>>> US Canada Nafta talks break up with no deal

U.S.-Canada Nafta talks break up with no deal; Trump is expected to notify Congress of plans to proceed with Mexico-only pact
20:27:18 * U.S.-Canada Talks Break Up With No Friday Agreement -- Sources

* Trump Is Expected to Notify Congress of Plans to Proceed with Mexico-Only Deal to Replace Nafta -- Sources

* Trump Announcement Is Expected to Suggest Canada Can Still Join Revised Nafta -- Sources

>>> US Gapping down


Gapping down
In reaction to disappointing earnings/guidance:

  • AMBA -13.8%, ZUO -13.3%, BIG -9.1%, COO -7.5%, NTNX -6.3%, ULTA -3.9%, YEXT -3.2%, CANG -2.2%

Other news:

  • SRC -4.2% (declared quarterly cash dividend of $0.125/share, prior $0.18/share)
  • CRON -4.2% (following 25%+ move lower
  • SBUX -2.4% (trading lower after Coca-Cola acquired Costa Ltd; speculation of new competition for SBUX)
  • CMG -1.8% (Pershing Square lowers active stake)
  • AZN -1.7% (announces top-line results from the TULIP 1 Phase III trial for anifrolumab in adult patients with moderate-to-severe systemic lupus erythematosus -- trial did not meet primary endpoint)

Analyst comments:

  • ATVI -2.7% (downgraded to Underperform from Neutral at BofA/Merrill)
  • GT -2.2% (downgraded to Hold from Buy at Berenberg)

>>> US Gapping up


Gapping up
In reaction to strong earnings/guidance:

  • AOBC +26%, LULU +10.6%, ATEN +8.1%, PDD +4.9%

M&A news:

  • KO +0.9% (to acquire Costa Limited for $5.1 bln)

Other news:

  • VHC +39% (favorable court ruling in long-running case vs. Apple)
  • IDTI +15.4% (Renesas (RNECF) said to be seeking an acquisition of IDTI, according to the Nikkei Asian Review)
  • VCYT +5.5% (achieves 'major' Medicare milestone for the Envisia Genomic Classifier through the MolDx program)
  • DBD +2.2% (completes financing to enhance liquidity and successfully amends credit agreement; actions are expected to drive more than $200 million of savings)
  • ENPH +1.9% (after closing 10% lower on the day)
  • RRD +1.8% (CIO disclosed the purchase of 20K shares worth more than $100K)
  • RGR +1.4% (following AOBC results)

Analyst comments:

  • NA

>>> US Early premarket gappers


Early premarket gappers

Gapping up:

  • VHC +35.6%, AOBC +25.8%, IDTI +13.6%, LULU +10.4%, ATEN +8.1%, VCYT +5.5%, PDD +3.4%, DBD +2.2%, ENPH +1.9%, RRD +1.8%, RGR +1.4%, PAGS +1.3%, KO +0.7%

Gapping down:

  • AMBA -14.4%, ZUO -12.3%, BIG -11.2%, CRON -8%, COO -7.5%, NTNX -7.1%, ULTA -4.3%, SRC -4.2%, CANG -2.2%, AZN -1.4%, YEXT -1.4%, CMG -1%

WSJ : U.S. Hedge Fund Seeks Board Shake-Up at Toshiba

U.S. Hedge Fund Seeks Board Shake-Up at Toshiba
King Street’s proposal hints at some foreign shareholders’ dissatisfaction with Toshiba’s management

TOKYO—New York-based hedge fund King Street Capital Management LP has proposed new independent directors at Toshiba Corp. TOSYY -0.17% , according to people familiar with the matter, the first indication of dissatisfaction among the foreign funds that bought into the Japanese industrial conglomerate last year.

King Street is one of the biggest shareholders in Toshiba, amassing a 5.2% stake, according to a regulatory filing on May 29. As of March 31, 72% of Toshiba’s shares were held by non-Japanese investors, according to the company.

The relationship between Toshiba and its non-Japanese shareholders could be an indicator of how shareholder activism is changing company management in Japan. Calls by Prime Minister Shinzo Abe’s government for shareholder-friendly management and better corporate governance have been drawing the interest of foreign investors.

The names of the director candidates proposed by King Street and the hedge fund’s rationale for seeking a board shake-up couldn’t be learned. One person with knowledge of a letter sent by King Street to Toshiba said it was a friendly approach. Another foreign investor familiar with King Street’s proposal said his team supported installing new independent directors.

A King Street representative declined to comment. Toshiba representatives didn’t respond to requests for comment.

Toshiba has been going through a tumultuous period since an accounting scandal came to light in 2015. The company suffered big losses when its U.S. nuclear subsidiary, Westinghouse Electric Co., went bankrupt in March 2017.

To fill a capital shortfall and avoid a delisting from the Tokyo Stock Exchange, Toshiba agreed in September 2017 to sell its cash-cow memory-chip unit to a group led by U.S. private-equity firm Bain Capital, and it raised some $5.3 billion from foreign investors by issuing new shares in December 2017.

After delays, Toshiba completed the chip-unit sale in June 2018 and announced a $6.3 billion share buyback using the proceeds.

In April, former banker Nobuaki Kurumatani took over as Toshiba’s chief executive. Some foreign investors think he should do a bigger share buyback and carry it out more quickly. So far, Toshiba hasn’t said when the buyback will happen.

At Toshiba’s annual shareholder meeting in June, Mr. Kurumatani was elected as a Toshiba director, but with only 63% support.

Since the accounting problems, Toshiba has restructured its board by reducing the number of directors and boosting the number of outsiders. Currently, seven of its 12 directors are independent.

Toshiba has sold many of the businesses that used to be associated with its brand name, including personal computers, television sets and medical devices. Still, the 143-year-old company remains one of the best-known in Japan with more than 132,000 group employees and $35 billion in annual revenue.

>>> Hermes may get strategic partner; owner Otto advised by Rothschild - report

Hermes may get strategic partner; owner Otto advised by Rothschild - report (translated)
31 AUG 2018
Hermes, the German package delivery company, may see the entry of a strategic partner, Boersen-Zeitung reported.
The German-language daily, without identifying sources, said the owner of Hermes, the trade and services group Otto, is seeking a partner to take over a significant part of Hermes, and is advised by investment bank Rothschild in this effort.
Otto is particularly interested in drawing investment into the Hermes operations in the largest European e-commerce markets, the report said, naming these as Germany, the UK and France. The overall turnover of the business is estimated at about EUR 2.5bn, the report said.
Internationally active online retailers and logistics companies are among the types of strategic partners being considered, the report said.
Otto may even let a partner gain a majority stake in the package distribution operations of Hermes Europe, the report said. It added that the new investor would need to be a good cultural fit. The family-owned Otto would still want to hold a significant stake in Hermes and retain influence over its strategic decisions, the article claimed.
The newspaper said Otto is thought to be seeking investment with a view to capitalizing on growth prospects for Hermes. In the coming three years, about EUR 500m is intended to be invested into Hermes, according to the article.
The newspaper was told that if the investor hunt is fruitless, Hermes remains in a position to grow profitably.

FT : Coca-Cola to buy Costa coffee chain from Whitbread for £3.9bn

Coca-Cola to buy Costa coffee chain from Whitbread for £3.9bn
Whitbread bought the chain for £19m in 1995

Coca-Cola is to buy Costa coffee from leisure group Whitbread in a deal that values the UK high-street chain at £3.9bn including debt.

Whitbread had previously announced it would spin off Costa from the rest of its business, which is focused on the faster-growing Premier Inn hotel brand, after coming under pressure from activist investors.

The sale marks the end of Whitbread’s 23-year ownership of Costa, which the group bought for £19m when it had just 39 shops. It now has more than 2,400 shops in the UK and 1,400 in more than 30 international markets, as well as operating a self-serve business.

Chief executive Alison Brittain said the deal represented a “substantial premium” to what would have been achieved by demerging Costa. A “significant majority” of the net cash proceeds of around £3.8bn from the deal will be returned to shareholders, Whitbread said. The company will also use the money to pay down debt, contribute to its pension fund and finance the expansion of Premier Inn.

James Quincey, Coca-Cola president and chief executive said that Costa would give the company, “new capabilities and expertise in coffee, and our system can create opportunities to grow the Costa brand worldwide”.

“Hot beverages is one of the few remaining segments of the total beverage landscape where Coca-Cola does not have a global brand. Costa gives us access to this market through a strong coffee platform.”

Coffee has been one of the frothiest markets for mergers and acquisitions activity over the past year, as competition between Swiss group Nestlé and JAB Holdings — the private investment group that manages the wealth of Germany’s billionaire Reimann family — has heated up.

Nestlé has struck deals including taking a majority stake in hipster roastery Blue Bottle and acquiring rights to sell Starbucks products, while JAB earlier this year struck a deal to combine Keurig Green Mountain coffee business with soft drinks producer Dr Pepper Snapple.

Ms Brittain said the deal was “great news for shareholders as it recognises the strategic value we have developed in the Costa brand and its international growth potential and accelerates the realisation of value for shareholders in cash”.

She added:

The announcement today represents a substantial premium to the value that would have been created through the demerger of the business and we expect to return a significant majority of net proceeds to shareholders. .