Man Group says in talks to buy Numeric

Man Group said it was in talks to buy U.S. asset manager Numeric Holdings and diversify its quantitative fund offering, giving the UK hedge fund manager's share price a boost.

A deal for Boston-based Numeric, part-owned by private equity group TA Associates and up for sale since early 2013, would broaden a quant fund stable currently focused on Man's flagship AHL computer-driven funds.

It would also boost its presence in the United States, the biggest hedge fund market in the world, as well as its foothold in the institutional market, dealing with clients such as pension funds, which are driving growth in the broader industry.

"This transaction would further diversify Man away from AHL and is consistent with Man's strategy to acquire a US-based asset manager," said RBC Capital Markets analyst Peter Lenardos.

"However, given the extremely limited information available, especially on profitability and price - we reserve judgment until more details emerge."

Man, which manages more than $55 billion in assets, has restructured extensively after being hit by poor performance and heavy outflows of client funds during the financial crisis, after which it bought fund of fund and advisory group FRM and alternative asset manager GLG. Phil Dobbin, analyst at Espirito Santo Investment Bank, which acts as market maker for Man and has a "sell" rating on the stock, said using Man's assets under management to market capitalisation as a guide, Numeric could be worth $430 million.

"But we don't have profitability figures for Numeric and have to remember Man has always traded at a high market cap to AuM (assets under management)," he said in a note to clients, adding that such a valuation of Numeric would require Man to use up its surplus capital.

Shares in Man recovered from a quiet start to rise 3 percent by 0740 GMT and lead gainers across the FTSE mid-cap index.

In a statement on Thursday, Man said discussions with Numeric, founded in 1989, with 74 employees and which manages more than $13.9 billion in assets, were ongoing and may or may not lead to a transaction. It declined to comment further.

Quantitative trading strategies use computer-based algorithms to determine when to buy and sell an asset.

(Reporting by Simon Jessop; editing by Huw Jones and John Stonestreet)

Peugeot share issue underway as new board meets

French carmaker PSA Peugeot Citroen ( id="symbol_PEUP.PA_0">PEUP.PA) launched the second stage of a long-awaited 3 billion euro ($4.2 billion) capital increase to fund its "Back in the Race" recovery plan and tie-up with China's Dongfeng ( id="symbol_0489.HK0489.HK).

_1">

As its new board met on Tuesday, the troubled firm surprised markets by issuing more stock than expected at a larger discount to raise 1.95 billion euros from existing shareholders.

Peugeot shares surged in afternoon trading, outpacing a broader European stock rally on hopes that recovering regional demand can help the recapitalized carmaker rebound.

The rights issue, in addition to a 1.05 billion stock sale to the French state and Dongfeng Motor Group, allows investors to purchase seven new shares at 6.77 euros for every 12 held, a 41 percent discount to Monday's comparable closing price.

That means future dividends will be divided among 877 million outstanding shares, a greater number than many analysts had anticipated.

"Our share price target is likely to halve on the back of this transaction," said Mike Dean of Credit Suisse.

The extent of existing shareholders' dilution is "further negative news for Peugeot following an underwhelming 'Back in the Race' presentation," the London-based analyst said.

But the stock reacted positively, building on tentative morning gains to close at 12.73 euros - a 10.6 percent advance excluding the mechanical effect of a parallel warrants issue that had cut the price by 1.53 euros overnight.

The rally was "probably a reflection of people being relieved" at the company's refinancing progress, said Erich Hauser of ISI Group, which had trimmed its Peugeot rating to "neutral" from "strong buy" following the February 14 strategy presentation by new Chief Executive Carlos Tavares.

The former Renault ( id="symbol_RENA.PA_2">RENA.PA) second-in-command has pledged to simplify model lineups and slash production costs in pursuit of a 2 percent operating margin goal for 2018, rising to 5 percent by 2023.

The capital hike will see the French government and state-owned Dongfeng each acquire 14.1 percent of the carmaker, which posted more than 7 billion euros in net losses for 2012-13, as well as take two board seats each.

Meeting for the first time on Tuesday under new Chairman Louis Gallois, the board named his predecessor Thierry Peugeot as one of three vice-chairmen, alongside representatives of Dongfeng and the French state.

Peugeot said the rights issue subscription period would run from May 2-14, underwritten by a syndicate led by BNP Paribas, Morgan Stanley and seven other major banks. Settlement, delivery and listing of the new shares will take place on May 23.

The deal terms imply that Peugeot shares would be valued at seven times forecast 2015 earnings after the capital hike, compared with a multiple of 4.1 beforehand, Paris-based brokerage Exane said.

That valuation is higher than profitable rival Renault, at 6.6, and not far behind German powerhouse Volkswagen ( id="symbol_VOWG_p.DE_3">VOWG_p.DE), which trades at 8.5 times forecast earnings.

Peugeot may raise up to 800 million euros more over a two-year period beginning next April, as the separate warrants are exercised for the purchase of additional stock.

_0">

Shareholders approved the three-stage capital increase at the carmaker's annual general meeting on Friday.

_1">

(Editing by Mark Potter and Erica Billingham)

_2">

3D Systems gross margin slips, shares slide

3D printer maker 3D Systems Corp's ( id="symbol_DDD.N_0">DDD.N) quarterly gross margins fell for the first time in two years, raising concerns about its growth prospects in an industry, which is drawing the attention of bigger technology firms.

_0">

3D Systems shares fell as much as 11 percent, making the stock one of the top losers on the New York Stock Exchange on Tuesday morning.

The company said on Tuesday that its gross margin expansion was being delayed as it printers continued to be a major source of revenue.

3D Systems printers, priced at less than $1,000 to about $1 million, generate lower gross margins than its printing materials and services.

The company also said it now expects to get most of the revenue and profit it forecast for 2014 in the second half of the year when it launches new products and services.

The nascent 3D printer industry has generated widespread interest in the last couple of years. It has, however, also drawn criticism from some analysts for being overhyped and immature.

HP Co ( id="symbol_HPQ.N_1">HPQ.N), which plans to tap into the market, said in March it would focus on selling to businesses, rather than on making cheaper consumer printers.

"We take companies like HP very seriously, we also don't underestimate the degree of complexity that they would have to position themselves as a relevant and meaningful player," Chief Executive Avi Reichental said.

3D Systems reported a better-than-expected 45 percent jump in first-quarter revenue, but gross margin fell 130 basis points to 51.1 percent.

The company's revenue increased to $147.8 million in the quarter ended March 31 from $102.1 million. Sales of 3D printers rose 60 percent to $50.7 million.

"... As we place more printers faster, we expect an overall gross profit margin expansion trend over the next few periods," Chief Financial Officer Damon Gregoire said on a conference call with analysts.

Gregoire said faster growth in printing material sales and higher revenue contributions from software and services would improve margins.

Net income attributable to 3D Systems fell to $4.9 million, or 5 cents per share, in the quarter from $5.9 million, or 6 cents per share, a year earlier.

Excluding items, the company earned 15 cents per share, in line with analysts' average expectation.

3D Systems, which named Black Eyed Peas rapper will.i.am chief creative officer in January, reaffirmed its full-year forecast of adjusted earnings of 73 cents-85 cents per share on revenue of $680 million-$720 million.

The company's shares, which have lost nearly half their value this year, were trading at $43.73 in afternoon trading on Tuesday. Shares of rival Stratasys Ltd's ( id="symbol_SSYS.O_2">SSYS.O) fell as much as 6 percent while those of ExOne Co ( id="symbol_XONE.O_3">XONE.O) fell 5 percent.

3D Systems stock traded at almost 19 times its earnings, while that of Stratasys traded at 25 times, according to Thomson Reuters StarMine.

(Reporting by Sruthi Ramakrishnan in Bangalore; Editing by Saumyadeb Chakrabarty and Joyjeet Das)

Pfizer prepares sweeter bid for AstraZeneca: report

Pfizer Inc ( id="symbol_PFE.N_0">PFE.N) may sweeten its offer for Britain's AstraZeneca Plc ( id="symbol_AZN.LAZN.L) to more than 63 billion pounds, or $106 billion, and raise the cash portion of the deal, to kickstart negotiations, Bloomberg reported on Thursday.

_0">

Citing people with knowledge of the matter, the report said a new bid may value AstraZeneca at more than 50 pounds ($84.47) per share and could come as early as next week. Pfizer disclosed earlier this week that it had twice approached AstraZeneca about a takeover, only to be rebuffed in both cases.

_1">

Pfizer and AstraZeneca declined to comment on the report.

Since Pfizer went public with its approach to AstraZeneca, investors and analysts have been expecting the largest U.S. drugmaker would come back with more than its initial offer worth 58.8 billion pounds ($98.9 billion) and increase the cash component. Under British takeover rules, Pfizer has until May 26 to announce its intent to make an offer for AstraZeneca, or walk away.

When Astra turned down the Pfizer offer, it did not simply say that the bid significantly undervalued the company; it put a "very" in front of it, noted John Boris, an analyst with SunTrust Robinson Humphrey.

"They're basically saying 'come back to me with a materially higher offer,'" said Boris. He predicted that Pfizer would raise the offer to about $110 billion, or $87 a share.

A purchase of AstraZeneca would not only bolster Pfizer's pipeline of cancer drugs in development, but allow it to redomicile in Britain to take advantage of significantly lower tax rates there, and to use tens of billions of dollars it has overseas without having to pay high taxes for bringing the cash back to the United States.

Pfizer shares turned lower following the Bloomberg report and were off 0.3 percent at $31.18 on the New York Stock Exchange.

(Reporting by Bill Berkrot and Ransdell Pierson; Editing by Richard Chang)

AstraZeneca fights Pfizer bid by predicting sales surge - eventually

AstraZeneca Plc laid out its defense against Pfizer Inc's $106-billion takeover approach on Tuesday by predicting its sales would rise by three quarters over the next decade, although only after a short-term drop.

With promising new medicines expected to lift annual revenue above $45 billion by 2023, up from $25.7 billion in 2013, selling out to the U.S. group now would deprive investors of huge gains, it argued.

"The increasingly visible success of our independent strategy highlights the future prospects for our shareholders," said Chairman Leif Johansson. "These are benefits that should fully accrue to AstraZeneca's shareholders."

Chief Executive Pascal Soriot said plunging AstraZeneca into a disruptive merger would also jeopardize its ability to deliver on the new drug pipeline, which is expected to account for 30 percent of the 2023 sales total.

Investors and analysts agree Britain's second-biggest drugmaker has an improving experimental portfolio in areas ranging from cancer to asthma, but they remain nervous about the uncertain commercial future of many products.

AstraZeneca has rebuffed three approaches from Pfizer, which wants to create the world's biggest pharmaceuticals company - and cut its tax bill - by buying the group. It said on Friday that the U.S. firm's latest offer of 50 pounds a share "substantially" undervalued the company.

The group has not ruled out a deal altogether, however, and people familiar with the matter said it was willing to talk if there were a compelling offer. Several large shareholders have told Reuters they would be open to a deal at a higher level.

Shares in AstraZeneca were down 2.7 percent at 46.80 pounds at 11:10 am ET (1510 GMT).

"OVERLY OPTIMISTIC"

Sales are set to fall over the next three years as older medicines lose patent protection, slipping to $24.5 billion by 2016 and $23.6 billion in 2017, according to Thomson Reuters consensus analyst forecasts.

AstraZeneca has previously said it disagrees with analysts and sees sales back up at last year's level by 2017. Now it is forecasting "strong and consistent" growth from 2017 to 2023, driven by new treatments for cancer, diabetes, heart disease and lung disorders.

It also flagged up a possible therapy for Alzheimer's disease, a notoriously high-risk area for drug development.

Growth in core earnings per share, which excludes certain items, is expected to exceed revenue growth during this period, it added.

Jefferies analysts said the forecasts appeared "overly optimistic" but the detailed product breakdown might help raise the price and cash mix in any deal. In addition to a higher bid, AstraZeneca also insists there should be more cash than the 32 percent suggested by Pfizer, with the balance paid in shares.

AstraZeneca launched its 10-year sales forecast defense salvo a day after Pfizer CEO Ian Read renewed his call for the British company's board to enter talks.

Read insisted his offer was "compelling" and signaled he was now weighing all options, including a possible hostile bid or looking at other targets, though he stressed that buying AstraZeneca remained "Plan A".

_0">

Pfizer's pursuit of AstraZeneca has created a political stir in Britain, with critics of the U.S. group's approach fearing that a takeover will lead to big cuts in drug research, despite assurances given by Pfizer to the government.

_1">

Officials have said a deal would be a commercial matter for the two companies but business minister Vince Cable said Britain could use its powers to assess if a takeover was in the public interest, while lawmakers called on Pfizer's bosses to appear before parliament.

_2">

CANCER FOCUS

_3">

Most investor interest centers on AstraZeneca's experimental cancer medicines designed to boost the immune system. Such drugs promise to revolutionize treatment of many tumor types and would also complement Pfizer's line-up of oncology medicines.

_4">

But AstraZeneca is lagging rivals such as Bristol-Myers Squibb Co, Merck & Co and Roche Holding AG in this field.

_5">

"This is a company that has made significant progress in moving its pipeline forward over the last 18 months," said Alistair Campbell, an analyst at Berenberg Bank. "Is it enough on a fundamental basis to justify the current share price? Personally, I don't think so - at least not without the certainty you need in terms of knowing clinical trial outcomes."

_6">

Among individual products, AstraZeneca said heart drug Brilinta had the potential to deliver annual sales of around $3.5 billion by 2023, with diabetes and respiratory medicines both adding about $8 billion apiece.

_7">

In cancer it forecast potential peak sales of $6.5 billion for its experimental immunotherapy drug MEDI4736 - the product that has excited most interest from investors and analysts.

_8">

AstraZeneca said last month it planned to push ahead with late-stage Phase III testing of MEDI4736, following evaluation of positive Phase I data that will be presented at an American Society of Clinical Oncology (ASCO) conference on May 30-June 3.

_9">

The detailed presentations on this and other experimental cancer medicines will be important for AstraZeneca and rivals, and could move its shares - but may be just too late for the Pfizer bid battle.

_10">

Pfizer has a deadline of May 26 to make a firm offer or walk away under British "put up or shut up" takeover rules.

_11">

"They've got drug candidates in what look to be really exciting areas," said Dan Mahony, a fund manager at Polar Capital, who raised his stake in AstraZeneca last year. "But it is not clear to us yet who, across the industry, has the best drug."

_12">

(Additional reporting by Anjuli Davies; Editing by David Stamp and Will Waterman)

_13">

Twitter shares plumb new lows as stock lock-up expires

Shares of Twitter Inc sank 18 percent to a new low in frenzied trading on Tuesday, wiping out more than $4 billion of its market value, as early investors sold stock in the messaging service for the first time after a six-month "lock-up" expired.

The stock closed at $31.85 on the New York Stock Exchange, as losses deepened late in the session to the lowest since its debut on November 7 at $37. On a consolidated basis, more than 130 million shares changed hands - 10 times the daily average volume for the last 50 days.

The lock-up agreement that expired this week applied to about 470 million shares, or 82 percent of Twitter's equity, held by insiders, venture capitalists and other investors. Twitter allowed one batch of shares to be sold in February, but that lockup governed only about 10 million shares, most of which were held by non-executive employees.

"The move is bigger than expected and is indicative of the negative investor sentiment towards Twitter right now," Atlantic Equities analyst James Cordwell told Reuters.

Tuesday's reaction to Twitter's lock-up expiry was in sharp contrast to that of Facebook Inc in late 2012. Facebook shares jumped 13 percent on November 14 that year, when its lock-up expiry of roughly 800 million shares did not trigger an immediate wave of insider selling.

Twitter's shares have been trading at all-time lows since April 29, when the company disclosed sagging usage metrics.

Indeed, concerns about user growth and engagement levels have wiped out about half of Twitter's market value, more than $18 billion, since late December, even as it has hit revenue targets in the two quarters since it went public at $26 a share.

The stock does not look cheap either, despite the declines. Before Tuesday's selloff, Twitter shares were trading at 323 times forward earnings per share, according to Thomson Reuters StarMine. Facebook trades at about 39 times.

"I am starting to think that sentiment might have got too negative, but I don't see anything that can turn this around in the near term," Cordwell said.

The largest holder of Twitter shares, private equity firm Rizvi Traverse, had no intention of selling when the lockup expired, a spokesman for the firm said on Friday.

Rizvi Traverse, which owns about 85.2 million Twitter shares, could not be reached for comment on Tuesday.

Lowercase Capital, which also holds a significant stake in Twitter, said Monday it had no intention of selling its shares.

Twitter co-founders Jack Dorsey and Evan Williams and Chief Executive Dick Costolo said in April they did not plan to sell shares after the restrictions were lifted.

Venture capital firm Benchmark, which holds a roughly 6 percent stake, has also said it would not sell its stake.

But other major shareholders could see an opportunity to cash out, given that none of Twitter's insiders sold their shares during the initial public offering.

Large shareholders include venture capital firms Union Square Ventures and Spark Capital. Spark declined to comment, while Union Square Ventures could not be immediately reached.

_0">

Many tech companies have a lock-up clause to prevent holders from flooding the market as soon as the company goes public.

_1">

(Additional reporting by Soham Chatterjee; Editing by Savio D'Souza, Ted Kerr, Bernadette Baum and Richard Chang)

_2">

Insurer Allianz defends Pimco after investors take flight

Europe's biggest insurer Allianz defended its U.S. asset management business Pimco on Wednesday as it came under fire for failing to stem the flow of heavy investor withdrawals.

Allianz is under pressure from some shareholders to step up oversight of Pimco, the world's largest bond investor with nearly $2 trillion in assets, because of a run of poor returns and the departure of CEO Mohamed El-Erian amid a row with co-founder Bill Gross.

But the insurer's chief executive said that investors needed to ignore short-term volatility and take a longer-term view, pointing out that Pimco had produced better returns than many of its competitors for large parts of the past 25 years.

"There is really no reason to rake us over the coals or to sense the end is at hand," Michael Diekmann told the insurer's annual shareholder meeting in Munich.

Diekmann said customers had been supportive of the creation of a new team of six deputy chief investment officers to support Gross in the wake of El-Erian's departure.

"Responsibilities within Pimco have been redistributed and clearly regulated," Diekmann said. "They now lie on more shoulders."

Over the past year Pimco has seen investors pull $55 billion from its flagship bond fund, The Pimco Total Return Fund, which is overseen by Gross.

Investors have also pulled almost $2 billion from Pimco's emerging markets debt funds during the first four months of this year as ill-timed investments in Russia, Brazil and Mexico hurt returns.

In the face of investor defections, Allianz's third-party assets under management remained stable during the first quarter only because of market value increases.

'HALO CRUMBLING'

"Pimco's halo is crumbling, and with it Allianz's share price," Union Investment portfolio manager Ingo Speich said at the AGM.

Speich, whose company is Allianz's tenth-largest shareholder, according to Thomson Reuters data, pointed out that Allianz shares have underperformed both the STOXX Europe 600 insurance index and the German blue-chip DAX index by about 5 percent since the start of the year.

"What are you going to do to finally get Pimco out of the negative headlines? Are you going to get more involved at Newport Beach," Speich added, referring to Pimco's California base nearly 6,000 miles from Allianz's Munich headquarters.

Three top shareholders told Reuters they want Allianz to rethink the six-person management structure put in place at Pimco after El-Erian's departure and provide greater detail on Pimco's long-term plan to broaden its focus beyond fixed income, among other things.

Some shareholders think Gross, known on Wall Street as the Bond King, has been given too much freedom by Allianz, which bought the firm for $3.3 billion in 2000.

Historically, Pimco's success has worked wonders for Allianz. In the past decade alone, Pimco's contribution to the German group's operating profit has climbed almost fourfold to 3.2 billion euros ($4.46 billion), representing a third of total core earnings. Allianz now sells nearly two thirds of its investment products to North American clients.

_0">

Over the past year, however, Gross has shown signs of losing his touch. In a difficult year for bond markets, Gross's flagship Pimco Total Return Fund lost 1.9 percent in 2013, its first annual loss since 1999 and worst performance since 1994, according to Morningstar.

_1">

Allianz has said little publicly until now about Pimco's performance or the internal disagreements at the fund manager.

_2">

The insurer's head of investor relations, Oliver Schmidt, said in an interview published on Allianz's website that the company is working to address investor concerns about asset management and the fallout from rock-bottom interest rates.

_3">

"We are currently in the midst of extensive discussions with investors regarding both our investment and our product strategy," Schmidt said.

_4">

Investors are also keen to hear plans about Allianz's own management, given that the contracts of six of its 11 board members - including Diekmann - are due to expire at the end of the year. Diekmann, who turns 60 in December, has not indicated whether he wants to continue in the job.

_5">

Allianz has previously said that its supervisory board would look at the board positions in October, far too late for investors who fear the delay may add to uncertainty surrounding the business.

_6">

(Editing by Carmel Crimmins and David Goodman)

_7">

AstraZeneca takeover would benefit science: Pfizer

Pfizer ( id="symbol_PFE.N_0">PFE.N) sought to allay fears that its proposed $106 billion takeover of AstraZeneca ( id="symbol_AZN.LAZN.L) would deal a blow to drug research, saying the new company would bolster innovative science and speed the development of new treatments.

_0">

The deal would be the largest foreign takeover of a British company and has raised fears that resulting cost cutting would see the loss of thousands of skilled jobs, undermining the UK's science base.

_1">

AstraZeneca, Britain's second-largest drugs company, has rejected successive approaches from its larger American rival.

As political opposition to the plan grew, Pfizer reiterated its commitment to the deal, posting a graphic on its website that touted the benefits of a merger.

It said the combined group would be able to expand its global research, speed up the development of treatments and broaden its footprint in emerging markets.

A combined Pfizer-AstraZeneca would be the world's largest pharmaceuticals business and save Pfizer billions of dollars in taxes by shifting its domicile to Britain, although it would still be run out of New York.

In a mounting war of words, Pfizer quoted the former chairman and CEO of AstraZeneca rival GlaxoSmithKline ( id="symbol_GSK.L_2">GSK.L), Richard Sykes, saying the deal was a "fantastic opportunity" and "Pfizer are serious and they've got a lot of money to spend".

But British Prime Minister David Cameron is facing growing pressure from lawmakers to secure promises about jobs, research and intellectual property. On Tuesday, Business Secretary Vince Cable said the government could use its public interest powers to intervene in the deal.

On Tuesday, AstraZeneca laid out its defense strategy, touting its strong long-term growth potential as an independent company.

(Reporting by Ben Hirschler; editing by Tom Pfeiffer)

Cheetah Mobile shares rise about 13 percent in debut

Cheetah Mobile Inc's ( id="symbol_CMCM.N_0">CMCM.N) shares rose about 13 percent in their market debut, valuing the Chinese security software maker at about $2.2 billion, after its initial public offering was priced near the top end of the expected range.

_0">

Earlier on Thursday, the company said its offering of 12 million American depositary shares (ADSs) was priced at $14 each, raising $168 million .

Cheetah had said it expected its IPO to be priced between $12.50 and $14.50 per ADS.

The Beijing-based company provides security and optimization software used both in smartphones and PCs. Its apps such as Clean Master and Battery Doctor are popular on Google Play.

Cheetah's shares opened at $15.25 and touched a high of $15.89 in early trading on the New York Stock Exchange.

The company is being spun out of software maker Kingsoft Corp Ltd ( id="symbol_3888.HK_1">3888.HK), which will retain control with about 54 percent of Class B shares and 4.7 percent of Class A shares.

Tencent Holdings Ltd ( id="symbol_0700.HK_2">0700.HK), currently China's largest listed internet company and owner of the mobile messaging app WeChat, is the second-biggest shareholder in Cheetah with an 18 percent stake.

Cheetah's app Clean Master, which boosts memory in smartphones and protects users' data, had 237.3 million downloads and 72.9 million average daily active users in March, the company said.

The company also makes an internet browser for mobile phones and PCs. The company's rivals include Qihoo 360 Technology Co ( id="symbol_QIHU.N_3">QIHU.N), another U.S.-listed Chinese company.

Cheetah's revenue more than doubled in 2013, while its profit surged 530 percent. The company had net income of $3 million and revenue of $50.8 million in the quarter ended March 31.

Net proceeds from the offering will be used for marketing and other corporate purposes, Cheetah said in the filing.

Morgan Stanley, JPMorgan and Credit Suisse were among the underwriters for the IPO.

Chinese companies are flocking to the U.S. market in their biggest numbers since 2010, encouraged by high investor demand for technology start-ups.

Some 30 Chinese companies could list in the United States this year, according to investment bankers interviewed by Reuters.

Listings by overseas companies accounted for 16 percent of the 68 U.S. IPOs this year as of March 18, raising $1.9 billion.

Alibaba Group Holding Ltd ( id="symbol_IPO-ALIB.N_4">IPO-ALIB.N) filed for its hugely anticipated IPO on Tuesday. E-commerce company JD.com Inc IPO-JD.O is also likely to go public soon.

Twitter-like messaging service Weibo Corp ( id="symbol_WB.O_6">WB.O) had a successful debut in April, with its shares soaring as much as 19 percent when they listed.

(Reporting by Avik Das in Bangalore; Editing by Sriraj Kalluvila and Kirti Pandey)

AMC Networks forecasts slower advertising growth

Cable TV broadcaster AMC Networks Inc ( id="symbol_AMCX.O_0">AMCX.O) said it expects slower advertising growth this quarter as its latest series, "Turn", draws fewer viewers than its older hits, sending its shares down nearly 18 percent.

AMC also reported a first-quarter profit that missed analysts' estimates as it spent more on new programs to replace hit shows such as "Breaking Bad" and "Mad Men".

The company's newest show "Turn" debuted in April with 2.1 million viewers, less than half of what its hit zombie show "The Walking Dead" started with. (r.reuters.com/sap29v)

"It sounds like the costs will continue to be higher-than-expected in the second and third quarters, as they are replacing licensed shows with wholly owned shows," Evercore Partners analyst Alan Gould said.

"Turn", which tells the story of four childhood friends who became spies during the American Revolutionary War in 1778, is facing stiff competition from HBO's hit series "Game of Thrones".

"The series is not doing that well. I think they'll have to write off that show," Albert Fried & Co LLC analyst Rich Tullo said.

AMC has also lined up "Halt & Catch Fire," a series set during the personal computer boom of the 1980s, for a June launch.

The company's operating expenses soared 48 percent to $376.9 million in the quarter ended March 31, partly due to its purchase of Chellomedia — the former international content arm of Liberty Global Inc ( id="symbol_LBTYA.O_1">LBTYA.O).

Revenue jumped 37 percent to $524.6 million, beating the average analyst estimate of $507.5 million.

Advertising revenue increased 27 percent as more people watched the fourth-season finale of "The Walking Dead".

National networks revenue rose 20.7 percent to $448.7 million. Revenue from AMC's international networks category, which includes Chellomedia, rose seven-fold to $76.6 million.

Net income rose to $71.4 million, or 98 cents per share, from $61.5 million, or 85 cents per share, a year earlier.

Excluding items, the company earned $1.04 per share.

Analysts on average had expected earnings of $1.16 per share, according to Thomson Reuters I/B/E/S.

AMC shares were down 9 percent at $59.61 on the Nasdaq on Thursday afternoon after falling to $53.99 earlier in the day.

Almost 4 million shares changed hands by 1320 ET, about five times the stock's 10-day moving average.

(Reporting By Lehar Maan in Bangalore; Editing by Sriraj Kalluvila and Simon Jennings)

Molycorp slumps 17 percent to record low on bigger quarterly loss

Molycorp Inc ( id="symbol_MCP.N_0">MCP.N) shares slumped 17 percent on Thursday in the wake of the U.S.-based rare earths producer's results a day earlier which showed a bigger first-quarter loss and production hiccups at a newly expanded processing plant in California.

_0">

Market concerns about the rate at which the Denver-area company was burning through cash and the possibility that it may have to tap the market for more funds later in the year sent the stock to an all-time low of $3.76 on the New York Stock Exchange.

The company reported a net loss on Wednesday of $86.0 million as rare earth prices dropped, more than double its loss of $38.2 million a year earlier, and it produced less material than expected at its Mountain Pass facility in California.

"In one word, it is all about uncertainty... They were not able to really tell the market when Mountain Pass will be running at the levels - production and cost - that they need," said Luisa Morena, an analyst at Euro Pacific Canada.

Molycorp has sunk $1.25 billion into modernizing and expanding the Mountain Pass facility. But production interruptions in the first quarter resulted in output being less than the company expected.

The company listed on the New York Stock Exchange in 2010 at $13, and soared above $79 in May 2011 when rare earth prices were rallying.

Prices of rare earths - an essential part of many high-tech products from smartphones to hybrid cars - have dropped since early 2011 as China, the world's main producer, eased export controls.

It is "pretty certain" that Molycorp will try to raise funds in the market again, Morena said.

"They have some $1.3 billion in debt and they will have to restructure that next year or maybe later this year... if the market doesn't improve," she said.

(Reporting by Nicole Mordant in Vancouver; Editing by Bernadette Baum)

UK research foundation concerned about Pfizer bid for AstraZeneca: FT

Wellcome Trust, Britain's biggest medical research foundation said it had "major concerns" about U.S. drug major Pfizer's ( id="symbol_PFE.N_0">PFE.N) 63 billion pound offer for AstraZeneca ( id="symbol_AZN.LAZN.L), the Financial Times reported.

_0">

In a private letter to UK chancellor of Exchequer George Osborne, the trust raised doubts about Pfizer's commitment to investment in Britain and said AstraZeneca was critical to Britain's science base.

_1">

"Pfizer's past acquisitions of major pharmaceutical companies have led to a substantial reduction in R&D activity, which we are concerned could be replicated in this instance," Wellcome Trust Chairman Sir William Castell was quoted as saying by the British newspaper.

Wellcome Trust became the latest in a series of vocal opponents to the potential merger, which would create the world's largest drugmaker.

Pfizer is said to be considering raising its offer after AstraZeneca rejected its previous offer of $106 billion. The value of that cash-and-stock offer has since slipped because of a fall in Pfizer shares following weak quarterly results.

The deal faces political scrutiny as pressure builds on Prime Minister David Cameron to protect Britain's jobs and research base should it go through.

Wellcome Trust spends more than 750 million pounds a year on biomedical research, according to the FT. ($1 = 0.5899 British Pounds)

(Reporting by Tasim Zahid in Bangalore; editing by Jane Baird)

Pfizer defends 'powerhouse' Astra deal as CEO braces for grilling

Pfizer defended the business case behind its plan to acquire AstraZeneca on Monday and questioned the UK drugmaker's ability to stand alone for much longer as the New York-based group's CEO prepared for a grilling from British lawmakers.

Aiming to douse questions about its commitments to British jobs, Pfizer also said its agreement to complete AstraZeneca's new research centrer in Cambridge, retain a factory in northwest England and put a fifth of its research staff in Britain if the deal goes ahead were legally binding.

The comments are Pfizer's latest counter to critics of its proposed $106 billion deal, which would be the largest foreign takeover of a British firm and is opposed by many scientists and politicians - as well as AstraZeneca itself.

With its bid now the subject of heated debate in Britain's Houses of Parliament and across the country's news channels, the U.S. drugmaker took a harder line on Monday, saying the merger would create "a UK-based scientific powerhouse".

It also took a swipe at AstraZeneca's go-it-alone strategy by arguing that Britain's second biggest pharmaceuticals business lacked the financial muscle to make the most of its experimental medicines.

"Looming patent expiries and near term revenue losses jeopardize its ability to deliver on its very promising pipeline," Pfizer said in a written submission to a parliamentary committee.

Pfizer's Scottish-born Chief Executive Ian Read faces tough questions from British lawmakers on Tuesday about his plans to acquire AstraZeneca - a deal driven in large part by Pfizer's wish to cut its tax bill.

Lawmakers will also interrogate AstraZeneca's French CEO Pascal Soriot and business minister Vince Cable on Tuesday. Then a second parliamentary committee on May 14 will question both CEOs again, along with British science minister David Willetts, about the science aspects of the deal.

In response to worries about safeguarding the British company's research, Pfizer's R&D head Mikael Dolsten posted a video on Pfizer's website saying he had been through five different mergers which did not disrupt drug research.

"If you keep your sense of curiosity and an open mind, you can learn tremendously," he said.

"We must stay laser-focused on our important projects. And that's, of course, true for Pfizer scientists and AZ scientists and will be true also if we can make a potential combination come together."

Dolsten said there was "a really great fit" with the products that AstraZeneca had in its portfolio, with potential for combining drugs in areas such as lung cancer to offer much more effective treatments.

There is considerable skepticism about Pfizer's long-term commitment to British jobs, given its record of cost cutting after past acquisitions and after it said it could adjust those promises if circumstances change "significantly."

But Pfizer said the fact it had made the promises as part of its offer made them legally binding and the pledges should be given "full weight".

Prime Minister David Cameron said on Sunday he had made "very good progress" in securing guarantees from Pfizer, though the firm's latest statements contained no new offers.

SWEETENED OFFER?

_0">

Pfizer is widely expected to come back with a sweetened offer for AstraZeneca this week, though people familiar with the matter said it was likely to wait until after the parliamentary select committee hearings.

_1">

The British group rejected a May 2 cash-and-stock offer worth 50 pounds a share from its larger American rival, and CEO Soriot has been on a roadshow to meet leading investors and lay out his strategy for a prosperous independent future.

_2">

Soriot has secured the backing of several high-profile shareholders, but others have told Reuters they would like him to engage with Pfizer if the U.S. group makes an improved offer.

_3">

In addition to wanting a higher price - many analysts think Pfizer will have to offer around 55 pounds a share - investors are also keen to increase the proportion of cash in any deal from 32 percent at present.

_4">

Pfizer is limited in the amount of cash it can offer since in order to keep the tax advantages of re-domiciling to Britain it must ensure at least 20 percent of the enlarged group is British-owned.

_5">

Under British takeover rules, Pfizer has until May 26 to make a firm bid for AstraZeneca or walk away.

_6">

A slide in Pfizer's share price following its first-quarter results last week has reduced the current value of its May 2 offer to just under 48 pounds. AstraZeneca shares traded 0.3 percent higher at 46.15 pounds by 1115 GMT.

_7">

Pfizer has a tarnished reputation in Britain after shutting down most of its drug research in Sandwich, southern England, where Viagra was invented, with the loss of some 1,700 jobs.

_8">

(Editing by Sophie Walker)

_9">

Pfizer pledges to ringfence key new drugs in AstraZeneca deal

Pfizer ( id="symbol_PFE.N_0">PFE.N) said it would ringfence the development of important drugs if it acquired AstraZeneca ( id="symbol_AZN.LAZN.L), rejecting a charge from the British company that a takeover would disrupt important research and put lives at risk.

_1">

"As we put these companies together, we will continue with our pipeline, AZ will continue with theirs," Pfizer's Chief Executive Ian Read told lawmakers on a second day of questioning about what could be the biggest ever UK corporate deal.

"We would ringfence any important products and they would continue to be developed. There is absolutely no truth to any comment that some products of critical nature would be delayed getting to patients, if anything we would accelerate that to patients."

AstraZeneca said on Tuesday that Pfizer's proposal risked disrupting its research and delaying getting life-saving new drugs to market, as well as undervaluing the business.

"What will we tell the person whose father died from lung cancer because one of our medicines was delayed - and essentially was delayed because in the meantime our two companies were involved in saving tax and saving costs?" the British company's Chief Executive Pascal Soriot said on Tuesday.

On a second day in Parliament focused on the concerns of the science community, Read faced calls from a committee of lawmakers and other speakers for Pfizer to extend its commitment to UK jobs and research from five years to 10 or more.

"I would like to see a longer period than that (five years)," science minister David Willetts told the committee.

British Prime Minister David Cameron said he was seeking the best possible guarantees from Pfizer.

"This government has been absolutely clear that the right thing to do is get stuck in to seek the best possible guarantees on British jobs, on British investment, and British science," he told lawmakers in parliament on Wednesday.

The U.S. boss had earlier defended his five-year horizon, saying it was enough time to select medicines that had the greatest chance of approval and the biggest opportunity to meet the needs of patients.

Pfizer had changed its R&D strategy to avoid lengthy, and ultimately fruitless, research by bringing in commercial and development expertise at the proof of concept stage in the assessment of experimental drugs, he said.

"It's very important for me for productivity to ... hold (scientists) accountable, to say 'I'm allocating you capital on a five-year period and I'm going to review that on five-year periods'," he said.

Pfizer has indicated it could raise its offer for Britain's second-biggest drugmaker from $106 billion, if AstraZeneca is prepared to talk, but lawmakers are deeply concerned about the impact of a takeover on the country's science base.

The U.S. company has a record of making deep job cuts after past takeovers of companies including Wyeth, Warner-Lambert and Pharmacia.

FEWER SCIENTISTS

Read said on Wednesday there would likely be fewer scientists in a newly combined company than currently work in the two firms, but he declined to put any numbers on it.

_0">

Nobel laureate Paul Nurse, the president of the Royal Society, Britain's national academy of science, wrote to the chairman of Parliament's science committee Andrew Miller to express his concern that Pfizer's promises so far were vague and inadequate.

_1">

Pfizer's five-year commitment includes completing AstraZeneca's new research center in Cambridge, retaining a factory in the northwestern English town of Macclesfield and putting a fifth of its research staff in Britain if the deal goes ahead.

_2">

But it has also said this could be altered if circumstances changed "significantly" and Scottish-born Read said he could not commit to maintaining a specific R&D budget for Britain.

_3">

Nurse said a five-year pledge was simply not good enough.

_4">

"A five-year commitment to the UK is insufficient. A commitment of at least 10 years is required. Science is not a quick win," he wrote.

_5">

AstraZeneca has rejected Pfizer's cash-and-stock offer, which was worth 50 pounds a share at the time it was made on May 2, arguing it has a bright future as an independent business, with a pipeline of promising new drugs.

_6">

So-called Parliamentary select committees cannot block corporate transactions but they can question executives ferociously, as banks, energy companies and Rupert Murdoch's News Corp ( id="symbol_NWSA.O_2">NWSA.O) have all found out in the past.

_7">

(Additional reporting by William James; Editing by Mark Potter, Greg Mahlich)

_8">

AstraZeneca rejects Pfizer's take-it-or-leave-it offer

Britain's AstraZeneca on Monday rejected a sweetened and "final" offer from Pfizer, puncturing the U.S. drugmaker's plan for a merger to create the world's biggest pharmaceuticals group.

The rebuff came nine hours after Pfizer said on Sunday night it had raised its takeover offer to 55 pounds a share, or around 70 billion pounds ($118 billion) in total, and would walk away if AstraZeneca did not accept it.

The rejection left some major shareholders fuming as shares in AstraZeneca slumped 11 percent to close at 42.88 pounds after falling as much as 15 percent - their biggest ever intra-day decline. Pfizer rose 1 percent in New York.

AstraZeneca Chairman Leif Johansson told Reuters he now saw no prospect of a deal with Pfizer before a deadline of May 26 set under British takeover rules, or any likelihood of that deadline being extended.

Experts also said Pfizer had left itself no room to return with a last-minute higher offer due to the strict takeover code.

Pfizer wants to create the world's largest drugs firm, with a headquarters in New York but a tax base in Britain, where corporate tax rates are lower than in the United States. The plan has met entrenched opposition from AstraZeneca, as well as politicians and scientists who fear cuts to jobs and research.

"It died of multiple wounds. Too little cash, too many suspicions about Pfizer's motives, and too little confidence in its assurances about jobs," said Erik Gordon, professor at the University of Michigan's Ross School of Business. "Pfizer's chances are going down, despite its offer of a higher price."

Johansson said he had made clear in discussions with Pfizer that his board could only recommend a bid that was more than 10 percent above an offer of 53.50 pounds made by Pfizer on Friday, which would amount to at least 58.85 pounds. He blamed Pfizer for calling a halt to discussions after a telephone call lasting more than an hour with Pfizer's chairman and CEO Ian Read on Sunday afternoon.

In addition to the inadequate price, Johansson also slammed what he said was a lack of industrial logic behind Pfizer's move; the risks posed to shareholders by the controversial tax plans; and the threat to life science jobs in Britain, Sweden and the United States.

"Pfizer's approach throughout its pursuit of AstraZeneca appears to have been fundamentally driven by the corporate financial benefits to its shareholders of cost savings and tax minimization," Johansson said in a statement.

"From our first meeting in January to our latest discussion yesterday, and in the numerous phone calls in between, Pfizer has failed to make a compelling strategic, business or value case."

But many of Johansson's shareholders were deeply unimpressed. "We do not think the Astra management have done a good job on behalf of shareholders," said one fund manager at a top-10 investor in the group.

Alastair Gunn of top-30 shareholder Jupiter Fund Management said: "We are disappointed the board of AstraZeneca has rejected Pfizer's latest offer so categorically. They should have at least engaged in a constructive conversation with Pfizer."

However, Pfizer's proposed takeover, which would be the largest-ever foreign acquisition of a British company, is opposed by many scientists and politicians who fear it would undermine Britain's science base.

The U.S. group said its new offer was final and could not be increased. It said it would not make a hostile offer directly to AstraZeneca shareholders and would only proceed with an offer with the recommendation of the AstraZeneca board.

Pfizer had also increased the cash element in its offer to 45 percent, under which AstraZeneca shareholders would get 1.747 shares in the enlarged company for each of their AstraZeneca shares and 24.76 pounds in cash.

_0">

The new offer represents a 15-percent premium over the current value of a cash-and-share approach made on May 2 - worth 50 pounds a share at the time - which was also swiftly rejected by AstraZeneca.

_1">

Pfizer's Read said he believed his proposal was "compelling" for AstraZeneca shareholders and expressed frustration at its refusal to talk, urging the British company's shareholders to pressure its board to engage.

_2">

TAKE A BREAK

_3">

In the absence of further discussions or an extension of the deadline for making a firm offer under British takeover rules, Pfizer's proposal will expire at 5 p.m. (1600 GMT) on May 26. After that, it would have to wait six months before making another bid.

_4">

"AstraZeneca will have six months to demonstrate that it was right to reject Pfizer's offer, or face the prospect of a fresh approach," said analyst Mick Cooper at Edison Investment Research.

_5">

While Pfizer would have to wait on the sidelines until November, it would be possible for AstraZeneca to initiate talks from late August, if it decided it wants coax a higher offer.

_6">

The latest increased offer had been widely expected. Pfizer said last week it would consider a higher offer as it urged AstraZeneca's board to enter talks.

_7">

The British firm has laid out details of its pipeline of new drugs and argues it has no need for a deal. However, many analysts believe its projections that it can increase sales by 75 percent to $45 billion a year by 2023 are over-optimistic.

_8">

There has been a mounting political backlash against the proposed deal in Britain, the United States and Sweden, where AstraZeneca has half its roots.

_9">

The Swedish government launched a concerted effort on Friday against a merger that it fears will lead to cuts in science jobs and research, echoing concerns aired by British lawmakers at two parliamentary hearings last week, and fears for U.S. jobs in states where AstraZeneca has a large presence.

_10">

British Prime Minister David Cameron has said he wanted more assurances from Pfizer, in the event of a takeover, although as the head of the free-market Conservative Party he does not want to be seen to be deterring foreign corporate investment.

_11">

Pfizer gave a five-year commitment to complete AstraZeneca's new research centre in Cambridge, retain a factory in northern England and put a fifth of its research staff in Britain, but added that these pledges could be adjusted if circumstances changed "significantly".

_12">

The tax aspects of the deal, meanwhile, have sparked anger in the United States, where lawmakers are now considering legislation to prevent what are known as corporate inversions, under which U.S. companies re-incorporate overseas to avoid U.S. taxes.

_13">

Inversions have helped fuel a wave of deals in the pharmaceuticals sector in recent months. Buying AstraZeneca would allow Pfizer to carry out the largest such deal yet.

_14">

(Additional reporting by Chris Vellacott, Jemima Kelly, Kate Holton and Anjuli Davies in London; Editing by Eric Walsh, David Holmes, Alastair Macdonald and Philippa Fletcher)

_15">

See you later? Slim Pfizer deal hopes prop up AstraZeneca

Pfizer's ( id="symbol_PFE.N_0">PFE.N) chances of striking a deal to buy AstraZeneca ( id="symbol_AZN.LAZN.L) in the coming days look vanishingly small, but the notion it could return later this year is propping up the British drugmaker's shares.

_1">

The stock rose 3 percent on Wednesday, despite AstraZeneca insisting on Tuesday there wasn't the slightest chance of Pfizer's $118 billion offer being increased by a May 26 deadline set by UK takeover rules.

While Pfizer agrees it cannot raise its final offer of 55 pounds a share, its advisers have been urging investors to speak up against AstraZeneca's decision to reject its proposal, according to several people familiar with the matter.

One suggestion now circulating is that disgruntled AstraZeneca shareholders could call an extraordinary general meeting (EGM) to put Pfizer's offer to a vote. The support of just 5 percent of shareholders is needed to call such a meeting.

Even if shareholders wanted to revive the bid - or oust the board - an EGM would not come in time to rescue the current process before the takeover rules deadline, but they could force AstraZeneca to open communications with Pfizer in late August, after a compulsory three-month cooling-off period.

"Some of the more active hedge funds, instead of selling out are buying in," said one hedge fund investor. "There has been sufficient shareholder dissatisfaction about this deal that investors can use that to get a favourable outcome further down the road."

The only way a deal could be salvaged this month would be for AstraZeneca Chairman Leif Johansson and his board to make a complete U-turn and recommend Pfizer's current 55-pound offer, which looks out of the question.

More leading shareholders spoke out publicly on the deal on Wednesday, but they didn't speak with one voice, underlining the challenge facing the Pfizer camp in trying to stir an investor rebellion.

Threadneedle Asset Management came out in support of AstraZeneca's stance, while investment and insurance group AXA said the board should not have prevented Pfizer's offer being put to investors.

The AXA view was echoed by Legal & General, according to the Wall Street Journal. An L&G spokesman confirmed to Reuters that the fund manager had talked to both companies but declined to comment further.

EVENLY BALANCED

To date, investors representing around 10 percent of AstraZeneca's share base have spoken out against the board's decision, with a similar number broadly lending their support, according to Thomson Reuters data.

At more than 44 pounds, the shares remain well short of Pfizer's offer but a fair way above the undisturbed price of 37.82 pounds seen before news of Pfizer's interest emerged in mid-April.

A recent run of favourable clinical trial news about AstraZeneca's new drugs has also supported the stock, with UBS issuing a note on Wednesday setting a price target for the shares of 50 pounds, without a Pfizer deal.

Analysts at Barclays, who have a 40 pounds target, said in a note that the market was pricing in a probability of around 15 percent that there would eventually be an agreed deal with Pfizer valuing AstraZeneca at some 60 pounds.

The U.S. company's ambitions to create the world's largest drugmaker - and slash its tax bill in the process - appeared within reach at one point in talks between the two sides last weekend, with AstraZeneca indicating a desired price of 58.85 pounds.

_0">

But AstraZeneca's Johansson told Reuters on Monday that Pfizer had closed down discussions after a telephone call lasting more than an hour on Sunday and had surprised AstraZeneca by issuing its final offer later that night.

_1">

(Reporting by Ben Hirschler; Editing by Will Waterman)

_2">

Pfizer walks away from $118 billion AstraZeneca takeover fight

Pfizer abandoned its attempt to buy AstraZeneca for nearly 70 billion pounds ($118 billion) on Monday as a deadline approached without a last-minute change of heart by the British drugmaker.

The decision ends a month-long public fight between two of the world's biggest pharmaceutical companies that sparked political concerns on both sides of Atlantic over jobs and corporate tax maneuvers.

British rules now require an enforced cooling-off period. AstraZeneca could reach out to Pfizer after three months and Pfizer could take another run at its smaller British rival in six months time, whether it is invited back or not.

Pfizer's move came two hours before a 5.00 pm (1200 ET) deadline to make a firm offer or walk away, under UK takeover rules. Its decision to quit the stage, at least for now, had been widely expected after AstraZeneca refused its final offer of 55 pounds a share.

"Following the AstraZeneca board's rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca," Pfizer said in a short news release.

The biggest U.S. drugmaker promised it would not go hostile by taking its offer directly to AstraZeneca shareholders, leaving the fate of what would have been the world's largest ever drugs merger in the hands of its target, whose board would have had to make a complete U-turn to get a deal done.

"We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us," said Ian Read, Pfizer's chairman and chief executive.

Pfizer's final offer was at a price that many analysts and investors had previously suggested would bring AstraZeneca to the table for serious negotiations.

But in rejecting an earlier offer of 53.50 pounds as undervaluing the company, the British group indicated it needed a bid more than 10 percent higher, or at least 58.85 pounds per share, for its board to consider a recommendation.

Pfizer had urged AstraZeneca shareholders to agitate for engagement and several expressed disappointment at its intransigence, although others - encouraged by AstraZeneca's promising drug pipeline - backed the firm's standalone strategy.

AstraZeneca Chairman Leif Johansson welcomed Pfizer's decision to back down, which he said would allow the British company to focus on its growth potential as an independent company.

What happens next will depend upon whether AstraZeneca's share price deteriorates in the coming weeks and how hard its shareholders push for it to revisit a deal with Pfizer.

BlackRock, AstraZeneca's biggest shareholder, backed the board's rejection of Pfizer's 55 pounds a share offer, but urged it to talk again in the future.

POLITICAL OPPOSITION

The proposed transaction ran into fierce opposition from politicians in Britain, Sweden - where AstraZeneca has half it roots - and the United States over the likelihood that the marriage would lead to thousands of job cuts.

Ultimately, it was price and the lack of room for eleventh-hour maneuvering by Pfizer that killed the deal.

_0">

Pfizer had several reasons for taking aim at AstraZeneca for what would have been its fourth mega-merger in 14 years.

_1">

Highest on the list appeared to be Pfizer's desire to take part in a recent trend of so-called tax inversions, under which it could reincorporate in Britain and pay significantly lower corporate tax. Pfizer would also be able to use tens of billions of dollars it has parked overseas, avoiding high U.S. taxes for repatriating the huge cash pile.

_2">

Pfizer also had its eye on a promising portfolio of drugs in AstraZeneca's developmental pipeline, especially several potentially lucrative cancer medicines.

_3">

It was this pipeline that AstraZeneca management used to make its case for Pfizer significantly undervaluing the company.

_4">

Chief Executive Pascal Soriot went as far as making a 10-year forecast for a 75 percent rise in sales by 2023.

_5">

"As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy," Pfizer's Read said. "We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients' needs and remaining responsible stewards of our shareholders' capital."

_6">

The merger would have restored Pfizer as the world's largest drugmaker by sales, a position it relinquished to Swiss-based Novartis when billions of dollars in annual revenue evaporated after its top-selling cholesterol fighter Lipitor began facing generic competition in 2011.

_7">

(Editing by David Evans and Mark Potter)

_8">

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.

_0">

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)

Singapore to launch overnight yuan liquidity facility in July

Singapore plans to launch a facility to provide overnight yuan liquidity as trade transactions using the currency rise.

_0">

The move will help enhance the city-state's position in the fierce competition for offshore yuan business and is another step forward in China's effort to internationalise the currency.

The facility, offering up to 5 billion yuan ($805.3 million) in overnight funds on any given day to financial institutions in Singapore, will be launched on July 1, the Monetary Authority of Singapore (MAS) said on its website.

The facility complements the existing MAS yuan facility that allows banks to borrow yuan funds on a term basis for trade, direct investment and market stability purposes.

"As the volume of RMB activities grows in Singapore, the overnight RMB liquidity facility will help alleviate end-of-day funding strains of financial institutions. This will provide a conducive environment for the continued expansion of RMB activities in Singapore," MAS Deputy Managing Director Jacqueline Loh said.

Meanwhile, the People's Bank of China (PBOC) Nanjing branch also announced on Friday that it would allow eligible corporates and individuals in the Suzhou Industrial Park (SIP) to conduct cross-border yuan transactions with Singapore.

Banks in Singapore will be able to carry out cross-border yuan lending to companies in SIP and corporates in SIP can issue yuan bonds in Singapore.

Equity investment funds in SIP will also be enabled to conduct direct investment in corporates in Singapore and individuals in SIP can conduct yuan remittances between the two countries for the settlement of current account transactions and direct investment in corporates in the city-state.

Competition to be the next offshore yuan centre behind Hong Kong has intensified as China accelerates efforts to promote its currency to regions beyond Asia.

China Construction Bank (CCB), China's second-largest lender, has been selected to become the first clearing service for renminbi trading in London, the Financial Times reported, citing people close to the decision.

Britain and China signed an agreement last month to set the service up, days after Germany clinched a similar deal.

Yuan payments rose in value by 29 percent in March from a month earlier and gained one place to seventh position as a global payments currency, latest statistics from SWIFT showed.

($1 = 6.2090 Chinese yuan) (Reporting by Michelle Chen; Editing by Jacqueline Wong)

INSIGHT-Argentina's economy minister: from 'flaming Red' to pragmatic negotiator

When he became Argentina's economy minister late last year, many in the business community feared Axel Kicillof, who was once described by a critic as a "flaming Red Marxist," might plunge Latin America's No. 3 economy deeper into isolation in the name of ideology.

Instead, the enigmatic scholar who previously lambasted foreign firms for "looting" the country, has in a few months resolved some of Argentina's long-running disputes with companies and creditors, in a bid to attract investment back into the country.

Deals with the Paris Club of creditor nations to pay back almost $10 billion in debt and with Spanish oil major Repsol to compensate it for the seizure of energy company YPF have sent Argentine bonds and equities climbing as investors show renewed confidence in a country that has been cut off from global credit markets since a 2001/02 default.

The key test of Kicillof's new conciliatory approach will be whether he can secure a deal with "holdout" bondholders who refused Argentina's prior debt swaps - the main obstacle to putting the default behind it. If the U.S. Supreme Court decides this week not to hear Argentina's case against the holdouts, and Kicillof fails to negotiate a deal, Argentina faces the prospect of defaulting again.

In debt exchanges in 2005 and 2010, 93 percent of Argentina's bondholders took a 65 percent haircut, or loss, on their holdings, leaving a handful of holdouts who demand they be repaid in full.

"He has switched from being ideological to being pragmatic," one executive who has dealt with the 42-year old former economics professor extensively told Reuters. "Contrary to appearances, he has a very businesslike streak."

The executive, like others spoken to for this story, declined to be named, fearing it could impact relations with the government.

Kicillof declined to comment for this story.

Analysts say it was President Cristina Fernandez' defeat in last year's mid-term elections and a perilous decline in Argentina's foreign reserves that prompted her government's reluctant switch towards a more orthodox approach to foreign investors.

It is unclear to what extent Kicillof's apparently new pragmatic approach is driving the agenda or whether Fernandez has had a change of heart. He is close to both the president and to her son's influential youth movement.

Some policy experts fear Kicillof wants to prop up Argentina's ailing economy until the end of the president's term next year by boosting foreign investment instead of undertaking tough reforms of subsidies, trade and capital controls that are the root cause of the country's poor growth outlook.

"These are tactical decisions that are more liberal than before but at the same time, the government maintains its controls over the economy - and that's not liberal at all," said Ricardo Rouvier, an analyst who now runs his own consultancy and is a former adviser to Fernandez.

Still, top businessmen and foreign officials told Reuters they were impressed by the speed and ability with which Kicillof has gone about sealing deals.

A source present at the Paris Club talks earlier this month said he made a good impression by making a case for the deal on solid financial grounds rather than political ones.

Known for his aversion to ties, Kicillof's casual style and hands-on approach surprised them. He whipped out his laptop to draft the deal himself, rather than delegating to aides, prompting some to quip "where's the minister?".

Another business executive who meets him regularly said he was not the "tough guy" he had initially appeared to be.

_0">

Unlike the previous strongman in Fernandez's economics team, pugnacious Peronist Guillermo Moreno, who once took a boxing glove to a tense business meeting as a threat, Kicillof was "friendly, polite and well-educated", said the Argentine business executive.

_1">

"He has his vision of things, and you won't convince him otherwise, but when he wants to see a result he is capable of getting out of his tunnel vision."

_2">

The young minister was raised in the exclusive Buenos Aires district of Recoleta and went to an elite school. He was top of his class at university. An economist who first knew him then, said that in contrast to others in Fernandez's cabinet, he was more of a left-wing intellectual than a populist Peronist.

_3">

He is, though, appealing to a younger demographic more than many politicians. With glacial blue eyes and dark sideburns, Kicillof has been dubbed "the pretty face of Argentina's economy" by the Spanish daily El Pais.

_4">

'FREAKING OUT'

_5">

Investors had plenty of reason to be wary of Kicillof. He first made international headlines when, as deputy economy minister in 2012, he masterminded the seizure of YPF from Spain's Repsol and defended the move in fiery speeches. It was around this time that Walter Molano, an analyst at U.S.-based BCP Securities, made the "flaming red Marxist" comment.

_6">

"We were all freaking out about this guy, when people started talking about him being economics minister," said Alberto Bernal, head of emerging markets at Miami-based investment bank and broker Bulltick Capital Markets. "The way I would label him now is someone who is still very ideological, a Marxist, but a Marxist who is willing to talk to Wall Street."

_7">

Bernal said that on a December trip to Buenos Aires with investors, he got the warmest welcome he had received from Argentine officials in more than a decade of such trips. "I felt a big interest from the Argentine government," he said. "The attitude of the government was totally different."

_8">

When appointed, Kicillof had little experience in either business or politics, having spent most of his career in academia, giving classes and writing about John Maynard Keynes and Karl Marx.

_9">

At news conferences, he still lectures for hours, often underscoring his dislike of economic liberalism. After the Paris Club deal, he boasted of having avoided the involvement of the International Monetary Fund, which forced prior Argentine governments to reduce social spending and privatise companies.

_10">

Critics say if Kicillof had been less ideological and accepted IMF auditing, he might have got a more generous repayment schedule. His strategy was, though, broadly celebrated in a country where the IMF is vilified by many people.

_11">

An old-school ideologue who criticises the tenets of 21st century globalism, he says Argentina's path to prosperity is through strong domestic demand and he has expanded welfare programs.

_12">

But analysts say they believe that the nation's dwindling reserves must have also made him aware of Argentina's urgent need for foreign funds to keep the economy afloat and continue financing his and Fernandez's shared dream of "social inclusion".

_13">

The economy is currently in or close to a recession, and is set for its first decline in Gross Domestic Product since 2002 this year, as industrial output falls and one of the world's highest inflation rates hits consumer spending and investment.

_14">

"What they've basically done is gone about tackling each of the issues still in the way of Argentina getting back to the market," said David Rees at Capital Economics research group in London.

_15">

Still, negotiating with holdouts, many of whom bought Argentina's debt at a massive discount and are now demanding payment back in full, would be more of a bitter pill to swallow - and much more contentious politically than other deals to date.

_0">

Last month, Argentina's cabinet chief said the country might consider a deal with holdouts, including hedge fund NML Capital Ltd, but NML said it had still not been contacted by the Argentine government despite "repeated requests to negotiate".

_1">

Argentina is "doing everything backwards," said a source familiar with NML's thinking. "Paying the Paris Club doesn't really open the market for them, only in small ways."

_2">

_3">

PRESIDENTIAL BACKING

_4">

Kicillof's popularity with the President and the pro-government youth movement founded by her son gives him a stronger negotiating position than previous economy ministers.

_5">

Ignacio Labaqui, analyst for consultancy Medley Global Advisors, said he is the first Argentine minister in almost a decade to control nearly all areas of economic policy.

_6">

Fernandez consults with him frequently throughout the day, by mobile or in person over lunch, and praises him in her speeches. Kicillof will need to wield this influence if he wants to get her approval for negotiating with holdouts, a step she has previously refused to support.

_7">

"He influences her and her economic policies a lot," said a mid-level official at the presidential palace, the "pink house". (Additional Reporting by Nicolas Misculin, Eliana Raszewski and Alejandro Lifschitz in Buenos Aires Leigh Thomas in Paris and Daniel Bases in New York; Editing by Martin Howell)

_8">

China to encourage fund innovations to boost stock market, economy

China has issued new guidelines to encourage the $1.2 trillion mutual fund industry to innovate, promising to let more foreign firms into the industry as part of Beijing's recent efforts to boost the stock market and the real economy.

The guidelines will be a blueprint for the development of the domestic industry in the next three to five years, a regulatory spokesman told a weekly news conference in Beijing on Friday.

By the end of May, China's 91 mutual fund companies with 680 funds managed a total assets of 7.25 trillion yuan ($1.2 trillion), making the domestic fund industry the 10th biggest in the world, official data shows.

Still, stock holdings by professional institutional investors, dominated by mutual funds and brokerages, only accounted for 10.87 percent of China's total stock market capitalisation by the end of last year.

The fledging market is dominated by much less sophisticated retail investors, a result that has led to rampant speculation in loss-making and other small-capitalised firms and a lack of interest in blue chips favoured in more mature markets.

"Aggressively expanding securities mutual funds is an important task to promote the healthy development of China's capital markets," the China Securities Regulatory Commission said in a summary of the guidelines published in its microblog.

"The principles to develop the industry include letting the market play a decisive role in innovations and letting the sector's developments serve the real economy," it said.

The new guidelines will encourage fund firms to create new investment products that cross different markets and assets, such as cooperating with banks and brokerages to launch asset management products.

Fund managers could also outsource their business so as to reduce operational costs, the regulator said in the guidelines, adding that both major and smaller fund firms would be encouraged so as to build a multi-level fund industry.

The authorities will in future raise the current foreign ownership limit of 49 percent for Chinese joint-venture mutual fund firms, the regulator said without elaborating.

Regulators will also encourage fund firms to cooperate with Internet operators and allow the establishment of more private equity entities, among other supportive measures.

China's stock market has been relatively sluggish in the aftermath of the global financial crisis. A slowdown in the world's second-largest economy is also threatening a recovery.

More than $1.4 trillion in value, equivalent to 16 percent of China's gross domestic product in 2013, has been erased from the Shanghai and Shenzhen exchanges since the main Shanghai Composite Index's record peak of 6,124 points in 2007.

That has brought the average price/earnings ratio of around 2,500 Chinese listed firms to less than 10 times historic earnings, from more than 70 times in 2007, exchange data showed.

More recently, however, domestic institutional investors appear to have gone back into equity markets, following classic economics of buying low ahead of a possible turn as Beijing ramps up stimulus to boost the economy.

The main index closed up 0.93 percent on Friday but is still down 2.13 percent so far this year.

($1 = 6.21 Chinese yuan) (Editing by Jacqueline Wong)

UPDATE 1-EU to toughen up bankers pay rules

The European Union's banking watchdog will toughen up its guidelines on bankers' pay after a study uncovered wide variations in how lenders apply the rules across the 28-country bloc and how banks are avoiding the bonus cap.

The European Banking Authority (EBA) did not say how it will toughen the rules but this is likely to include tighter supervision and more detail in how the rules should be applied.

After the 2007-09 financial crisis sparked public anger over bonuses at banks that taxpayers had to rescue, the EU introduced curbs on the pay of top bankers earning a million euros or more.

The current rules mean that 40-60 percent of a bonus must be deferred over 3-5 years, with the possibility to claw back the cash if problems like misconduct are later discovered.

The curbs were toughened so that bonuses handed out from early next year can be no higher than fixed salary, or twice that amount with shareholder approval. Staff earning more than 500,000 euros will be affected.

Top banking staff in 2012 received on average 187,441 euros ($255,200) in bonuses and 172,379 euros in base pay, making a total of 359,820 euros, the review published by the watchdog revealed on Friday.

This represents a 31 percent rise in base salary and a similarly sized fall in bonuses, resulting in an overall drop in average total pay of 10 percent since 2010, the EBA said. Many banks were still busting the cap on bonuses that will apply to payouts from early 2015, it added.

The EBA said pay practices varied too widely among banks with regards to the proportion of a bonus that was deferred and the number of bankers subject to the curbs.

Only 54 percent of high earners are categorised as top bankers, meaning many are escaping the pay restrictions.

Britain has more top earners than all the other EU states combined. It has 2,714 earning over a million euros, but just under half are identified as coming under EBA rules, whereas in other EU states nearly all top earners are properly identified.

The watchdog also noted that some banks are paying so-called position or role-based allowances, paid as part of base salaries, but some policymakers say these allowances are being used to mitigate the new bonus cap.

Banks argue that such allowances are part of fixed pay, but the EBA said they were discretionary, paid to selected staff and in most cases only for a limited period.

"The EBA is currently analysing this emerging practice and will set guidance criteria to correctly assign these elements to either variable or fixed remuneration, so as to ensure that these practices do not lead to a circumvention of the newly introduced cap," the watchdog said.

_0">

The EBA's revised guidance will be put out to public consultation at the end of this year and come into effect in early 2015 to ensure more consistent application of the rules.

Britain is challenging the bonus cap in the EU's top court, saying it creates more risks by making it harder for banks to cut fixed costs when business falls.

($1 = 0.7345 Euros) (Reporting by Huw Jones, editing by Chris Vellacott; Editing by Elaine Hardcastle)

European shares hit 1-week low on Iraq crisis, travel stocks suffer

Europe's top share index headed for a weekly drop after gaining for eight straight weeks, with escalating conflict in Iraq hitting travel stocks and the prospect of an early rate hike in the United Kingdom hurting property shares on Friday.

The pan-European FTSEurofirst 300 slipped to a one-week low, moving further away from this week's 6-1/2-year high. It was down 0.7 percent at 1,382.78 points by 1051 GMT after falling to a low of 1,381.86, the lowest since early June.

Travel and leisure stocks led the market lower, with the European sector index falling 2.3 percent after growing tensions in Iraq hit sentiment and boosted oil prices.

"The market was looking for an excuse to take profits after a rally to new highs and tensions in Iraq gave investors an opportunity to trim their positions," Philippe Gijsels, head of research at BNP Paribas Fortis Global Markets in Brussels.

"America may send a few fighter planes to help Iraq, but it doesn't look like the start of a new Iraq war. I don't see a sharp pull-back in the market. Shares could fall another 3 to 5 percent in the near term before bouncing back."

U.S. President Barack Obama threatened military strikes in Iraq against Sunni Islamist militants who have surged from the north to menace Baghdad and want to establish their own state in Iraq and Syria.

British Airways owner International Airlines Group, Germany's Lufthansa and budget airline firm easyJet , down 3.7 to 4.1 percent, were among the top decliners on the FTSEurofirst 300 index.

British property companies also came under selling pressure after Bank of England Governor Mark Carney said UK interest rates could rise sooner than financial markets expect and the bank would consider tackling housing market risks, including an undesirable loosening in mortgage underwriting standards.

British Land and Land Securities fell 3.6 percent and 3.5 percent respectively.

Analysts advised caution, which was also reflected in a rally in European volatility index, investors' main fear gauge and a measure to insure against future swings in shares. The index rose more than 9 percent after falling to a low not seen since December 2006 this week.

"I'd rather be short (European stocks) at the moment," Hobart Capital Markets broker Justin Haque said. "The market has lived in a blissful state but we're not short of warning signs: there's a war in Iraq and Carney wants to raise rates."

Europe bourses in 2014: link.reuters.com/pap87v

Asset performance in 2014: link.reuters.com/gap87v

Today's European research round-up (Additional reporting by Francesco Canepa; Editing by Toby Chopra)

Yield famine could make bailed-out Cyprus a feast for bond investors

Cyprus is preparing to sell bonds to yield-starved investors in the next few weeks, making a return to markets that looked very distant just a year ago when it was bailing-in bank depositors and imposing capital controls.

Still mired in recession, and with its credit ratings deep in junk territory following a debt exchange last year that ratings agencies classed as a default, the island hired five banks this week to oversee a planned bond sale.

That would mark the fastest comeback to markets of any of the euro zone countries that were forced to seek international aid as a debt crisis engulfed the currency bloc. It would also take place while capital controls are still in force, although Nicosia says it aims to lift them by the end of the year.

With interest rates in developed countries at historic lows and investors grabbing anything that offers even a tiny pick-up in yield, the sale is expected to be a success.

"Now is the best time for Cyprus to establish itself in markets. Push, push, push for yield," said Dan Fuss, vice chairman of Kansas City-based Loomis Sayles & Company.

The returns on offer are hard to match.

Cyprus's benchmark February 2020 bonds yield 4.75 percent , well above the 2.8 percent offered by similar bonds of Portugal, which recently exited its bailout, and the roughly 2 percent yield on Spanish and Italian debt.

Yields on top-rated bonds are even lower, which pushes investors to buy riskier assets to maximise returns.

In April, twice bailed-out Greece sold five-year bonds yielding just under 5 percent in one of the fastest returns to commercial borrowing of a state that had defaulted on debt.

Last week, the European Central Bank cut all its policy rates and promised more liquidity for banks in a move that fostered even more demand for high-risk assets.

"The yield ... is attractive. That was the case before the ECB last week and the tone has improved since then," said Robert Tipp, chief investment strategist at Newark-based Prudential Fixed Income, which holds Cypriot and Greek debt.

GOOD PUPIL

_0">

Such borrowing costs look appealing for Cyprus as well. Higher-rated states in the euro zone had to pay much more to sell their debt only two years ago.

Politically, the market return would be an endorsement of the island's resolve in sticking to the tough terms of its rescue package, while Brussels is likely to offer it as proof that its bitter austerity medicine has worked.

Cyprus has constantly outperformed expectations since it signed the 10 billion euro aid deal in March 2013.

Its economy is expected to contract by 4.2 percent this year, less than the 4.8 percent initially expected, and some, such as local consultancy Sapienta, see the decline in output at closer to 3 percent.

_4">

The island has also gradually reduced capital controls in the past year, although investors with money in some Cypriot banks still cannot move cash abroad without prior approval.

_5">

The restrictions do not affect investments in government bonds directly, but the fact that money cannot move freely in and out of the country is usually a big deterrent for any foreign investor.

_6">

Not this time, though.

_7">

"At the moment I don't think investors care a lot about capital controls ... market prices suggest they're likely to be able to issue," said Michael Michaelides, rates analyst at RBS.

_8">

_9">

THE GREEK COMPARISON

_10">

There are no concrete details about what kind of bonds may be on offer, with the roadshow yet to start.

_11">

But analysts reckon a five- or even a 10-year might be feasible, while the buyers are likely to be the same ones who bid for the Greek bonds: a large part will probably go to British- and U.S.-based hedge funds.

_12">

Hans Humes, chief investment officer at Greylock Capital, who bought Greece's bonds, said he was interested in Cyprus.

_13">

"What Cyprus has over Greece is that they didn't do a sovereign debt restructuring," said the New York-based veteran of troubled debt markets.

_14">

Greece's new bond now yields around one percentage point less than when it was issued - something which may encourage investors to buy. But beyond any profits it may bring, a Cypriot market comeback will have a deeper meaning.

_15">

"For the country itself and for the people that have gone through the crisis it will show that if you keep persevering and do the right things you will be able to access the market again," said Stuart Culverhouse, chief economist at distressed debt brokerage Exotix in London.

"It would also be seen by Brussels and other European capitals as an endorsement of the actions they have taken." (Additional reporting by Michele Kambas; Editing by Catherine Evans)

BNP got high-level 2006 warnings on sanctions busting - report

French bank BNP Paribas was warned in 2006 by a high-ranking U.S. Treasury official and in three reports by legal experts that it risked being penalised for breaking U.S. sanctions, according to Le Monde newspaper.

_0">

Since France's biggest bank flagged the risk of a big fine in February this year, sources close to the affair have said it ignored early warnings of the risks it faced. They pointed out that the alleged offending transactions being investigated by U.S. authorities continued until 2009.

The French newspaper's report, written as talks accelerate towards a possible $10 billion fine and other penalties, said Stuart Levey, then the U.S. Treasury Under Secretary for Terrorism and Financial Intelligence, made a visit to Paris in September 2006.

The paper, drawing on the findings of its own investigation, said Levey met the bank's top officials, including Baudoin Prot, who has since become chairman, in its boardroom.

Levey was there not to talk about the legal risks, but to warn the bank to be vigilant, citing the names of a number of blacklisted Iranian banks, the Le Monde report said.

U.S. President George Bush had called Iran part of an "Axis of Evil" and wanted European banks to stop working there. Levey took the same "clear" message to other European banks, Le Monde reported.

A second set of warnings also came in 2006, the report said, this time from legal experts, after ABN Amro was fined $40 million for breaking sanctions against Iran and Libya in January of that year.

Until that point, lawyers Cleary Gottlieb had assured BNP Paribas it was not at risk as long as it operated outside U.S. territory, Le Monde said. However the ABN Amro fine was a first - covering transactions done outside the United States. After it, Cleary Gottlieb changed its advice to say there was a risk in certain cases. Two other expert reports commissioned by the bank came to a similar conclusion.

BNP Paribas was not immediately available to comment on the Le Monde report.

The bank has said publicly only that it is in discussions with U.S. authorities about "certain U.S. dollar payments involving countries, persons and entities that could have been subject to economic sanctions".

It has set aside $1.1 billion for the fine but told shareholders it could be far higher than that. Last month it also said it had improved control processes to ensure such mistakes did not occur again.

The suggestion that Prot had a personal warning from the U.S. Treasury puts a new focus of attention on him after the bank announced the departure of chief operating officer Georges Chodron de Courcel on Thursday.

U.S. authorities - five of them in all including the New York financial regulator - are investigating whether BNP evaded U.S. sanctions between 2002 and 2009. Sources familiar with the matter say they are trying to establish whether the bank stripped out identifying information from wire transfers so they could pass through the U.S. financial system without raising red flags. (Reporting by Andrew Callus and Matthieu Protard; editing by Tom Pfeiffer)

Sri Lanka rupee tad weaker on importer dlr demand

The Sri Lankan rupee edged down from a near a one-year high on Friday as importer dollar demand outpaced greenback sales by banks and exporters while state banks bought dollars to prevent volatility, dealers said.

_0">

The rupee ended at 130.25/28 per dollar, little changed from Wednesday's close of 130.25/27, which was its highest since June 28, 2013.

Both the forex and stock markets were closed on Thursday for a public holiday.

"There was late importer dollar demand," said a currency dealer asking not to be named.

The two state banks, through which the central bank intervenes to direct the market, bought dollars at 130.25 rupees, as the central bank is allowing a gradual appreciation in the local currency to prevent shocks, dealers said.

Dealers said exporter dollar sales picked up on expectations that the rupee would strengthen further.

The central bank bought dollars at 130.35 rupees on May 30 and started lowering its buying rate since then, allowing a gradual appreciation.

Central bank Governor Ajith Nivard Cabraal told Reuters last Friday that the rupee was facing some appreciation pressure and the bank was allowing the trend on a gradual basis to let all stakeholders adjust to the changes.

He had said earlier that the central bank would keep intervening in the currency market to prevent a rapid rise in the rupee. The central bank has absorbed over $400 million as of May 27 to prevent a sharp gain in the rupee.

Dealers said the central bank's intervention has prevented gains in the currency and they expect the local currency to face upward pressure until credit growth and imports pick up. (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi)

Founder quits UK payday lender Wonga

British payday lender Wonga said its co-founder Errol Damelin had quit as a director of the company, just seven months after stepping down as chief executive.

_0">

Wonga is one of the biggest short-term lenders in Britain and has come under fire, along with the industry as a whole, for the high level of interest rates it charges.

Its rates can equate to as much as 5,853 percent a year, though its loans are only supposed to be held for a short period of time, often to provide funds for someone until they are paid.

Britain's financial regulator is planning to impose tougher rules on the industry.

Wonga said on Friday Damelin, who co-founded the company in 2006, had indicated in November he wanted to begin an orderly exit from the firm so he could start working on new business ventures. He stepped aside as chief executive at that time and became chairman.

"He is now happy that the migration to a senior team suited to running a large and regulated financial services business is well underway and sufficiently advanced for him to step aside," Wonga said in a statement.

Wonga said last week its CEO Niall Wass, who took over from Damelin in November, was quitting to take a position with another company. (Reporting by Steve Slater; Editing by David Holmes)