rumeur BAKER HUGUES' bid on CGG... unconfirmed
Bob Diamond has failed to secure the additional $400m he was targeting for his African venture after some investors balked at the second fundraising in six months, according to two people familiar with the situation.
The setback comes as some investors hesitated over pouring significant amounts of money into what is still an illiquid stock. Other investors, who did not participate in the current fundraising, added that Mr Diamond had demonstrated so far his M&A ability, but had yet to show he could make money running a bank in Africa.
Mr Diamond, the former chief executive of Barclays, wanted to increase the war chest of his Atlas Mara cash shell for more acquisitions in the African banking sector. But the fund, which secured $325m in December through an initial public offering on the London Stock Exchange, is set to fall short of the $400m target set for the second fundraising, securing instead in excess of $300m.
“It is not where they thought they were going to be,” said one person familiar with the situation. Another person confirmed the $400m would not be reached, but said that Mr Diamond received strong support from the current shareholder base.
Mr Diamond was ousted from Barclays in 2012, after the bank was fined for manipulating the Libor interbank lending rate.
The setback will not torpedo the deals that Atlas Mara has already secured, however. The vehicle announced its first deal in March, paying $265m in cash and shares to buy BancABC, a medium-sized lender with operations in Botswana, Mozambique, Tanzania, Zambia and Zimbabwe, and a small stake in Union Bank of Nigeria. The vehicle also signed a deal to buy a majority stake in the Development Bank of Rwanda through its privatisation.
After failing to reach its fundraising target, Atlas Mara could raise debt in the next few months, rather than equity, to finance acquisitions. Mr Diamond has made clear that the acquisition spree was not over, saying in March: “This is the beginning . . . Watch this space.”
Rival bankers and investors believe that Atlas Mara’s next acquisition is likely to be in the prized – but expensive – west African market, home of Nigeria, the continent’s largest economy.
Sub-Saharan Africa is attracting bankers because most of the region’s population of about 1bn do not use banking services. Only a quarter hold a bank account, and fewer than 5 per cent have a credit card. At the same time, though, the region is enjoying its best economic expansion in a generation.
Mr Diamond set up Altas Mara last year in partnership with Ashish Thakkar, the 32-year-old head of Mara Group, a conglomerate with operations in 19 African countries. Mr Diamond and Mr Thakkar personally invested $20m in the venture and they invested again more funds in the second fundraising.
Atlas Mara declined to comment.
Oil markets continue its firm tone- WTI above the $107.50 level - Brent above $114.50
Alstom: MHI could acquire 11% stake alongside French government as part of deal with Siemens
Japan’s Mitsubishi Heavy Industries (MHI) is considering acquiring a stake in Alstom as part of a proposed joint transaction with listed German industrial group Siemens, French daily Le Figaro reported. The report cited a person in the know as saying that MHI could make a partnership offer to Alstom by Monday next week, whereby Siemens could acquire the French company’s gas turbine business and sell Siemens' railway operations back to Alstom. MHI could take a minority shareholding in the power operations of Alstom, including the steam turbine business, and a 10-11% stake in the French group directly.
According to the report, MHI would be asking the French government to acquire a stake of the same size. The report noted that Patrick Kron, the head of Alstom, contacted MHI in fall last year, but was then rebuffed by the Japanese group.
Source Le Figaro
Elizabeth Arden Investors Sense Bid Amid Surprise Loss: Real M&A
2014-06-12 23:17:28.591 GMT
(For a Real M&A column news alert: SALT REALMNA <GO>.)
By Tara Lachapelle
June 13 (Bloomberg) -- Elizabeth Arden Inc.’s worst
earnings report may have put the company in play.
The shares sank the most in more than five years on May 13
after declining perfume sales resulted in a surprise loss for
its latest quarter. The $855 million company, which hired
Goldman Sachs Group Inc. to explore its options, had already
attracted interest from at least one potential buyer so far this
year, LG Household & Health Care Ltd. While the South Korean
company said this week it hasn’t yet decided whether to bid, the
stock rose 16 percent amid speculation a deal is imminent.
The sinking stock price doesn’t reflect any lost value in
the brand and a deal could benefit both the acquirer and
Elizabeth Arden, Telsey Advisory Group said. Cosmetic brands
tend to sell for about three times revenue, said B. Riley & Co.,
implying about $1.4 billion for the Elizabeth Arden line, before
accounting for its other brands. A deal looks more expensive
considering its weak earnings. An offer for more than $1 billion
would make it one of the industry’s priciest acquisitions
relative to profit, according to data compiled by Bloomberg.
“When you have a company with a valuable brand and the
share price drops because all of a sudden there’s mis-execution,
then there’s going to be interest,” Linda Bolton Weiser, a New
York-based analyst at B. Riley, said in a phone interview.
“They reported a really awful March quarter. The valuation
declined and yet the brand is still the brand, so it still has
the inherent value that it always would have had.”
Representatives for Elizabeth Arden didn’t respond to a
phone call or e-mail seeking comment.
Celebrity Fragrances
Last month, the company posted a net loss of $26.4 million
for its fiscal third quarter, the worst since at least 1997,
saying sales slid 20 percent.
About a third of its $1.24 billion of revenue in the past
12 months came from Elizabeth Arden namesake products, while the
rest was from celebrity fragrances such as Justin Bieber and
Nicki Minaj and designer perfumes such as BCBGMaxazria and Juicy
Couture. It also has a minority stake in the third-party
operator of the Red Door beauty spas.
Separating Brands
To open itself up to more buyers and command a higher
valuation, the company could sell its core brand separately from
the fragrance business, said David Wu, a New York-based analyst
at Telsey Advisory Group. Sales for the Elizabeth Arden brand
don’t reflect how well-known the name is, leaving room for a
buyer to try to narrow that gap, he said.
“There’s a huge disconnect between the high brand
awareness and relatively low sales volume,” Wu said in a phone
interview. “If you think about the core EA brand, there’s
really an opportunity to grow across all regions -- the U.S.,
Europe and Asia. An acquirer with a strong distribution network
and R&D capabilities could help drive stronger top-line
growth.”
Elizabeth Arden hired Goldman Sachs to contact private-
equity firms and other potential buyers, a person familiar with
the matter said in April, asking not to be identified because
the matter is private. The company confirmed the move last month
and said it was exploring strategic alternatives.
Try Again?
Shiseido Co., the Tokyo-based owner of BareMinerals and
Nars, is a possible suitor for the Elizabeth Arden brand, while
New York-based Coty Inc., the $6.5 billion company that
attempted a takeover of Avon Products Inc. two years ago, could
be interested in the entire company, Wu said.
Representatives for Shiseido didn’t respond to a request
for comment outside normal business hours. Representatives for
Coty also couldn’t be reached.
“I had thought that somebody like Coty would be a better
fit because they could really integrate it and take a lot of the
costs out,” Weiser of B. Riley said. “Coty would like to have
a brand like Elizabeth Arden in its portfolio.”
However, a bid from Coty may be unlikely now that it’s
spending $468 million to repurchase stock, she said.
Big Deals
Seoul-based LG Household, which generates almost all of its
revenue in its home country, said in April that it’s looking at
“big deals” locally and overseas, including one for Elizabeth
Arden. While about 60 percent of Elizabeth Arden’s revenue is in
the U.S., it also sells its products in Canada, Europe,
Australia, South Africa and China.
LG Household’s offer for Elizabeth Arden may be valued at
more than 1 trillion won ($983 million), Maeil Business
Newspaper reported in April, citing an unidentified investment
bank official. LG Household, valued at $7.4 billion, completed
its pre-due diligence and may spend the equivalent of $1.48
billion to purchase the company, according to an article this
week on DealReporter that cited a newspaper in South Korea.
Including Elizabeth Arden’s $368 million of net debt, an
offer at that level would be about 23 times what the company
earned before interest, taxes, depreciation and amortization in
the past 12 months, data compiled by Bloomberg show. That would
be among the most expensive cosmetics deals larger than $500
million, which have gone for a median of 13.5 times Ebitda, the
data show.
Hee-Jung Park, a representative for LG Household, said in
an e-mail earlier this week that while Elizabeth Arden is a
target LG Household is considering, “no specific details have
been determined as of now.”
Park couldn’t be reached for further comment outside of
normal business hours.
Without Buyers
The shares closed at $28.78 yesterday. If the company
doesn’t get acquired, they may trade for only about $30 in the
next year, according to the average of analysts’ estimates
compiled by Bloomberg.
An offer for about $1.5 billion would be at the high end of
the $30- to $41-a-share range that Wells Fargo & Co.’s Joe
Lachky sees as “most realistic,” the analyst wrote in a June
11 report. The multiple appears high because Elizabeth Arden’s
earnings are currently depressed, though it will likely take
several years to get back to peak earnings, he wrote.
Albert Saporta, head of research at Makor Capital Ltd. and
a managing director at AIM&R, said he values Elizabeth Arden at
$35 to $40 a share in a sale. That said, the market is pricing
in a low probability of an offer at the midpoint of that range,
he said in an e-mail.
It’s a “very attractive” situation for investors to bet
on because “the chances of a deal are way higher than that,”
Saporta said. “I think the probability is well above 50
percent.”
For Related News and Information:
Elizabeth Arden Shares Dive After Unexpected Quarterly Loss
NSN N5J4246S972F <GO>
Elizabeth Arden Is Said to Hire Goldman Sachs to Seek Buyers
NSN N4K6E26KLVRC <GO>
LG Household Says It’s Considering Bid to Buy Elizabeth Arden
NSN N4GRIW6K50YG <GO>
Bloomberg Industries - Household Products: BI HHCPG <GO>
Real M&A columns: NI REALMNA <GO>
Top deal stories of the day: DTOP <GO>
--With assistance from Joshua Fineman and Jodi Xu in New York
and Shinhye Kang in Seoul.
To contact the reporter on this story:
Tara Lachapelle in New York at +1-212-617-8911 or
tlachapelle@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Whitney Kisling
2014-06-12 23:17:28.591 GMT
(For a Real M&A column news alert: SALT REALMNA <GO>.)
By Tara Lachapelle
June 13 (Bloomberg) -- Elizabeth Arden Inc.’s worst
earnings report may have put the company in play.
The shares sank the most in more than five years on May 13
after declining perfume sales resulted in a surprise loss for
its latest quarter. The $855 million company, which hired
Goldman Sachs Group Inc. to explore its options, had already
attracted interest from at least one potential buyer so far this
year, LG Household & Health Care Ltd. While the South Korean
company said this week it hasn’t yet decided whether to bid, the
stock rose 16 percent amid speculation a deal is imminent.
The sinking stock price doesn’t reflect any lost value in
the brand and a deal could benefit both the acquirer and
Elizabeth Arden, Telsey Advisory Group said. Cosmetic brands
tend to sell for about three times revenue, said B. Riley & Co.,
implying about $1.4 billion for the Elizabeth Arden line, before
accounting for its other brands. A deal looks more expensive
considering its weak earnings. An offer for more than $1 billion
would make it one of the industry’s priciest acquisitions
relative to profit, according to data compiled by Bloomberg.
“When you have a company with a valuable brand and the
share price drops because all of a sudden there’s mis-execution,
then there’s going to be interest,” Linda Bolton Weiser, a New
York-based analyst at B. Riley, said in a phone interview.
“They reported a really awful March quarter. The valuation
declined and yet the brand is still the brand, so it still has
the inherent value that it always would have had.”
Representatives for Elizabeth Arden didn’t respond to a
phone call or e-mail seeking comment.
Celebrity Fragrances
Last month, the company posted a net loss of $26.4 million
for its fiscal third quarter, the worst since at least 1997,
saying sales slid 20 percent.
About a third of its $1.24 billion of revenue in the past
12 months came from Elizabeth Arden namesake products, while the
rest was from celebrity fragrances such as Justin Bieber and
Nicki Minaj and designer perfumes such as BCBGMaxazria and Juicy
Couture. It also has a minority stake in the third-party
operator of the Red Door beauty spas.
Separating Brands
To open itself up to more buyers and command a higher
valuation, the company could sell its core brand separately from
the fragrance business, said David Wu, a New York-based analyst
at Telsey Advisory Group. Sales for the Elizabeth Arden brand
don’t reflect how well-known the name is, leaving room for a
buyer to try to narrow that gap, he said.
“There’s a huge disconnect between the high brand
awareness and relatively low sales volume,” Wu said in a phone
interview. “If you think about the core EA brand, there’s
really an opportunity to grow across all regions -- the U.S.,
Europe and Asia. An acquirer with a strong distribution network
and R&D capabilities could help drive stronger top-line
growth.”
Elizabeth Arden hired Goldman Sachs to contact private-
equity firms and other potential buyers, a person familiar with
the matter said in April, asking not to be identified because
the matter is private. The company confirmed the move last month
and said it was exploring strategic alternatives.
Try Again?
Shiseido Co., the Tokyo-based owner of BareMinerals and
Nars, is a possible suitor for the Elizabeth Arden brand, while
New York-based Coty Inc., the $6.5 billion company that
attempted a takeover of Avon Products Inc. two years ago, could
be interested in the entire company, Wu said.
Representatives for Shiseido didn’t respond to a request
for comment outside normal business hours. Representatives for
Coty also couldn’t be reached.
“I had thought that somebody like Coty would be a better
fit because they could really integrate it and take a lot of the
costs out,” Weiser of B. Riley said. “Coty would like to have
a brand like Elizabeth Arden in its portfolio.”
However, a bid from Coty may be unlikely now that it’s
spending $468 million to repurchase stock, she said.
Big Deals
Seoul-based LG Household, which generates almost all of its
revenue in its home country, said in April that it’s looking at
“big deals” locally and overseas, including one for Elizabeth
Arden. While about 60 percent of Elizabeth Arden’s revenue is in
the U.S., it also sells its products in Canada, Europe,
Australia, South Africa and China.
LG Household’s offer for Elizabeth Arden may be valued at
more than 1 trillion won ($983 million), Maeil Business
Newspaper reported in April, citing an unidentified investment
bank official. LG Household, valued at $7.4 billion, completed
its pre-due diligence and may spend the equivalent of $1.48
billion to purchase the company, according to an article this
week on DealReporter that cited a newspaper in South Korea.
Including Elizabeth Arden’s $368 million of net debt, an
offer at that level would be about 23 times what the company
earned before interest, taxes, depreciation and amortization in
the past 12 months, data compiled by Bloomberg show. That would
be among the most expensive cosmetics deals larger than $500
million, which have gone for a median of 13.5 times Ebitda, the
data show.
Hee-Jung Park, a representative for LG Household, said in
an e-mail earlier this week that while Elizabeth Arden is a
target LG Household is considering, “no specific details have
been determined as of now.”
Park couldn’t be reached for further comment outside of
normal business hours.
Without Buyers
The shares closed at $28.78 yesterday. If the company
doesn’t get acquired, they may trade for only about $30 in the
next year, according to the average of analysts’ estimates
compiled by Bloomberg.
An offer for about $1.5 billion would be at the high end of
the $30- to $41-a-share range that Wells Fargo & Co.’s Joe
Lachky sees as “most realistic,” the analyst wrote in a June
11 report. The multiple appears high because Elizabeth Arden’s
earnings are currently depressed, though it will likely take
several years to get back to peak earnings, he wrote.
Albert Saporta, head of research at Makor Capital Ltd. and
a managing director at AIM&R, said he values Elizabeth Arden at
$35 to $40 a share in a sale. That said, the market is pricing
in a low probability of an offer at the midpoint of that range,
he said in an e-mail.
It’s a “very attractive” situation for investors to bet
on because “the chances of a deal are way higher than that,”
Saporta said. “I think the probability is well above 50
percent.”
For Related News and Information:
Elizabeth Arden Shares Dive After Unexpected Quarterly Loss
NSN N5J4246S972F <GO>
Elizabeth Arden Is Said to Hire Goldman Sachs to Seek Buyers
NSN N4K6E26KLVRC <GO>
LG Household Says It’s Considering Bid to Buy Elizabeth Arden
NSN N4GRIW6K50YG <GO>
Bloomberg Industries - Household Products: BI HHCPG <GO>
Real M&A columns: NI REALMNA <GO>
Top deal stories of the day: DTOP <GO>
--With assistance from Joshua Fineman and Jodi Xu in New York
and Shinhye Kang in Seoul.
To contact the reporter on this story:
Tara Lachapelle in New York at +1-212-617-8911 or
tlachapelle@bloomberg.net
To contact the editors responsible for this story:
Beth Williams at +1-212-617-2307 or
bewilliams@bloomberg.net
Whitney Kisling
Blackstone Group CEO Steve Schwarzman on Thursday took another not so veiled swipe at President Obama.
Speaking at Blackstone’s investor day, he said the biggest risk to his growing alternative-assets firm was irrational policy making.
Even though Blackstone’s shares have risen more than 60 percent over the last year, Schwarzman seemed to be in something of a fighting mood.
He said it was ironic governments were tasked with making life better for their citizens but seemed to be doing things that had the opposite effect, a source who was at the Waldorf Astoria gathering told The Post.
In reality, several prominent Republicans and President Obama in recent months have challenged the way the private-equity industry makes money.
House Ways and Means Chairman David Camp (R-MI) in February advised ending the carried interest tax break that allows PE fund managers to claim capital gains tax treatment on their commissions (a 20 percent tax rate instead of 39.6 percent).
Additionally, the Securities and Exchange Commission in May said half of all private equity firms were not telling their fund investors, often state pension funds, what fees they were being charged, putting clear pressure on firms to change their ways.
In 2010, Schwarzman compared proposals to raise taxes on private equity to conditions in Nazi Germany.
Schwarzman — worth $10.5 billion — also took shots at his private-equity peers saying Blackstone had been successful at real estate and energy investing while competitors had failed.
He was trying to convince analysts that Blackstone after doubling its assets under management in the last four years to $272 billion would continue to deliver exceptional returns.
Altadis CEO hints at possible 100% sale of Logista
Altadis Chief Executive Juan Arrizabalaga hinted on Thursday that it may sell 100% of Compañía de Distribución Integral Logista Holdings (Logista), reported Cinco Dias. Arrizabalaga is quoted as saying that the distribution unit is considered non-strategic to Altadis' tobacco making business.
The executive added that the first objective was to list Logista in the stock market before the summer. Though he could not confirm the stake to be sold, it will be probably around 40%, according to the Spanish-language report.
Logista could fetch a valuation of EUR 1.5bn, the paper noted.
Source Cinco Dias
C&C shares gain on talk of takeover interest
C&C shares gained 6% yesterday, 12 June in Dublin on talk that the Irish drinks company may have attracted takeover interest, The Irish Times reported. The newspaper’s market report section mentioned rumours that C&C may be a bid target for a major global drinks group such as SABMiller or Anheuser-Busch Inbev, but did not cite a source for the speculation.
The article also noted talk that C&C may soon pursue a UK listing.
C&Cs share price closed EUR 0.28 up at EUR 4.854 in Dublin yesterday, giving the company a market capitalisation of EUR 1.68bn (USD 2.27bn).
Source Irish Times
Sacyr rules out selling Repsol shares
Sacyr Chairman Manuel Manrique ruled out, at a general meeting on Thursday, the sale of shares of Repsol, reported Expansion. The Spanish builder, which is Repsol's second largest shareholder with a 9.2% stake, has no plans to sell it in order to refinance the EUR 2.2bn loan associated with the stake, according to the report.
There had been market speculation that Sacyr may sell about 3% of Repsol to refinance the loan, the Spanish report noted.
Source Expansion
Michel Combes heads Alcatel-Lucent for a little over a year. After a year dedicated to the financial emergency and redefining strategic priorities, the recovery of the French supplier enters a second phase.
What are your priorities for 2014?
I'm trying to juggle three fights. The first is to make a future for Alcatel-Lucent, repositioning itself as a leader in the telecom industry with the Shift plan we announced it a year ago. The second is the future of networks and the transition to digital. Our director of strategy and innovation, Philippe Keryer, chairs the working group on the telecom sovereignty within the 34 industrial plans promoted by Arnaud Montebourg. We take our role as a leader of the French technology sector, and to ensure that future networks will write from Europe. The third fight, which I will be more emphasis in the coming weeks, this is the future of European telecoms. We can not be the forgotten continent of digital mutation. We are in danger. We must conduct a comprehensive aggiornamento our competition policy and review the rules for net-neutrality by pragmatism. I repeat for two years and I have a feeling of not being alone, other areas are affected. In this respect, the arrival of a new Commission is an opportunity to offer a piece of dream in the European project.
Where do you plan execution Shift?
He enters the second chapter, the most exciting. We will now focus on innovation, transformation and growth. We are working on improving the flow, but also through partnerships, technological breakthroughs in the "small cells" with Qualcomm, virtualization with Intel, or cybersecurity with Thales. There will be other partnerships. We also want to maintain more fluid and more entrepreneurial modes in AlcatelLucent. We are already able to attract talent from Cisco, Juniper or Ciena is new. We will also recruit people from adjacent areas, such as cloud. Finally, we seek growth by repositioning our offer around services, such as platforms, management of mobile customers (OSS).
You have about 400 million euros in sales to achieve as part of your three-year plan. Could you open your capital significantly or ally?
We fight. We got some positive results but the battle is not won. My operational battle has quadrupled the market capitalization . Our ownership has evolved, "hedge funds" have been replaced by institutional investors . Is a consolidation Western suppliers? I remind you that since 2006, OEMs are already consolidated. That said, industrial geography, boundaries between trades and technologies evolve quickly. We must be vigilant, understand the dynamics and stay agile.
How job cuts in France did they go over 850 to just under 650?
We benefited from the appeal to patriotism government, the investment recovery of some major European players, and reorganization to make Europe the rear base for Africa and the Middle East . In addition, we signed an agreement with two social partners. In total, our plan will locate in France 50% of European R & D: 4G and 5G, and cloud platforms, the "small cells," this is where it happens. Renowned mathematicians were recruited at Bell Labs Villarceaux. For the work they have done, I salute the courage of trade unions and employees.