Gapping down
In reaction to disappointing earnings/guidance:
- RHT -14.4%, SGH -1.9%
Select RHT related names trading lower in sympathy:
- NOW -1.8%, WDAY -1.1%, SPLK -1%, CRM -0.5%
Other news:
- YTRA -7.9% (prices 9 mln ordinary shares at $5.50/share)
- XERS -1.4% (IPO modestly pulling back after closing up 35% on the first day of trade)
- CDTX -1% (files for 12,499,997 share common stock offering by selling shareholders)
- NRZ -0.9% (commences secondary offering of 3,694,228 shares of common stock by holders pursuant to an exercise of options by FIG and/or its affiliates/employees )
- TSG -0.8% (upsizes and prices 25 mln shares of common stock at $38.00 per share)
Analyst comments:
- INGR -0.6% (downgraded to Equal-Weight from Overweight at Stephens)
- VRX -0.8% (downgraded to Hold from Buy at TD Securities)
- NKE -0.8% (downgraded to Neutral from Buy at Buckingham Research)
- ECL -1.2% (downgraded to Underweight from Neutral at JP Morgan)
- KLAC -1.2% (downgraded to Hold at Needham)
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Gapping up
In reaction to strong earnings/guidance:
- KMX +4.2%, BB +2.6%
M&A news:
- WSC +13.6% (to acquire Modular Space Holdings)
Select financial related names showing strength:
- CS +2.5%, DB +1.8%, HSBC +1.6%, JPM +0.5%, C +0.4%
Other news:
- TNDM +20.6% (announces FDA approval of t:slim X2 Insulin Pump with Basal-IQ technology)
- SENS +4.8% (FDA has approved its PMA application to market its Eversense Continuous Glucose Monitoring System to people with diabetes in the United States)
- TCS +3.4% (files for 32,492,421 share common stock offering by selling shareholders)
- PAGS +2.3% (prices follow-on public offering by it and its selling shareholder of 33 mln Class A common shares at a public offering price of $29.25)
- AVRO +1.6% (after the IPO closed more than 60% higher on its first day of trade)
- CMC +1.5% (rebounding after yesterday's earnings related weakness)
Analyst comments:
- AYX +3.5% (initiated with Outperform at Oppenheimer)
- VSLR +3% (upgraded to Buy from Neutral at Guggenheim)
- URI +1.5% (upgraded to Buy from Neutral at UBS)
- MOH +1.4% (upgraded to Buy from Hold at Jefferies)
- DG +1.3% (upgraded to Strong Buy from Outperform at Raymond James)
- MU +1% (initiated with a Buy at The Benchmark Company; tgt $80)
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Early premarket gappersGapping up:
- TNDM +20.5%, AYX +3.5%, SENS +2.4%, BB +2.1%, AVRO +1.6%, CMC +1.5%, HSBC +1%, BMY +0.6%, C +0.5%, JPM +0.4%
Gapping down:
- RHT -12%, SGH -3.5%, TCS -3.1%, XERS -1.4%, WDAY -1.3%, NRZ -1.1%, CDTX -1%, SPLK -1%, GS -0.4%, HYH -0.4%
Inmarsat: Echostar Holdings (SATS) discloses 2.97% in Inmarsat amid pursuit of acquisition (7.12)
NorPaper sold by OpenGate Capital to Gemayel Freres & Chaoui Industriel
22 JUN 2018
OpenGate Capital, a global private equity firm, announced that it has completed the sale of one of its legacy, pre-fund investments, NorPaper Group, to Gemayel Freres & Chaoui Industriel Group, a Lebanon-based business specialized in recycled corrugated cardboard and packaging products. Terms of the transaction were not disclosed.
OpenGate Capital acquired NorPaper from Canadian paper conglomerate, Cascades, in 2011. NorPaper is a leading producer of white top testliner paper that is sold to European packaging manufacturers. Realizing an opportunity to increase capacity within NorPaper, OpenGate completed an accretive, add-on acquisition in February of 2015 of DS Smith Packaging Papeterie de Nantes SAS (“Nantes”), a division of DS Smith, Plc (LON: SMDS). Integrated into NorPaper, Nantes broadened the product portfolio and added 50kT per year of production capacity through its white top testliner paper made from 100% recycled fiber with best in class quality and printability. The Nantes mill also addressed growing market demand for paper products in a wider grammage and trim range. Combined, NorPaper and Nantes have an annual capacity of 200kT, making it the leading white top testliner paper producer in France and among the top five in Europe.
Andrew Nikou, OpenGate’s Founder and CEO stated, “We are incredibly proud of OpenGate’s investment in NorPaper from sourcing the acquisition through our relationship with Cascades, to the add-on acquisition from DS Smith. As we transfer the business to Gemayel & Chaoui Industriel Group, we recognize that under the new leadership, NorPaper has many new exciting years ahead. I want to thank the entire NorPaper team led by CEO, Laurent Glachant, for their dedication and hard work in driving this business forward.”
Julien Lagrèze, Partner at OpenGate’s Paris office, oversaw the entire lifecycle of the NorPaper investment from acquisition through add-on acquisition and realization. Lagrèze commented, “NorPaper is a reflection of OpenGate’s lower middle market investment strategy and we are proud of all that has been accomplished. From executing a complete carve-out to implementing a multi-faceted operational improvement plan, which included the development of a cooperative paper swap agreement with several European corrugated cardboard manufacturers, NorPaper sales and margins greatly improved since acquired by OpenGate in 2011. Throughout our investment period, NorPaper grew its paper product offerings that drove increased volumes and end-use applications. Given all that has been accomplished, NorPaper is at the right point in its evolution to be acquired by Gemayel & Chaoui Industriel Group so that it can progress further under new leadership.”
NorPaper’s CEO, Mr. Laurent Glachant stated, “Working with the team at OpenGate Capital has been a rewarding process over the past several years. NorPaper has grown into a highly regarded business, recognized for producing a variety of white top testliner and recycled paper materials for our customers. I want to thank Julien Lagrèze and his team at OpenGate for all of the support we received that enabled us to achieve the growth and improvements at NorPaper. As we look ahead, we are excited to enter into the next phase of our evolution with Mr. Gemayel and his partners.”
This is the second legacy, pre-fund realization for OpenGate in the past six months following the sale of Benvic, a European PVC compounding business that was sold to Investindustrial in December of 2017.
Link to press release
Orange stake sale by French government not on agenda in short term (translated)
22 JUN 2018
The French government is not planning to sell its shareholding in French telco Orange [EPA: ORA] in the short term, French daily L’Agefi reported. The comments were made by Martin Vial, commissioner for the French State’s participations, replying to recent rumours doing the rounds.
An earlier report from French daily Les Echos claimed that the French government was considering selling shares in listed French companies, including Orange, in which it directly owns a 13.4% shareholding valued at EUR 5.2bn.
The original article from L’Agefi appeared in print, page 9.
Link to news report from Les Echos
Engie will not be controlled by Chinese or US-UK investors, government official says (translated)
22 JUN 2018
The French government is planning to strictly monitor the future shareholding structure of listed French energy group Engie [EPA:ENGI], French daily L’Agefi reported. The report cited Martin Vial, commissioner for the French State‘s participation , as saying that the government would make sure that Engie is not controlled ultimately by investors from China, the US or the UK. He added that he was following a similar situation in Portugal, where Portuguese company Energias de Portugal received an offer from China Three Gorges.
The report noted that the French government presented its PACTE bill this week, which includes the privatisation of companies such as Engie, airports operator Aeroports de Paris [EPA:ADP] (ADP), and state-owned lottery gaming specialist Francaise des Jeux (FDJ).
The original article appeared in print, page 9.
Sky shareholder Odey Asset Management believes bidders could easily afford to offer GBP 18 per share
22 JUN 2018
Sky [LON:SKY] shareholder Odey Asset Management has said it believes bidders for the FTSE-100 satellite group could comfortably afford to offer GBP 18 (EUR 20.55) per share, The Times reported.
The newspaper quoted Odey founder and fund manager Crispin Odey, who said his firm’s research indicates that Sky’s finances will improve soon, prompting bidders to table higher offers.
Comcast [NASDAQ:CMSA], a Philadelphia, Pennsylvania-based cable TV company, has offered GBP 12.50 per share for Sky, a valuation of GBP 22bn.
Twenty-First Century Fox [NASDAQ:FOX], the New York City-based media group that holds a 39% stake in Sky, has offered GBP 10.75 per share for the 61% it does not already own. Sky’s board has withdrawn its recommendation for Fox’s offer.
As reported, Fox is looking to acquire full ownership of Sky before selling the business, alongside its other entertainment assets, to The Walt Disney Company [NYSE:DIS]. Comcast is also bidding against Disney for the other Fox entertainment assets.
Odey, whose fund holds a 0.9% stake in Sky, has estimated that the business is worth GBP 18.00 to GBP 26.00 per share, the item said. Odey argued that as debt is currently cheap, bidders could easily afford to offer GBP 18.00. The report mentioned a potential bid value of GBP 50bn, but did not attribute the figure to a source.
Odey said Sky’s previous investment in programming will lead to improved sales, which could increase free cash flow to GBP 2.5bn, up from GBP 1.6bn now. The GBP 2.5bn free cash flow would value the target company at nearer to GBP 26.00 per share, Odey estimated.
One analyst cited by the report said Disney’s offer for Fox’s assets carries less regulatory risk than Comcast’s offer, while Disney’s offer would be more attractive for Fox’s controlling shareholders the Murdoch family for tax reasons, as its offer is in cash and shares while Comcast’s bid is cash-only.
Another analyst cited by the report doubted that bidders would be unlikely to pitch offers higher than 10% above Comcast’s bid. A 10% premium to Comcast’s offer would value Sky at GBP 13.75 per share, the analyst said, noting that the company’s shares are already trading at about that level.
The Times is published by News Corp [NASDAQ:NWSA], whose chairman Rupert Murdoch is co-chair of Fox alongside his son Lachlan Murdoch. Murdoch’s other son, James, is Fox’s CEO and chairman of Sky.
Sky’s share price closed GBP 0.25 up at GBP 14.05 in London on Thursday, giving the company a market capitalization of GBP 24.15bn.
Link to original source
Chanel Posts Sales of $9.6 Billion in 2017
The privately held company published consolidated financial results for the first time since it was founded in 1910.
PARIS — Chanel, the privately held company owned by the secretive Wertheimer brothers, on Thursday broke with a century-old tradition by publishing its consolidated financial results for the first time.
The maker of quilted handbags and No. 5 perfume recorded sales of $9.6 billion in 2017, up 11 percent year-on-year in constant currency terms, placing it shoulder-to-shoulder with Louis Vuitton, commonly considered the world’s biggest luxury brand. LVMH Moët Hennessy Louis Vuitton, the French conglomerate that owns Vuitton, does not break out figures for its fashion brands.
Chanel said it recorded an after-tax profit of $1.8 billion, up 18.6 percent, while investment in “brand support activities” was up 15 percent from the prior year to $1.5 billion.
“Chanel Limited’s accounts confirm the strength of the Chanel brand, the result of the company’s long-term strategy which has creativity at the heart of its business model. This enables Chanel to create social and economic value and to ensure that Chanel remains one of the most desired brands globally,” the house said.
It added that its long-term strategy was underpinned by a strong balance sheet, with net debt of $18 million and free cash flow of $1.6 billion.
“Our financial strength gives us the means to remain independent and to focus on the long term. We continue to create and invest to ensure that Chanel remains one of the most iconic and innovative brands in the world,” Philippe Blondiaux, global chief financial officer, said in a statement.
Among the stores opened in 2017 was a flagship in Tokyo’s Ginza district. The company also revealed major investment in manufacturing and distribution facilities, including a new site in the north of Paris designed by award-winning architect Rudy Ricciotti that will bring most of its specialty ateliers under one roof.
In addition, Fondation Chanel plans to invest more than $120 million over the next five years in advancing the role of women in society.
Casino teams with L’Oréal to launch Paris wellbeing stores
Two ‘le drugstore parisien’ outlets will offer extended hours and Sunday opening
French retailer Groupe Casino is teaming with consumer group L’Oréal to launch a beauty and wellbeing store concept in Paris, illustrating how retailers are seeking new ways of attracting consumers to shops in the face of growing competition from online.
On Saturday, Casino will open “le drugstore parisien” in two locations in the French capital through its Franprix convenience stores brand. As well as selling products ranging from beauty and wellbeing to snacks and accessories, the store will offer additional services including free WiFi and restrooms, mobile charging stations, hairdressers and pick-up stations for postal goods.
If the two stores — one on Rue de la Chaussée-d’Antin in the 9ème arrondissement and the other on Rue du Bac, near the fashionable Saint-Germain-des-Prés district — are successful, Casino plans to roll out the concept more widely in Paris and abroad.
Jean-Charles Naouri, Casino’s chief executive and controlling shareholder, is regarded as a pioneer in French retail. He downsized hypermarkets years before rivals, anticipating that the format would fall out of favour with consumers, and expanded convenience stores under the Franprix banner.
“With this ‘Parisian drugstore’ we meet the new expectations of consumers in metropolitan areas,” Mr Naouri said.
Unlike the large pharmacy and convenience chains such as CVS Health and Duane Reade in the US or Boots in the UK, French pharmacies stock only medicines and personal products. They tend to have restricted opening hours and are closed on Sundays.
“In Paris, there are pharmacies on one side and food retail on the other, but there is nothing really in the middle,” said Cécile Guillou, general manager of le drugstore parisien.
The only store in Paris that is at all comparable to Franprix’s new concept is the Publicis Drugstore on the Champs-Elysées, which brings together a round-the-clock pharmacy with a restaurant, bookstore, delicatessen and bookstore, and is a popular meeting place for Parisians.
Franprix’s first two drug stores will be open seven days a week, Monday to Saturday from 10.00am to midnight and Sunday from 11.00am to 8pm. For one day each month they will be open for 24 hours to offer Parisians what Casino calls “exclusive entertainment and wellness services”. This shows how brands are trying to create a more immersive and experiential dynamic that extends beyond just buying products.
Several L’Oréal brands including Maybelline, Garnier and NYX Professional Makeup will be stocked in the stores. Jean-Paul Agon, L’Oréal chief executive, said: “We are very happy to be a player in the change alongside Casino to invent a new beauty experience for consumers in France.”
The launches come as Casino’s share price has dropped a third this year. This reflects investor concerns about the structural complexity with which Mr Naouri has built the group over the past three decades and worries about the financing arrangements in its complex chain of investment vehicles, some of which face imminent debt refinancing deadlines.
Casino last week announced a disposal plan of €1.5bn in non-core assets, including real estate, to help reduce debt and shore up investor support.