Referring to a story by Reuters last week, Canadian miner Kirkland Lake Gold have confirmed that a shareholders meeting last week resulted in a unanimous vote in favour of a takeover of Australian firm Newmarket Gold.
In a joint statement, the two firms revealed that 99 percent of Newmarket shareholders and 83 percent of Kirkland shareholders were in favour of the deal. In order for the agreement to be finalized the board needed 70 percent of Kirkland support and over half of Newmarket support. The deal is thought to be worth around $800 million and should be finalized by the end of the month.
Newmarket shares dropped 0.4 percent to C$3.43 in response to the news and Kirkland Lake fell 1.7 percent to C$7.19 on the Toronto Stock Exchange.
This deal comes hot on the heels of a tie-up involving Kirkland and St Andrew Goldfields in February in an all-stock transaction valued at C$182 million. The agreement created an entity with four Ontario-based mines and three mills.
Kirkland Lake's largest shareholder, Van Eck Associates, said to Reuters that it supported the deal but declined to give details on how it eventually voted. Many other shareholders were vocal in their opposition to the deal as they saw minimal expansion opportunities and efficiency saving with both companies having their main assets in different countries. Newmarket has most of theirs in Australia.
“There’s a feeling with a small minority of the Kirkland shareholders that the board were a little too quick to dismiss their own buyout offers,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in a note to clients.
“Both Silver Standard Resources and Gold Fields made attractive offers but both were withdrawn last week,” Coleman added.
The board cited increased analyst coverage and valuation for going through with the Newmarket takeover and the new combined company will operate five mills and eight underground mines which output over 600,000 ounces of gold this year. The main operations will be Newmarket's Fosterville mine in Victoria, Australia, and Kirkland Lake's Macassa mine in Ontario.
The board are expected to make a further announcement at the start of December concerning further details on the deal.
Tuesday, November 29, 2016
Monday, November 28, 2016
JLR wants to bring further production to UK
Indian-owned car company Jaguar Land Rover (JLR) have said in a statement they want to manufacture electric models in the UK, saying it would make sense to build the cars in its home market.
The announcement comes as a further post-Brexit boost to the British car industry, Jaguar Land Rover being the biggest British carmaker having built around 30 percent of the UK’s 1.7 million cars in 2015. The company is owned by a subsidiary of Indian conglomerate Tata Group, Tata Motors Limited.
Ralf Speth, JLR chief executive, had hinted recently that the firm would like to bring more production to the UK, with the company already operating three car manufacturing plants in England.
“The UK is the home of our engineering and design process, it would be great if we could also build our electric vehicles here, specifically in the West Midlands,” said Speth in the statement. “These plans are dependent on various conditions, however, such as scientific support, government initiatives and pilot testing.”
The government have made a tangible effort to promote Britain as a prime location for innovative companies to manufacture their products over the past few years and last Friday authorities announced $490 million of funding to support clean energy production.
Nissan recently said they would manufacture two brand new models at the largest car plant in the UK following pledges by PM Theresa May over government support.
JLR were not immediately available for extra comment regarding job creation or a timeframe for their plans to build electric cars in Britain.
“We think JLR are going to hold out for the same kind of governmental subsidies that Nissan secured a few weeks ago,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “It’s pretty obvious why this statement is coming out now. They are laying the groundwork for negotiations. And the government will be sitting up and taking notice, a new electric vehicle manufacturing plant in the UK is a pretty big carrot.”
JLR currently builds their first electric model in Austria and showed it off at a car show in California two weeks ago.
The announcement comes as a further post-Brexit boost to the British car industry, Jaguar Land Rover being the biggest British carmaker having built around 30 percent of the UK’s 1.7 million cars in 2015. The company is owned by a subsidiary of Indian conglomerate Tata Group, Tata Motors Limited.
Ralf Speth, JLR chief executive, had hinted recently that the firm would like to bring more production to the UK, with the company already operating three car manufacturing plants in England.
“The UK is the home of our engineering and design process, it would be great if we could also build our electric vehicles here, specifically in the West Midlands,” said Speth in the statement. “These plans are dependent on various conditions, however, such as scientific support, government initiatives and pilot testing.”
The government have made a tangible effort to promote Britain as a prime location for innovative companies to manufacture their products over the past few years and last Friday authorities announced $490 million of funding to support clean energy production.
Nissan recently said they would manufacture two brand new models at the largest car plant in the UK following pledges by PM Theresa May over government support.
JLR were not immediately available for extra comment regarding job creation or a timeframe for their plans to build electric cars in Britain.
“We think JLR are going to hold out for the same kind of governmental subsidies that Nissan secured a few weeks ago,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “It’s pretty obvious why this statement is coming out now. They are laying the groundwork for negotiations. And the government will be sitting up and taking notice, a new electric vehicle manufacturing plant in the UK is a pretty big carrot.”
JLR currently builds their first electric model in Austria and showed it off at a car show in California two weeks ago.
Friday, November 25, 2016
Tata calls for emergency meeting as Mistry ousted
Indian firm Tata Steel have said after a special board meeting that they have decided to sack chairman Cyrus Mistry effective immediately, a move which follows Mistry’s exit from two other Tata Group firm’s and the group’s holding company Tata Sons.
Mistry has come under heavy criticism in the past few months and things came to a head in late October when Tata Sons deposed him from his position. In the last month both parties have let loose with a stinging volley of insults and criticisms, both blaming the other for issues at the $120 billion conglomerate.
Last week the board of Tata Steel held an extraordinary general meeting in order to oust Mistry and another executive, Nusli Wadia, from the directorship of the firm. A similar situation occurred last month at Tata Global Beverages, which runs Starbuck’s in the country, as Mistry was removed from that board too. He was also deposed as chairman of Tata Consultancy Services.
A close friend of Mr Mistry who prefers to remain nameless says there was a coup at the highest levels of Tata Group to eliminate his control at the executive level. The source described the behaviour of Tata Sons as “deeply unsettling”.
The new chairman of the board at Tata Steel will be O P Bhatt, a man with plenty of experience as current director of the company’s board.
The purge has not stopped there. Both Tata Motors, which owns Land Rover, and the Indian Hotels Co Ltd group, which is also part of the Tata Group and runs the Taj brand, have also called for extraordinary meetings in order to evaluate Mistry’s positions with the two firms.
“The main reason for Mr Mistry’s demise at Tata seems to be the falling dividends and skyrocketing expenses,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “Of course, when you fall out of favour at corporate level it’s very difficult to keep your standing at all the companies under the umbrella of the conglomerate. It’s a very long fall from that height and you tend to hit every branch on the way down.”
In the middle of November, Mistry attempted to defend the accusations levelled at him by releasing a statement in which he explained why the impairment provisions and other rising expenses were unrelated to his actions. He also accused the board of trying to sway shareholder sentiment towards him.
Mistry has come under heavy criticism in the past few months and things came to a head in late October when Tata Sons deposed him from his position. In the last month both parties have let loose with a stinging volley of insults and criticisms, both blaming the other for issues at the $120 billion conglomerate.
Last week the board of Tata Steel held an extraordinary general meeting in order to oust Mistry and another executive, Nusli Wadia, from the directorship of the firm. A similar situation occurred last month at Tata Global Beverages, which runs Starbuck’s in the country, as Mistry was removed from that board too. He was also deposed as chairman of Tata Consultancy Services.
A close friend of Mr Mistry who prefers to remain nameless says there was a coup at the highest levels of Tata Group to eliminate his control at the executive level. The source described the behaviour of Tata Sons as “deeply unsettling”.
The new chairman of the board at Tata Steel will be O P Bhatt, a man with plenty of experience as current director of the company’s board.
The purge has not stopped there. Both Tata Motors, which owns Land Rover, and the Indian Hotels Co Ltd group, which is also part of the Tata Group and runs the Taj brand, have also called for extraordinary meetings in order to evaluate Mistry’s positions with the two firms.
“The main reason for Mr Mistry’s demise at Tata seems to be the falling dividends and skyrocketing expenses,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “Of course, when you fall out of favour at corporate level it’s very difficult to keep your standing at all the companies under the umbrella of the conglomerate. It’s a very long fall from that height and you tend to hit every branch on the way down.”
In the middle of November, Mistry attempted to defend the accusations levelled at him by releasing a statement in which he explained why the impairment provisions and other rising expenses were unrelated to his actions. He also accused the board of trying to sway shareholder sentiment towards him.
Monday, November 21, 2016
St. Louis Fed president drops heavy hints for holiday rate bump
U.S. Federal Reserve board member James Bullard has warned that fundamental changes stemming from potential policies of incoming president Donald Trump could mean that the Fed would need to adjust their strategy in the coming months, but he still made it clear he feels a rate hike is coming this holiday season.
Bullard, who is president of the St. Louis Fed, said the central bank is now focusing primarily on how they will tackle the 2017 rate path, leading many observers to conclude that a December rate increase is a done deal.
“We are concerned first and foremost on how the President-elect’s policies on taxation and spending are going to interact with Federal Reserve strategy next year,” Bullard told a conference in Germany’s business centre of Frankfurt.
“A December move by the FOMC is what the markets are betting on and I’m supporting that particular view.”
Traders recently upped their bets on a December rate hike by pricing in a 90 percent chance yesterday.
Many investors are expecting some of Trump’s new policies to have a definite impact on the American economy in the short term but that some of his proposals could take longer than he would hold the White House to bear any fruit.
“Trump can only stay in power for eight years, so some of his long term goals regarding immigration and infrastructure probably won’t be realised while he’s still in power,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in an email to clients. “Trade agreements are another policy that can take a long time to come about, years of negotiations and stoppages. There can be an impact in these areas but not before many years, maybe even a decade.”
Some areas that could have an immediate effect are tax reforms and regulatory changes, especially in the financial sector. Investors and policymakers at the Fed are both keen to see the details of Trump’s proposed changes.
Bullard, who is president of the St. Louis Fed, said the central bank is now focusing primarily on how they will tackle the 2017 rate path, leading many observers to conclude that a December rate increase is a done deal.
“We are concerned first and foremost on how the President-elect’s policies on taxation and spending are going to interact with Federal Reserve strategy next year,” Bullard told a conference in Germany’s business centre of Frankfurt.
“A December move by the FOMC is what the markets are betting on and I’m supporting that particular view.”
Traders recently upped their bets on a December rate hike by pricing in a 90 percent chance yesterday.
Many investors are expecting some of Trump’s new policies to have a definite impact on the American economy in the short term but that some of his proposals could take longer than he would hold the White House to bear any fruit.
“Trump can only stay in power for eight years, so some of his long term goals regarding immigration and infrastructure probably won’t be realised while he’s still in power,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in an email to clients. “Trade agreements are another policy that can take a long time to come about, years of negotiations and stoppages. There can be an impact in these areas but not before many years, maybe even a decade.”
Some areas that could have an immediate effect are tax reforms and regulatory changes, especially in the financial sector. Investors and policymakers at the Fed are both keen to see the details of Trump’s proposed changes.
Friday, November 18, 2016
Greenback strides to 30 year high versus yen
The stellar dollar rise continued this week reaching its highest peak against its basket currency competitors since 2002 and putting in its best two-weekly performance versus the yen since 1988 on the back of republican candidate Donald J Trump’s surprise win in the U.S. presidential race.
The dollar was further bolstered by remarks from Janet Yellen, U.S. Federal Reserve Chair, who said last week that she expected interest rates to rise “sooner rather than later” giving the clearest indicator yet that, as the markets expect, the hike will come before the end of the year.
The U.S. currency gained around 8 percent in the last two weeks to hit a six-monthly high against the yen of 110.926. That’s the dollars best performance over a fortnightly period for three decades and its second best performance since floating exchange rates began.
“We are most definitely seeing a very large scale shifting of investments stateside,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in an interview with BBC business news yesterday.
“Not since March 2003 have we seen the dollar index at this kind of level, it shot to 101.36 yesterday. Of course this is all based on the perception that Mr Trump will follow through on his promises to lower taxation and increase spending on major infrastructure projects and defence,” Coleman continued.
As expectations drive asset prices in the U.S., investors are being deterred from stocks in Europe due to continued economic and political concerns, like the effect of the Brexit vote and ever increasing bailouts flowing to Athens. This serves to further bolster the greenback.
Favourable data reports have given even more credence to those speculating on a December rate hike, as encouraging housing starts numbers, which hit a decade long peak, prompted Yellen to say a rate hike was in the offing. Consumer prices posted a semi-annual high and jobless claims hit a 44 year low.
According to research firm, CME FedWatch, traders are now pricing in a 91 percent chance of a rate hike during the holiday season. The Fed is due to convene for their monthly meeting on December 13-14 to decide on policy and will release the minutes the following day.
Olivier Korber, SocieteGenerale senior strategy consultant, said in a recent blogpost, “We might expect the euro to keep falling if certain protectionist policies come into play at the start of 2017.”
The dollar was further bolstered by remarks from Janet Yellen, U.S. Federal Reserve Chair, who said last week that she expected interest rates to rise “sooner rather than later” giving the clearest indicator yet that, as the markets expect, the hike will come before the end of the year.
The U.S. currency gained around 8 percent in the last two weeks to hit a six-monthly high against the yen of 110.926. That’s the dollars best performance over a fortnightly period for three decades and its second best performance since floating exchange rates began.
“We are most definitely seeing a very large scale shifting of investments stateside,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in an interview with BBC business news yesterday.
“Not since March 2003 have we seen the dollar index at this kind of level, it shot to 101.36 yesterday. Of course this is all based on the perception that Mr Trump will follow through on his promises to lower taxation and increase spending on major infrastructure projects and defence,” Coleman continued.
As expectations drive asset prices in the U.S., investors are being deterred from stocks in Europe due to continued economic and political concerns, like the effect of the Brexit vote and ever increasing bailouts flowing to Athens. This serves to further bolster the greenback.
Favourable data reports have given even more credence to those speculating on a December rate hike, as encouraging housing starts numbers, which hit a decade long peak, prompted Yellen to say a rate hike was in the offing. Consumer prices posted a semi-annual high and jobless claims hit a 44 year low.
According to research firm, CME FedWatch, traders are now pricing in a 91 percent chance of a rate hike during the holiday season. The Fed is due to convene for their monthly meeting on December 13-14 to decide on policy and will release the minutes the following day.
Olivier Korber, SocieteGenerale senior strategy consultant, said in a recent blogpost, “We might expect the euro to keep falling if certain protectionist policies come into play at the start of 2017.”
Friday, November 11, 2016
Shares in Fitbit rise on buyout rumours
Fitbit Inc, a San-Francisco-based tech firm that produces wearable gadgets, saw its shares gain as much as 10 percent after a little known private equity firm said it had approached the company with a buyout offer. The shares then gave up some of those gains after Fitbit said they had not been in talks with anyone concerning a sale.
The purported buyers, ABM Capital Ltd, issued a statement on Wednesday saying that their offer had been received by the SEC offices; however a spokesman for Fitbit denied any knowledge of the offer from ABM or anyone else.
Details of the filing are sketchy, but Reuters were able to determine that ABM wanted to purchase Fitbit for $12.60 per share. ABM was not reachable using the telephone number on the case sheet.
“This offer looks suspicious and we are definitely taking it with a pinch of salt,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “The legitimacy of a company has to be called into question when they make spelling mistakes on a filing and their offices can’t be reached by phone.”
According to the U.S. Securities and Exchange Commission (SEC) they received the filing early Tuesday morning but did not comment on the veracity of ABM other than to say they had not received any previous filings from the Beijing-based company.
The SEC has a publicly accessible database called Edgar where thousands of fund managers and public companies make filings. Sector watchdogs have been worried about the security of the database after a previously unknown company called PTG Capital Partners offered to purchase cosmetics giant Avon Products Inc for $4 billion last year.
Fitbit shares rose as much as 10 percent in the morning session as news broke of the offer but sank back down to only $8.89 per share, well below the offer price of $12.60, which would have represented a 47 percent premium.
Fitbit’s performance has been slumping this year, losing 65 percent of their $2 billion valuation amid rising competition from international manufacturers.
Executives of Fitbit declined to comment on the recent developments, but a statement last month said the company are bringing in new initiatives to increase revenue.
The purported buyers, ABM Capital Ltd, issued a statement on Wednesday saying that their offer had been received by the SEC offices; however a spokesman for Fitbit denied any knowledge of the offer from ABM or anyone else.
Details of the filing are sketchy, but Reuters were able to determine that ABM wanted to purchase Fitbit for $12.60 per share. ABM was not reachable using the telephone number on the case sheet.
“This offer looks suspicious and we are definitely taking it with a pinch of salt,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “The legitimacy of a company has to be called into question when they make spelling mistakes on a filing and their offices can’t be reached by phone.”
According to the U.S. Securities and Exchange Commission (SEC) they received the filing early Tuesday morning but did not comment on the veracity of ABM other than to say they had not received any previous filings from the Beijing-based company.
The SEC has a publicly accessible database called Edgar where thousands of fund managers and public companies make filings. Sector watchdogs have been worried about the security of the database after a previously unknown company called PTG Capital Partners offered to purchase cosmetics giant Avon Products Inc for $4 billion last year.
Fitbit shares rose as much as 10 percent in the morning session as news broke of the offer but sank back down to only $8.89 per share, well below the offer price of $12.60, which would have represented a 47 percent premium.
Fitbit’s performance has been slumping this year, losing 65 percent of their $2 billion valuation amid rising competition from international manufacturers.
Executives of Fitbit declined to comment on the recent developments, but a statement last month said the company are bringing in new initiatives to increase revenue.
Thursday, November 10, 2016
ConocoPhillips will streamline to focus on core business
As it attempts to bolster its core businesses, one of the United States’ largest independent oil producers, ConocoPhillips, have announced in a statement that they will offload nearly $10 billion worth of their natural gas assets.
Two years of low commodity prices have squeezed margins for Conoco and similar players in the market and the desire to sell off large chunks of peripheral operations reflects the continued efforts by oil companies to push towards further efficiency and streamlining.
On the statement’s release, shares of Conoco dropped around a percentage point to $45.22 in the morning session in New York and U.S. crude prices fell by the same margin overall.
Chief Executive Ryan Lance has been praised in recent years for his drive to reduce the company’s $30 billion debt, and the sale of the gas assets is another step towards his vision of sustainability for the Houston-based firm.
“Getting debt off our balance sheet is of primary importance both to the board and to shareholders and potential investors,” said Lance in a BBC interview. “The assets in question are not a good fit for the company in the long term so selling now is good on two fronts, to reduce debt and to streamline our operations.”
The planned divestiture is estimated at between $9billion and $11 billion worth of North American gas assets and comes after the company slashed its budget by 50 percent in 2015.
“What the board are essentially doing is not betting on commodity prices coming back to normal levels,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “Instead they are wisely adapting their business model so it can withstand these kinds of price cycles. We don’t know how long the current dip in crude is going to last for.”
The capital inflow expected from the sale will allow Conoco to focus on maintenance of their shale operations in the U.S. and development of new exploration projects in Europe. The company were previously active in 30 nations across the world, but have cut that figure in half in the last ten years.
Brent crude was trading at $45.97 on Friday; a price that still makes it difficult for large oil companies to be profitable. The benchmark figure is $50. This has forced firms like Conoco to develop new methods to raise funds, and Lance recently announced a share repurchase program worth around $4 billion.
Two years of low commodity prices have squeezed margins for Conoco and similar players in the market and the desire to sell off large chunks of peripheral operations reflects the continued efforts by oil companies to push towards further efficiency and streamlining.
On the statement’s release, shares of Conoco dropped around a percentage point to $45.22 in the morning session in New York and U.S. crude prices fell by the same margin overall.
Chief Executive Ryan Lance has been praised in recent years for his drive to reduce the company’s $30 billion debt, and the sale of the gas assets is another step towards his vision of sustainability for the Houston-based firm.
“Getting debt off our balance sheet is of primary importance both to the board and to shareholders and potential investors,” said Lance in a BBC interview. “The assets in question are not a good fit for the company in the long term so selling now is good on two fronts, to reduce debt and to streamline our operations.”
The planned divestiture is estimated at between $9billion and $11 billion worth of North American gas assets and comes after the company slashed its budget by 50 percent in 2015.
“What the board are essentially doing is not betting on commodity prices coming back to normal levels,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “Instead they are wisely adapting their business model so it can withstand these kinds of price cycles. We don’t know how long the current dip in crude is going to last for.”
The capital inflow expected from the sale will allow Conoco to focus on maintenance of their shale operations in the U.S. and development of new exploration projects in Europe. The company were previously active in 30 nations across the world, but have cut that figure in half in the last ten years.
Brent crude was trading at $45.97 on Friday; a price that still makes it difficult for large oil companies to be profitable. The benchmark figure is $50. This has forced firms like Conoco to develop new methods to raise funds, and Lance recently announced a share repurchase program worth around $4 billion.
Wednesday, November 9, 2016
Jewellery chain looks to Jefferies for $1 billion sale
Investment bank Jeffries LLC have announced that they are assisting jewellery chain, Kendra Scott, in a sale of the company, and both parties insist a figure of around a billion dollars is achievable, according to sources who prefer to remain anonymous.
Analysts say the accessories firm has achieved remarkable growth since its 2002 inception when the eponymous founder started making jewellery in her garage.
The sources mentioned annual earnings in 2017 are forecast to be around $80 million for the Texas-based company, before depreciation and tax.
Both Jeffries and Kendra Scott declined to answer questions on the news and the sources asked for names to be withheld due to the sensitive nature of talks.
Kendra Scott has made a name in a niche market selling custom shaped rings, charms and necklaces using natural stones and fine gold finishing. The company also offers customers further customization of their items at special “colour bars” both on the high-street and at their e-store where they can micromanage their build.
The company has dozens of stores across the United States, especially the south of the country where it originally opened in Austin over 6 years ago. It also supplies department stores at wholesale prices.
“The amazing thing about Kendra Scott is that they seem to have struck a remarkable balance between price and fashion. Most of their pieces are under a hundred dollars and yet have featured on catwalks from Paris to New York,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in a note to clients.
“They also have an excellent online footprint, especially in social media. It’s obvious they are heavily targeting “millennials” who have come to love anything customizable, especially if they can tinker online,” Coleman added.
Another big player in the online jewellery industry, Blue Nile Inc, said that they had agreed to be taken private and will be assisted by private equity company Bain Capital in a deal worth around half a million dollars.
Analysts say the accessories firm has achieved remarkable growth since its 2002 inception when the eponymous founder started making jewellery in her garage.
The sources mentioned annual earnings in 2017 are forecast to be around $80 million for the Texas-based company, before depreciation and tax.
Both Jeffries and Kendra Scott declined to answer questions on the news and the sources asked for names to be withheld due to the sensitive nature of talks.
Kendra Scott has made a name in a niche market selling custom shaped rings, charms and necklaces using natural stones and fine gold finishing. The company also offers customers further customization of their items at special “colour bars” both on the high-street and at their e-store where they can micromanage their build.
The company has dozens of stores across the United States, especially the south of the country where it originally opened in Austin over 6 years ago. It also supplies department stores at wholesale prices.
“The amazing thing about Kendra Scott is that they seem to have struck a remarkable balance between price and fashion. Most of their pieces are under a hundred dollars and yet have featured on catwalks from Paris to New York,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in a note to clients.
“They also have an excellent online footprint, especially in social media. It’s obvious they are heavily targeting “millennials” who have come to love anything customizable, especially if they can tinker online,” Coleman added.
Another big player in the online jewellery industry, Blue Nile Inc, said that they had agreed to be taken private and will be assisted by private equity company Bain Capital in a deal worth around half a million dollars.
Tuesday, November 8, 2016
Beer brands up for sale as AB InBev complete $150 billion takeover
As part of Anheuser-Busch InBev’s huge buyout of SABMiller which was finalized in late October, the company have put several brands of their beer up for sale and at least seven separate industry heavyweights and private funds are expected to table bids before the end of November.
Likely interested parties include Polish firms Lech and Tyskie, Czech Republic’s Pilsner and, according to inside sources, some Asian companies.
The beer brands are thought to be worth upwards of $5 billion and sources revealed Japanese brewer Asahi Holdings have teamed up with Czech investment firm PPF Group to muster a substantial bid.
Polish juice maker MaspexWadowice Group and an unnamed Hungarian energy conglomerate have also combined to put in an offer.
“Early rumours are fairly complex with news that there are a multitude of offers from individual companies and consortiums,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “We’ve seen rapid consolidation in the sector already this year as companies feel the pinch amid increased competition from small breweries and the rise in popularity of local craft beer.”
Sources also mentioned other consortiums involving private equity firms were interested in putting forward offers before the end of the year, as second and third round bids will be taken.
One entity that has dropped out of the running is BC Partners, a European private equity firm who last week announced that they were in preliminary talks with Anheuser-Busch but failed to reach common ground.
Several stake holders in SABMiller are also interested in selling their shares and taking a closer look at AB InBev brands, including Polish billionaire Sebastian Kulczyk and China Resources who run SABMiller’s China arm.
AB InBev produces famous beer brands such as Budweiser, Corona and Stella Artois and has several separate listings on global stock exchanges.
A spokesperson for the company said, “We can confirm that we are looking at several offers at the moment but that there are due to be many bidding rounds for our branded beers. We are looking forward to sitting down to serious talks with those interested parties in the next few months and hopefully we can make an announcement to our shareholders before the second quarter of 2017.”
Likely interested parties include Polish firms Lech and Tyskie, Czech Republic’s Pilsner and, according to inside sources, some Asian companies.
The beer brands are thought to be worth upwards of $5 billion and sources revealed Japanese brewer Asahi Holdings have teamed up with Czech investment firm PPF Group to muster a substantial bid.
Polish juice maker MaspexWadowice Group and an unnamed Hungarian energy conglomerate have also combined to put in an offer.
“Early rumours are fairly complex with news that there are a multitude of offers from individual companies and consortiums,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International. “We’ve seen rapid consolidation in the sector already this year as companies feel the pinch amid increased competition from small breweries and the rise in popularity of local craft beer.”
Sources also mentioned other consortiums involving private equity firms were interested in putting forward offers before the end of the year, as second and third round bids will be taken.
One entity that has dropped out of the running is BC Partners, a European private equity firm who last week announced that they were in preliminary talks with Anheuser-Busch but failed to reach common ground.
Several stake holders in SABMiller are also interested in selling their shares and taking a closer look at AB InBev brands, including Polish billionaire Sebastian Kulczyk and China Resources who run SABMiller’s China arm.
AB InBev produces famous beer brands such as Budweiser, Corona and Stella Artois and has several separate listings on global stock exchanges.
A spokesperson for the company said, “We can confirm that we are looking at several offers at the moment but that there are due to be many bidding rounds for our branded beers. We are looking forward to sitting down to serious talks with those interested parties in the next few months and hopefully we can make an announcement to our shareholders before the second quarter of 2017.”
Friday, October 7, 2016
E.U. chairman – Deutsche penalty too large, will hurt Europe
Jeroen Dijsselbloem, the chairman of euro zone financial ministers, has said that the fine laid down by the United States against Deutsche Bank is too big and will negatively affect the economic stability of the whole region.
Deutsche is one of the euro zone’s largest banking institutions, and Dijsselbloem commented that the size of the bank would not save it from failing, although he went on to say he thought Deutsche’s impressive solvency ratio and liquidity back-ups would mean the bank would steer itself away from trouble.
“From what our analysts are telling us we are confident that Deutsche is sufficiently prepared to come out of this on their own. We are not saying they are too big to fail,” Dijsselbloem said.
“It’s up to us though, to make sure they don’t fail. To do that we need to lobby on their behalf against this U.S. fine which we feel is totally overblown, let’s hope further negotiations get the amount reduced because a fine like that is only going to hurt Europe in general,” he added.
As punishment for their role in the sub-prime mortgage affair in 2007-2009, the U.S. financial authorities want to slap a $14 billion penalty on Deutsche.
“It’s a heavy fine, especially for such an influential bank that is trying really hard to restructure its operations and strengthen itself,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in an email to clients. “The last thing in the world they need right now is this kind of capital outflow. Most experts feel this is going to be counter-productive to the macroeconomic system in the long run.”
Under new regulations brought in after the financial crisis, Deutsche Bank is finding it increasingly hard to adapt to the new environment and bring in the same kind of revenues as before. It is now significantly smaller than Wall Street competitors such as Goldman Sachs and JPMorgan.
Deutsche still have strong relationships with all the world’s most prominent financial organizations and houses, holding over 40 trillion euros of derivative positions with them.
Dijsselbloem continued, “Of course Deutsche have some creases they need to iron out, like all modern banks they need to adapt to new rules and tweak their business model. Streamlining is essential and most banks these days are focusing on becoming less complex.”
An IMF report recently singled out Deutsche as a bigger risk to the financial community than any other international banking house.
Deutsche is one of the euro zone’s largest banking institutions, and Dijsselbloem commented that the size of the bank would not save it from failing, although he went on to say he thought Deutsche’s impressive solvency ratio and liquidity back-ups would mean the bank would steer itself away from trouble.
“From what our analysts are telling us we are confident that Deutsche is sufficiently prepared to come out of this on their own. We are not saying they are too big to fail,” Dijsselbloem said.
“It’s up to us though, to make sure they don’t fail. To do that we need to lobby on their behalf against this U.S. fine which we feel is totally overblown, let’s hope further negotiations get the amount reduced because a fine like that is only going to hurt Europe in general,” he added.
As punishment for their role in the sub-prime mortgage affair in 2007-2009, the U.S. financial authorities want to slap a $14 billion penalty on Deutsche.
“It’s a heavy fine, especially for such an influential bank that is trying really hard to restructure its operations and strengthen itself,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in an email to clients. “The last thing in the world they need right now is this kind of capital outflow. Most experts feel this is going to be counter-productive to the macroeconomic system in the long run.”
Under new regulations brought in after the financial crisis, Deutsche Bank is finding it increasingly hard to adapt to the new environment and bring in the same kind of revenues as before. It is now significantly smaller than Wall Street competitors such as Goldman Sachs and JPMorgan.
Deutsche still have strong relationships with all the world’s most prominent financial organizations and houses, holding over 40 trillion euros of derivative positions with them.
Dijsselbloem continued, “Of course Deutsche have some creases they need to iron out, like all modern banks they need to adapt to new rules and tweak their business model. Streamlining is essential and most banks these days are focusing on becoming less complex.”
An IMF report recently singled out Deutsche as a bigger risk to the financial community than any other international banking house.
Saturday, September 17, 2016
Roof tile firm announces takeover bid
German tile manufacturer Braas Monier have announced in a press release that they are willing to sell the company to U.S. firm Standard Industries, but the valuation by the Americans of around two billion dollars is too low.
Braas received terms last week which included the offer to purchase each of their shares for 30 euros in cash, representing a 20 percent premium over the stocks finishing price before official talks began. Standard already owns prominent roofing outfits Siplast and SGI.
A Braas spokesperson said that Standard had “neglected to add any control premium to the offer” and that they have “most definitely undervalued the company.”
David Millstone, chief executive at Standard Industries was quick to reassure employees that any potential merger would not involve job cuts or other cost saving restructuring.
“Our aim is to make Standard a major player in the global roofing sector. In order to do that we must continue consolidating so we can compete with the firms at the top of the ladder. We are getting bigger and employing a larger workforce, we are not downsizing companies we acquire,” Millstone said.
Analysts say the newly created entity would employ nearly 20,000 people and have over five billion dollars worth of sales per year. Standard desperately wants to add a pitched residential roofing specialist to their group as their current operations focus mainly on flat roofs. The company have been looking to get a foothold in Europe, where only 15 percent of its earnings come from. The remaining 80 percent comes from its domestic U.S. sales.
“It’s hard to say at the moment which way this one is going to go,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in a note to clients. “Many of the bigger shareholder groups like 40N Latitude are ready to let their share of the company go, and it’s a substantial share at around 35 percent. But there are a lot who will hold out with an offer like the one Standard have tendered. It’s a little on the short side most unbiased observers would agree.”
A representative of Lucerne Capital, which owns 7 percent of Braas said in a phone interview, “having gone over the Standard offer with the board we can confidently say that we have no intention of letting our shares go for that price. The offer doesn’t reflect the potential benefits.”
Braas received terms last week which included the offer to purchase each of their shares for 30 euros in cash, representing a 20 percent premium over the stocks finishing price before official talks began. Standard already owns prominent roofing outfits Siplast and SGI.
A Braas spokesperson said that Standard had “neglected to add any control premium to the offer” and that they have “most definitely undervalued the company.”
David Millstone, chief executive at Standard Industries was quick to reassure employees that any potential merger would not involve job cuts or other cost saving restructuring.
“Our aim is to make Standard a major player in the global roofing sector. In order to do that we must continue consolidating so we can compete with the firms at the top of the ladder. We are getting bigger and employing a larger workforce, we are not downsizing companies we acquire,” Millstone said.
Analysts say the newly created entity would employ nearly 20,000 people and have over five billion dollars worth of sales per year. Standard desperately wants to add a pitched residential roofing specialist to their group as their current operations focus mainly on flat roofs. The company have been looking to get a foothold in Europe, where only 15 percent of its earnings come from. The remaining 80 percent comes from its domestic U.S. sales.
“It’s hard to say at the moment which way this one is going to go,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in a note to clients. “Many of the bigger shareholder groups like 40N Latitude are ready to let their share of the company go, and it’s a substantial share at around 35 percent. But there are a lot who will hold out with an offer like the one Standard have tendered. It’s a little on the short side most unbiased observers would agree.”
A representative of Lucerne Capital, which owns 7 percent of Braas said in a phone interview, “having gone over the Standard offer with the board we can confidently say that we have no intention of letting our shares go for that price. The offer doesn’t reflect the potential benefits.”
Friday, September 16, 2016
Turbine firm up-scales after new acquisition
According to a press release by the company’s CEO, German turbine manufacturer Nordex is looking to up-scale their orders after January’s takeover of Spain-based rival Acciona.
Nordex will be hoping to attract orders in the one hundred to two hundred megawatts range, and they say they are better prepared for higher volumes.
“Nordex is currently active in many small markets but they are obviously looking to make a move, especially in the United States,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in a phone interview.
In one of many consolidation mergers in the renewable energy sector, Nordex announced plans to spend $800 million to purchase Acciona Wind Power in November of 2015 and completed the deal early this year. It’s a clear sign the company is trying to get a better foothold in Europe as it prepares to branch out globally.
Lars Bondo Krogsgaard, the Nordex chief executive, said that future synergies from the merger, which currently are estimated at 100 million euros, might be greatly increased down the line.
“There is definitely a possibility that the merger could have a much more beneficial effect on synergies than our analysts previously forecast,” he said in a statement.
Krogsgaard will be hoping a move into the U.S. market will boost orders towards the end of this year. He took over as CEO last December and has drawn accolades for his forward thinking style.
Nordex will be hoping to attract orders in the one hundred to two hundred megawatts range, and they say they are better prepared for higher volumes.
“Nordex is currently active in many small markets but they are obviously looking to make a move, especially in the United States,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in a phone interview.
In one of many consolidation mergers in the renewable energy sector, Nordex announced plans to spend $800 million to purchase Acciona Wind Power in November of 2015 and completed the deal early this year. It’s a clear sign the company is trying to get a better foothold in Europe as it prepares to branch out globally.
Lars Bondo Krogsgaard, the Nordex chief executive, said that future synergies from the merger, which currently are estimated at 100 million euros, might be greatly increased down the line.
“There is definitely a possibility that the merger could have a much more beneficial effect on synergies than our analysts previously forecast,” he said in a statement.
Krogsgaard will be hoping a move into the U.S. market will boost orders towards the end of this year. He took over as CEO last December and has drawn accolades for his forward thinking style.
Thursday, September 15, 2016
UK exhibition firm looks for overseas expansion with Penton offer
With a view to expanding their business information and trade show division into the United States, British group Informa Plc announced on Wednesday they were in final talks with U.S. info-services company Penton. The deal is thought to be worth over a billion dollars.
Sources close to Informa say the firm will set up a new debt and equity structure they hope will raise 800 million pounds in order to finance the deal. The money will go to equity outfits MidOcean Partners and Wasserstein & Co, who are currently handling Penton.
Informa has been desperate to grow its global exhibitions business and the current deal will give them much needed exposure in the U.S. where they want to earn approximately half their revenue. Business exhibitions and trade fairs are big earners in the U.S. with over 80 large scale shows per year.
“The next logical progression for our exhibition division is a move into the U.S. territory,” said Informa chief executive Stephen Carter in a Reuters TV interview. “Penton has been on our radar for a while due to the diversity of brands they are involved in. They match the fields we would like to pursue such as aviation, technology and telecoms.”
Two years ago Informa purchased U.S. exhibition operator Hanley Wood and took over many prominent global events such as World of Concrete, China Beauty Expo and Arab Health. The exhibition division of Informa, which also publishes market data, academic books and news, accounted for over 20 percent of the company’s revenue last year.
James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International commented on the deal, “Informa want to be more active in the U.S. as it is one of the most attractive areas with regard to accretive earnings. It’s a huge positive for them to be completing the deal so quickly and a great follow up to their Hanley Wood acquisition.”
Coleman said he expects the addition of Penton to increase earnings by at least 8 percent after the first full year. Shares for the company rose 5 percent to 710.2 in London’s early morning session.
Specialists in the field don’t expect Informa to stop there, and say we should expect to see more action from them in M&A in the very near future, going after potential targets such as Tarsus Group and UBM.
Sources close to Informa say the firm will set up a new debt and equity structure they hope will raise 800 million pounds in order to finance the deal. The money will go to equity outfits MidOcean Partners and Wasserstein & Co, who are currently handling Penton.
Informa has been desperate to grow its global exhibitions business and the current deal will give them much needed exposure in the U.S. where they want to earn approximately half their revenue. Business exhibitions and trade fairs are big earners in the U.S. with over 80 large scale shows per year.
“The next logical progression for our exhibition division is a move into the U.S. territory,” said Informa chief executive Stephen Carter in a Reuters TV interview. “Penton has been on our radar for a while due to the diversity of brands they are involved in. They match the fields we would like to pursue such as aviation, technology and telecoms.”
Two years ago Informa purchased U.S. exhibition operator Hanley Wood and took over many prominent global events such as World of Concrete, China Beauty Expo and Arab Health. The exhibition division of Informa, which also publishes market data, academic books and news, accounted for over 20 percent of the company’s revenue last year.
James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International commented on the deal, “Informa want to be more active in the U.S. as it is one of the most attractive areas with regard to accretive earnings. It’s a huge positive for them to be completing the deal so quickly and a great follow up to their Hanley Wood acquisition.”
Coleman said he expects the addition of Penton to increase earnings by at least 8 percent after the first full year. Shares for the company rose 5 percent to 710.2 in London’s early morning session.
Specialists in the field don’t expect Informa to stop there, and say we should expect to see more action from them in M&A in the very near future, going after potential targets such as Tarsus Group and UBM.
Wednesday, September 14, 2016
Havana trip opportunity for Abe to bring up Korean missile issue
In a rare visit to Cuba, Japanese PM Shinzo Abe will take part in the usual greasing of economic ties that he has been focusing on with his trip to many emerging nations this year, but the trip will also give the Japanese premier a much needed chance to discuss North Korea’s nuclear and missiles program, a recent worry for the nation.
Cuba is just recently emerging from decades of economic and political isolation but is still one of the few allies North Korea has. This will be the first time the Communist-ruled country will welcome a leader from Japan.
In 2015 Cuba finally normalized economic ties with the United States, which lifted their long time embargo on the nation. Shinzo Abe will be hoping to emulate Barak Obama’s successful visit last year and sit down for friendly talks with the country’s leader Raul Castro.
East Asian countries were stunned by arms testing by North Korea last week, the fifth time the country has performed nuclear missile tests, and the biggest to date. In response, Japan, the U.S. and South Korea have been in extended diplomatic talks to solidify their alliance.
Yoshihide Suga, the Japanese Chief Cabinet Secretary, told a press meeting he was “looking forward to meaningful and co-operative discussions with Cuba regarding the issues of North Korea’s nuclear and missile testing in the region.”
Predictably, the U.S. government has called on the United Nations to send a quick and stern message to North Korea asking them to give up their pursuit of a nuclear arsenal. The U.S. envoy to Pyongyang said Washington was still “prepared to take part in sensible dialogue.”
Since full diplomatic and trade ties were restored between Cuba and the U.S. over a hundred American companies have visited Havana to try and expand U.S. business operations there. Japan is likewise keen to enter the Cuban market.
“Although the trade embargo has made business with Cuba nearly impossible, the time is right to attempt reconciliation with the island,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in an email to investors. “There are huge opportunities there as with all emerging markets. Tokyo doesn’t want to miss a trick and let the U.S. make too many inroads into the territory.”
Cuba is just recently emerging from decades of economic and political isolation but is still one of the few allies North Korea has. This will be the first time the Communist-ruled country will welcome a leader from Japan.
In 2015 Cuba finally normalized economic ties with the United States, which lifted their long time embargo on the nation. Shinzo Abe will be hoping to emulate Barak Obama’s successful visit last year and sit down for friendly talks with the country’s leader Raul Castro.
East Asian countries were stunned by arms testing by North Korea last week, the fifth time the country has performed nuclear missile tests, and the biggest to date. In response, Japan, the U.S. and South Korea have been in extended diplomatic talks to solidify their alliance.
Yoshihide Suga, the Japanese Chief Cabinet Secretary, told a press meeting he was “looking forward to meaningful and co-operative discussions with Cuba regarding the issues of North Korea’s nuclear and missile testing in the region.”
Predictably, the U.S. government has called on the United Nations to send a quick and stern message to North Korea asking them to give up their pursuit of a nuclear arsenal. The U.S. envoy to Pyongyang said Washington was still “prepared to take part in sensible dialogue.”
Since full diplomatic and trade ties were restored between Cuba and the U.S. over a hundred American companies have visited Havana to try and expand U.S. business operations there. Japan is likewise keen to enter the Cuban market.
“Although the trade embargo has made business with Cuba nearly impossible, the time is right to attempt reconciliation with the island,” said James Coleman, Managing Director and co-head of Portfolio Trading at Softbank CIBC International in an email to investors. “There are huge opportunities there as with all emerging markets. Tokyo doesn’t want to miss a trick and let the U.S. make too many inroads into the territory.”
Tuesday, September 13, 2016
Slovakian JLR factory to begin construction, contractors chosen
Work on a new factory that will produce luxury cars for Jaguar Land Rover (JLR) has begun in Slovakia after the firm nailed down two contractors for the job.
Japanese group Takenaka and Czech company Vces will join the project and see the $1 billion undertaking through to completion.
In a statement by JLR, a spokesperson said the construction of the new plant, estimated at $800 million, will employ a workforce of around 3,000 and will create thousands of extra jobs involving a broad network of suppliers that it will invest $200 million in.
A Slovakian department of commerce representative, Mikhail Sobotney said the project “will be a huge boost for the country.”
JLR mentioned that the new plant will feature state of the art conveyor belt technology from German robotics maker Kuka, and they expect the factory to be operational in January 2018.
Operations manager Alexander Wortberg told a press gathering, “This is a hugely exciting time for JLR and we are looking forward to getting started producing fantastic models of Jaguar. There will be two different models of the Land Rover each with a few variants.”
Although an official decision has not been made yet, the plan is to double the capacity of the plant from the initial 160,000 cars per year to over 320,000 by 2025 with further investment.
Some observers thought Britain’s decision to leave the European Union in June would affect JLR’s future investments in the financial bloc, but the company’s chief executive Ralf Speth was quick to tell journalists, “This is the biggest single investment JLR have taken part in for a very long time and the largest ever direct investment in Slovakia by a foreign firm. The UK might be leaving the E.U. but for us the bloc is still of great importance.”
The automotive sector is a primary source of revenue for the Slovakian nation, making up 25 percent of its total exports.
“Effectively Slovakia is the biggest per capita car maker in the world,” says Softbank CIBC International Managing Director and co-head of Portfolio Trading James Coleman. “It may be a poor nation currently but it is also the fastest growing in the E.U.”
Japanese group Takenaka and Czech company Vces will join the project and see the $1 billion undertaking through to completion.
In a statement by JLR, a spokesperson said the construction of the new plant, estimated at $800 million, will employ a workforce of around 3,000 and will create thousands of extra jobs involving a broad network of suppliers that it will invest $200 million in.
A Slovakian department of commerce representative, Mikhail Sobotney said the project “will be a huge boost for the country.”
JLR mentioned that the new plant will feature state of the art conveyor belt technology from German robotics maker Kuka, and they expect the factory to be operational in January 2018.
Operations manager Alexander Wortberg told a press gathering, “This is a hugely exciting time for JLR and we are looking forward to getting started producing fantastic models of Jaguar. There will be two different models of the Land Rover each with a few variants.”
Although an official decision has not been made yet, the plan is to double the capacity of the plant from the initial 160,000 cars per year to over 320,000 by 2025 with further investment.
Some observers thought Britain’s decision to leave the European Union in June would affect JLR’s future investments in the financial bloc, but the company’s chief executive Ralf Speth was quick to tell journalists, “This is the biggest single investment JLR have taken part in for a very long time and the largest ever direct investment in Slovakia by a foreign firm. The UK might be leaving the E.U. but for us the bloc is still of great importance.”
The automotive sector is a primary source of revenue for the Slovakian nation, making up 25 percent of its total exports.
“Effectively Slovakia is the biggest per capita car maker in the world,” says Softbank CIBC International Managing Director and co-head of Portfolio Trading James Coleman. “It may be a poor nation currently but it is also the fastest growing in the E.U.”
Wednesday, May 18, 2016
Brexit has Europe cautious, new German growth spurred on
German growth has
been on the receiving end of a well needed push as increased construction
figures led the continents biggest economy to its best quarterly rate in two
years.
However, the
potential British exit from the E.U. could throw caution to the wind as experts
reserve judgement on future economic performance until after June’s referendum.
A drop in interest
rates has also meant much higher consumer data, another welcome factor that has
spurred growth.
“Obviously if
consumers see no advantage to saving money then they will shop till they drop,”
said James Coleman, Managing Director and co-head of Portfolio Trading at
Softbank CIBC International. “Another factor we see was the large German
spending in aid of immigrants. That is going to have an effect on GDP growth
and construction data,” he added.
Coleman remains
cautious though. ”We can’t get carried away unfortunately. One thing that may
very well rock the boat is the Brexit vote coming up soon. We can’t be certain
which way this will go.”
Britons will take
to the polls on 23rd June to decide whether or not they wish to
remain in the European Union.
Super start
It’s been a
lightening start to 2016 and the growth forecast by Germany's
DIHK Chambers of Industry and Commerce has been raised to 1.6 percent from 1.2
percent previously.
DIHK boss Martin Wansleben exclaimed
recently “We are predicting a great year for the economy in general after the
construction and consumption data was analysed.”
Export data isn’t
quite as cheerful; with sagging foreign demand likely to be a drag on growth.
A surprise boost
to the economy came from the results of the refugee crisis. Government spending
is expected to reach a huge 10 billion euros in 2016, much of this being spent in
the construction sector on shelters for the homeless.
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