WSJ : Colt Makes $1.74 Billion Offer for Vista Outdoor, Gate-crashing Rival Deal

Colt Makes $1.74 Billion Offer for Vista Outdoor, Gate-crashing Rival Deal
The unsolicited offer comes after Vista and the Czechoslovak Group, or CSG, announced their own deal in October

Firearms manufacturer Colt CZ Group has made an unsolicited offer to acquire U.S. -based Vista Outdoor VSTO -0.12%decrease; red down pointing triangle that values its equity at $1.74 billion, seeking to block the latter’s proposed merger with a Czech industrial technology company.

Colt has proposed a cash-and-stock merger with the sporting and outdoor-goods company that would value its shares at $30.00 each, Vista said late Wednesday.

Colt is a well-known maker of pistols, revolvers and rifles.

The unsolicited offer comes after Vista and the Czechoslovak Group, or CSG, announced their own deal in October. The companies had agreed to merge Vista’s sporting-products business with CSG in an all-cash deal valuing it at $1.9 billion on an enterprise value basis, which includes debt. The business includes brands like Remington and other ammo and firearms marques.

Vista said late Wednesday that its board of directors hasn’t made a decision on Colt’s offer, “nor has it changed its recommendation in support of the acquisition of its Sporting Products business by CSG.”

The company said that its board will carefully review Colt’s offer and remains committed to acting in the best interest of its shareholders.

In a separate statement, Colt said its offer was superior and would recapture the value that Vista has lost over the 18 months since the company said it planned to spin off its outdoor-products segment.

“It is apparent to Colt CZ that, with the separation of the sporting products segment, the remaining outdoor products segment will be subscale as a stand-alone public company with substantial risks,” the firearms maker said.

FT : Far-right leader set to come first in Dutch elections, exit polls say

Far-right leader set to come first in Dutch elections, exit polls say
Geert Wilders’ Freedom party may be unable to form a coalition as big parties oppose him as prime minister

Dutch far-right leader Geert Wilders is on course to win the most votes in parliamentary elections on Wednesday that were dominated by debate around rising immigration in the Netherlands.

Wilders’ Freedom party is projected to win 35 seats, doubling its total, followed by a left-wing alliance led by the EU’s former climate chief Frans Timmermans with 26, and then the Liberal VVD with 23, according to an exit poll.

The poll by Ipsos for broadcaster NPO has proved to be a reliable guide in past elections to the final results, which are expected on Thursday morning.

Wilders’ victory, if confirmed, will send shockwaves through the EU, which has been struggling to absorb a fresh wave of migrants from Africa and Asia.


He also wants a referendum on leaving the EU.

But Wilders, an anti-Islam campaigner who has vowed to ban the Koran and mosques, will struggle to find coalition partners to form a government that can amass a majority in the 150-seat lower house of parliament.

Dilan Yeşilgöz-Zegerius, the leader of the VVD, said she would not support Wilders as prime minister. She arrived in the Netherlands as a child from Turkey, has pledged to cut immigration and crime, and to boost economic growth.

Centre-right newcomer Pieter Omtzigt, a former Christian Democrat who formed his New Social Contract party only in August, has also ruled out serving in a cabinet with Wilders. NSC is forecast to win 20 seats.

There were 26 parties contesting elections and the NPO poll found 16 would enter parliament. Analysts say whoever wins will require at least three other parties to govern — a prospect that could extend talks to form a government for months, with Prime Minister Mark Rutte staying in a caretaker capacity.

His ruling coalition collapsed in July over plans to try to limit immigration by making it harder for asylum seekers to be joined by family members.

The election campaign was dominated by migration, a housing crisis squeezing out young people and lower-income families, and environmental restrictions on farming in the densely packed country of 18mn.

Yeşilgöz-Zegerius said the country could not cope with the volume of arrivals. Net migration hit more than 220,000 in 2022, a tenfold increase in 20 years.

Omtzigt has suggested cutting annual numbers to 50,000, including those from the EU who have a right to work anywhere in the bloc. Wilders takes an even tougher line but has dropped his anti-Islam rhetoric in recent days.

Wilders still lives in a safe house and is guarded round the clock because of death threats.

A late surge for Wilders prompted a similar rise for Timmermans as leftwing voters turned out to try to thwart a rightwing government. The former EU commissioner leads a combined Labour and Green party, which increased its presence by nine seats, according to the poll.

However, he would also find it hard to form a government, as his closest ally, the progressive, liberal D66 group, is set to win only 10 seats.

The Dutch system has no minimum threshold to enter parliament, so there is a rich array of factions, from the Party for the Animals to 50 Plus, representing pensioners.

>>> US Close Dow +0.53% S&P +0.41% Nasdaq +0.46% Russell +0.69%

Closing Stock Market Summary
The stock market went into Thursday's Thanksgiving Day holiday giving investors more for which to be thankful. Fortified by yet another impressive earnings report from NVIDIA (NVDA 487.16, -12.28, -2.5%), which fell prone to a sell-the-news response, an encouraging initial jobless claims report, Israel and Hamas agreeing to a four day pause in fighting as part of a hostage release deal, and the lingering fear of missing out on further gains, the major indices padded their gains for the month.

The gains were modest but ultimately underpinned by broad-based buying interest and a general lack of selling interest at the index level. Advancers led decliners by a workmanlike 9-to-5 margin at the NYSE and by a 13-to-8 margin at the Nasdaq. The Invesco S&P 500 Equal-Weight ETF (RSP) gained 0.5%, as did the Vanguard Mega-Cap Growth ETF (MGK).

Deere (DE 370.74, -11.91, -3.1%), Guess? (GES 20.81, -2.91, -12.3%), Urban Outfitters (URBN 31.82, -4.49, -12.4%), Nordstrom (JWN 14.21, -0.69, -4.6%), and Autodesk (ADSK 202.66, -15.01, -6.9%) were some individual laggards of note following their earnings reports. Tesla (TSLA 234.21, -6.99, -2.9%), meanwhile, broke down below its 50-day moving average (237.99).

Otherwise, the market had a predominately positive disposition, holding its line in the afternoon trade following the news that Rainbow Bridge at Niagara Falls had been closed after a vehicle traveling to the U.S. from Canada had exploded. A follow-up report from NBC News said law enforcement officials were not calling this an act of terrorism.
Every sector finished the session higher with the exception of the energy sector (-0.1%). Gains for the other sectors ranged from 0.1% to 0.9%.

The energy sector trailed all day amid a roller-coaster session for oil prices, which traded as low as $73.90 per barrel before settling the session at $77.05 per barrel, down just 0.7%. A report that OPEC+ is delaying its weekend meeting until November 30 triggered the initial sell-off as Bloomberg suggested the delay was due to Saudi Arabia's dissatisfaction with the oil production levels of other members.

The implication was that the other members have been overproducing. Prices likely rebounded on a sense that Saudi Arabia will aim to get that overproduction in check.

Today's trading volume was certainly held in check. It was light, which was no surprise ahead of the holiday. As a reminder, the stock market will be closed on Thursday and will end trading early at 1:00 p.m. ET on Friday.

Happy Thanksgiving!
  • Nasdaq Composite: +36.3% YTD
  • S&P 500: +18.7% YTD
  • Dow Jones Industrial Average: +6.4% YTD
  • S&P Midcap 400: +4.9% YTD
  • Russell 2000: +1.9% YTD

Reviewing today's economic data:
  • Initial jobless claims for the week ending November 18 decreased by 24,000 to 209,000 (consensus 227,000) while continuing jobless claims for the week ending November 11 decreased by 22,000 to 1.840 million.
    • The key takeaway from the report is that this report covers the period in which the survey for the November employment report is conducted, so the low level of initial jobless claims should support expectations for some decent growth -- certainly at this point in the Fed's tightening cycle -- for nonfarm payrolls.
  • Durable goods orders for October declined 5.4% month-over-month ( consensus -3.1%) following a downwardly revised 4.0% increase (from 4.7%) in September. Excluding transportation, durable goods orders were flat month-over-month (consensus 0.2%) following a downwardly revised 0.2% increase (from 0.5%) in September.
    • The key takeaway from the report rests in the recognition that nondefense capital goods orders, excluding aircraft -- a proxy for business spending -- dipped 0.1% month-over-month following a 0.2% decline in September. That isn't a major drop-off by any means, but it does fit with a softening environment in the manufacturing space.
  • The final reading for the University of Michigan Consumer Sentiment Index for November came in at 61.3 ( consensus 60.9), versus the preliminary reading of 60.4 and October's final reading of 63.8. In the same period a year ago, the index stood at 56.7. November marks the fourth straight month that consumer sentiment has declined.
    • The key takeaway from the report is the jump in inflation expectations, which is not what the Fed wants to see following 525 basis points worth of tightening already. It is the type of indication that will keep the Fed entertaining the thought that further tightening may still be necessary.
  • The MBA Mortgage Applications Index was up 3.0% week-over-week with refinance applications up 2% and purchase applications up 3%
Friday's economic calendar features:
  • 09:45 ET: Preliminary November S&P Global US Manufacturing PMI (Prior 50.0)
  • 09:45 ET: Preliminary November S&P Global US Services PMI (Prior 50.6)

>>> US After Hours Summary: Quiet after hours session; TGT -0.1% on mixed securi

After Hours Summary: Quiet after hours session; TGT -0.1% on mixed securities shelf offering

After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: None

Companies trading higher in after hours in reaction to news: HOLI +2.9% (to hold special meeting in Jan; Special Committee continues sale process in expedited manner), TAC +0.1% (TAC and BHP announce commercial operation of hybrid renewables facility)

After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: None

Companies trading lower in after hours in reaction to news: NAAS -0.4% (terminates proposed Charge Amps acquisition), MEOH -0.4% (methanol production facility impacted by an unplanned outage), OSK -0.3% (awarded a $341 mln US Army contract for medium equipment trailers), TGT -0.1% (files mixed securities shelf offering), VSTO -0.1% (Colt CZ Group proposes combination that values VSTO at $30/sh)

>>> Vista Outdoor: Colt CZ Group discloses 2.4% stake in 13D filing; proposes co

Vista Outdoor: Colt CZ Group discloses 2.4% stake in 13D filing; proposes combination that values VSTO at $30/sh
  • Colt CZ announces in filing that it sent a letter to the Board of Directors of VSTO proposing a strategic combination between Colt CZ and the Issuer that would value the Issuer at $30.00 per share and include a $900 million share repurchase to be executed following closing of the proposed transaction.

FT : US telcos: distant cash flows from fibre are uncertain

US telcos: distant cash flows from fibre are uncertain
Groups needing to spend tens of billions of dollars on broadband lines are in an awkward position

The appeal of annuities lies in their predictability. But in an era of high interest rates, distant cash flows are suddenly less valuable.

That has put US telecoms companies that need to spend tens of billions of dollars to build or retrofit broadband lines in an awkward position. A Lumen Technologies executive summed this up when he enthused about the “beautiful” annuity stream that would come once the fibre was in the ground but acknowledged the challenge of a long payback window.

The sector is not feeling much love from Wall Street. Shares in the likes of Lumen, Frontier Communications, AT&T and Verizon are down between 7 and 75 per cent in 2023, a year in which the S&P 500 is up sharply. The race is on for companies to get to the phase of charging customers for superfast fibre internet before they burn through their cash balances.

Lumen garnered recent headlines for a complex debt restructuring that pushed out maturities a few years in exchange for paying higher interest rates. Its current debt balance of $20bn compares with a market value of just $1bn. Its free cash flow profile amid annual capital expenditures of $3bn is just around break-even.

Frontier has a market capitalisation of $5bn against total debt of $14bn. In 2021 it emerged from a bankruptcy that had cleansed it of $10bn of debt and ostensibly left it appropriately capitalised. Its current annual free cash flow deficit is $1bn, but is supposed to eventually flip to a positive $3bn.

Verizon and AT&T have much larger and diversified businesses. They pay sizeable dividends that support their share prices. For its part, AT&T has a joint venture with BlackRock to fund its fibre strategy.

Even as telcos look ahead to their investments turning into cash gushers, they are still tied to their past. A Wall Street Journal investigation into potentially toxic legacy wires could lead to billions in remediation costs or other liabilities for some companies. Time, as always, is money.

>>> Europe : Brokers Upgrades & Downgrades - 23rd of November 2023 V2.2(+)

>>> Up
* Adecco Raised to Buy at Bank Vontobel; PT 50 Swiss francs (+)
* Anglo American Raised to Buy at Deutsche Bank
* BAE PT Raised to 1,300 pence from 1,150 pence at JPMorgan
* HUTCHMED China ADRs Raised to Buy at Deutsche Bank; PT $22.10
* Panostaja Raised to Accumulate at Inderes; PT 57 euro cents
* Sage Raised to Buy at Bryan Garnier; PT 1,450 pence

>>> Down
* Adidas Cut to Neutral at CaixaBank BPI; PT 204.40 euros (+)
* Interroll Cut to Hold at Stifel; PT 2,600 Swiss francs
* Kion Cut to Hold at Stifel; PT 34 euros
* Telecom Argentina ADRs Cut to Sector Underperform at Scotiabank

>>> Initiation
* Arise Rated New Buy at SEB Equities; PT 73 kronor
* Arise Rated New Buy at Handelsbanken; PT 50 kronor (+)
* Autostore Rated New Hold at Arctic Securities; PT 18 kroner
* Auto Trader Assumed Sell at UBS
* OX2 Rated New Buy at Deutsche Bank; PT 60 kronor
* Shield Therapeutics Rated New Buy at Stifel; PT 15 pence (+)

>>> Call
* Anglo American Raised, Among Top Mining Picks at Deutsche Bank (+)
* BAE Gets New Street-High PT at JPMorgan on Growth, Visibility (+)