Please find attached an updated version of BTG Pactual’s 2014 Brazilian Presidential Elections Tracker. The latest Datafolha showed President Rousseff continuing to gain some ground compared to the last Datafolha poll (as opposed to the last IBOPE poll, which showed her recovery losing a bit of momentum). In the first round, President Rousseff would have 37% of voting intentions (vs. 36% in the previous Datafolha poll), followed by Ms. Silva with 30% (down from 33%) and Mr. Neves with 17% (up from 15%). “Blank/Null/Undecided” remained stable at 13%.
In a second round simulation, Ms. Silva and Ms. Rousseff are statistically tied at 46% x 44% but the gap narrowed further to 2% (from 4% in the last Datafolha), as opposed to the last IBOPE poll, which showed a slight widening of Ms. Silva’s lead vs. President Rousseff. “Blank/Null/Undecided” votes remained stable at 10%. Against Mr. Neves, President Rousseff would beat him by 49% x 39%, and their gap narrowed slightly to a 10% lead (vs. a 11% gap in the previous poll).
Positive ratings for the government inched up to 37% (vs. 36% in the last Datafolha poll). As for rejection rates, President Rousseff’s remained the highest (stable at 33%), while Mr Neves’ decreased to 21% (from 23%), and Ms. Silva’s rose to 22%, up from 18% before. In other words, Ms. Silva’s rejection rate exceed Mr. Neves’ for the first time.
At this point, there are 5 new polls registered at the electoral court: i) Vox Populi, collecting 2,000 interviews from 20/09-21/09, is expected to be published next Monday (22/09); ii) MDA, collecting 2,002 interviews from 20/09-21/09, is expected to be published next Tuesday (23/9); iii) IBOPE, collecting 3,010 interviews from 18/09-23/09, is expected to be published next Tuesday (23/9); iv)Vox Populi, collecting 2,000 interviews from 23/09-24/09, is expected to be published next Wednesday (24/9) and v) Sensus, collecting 2,000 interviews from 21/09-26/09, is expected to be published next Friday (26/9).
Goldman defence lifts veil on LIA relationship
Taxis pass 55 Baker Street, the building housing the offices of Brevan Howard Asset Management LP, in London, U.K., on Friday, April 15, 2011. Brevan Howard Asset Management LP hired three Goldman Sachs Group Inc. employees to trade for its biggest hedge fund, according to a person briefed on the matter. Photographer: Chris Ratcliffe/Bloomberg©Bloomberg
It is a fiercely contested $1bn lawsuit over disputed derivatives transactions and has pitted Libya’s Investment Authority against investment bank Goldman Sachs.
But behind the dry subject matter, the suit has thrown up colourful allegations that the bank offered training programmes, gifts, overseas trips and even a much coveted internship as it sought to win business from the sovereign wealth fund set up to invest the country’s vast oil wealth.
In its lawsuit filed earlier this year, the LIA had alleged that unsophisticated LIA staff were given aftershave and chocolate and were offered training programmes by Goldman, which provided and paid for extensive hospitality to LIA employees including a trip to Morocco.
The LIA alleges in its claim form that Youssef Kabbaj, the bank’s former head of north Africa, took LIA employees to Morocco and paid for extensive expenses for them on his Goldman credit card.
But Goldman Sachs recently filed its defence and paints a picture of key LIA management as being experienced and “perfectly capable” of understanding the nature of nine complex trades which are now the subject of a dispute, and the bank alleges that the LIA “was not, as it now contends, financially illiterate”.
Goldman’s defence documents provide a fascinating glimpse into a sovereign wealth fund that was advised by City blue bloods and courted by some of the world’s biggest financial institutions.
On the LIA’s advisory board sat Lord Jacob Rothschild, scion of the famous banking dynasty, and Sir Howard Davies, the former regulator who had to resign as director of the London School of Economics in 2011 when an independent report found that £1.5m in donations the university accepted may have been the proceeds of bribes paid to the Gaddafi family by companies seeking “business favours” from the regime.
A particularly detailed paragraph in Goldman’s documents refers to a 2007 email sent by “Sofia Wellesley of the LIA”, which describes LIA visitors who were staying at the Corinthia hotel that year. Fifteen western financial institutions are named, including Deutsche Bank, the Carlyle Group, JPMorgan and UBS.
Ms Wellesley, who recently married pop star James Blunt, is the granddaughter of the Duke of Wellington and went on to work for Cherie Blair’s Omnia Partners.
Goldman admits in its defence document filed at the High Court that “certain LIA employees visited Morocco with Mr Kabbaj” and on a number of occasions the LIA “confirmed in writing that it was aware of, and consented to, the defendant providing accommodation and entertainment”. Mr Kabbaj left Goldman Sachs in 2009 and joined hedge fund GLG Partners.
The investment bank claims that it “absorbed certain expenses in connection with training programmes, including any LIA employees attending such training programmes”, and that Mr Kabbaj “occasionally bought LIA employees small gifts, but it is denied this happened frequently, that it would be unusual in any commercial client relationship context, or that it is of any significance”.
Goldman also admits that there were discussions over whether it could accommodate an internship for Haitem Zarti, the brother of Mustafa Mohamed Zarti who was the LIA’s deputy executive director. Mr Zarti was appointed to the LIA at the suggestion of Colonel Gaddafi’s son Saif Al Islam Gaddafi.
Goldman claims discussions over his internship lasted a number of months and “he was not offered the position until after the last disputed trade was concluded”. The bank claims he started work in June 2008 and remained for 10 months and “the internship was viewed by the defendant as part of the training programmes it offered to the LIA”.
Top graduates from the world’s most prestigious universities compete fiercely each year for much-prized internships at Goldman Sachs.
The bank also claims in its defence that LIA employees including Mr Zarti were in communication with Mr Kabbaji in 2008 who provided informal feedback to Mr Zarti on the performance of LIA employees. LIA also sent a number of employees to attend Goldman training programmes on a range of topics, including in relation to derivatives and options, with such training specifically at the request of Mr Zarti.
However, Goldman Sachs stresses in its defence document that the relationship between LIA and itself did not go beyond “an arm’s-length one between banker and client” and rejects any claims by LIA that the relationship grew into one of trust and confidence as “vague and ambiguous”.
The lawsuit centres around nine disputed trades made after it was taken on as a client of Goldman Sachs after 2007.
In its claim form, the LIA alleges that it entered into a number of equity derivative transactions collectively costing $1bn which the investment fund alleges were “complex” and “carried a high degree of risk”, and also alleges the trades were “unusually large transactions” and “were poorly documented by Goldman”.
Goldman Sachs in its defence papers claims the transactions were “relatively straightforward and easy to understand” and the LIA “stood to make very substantial returns if the price of the shares in the companies which the LIA had selected rose sufficiently”.
It adds that in the majority of the disputed shares the potential return to the LIA was “unlimited” and says the “risks were clearly explained” in various presentations given to the LIA. It denies that the disputed trades were “poorly documented” or that they were “unusually large transactions” and claims that “all the disputed trades were sufficiently described to the LIA”.
It also denies that Goldman “encouraged” the LIA to enter into the disputed trades and that the LIA “was in any position of vulnerability or that the defendant took advantage of any such position”, or “took advantage of the LIA’s position of vulnerability to make substantial profits”.
Goldman also claims that whilst the LIA ultimately made losses on the disputed trades those losses “were the result of adverse market movement in the stocks which the LIA selected”.
Had the market price of the stocks in question increased, the amount by which the LIA could have profited from the transactions was “dependent on the extent to which the stocks increased in price, and was potentially unlimited”, the bank alleges.
Goldman has filed a counter claim against LIA claiming damages if it is established that representations made by the wealth fund are false.
BTG Pactual is building up an equities business in London as the Brazilian lender makes its latest foray into the domain of global asset managers and investment banks.
The bank, run by Brazilian billionaire André Esteves, has hired a senior investment manager from one of the world’s largest institutional investors to run the business.
William Royan, former head of the relationship investing team at the Ontario Teachers’ Pension Plan, joined BTG last week to set up an equities business within the bank’s international asset management arm.
Huw Jenkins, head of BTG's international arm, confirmed the news. “We are delighted that Bill has joined BTG in London to build an equities business that will target high returns and invest on a global basis," he told the Financial Times.
The move comes on the heels of its latest deal to buy BSI, the Swiss private bank, in a transaction that doubles the Brazilian bank’s assets under management to more than $200bn and opens doors to an expansion in Asia.
The bank, which during Brazil’s economic heyday went by the moniker “Better Than Goldman”, has been on a global hiring and buying spree since its almost $2bn initial public offering in 2012.
“We have benefited from the disarray in the global financial services industry over the past few years to make several important strategic moves,” Mr Jenkins said.
Uninhibited by tighter regulation that has prompted most US and European investment banks to abandon areas such as hedge funds and commodities, BTG has rapidly pushed into them.
“This is like the 80s all over again,” one rival banker at a European lender said. “If someone looks like the Wolf of Wall Street, it’s them.”
The equities business will support the private banking unit, where BTG wants to use Switzerland’s BSI to target entrepreneurial wealth in emerging markets with an offering that includes investment advice as well as investment banking services.
The $1.7bn private bank deal will increase its overall staff from 3,000 to 5,000 once it has received regulatory approval for the takeover from more than a dozen authorities globally.
After the deal has been given the go-ahead, BTG plans to set up a London operation for the private bank as it seeks to tap into the continued influx of international wealth into the UK’s capital. It is also interested in snapping up further wealth management portfolios and teams.
Bought back from UBS by Mr Esteves on the cheap in 2009 after selling it to the Swiss bank three years earlier, BTG has been prolific in its international expansion in recent years.
As well as acquiring BSI, the São Paulo-based bank has this year also taken over a reinsurance business called Ariel Re Holdings and it is planning to increase its fledgling commodities business from 250 people to as many as 400 over the next 12-24 months.
Its commodities business is headquartered in London, from where the Brazilian investment bank has for many years also been active in the hedge fund business.
“The challenge now, and one we believe we’re well-placed to rise to, is to ensure flawless execution of our strategy to maximise the synergies between these businesses,” Mr Jenkins, a former head of UBS’s investment bank, said.
BTG’s share price is up 14 per cent since its listing in spring 2012.
Several of its anchor shareholders, which invested two years before the IPO, have since sold their stakes, people close to the situation said. These include the US private equity group JC Flowers and RIT Capital Partners, Lord Jacob Rothschild’s investment vehicle.
$4.7B IPO Pipeline, Next 2 Weeks
Civitas Therapeutics
Cone Midstream
Medley Mgmt
Vitae Pharma
Vantage Energy
US IPO Capital Raised
2014: $77B*
2013: $52B
2012: $40B
2011: $30B
2010: $32B
2009: $22B
2008: $24B
2007: $50B
2006: $41B
2005: $30B
*Pace
SABMiller may be swallowed up by its main rival, AB InBev
THE world’s biggest brewer, AB InBev (ABI), is also the most frugal. There are no company cars for senior executives. Carlos Brito, the boss, flies economy class. That is one reason why, with 18% of global beer sales, ABI has a third of the profits.
This will matter in the wary manoeuvres now taking place among the giants of global brewing. On September 14th Heineken, the number three by volume (see chart), said it had rejected a takeover proposal from SABMiller, the number two. SAB seems to have been trying to defend itself against a possible takeover by ABI, which was said to be talking to bankers about raising £75 billion ($121 billion) to buy its rival. That was little more than a rumour, but industry-watchers suspect something big is indeed brewing, in brewing. And the chances are that ever-thirsty ABI, maker of Budweiser and Stella Artois, will swallow SAB.
The beer behemoth has few other ways to grow. In rich countries, consumption of beer has stopped rising. In America, ABI’s Anheuser-Busch division is suffering growing competition from small makers of “craft beer”. The number of American breweries has jumped from fewer than 100 in 1983 to more than 3,000 today. ABI has its roots in Brazil, but there drinkers are suffering from a sluggish economy and post-World Cup blues. This leaves ABI with two options, says Andrew Holland, an analyst at Société Générale: give its cash back to shareholders or buy something.
SAB is a tempting target. Though based in London, its origins are in South Africa; it has breweries and bottling plants in 15 African countries, where people still mainly guzzle moonshine. It has stakes in 21 others through an alliance with Castel, a French drinks company. Nearly 70% of SAB’s sales are in emerging markets, many of which are still developing a taste for beer. Last year its sales by volume expanded by 3% (not counting growth from acquisitions). ABI’s, in contrast, dropped 2%.
If ABI gets hold of SAB it will no doubt try to repeat tricks that have worked well since AmBev of Brazil merged with Interbrew of Belgium a decade ago and then pushed out its American boss: squeeze costs and use the new acquisition as a platform to spread its brands. That was the formula after the merged group bought Anheuser-Busch, the maker of Budweiser, in 2008. Grupo Modelo, a Mexican brewer which makes Corona and has been part of ABI since last year, is now undergoing the same rigours.
SAB would be a more difficult undertaking. For one thing, notes Mr Holland, it is more tightly managed than “fat and lazy” Anheuser-Busch was, so there is less scope for cutting costs. SAB is bigger and more complex than anything else ABI has taken on. A knack for cost-cutting may not serve it as well in fast-growing markets. Another problem is that in some countries the two giants’ combined businesses would be too big. In America Anheuser-Busch and SAB’s joint venture with Molson Coors, another rival, would together have three-quarters of the beer market. In China the two would have more than a third. These are not insurmountable problems. In America, for example, the stake in the joint venture could be sold to Molson Coors.
Despite the obstacles, a merger of the leading two beer companies looks the likeliest of the potential huge deals. Heineken, which is controlled by the Heineken family even though it owns just 23% of the company’s equity, has now given notice that it does not want to be bought (though that could change if SAB boosted its offer). Carlsberg, the smallest of the big four, is controlled by a foundation. So the parsimonious Mr Brito may well get his hands on SAB if he wants it enough. Teaching Africans to like Budweiser, however, may prove somewhat harder.
Climate Science Is Not Settled
We are very far from the knowledge needed to make good climate policy, writes leading scientist Steven E. Koonin
The crucial scientific question for policy isn't whether the climate is changing. That is a settled matter: The climate has always changed and always will. Photo: Mitch Dobrowner
The idea that "Climate science is settled" runs through today's popular and policy discussions. Unfortunately, that claim is misguided. It has not only distorted our public and policy debates on issues related to energy, greenhouse-gas emissions and the environment. But it also has inhibited the scientific and policy discussions that we need to have about our climate future.
My training as a computational physicist—together with a 40-year career of scientific research, advising and management in academia, government and the private sector—has afforded me an extended, up-close perspective on climate science. Detailed technical discussions during the past year with leading climate scientists have given me an even better sense of what we know, and don't know, about climate. I have come to appreciate the daunting scientific challenge of answering the questions that policy makers and the public are asking.
The crucial scientific question for policy isn't whether the climate is changing. That is a settled matter: The climate has always changed and always will. Geological and historical records show the occurrence of major climate shifts, sometimes over only a few decades. We know, for instance, that during the 20th century the Earth's global average surface temperature rose 1.4 degrees Fahrenheit.
Nor is the crucial question whether humans are influencing the climate. That is no hoax: There is little doubt in the scientific community that continually growing amounts of greenhouse gases in the atmosphere, due largely to carbon-dioxide emissions from the conventional use of fossil fuels, are influencing the climate. There is also little doubt that the carbon dioxide will persist in the atmosphere for several centuries. The impact today of human activity appears to be comparable to the intrinsic, natural variability of the climate system itself.
Rather, the crucial, unsettled scientific question for policy is, "How will the climate change over the next century under both natural and human influences?" Answers to that question at the global and regional levels, as well as to equally complex questions of how ecosystems and human activities will be affected, should inform our choices about energy and infrastructure.
But—here's the catch—those questions are the hardest ones to answer. They challenge, in a fundamental way, what science can tell us about future climates.
Even though human influences could have serious consequences for the climate, they are physically small in relation to the climate system as a whole. For example, human additions to carbon dioxide in the atmosphere by the middle of the 21st century are expected to directly shift the atmosphere's natural greenhouse effect by only 1% to 2%. Since the climate system is highly variable on its own, that smallness sets a very high bar for confidently projecting the consequences of human influences.
A second challenge to "knowing" future climate is today's poor understanding of the oceans. The oceans, which change over decades and centuries, hold most of the climate's heat and strongly influence the atmosphere. Unfortunately, precise, comprehensive observations of the oceans are available only for the past few decades; the reliable record is still far too short to adequately understand how the oceans will change and how that will affect climate.
A third fundamental challenge arises from feedbacks that can dramatically amplify or mute the climate's response to human and natural influences. One important feedback, which is thought to approximately double the direct heating effect of carbon dioxide, involves water vapor, clouds and temperature.
But feedbacks are uncertain. They depend on the details of processes such as evaporation and the flow of radiation through clouds. They cannot be determined confidently from the basic laws of physics and chemistry, so they must be verified by precise, detailed observations that are, in many cases, not yet available.
Beyond these observational challenges are those posed by the complex computer models used to project future climate. These massive programs attempt to describe the dynamics and interactions of the various components of the Earth system—the atmosphere, the oceans, the land, the ice and the biosphere of living things. While some parts of the models rely on well-tested physical laws, other parts involve technically informed estimation. Computer modeling of complex systems is as much an art as a science.
For instance, global climate models describe the Earth on a grid that is currently limited by computer capabilities to a resolution of no finer than 60 miles. (The distance from New York City to Washington, D.C., is thus covered by only four grid cells.) But processes such as cloud formation, turbulence and rain all happen on much smaller scales. These critical processes then appear in the model only through adjustable assumptions that specify, for example, how the average cloud cover depends on a grid box's average temperature and humidity. In a given model, dozens of such assumptions must be adjusted ("tuned," in the jargon of modelers) to reproduce both current observations and imperfectly known historical records.
We often hear that there is a "scientific consensus" about climate change. But as far as the computer models go, there isn't a useful consensus at the level of detail relevant to assessing human influences. Since 1990, the United Nations Intergovernmental Panel on Climate Change, or IPCC, has periodically surveyed the state of climate science. Each successive report from that endeavor, with contributions from thousands of scientists around the world, has come to be seen as the definitive assessment of climate science at the time of its issue.
For the latest IPCC report (September 2013), its Working Group I, which focuses on physical science, uses an ensemble of some 55 different models. Although most of these models are tuned to reproduce the gross features of the Earth's climate, the marked differences in their details and projections reflect all of the limitations that I have described. For example:
• The models differ in their descriptions of the past century's global average surface temperature by more than three times the entire warming recorded during that time. Such mismatches are also present in many other basic climate factors, including rainfall, which is fundamental to the atmosphere's energy balance. As a result, the models give widely varying descriptions of the climate's inner workings. Since they disagree so markedly, no more than one of them can be right.
• Although the Earth's average surface temperature rose sharply by 0.9 degree Fahrenheit during the last quarter of the 20th century, it has increased much more slowly for the past 16 years, even as the human contribution to atmospheric carbon dioxide has risen by some 25%. This surprising fact demonstrates directly that natural influences and variability are powerful enough to counteract the present warming influence exerted by human activity.
Yet the models famously fail to capture this slowing in the temperature rise. Several dozen different explanations for this failure have been offered, with ocean variability most likely playing a major role. But the whole episode continues to highlight the limits of our modeling.
• The models roughly describe the shrinking extent of Arctic sea ice observed over the past two decades, but they fail to describe the comparable growth of Antarctic sea ice, which is now at a record high.
• The models predict that the lower atmosphere in the tropics will absorb much of the heat of the warming atmosphere. But that "hot spot" has not been confidently observed, casting doubt on our understanding of the crucial feedback of water vapor on temperature.
• Even though the human influence on climate was much smaller in the past, the models do not account for the fact that the rate of global sea-level rise 70 years ago was as large as what we observe today—about one foot per century.
• A crucial measure of our knowledge of feedbacks is climate sensitivity—that is, the warming induced by a hypothetical doubling of carbon-dioxide concentration. Today's best estimate of the sensitivity (between 2.7 degrees Fahrenheit and 8.1 degrees Fahrenheit) is no different, and no more certain, than it was 30 years ago. And this is despite an heroic research effort costing billions of dollars.
These and many other open questions are in fact described in the IPCC research reports, although a detailed and knowledgeable reading is sometimes required to discern them. They are not "minor" issues to be "cleaned up" by further research. Rather, they are deficiencies that erode confidence in the computer projections. Work to resolve these shortcomings in climate models should be among the top priorities for climate research.
Yet a public official reading only the IPCC's "Summary for Policy Makers" would gain little sense of the extent or implications of these deficiencies. These are fundamental challenges to our understanding of human impacts on the climate, and they should not be dismissed with the mantra that "climate science is settled."
While the past two decades have seen progress in climate science, the field is not yet mature enough to usefully answer the difficult and important questions being asked of it. This decidedly unsettled state highlights what should be obvious: Understanding climate, at the level of detail relevant to human influences, is a very, very difficult problem.
We can and should take steps to make climate projections more useful over time. An international commitment to a sustained global climate observation system would generate an ever-lengthening record of more precise observations. And increasingly powerful computers can allow a better understanding of the uncertainties in our models, finer model grids and more sophisticated descriptions of the processes that occur within them. The science is urgent, since we could be caught flat-footed if our understanding does not improve more rapidly than the climate itself changes.
A transparent rigor would also be a welcome development, especially given the momentous political and policy decisions at stake. That could be supported by regular, independent, "red team" reviews to stress-test and challenge the projections by focusing on their deficiencies and uncertainties; that would certainly be the best practice of the scientific method. But because the natural climate changes over decades, it will take many years to get the data needed to confidently isolate and quantify the effects of human influences.
Policy makers and the public may wish for the comfort of certainty in their climate science. But I fear that rigidly promulgating the idea that climate science is "settled" (or is a "hoax") demeans and chills the scientific enterprise, retarding its progress in these important matters. Uncertainty is a prime mover and motivator of science and must be faced head-on. It should not be confined to hushed sidebar conversations at academic conferences.
Society's choices in the years ahead will necessarily be based on uncertain knowledge of future climates. That uncertainty need not be an excuse for inaction. There is well-justified prudence in accelerating the development of low-emissions technologies and in cost-effective energy-efficiency measures.
But climate strategies beyond such "no regrets" efforts carry costs, risks and questions of effectiveness, so nonscientific factors inevitably enter the decision. These include our tolerance for risk and the priorities that we assign to economic development, poverty reduction, environmental quality, and intergenerational and geographical equity.
Individuals and countries can legitimately disagree about these matters, so the discussion should not be about "believing" or "denying" the science. Despite the statements of numerous scientific societies, the scientific community cannot claim any special expertise in addressing issues related to humanity's deepest goals and values. The political and diplomatic spheres are best suited to debating and resolving such questions, and misrepresenting the current state of climate science does nothing to advance that effort.
Any serious discussion of the changing climate must begin by acknowledging not only the scientific certainties but also the uncertainties, especially in projecting the future. Recognizing those limits, rather than ignoring them, will lead to a more sober and ultimately more productive discussion of climate change and climate policies. To do otherwise is a great disservice to climate science itself.
Dr. Koonin was undersecretary for science in the Energy Department during President Barack Obama's first term and is currently director of the Center for Urban Science and Progress at New York University. His previous positions include professor of theoretical physics and provost at Caltech, as well as chief scientist of BP, where his work focused on renewable and low-carbon energy technologies.
DE Master Blenders and Mondelez seek bidders for French brands
The owners of Café Grand’Mère and L’Or have solicited potential bidders for the French coffee brands, according to people familiar with the matter.
The move comes as owners DE Master Blenders 1753 and Mondelez International’s coffee unit are racing to win antitrust approval for a joint venture that would help them take on global rival Nestlé.
A deal from Café Grand’Mère and L’Or, which makes capsules that can be used in Nestlé’s Nespresso machines, could fetch about €480m.
One person said the two businesses make €60m in combined earnings before interest, tax, depreciation and amortisation. The owners are likely to seek a multiple of about 8 times ebitda for the units, this person added.
DE Master Blenders and Mondelez have hired Lazard to help with the asset sale.
A potential sale is intended to help DE Master Blenders and Mondelez win French regulatory approval for their May deal that will create a global coffee powerhouse with combined revenues of $7bn.
Potential buyers include private equity groups PAI Partners, Bain, CD&R, Ardian and Cinven. Strategic bidders include Strauss, the Israeli foods group, and Italy’s Massimo Zanetti Beverage Group, which is gearing up to raise capital for acquisitions via an initial public offering later this year.
Under the terms of the May deal, US snacks group Mondelez will receive $5bn in cash from DE Master Blenders for its coffee business and a 49 per cent equity stake in the new company, to be called Jacobs Douwe Egberts.
The combined company will bring together the world’s second and third-largest coffee groups, which own brands including Jacobs, Carte Noire, Gevalia, Kenco and Millicano – and hold top market share in more than two dozen countries.
Analysts have said the combined businesses will control nearly 60 per cent of the market in France, which may bring greater regulatory and union scrutiny than in other countries.
DE Master Blenders and Mondelez structured the deal so that their combined French units would be acquired by a separate holding company, in anticipation of regulatory pressure that might have otherwise slowed the entire deal from closing.
The composition of assets for sale may change based on guidance from European regulators and other stakeholders.
The Mondelez deal is the most significant yet by JAB Holdings, the investment arm of the billionaire Reimann family, in its challenge to Nestlé. JAB and Lazard declined to comment.
JAB took over DE Master Blenders for €7.6bn last year, following the $340m acquisition of the Caribou Coffee chain and the Peet’s Coffee & Tea chain for $1bn.
Pernod Ricard remains interested in buys; special focus on US market
French beverages group Pernod Ricard remains interested in acquisitions that add to the group’s portfolio, Boersen-Zeitung reported.clor
Gilles Bogaert, the chief financial officer of Pernod Ricard, told the German newspaper that the group is interested in the US market, especially in premium brands with excellent growth potential. However, he made clear in the article that any buy has to adhere to the strict financial and strategic guidelines of Pernod Ricard, as well as create additional value and remain within the defined debt limits. Bogaert stressed in the report that Pernod Ricard wants to retain its investment grade at all costs.
Pernod Ricard has a market cap of EUR 24.185bn.
Source Boersen-Zeitung
Sweden's Investor Buys 8% Wartsila Stake Deal Makes Investor Wartsila's Largest Shareholder With a 16.8% Stake
STOCKHOLM— Investor INVE-B.SK +0.31% AB, the investment vehicle of Sweden's Wallenberg family, has bought additional shares in Finland's Wartsila worth €639 million ($824.8 million), making it the company's largest shareholder with a 16.8% stake.
Investor has held shares in the ship engine manufacturer since 2011, and in 2012 formed a joint venture with Fiskars that saw the two companies holding a 21.8% stake between them. Through the deal announced Friday, the joint venture will be dissolved and Investor will pay Fiskars €40.55 a share for 15.8 million shares, or 8% of Wartsila.
Investor's chief executive Borje Ekholm said: "Based on its leading market positions, strong growth potential and large exposure to emerging markets and aftermarket sales, we view Wartsila as an attractive long-term investment."
The transaction is expected to be completed within the coming weeks, after which Investor's ownership in Wartsila will total 33.1 million shares, or 16.8%. Fiskars retains a 5% holding in Wartsila after the deal, from an original stake of 13%.
Clorox washed away takeover offer: source
Just a few months before its shakeup in the C-suite, Clorox rebuffed a takeover offer from a rival, The Post has learned. The consumer packaged-goods company, which makes the namesake bleach, announced on Thursday that Donald Knauss would step down as CEO after eight years. Under his watch, Clorox’s board rejected activist Carl Icahn’s recommendation to sell the company in 2011. More recently, within the last three to six months, Clorox rejected an approach from a competing packaged-goods company interested in a sale or a merger, a source with direct knowledge of the situation said. The spurned suitor valued Clorox at a roughly 20 percent premium to its trading price, the source said. Clorox’s shares, which have been little changed this year, ticked up 67 cents to close at $90.57 on Friday, giving it a market cap of roughly $11.7 billion. Clorox, which acquired several businesses under Knauss, including Burt’s Bees at a rich multiple, was clearly not interested in a sale, the source said. "The reception was not welcome," said the source. "If it was welcomed, something would have gotten done." Logical suitors for Clorox include Church & Dwight, Procter & Gamble, Jarden and Unilever. A Clorox spokeswoman declined to comment on "rumor or speculation." Most of Clorox’s brands, including Tilex, Glad trash bags and Brita water filters, are No. 1 or No. 2 in their categories. But American consumers are less willing to pay premium prices for basic household goods — even those with top brand names — and the company is struggling for growth. The company’s 0.5 percent organic sales growth last quarter disappointed investors. Clorox said Thursday that COO Benno Dorer would take over in November for Knauss, who will remain chairman of the board. In 2011, activist Icahn made a run at Clorox, offering $78 a share for the company. Most Wall Street watchers believe the move was designed to get a strategic buyer to come forward. When none materialized, Icahn sold his shares at a modest profit, while Clorox went about its business. "[Icahn] put a deal on the table, and no one did anything," the source said.