TheChek News Flow

The company began trading above the 24.50 euro offering price.

PARIS — Puig is now a publicly traded company, raising 2.6 billion euros for its founding family on its first day of trading Friday.

The owner of brands such as Rabanne, Carolina Herrera and Jean Paul Gaultier began trading at 25.50 euros a share, above the 24.50 euro price offer. The stock closed the day flat, at 24.50 euros.

The IPO, which values Puig at 13.9 billion euros, was multiple times oversubscribed, according to the company.

Puig’s float is the largest in Europe so far in 2024 and the biggest in Spain since 2015.

Buoyant equity markets and the promise of mitigating interest rates are helping drive interest in IPOs around the globe. In the beauty space, Galderma and Douglas floated in Europe last month, with strong and disappointing debuts, respectively.

Puig raised 2.6 billion euros through the issue of 106.5 million shares. If the overallotment is exercised in full, the total offering could rise to 3 billion euros.

Marc Puig, chairman and chief executive officer of the beauty and fashion company, rang the bell at the Barcelona Stock Exchange Friday. Behind him hung the image of Puig’s new corporate logo, which is an evolution of its original.

Puig is among the third generation of family members running the 110-year-old company. He has said no one from the fourth generation would be operationally involved in years to come.

Once the beauty group’s offering is finished, the company’s founding namesake family will through Puig SL, the group’s controlling shareholder that’s managed by Exea, retain 71.7 percent of the company’s economic rights and 92.5 percent of its voting rights.

The company operates across 32 countries with 17 brands. The largest of those sales-wise are Rabanne, Charlotte Tilbury and Carolina Herrera. Ninety-five percent of company net revenues last year, which reached more than 4.3 billion euros, came from Puig’s fully or majority-owned brands.

Luxury brands need a broader pricing architecture that delivers meaningful value for all customers, writes Imran Amed.

LONDON — Walk into any luxury megabrand flagship these days, and you’ll face prices that boggle the mind. According to HSBC, the average price of personal luxury goods in Europe has increased by an eye-watering 52 percent since 2019.

This can be partly explained by the aftershocks of the pandemic, which sent inflation soaring, driving up the cost of raw materials and labour. Leena Nair, chief executive of Chanel, whose classic medium 2.55 flap bag now costs €11,100, up 91 percent since October 2019, told Bloomberg last week: “We use exquisite raw materials and our production is very rigorous, laborious, handmade — so we raise our prices according to the inflation that we see.”

But price hikes have also been used to grow revenue and profit. “Pricing was the main driver of sales growth between 2021-2023, but we think it will be far more subdued in the years to come,” analysts at HSBC wrote in a note in January.

Indeed, higher prices were fine when the market was willing to absorb them. In the years since the pandemic, pent up demand (and Covid-era savings) allowed brands to keep pushing prices up and up. But as the post-pandemic luxury boom recedes and aspirational customers, in particular, pull back and trade-off their spending on luxury products with travel and experiences, even the most rabid luxury fans are now thinking twice before buying.

As for the super wealthy, they may be able to afford higher prices, but there is an inherent price-to-quality consideration that drives their decision-making too, especially when they perceive the quality at some brands is declining. Nobody likes being taken for a ride. More and more, these customers are now asking themselves: ‘is this good value for my money?’

This value equation is further complicated now that there is an active secondary market on resale sites like TheRealReal and Vestiaire Collective which give an indication of which luxury products and brands will hold their value over time. So, if it’s less expensive to buy a higher-quality, second-hand product in very good condition, why fork out the cash for an overpriced, lower-quality new one that will lose its value?

The customer backlash to the aggressive price rises is real. There are entire Reddit threads and Purse Blog forums, where price-conscious customers are complaining about the price increases. But it’s not just grumpy customers complaining without reason.

Earlier this month, 144 people commented on the r/handbags Reddit thread (with 114,000 members) about the price increases for Loewe’s coveted Puzzle bag, which now costs more than $4000.

“This is ridiculous. I bought my small Puzzle in 2021 for $2400 total,” wrote Secure_Olive_154. “These brands have lost their minds. I just don’t even feel like buying these bags anymore. I’ll stick with vintage and getting wear out of what I already own.”

Other customers say they are waiting for discounts before they buy. A user named anakngtipaklongnaman added “Loewe [sales associates] offer discounts when you’re at the boutique. I was offered this adorable Puzzle at 20 percent off retail.”

The worst thing for brands to do is to raise prices and then offer discounts, even if this is done quietly. One luxury executive told me that this has become particularly problematic in China where powerful shopping mall developers like SKP in Beijing, who are paid at least in part based on the revenues generated by their luxury brand tenants, are insisting that brands participate in ‘SKP Days’ when customers can use vouchers to shop at a discount at even the most high-end brands. This trains customers to expect discounts, and further reinforces that the listed retail prices do not offer fair value.

One notable — and very interesting — exception to the enormous price rises and ‘SKP Days’ is Hermès, which deploys a more nuanced pricing strategy than the blunt tool some other brands have used, which is to raise prices across the board, even with entry-level products.

Chanel has made some of the most aggressive price increases. A classic medium 2.55 flap bag now costs €11,100, up 91 percent since October 2019.

At Louis Vuitton the price of a Speedy 30 Bag — made of coated canvas, not leather — has doubled to €1600 over the same period.

Gucci, which is in the midst of executing an elevation strategy, has increased the price of its Marmont small matelassé shoulder bag by 75 percent, now with a price tag of €1490.

Most of the customer frustration about Hermès is focused on their hard-to-get Birkin and Kelly bags which has even attracted a class action lawsuit from two shoppers in California. These bags can cost $100,000 or more for the most exclusive styles in exotic skins, but there are still plenty of entry-level products that seem like much better value when compared to a canvas Louis Vuitton Speedy or Gucci Marmont.

While I was perusing the Hermès website today, I was pleasantly surprised to find that the Evelyne 16 Amazone cross-body bag made of grained Clemence leather perforated with an Hermès H logo, costs only £1660 (about $2100). You can also buy a 90 cm silk scarf for £450 ($565) or elegant Oran leather sandals for £615 ($775). Amid the ever-spiralling prices in luxury land, Hermès entry-level products are great access points for first-time customers.

“One reason Hermès is so resilient is that despite being the most expensive brand in the space, they carry many categories that are accessible in nature,” HSBC’s Erwan Rambourg wrote to me in an email. “Louis Vuitton, Dior, Chanel and Hermès should have all price points — everything for everyone — given their scale. Many brands are likely to rethink their access assortment as you can only sell that many nano or micro bags.”

In the first quarter, Hermès reported organic growth of 17 percent, far outpacing LVMH Fashion and Leather Goods which grew by only 2 percent. Kering suffered a catastrophic revenue contraction of 10 percent in Q1, and now projects that profits will decline by up to 45 percent in the first half of 2024.

Meanwhile, Hermès has said it will continue to increase its prices by 7-8 percent in the coming year. As the old saying goes, slow and steady wins the race.

Washington’s crackdown shows its leverage over global banking system

A US crackdown on banks financing trade in goods for Vladimir Putin’s invasion of Ukraine has made it much more difficult to move money in and out of Russia, according to senior western officials and Russian financiers.

Moscow’s trade volumes with key partners such as Turkey and China have slumped in the first quarter of this year after the US targeted international banks helping Russia acquire critical products to aid its war effort.

A US executive order, implemented late last year, prompted lenders to drop Russian counterparties and avoid transactions in a range of currencies, said western officials and three senior Russian financiers.

“It has become harder for Russia to access the financial services that it needs to get these goods,” said Anna Morris, deputy assistant secretary for global affairs at the US Treasury.

“It’s definitely a goal to make it much more difficult for that money to flow, to increase the cost to the Russians [and] the friction in the system. Disruption is an important outcome,” she added.

Getting around the restrictions now requires a growing network of middlemen to avoid regulatory scrutiny even if the transactions have nothing to do with Russia’s war machine, the officials and financiers said, while increasing currency conversion and commission costs.

“It’s getting harder and harder every month. One month it is dollars, the next month it is euros; within six months you basically won’t be able to do anything. The logical endpoint of this is turning Russia into Iran,” said a senior Russian investor, referring to strict financial sanctions against Tehran.

The US executive order is designed to target banks in countries that recorded sharp rises in trade with Russia after the west imposed sanctions following Moscow’s full-scale invasion of Ukraine more than two years ago.

Turkey’s exports of “high-priority” goods — items mainly for civilian use but identified as critical for the war effort, such as microchips — to Russia and five former Soviet countries soared after the full-scale invasion of Ukraine. According to Trade Data Monitor, the volume hit $586mn in 2023, a fivefold increase on prewar volumes.

But in the first quarter of this year, Turkey’s exports to Russia fell by a third year on year to $2.1bn. And the value of its reported exports of high-priority goods to Russia and its neighbouring countries fell 40 per cent to $93mn in the first quarter of 2024 from the previous quarter, showing the impact of the executive order.

The sharp drops in war-related exports are attributable to banks’ fear of repercussions from the US, which can track any dollar transaction and cripple lenders by cutting them out of the dollar-based financial system, US officials and experts said.

The Treasury can hit lenders with secondary sanctions if it suspects they are dealing with companies that are banned because of their links to Russia’s military-industrial complex.

“The US really has leverage over the financial sector,” said Elina Ribakova, a non-resident senior fellow at the Peterson Institute for International Economics. “It can find out if you’re doing something wrong, even the smallest bank, if you are somehow connected to the dollar. So that scares people.”

The restrictions on payments have had a chilling effect far beyond the shadow trade in components for Russia’s war machine, as banks cut off entire categories of transactions with Moscow rather than fall foul of US sanctions.

Russian traders have turned to smaller banks and alternative currencies as major banks in countries such as Turkey and China shy away.

Vladimir Potanin, the oligarch who controls Norilsk Nickel metals group, recently said sanctions had cut the company’s revenue by at least 15 per cent since 2022, in part because of 5 to 7 per cent commissions to middlemen on export transactions.

Traders selling goods to Russia, including restricted goods, are less likely to be deterred than banks, said Jane Shvets, a partner and sanctions expert at US law firm Debevoise & Plimpton.

“The pullback of larger financial institutions has disrupted the trade, but the question is whether it will bounce back as these ‘shadier’ alternatives for moving money proliferate,” she said.

The increasingly complex transactions risk confounding western regulators hunting trade in restricted goods as Russian entities and their counterparties add more transactions separating buyer and seller, said Matis Mäeker, head of Estonia’s financial intelligence unit.

“If you have four banks in the chain, that means there are several payments or hops connected from one transaction that previously moved from A to B” as money passes between users, he said.

That is increasing the cost of transactions, yet also making it harder for enforcement authorities to see them in time, he added. “There are so many banks in the world — they will find a new way to bypass the sanctions,” he said.

Russian importers and exporters are also settling more trades in roubles because of the difficulties of swapping the currency for dollars and euros, according to financiers involved.

Traders buying Russian oil in India are now conducting transactions in roubles after the US pushed banks in the United Arab Emirates to stamp out payments in dirhams, said a senior Russian banker and a former Russian oil executive.

“This is a sanctions loophole,” said the senior Russian banker, adding that foreigners are permitted to buy roubles on the Moscow Exchange for use in payment settlements with Russian counterparties. “These payments are easily processed because [foreign banks] can open correspondent accounts in roubles at the Russian branches of foreign banks.”

He believes the rouble will become “the main currency in the underbelly of Russia, because that’s the only way to make sure that [the US Treasury’s Office of Foreign Assets Control] does not see it”.

In early April the Bank of Georgia, the second-largest lender in the Caucasus nation and listed on the London Stock Exchange, told its customers that transfers to Russia in “technology, construction, industrial and aviation” would only be made in roubles.

The change was made “in compliance with Ofac requirements”, said the message, which seen by the Financial Times. Bank of Georgia did not immediately respond to a request for comment.

Cross-border payments are increasingly being carried out in roubles, while the use of the Chinese, Turkish and UAE currencies are declining, according to Russia’s central bank. Before the 2022 war, less than 15 per cent of Russian exports were paid in roubles. But the currency’s share rose to 40 per cent in February this year, with the highest jump recorded after the US executive order.

For imports, payments in roubles have increased to about 40 per cent from a prewar level of 30 per cent.

The rouble’s limited convertibility, however, makes it difficult for Russian banks and counterparties to make up the lost volume of trade in dollars and other western currencies, the senior Russian investor said.

“Even the friendliest jurisdictions like Kyrgyzstan are vulnerable. And you cannot take that much out there anyway because the capital of these banks is all so small,” the investor said.

Steel group objects to Chatham Docks plan as it would have ‘seismic adverse consequences’ on the national economy

ArcelorMittal has warned the UK government that one of its main divisions may be forced to leave the country if an application to redevelop a commercial port in south-east England is approved this week. 

The world’s second-largest steel company said a decision to allow the closure and subsequent redevelopment of a part of Chatham Docks in Kent would have “seismic adverse consequences” for the British economy and multiple strategic industries.

The warning is contained in a letter from ArcelorMittal sent to Michael Gove, the levelling-up secretary, on Saturday and which was first reported by Sky News.

Matthew Brooks, managing director of ArcelorMittal Kent Wire, which supplies steel for construction, urged Gove in the letter to intervene to allow fuller scrutiny of proposals due to be heard by Medway Council this Wednesday. Under the application by Peel Waters, part of Peel Group, the site would be redeveloped for housing and commercial facilities. 

“Our concern is that Peel’s application to redevelop Chatham Docks is not only wrong for Britain but has proceeded with little scrutiny and a lack of public awareness. Many key stakeholders are therefore unaware of the consequences if it were to proceed,” Brooks wrote in the letter, a copy of which has been seen by the Financial Times.

“This is highly time-sensitive — calling in the application after next Wednesday will not be possible,” said Brooks. 

If the application is allowed to go ahead, Brooks wrote, ArcelorMittal “would regrettably be left with no alternative but to leave Chatham Docks and, more than likely, cease operations in Britain, given the lack of suitable alternative sites”.

The Luxembourg-based steel company, which is chaired by Indian tycoon Lakshmi Mittal, uses the site in Kent to supply reinforcement materials for the construction industry.

In the letter, Brooks said its operations at Chatham Docks are responsible for approximately 30 per cent of Britain’s concrete steel reinforcement, making the site a “strategic asset” for the country’s economy. Its materials have helped to build several high-profile infrastructure projects including Crossrail, HS1 and Heathrow Terminal 5. 

The docks employ almost 800 people, according to the steel group, and generate economic value equivalent to £112,000 per worker which, it argues, is “considerably higher than the Medway average of £63,900”.

ArcelorMittal declined to comment on Sunday. Peel Waters could not be reached for comment. 

What is going on at Chanel? The brand’s cruise collection unveiled on Thursday on the roof of the Le Corbusier building La Cité Radieuse in Marseille in the south of France triggered a barrage of negative comments on social media never seen for such a major luxury brand. The public display of hostility makes more urgent the question of whether the time has come for Chanel to part ways with designer Virginie Viard and to consider who might replace her.

Chanel’s last cruise collection was applauded by those fashion critics whose media outlets depend on the brand’s advertising budgets. However, on its official Instagram account, on which anyone can write a comment, it was vehemently booed. Among the comments: “Horrible!”; “Awful, no concept;” “A catastrophe;” “A boring seen-it-all-before show;” “A collection from Zara;” “It makes me so sad;” “We really miss Karl.”

One person even wrote: “If Chanel does not change its artistic direction, it’s going to flounder. Before, Chanel was about joy. Now it’s over.” Another said: “Please get rid of her (referring to Viard). It’s no longer possible to watch this.” And someone asked: “When is Hedi Slimane arriving?”

The mighty Chanel has never been attacked in such a manner. However, there were clearly some issues with this cruise show. First, Marseille was not the right location for Chanel. The Phocaean city has many charms, but it is also known for its grubby and gangster-dominated neighborhoods. These hardly suit the glam and exclusive aura associated with Chanel. The aerial views of lines of concrete buildings, filmed by drones for the video that the brand showed about the cruise collection, evoked a vision of a third-rate suburb.

Viard tried to bring the brand down to earth to mingle with the plebs. That was a mistake. Chanel’s DNA is about sophistication, refinement and craftsmanship. As many observers noted on the brand’s Instagram account, Viard’s predecessor Karl Lagerfeld – the designer who understood everything about luxury and turned Chanel one of the world’s most desirable brands - would have never allowed this to happen.

About the clothes. Many outfits -- not all of them -- lacked the positive energy and timeless elegance expected from Chanel. There were lots of tangy green and yellow outfits that matched the dots of color adorning the Corbusier building, but that aesthetic connection looked odd and did not feel right for Chanel. Le Corbusier helped redefine collective living at a time of massive urbanization in France in the early 20th century. La Cité Radieuse in Marseille was one of his buildings aimed at democratizing comfort, something that until then was reserved for the elite.

Chanel is not about the masses. It is about the lucky few who can afford its wares and status symbols. How could Chanel’s image directors fail to see that Le Corbusier was not right for the brand?

The collection featured several printed dresses and all-white silhouettes that were wearable, but nothing to brag about and, most important, they did not ooze luxury. There were a few cardigans in a perforated fabric, perhaps meant to recall a fishnet – Marseille is a major fishing port - but they looked like something grandmothers might wear.

Not only did this collection lack sophistication, it lacked good ideas. One new element introduced was a grey hoodie attached to some tweed jackets. It produced a “trying too hard to be cool” effect and looked strange. When designer Pierpaolo Piccioli put hoodies on beautiful jackets for his last Haute Couture Valentino collection presented in January, it gave couture a modern twist. He lined the hoodie with tiny floating feathers that made them pass the chic test. Chanel’s hoodies, on the other hand, looked like fashion heresy. Here, the brand flirted with streetwear but it is a style that is in decline, fashion critics say. Quiet luxury and effortless elegance are what luxury shoppers seek today. Streetwear works at Louis Vuitton menswear under designer Pharrell Williams who makes it legitimate. It does not work for Chanel, however.

Cruise collections, often presented in early May before the Cannes Film Festival, represent a way for major fashion brands such as Chanel, Louis Vuitton and Dior to create a buzz and generate traffic in stores. They usually show them in exotic locations to which they fly social media influencers, top clients and journalists. For years, they tried to outbid each other with the most spectacular, far-flung locations until it became “environmentally incorrect” in terms of carbon footprint to fly half way across the planet to see a fashion show.

This major fashion faux pas is a sign that Chanel is going through turbulent times. Cracks are clearly starting to appear in the beautiful castle that is the storied French brand. In January, Miss Tweed reported that Chanel was in the grip of a revolution. Its Indian-born executive CEO Leena Nair, who had never worked in luxury before joining the brand two years ago, had ousted more than a dozen key executives and senior managers, shocking staff and industry partners. Even CFO Philippe Blondiaux was planning to leave in 2026. At the time, Chanel declined to comment and would not deny this on the record.

When Nair started as CEO in January 2022, many of Chanel’s powerful bosses believed she would be more of a super human resources and chief operating officer than a real CEO, since Alain Wertheimer, who owns the brand with his brother Gerard and half-brother Charles Heilbronn, ultimately remained the company’s main decision-maker. Chanel’s managers did not expect her to radically change things. As the months went by, they began to realize they had to obey her orders, since she had Wertheimer’s backing. Company executives resented being told how they should run their business by someone who knew so little about luxury and many left as a result. To explain the exodus, the brand said many departing managers were close to retirement.

Chanel told Miss Tweed the departures were “part of the natural cycle of succession”.

However, this cruise show means that those who understood what Chanel was about are no longer in charge or there to prevent such PR disasters from happening.

Chanel is the world’s No. 2 luxury brand in terms of sales, just behind Louis Vuitton. In 2022, it made an operating profit of $5.77 billion on revenue of $17.2 billion. The company employs more than 35,000 people.

Under the creative stewardship of Viard, the brand has become more girly, feminist and intellectual. Its shows have become a much less grandiose affair than when the Kaiser was in charge. We remember Lagerfeld’s mind-blowing settings inside the cavernous Grand Palais which one day featured a gigantic supermarket, then a huge rocket or a reconstituted beach complete with waves lapping sandy shores. Lagerfeld asked for the impossible and got it every time.

When in 2019 the Wertheimer family appointed Viard as Lagerfeld’s former right-hand woman, their objective was continuity. She has fulfilled her mission, producing collections season after season that remained faithful to the maison’s codes: the tweed, the double C, the pearls and the camellia. However, now it seems people have grown tired of seeing the same thing over and over again. Chanel’s shows are no longer as stunning and awe inspiring as they once were. They seem to be out of tune with the times.

In a clear blow to Viard, veteran fashion critic Suzy Menkes wrote on her Instagram account in October, after Viard’s last ready-to-wear collection, that the only designer who made clothes that were in tune with the times was Lagerfeld.

“The truth is that the late designer is the only person who could produce, season after season, designs that fitted fashion of the moment… The problem with the current collections by Virginie Viard is that there is no sense of a changing world: the male/female power; violence on the streets; flooded homes; different versions of beauty – and so much more that the modern world has thrown upon us.” Menkes described Viard’s fashion for Chanel as “politely pretty” but not much more.

Adding to the market’s disenchantment with the brand from a fashion point of view, the French luxury giant has irked consumers by massively raising prices. The price of some of its best-selling products, such as the famous 2.55 quilted bag with a chain, has been increased by more 90 percent in the past four years. It now costs nearly €11,000. Even the most loyal clients find that excessive.

Late last month, Nair said in an interview with Bloomberg that the increase reflected the craftsmanship and quality of materials, as well as inflation. “We use exquisite raw materials and our production is very rigorous, laborious, hand-made – so we raise our prices according to the inflation that we see,” Nair told Bloomberg in a TV interview with Francine Lacqua.

It is time Alain Wertheimer had a serious conversation with Nair and Chanel’s executives about what to do next. It has become urgent to think about the post-Viard era and what story Chanel wants to tell us over the next decade. Many fashionistas see Celine’s outgoing Hedi Slimane replacing Viard at Chanel, particularly since his last fashion show in March was very Chanel-like. Such a scenario has been evoked for more than a decade, but it is far from clear that the Wertheimers would be ready to put up with Slimane’s antics. Miss Tweed was the first to report last month that Slimane planned to leave LVMH’s Celine. Stay tuned.

Multi-million-dollar grants adding up to more than $46 million from the US Federal Highway Administration (FHWA) will help support electrification efforts at several American ports.

The Long Beach Container Terminal (LBCT) in Long Beach, California has received a $34.9 million grant from the FHWA to replace 155 on-site commercial trucks and buses with zero-emission vehicles (ZEV). The grant will fund both the purchase of new electric trucks and the necessary charging infrastructure to support them.

LBCT said the grant dollars will allow it to continue its multi-billion dollar investments in more sustainable logistical operations. “Our vehicle electrification project, coupled with previous investments, enables LBCT to achieve a unique status that is reframing the way the world views sustainable goods movement, enhancing community quality of life and climate change,” said Anthony Otto, CEO of LBCT.

Real progress at Port of Long Beach

Back in 2018, Power Progress reported that the Port of Long Beach had plans to install zero-emissions cranes and cargo handling equipment at its terminals. True to its word, the port has invested more than $2.5 billion to convert its cranes and terminal tractors vehicles to electric equipment. It’s a project that LBCT says has led to an 86 percent (!) reduction in harmful carbon emissions.

“This investment is a huge win for clean air, electrification and the region,” said US House Rep. Robert Garcia. “These federal dollars will make our port cleaner, safer and help us meet our climate goals.”

In a separate announcement, charging infrastructure operator Voltera said that its sites in California and Georgia would receive $11.4 million of the FHWA funding.

Container ports used to be some of the dirtiest, most heavily polluted areas in the world. That was bad for everyone – but it was especially bad for the people who lived and worked near them. That’s why any positive change is good. Beyond just “positive change,” however, ports today seem to be leading the way when it comes to electric vehicle and hydrogen adoption.

How things change!

Endorsements come as exclusive talks end without deal and Sony and Apollo push rival $26bn offer

Two of Hollywood’s biggest names have thrown their weight behind Skydance’s bid for Paramount as it moves to fend off a rival approach from Sony and Apollo. 

James Cameron, whose film Titanic is the biggest hit in Paramount’s history, and Endeavor chief executive Ari Emanuel told the Financial Times that they believed Skydance founder David Ellison could revive the struggling company. 

“I love the Ellison idea,” Cameron said in an interview. “If he gets . . . to run Paramount creatively, it could be a huge boon for this business in these ailing times. David’s proven himself.”

Emanuel, a Hollywood “superagent” and chief executive of the company that owns the WME talent agency and controls TKO Group, said Ellison is “a natural acquirer” of the company. 

“David has a real movie business [with] big franchises,” he said. “Everybody is in business with him — Amazon, Netflix, Apple, Paramount and Disney all have a good relationship with David.” 

Ellison, son of Oracle founder Larry Ellison, launched Skydance in 2010 and has made a number of blockbusters, including Top Gun: Maverick, which Paramount released.

Backed by private equity groups RedBird and KKR, Ellison is pursuing a two-step deal. First, he would pay $2bn for National Amusements, which houses the majority of the voting shares that are controlled by Shari Redstone. Paramount would then acquire Skydance for $5bn in a stock deal.

Paramount is among the most legendary companies in Hollywood, but it has struggled to compete in a brutal streaming battle that has upended the entertainment business. 

Paramount is controlled by Redstone’s National Amusements, a family business that started out as a chain of New England cinemas in the 1930s. NAI controls nearly 80 per cent of the voting shares of Paramount, but holds only about 10 per cent of its equity. 

The endorsements from Cameron and Emanuel come at a precarious moment for Ellison’s bid. 

Skydance had been in exclusive negotiations with Paramount, but that window lapsed on Friday without an agreement. A special committee appointed by the Paramount board, which is tasked with evaluating the group’s options, can continue to weigh the bid, however. Sources close to the bid told the FT that Ellison was willing to walk away, though no immediate indications suggested he was preparing to do so. 

The end of the exclusive window came just a day after Sony and private equity group Apollo submitted a $26bn offer for Paramount. 

In Hollywood there are fears that an Apollo-Sony acquisition of Paramount would reduce the number of major studios, leading to job cuts and potentially throwing into question the future of the storied Paramount lot on Melrose Avenue. 

But some Paramount investors have told the FT they prefer Apollo’s approach, saying it would offer a better premium for common shareholders. 

At the weekend, Warren Buffett revealed he had sold his entire stake in Paramount at a loss. Buffett’s $2.6bn investment in 2022 was seen as a bullish sign for Paramount, but the shares have plummeted more than 60 per cent since Berkshire first disclosed its stake. 

“I think I’m smarter now than I was a year or two ago, but I also think I’m poorer because I acquired the knowledge in the manner I did,” Buffett said, referring to his understanding of the entertainment business. “We lost money on Paramount and I did it all by myself folks.”

Emanuel said Ellison, who is 41, has “a fire in his belly” that could help turn the company around. 

“I don’t want to denigrate anybody, but I think [Paramount] needs a little bit of new energy. I think he will bring that,” he said. “I think he’ll be an incredible additional partner to Shari in this situation.” 

Cameron said he worked as a behind-the-scenes adviser to Ellison during Skydance’s production of Terminator Genisys, a sequel to his 1984 classic Terminator. “I was sceptical of the trust fund baby, you know, dad’s money,” he said. “Yeah, he had the resources, but he also was the right guy to be able to command those resources.”

He added: “I wouldn’t hesitate to work with him on a project . . . and we do have some things cooking.”

Warren Buffett’s Berkshire Hathaway offloaded around 13% of its Apple holdings in Q1 2024, the conglomerate revealed this weekend. Despite selling around 115 million shares, however, Buffett reaffirmed his commitment to AAPL going forward.

Meanwhile, Tim Cook, who made the trip to Omaha for Berkshire’s annual meeting on Saturday, praised Buffett for his belief in Apple.

Warren Buffett offloads 115 million AAPL shares

As reported by CNBC, Berkshire’s Q1 2024 earnings report revealed that its stake in Apple is now worth $135.4 billion – indicating that it holds around 790 million shares. Based on Apple’s stock price, this would mean Berkshire sold about 115 million shares, CNBC says.

Still, Apple is Berkshire’s largest holding by a wide margin. Likewise, Berkshire is Apple’s largest shareholder outside of ETF providers.

During Berkshire Hathaway’s annual meeting on Saturday, Buffett praised Apple and said it’s an “an even better business” than two of the conglomerate’s other major holdings, American Express and Coca-Cola. Buffett also assured investors: “Unless something dramatic happens that really changes capital allocation, we will have Apple as our largest investment.”

Buffett didn’t offer specific details on why Berkshire sold 13% of its Apple holdings in the quarter. He did, however, imply that it was to increase its cash stake for tax purposes:

“It doesn’t bother me in the least to write that check and I would really hope with all that America’s done for all of you, it shouldn’t bother you that we do it and if I’m doing it at 21% this year and we’re doing it a little higher percentage later on, I don’t think you’ll actually mind the fact that we sold a little Apple this year.”

Apple CEO Tim Cook was in the audience of Berkshire’s annual meeting in Omaha, Nebraska on Saturday. With regard to Berkshire’s decision to offload some of its Apple holdings, Cook told CNBC that “it’s a privilege to have them as a shareholder.”

When Berkshire sold 10 million shares of AAPL in 2020, Buffett later admitted that the decision “was probably a mistake.” In Q4 2023, Berkshire offloaded around 1% of its AAPL holdings (10 million shares), so this marks the second consecutive quarter that the conglomerate reduced its stake in Apple.