WSJ : Pernod Ricard to Buy Stake in Tequila Maker Backed by Country Star George

Pernod Ricard to Buy Stake in Tequila Maker Backed by Country Star George Strait
Deal for Codigo 1530 Tequila set to boost French distiller’s exposure to premium spirits in the U.S.

Pernod Ricard SA PRNDY 4.03% has agreed to buy a majority stake in Codigo 1530 Tequila, a premium spirits brand backed by country-music star George Strait, in the distiller’s latest move to boost its exposure to high-end booze in the U.S.

The French company said late Monday it would pay an undisclosed sum to acquire a majority stake in Codigo, which produces a range of ultrapremium and prestige tequilas.

Companies across the alcohol industry have sought to boost their exposure to higher-end products in recent years as drinkers show an increasing willingness to pay up for pricier booze—a trend that accelerated during the pandemic and has boosted sales of Scotch, bourbon and tequila.

Pernod said Codigo would complement its broad portfolio of products, which already include Absolut vodka and Jameson whiskey, and that its experience in the distribution of premium brands would help the tequila maker reach new drinkers.

Código is already available within 50 states across the U.S. and is at the early stage of its international development with a presence in over 30 markets, the company said.

Código was founded in 2016 by Ron Snyder, Federico Vaughan and Mr. Strait—who has sold millions of records—and produces its drinks in the Mexican state of Jalisco.

Analysts at Jefferies said the deal for Codigo was a good strategic fit with Pernod’s existing agave-spirits portfolio. While this category makes up only a small percentage of Pernod’s sales, tequila is a major driver of growth in the important premium segment, the analysts said.

Jefferies, citing data from industry tracker IWSR, said Codigo’s average price point is $812 a case or $68 a bottle. It also said, per IWSR data, that Codigo sold about 35,900 cases in 2021, with a retail-sales value of $29 million, leading it to estimate supplier sales of around $15 million.

News of the Codigo deal comes on the heels of two similar moves by Pernod last week. The company said it would take a minority stake in sotol brand Nocheluna, which is set to be launched across the U.S. in the coming months and is backed by rock musician Lenny Kravitz. Pernod also said it would raise its stake in U.S. group Sovereign Brands, which owns a portfolio of super-premium wine and spirits brands.

>>> Stoxx 600 Pre-Market Indications

  • Nel (D7G TH) +2.4%
  • Glencore (8GC TH) +2.3%
    • Energy Tightness, Not Value, May Support Metals After 2022 Drop
  • VW (VOW3 TH) +2%
    • *EUROPE CAR SALES ROSE 7.9% IN SEPT., REMAINED BELOW 2019 LEVEL
  • Evotec SE (EVT TH) +1.7%
    • EQS-News: Evotec launches PanOmics data analysis platform PanHunter at Bio-IT World
  • ASMI (AVS TH) +1.7%
  • Anglo American (NGLB TH) +1.6%
    • Energy Tightness, Not Value, May Support Metals After 2022 Drop
  • Axa (AXA TH) +1.5%
  • ASML (ASME TH) +1.5%
  • Lufthansa (LHA TH) +1.4%
  • Vonovia (VNA TH) +1.4%
  • Philips (PHI1 TH) -1.7%

>>> TradeGate Pre-Market Indications

DAX:
  • Vonovia (VNA TH) +1.8%
  • Covestro (1COV TH) +1.6%
  • Adidas (ADS TH) +1.5%
    • Retailers Rally, Asos in Talks With Banks: EMEA Consumer Wrap
  • Siemens Healthineers (SHL TH) +1.5%
    • Siemens Healthineers Reinstated Overweight at Morgan Stanley
  • VW (VOW3 TH) +1.5%
  • Deutsche Bank (DBK TH) +0.7%
  • SAP (SAP TH) +0.7%
  • Bayer (BAYN TH) +0.6%
    • Roche Sales Drop as Demand Abates for Covid Tests and Medicines
  • Airbus (AIR TH) +0.5%
  • Porsche SE (PAH3 TH) +0.5%
MDAX:
  • TAG Immobilien (TEG TH) +2.7%
  • Aroundtown (AT1 TH) +2.4%
    • Bloomberg Europe Corporate Index Up, OAS Widens
  • Evotec SE (EVT TH) +2%
  • Kion (KGX TH) +1.8%
  • K+S (SDF TH) +1.7%
  • Commerzbank (CBK TH) +0.8%
  • ProSieben (PSM TH) +0.8%
  • Duerr (DUE TH) +0.7%
  • Stroeer (SAX TH) +0.3%
    • Watch Ad Stocks After Publicis’s Organic Revenue Beats Estimates
  • Delivery Hero (DHER TH) +0.3%
    • Short Seller Favorites Darktrace, Just Eat Lead Tech Stock Rally

>>> What to look at today - 18th of October 2022

Stocks extended a rebound and major currencies rallied versus the dollar amid the UK’s efforts to foster greater stability in its volatile bond market.  A gauge of Asian equities advanced Tuesday, led by technology stocks in Hong Kong. US equity futures jumped as much as 2% after the S&P 500 closed above a key technical support level on Monday. 
A Bloomberg gauge of the greenback declined for a second day as the New Zealand dollar surged on rate-hike bets and the pound fluctuated following a Financial Times report that the Bank of England was likely to delay the sale of government bonds. The yen paused in its run toward the closely watched 150 per dollar level, which has investors on high alert for possible intervention. Japanese Finance Minister Shunichi Suzuki said he was watching market moves with a sense of urgency. Chinese junk dollar bonds dropped to a record low, as a property crisis sparked by a crackdown on excessive borrowing and a slide in home sales show few signs of turning around without more policy steps. China’s decision to delay the publication of key economic data including third-quarter gross domestic product added a touch of caution to trading in the region. The Communist Party congress has provided few signs of a let up in China’s Covid-zero and property-market policies that are weighing on the economy.  Treasury yields declined during Asian trading, as did rates on Australia’s benchmark bonds. Government bond yields in New Zealand bucked the trend, rising with the country’s currency after inflation data remained stronger than expected. The figures underscored risks to markets from persistently high consumer prices even in countries at the vanguard in tightening monetary policy.  oil rose as investors weighed signs of a tight market against concerns over a global economic slowdown. Gold edged higher and Bitcoin continued to trade below $20,000. US After Hours FUBO +8.3% on upbeat Q3 guidance; MFA +10.9% after reporting certain financial measures; AR +4.6% on news it will join S&P MidCap 400, BBWI +3.6% on MOXY launch news.

Nikkei +1.42% Hang Seng +1.08% CSI -0.30% Shanghai -0.28% Shenzen +0.26%

Eur$ 0.9850 CNH 7.2009 CNY 7.1926 JPY 148.94 GBP 1.1342 CHF 0.9941 RUB 62.2180 TRY 18.5847 WTI$ 86.18 +0.84% Gold 1,654 +0.22% BTC 19,600 +0.32% ETH 1,335 +0.41%

S&P +1.65% Nasdaq +1.82% EuroStoxx +1.19% FTSE +0.86% Dax +1.08% SMI +0.53%

Macro :
- Mobius Warns US Interest Rates Will Hit 9% If Inflation Persists
- CFTC Says Receivership Concluded in $1.3B Ponzi Scheme Case
- Scholz Overrules Greens in Surprise Move to Extend Nuclear Power
- Goldman Says Sell S&P 500 Calls to Fund Bullish China View
- JPMorgan’s Kolanovic Trims Risk as He Turns More Wary on Economy

Keep an eye on :
- AIR FP : Airbus Wins First Third-Party Mission for Giant Beluga Cargo Jet
- AIR FP : Airbus Aims Smallest A220 Business-Jet at US After Russia Loss
- AKRBP NO : Aker BP Prelim 3Q Average Production 411,700 BOE/D
- AV/ LN : Aviva Loses Long-Short Senior Strategist to Asset Manager Silex
- BMPS IM : Monte Paschi Turns to Market for Capital Rescue: ECM Watch
- CSGN SW : Credit Suisse Is Said to Begin Sale of US Asset Management Arm
- DARK LN : Short Seller Favorites Darktrace, Just Eat Lead Tech Stock Rally
- DTE GY : T-Mobile Amends Credit Agreement, Provides for $7.5b Revolver
- EDP PL : Portugal Regulator Proposes 2.8% Increase for Electricity Tariff
- EBK GY : Germany to Extend Life of Nuclear Plants to Ease Energy Crisis
- ENEL IM : Enel in Talks With Banks on New €16b Loan: Messaggero
- ENGI FP : Repsol, Engie Submit Offers to Buy Asterion Energies: Reuters
- EQT SS : EQT Completes Baring PE Asia Deal in Sector’s Biggest Buyout (1)
- ERF FP : Eurofins Scientific 3Q Revenue EU1.62B Vs. EU1.63B Y/y
- FCAP LN : FinnCap Got Indicative Non-Binding Proposals From Panmure Gordon
- GALP PL : Galp Says Still Has No Assessment on Nigeria LNG Supply Impact
- GSK LN : GSK Expands Pact With Tempus on Patients Enrollment in R&D Trial
- IBE SM : *IBERDROLA STARTS SALE OF 49% IN UK OFFSHORE FARM: EL ECONOMISTA
- LOOK LN : Lookers Launches Share Buyback Program of up to £15M
- LHA GY : Lufthansa Doubles 2022 Earnings Forecast After Surge in Bookings
- RI FP : Pernod Ricard to Buy a Majority Stake in Código 1530 Tequila
- PFV GY : Pfeiffer Vacuum FY Sales Forecast Beats Estimates
- PUB FP : Publicis Sales Beats Estimates, With Digital Leading Growth
- REP SM : Repsol, Engie Submit Offers to Buy Asterion Energies: Reuters
- RIO LN : Rio Tinto Sees 2022 Pilbara Ore Shipments at Low End of Range
- ROG SW : Roche Sales Drop as Demand Abates for Covid Tests and Medicines
- RWE GY : Germany to Extend Life of Nuclear Plants to Ease Energy Crisis
- RWE GY : RWE to Immediately Prepare German Nuclear Plant for Extension
- SREN SW : Swiss Re Estimates ~$1.3B Hurricane Ian Claims, Sees 3Q Loss (1)
- THG LN : THG Holder SoftBank to Sell Entire 80.6m Stake in THG
- UN01 GY : Germany to Extend Life of Nuclear Plants to Ease Energy Crisis

>>> Europe : Brokers Upgrades & Downgrades - 18th of October 2022

>>> Up
* Antofagasta Raised to Equal-Weight at Morgan Stanley
* Boozt Raised to Hold at Nordea
* Bravida Raised to Buy at Nordea; PT 133 kronor
* Dechra Pharma Raised to Buy at Jefferies; PT 3,112 pence
* Fortnox Raised to Buy at SEB Equities; PT 52 kronor
* Juniper Raised to Neutral at Piper Sandler; PT $29

>>> Down
* Adevinta Cut to Sell at Berenberg; PT 64 kroner
* Atea Cut to Hold at Nordea
* Atlantic Sapphire ASA Cut to Sell at Fearnley; PT 4 kroner
* Enento Group Cut to Hold at SEB Equities; PT 22 euros
* First Quantum Minerals Cut to Underweight at Morgan Stanley
* Mips Cut to Sell at Handelsbanken
* Rexel Cut to Equal-Weight at Morgan Stanley; PT 19 euros
* Schibsted Cut to Sell at Berenberg; PT 140 kroner
* Virbac Cut to Hold at Jefferies; PT 296 euros

>>> Initiation
* RAD IM Rated New Outperform at EnVent S.p.A.; PT 1.71 euros
* Simon Property Rated New Peerperform at Wolfe
* Yolo Group Rated New Outperform at EnVent S.p.A.; PT 4.79 euros

>>> Call
* JPMorgan’s Kolanovic Trims Risk as He Turns More Wary on Economy

FT : EU weighs paying for Musk’s donated Starlink internet service in Ukraine

EU weighs paying for Musk’s donated Starlink internet service in Ukraine
Member states suggest formalising SpaceX contract after billionaire threatened to end the service

The EU is discussing whether to cover the subscription cost of the Starlink terminals Elon Musk donated to Ukraine as part of options to safeguard internet communications in the war-stricken country.

Josep Borrell, EU chief diplomat, has tasked officials with drawing up plans to bolster internet coverage in Ukraine after Musk threatened to stop paying for the running of the Starlink terminals he donated to Kyiv, three officials with knowledge of the decision told the FT. The US-based billionaire has said it was costing his company SpaceX up to $20mn a month to run the devices.

Musk’s mobile internet systems have become crucial to the Ukrainian army’s communications on the battlefield where internet infrastructure has been damaged. More than 20,000 Starlink terminals are in Ukraine, many of them used by the military. While some of them were donated by SpaceX, many are paid for by the US government, western allies or through crowdfunding.

Musk on Monday tweeted: “To be precise, 25,300 terminals were sent to Ukraine, but, at present, only 10,630 are paying for service.”

While the entrepreneur on Saturday said he had changed his mind and would cover the cost of running the terminals “indefinitely”, EU officials say they are concerned over his reliability. Some member states used a meeting of EU foreign ministers in Luxembourg on Monday to pledge cash to fund the service.

“For the time being, let’s be happy that he is paying for it. But we need to be on the safe side,” said one of the officials. “The Ukrainians are very worried that he will still cut it off.”

The EU discussions come as Kyiv reported widespread outages of Starlink devices on the frontline in recent weeks and as the Pentagon disclosed talks with the billionaire over the cost of the terminals in the country. Musk on Monday insisted SpaceX had since “already withdrawn its request for funding”.

But the EU is evaluating whether to negotiate a formal contract with SpaceX and set up a joint fund to pay for the Starlink terminals the company donated. EU officials will also explore alternative satellite options, they said.

Proponents of a fund say that it would allow them to take Musk to court if he suspended the service, rather than relying simply on his personal decision to keep providing it.

The official said: “One option is that we pay for Starlink because it is already operational, they have thousands of terminals already there on the ground . . . a contract [with EU countries] would bring stability.”

“But why do we need Musk? Other companies might be able to provide this service,” they added. “It could be cheaper and more reliable.”

A second official said paying for Starlink was “just one of many possible options” the EU could look into as potential steps.

Western countries praised Musk earlier this year after Starlink was used to bring internet services to Ukraine in the aftermath of Vladimir Putin’s invasion in February. But this month, he angered Ukrainian officials for outlining a peace settlement involving Russia keeping the annexed Crimean peninsula.

The Financial Times also revealed some Starlink terminals had stopped working in areas recently liberated from Russian occupation, raising questions about whether SpaceX was blocking the service to some parts of the front lines.

Musk later appeared to threaten to withdraw Starlink services, complaining that his company was spending millions to “create, launch, maintain & replenish satellites & ground stations & pay telcos for access to internet via gateways”.

>>> US After Hours Summary: FUBO +8.3% on upbeat Q3 guidance; MFA +10.9% after r

After Hours Summary: FUBO +8.3% on upbeat Q3 guidance; MFA +10.9% after reporting certain financial measures; AR +4.6% on news it will join S&P MidCap 400, BBWI +3.6% on MOXY launch news

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: FUBO +8.3%, MATX +0.1%, SFBS +0.1%

Companies trading higher in after hours in reaction to news: MFA +10.9% (reports certain financial measures), AR +4.6% (joining S&P MidCap 400), BBWI +3.6% (launches MOXY), BTG +0.8% (reports total gold production for Q3), NFLX +0.4% (rolls out profile transfer), XAIR +0.2% (announces positive data), JPM +0.2% (investment banking chief to retire, according to Reuters), BA +0.2% (offering 737 Max jets to Air India, according to Bloomberg), INTC +0.1% (eyeing lower valuation for Mobileye IPO, according to WSJ)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: MRTN -1.8%, XPO -0.8%

Companies trading lower in after hours in reaction to news: SILK -5.8% (commences $100 mln share offering), AZTA -3.4% (COO resigned), LOCO -2.3% (names new COO), KIND -1.6% (strategic collaboration with ORCL), USPH -0.1% (updates on Hurricane Ian impact), CWT -0.1% (subsidiary receives regulatory approval to purchase Keauhou Community Services), GILD -0.1% (to receive European Marketing Authorization)