>>> Ocado stakebuilding by Kroger could signal bid intentions - speculative repo

Ocado stakebuilding by Kroger could signal bid intentions - speculative report
08 JUN 2018
Ocado [LON:OCDO], a UK-based grocery delivery service, could be a takeover target for the Cincinnati, Ohio-based supermarket group Kroger [NYSE:KR], according to a speculative report in The Daily Telegraph. The newspaper’s market report section noted that Kroger this week increased its stake in Ocado from 5.92% to 6.06%.
The report went on to mention market speculation that Kroger’s stakebuilding is aimed at defending against a potential takeover bid from the online retailer Amazon.com, Inc [NASDAQ:AMZN] and that its stake in Ocado could be a step towards a Kroger bid for Ocado.
Ocado and Kroger inked a deal for Ocado to become Kroger’s exclusive order fulfilment partner.
Ocado’s share price closed 34.8p up at 955.6p in London on Thursday, 7 June, giving the company a market capitalisation of GBP 6.40bn (EUR 7.27bn).
The Daily Telegraph report appeared on page 7 of the newspaper’s Business section on Friday, 8 June.

>>> What to look at today - 8th of June 2018

Asian stocks traded lower Friday after a risk-off session in global markets where technology stocks retreated and Brazilian assets slumped. Treasury yields recovered some of Thursday’s decline.
Japanese and Australian shares edged lower while South Korean stocks showed modest losses. Chinese and Hong Kong shares hit their lows as China’s trade surplus came in narrower than expected. Earlier, U.S. benchmarks closed mixed, with the Nasdaq 100 falling the most in three weeks. Traders had flocked to Treasuries, igniting gains that at one point pushed the 10-year yield down nine basis points in a matter of minutes. The dollar fluctuated and the yen held gains. The Stoxx Europe 600 Index fell after disappointing data on euro-area exports and German factory orders.
US After Hours : ZUMZ +13%, DOCU +8%, SFIX +6%, COO +1.5%, CREE -3.5% following earnings/guidance

Nikkei -0.47% Hang Seng -1.43% CSI -1.50% Shanghai -1.45% shenzen -1.29%

Eur$ 1.1804 CNH 6.3990 CNY 6.4031 JPY 109.60 GBP 1.3421 CHF 0.9809 RUB 62.4013 WTI $ 65.75 -0.33%

S&P -0.30% EuroStoxx -0.87% FTSE -0.60% Dax -1.07% SMI -0.77%

Macro :
- German Carmakers Want EU to Offer Trump Lower Tariffs: FAZ
- Commerzbank Cuts Equities to Neutral Ahead of ‘Risky’ Summer

Keep an eye on :
- ACS SM : ACS, Atlantia Seek EU1.3B for Hispasat Sale, Expansion Reports
- AF FP : Air France-KLM Says Number of Passengers Grew 1% in May
- ATC NA : Bouygues Tried to Buy SFR - LeFigaro.fr : http://bit.ly/2M8X9lx
- ANTO LN : Codelco’s Copper Output Lowest in More Than a Year: Cochilco
- BAC US : BofA Is Said to Move About 400 Jobs From London to Paris: Rtrs
- BARC LN : Barclays Is Said to Hire Credit Suisse’s Matthew Cousens: FN
- BFIT NA : Eric Wilborts Sells Entire 5.9% Stake In Basic-Fit
- DBK GY : Deutsche Bank Chair Said to Talk to Holders on Commerzbank Deal
- DBK GY : Deutsche Bank Is Said to Pursue $3 Billion Energy Portfolio Sale
- DBK GY : Deutsche Bank’s Revenue Trajectory is the ‘Key Unknown,’ MS Says
- DMGT LN : Geordie Greig Named as New Editor of the Daily Mail: Guardian
- FNTN GY : Freenet to Join 5-G Auction if Limited Frequency Offered: BZ
- GNFT US : Intercept Slips as Results From Generic Study Published in NEJM
- RMS FP : Hermes to Join France’s Benchmark CAC 40 Index
- IBAB BB : Ion Beam to Install Cyclone 70 System in Arizona for $16m-$20m
- ICPT US : Intercept Slips as Results From Generic Study Published in NEJM
- KER FP : Gucci Signals Slowdown With EU9 Billion Total Retail Value
- KIN BB : Kinepolis’s Bert, Related Parties Cut Stake to Less Than 50%
- LULU US : Lululemon 10m Shrs Are Said Offered at $121.50-122.70/Shr
- MRK GY : French Appeals Court Says Merck Must Supply Old Thyroid Pill
- KN FP : Natixis Shutters Trade-Finance Desks in Geneva and Dubai
- NOVOB DC : Novo Nordisk Is Said to Plan Mass Layoffs: Borsen
- OCDO LN : more rumor of Kroger Bid - Telegraph
- PEAN SW : Peach Property Raises Target Volume of Hybrid Warrant Bond Issue
- RBS LN : RBS CEO Says Bank Hopes to Buy Back Stock to Reduce U.K. Stake
- REV US : Perelman Could Take Revlon Private Soon, Mox Reports Says
- ROG SW : Genentech’s Rituxan Gets FDA Approval For Pemphigus Vulgaris
- RWE GY : German 1Q Nuclear Power Generation Grew 29%: AG Energiebilanzen
- SPM IM : Saipem, CTCI Corp. Win $925M E&C Onshore Contract in Thailand
- SGO FP : Saint-Gobain CEO: 2H Will Be Better Than 1H
- SFL IM : Safilo Obtains Extension of Revolving Credit Facility
- SEVAN NO : Sembcorp Marine Unit to Buy Sevan Marine’s Subsidiary for $28M
- SLA LN : Standard Life Aberdeen Holder Lloyds to Offer 97.7m Shrs
- SNH GY : Steinhoff Africa Faces Competition From Tekkie Town Founder: MW
- SNBN SW : SNB Chooses Markets, Not Companies For Investing: Jordan to SRF
- TKA GY : Thyssenkrupp Considering Divesting Its Shipyard Division: HB
- VIFN SW : FDA Approves Vifor Pharma’s Mircera for Pediatric Patients

>>> Europe : Brokers Upgrades & Downgrades - 8th of June 2018

>>> Up
* Auto Trader Upgraded to Hold at Berenberg
* Capita Upgraded to Outperform at RBC; PT 2 Pounds
* Euskaltel Upgraded to Overweight at JPMorgan; PT 9.50 Euros
* Iliad Upgraded to Hold at Santander; PT Set to 191 Euros
* Ingenico Group Upgraded to Overweight at Barclays; PT 91 Euros
* Pets at Home Raised to Equal-weight at Morgan Stanley
* ProSieben Upgraded to Hold at DZ Bank; PT 24.60 Euros
* Randgold ADRs Upgraded to Overweight at JPMorgan; PT $94
* S IMMO Upgraded to Buy at Erste Group; PT 20 Euros
* Telia Upgraded to Buy at Goldman; PT 54 Kronor
* Thales Upgraded to Add at AlphaValue

>>> Down
* Boliden Downgraded to Equal-weight at Barclays; PT 295 Kronor
* KAZ Minerals Downgraded to Neutral at JPMorgan; PT 9.70 Pounds
* MQ Downgraded to Reduce at Kepler Cheuvreux; PT 13 Kronor
* Pets at Home Downgraded to Hold at Berenberg
* Scandic Cut to Hold at SEB Equities; Price Target 98 Kronor

>>> Initiation
* Bank of Cyprus Rated New Outperform at KBW; PT 2.75 Euros

>>> Call

>>> US After Hours: ZUMZ +13%, DOCU +8%, SFIX +6%, COO +1.5%,


After Hours Summary: ZUMZ +13%, DOCU +8%, SFIX +6%, COO +1.5%, CREE -3.5% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: ZUMZ +12.6%, DOCU +7.9%, SFIX +5.7%, COO +1.5%, CBLK +0.7%

Companies trading higher in after hours in reaction to news: RDC +0.7% (light volume -- was awarded drillship contract by ExxonMobil), TRXC +0.6% (filed a FDA 510k submission for additional Senhance System instruments including 3 millimeter diameter instruments), LVS +0.4% (authorized increase in share repurchase program to $2.5 bln from $1.56 bln and increases amount of its U.S. term loan by $1.35 bln), LLY +0.3% (initiated with Overweight at Cantor Fitzgerald), LIVN +0.3% (initiated with Buy rating and $115 tgt at Stifel)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: CREE -3.5% (reaffirms outlook and announces retirement of Executive Vice President and CFO Mike McDevitt), HOME -1.1%, AVGO -0.7%

Companies trading lower in after hours in reaction to news: MVIS -4.9% (proposes public offering of up to $18 mln of common stock and appointed Sumit Sharma to the newly created position of Chief Operating Officer), ADMA -3.8% (commenced public offering of common stock), EXAS -3.1% (commences $150 mln offering of its 1.0% convertible senior notes due 2025), ZS -1.9% (modestly pulling back following today's 23% move higher), LITE -1.2% (announces resignation of CFO Aaron Tachibana effective August 31; appoints Chris Coldren interim CFO)

>>> US Close Dow +0,38% S&P -0,07% Nasdaq -0,70% Russell -0,49%

Closing Market Summary: Tech Shares Slide, Bring S&P Win Streak to an End

The major averages finished Thursday on a mostly lower note, with the S&P 500 shedding 0.1% to end a four-session winning streak. The Nasdaq and the Russell 2000 retreated from all-time highs, finishing lower by 0.7% and 0.5%, respectively, while the Dow outperformed, adding 0.4%.

Most S&P 500 sectors finished the day in positive territory, with energy (+1.6%) and telecom services (+1.2%) leading the charge. Energy stocks rose with the price of crude oil following reports that Venezuela is nearly a month behind in crude deliveries due to its ongoing economic crisis. WTI crude futures advanced 1.9% to $65.95 per barrel after hitting a two-month low on Wednesday. In addition to energy, the consumer staples (+0.6%) and utilities (+0.4%) sectors also outperformed.

However, the information technology sector -- which is the biggest S&P 500 group, representing a quarter of the broader market by itself -- dropped 1.1%, overpowering mostly modest gains from the ten other groups. Within the space, giants like Microsoft (MSFT 100.88, -1.61), Facebook (FB 188.18, -3.16), and Alphabet (GOOG 1123.86, -13.02) lost between 1.2% and 1.7%, and chipmakers pushed the Philadelphia Semiconductor Index lower by 1.0%.

In Washington, Commerce Secretary Wilbur Ross said the U.S. has struck a deal to end crippling sanctions against Chinese telecom giant ZTE that includes a $1 billion penalty and the implementation of a U.S.-chosen compliance team to monitor the company going forward. ZTE will also be required to change its board of directors and its executive team in the next 30 days. Separately, President Donald Trump and Japan's Prime Minister Shinzo Abe held a joint press conference on Thursday, touching on next week's U.S.-North Korea summit.

On the corporate front, Qualcomm (QCOM 60.64, +0.80) and NXP Semi (NXPI 120.07, +5.55) rallied 1.3% and 4.9%, respectively, following reports that China is ready to approve Qualcomm's proposed acquisition of NXP. Meanwhile, J.M. Smucker (SJM 100.80, -5.72) lost 5.4% and Five Below (FIVE 99.05, +17.77) spiked 21.9% after both companies released their quarterly results, and Allergan (AGN 163.27, +7.89) jumped 5.1% following reports that billionaire investor Carl Icahn has built a small position in the drugmaker.

U.S. Treasuries rallied on Thursday, shooting to new highs in the afternoon when emerging market currencies dropped to new lows against the U.S. dollar. There wasn't a news catalyst to credit for the move, but it's worth noting that Indonesia, Turkey, and India have all raised rates recently in an effort to stem capital flight. The iShares MSCI Brazil Capped ETF (EWZ 31.71, -1.77) got clobbered on Thursday, dropping 5.1%, and the iShares MSCI Emerging Markets ETF (EEM 46.42, -0.72) lost 1.5%. The yield on the benchmark 10-yr U.S. Treasury note dropped five basis points to 2.93%.

Reviewing Thursday's economic data, which was limited to weekly Initial Claims and the Consumer Credit report for April:

  • The latest weekly initial jobless claims count totaled 222,000, while the consensus expected a reading of 225,000. Today's tally was below the revised prior week count of 223,000 (from 221,000). As for continuing claims, they rose to 1.741 million from a revised count of 1.720 million (from 1.726 million).
    • The key takeaway from this report is that the low level of initial claims is consistent with a tight labor market.
  • The Consumer Credit report for April showed an increase of $9.2 billion (consensus $13.9 billion). March credit growth was revised to $12.3 billion from $11.6 billion.
    • The key takeaway from the report is that the increase in consumer credit was the lowest since September 2017, which suggests rising interest rates may have driven consumers to pay down debt and/or tempered their demand for credit.

On Friday, investors will receive just one economic report, Wholesale Inventories for April (consensus +0.2%).

  • Nasdaq Composite +10.6% YTD
  • Russell 2000 +8.6% YTD
  • S&P 500 +3.6% YTD
  • Dow Jones Industrial Average +2.1% YTD