TheChek News Flow

Mosaic misses by $0.04, misses on revs

Reports Q3 (Sep) earnings of $0.51 per share, excluding non-recurring items, $0.04 worse than the Capital IQ Consensus Estimate of $0.55; revenues fell 27.9% year/year to $1.91 bln vs the $1.96 bln consensus, primarily driven by lower prices and lower North American sales volumes. "Lower potash and phosphate prices, a late North American fall application season and cautious dealer behavior led to this quarter's weaker results," said Jim Prokopanko, President and Chief Executive Officer of Mosaic. "We believe the current challenges in the environment in which we operate, for both phosphate and potash, are cyclical in nature and provide Mosaic opportunities to deploy capital, including shareholder distributions. The long-term outlook for Mosaic remains compelling." Q4 outlook: Total sales volumes for the Potash segment are expected to range from 1.5 to 1.9 million tonnes for the fourth quarter of 2013, compared to 1.4 million tonnes last year. Mosaic's average MOP selling price, FOB mine, for the fourth quarter of 2013 is estimated to range from $285 to $310 per tonne. Mosaic's gross margin rate in the segment is expected to be in the mid-20 percent range during the fourth quarter. The Potash segment operating rate is expected to be below 65 percent during the fourth quarter of 2013 with planned Esterhazy maintenance after the completion of a proving run. Total sales volumes for the Phosphates segment are expected to range from 2.5 to 2.9 million tonnes for the fourth quarter of 2013, compared to 2.8 million tonnes last year. Mosaic's average DAP selling price, FOB plant, for the fourth quarter of 2013 is estimated to range from $370 to $400 per tonne. Segment gross margin percentage in the fourth calendar quarter is estimated to be flat with the prior quarter, due primarily to lower selling prices offset by lower raw materials costs. The Company's operating rate at its North American phosphate operations is expected to be approximately 80 percent of operational capacity during fourth quarter of 2013.

Michael Kors beats by $0.03, beats on revs; guides Q3 EPS in-line, revs above consensus; guides FY14 EPS in-line, revs in-line

Reports Q2 (Sep) earnings of $0.71 per share, $0.03 better than the Capital IQ Consensus Estimate of $0.68; revenues rose 38.9% year/year to $740.3 mln vs the $727.3 mln consensus. Retail net sales increased 46.8% to $355.6 million driven by a 22.9% increase in comparable store sales and 83 net new store openings since the end of the second quarter of fiscal 2013. Wholesale net sales increased 29.9% to $351.9 million and licensing revenue increased 65.4% to $32.9 million. Licensing segment, revenue increased 65%, driven primarily by the strength in watches and eyewear. Sales in North America grew 31% and comparable store sales increased 21%, driven by strength across accessories and watch offerings and strong consumer response to jet-set in-store experience. North America wholesale segment growth driven by accessories and footwear categories as well as the continued sales lift from shop-in-shop conversions in department stores. In Europe, sales grew 101% in the second quarter, as brand awareness continued to drive comparable store sales growth of 45%. Gross profit increased 42.4% to $449.9 million, and as a percentage of total revenue increased to 60.8% compared to 59.3% in the second quarter of fiscal 2013. Co issues mixed guidance for Q3, sees EPS of $0.83-0.85, excluding non-recurring items, vs. $0.85 Capital IQ Consensus Estimate; sees Q3 revs of $845-855 mln vs. $843.42 mln Capital IQ Consensus Estimate. This assumes a comparable store sales increase in the range of 15% to 20%.

Co issues in-line guidance for FY14, sees EPS of $2.77-2.81, excluding non-recurring items, vs. $2.77 Capital IQ Consensus Estimate; sees FY14 revs of $2.9-3.0 bln vs. $3 bln Capital IQ Consensus Estimate.

Early premarket gappers

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Ron Burkle’s $8 a share bid for the Morgans Hotel Group was called into question on Monday, The Post has learned. The investor, whose after-market offer Friday sparked a 12 percent spike in the company’s shares Monday, to $7.94. But Burkle may be barred from making the offer, sources close to Morgans said Monday. Then again, some are questioning whether Burkle actually made a bid — despite widespread media reports of such a move. “The Yucaipa Companies, LLC would like to make a proposal to the board to purchase the company for $8 a share,” the billionaire Burkle said in a letter to the Morgans board on Friday. It certainly sounded like an offer. But Burkle was careful not to make an actual offer because, two sources on different sides of the situation said, he may not be able to legally. Tying the investor’s hands is an agreement Burkle made in 2009 when he lent Morgans $75 million, sources said. Burkle agreed he would not make an offer for Morgans unless there was a proxy fight, the sources said. “There is a restriction unless there is an active proxy fight,” a source said. And Morgans’ next annual meeting is not until next fall. Perhaps not so coincidentally, Kerrisdale Capital Management in September said it intended to nominate a separate set of directors to the board of Morgans in the 2014 board election. It is rare for a shareholder to announce an intention to launch a proxy fight months before it actually can do so. By announcing its intentions, Kerrisdale may have given Burkle legal cover. However, the two sources said, it is legally a very gray area since there is no actual proxy fight happening. A Yucaipa spokesperson stressed to The Post Monday that Burkle has not made an offer for Morgans. A Morgans spokesman declined comment. Morgans interim CEO Jason Taubman Kalisman, the 34-year-old grandson of real estate developer Alfred Taubman, has been at war with the 60-year-old investor. Burkle wants Morgans to sell itself, possibly to him, while Kalisman is more interested in licensing the boutique chain that owns or manages 13 hotels. On Friday, Morgans board said it would carefully review Burkle’s proposal with its financial and legal advisers and respond in due course.

After bondholders, OSX, Schlumberger, Ensco top OGX creditor list

Mon Nov 4, 2013 7:26pm EST By Sabrina Lorenzi and Jeb Blount RIO DE JANEIRO, Nov 4 (Reuters) - Bondholders, followed by oilfield-service companies, are the biggest creditors of Brazilian tycoon Eike Batista's oil company OGX, which made Latin America's biggest-ever bankruptcy filing last week, according to a list obtained by Reuters. The No. 2 creditor after bondholders is OSX Brasil SA , the Batista-controlled shipyard and ship-leasing company that built three offshore oil production platforms for OGX. OSX is owed at least 2.45 billion reais ($1.1 billion) or about 21 percent of the oil company's obligations. The next largest creditor is Schlumberger NV, the world's largest oilfield service company, which is owed at least 214.7 million reais or 1.9 percent of obligations, according to Reuters analysis of the list. The 8.17 billion reais ($3.6 billion) owed to holders of OGX's bonds, which expire in 2018 and 2022, accounts for about 72 percent of the company's consolidated obligations. The creditor list was part of the bankruptcy petition filed on Oct. 30 in a Rio de Janeiro court by OGX Petróleo e Gas SA , as the company is formally known. OGX's bankruptcy filing, the latest major development in one of the biggest corporate meltdowns in recent history, stemmed from the company's inability to meet ambitious production targets set by Batista, who hailed OGX as the flagship of his once high-flying energy, commodities and logistics empire. With little revenue and a share price that plunged more than 98 percent in the last 16 months, OGX ran out of cash to pay debt, suppliers and other companies in his EBX group. Some EBX companies, including a port operator and a shipbuilder, depended on each other for revenue and the value of their shares also plummeted during the selloff. Batista, who was once worth about $30 billion and was the world's seventh-richest man, in the process saw his fortune dry up, leaving him without the assets or credit necessary to keep financing his companies. He was unable, for instance, to fulfill a promise to bolster OGX by buying as much as $1 billion worth of new stock. Now, OGX hopes the bankruptcy can help it restructure. The top-five creditors after the bondholders is rounded out by Houston-based drill-rig operator Diamond Offshore Inc, owed 91.4 million reais; London-based drill-rig operator Ensco Plc, owed 63.9 million reais; and Fairfield, Connecticut-based General Electric Co, owed 54.1 million reais. Together, Schlumberger, Diamond, Ensco and GE hold about 4 percent of OGX's obligations. The list contains nearly 250 specific creditors, including major companies such as Brazilian state-run oil company Petroleo Brasileiro SA, also known as Petrobras, which is owed 40.9 million reais. Thomson Reuters Corp, the parent company of Reuters News, is owed 26,189 reais. Smaller creditors include a downtown Rio de Janeiro deli, several taxi cooperatives and FedEx Corp. each being owed several hundred or several thousand reais. OGX's smallest creditor, Rosario Placas e Carimbos, a sign and rubber-stamp company, is owed 0.50 reais, or about 22 U.S cents. Below is a list of OGX's largest creditors, according to its bankruptcy petition. Company/Creditor Debt Blns % of OGX of R$ Total

1. Bondholders R$ 8.166 71.7% 2. OSX Brasil R$ 2.445 21.1% 3. Schlumberger R$ 0.214 1.9% 4. Diamond Offshore R$ 0.091 0.8% 5. Ensco R$ 0.064 0.6% 6. GE R$ 0.054 0.5% 7. Petrobras R$ 0.041 0.4% 8. Baker Hughes R$ 0.036 0.3% TOTAL (ALL OGX R$11.389 100% CREDITORS) The bankruptcy petition is part of case No. 0377620-56.2013.8.19.0001, in the Justice Tribunal of Rio de Janeiro State.

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BN 11/05 09:32 *ARTWORKS WILL NOT BE LISTED ONLINE, PROSECUTOR SAYS BN 11/05 09:31 *MANY ARTWORKS WERE NOT KNOWN BEFORE, OTHERS BELIEVED LOST BN 11/05 09:31 *HOFFMANN SAYS ART IS OF EXTRAORDINARY QUALITY, WELL PRESERVED BN 11/05 09:29 *LEGAL SITUATION OF SEIZED ART IS `VERY COMPLEX' PROSECUTOR SAYS BN 11/05 09:26 *RESEARCH INTO THE ARTWORKS IS STILL UNDERWAY, HOFFMANN SAYS BN 11/05 09:25 *ARTWORKS WERE SEIZED FROM MUSEUMS, OTHERS IN JEWS' FORCED SALES BN 11/05 09:25 *SOME WORKS IN HOARD WERE CLEARLY SEIZED BY NAZIS, HOFFMANN SAYS BN 11/05 09:16 *MUNICH ART HOARD INCLUDED CANALETTO, NOT JUST `DEGENERATE' ART BN 11/05 09:15 *ART HISTORIAN HOFFMANN SAYS NOT ONLY MODERN, ALSO MEDIEVAL ART BN 11/05 09:13 *BECKMANN, DIX, TOULOUSE-LAUTREC, PICASSO AMONG ARTISTS IN HOARD BN 11/05 09:12 *PAINTINGS WERE IN GOOD CONDITION, CUSTOMS AUTHORITIES SAY BN 11/05 09:11 *GERMAN AUTHORITIES SEARCHED MUNICH ART APARTMENT IN 2012

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Nazi-Seized Stash in Munich Includes Unknown Dix, Chagall (1) 2013-11-05 10:57:56.978 GMT

(Updates with more artworks, starting in first paragraph. For more Bloomberg Muse, click on MUSE <GO>.)

By Eva von Schaper and Catherine Hickley Nov. 5 (Bloomberg) -- A stash of art uncovered in a Munich apartment in 2012 included works that were previously unknown, among them a self-portrait by Otto Dix and a Chagall gouache, said Meike Hoffmann, an art historian investigating the hoard. The cache of 1,400 paintings, lithographs, drawings and prints was discovered by authorities investigating Cornelius Gurlitt on suspicion of tax evasion. It included works by Max Beckmann, Pablo Picasso, Marc Chagall, Oskar Kokoschka, Franz Marc, Pierre Auguste Renoir and Max Liebermann, said Siegfried Kloeble of the Munich customs authorities. Some works were seized by the Nazis from German museums -- others may have been sold by Jewish families under duress, Hoffmann said. Reinhard Nemetz, the chief prosecutor in Augsburg, said authorities won’t publish a list online. “The legal situation of the artworks is very complex,” Nemetz said at a news conference today in Augsburg. “We don’t want a situation where there are 10 claims for one painting.” The Nazis seized more than 20,000 modern artworks that they saw as contrary to Aryan ideals from German museums. They also stole hundreds of thousands of artworks from Jewish families. “Without a list, we can’t do anything,” said David Rowland of Rowland & Petroff in New York, who represents the heirs of Curt Glaser, an art critic and collector. “They should put a list on the Internet with photos.”

Good Condition

Some of the art dates back as far as the 16th century. It was stored correctly and in good condition, Hoffmann said. It also includes a long-lost Courbet painting that was auctioned in 1949 and a Franz Marc landscape with horses. A Matisse is known to have been seized in France from the Rosenberg family, Hoffmann said. Cornelius Gurlitt was held by officials investigating possible money laundering during a random check on a train from Switzerland to Munich. The investigation led to his Munich home in 2012, Kloeble said. The Munich apartment is where Gurlitt kept the artworks handed down by his father, Hildebrand, according to Focus magazine, which first reported the story. Based in Hamburg before World War II, Hildebrand Gurlitt (1895-1956), was one of just four art dealers permitted by the Nazi authorities to sell artworks seized as “degenerate” from German museums from the end of 1938 to 1941. Though they were instructed to sell them abroad for hard currency, the four passed many on to fellow German dealers or kept them for themselves, according to the Free University’s “Degenerate Art” website.

Muse highlights include Martin Gayford on European art, Greg Evans on U.S. television, Amanda Gordon’s Scene Last Night and Philip Boroff on U.S. theater.

For Related News and Information: Top Stories: TOP<GO> For top arts and lifestyle stories, MUSE <GO> For stories about Nazi-looted art, TNI ART HOLOCAUST <GO> For stories by Catherine Hickley: NI HICKLEY <GO>

--Editors: Mark Beech, Farah Nayeri

To contact the reporters on this story: Eva von Schaper in Munich at +49-89-24447-8801 or evonschaper@bloomberg.net or Catherine Hickley in Berlin at +49-30-700106-224, or chickley@bloomberg.net.

To contact the editor responsible for this story: Manuela Hoelterhoff at +1-212-617-3486 or mhoelterhoff@bloomberg.net.

John Paulson’s most famous bets are the ones with an apocalyptic tint. His “big short” on the US housing market catapulted his eponymous hedge fund into the big league in 2007, and he has subsequently gambled that the price of gold will skyrocket in an era of central bank money-printing (well, you cannot win them all). This year, though, some of Paulson & Co’s best returns are coming from a rosier bet. Specifically, his $2.3bn Recovery funds have gained a tasty 40 per cent since the start of 2013, thanks to investments in banks, insurers and – less well publicised – asset managers.

It is a simple thesis, widely shared, and one that has proved lucrative in past cycles: asset managers offer a leveraged play on a rising equity market. When assets increase in value, it boosts the cut managers take in fees, while the sight of rising markets lures investors back to their brokers’ offices; a virtuous circle. Except that some asset managers are more leveraged to rising equity markets than others, and almost all of them will benefit less in this upturn than they have previously. Mr Paulson is hardly taking a scattershot approach. According to its most recent letter to investors in the Recovery funds, seen by the Financial Times, Paulson & Co has honed in on private equity managers as a preference, specifically Blackstone and Apollo Global Management. One of the main reasons is that private equity managers are once again able to charge performance fees on top of regular management fees, now that funds have recovered recession-era losses. “Asset management companies such as Blackstone are ideal Recovery fund investments because of the correlation between economic growth and increases in realised performance fees, which are up 800 per cent over the past two years,” the letter says. Equally important, private equity firms also invest their own money. They benefit from a valuation uplift in their portfolio and from the renewed appetite for initial public offerings, another byproduct of rising equity markets, which allows them to cash in previous deals. Apollo has been the most active in realising profits on its private equity investments, bringing in $10bn this year through deals including the flotations of Evertec, the Caribbean payments processor, and Constellium, the aluminium products group. Paulson & Co refused to comment on the size of its positions in Blackstone and Apollo, which have not been disclosed in regulatory filings and therefore may have been made indirectly through instruments other than the companies’ equity. The major private equity firms were not listed companies when global markets were recovering from the recession in the early 2000s. More highly leveraged to the rising equity market than those of traditional managers, their shares provide an alternative to the asset management stocks that were available to investors who wanted to make this trade during the last upturn. Yet almost every shade of firm in the sector has been in demand as the S&P 500 has surged. Most hit record highs last year or earlier this year and kept on going. The broad sector rally comes despite mixed operating performances by the big global managers, and some downright disappointing figures in the recent set of quarterly earnings. Firms such as Federated Investors and Franklin Resources, whose strongest businesses are money market funds and fixed income investing, respectively, were among those to record outflows in the third quarter. But while bond businesses were as bad as predicted, given market volatility and fears of a turn in interest rates, equity businesses were not nearly as good as expected as a counterpoint. Active equity management, it seems, is simply not going to rebound as sharply in this cycle as previously. T Rowe Price blamed outflows on a few big institutional clients turning more cautious on the markets. This could well be the start of another worrying trend: institutions who were forced into equities, because the low yields on fixed income would leave them hopelessly underfunded, might return to their comfort zone in bonds in a higher-rate environment. But the main culprit is the secular shift from active to passive management. Inflows boosted assets under management at BlackRock’s iShares exchange traded equity funds by 3.6 per cent in the third quarter, compared with a meagre 0.7 per cent into actively managed retail equity funds. On the institutional side of its business, cheaper passive equity products outperformed active, too. The one real winner from earnings season was WisdomTree, the ETF specialist. The asset management sector is a broader and much-altered canvas for stock market investors looking to play this equity market rally, compared to previous cycles. As Mr Paulson has identified, the rising tide will lift some boats higher than ever, but it might not this time lift them all.

The Stock Tastes of a Few Investment Titans

What have John Paulson and Howard Marks been buying lately. Also take a look at some insider buys.

Hedge-fund legend John Paulson has come up with a second act. And this time, it's on the long side. Famous for making billions of dollars by shorting the mortgage market ahead of the financial crisis through investments in credit-default swaps, Paulson has also made bad bets, including a big bet on gold in recent years. But according to the Financial Times, Paulson has regained some of his legendary fame in the bull market by going long a collection of financial services stocks, including banks, insurance companies and, less well publicized, asset managers and private-equity firms

"It is a simple thesis, widely shared, and one that has proved lucrative in past cycles," writes the FT. "Asset managers offer a leveraged play on a rising equity market. When assets increase in value, it boosts the cut managers take in fees, while the sight of rising markets lures investors back to their brokers' offices; a virtuous circle." But the FT adds that Paulson sees particular value in private-equity firms such asBlackstone Group (ticker: BX) and Apollo Global Management (APO). "One of the main reasons is that private equity managers are once again able to charge performance fees on top of regular management fees, now that funds have recovered recession-era losses," FT writes. "Equally important, private equity firms also invest their own money. They benefit from a valuation uplift in their portfolio and from the renewed appetite for initial public offerings, another byproduct of rising equity markets, which allows them to cash in previous deals." Paulson's firm,. Paulson & Co., has refused to comment on the size of its positions in Blackstone and Apollo, which have not been disclosed in regulatory filings. A related story in the FT discusses another reason why asset managers and their cousins, private-equity firms, are attractive: an acceleration of deals in the industry. "The fund industry has experienced one of its busiest years for dealmaking since 2006, as private equity companies vie with independent fund groups for attractive takeover targets," the British newspaper writes. "Asset management merger and acquisition volumes reached nearly $2 trillion by the end of the third quarter, already exceeding total volumes in each of the three preceding years, figures from Freeman & Co, the boutique M&A advisory firm, show. This makes 2013 the second-strongest year for fund management M&A in seven years." Meanwhile, Howard Marks, the chairman of Oaktree Capital Group LLC (OAK), a respected money-management firm based in Los Angeles, told a group of reporters in Shanghai, China that his firm is buying Chinese stocks after valuations tumbled. The nation's equities are "tremendous bargains," Marks said, according to Bloomberg, though he refused to discuss specific names. While China's economy faces risks from being weaned off stimulus, a burgeoning middle class and government plans for urbanization will bolster the country's long-term potential, Marks reportedly told Bloomberg. .By contrast, said Marks, U.S. stocks are fully valued. Marks is a highly regarded investor whose quarterly market missives about the market are read by other leading investors, including Warren Buffett. Finally, while it's always worth knowing what investors like Paulson and Marks are up to, it's also valuable to see what the more conventional smart money is doing with its money. A piece by Street Authority's David Sterman takes note of significant purchases of stocks with sizable market caps by corporate executives. Among the stocks that seen their share of buying by top executives: Symantec (SYMC), the software security vendor, United Continental (UAL), the airline company, andFreeport McMoRan (FCX), the copper producer. For example, at Symantec, CEO James Bennett has spent more than $2 million on his company's stock despite skepticism about the company and its stock by many on Wall Street. " [(Merrill Lynch's] tempering its enthusiasm with an "underperform" rating that reflects Wall Street's near-term cautious approach, but Bennett's hefty insider purchase suggests cause for optimism among longer-term investors," Sterman writes. . And at Freeport, two leading executives, including CEO James Moffett, have committed roughly $80 million of their own money to this stock over the past few months. "To my mind, these moves aren't indicative of a bullish outlook for copper prices, which has historically been the major catalyst for this stock," Sterman writes. Instead, he contends, it is due to the surging free cash flow and resulting debt paydowns that "still appears unappreciated by Wall Street."

China PBoC Q3 Monetary Policy Implemenation Report: Reiterates to continue prudent monetary policy - - CPI y/y growth likely to increase in Q4, as upwards pressure on prices still exists. >- Reiterates to use various policy tools to guide reasonable growth in credit and social financing. - Economy may see long term deleveraging prices. - Foundation for stable prices is not solid. - Property and local govt debt are outstanding problems. - Will effectively prevent systemic risks and promote steady economic growth. - Economy still faces risks and challenges - Price situation basically stable but needs close watching

NH Hoteles shareholder Ortega to sell 4% stake for EUR 50m

NH Hoteles shareholder Amancio Ortega is preparing to sell his 4.05% stake in the hotel chain to HNA of China, reported Expansion, citing market sources.

The deal would be worth EUR 49.55m at current market prices, the Spanish language report said, and is subject to approval from Chinese authorities.

HNA acquired 20% of NH Hoteles in April for EUR 234.5m, the item noted.

Ortega holds his stake in NH via his investment vehicle Pontegadea.

Source Expansion