TheChek News Flow

Swiss commodities trader says offer depends on engagement from Canadian miner’s board

Glencore has said it is willing to improve its $23bn offer for Teck Resources if the Canadian mining company’s board is prepared to engage with it to discuss in the deal.

In a letter addressed to Teck shareholders on Wednesday morning, Glencore chief executive Gary Nagle said the Teck board had “consistently refused any engagement”.

“Glencore has never stated that its proposal is ‘best and final’,” Nagle wrote. “We believe that with engagement, we could improve our proposal’s terms and value, which would be in the best interests of all Teck shareholders.”

Earlier this month the Swiss-based commodities trading company proposed to acquire Teck Resources, merge the two companies, then split then into a coal and metals business.

Teck’s board unanimously rejected Glencore’s bid, as well as an improved offer, saying the proposal was a “non-starter”.

Teck’s shareholders will vote on April 26 whether to approve the company’s earlier plan to split itself in two — a vote that is increasingly seen as an indirect referendum on Glencore’s offer.

Wednesday’s public letter is the first time that Glencore has addressed Teck’s shareholders directly, whereas previously it had addressed the board.

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Mubadala-backed M42 would buy the operator of 440 dialysis clinics from buyout firm Bridgepoint

A Mubadala Investment Co.-backed healthcare company is nearing a deal to acquire kidney-care provider Diaverum for more than $2 billion including debt, according to people familiar with the matter, extending the Abu Dhabi sovereign-wealth fund’s bet on healthcare.

M42, a newly launched healthcare operator owned by Mubadala and a partner company, G42, is planning to acquire Diaverum from U.K.-based buyout firm Bridgepoint Group BPT 2.47% PLC. A deal is expected to be announced later this week, assuming talks don’t break down, the people said.

The deal would help bolster M42’s existing operations in the Middle East while accelerating its stated ambition to expand its healthcare services globally. Its existing holdings include Amana Healthcare, a U.A.E. provider of rehabilitation and other services, and Imperial College London Diabetes Centre, a partnership set up with the U.K. university to treat the growing demand for diabetes care in the Emirates.

Diaverum, based in Sweden, oversees a global network of 440 dialysis clinics, almost triple the 155 facilities Bridgepoint inherited when it bought the business in 2007 for an undisclosed amount. Diaverum has also expanded geographically over that period, operating in 23 countries, up from 15.

Dialysis is a procedure to remove waste products and excess fluid from the blood when the kidneys stop working properly. It often involves diverting blood to a machine to be cleaned. The size of the dialysis market globally is expected to grow in coming years because of aging populations and the increased incidence of kidney disease related to diabetes and other conditions.

Diaverum’s operations include 40 dialysis facilities in Saudi Arabia where Diaverum operates under a five-year contract with the Saudi Ministry of Health, according to the company’s website. Confidence in winning renewal of the license in 2024 was key to the deal, which gave M42 an advantage over other bidders because of its existing base in the region and Mubadala’s backing, said some bankers following the sale process.

Mubadala is the investment arm for the Abu Dhabi government. It oversees $284 billion in assets and invests across a range of industries including business services, energy, financials, healthcare and industrials.

Bridgepoint manages more than €37 billion, equivalent to about $40.6 billion of assets, focusing its investments in industrials, business and financial services, consumer and healthcare, according to the firm’s website.

Bridgepoint attempted to list Diaverum in an initial public offering in 2020. It withdrew the IPO after not achieving a high-enough valuation.

The owner of ad agencies including BBDO and TBWA predicts continued growth throughout 2023 as clients spend on performance- and event-based marketing services

Omnicom Group Inc. said it will significantly reduce its real-estate footprint and formalize return-to-office requirements for all U.S. employees as the company said it expects growth to continue through 2023, an indication that executives believe marketers’ continued spending will help the advertising giant largely avoid the economic headwinds that have hit the tech and finance industries.

Omnicom, which owns agencies such as BBDO, OMD and TBWA, will require all U.S. employees to return to the office at least three days per week, Chief Executive John Wren said on a call to discuss the company’s first-quarter earnings.

“The great resignation is over,” said Mr. Wren. “Naturally, there will be individual cases where people won’t want to come back, and they’ll seek other alternatives. But in the scheme of things, it is not going to be significant.”

Organic revenue grew 5.2% year-over-year in the first quarter, beating analysts’ consensus estimates of 3.9%, according to Wells Fargo. Total revenue for the quarter was $3.44 billion, a 1% increase over the first quarter of 2022, and Omnicom is on track to meet its own predictions of 3% to 5% organic growth for the year, said Mr. Wren.

Organic revenue is a metric that removes the effects of currency fluctuations, acquisitions and disposals.

Omnicom was the first of the major ad holding companies to report its earnings for the first quarter. Its share price hit a 52-week high of $96.78 before the market closed Tuesday and continued to rise in after-hours trading.

Omnicom plans to reduce its global real-estate holdings by more than 1.6 million square feet, said Mr. Wren. Since 2018, the company’s total headcount has increased by approximately 4,000 while office space decreased by 35%, he said.

Mr. Wren acknowledged that Omnicom would spend more money in the short-term to reintroduce employees to in-office requirements. In order to facilitate the transition, Omnicom has also invested in U.S. satellite offices such as locations in Connecticut, New Jersey and Long Island, N.Y., designed to reduce New York-area employees’ commutes, he said.

The company reported $119.2 million in pretax real-estate repositioning costs for the quarter, but this upfront payment will significantly reduce rent and occupancy expenses in the long term, said Chief Financial Officer Philip Angelastro.

Mr. Wren noted continued uncertainty related to the war in Ukraine and rising instability in the Middle East, as well as the collapse of several banks that served the tech industry.

“Clients are getting cautious, and they’re trying where they can to avoid long-term commitments and create as much flexibility in their spending as possible,” said Mr. Wren. “Therefore we’re doing the same.”

One way Omnicom will try to control costs is by opening three company campuses in India as hiring and offshoring operations in that country continue to grow, he said.

The company’s strongest revenue growth came from so-called precision marketing services, which allow advertisers to target consumers directly by using behavioral data, as well as experiential, or event-based, marketing, with the latter seeing especially strong growth outside the U.S., Mr. Wren said.

The company will also increase its investment in AI tools, primarily through a partnership with Microsoft Corp. Clients that want to participate in related projects will combine their data with Omnicom’s own database in order to find new ways to target consumers, according to Mr. Wren.

“There’s a lot of ethical questions as well as privacy questions,” he said. “We’re testing it, playing with it, but certainly not deploying it to the full extent of the power that it has.”