeks and did not know where he was.

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INVESTIGATING RECEIPTS

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Decheng had imported aluminium and alumina for financing over the past decade and added copper to imports in recent years, trading sources said.

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When a cargo has arrived at a bonded warehouse in China, the warehouse company typically issues a receipt as proof of the stocks. The firm can then use the receipt to obtain short-term finance from a bank, with the metal as collateral.

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This has become a popular method of raising finance in China, often to skirt higher local borrowing rates and other credit restrictions, and is not illegal. The short-term funds raised might be invested in other markets, such as property, or re-lent via the regular or shadow banking system.

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Two police sources said authorities were investigating whether Decheng had raised multiple loans using duplicate warehouse receipts backed by the same cargo, which, if proven, could potentially leave its creditors exposed.

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Authorities have not yet disclosed the amount of metal involved in the financing probe, but sources familiar with the matter said it was about 20,000 tonnes of copper, nearly 100,000 tonnes of aluminium ingots and about 200,000 tonnes of alumina, the raw material for aluminium production. That quantity of metal would be worth about $390 million at current prices.

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Spooked by default worries, around a dozen Chinese bank representatives held a meeting in Qingdao with local government officials on June 6 to discuss the situation, said an official at the local Qingdao branch of Industrial and Commercial Bank of China , who asked not to be named.

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"We're not the only one with a big exposure. Quite a few other banks at the meeting said Decheng has outstanding loans of over several hundred million yuan with them," said the official, who did not attend the meeting but said members of his team did.

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Two sources said the local banks decided at the meeting that they would not press charges against Decheng and would not freeze its assets.

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"Decheng has a lot of physical assets, so the thinking for now is that the assets can be sold and Decheng can pay down some debt," said an industry source familiar with the situation.

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It is unclear how competing claims on Decheng's assets would be resolved if any fraud were proven.

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Foreign banks have said little for now while they try to assess their potential exposure. New York-based Citigroup Inc , Standard Bank Group and Standard Chartered are among the main players financing copper on behalf of clients at the port.

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Standard Chartered has said it is reviewing metals financing to a small number of firms in China. Citigroup said it would work closely with relevant authorities, warehousing companies and clients in the event that its clients were affected. South Africa-based Standard Bank said it was investigating potential irregularities at Qingdao, but could not quantify losses, if any.

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"All the stakeholders, including representatives from the foreign warehouses, banks and trading houses affected, held a meeting last week to get a handle of the situation," said a source at one of the Western banks. "We are still assessing our exposure because we don't know if there have been fake receipts issued."

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The ICBC official in Qingdao said Decheng has defaulted on loan repayments since April and owes the bank more than 100 million yuan ($16 million) for its onshore business unrelated to metals financing at Qingdao Port. No one at ICBC's head office could be reached for comment.

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Qingdao port has sealed its Dagang bonded metal storage area and suspended delivery of metals from the section after companies sought court orders to sequestrate the metal. ($1 = 6.2151 Chinese Yuan Renminbi) (Additional reporting by Rachel Armstrong in Singapore; Writing by Alex Richardson; Editing by Ian Geoghegan)

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UPDATE 1-Market Chatter-Corporate finance press digest

The following corporate finance-related stories were reported by media:

* Thai telecommunications firm Samart Corporation Pcl has entered talks to buy a minority stake in its Samart I Mobile Pcl business from Malaysia's Axiata Group Bhd, a Samart Corp source told Reuters on Friday.

* Private equity firm American Securities LLC is looking to merge three of its auto parts manufacturing companies and take the combined company public at a valuation of around $4 billion, including debt, according to people familiar with the matter.

* Siemens and Mitsubishi Heavy Industries are trying to beat a bid by U.S. conglomerate General Electric for Alstom with an offer that would focus on alliances with the French engineering group, sources said on Thursday.

* Canada's Talisman Energy Inc is reviewing its Asian oil and gas portfolio, valued at about $4 billion, which could lead to a partial or full sale, people familiar with the matter said.

* The initial public offering of Michaels Cos Inc, which has been planned for the last two years, will finally take place this summer, according to people familiar with the matter.

* Greece's fourth-biggest lender Alpha Bank is close to clinching a deal to buy Citibank's retail operations in Greece, two Greek banking sources told Reuters on Thursday.

* The U.S. Federal Bureau of Investigation and the Securities and Exchange Commission are investigating possible insider trading involving billionaire investor Carl Icahn, golfer Phil Mickelson and Las Vegas gambler William Walters, a source familiar with the matter said.

* Indonesia's Pertamina aims to sell several cargoes of liquefied natural gas (LNG) in July, and is currently in discussion over exact loading dates, a person familiar with the matter said.

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* The owner of Univision Communications Inc has recently held preliminary talks about selling the Spanish-language broadcaster with CBS Corp, Time Warner Inc and other media companies, the Wall Street Journal reported, citing people familiar with the matter.

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* Private equity firm Apollo Global Management LLC is in talks to buy Encana Corp's Bighorn Properties in Alberta, Canada in a deal expected to be worth about $1.8 billion, the Wall Street Journal reported.

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* John Malone's Liberty Global Plc and Discovery Communications Inc are in discussions with the owners of Formula One to bridge a $1 billion gap in the valuation of the motor-racing series as they seek to buy a 49 percent stake, according to Bloomberg.

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For the deals of the day click on

_8">

For the Morning News Call-EMEA newsletter click on (Compiled by Esha Vaish in Bangalore)

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TPG agrees to buy Australia property firm DTZ from UGL for $1.1 bln -source

A consortium led by global private equity firm TPG Capital Management LP has agreed to buy the property arm of Australian engineering services company UGL Ltd for A$1.215 billion ($1.14 billion), a source with direct knowledge of the matter told Reuters on Friday.

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UGL put the unit DTZ on sale to cut debt as its main engineering services division faces declining revenues due to a slowdown in the Australian mining sector.

TPG's consortium partners include Hong Kong private equity firm PAG and Canada's Ontario Teachers' Pension Plan, the source added.

A deal is expected to be signed as early as Friday, the source said, declining to identified as the decision is not public yet.

UGL was not available for immediate comment, while TPG declined to comment.

PAG and OTPP could not be immediately reached for comment. ($1 = 1.0620 Australian Dollars) (Reporting by Stephen Aldred; Additional reporting by Byron Kaye in SYDNEY; Editing by Denny Thomas and Ryan Woo)

Merlin private equity backers sell $615 mln stake

Two of Merlin Entertainments' private equity backers sold 100 million shares in the British theme park owner for 366 million pounds ($615 million) on Friday, according to Deutsche Bank, one of the banks handling the sale.

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Plans to place the shares by CVC Capital Partners Ltd and Blackstone Group LP via Deutsche Bank and Morgan Stanley were announced after Thursday's close.

Merlin is the world's second-biggest operator of visitor attractions behind Walt Disney with brands such as Madam Tussauds and Legoland and counted Blackstone and CVC as its biggest shareholders after Kirkbi A/S, according to Thomson Reuters data.

($1 = 0.5956 British Pounds) (Reporting by Steve Slater; Editing by Pamela Barbaglia)

Greece's Alpha confirms purchase of Citibank's Greek retail ops

Alpha Bank, Greece's fourth-biggest lender by assets, said on Friday it agreed to acquire Citibank's retail banking operations in Greece at a price of 2 million euros ($2.72 million).

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"Under the agreement, the acquired operations comprise Citi's wealth management unit with customers' assets under management of about 2.1 billion euros, out of which deposits of about 1 billion euros, net loans, mainly credit card balances, of 0.4 billion, as well as a retail branch network of 20 units which serves 480,000 clients," Alpha said.

The statement confirms sources telling Reuters on Thursday that the deal was imminent.

($1 = 0.7345 Euros) (Reporting by Harry Papachristou)

BMW says met Tesla executives to discuss electric cars

German premium auto maker BMW on Friday said its managers had met with executives from U.S.-based electric car maker Tesla Motors Inc to talk about potential cooperation on electric mobility.

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"Both companies are strongly committed to the success of electro-mobility and discussed how to further strengthen the development of electro mobility on an international level," a BMW spokesman said in a statement.

BMW said the meeting had taken place on Wednesday but declined to comment in detail about the nature of the talks, or about which BMW executives has met with Tesla. (Reporting by Edward Taylor; Editing by Jonathan Gould)

UPDATE 1-Alpha to buy Citibank's Greek retail business

Alpha Bank, Greece's fourth-biggest lender by assets, said on Friday it had agreed to buy Citibank's loss-making retail operations in Greece for 2 million euros ($2.72 million), the latest deal in the sector's consolidation.

Greece's debt crisis has hammered its banking industry, prompting foreign players, including Credit Agricole, Societe Generale and Portugal's Millennium bcp , to sell local units to Greek lenders in recent years.

Hit by a sovereign debt restructuring and rising loan impairments during a deep six-year economic slump, the industry has consolidated down to four big players after a wave of acquisitions and the winding down of non-viable banks.

The fortunes of National, Piraeus, Eurobank, and Alpha, which now control more than 90 percent of the banking market, have begun to improve after two recapitalisations and regained capital market access.

On Friday Eurobank said it had hired five investment banks to arrange a possible bond sale, becoming the fourth Greek lender to tap international investors with a senior unsecured bond issue.

Alpha's statement confirmed what banking sources told Reuters on Thursday about a deal for Citi's local retail operations.

The Greek bank said the acquisition would contribute to its pre-provision income from the first year and improve liquidity ratios.

The deal involves Citi's wealth management unit with 2.1 billion euros of client assets, including deposits of about 1 billion euros, credit card loan balances of 400 million euros and 20 retail branches.

Citibank, which started shipping and corporate lending operations in Greece in 1964 and expanded into retail banking in the 1980s, said the sale was part of its strategy to divest non-core operations and focus on corporate and shipping clients.

The sale, which is subject to regulatory approval, is expected to close in the third quarter of 2014. A total of about 730 Citi employees will be transferred to Alpha Bank. (Editing by Pravin Char)

Ackman seeks court ruling on Allergan special meeting

William Ackman's Pershing Square Capital Management said it had filed a lawsuit seeking confirmation that a requested special shareholder meeting of Allergan Inc's shareholders would not trigger Allergan's poison pill takeover defence.

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The Botox maker has rejected a $53 billion joint offer from Ackman and Canadian drugmaker Valeant Pharmaceuticals International .

Allergan said in April that its board had adopted a one-year shareholder rights plan to give it more time to consider takeover proposals.

Allergan's shareholder rights plan will trigger if a person or group acquires 10 percent or more of its shares.

The lawsuit filed in Delaware Court of Chancery followed a request to Allergan from Pershing Square on June 6 seeking confirmation that Allergan would not use its poison pill to impede Ackman's request for a special meeting.

A response from Allergan's counsel on Thursday did not provide that confirmation, Pershing Square said.

Allergan rejected a sweetened offer from Valeant and the activist investor on Tuesday. (Reporting by Natalie Grover and Sweta Singh; Editing by Ted Kerr)

UPDATE 2-BMW and Tesla executives meet to discuss electric cars

Executives from German carmaker BMW and U.S.-based Tesla Motors Inc met this week in a move which could lead to the creation of charging stations usable for different types of electric cars.

BMW and electric carmaker Tesla are seeking ways to raise the popularity of battery-powered vehicles, which consumers have shunned due to their limited operating range, the scarcity of charging stations and the time it takes to recharge them.

"Both companies are strongly committed to the success of electro-mobility and discussed how to further strengthen the development of electro-mobility on an international level," a BMW spokesman said in a statement on Friday.

BMW said the meeting had taken place on Wednesday but declined to comment in detail about the nature of the talks, or about which BMW executives had met with Tesla.

In a conference call on Thursday, Tesla Chief Executive Elon Musk said there had been talks with BMW about how to promote the use of electric vehicles and how to make better use of Tesla's network of charging stations.

Carmakers including General Motors, Ford, Chrysler, BMW, Daimler, Volkswagen, Audi and Porsche have committed to adopting a common SAE combo standard for fast-charging connectors.

Fast-charging stations allow electric vehicle owners to recharge batteries up to 80 percent in less than 20 minutes. Today, the Chevrolet Spark and the BMW i3 for example can use the same battery recharging stations.

Tesla has, however, developed its own network of high-speed charging stations including along key autobahn routes in Germany in an effort to make electric cars viable for long-distance commuting.

Tesla's charger system can be fitted with an adapter that allows its cars, including the Tesla Model S, to be recharged on both the SAE chargers and its own system.

SHARING PATENTS

Tesla also said on Thursday that it would allow others to make use of its intellectual property in the hope of speeding up development of electric cars by all manufacturers.

Musk said this included all of Tesla's patents, including several hundred current ones and several thousand in the future.

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German premium auto makers have been keen to collaborate with Tesla.

In January, Daimler Chief Executive Dieter Zetsche said the German maker of Mercedes-Benz cars was open to deepening its partnership with the U.S. firm.

Daimler holds a 4.3 percent stake in Tesla, which is already supplying it with electric motors and batteries for its Smart Fortwo electric vehicle (EV) and the new Mercedes-Benz B-Class EV. (Editing by Jonathan Gould and Mark Heinrich)

Telecom Italia shake-up opens door to activist investors

For decades many of Italy's top companies have been in the grip of shareholder pacts, often stifling reform, but its largest telecoms operator, Telecom Italia, could soon break free, letting in activist investors who sense an opportunity for profitable change.

The trigger could be as soon as June 15, when financial groups Mediobanca, Assicurazioni Generali and Intesa Sanpaolo could end a 2007 shareholder pact in Telco, the holding company that controls Telecom Italia .

The tight control of Telco's core shareholders, led by Spanish telecom Telefonica, has discouraged most other investors from buying in.

Marco Fossati, whose investment vehicle Findim owns 5 percent of the telecom, tried but failed in October to change Telecom Italia's board, which he said acted in the interests of the core shareholders, not the rest.

But the recent appointment of an all-independent board and the likely dismantling of Telco make further change possible.

Generali, which owns 19.3 percent of Telco, said on Wednesday it would exercise its right to withdraw from the pact at the first available opportunity next week.

One activist investor, U.S. fund Amber Capital, already has its foot in the door, with a small stake of under 1 percent, but one of its fund managers, Giorgio Martorelli, said he expects more to join it when the pact is dismantled.

And there is a packed agenda for those that do.

"What activists can do for Telecom Italia is to support initiatives to cut the company's debt pile, reduce its exposure to Brazil and align management's incentives with shareholders' value creation," Martorelli said.

Telecom Italia needs to attract new investors to help tackle its hefty 27.5 billion euros ($37 billion) of debt.

Amber also wants to convert Telecom Italia's savings shares into ordinary stock to increase liquidity and simplify the capital structure.

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ACTIVISTS SET SIGHTS ON EUROPE

Activist shareholders - mainly hedge funds, asset managers and wealthy entrepreneurs - tend to target underperforming or poorly managed companies and put pressure on the board to simplify corporate policy, cut costs and sell underperforming units to enhance the value of their investment.

They have been mostly a U.S. phenomenon, but that is changing.

"U.S. activists are switching their attention to Europe," Knight Vinke Chief Executive Eric Knight told Reuters.

Italy has seen little activity so far, but the demise of shareholder pacts like Telco's is creating opportunities.

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RCS MediaGroup, which owns newspaper Corriere della Sera, wound up a shareholder pact blocking 60 percent of the company in October, and disputes among long-term investors Diego Della Valle and John Elkann could make the company vulnerable to activists, Martorelli said.

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Gruppo Save, the operator of Venice's Marco Polo airport, has also recently reorganised its shareholder pact, encouraging activists like Amber to seek even greater change.

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Amber has also been pushing changes in Italy's biggest builder Salini Impregilo and dairy group Parmalat .

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Telecom Italia chairman Giuseppe Recchi gives them a cautious welcome.

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"There is room for activists in Italy as long as they have constructive proposals," he told Reuters, adding that they needed to take a long-term view, rather than merely seek quick profits. ($1 = 0.7345 Euros) (Editing by Will Waterman)

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Priceline to buy OpenTable for $2.6 bln

Travel website owner Priceline Group Inc said it would buy restaurant reservation website operator OpenTable Inc for $2.6 billion in an all-cash deal.

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The offer of $103 per share represents a premium of 46 percent to OpenTable's Thursday close. (Reporting by Rohit T. K. in Bangalore; Editing by Maju Samuel)

Wal-Mart to launch e-commerce marketplace in India in July

Wal-Mart Stores Inc will launch its business-to-business e-commerce platform in the Indian cities of Lucknow and Hyderabad in the first week of July, the world's largest retailer's India boss said on Friday.

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Sales through the firm's e-commerce service will be available only to its trader members, said Krish Iyer, India president and chief executive officer.

Iyer said Wal-Mart would look at rolling out this service to other cities, but not for another six months at least.

In April, Wal-Mart announced plans to open 50 more wholesale outlets in India and start online operations to sell to small shopkeepers, several months after it decided against opening its own retail stores. (Reporting by Aditi Shah; Editing by Mark Potter)

DEALTALK-Drug-linked payouts: complex fix for Pfizer's next Astra bid?

The world's biggest would-be drugs merger hit a wall last month but speculation about smart ways that Pfizer could yet seal a deal with AstraZeneca remains intense.

Even as talks fell apart last month, some in Pfizer's camp remained optimistic the transaction could be revived - and certain AstraZeneca advisers have not ruled out renewed talks. Under British takeover law, the UK firm can approach Pfizer at the end of August to discuss a sweetened bid, or Pfizer can try again in November.

While the most obvious method for Pfizer to win AstraZeneca around might seem to be more cash, some hedge funds think the U.S. firm could structure payouts by tying them to the performance of key AstraZeneca drugs.

A so-called contingent value right, or CVR, was a winning formula for Sanofi in its 2011 battle for Genzyme and the tradeable product - promising additional payouts once future benchmarks are hit - has been used in several other drug industry deals when the two sides could not agree on price.

"An enriched cash:equity mix as well as a CVR component to bridge the ... valuation gap between the two management teams may see the deal agreed upon on a friendly basis," said analysts at Jefferies this week, predicting an 80 percent probability of AstraZeneca inviting Pfizer back after an enforced cooling-off period ends in late August.

UNWIELDY OPTION?

Where CVRs have worked before, they have typically been tied to one particular drug upon which buyers and sellers could not agree a price - such as Genzyme's multiple sclerosis drug Lemtrada.

Applying a CVR to AstraZeneca, then, could be tough, given the number of new drugs in its pipeline and the time needed to prove their value: Debate about the UK company's valuation centres on a wide range of experimental drugs in cancer, respiratory disease and other areas, for which it has made sales forecasts stretching as far as 2023.

"Who wants to own a CVR for 10 years?" said Dan Mahony, a fund manager at Polar Capital, who built up his stake in AstraZeneca last year and doubts the idea would be attractive to investors.

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"I'm not sure a CVR would necessarily work in this situation. You'd end up with something that is a really long-dated option - and anything that is illiquid and doesn't really trade is always a bit of a pain in the neck."

In order to cover itself against the risk of a new drug not working out, Pfizer would have to construct any CVR around a number of very different assets ranging from new cancer drugs like MEDI4736 and AZD9291 to benralizumab for asthma to diabetes and heart drugs, suggested Mark Clark, an analyst at Deutsche Bank - a nice idea, but "probably too unwieldy."

"If Pfizer was cash-strapped then it might be a sensible way to work through the difficulties - but it's not cash-strapped and it seems overly complex," Clark said.

MORE CASH

It would be far simpler for Pfizer instead to bump up the cash element in its 55 pounds-a-share offer - rejected as inadequate - and meet the 58.85 pounds that AstraZeneca has indicated is the minimum at which it might recommend a deal.

Many healthcare bankers not involved in the bid predict Pfizer will be back - not least because no other target both complements the U.S. company's product range and offers the same potential for tax and cost benefits.

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Pfizer Chief Financial Officer Frank D'Amelio suggested as much this week - and pushed AstraZeneca shares higher - when he told a Goldman Sachs healthcare conference that talks about a deal had fallen down simply over price.

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"In a word it was price," D'Amelio said. "Any other issues that were raised during the negotiations, during the conversations, I think we were able to adequately, effectively address those."

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Since AstraZeneca also raised deep-seated concerns about execution risks and British politicians whipped up a storm over job cuts, D'Amelio's comments were taken as a sign that Pfizer sees such problems as manageable. D'Amelio stressed that he could not speculate on whether Pfizer would return or not.

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UK takeover rules prohibit any re-engagement for three months from May 26 - and what happens after that will depend on how AstraZeneca's drug research fares in the meantime and what happens to its shares - a strong run on the stock could push it out of Pfizer's reach.

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So far, the newsflow for AstraZeneca has been good, with promising data on new cancer drugs and no competition yet to its blockbuster heartburn medicine Nexium in the U.S. market due to problems at generic supplier Ranbaxy - a factor that could allow it to beat its current targets for 2014 earnings. (Editing by Sophie Walker)

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UPDATE 1-Ackman seeks court ruling on Allergan special meeting

William Ackman's Pershing Square Capital Management on Friday it filed a lawsuit against Allergan Inc seeking confirmation that its request to hold a special meeting of Allergan shareholders would not trigger poison pill takeover defense.

Ackman and Valeant Pharmaceuticals International are pursuing in a hostile takeover of Allergan.

Ackman, who owns nearly 10 percent of Allergan, has called for a shareholder meeting to elect new directors to the company's board. The suit seeks to confirm that Ackman is not about to trigger Allergan's poison pill takeover defense as it seeks shareholder support for the meeting.

Allergan, which makes Botox for wrinkles and other uses, has rejected a $53 billion joint offer from Ackman and Valeant. Ackman last week filed documents with the Securities and Exchange Commission that would start a proxy battle.

Allergan and Valeant both declined to comment on the suit.

Allergan adopted a one-year shareholder rights plan, often called a poison pill, on April 22, the day Valeant and Ackman made their offer. The company said it needed time to consider takeover proposals.

Allergan's pill will be triggered if a person or group acquires 10 percent or more of its shares. A poison pill aims to dilute a stock's value by flooding the market with more shares; this makes it pricier for a shareholder to get a controlling stake.

The lawsuit filed in Delaware Court of Chancery said it followed a request to Allergan from Pershing Square on June 6 seeking confirmation that Allergan would not use its poison pill to impede Ackman's request for a special meeting.

Allergan's bylaws require that a group calling a special meeting collectively represents 25 percent of shares outstanding. In the suit, Ackman says he is concerned that by calling the meeting, it will trigger the pill.

A response from Allergan's counsel dated June 11 did not provide confirmation that it would not, the document said.

Allergan said in the letter to Pershing Square that its solicitation and receipt of proxies from other Allergan stockholders for the purpose of requesting a special meeting would not, in and of itself, trigger the pill.

Allergan declined to answer more specific questions about the details of Pershing Square's plan for soliciting those proxies in the absence of all the facts, according to a copy of the letter included in the lawsuit.

Allergan rejected a sweetened offer from Valeant and the activist investor on Tuesday.

Valeant shares traded in New York fell 0.3 percent to $120.40 while Allergan shares rose 0.6 percent to $162.97. (Reporting by Natalie Grover and Sweta Singh and Caroline Humer in New York; Editing by Ted Kerr, Bernadette Baum and Dan Grebler)

UPDATE 2-Priceline to buy OpenTable for $2.6 bln

Travel website owner Priceline Group Inc will buy restaurant reservation website operator OpenTable Inc for $2.6 billion, aiming to broaden its services outside the increasingly competitive online travel industry.

Priceline's offer of $103 per share for the owner of OpenTable.com represents a premium of 46 percent to OpenTable's Thursday close.

OpenTable's shares inched past the offer price to trade as high as $104.19 on the Nasdaq, suggesting that some investors expect a higher bid.

Priceline's shares were down 1.6 percent at $1,205.50.

Priceline, whose competitors include Expedia Inc and Orbitz Worldwide Inc, has a record of buying smaller companies and transforming them into large, successful businesses.

With little room to expand, online travel companies are looking outside the industry to boost revenue and drive more customers to their websites by offering more of a one-stop shop for travelers by offering services at their destination.

TripAdvisor Inc, for example, bought French online restaurant booking platform Lafourchette last month to enter the restaurant-booking industry.

Friday's deal gives the travel site operator access to OpenTable's agreements with over 23,000 U.S. restaurants.

OpenTable has been trying to expand its international business as it faces increased competition from Yelp Inc and a slew of startups focused on local services.

"Priceline could further strengthen OpenTable's business, especially in Europe, where Priceline is the market leader, as a result of its significant online user traffic and its organizational infrastructure," Citi Investment Research analyst Mark May wrote in a research note.

Priceline bought Kayak.com last year and has built it into one of the biggest travel websites outside the United States. It has also ramped up U.S. advertising for Booking.com, which it bought in 2005, giving stiff competition to Expedia.

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As of Thursday, OpenTable's shares were trading at about 33.5 times 12-month estimated forward earnings, far below the 498.7 times of Yelp, its closest competitor, according to Thomson Reuters StarMine.

"I think (the takeover) creates urgency for larger players to acquire the leading local platforms," Telsey Advisory Group analyst James Cakmak told Reuters, mentioning Yahoo Inc , Google Inc and Microsoft Corp as potential buyers in the sector.

OpenTable posted its first quarterly loss in five years for the period ended March 31 as it spent more on marketing to stem the slowdown in the number of restaurants signing up for its services.

The number of North American restaurants using OpenTable's platform rose 19 percent, but growth was slower than in the previous two quarters.

OpenTable, which gets $1.00 from a restaurant if a diner reserves a table through its website or app, will continue to operate as an independent business led by its current management, Priceline said.

Yelp's shares were up 13 percent at $74.65 in midday trading, having fallen 5 percent this year to Thursday's close.

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Priceline reported a 36 percent rise in second-quarter profit as hotel and car booking rose.

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The deal is expected to close in the third quarter. (Additional reporting by Lehar Mann; Editing by Maju Samuel and Ted Kerr)

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BRIEF-CVC and Blackstone place 100 mln Merlin shares

Deutsche Bank :

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* CVC and Blackstone launch 100 mln share placing of Merlin via Deutsche Bank & Morgan Stanley Further company coverage:

CVC and Blackstone place 100 mln Merlin shares

Merlin Entertainments' private equity backers CVC Capital Partners Ltd and Blackstone Group LP are placing 100 million shares of the British theme park owner through Morgan Stanley and Deutsche Bank, the German lender said.

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Merlin, the world's second-biggest operator of visitor attractions behind Walt Disney with brands such as Madam Tussauds and Legoland, counts Blackstone and CVC as its biggest shareholders after Kirkbi A/S, according to Thomson Reuters data. (Reporting by Richa Naidu in Bangalore, editing by David Evans)

Merlin private equity backers sell $615 mln stake

Two of Merlin Entertainments' private equity backers sold 100 million shares in the British theme park owner for 366 million pounds ($615 million) on Friday, according to Deutsche Bank, one of the banks handling the sale.

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Plans to place the shares by CVC Capital Partners Ltd and Blackstone Group LP via Deutsche Bank and Morgan Stanley were announced after Thursday's close.

Merlin is the world's second-biggest operator of visitor attractions behind Walt Disney with brands such as Madam Tussauds and Legoland and counted Blackstone and CVC as its biggest shareholders after Kirkbi A/S, according to Thomson Reuters data.

($1 = 0.5956 British Pounds) (Reporting by Steve Slater; Editing by Pamela Barbaglia)

Diamond set to fall short of $400 mln fundraising goal -source

Former Barclays chief executive Bob Diamond is set to fall short of his target to raise another $400 million for his African banking venture Atlas Mara, a person with knowledge of the situation said.

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Diamond, who spearheaded the growth of Barclays' investment bank before being forced out as CEO in 2012 by UK regulators after the bank was fined for attempted rigging of Libor interest rates, plans to increase the war chest of his Atlas Mara vehicle to pursue more African acquisitions and grow the business faster.

But some investors have balked at the fundraising so soon after it raised $325 million in its initial public offering in December, mainly due to concern about the illiquid nature of Atlas Mara shares, the source said.

That is likely to see it fall short of the $400 million target, although the fundraising will not close until later this month, he said. The source said Diamond had received strong support from the current shareholder base.

The Financial Times, which first reported the fundraising shortfall, said other investors which had not participated in the current fundraising said Diamond had demonstrated his M&A ability but had yet to show he could make money running a bank in Africa.

Diamond has teamed up with Africa-based entrepreneur Ashish Thakkar to set up Atlas Mara, with the intention of building it into Africa's leading financial services firm and putting him in potential competition with Barclays, which has pinpointed Africa as one of its main areas to grow.

Atlas Mara bought BancABC in March to give it a platform in several countries including Botswana, Mozambique and Tanzania, and the source said its strategy and acquisition plans to broaden and deepen its African footprint was unaffected by the fundraising shortfall.

Atlas Mara shares were suspended after its purchase of BancABC was treated as a reverse takeover, and are expected to relist before the end of July. (Reporting by Steve Slater; Editing by Alexander Smith and Mark Potter)

BRIEF-Johnston Press says underwriters procure shares via rump placing

Johnston Press Plc :

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* Confirms that Panmure Gordon and JP Morgan Cazenove, in their capacity as underwriters, have procured subscribers for remaining 355,748,073 new ordinary shares for which valid acceptances were not received in respect of rights issue Source text for Eikon: Further company coverage:

New Issue- Compass Group prices dual tranche deal

Following are terms and conditions

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of a dual tranche deal priced on Friday.

Tranche 1

* * * *

Borrower Compass Group Plc

Issue Amount 500 million euro

Maturity Date January 27, 2023

Coupon 1.875 pct

Reoffer price 99.004

Yield 2.003 pct

Spread 65 basis points

Underlying govt bond Over Mid-swaps, equivalent to 94.7bp

Over the September 2022 DBR

ISIN XS1079320203

* * * *

Tranche 2

Borrower Compass Group Plc

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Issue Amount 250 million sterling

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Maturity Date June 26, 2026

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Coupon 3.85 pct

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Reoffer price 99.737

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Yield 3.841 pct

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Spread 98 basis points

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Underlying govt bond Over the 5.0 pct 2025 UKT

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ISIN XS1079317167

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* * * *

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Common terms

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Payment Date June 27, 2014

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Lead Manager(s) BofAML, Barclays, Citi, HSBC, BNP Paribas, Lloyds,

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Mizuho, RBS, SGBM & Societe Generale CIB

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Ratings Baa1 (Moody's)

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Listing London

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Full fees Undisclosed

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Denoms (K) 100-1

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Governing Law English

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Notes Launched under issuer's EMTN programme

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Security details and RIC, when available, will be

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on

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Customers can right-click on the code for

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performance analysis of this new issue

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For ratings information, double click on

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For all bonds data, double click on

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For Top international bonds news

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For news about this issuer, double click on the issuer RIC,

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where assigned, and hit the newskey (F9 on Reuters terminals)

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UPDATE 2-FDA delays decision on Orexigen's obesity drug by 3 months

Orexigen Therapeutics Inc said the U.S. Food and Drug Administration delayed a decision on the marketing application for its obesity drug, contrave, by three months, sending the company's shares down as much as 20 percent on Wednesday.

The FDA indicated that the extension was needed to reach agreement on packaging and other post-marketing obligations related to the evaluation of potential heart risks associated with the drug, Orexigen said.

Analysts said they still expected contrave to be approved, as the FDA and Orexigen were in talks over the package insert and other post-marketing requirements.

The ongoing discussions suggest that the regulator has become more comfortable with contrave's risk/benefit profile, Wells Fargo analyst Brian Abrahams wrote in a note.

The FDA, which rejected the drug in 2011, had asked Orexigen to conduct additional trials to assess potential heart risk of the drug.

An interim analysis of an 8,900-patient study showed that overweight and obese patients receiving contrave did not have a higher heart risk compared with those on a placebo, the company said in November.

Contrave is a combination of the antidepressant bupropion and Orexigen's formulation of naltrexone, designed to prevent drug dependence.

Obesity has assumed epidemic proportions in the United States, with over one-third of adults in the country being obese, according to the Centers for Disease Control and Prevention.

If approved, contrave will compete with Vivus Inc's Qsymia and Arena Pharmaceuticals Inc's Belviq, which have been slugging it out to conquer the weight-loss market since 2012. Despite their potential, sales of the two drugs have been far short of expectations.

Some analysts blame marketing strategies for tepid sales, while others say physicians are unconvinced that new drugs have overcome the safety issues that caused the withdrawal of earlier diet drugs.

Side-effects have resulted in a number of diet treatments being withdrawn from the market. Among these are the notorious "fen-phen" combination that was pulled out in 1997 due to heart valve problems and Sanofi SA's Acomplia, which went off the market in 2008.

Qsymia and Belviq have been plagued by safety concerns, ranging from depression and anxiety to heart risks and potential harm to fetuses in pregnant patients.

Orexigen, which has licensed the North American rights to contrave to Takeda Pharmaceutical Co, entered into a agreement with Sanofi in November to manufacture the drug outside North America.

Contrave is also currently being evaluated by European regulators. The FDA is also in talks with Orexigen regarding the late-stage development of the company's second experimental diet drug, empatic.

Wallachbeth Capital analyst Bob Ai estimated that contrave's global sales could touch $850 million by 2020.

San Diego-based Orexigen's shares were down 15.8 percent at $5.73 in late morning trading on the Nasdaq. (Additional reporting by Anjali Rao Koppala in Bangalore; Editing by Don Sebastian and Kirti Pandey)

UPDATE 3-Lufthansa warns on profit, shares plunge

Lufthansa cut back its profit targets for the next two years on Wednesday citing competition from Middle East and low-cost rivals, sending shares of Europe's biggest-selling airline plunging.

The warnings surprised investors after better-than-expected results in May and come just over a month after new chief executive Carsten Spohr took charge.

Spohr will now set out fresh restructuring plans next month, and the German airline will review its spending plans, including the possible cancellation or deferral of plane orders from Airbus or Boeing, Finance Chief Simone Menne told analysts and reporters.

Lufthansa cut its forecast for 2014 operating profit to 1 billion euros from a forecast of 1.3-1.5 billion and lowered its 2015 earnings target to 2 billion euros from 2.65 billion.

Europe's largest airline by revenue said it was suffering from competition on European flights as well as on routes across the Atlantic where demand from business travellers has traditionally delivered healthy operating margins.

"The main reason for this lower forecast is significantly weaker than expected revenue development in the passenger and freight businesses compared to what we anticipated at the beginning of the year," Menne said.

"There is overcapacity in the North Atlantic," she said, noting Lufthansa was feeling the heat especially from Gulf carriers Emirates, Qatar Airways and Etihad, and from low-cost airlines, such as easyJet and Ryanair.

"The extent of the warning is comparatively big. It's especially disappointing that the target for 2015 was also reduced," DZ Bank analyst Dirk Schlamp said.

Lufthansa shares were down 14 percent as of 1443 GMT, shedding almost 1.5 billion euros ($2 billion) in market value and poised to mark their biggest ever one-day drop.

The warning dragged down European rivals too, with Air France-KLM down 7 percent and British Airways owner IAG off 3 percent.

PRICING PROBLEMS

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"We had hoped that the pricing weakness was temporary," Menne said, referring to overall trends at the group. "But May showed negative pricing year on year and for forward bookings in June and July we see unit revenues are clearly behind last year's figures."

RBC analyst Damian Brewer said the airline had been the most aggressive in terms of raising seat capacity this summer even though the German economy is not growing as fast as others.

"IAG are growing but also the UK economy is heading towards 3 percent GDP growth, not 1 percent or so as is the case in Germany," he said.

Lufthansa intends to increase capacity by 7.4 percent on North American routes this summer, Menne confirmed.

She said the cargo business would now likely post a profit only slightly above last year's 77 million euros, rather than the significant jump hoped for. Here too, Lufthansa is losing out to Gulf carriers.

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NEW CEO

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Already in the midst of a major restructuring programme dubbed Score, Menne said the company remained on track to reduce unit costs by 4 percent this year.

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Menne said the airline, which is spending billions on upgrading business class seats and a premium economy class to catch up to rivals, will cut the number of seats it offers in winter and possibly next year.

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She also said Lufthansa will review its capex plans, including looking at options to potentially delay or cancel current plane orders.

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Lufthansa has 261 planes on order with a list value of 32 billion euros which are due for delivery by 2025. Of the total, 178 are Airbus aircraft while 53 are on order from Boeing.

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Any order cancellations would deal another blow to Airbus after Emirates on Wednesday scratched a $16 billion order for the A350 airliner.

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Lufthansa, Airbus' biggest customer and operator, committed to buy 25 A350s last year with options to take a further 30 in a deal worth up to $16 billion at list prices.

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Christoph Niesel, a fund manager at Union Investment, one of Lufthansa's 15 largest shareholders, said the profit warning signalled that both internally and externally there were a lot of challenges to meet.

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"But with the new targets, Lufthansa even has room to surprise on the positive side," Niesel said.

($1 = 0.7345 euros) (Reporting by Victoria Bryan and Peter Maushagen; additional reporting by Sarah Young and Sabine Wollrab; editing by Ludwig Burger and Jason Neely)

FTSE ends lower; Rolls-Royce slides on plane order cancellation

Britain's top share index fell on Wednesday, pressured by stocks going ex-dividend and a sharp decline in Rolls-Royce following the cancellation of a major plane order.

Rolls-Royce dropped 5.5 percent, the top faller in the blue-chip FTSE 100 index, after Dubai's Emirates scrapped a $16 billion order for Airbus A350 planes that are fitted with engines from Rolls-Royce.

British Airways owner IAG also put pressure on the market, sliding 3.1 percent after rival Lufthansa said it would not reach its profit targets for the next two years as competition was suppressing prices on its main European and U.S. routes. Lufthansa shares slumped 14.2 percent in Frankfurt.

"Airlines are going to face a tough time as competition in the sector is increasing. Lufthansa's profit warning is a reminder that the situation is not going to improve in the near future and their margins might come under further pressure," David Battersby, investment manager at Redmayne-Bentley, said.

"However, I continue to be positive on the market and think that 7,000 for the FTSE 100 by the end of the year is quite possible. There are a lot of UK companies which are priced attractively and giving good dividends."

The benchmark FTSE 100 index ended 0.5 percent, or 34.68 points, lower at 6,838.87.

Stocks trading without the attraction of their latest dividend, namely Johnson Matthey and Vodafone, accounted for the majority of the FTSE 100's falls, knocking 8.24 points off the index. Vodafone dropped 4.5 percent, while Johnson Matthey fell 1.3 percent.

Analysts said that investors were losing faith in the idea that the index, which is less than 2 percent off its record high set in December 1999, will reach new highs in the near term.

"We think the FTSE 100 feels quite toppy up here - we are bullish in the medium term but at the moment, with summer approaching and volumes continuing to be light, we feel as if there could be some profit taking around these levels," said Mark Ward, Sanlam Securities' head of trading.

Alpari analyst Craig Erlam said a break below Tuesday's low of 6,835 would provide the first indication that the index was headed back towards its 6,800-range lows.

Frothy valuations are preventing investors from putting more money to work in equities. The FTSE 100 is trading on a 12-month forward price/earnings ratio of 13.7 times, against its 10-year average of 11.7 times, Thomson Reuters Datastream shows.

Some analysts said the index will fail to make much headway until the interim reporting season gets underway, around mid-July.

"Given the steady grind higher recently we're bumping at the top of the valuation range. I just think we're still at the point where we're waiting for the earnings to support that," said Peel Hunt equity strategist Ian Williams.

Among gainers, supermarket retailer J Sainsbury rose 1 percent after its sales update was seen as not as bad as expected. Sales at its stores open more than a year fell 1.1 percent, excluding fuel, in the 12 weeks to June 7, against a decline of 3.1 percent in the fourth quarter. Analysts had forecast a drop of 0.5-1.5 percent. (Additional reporting by Tricia Wright; Editing by Larry King/Ruth Pitchford/Susan Fenton)

UPDATE 2-Bouygues Telecom to cut jobs after sale talks fail

France's third biggest mobile operator Bouygues Telecom plans to cut 1,516 jobs or 17 percent of its staff to reduce costs to ensure its survival in a market where prices are down by nearly one-third.

Olivier Roussat, who heads the telecoms arm of the family-controlled conglomerate, also acknowledged on Wednesday that the company had held talks with potential buyers - low-cost player Iliad and market leader Orange - but these were no longer ongoing.

"Obviously the talks did not succeed otherwise we would not present this plan to remain independent," Roussat said. He declined to give reasons for the failure of the negotiations.

"We are cutting costs to survive in a four-player market."

Bouygues Telecom has been the centre of deal speculation since April, when it lost a bidding war for number two carrier Vivendi's SFR to cable operator Numericable.

Two people close to the situation said the talks between Bouygues and potential buyers had stumbled over price but they did not rule out the possibility that these could resume at a later date. Bouygues wanted a price of 8 billion euros ($10.89 billion), or 9 times 2013 operating profit, as a starting point for talks with both Iliad and Orange, the people said.

One of the people said that such a price would not create value once regulators imposed remedies to protect competition. Iliad's initial informal offer was between 4 and 5 billion euros, while Orange's could not be determined.

Bouygues shares closed 6.3 percent lower as consolidation hopes deflated. They have risen almost 17 percent this year boosted by a recovery in the construction and roads business and investor hopes for potential asset sales.

Orange closed down 3.3 percent and Iliad 6.8 percent.

PRICE WAR

Iliad's arrival on the mobile scene in January 2012 sparked the price war that is now increasing the pressure to consolidate. Mobile prices fell 27 percent last year and 11 percent in 2012, according to the telecoms regulator.

Bouygues has been hardest hit because of its smaller size. Its mobile market share declined by three percentage points and its operating margin fell to 15 percent in the first quarter from 22 percent in the same period in 2011.

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Bouygues in March took the price battle to the fixed broadband market with a TV, Internet and fixed-line phone bundle at 19.99 euros a month, a move that analysts said was targeted at Iliad, which has similar offers from 29.99 euros a month.

Bouygues' new commercial strategy will focus even more on the fixed market, an area where it has long trailed rivals. It plans to invest in its network to offer broadband directly to 16 million homes from 12 million currently instead of renting lines from Orange. It will also invest more in faster fibre broadband lines. Bouygues said capital expenditure on its network would remain stable at around 500 million euros a year.

Alongside this, the job cut plan aims to save 300 million euros a year by end of 2015.

Back-office jobs like marketing and information technology will be targeted, while the roughly 4,500 people employed in customer service and stores will remain untouched.

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Bouygues cut 542 people via a voluntary scheme in 2012, but this time there may be some compulsory cuts.

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CONSOLIDATION

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The mobile market's difficulties since Iliad's arrival has led executives from the major telecom companies to call for consolidation.

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France's main competition regulator Bruno Lassere no longer opposes this, and Industry Minister Arnaud Montebourg has openly called for it to calm what he has called "destructive competition".

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Speaking at a press briefing on Wednesday, Lassere said he had held discussions with all the operators in the past few months as they considered various tie-ups. "I cannot give them a formal opinion, but can provide my views and map out the potential risks," Lassere said.

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Having four operators is certainly better for consumers than three, he said, but more important than the number is preserving an aggressive "maverick" who forces price cuts.

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"The telecoms market is at a turning point ... If consolidation is inevitable, then we should prepare for it and negotiate it effectively. The worst outcome would be that one of the actors simply disappears because it can no longer survive."

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($1 = 0.7345 Euros) (Reporting by Leila Abboud and Gwenaelle Barzic; Editing by Andrew Callus and Jane Merriman)

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UPDATE 1-Retailer boohoo.com continues strong showing in first quarter

British online fashion retailer boohoo.com reported a 24 percent jump in first-quarter revenue on the back of a strong full-year performance, as recovering consumer confidence spurred more people to shop online.

Shares in the retailer, which floated on London's Alternative Investment Market in March, rose as much as 7.6 percent to 49.50 pence in early trading on Thursday.

The stock lost about 13 percent in value last week when rival retailer ASOS Plc warned on profits. However, Boohoo reassured the market at that time that it was trading in line with expectations.

Boohoo reiterated its outlook on Thursday and said it anticipated "revenue growth to accelerate as comparatives become less demanding" through the rest of the year.

Boohoo designs, sources, markets and sells own-brand clothing, shoes and accessories through its website to a core market of 16- to 24-year-old consumers in the UK and globally.

The company, majority-owned by its founders Kamani family, said UK revenue rose 44 percent while Europe was up 36 percent in the first quarter ended May 31, adding that revenue growth in May was double that seen in March.

"We do feel reassured by management's comments that May's exit rate was twice as fast as March, as the step up in marketing in Q1 started to kick in," Investec analyst Kate Calvert wrote in a note.

Full-year pretax profit more than tripled to 10.7 million pounds ($17.97 million) at the retailer.

Revenue came in at 109.8 million pounds in the year ended Feb. 28 compared with 67.3 million pounds a year earlier.

Boohoo said it recently amended its pricing strategy in Australia to reflect weakness in the Australian dollar.

A weak performance in Australia dragged the company's 'Rest of the World' revenue down 20 percent.

"As expected 1Q15 update optically a tad behind FY15 growth as a tough comparative and Aussie FX weigh," Jefferies analysts said in a note.

Shares in the Manchester, northern England-based company were up 5.4 percent at 48.44 pence at 0800 GMT on the London Stock Exchange.

($1 = 0.5956 British Pounds) (Reporting by Roshni Menon; Editing by Gopakumar Warrier)

FDA lifts partial hold on study testing Geron's drug, shares jump

Geron Corp said the U.S. Food and Drug Administration lifted a partial clinical hold on a study testing its blood cancer drug, imetelstat, sending its shares soaring about 34 percent in premarket trading.

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Patient enrollments in the trial, sponsored by Mayo Clinic, were halted in March over concerns of liver damage.

It came a week after the regulator ordered Geron to cease company-sponsored trials of the drug evaluating its use in thrombocythemia and multiple myeloma, two forms of blood cancer, over similar concerns.

Imetelstat, Geron's only drug, was touted as the company's savior after curing 22 percent of myelofibrosis patients in a trial last year. (Reporting by Natalie Grover in Bangalore; Editing by Don Sebastian)

UPDATE 1-Stockmann cuts 2014 outlook after weak May sales

Finnish department stores and fashion chain Stockmann cut its outlook on Thursday for the second time in two months, partly due to weaker-than-expected demand at domestic stores.

The Finnish economy has shrunk for two straight years, reflecting weak exports and a downturn elsewhere in Europe, and lately the weakness has spread to private consumption, with retailers feeling the impact.

The company's troubles were compounded by weak sales in Russia, where the weaker rouble has made imported products more expensive. Russia is Stockmann's second-biggest market.

Stockmann said May sales fell 8.3 percent from a year ago and warned that without a considerable change in the market environment in the latter half of the year, operating profit would end up significantly weaker than in 2013, marking a second outlook cut in two months.

On April 29, the company had said it expected 2014 operating profit would not exceed the figure for 2013.

"Demand of non-food products has continued to be weaker than expected in the Finnish market during the second quarter," Stockmann said on Thursday, adding that a weak Russian rouble was also hurting results.

Stockmann's local rival Kesko said earlier on Thursday its May sales fell 5.9 percent from the same month a year earlier.

Stockmann shares were down 2.5 percent and Kesko's 2.4 percent by 1125 GMT. (Reporting by Jussi Rosendahl and Sakari Suoninen; Editing by Jason Neely and David Holmes)

UPDATE 2-Discount retailer B&M's shares rise in London debut

Shares in Britain's B&M European Value Retail, chaired by former Tesco chief executive Terry Leahy, rose nearly 8 percent on their market debut, showing that investors remain enthusiastic about the discount sector of the retail industry.

Fast-growing B&M has around 370 stores selling products ranging from bedding to barbecues. Leahy, who left Britain's biggest supermarket chain in 2011, joined B&M in 2012.

B&M sold about 40 percent of its shares to institutions at a price of 270p each. They traded at 291 pence at 1205 GMT.

That values the firm at 2.9 billion pounds ($4.87 billion), 2 billion pounds above its main discount rival Poundland whose shares were listed in March. It also puts the company within striking distance of the FTSE 100 index, with the smallest constituents valued at 3 billion pounds.

Discount retailers, both in general mechandise and food, are taking sales from Britain's "big four" supermarkets, including Tesco, which became the undisputed leader of the sector under the charge of Leahy.

B&M, based in Liverpool in north west England, reported adjusted core earnings of 130 million pounds in the year to end-March, up 24 percent, on sales of 1.27 billion pounds.

B&M's share price gives the retailer a forward price-earnings multiple of 27.6, based on analysts forecasts that the company could make a net profit of 105 million pounds in the year ending March 2015. That puts it ahead of Poundland's valuation of 25.6 times expected earnings, according to Thomson Reuters data.

A costly exit from the U.S. and loss of market share has left Tesco trading on a multiple of 12.4 times its prospective earnings. The stock has fallen some 27 percent since Leahy quit.

B&M's Chief Executive Simon Arora aims to expand the chain at a rate of around 40 new shops a year. He has said two-thirds of the British population do not have easy access to B&M, and there is room for around 850 stores across the UK.

"We are delighted that investors have demonstrated their support for B&M and its growth story in the value sector and that they share our excitement about the Group's future," he said on Thursday.

B&M said selling shareholders, the Arora family and U.S. private equity firm Clayton, Dubilier & Rice, will receive 1.01 billion pounds of gross proceeds from the sale, assuming no exercise of an over-allotment option.

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DISCOUNT VALUE

Poundland, which sells all items for one pound rather than B&M's range of prices, also saw its shares jump on its market debut in March. While they have lost some of the initial surge, they remain 44 pence above the float price of 300 pence.

Industry analyst Nick Bubb said Poundland had better brand recognition, but B&M had better like-for-like sales growth, perhaps reflective of its "multi-price" business model.

Proceeds from London IPOs have more than trebled this year to $8.8 billion across 33 listings, according to Thomson Reuters data.

Other retail offers have fared less well since listing. Pets at Home, which floated at 245 pence in March, trades at 219 pence today. The group reported a 12 percent rise in annual earnings to 110.7 million pounds earlier on Thursday.

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Shares in online fashion retailer boohoo.com, which posted a 24 percent jump in first quarter revenue, are trading at 49 pence, just below its 50 pence listing price in March.

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Online appliance retailer AO World is also losing ground, with its shares valued at 266 pence against a 285 pence listing price.

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BofA Merrill Lynch and Goldman Sachs were joint sponsors and bookrunners for B&M, while Credit Suisse and Deutsche Bank were also joint bookrunners. Lazard was an adviser on the IPO.

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($1 = 0.5956 British Pounds) (Editing by James Davey and Elaine Hardcastle)

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Oil companies prop up FTSE as miners collapse

Energy companies kept Britain's top share index out of the red on Thursday as oil prices were lifted by violence in Iraq.

But the FTSE struggled to make any real headway as heavyweight mining stocks dropped sharply after worries about declining Chinese demand sent copper prices to a one-month low.

The FTSE 100 ended up 4.24 points, or 0.1 percent, at 6,843.11 points.

Energy stocks added 10.24 points to the index as Brent crude oil climbed towards $112 a barrel on concerns for supply from Iraq, a major OPEC exporter. Sunni Muslim rebels from an al Qaeda splinter group overran the Iraqi city of Tikrit on Wednesday and closed in on the biggest oil refinery in the country.

"If oil prices go up... it directly flows to revenues and to the bottom line," Oswald Clint, an analyst at Sanford Bernstein, said.

BG, which does not have a presence in Iraq, rose 2.5 percent, the top FTSE riser, while BP and Royal Dutch Shell, which are present in the country, added 0.7 percent and 0.5 percent, respectively.

Companies dealing in basic materials, however, knocked 10.8 points off the FTSE. Miners Rio Tinto and Anglo American were each down over 3 percent, the top FTSE fallers.

ITV rose 1.6 percent after a Brandrepublic report suggested that advertising group Omnicom would redirect 30 million pounds ($50.37 million) worth of ad spending to the British broadcaster from rival Channel 5.

"An extra 30 million pounds in an operationally geared business like ITV could see a high flow-through of that into profits, so that's certainly good news for ITV," Paul Richards, an analyst at Numis Securities, said.

Trade in ITV shares was busy, with volume 50 percent above the stock's daily average for the past three months. Trading across the FTSE 100 was quieter, with volume around two-thirds percent of its own average.

The index has traded in a tight 130-point range since the beginning of May, while other European indexes have pushed up to new multi-year highs, buoyed by stimulus from the European Central Bank.

The FTSE 100 is down 0.3 percent this week - the third time it has failed to break out of the range in the last six weeks.

"The UK FTSE remains locked in a tight ... range, with catalysts lacking for a break either way," Mike van Dulken, head of research at Accendo Markets, said in a note. ($1 = 0.5956 British pounds) (Additional reporting by Alistair Smout; Editing by Mark Heinrich)

U.S. airline shares fall for 2nd day, hit by rising oil prices

Shares of major U.S. airlines dropped for a second straight day on Thursday as oil prices climbed to a three-month high in the wake of the worst fighting in Iraq since the U.S. troop withdrawal in 2011.

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American Airlines Group Inc, the world's largest carrier, tumbled 5.4 percent, while United Continental Holdings Inc 5.7 percent and Delta Air Lines Inc dropped 5 percent. The sector also fell on Wednesday, when German carrier Deutsche Lufthansa AG pared its profit targets for the next two years, citing greater competition .

Southwest Airlines Co and JetBlue Airways Corp were both down more than 4 percent.

Brent crude oil climbed topped $112 a barrel on worries that escalating violence in Iraq could disrupt oil supplies from the major OPEC exporter. Fuel and labor are the biggest costs for airlines.

Kevin Crissey, an airline analyst with Skyline Research, said newer investors were likely not accustomed to the volatile effect of fuel prices on the sector. He also said profit-taking was likely playing a role in the sector skid.

"This shouldn't be an indictment to everything good that's been going on in the industry," Crissey said. "The consolidation, the capacity discipline, that's all still true, but fuel still matters."

Shares of airlines have rallied over the past year as carriers moved to enhance shareholder returns. Last month Delta said it would raise its quarterly dividend by 50 percent and launch a new $2 billion share buyback.

Even with the declines over the past two days, Delta shares have risen about 39 percent so far this year, and American is up about 57 percent. Alaska Air Group Inc, which announced a 2-for-1 stock split on Thursday, has risen about 27 percent this year. It was off 3.6 percent on Thursday.

Crissey said he expected airlines to be profitable despite the latest rise in oil. "It shouldn't change the overall thesis that the airlines are doing quite well, demand is decent, their capacity discipline is in place and there's fewer of them," Crissey added. "It's still a very attractive time for the airline space."

Iraqi Kurdish forces took control of the northern oil city of Kirkuk on Thursday, after government troops abandoned their posts in the face of a triumphant Sunni Islamist rebel march toward Baghdad that threatens Iraq's future as a unified state. (Reporting by Karen Jacobs in Atlanta; Editing by Jeffrey Benkoe)

UPDATE 3-FDA lifts partial hold on study testing Geron's only drug

Geron Corp said the U.S. Food and Drug Administration had lifted a partial clinical hold on a study testing its sole drug as a treatment for myelofibrosis, a rare form of blood cancer, sending the company's shares soaring in morning trading.

Enrollment in the early-stage trial, sponsored by the Mayo Clinic, was halted in March over concerns about liver toxicity pending followup data from Mayo's investigator on the possible reversibility of the liver damage.

Enrollment for the study ceased in January, and about 20 of the 79 patients dropped out.

Geron, whose shares rose as much as 33 percent on Thursday, did not then disclose the reason behind the dropouts, but said the remaining enrolled patients would continue to receive the drug, imetelstat.

However, in March the FDA also imposed a halt on separate company-sponsored trials evaluating the use of the drug in thrombocythemia and multiple myeloma, citing similar concerns.

Geron said on Thursday the company-sponsored trials remain suspended.

Stifel Nicolaus & Co analyst Brian Klein said that while the FDA's lift on the partial hold was positive, it was unlikely that the Mayo Clinic would enroll new patients.

As the partial hold had not prevented Mayo from dosing patients already enrolled, Thursday's announcement will make no difference to the final results of the study, he said.

Klein said he did not expect the FDA to lift its hold on company-sponsored trials in the next few months.

Geron, once one of the leading firms in the race to develop the first commercial stem-cell therapy, divested its stem-cell assets last year to focus on cancer treatments.

Imetelstat was touted as the company's savior after curing 22 percent of myelofibrosis patients in a trial last year.

Geron is likely to ask the FDA to lift the hold on the company-sponsored trials before providing all toxicity data from prior trials in order to initiate its own study in myelofibrosis patients, George Zavoico, an analyst at brokerage MLV & Co said.

"We believe the FDA will allow Geron to proceed, and if so the next trial could start in early 2015," he told Reuters.

If approved, Geron's drug would compete with Incyte Corp's myelofibrosis drug, Jakafi, which generated sales of $235.4 million last year.

Some analysts have indicated that imetelstat's ability to evoke a disease-modifying effect - defined as partial or complete remission - suggests it would be superior to Jakafi.

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Incyte's shares were slightly higher at $53.90, while Geron's shares were up about 27 percent at $3.31 in early afternoon trading on the Nasdaq.

Imetelstat is designed to inhibit telomerase, an enzyme that enables the rapid multiplication of tumor cells.

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The company had earlier discontinued testing the drug for treatement of breast and lung cancer after trial failures. (Reporting by Natalie Grover in Bangalore; Editing by Don Sebastian and Ted Kerr)

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UPDATE 4-Lululemon sees tough second quarter, shares tumble

Lululemon Athletica Inc offered little sign on Thursday that it was pulling out of an extended slump, cutting financial forecasts and warning that second-quarter sales at its once-trendy yogawear shops were off to a weak start.

Its shares dropped more than 15 percent after it said purchases were dropping even as customer traffic was picking up. During a conference call, Chief Executive Laurent Potdevin blamed the decline in part on a "suboptimal" product assortment.

With Thursday's retreat, the shares have dropped more than 40 percent since the company announced an embarrassing recall of overly sheer yoga pants in March 2013. The incident shook up customers and investors in the company just as lower-priced competitors started to crowd into the yogawear market, a business that Lululemon virtually invented.

"We have a core product assortment that has not been evolved as quickly as it should have been," Tara Poseley, Lululemon's new chief product officer, said on the call. She said Lululemon did not offer enough seasonal products, as opposed to all-season "core" products, in the first quarter.

The results came a day after Lululemon's founder and largest shareholder, Dennis "Chip" Wilson, announced he had voted against the election of the company's new chairman as well as another board member. Wilson praised management but said the board is too focused on short-term growth.

For the second quarter, which started on May 5, Lululemon expects no comparable sales growth at all.

Comparable sales edged up 1 percent in the first quarter, but the gain reflected an increase in online business. In established stores, sales dropped 4 percent.

Potdevin admitted to investors earlier this year that Lululemon was "not the only game in town anymore." Rivals such as Gap Inc, Under Armour, VF Corp and even department stores are pushing fashionable workout gear.

Even as first-quarter earnings came in slightly ahead of expectations, Lululemon's latest forecasts reinforced the impression that the retailer is struggling to regain its stride.

"The second quarter guidance is for a real deceleration from the already anemic first quarter," said Cowen and Co analyst Faye Landes.

In another blow, Lululemon said veteran Chief Financial Officer John Currie would retire by the end of the fiscal year. His departure comes about a year after Chief Executive Christine Day announced her own exit, a move that followed an extended slowdown in sales at a company once renowned for double-digit growth.

FALLING BEHIND

The company now expects revenue for the year to be in the range of $1.77 billion to $1.80 billion, with adjusted earnings of between $1.71 and $1.76 per share. It had earlier forecast earnings of $1.80 to $1.90 per share on revenue of $1.77 billion to $1.82 billion.

Analysts, on average, had expected full-year earnings of $1.89 a share on revenue of $1.8 billion, according to Thomson Reuters I/B/E/S.

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Vancouver-based Lululemon's reputation for selling pricey but top-quality yoga and running clothes was badly tarnished by last year's recall, which came after some customers noticed that their stretchy pants were partially transparent.

For more than a year, it has worked to smooth out quality and supply-chain issues, battle lawsuits, deal with departing executives and soothe customers after Wilson said in an interview that "some women's bodies just actually don't work" for Lulu's pants.

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The retailer had previously said it would not fully resolve its supply chain issues until 2015.

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Excluding a one-time adjustment for planned repatriation of foreign earnings, the company said profit in the quarter was 34 cents a share. Analysts on average were expecting earnings of 32 cents a share.

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On a net basis, profit in the fiscal first quarter ended May 4 fell to $19 million, or 13 cents per share, from $47.3 million or 32 cents per share a year earlier.

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Revenue rose 11 percent to $384.6 million, while sales at established stores and online sales edged up 1 percent from a year earlier. The company had forecast little change. The small gain came thanks to online sales, which rose 25 percent while comparable sales at corporate stores fell 4 percent.

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The company said it could buy back up to $450 million worth of common shares over two years.

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Shares were down 15.5 percent at $37.43 on Thursday afternoon on the Nasdaq.

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(Additional reporting by Shubhankar Chakravorty in Bangalore; editing by Kirti Pandey, Sofina Mirza-Reid, Chizu Nomiyama and Matthew Lewis)

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Amaya Gaming near deal to buy poker website PokerStars - Bloomberg

Canada's Amaya Gaming Group, is near a deal to buy the parent of PokerStars, the world's largest poker website, Bloomberg said, citing two people with knowledge of the situation.

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Blackstone Group LP's credit business, GSO Capital Partners LP, is backing the bid and arranging more than $1 billion to help finance the deal, according to one of the people, Bloomberg said. (link.reuters.com/zav99v)

An announcement to buy PokerStars' parent Rational Group Ltd may come on Thursday, one of the people told Bloomberg.

Blackstone is preparing to announce its largest-ever credit deal, with more than $1 billion of fund commitments, Bennett Goodman, head of Blackstone's credit business, said at the company's investor day, according to Bloomberg.

The agreement, which Blackstone expects will be announced on Thursday, is an acquisition financing for a North American company, Goodman said without naming the business involved, Bloomberg reported.

Amaya Gaming' shares rose 17 percent to $14.08 on Thursday, before trading in the stock was halted on the Toronto Stock Exchange. The stock has risen about 39 percent in the last week.

New ownership could remove an obstacle for PokerStars to return to the United States, where online gambling is now legal in three states, Bloomberg reported.

The Isle of Man-based company paid $731 million in July 2012 to settle a money laundering lawsuit filed a year earlier by the U.S. Department of Justice.

Amaya Gaming and PokerStars were not immediately available for comment. (Reporting By Tanvi Mehta and Narottam Medhora in Bangalore; Editing by Savio D'Souza)

Sycamore Partners mulls offer for apparel retailer Express

Private equity firm Sycamore Partners Said it was interested in acquiring apparel retailer Express Inc and asked the company to allow it to perform due diligence.

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The private equity firm on Thursday disclosed a stake of about 9.9 percent in the company, according to a regulatory filing. (link.reuters.com/huv99v)

Express's shares rose 22 percent to $16.55 in extended trading. The stock closed down nearly 3 percent at $13.55 on Thursday, valuing the company at $1.14 billion.

"We would like to perform confirmatory due diligence to determine a definitive valuation of the company," Sycamore said in a letter to the company's board, adding it would take 30 days to complete its due diligence, obtain financing commitments and submit its offer.

Express has warned last month that it could post a loss in the current quarter due to high inventory and slow traffic. (Reporting by Shailaja Sharma in Bangalore; Editing by Savio D'Souza)