>>> Convergys sees limited interest in second round, sources say

Convergys sees limited interest in second round, sources say
16 MAY 2018
Convergys [NYSE:CVG] has seen limited suitor interest on the back of its weak financial performance, according to two sources briefed on the matter.

The Cincinnati-based outsourcing group is in the second round of an auction run by longtime adviser Centerview Partners, the sources said.
A few private equity firms are around the situation, the first source said. This source and a sector adviser said Convergys is a tough buyout.
Since Convergys is a turnaround story, the company is a better fit for a financial sponsor or sponsor-backed company, than a trade buyer, the second source said. The first source said he is not aware of a strategic suitor showing interest in Convergys.

Last week Convergys reported a 10% drop in 1Q18 revenue on a constant-currency basis. The call center operator forecasts that overall 2018 revenue will fall by 7% on the same basis. Revenue last year decreased by 4% to USD 2.8bn.

The USD 2.3bn enterprise value company trades at around 7.25x projected 2018 EBITDA.

The Wall Street Journal reported after the earnings announcement that Convergys was far along in the sale process and was talking to PE firms and strategics. The newspaper said Convergys started considering options after CEO Andrea Ayers announced plans in January to depart.
Ayers told investors on Convergys’ 1Q18 earnings call that the board had hired a search firm to recruit a new CEO and said “work is progressing as expected.”
The company has said it expects revenue to start growing on a sequential basis in 3Q18 and that the predicted revenue decline for all of 2018 is because of its two largest clients.
Asked on the call about the impact of the proposed merger of wireless operators T-Mobile US [NASDAQ:TMUS] and Sprint [NYSE:S], Chief Financial Officer Andre Valentine acknowledged that Sprint is a top ten client for Convergys, but said it is “too early to speculate on any real impact from the merger.” The relationship will grow this year, the CFO added.
Elliott Management disclosed a 4.9% stake in Convergys at the end of last year and continued to own the same number of shares at the end of March, according to SEC filings. The activist investor has not filed a 13-D outlining any demands on the company.
Convergys declined to comment; Centerview did not return a request for comment.

>>> US Gapping down


Gapping down
In reaction to disappointing earnings/guidance:

  • CSIQ -1.5%

Other news:

  • VSTM -11.3% (announces commencement of $35 mln common stock offering)
  • CLXT -6.1% (files for offering of 3,050,000 shares of its common stock)
  • ABR -3.3% (plans to make a public offering of 5.5 mln shares of its common stock)
  • DB -2.9% (continued weakness)
  • SAN -2.8% (may be in sympathy with DB)
  • PRTY -2.6% (announces secondary offering of 12 mln shares by selling stockholder)
  • ORA -2.3% (to restate its second, third and fourth quarter 2017 financial statements and full-year 2017 financial statements)
  • CS -1% (may be in sympathy with DB)
  • AMRS -0.7% (files to delay 10-Q)

Analyst comments:

  • PPG -0.5% (downgraded to Hold from Buy at Jefferies)
  • VIPS -0.6% (downgraded to Sector Weight from Overweight at KeyBanc Capital Mkts)
  • MMM -0.9% (downgraded to Hold from Buy at Jefferies)
  • CTL -1.1% (downgraded to Underperform from Neutral at Macquarie)
  • SYMC -1.5% (downgraded to Neutral from Buy at Goldman)
  • AVT -2.1% (downgraded to Sell from Neutral at Goldman)

>>> US Gapping up


Gapping up
In reaction to strong earnings/guidance:

  • BOOT +16.1%, M +11.1%, MFGP +8.9%, SE +6.2%, ODP +2.6%, PETQ +0.9%

M&A news:

  • ABAX +14.9% (to be acquired by Zoetis (ZTS) for $83/share in cash)

Select metals/mining stocks trading higher:

  • RIO +2.4%, BBL +1.4%, BHP +1.4%, VALE +0.8%

Other news:

  • GME +9.2% (CNBC reporting that Tiger Management has issued a letter urging the company to launch a strategic review)
  • SGMO +4% (FDA has accepted the Investigational New Drug (IND) application for BIVV003 for the treatment of people with sickle cell disease)
  • TEVA +3.6% (Berkshire Hathaway (Warren Buffett) discloses updated portfolio positions - increased stake)
  • ADMA +3% (United States Patent and Trademark Office issued to the Company U.S. Patent No. 9,969,793 covering methods of treating respiratory infections), EIGR +2.7% (expands licensing agreement with Merck)
  • MU +2% (continued strength)
  • XNET +1.4% (continued strength)
  • CHDN +1.3% (announces entry into real money online gaming and sports betting markets)
  • SNY +0.6% (Regeneron Pharma (REGN +0.5%) & Sanofi announce that a pivotal Phase 3 trial evaluating DUPIXENT to treat moderate-to-severe atopic dermatitis in adolescents met its primary and key secondary endpoints)

Analyst comments:

  • AMD +1.4% (upgraded to Neutral from Negative at Susquehanna)

>>> Folli Follie defers London listing indefinitely, sale possible – sources

Folli Follie defers London listing indefinitely, sale possible – sources

  • Fosun stake-building could continue
  • Other potential bidders seen in pursuit

Folli Follie Group [ATH:FF], the Greek luxury goods group, has indefinitely deferred future plans for a London listing and could be open to a sale instead, a source familiar and a source briefed on the matter told this news service.
The company had been mulling a London listing, but this has been put on hold in the wake of speculator allegations, the sources said. On 3 May long-short fund Quintessential Capital Management (QCM) accused Folli Follie of audit irregularities, sending shares down by over 50% over the last 12 days.
The first source and a local analyst said that clearly this is totally the wrong time to consider a secondary listing in London or anywhere else as it would not be able to raise the true value that the company is worth in the wake of the QCM campaign.
Sentiment for Greek IPOs had seemed good on the back of the successful IPO of another local company, Energean Oil & Gas [LON:ENOG], the Greece- and Israel-focused exploration and production company which recently listed in London, the source familiar said. FFG had been optimistic about the secondary listing plan, the source added.
FFG's second biggest shareholder, Chinese conglomerate Fosun International, for its part has changed its strategy from a potential exit via an IPO to a potential takeover, taking advantage of synergies and value it still sees in the company, both sources said. Fosun on 9 May increased its stake from 13.8% to just over 15%, following the price drop of the shares, as earlier reported. If the price remains low Fosun could increase further still, the source briefed added.
Part of the reason Fosun now sees long term growth prospects with FFG is that Fosun has recently established a new fashion group which has luxury portfolio brands such as Lanvin, Wolford, the same source added, declining to elaborate further on any plans with FFG in this regard.
Nonetheless, Fosun is skeptical about being able to gain control of FFG given that the Koutsolioutsos family that closely holds the company, the source briefed said. It could be hard for the family to give up their stake, as the family very much wanted the company to remain a Greek entity, the source briefed added.
The Koutsolioutsos family has 39% in FFG and foreign institutionals have 31.2%, whilst Fidelity Investments holds 8.3% as per the company website.
However, Fosun is not the only company that sees value in FFG and other suitors are already circling also, the first source said.
FFG is vulnerable to takeover not only due to the QCM campaign, but as a result of residues of poor Greek sentiment that the country's eight-year debt crisis has caused, the first source said. There is still a lot of negative sentiment still towards Greek companies, often not based on reality, but those that know FFG and have worked with it see the value and are interested in a potential acquisition, the first source added.
A spokesperson for FFG did not return calls, whilst a spokesperson Fosun said it does “not comment on market rumours”.
FFG announced on 14 May that is has appointed EY to re-audit its accounts.
FF Group designs, produces and markets its own jewelry and accessories brands globally, as per its website. Brands include Folli Follie and British jeweller Links of London.

WSJ : Disney Considers Letting Pixar Co-Founder John Lasseter Return

Disney Considers Letting Pixar Co-Founder John Lasseter Return
Executives discuss a reduced role for animation guru, who took leave of absence following accusations of unwelcome hugging and other touching


LOS ANGELES—Executives at Walt Disney Co. DIS 0.47% have discussed bringing animation guru John Lasseter back to the company in a new role that would reduce his managerial power but allow him to retain creative influence, according to a person familiar with the matter.

Those discussions come as the end of Mr. Lasseter’s six-month leave, taken following accusations of unwelcome hugging and other touching, approaches on May 21. So far, Disney has given no indication whether or not Mr. Lasseter will return. It is also possible that Monday will pass with no decision.
Pixar Animation Studios and Walt Disney Animation, which Mr. Lasseter helped develop into family-entertainment powerhouses, have adapted to operating in his absence, even as staff members remain in the dark about who will lead them, employees said. The entertainment giant faces a tricky situation in deciding what to do about Mr. Lasseter, a predicament facing many companies in the #MeToo era as they deal with executives whose infractions they didn’t consider severe enough to warrant termination.
In Mr. Lasseter’s case, Disney executives led by Chief Executive Robert Iger are deciding the fate of a man long considered one of Hollywood’s most bankable and well-known creative geniuses.
In his position as chief creative officer of Disney’s studios, a title he has retained while on leave, Mr. Lasseter has steered a number of the company’s most valuable franchises, including “Toy Story” and “Finding Nemo.” After Disney acquired Pixar in 2005, he helped lead a revival of Disney Animation Studios, which made “Frozen” and “Zootopia,” and consulted on everything from toy design to theme park attractions.

Along the way, Mr. Lasseter became something of a celebrity himself, showing up at Disney fan conventions to present new footage or sell versions of his signature Hawaiian shirts. Rosé from his family’s Sonoma Valley vineyard is still available at Disneyland and Walt Disney World.
A representative for Mr. Lasseter didn’t respond to a request for comment.

If Mr. Lasseter returns in his prior role, Disney risks alienating employees and opening itself to blame for any future inappropriate behavior on his part. Some current and former Pixar employees have told media outlets, including The Wall Street Journal, that Mr. Lasseter regularly hugged or otherwise touched them without consent.
Some employees said that Mr. Lasseter’s behavior didn’t bother them. Others, however, particularly younger women, said they were uncomfortable and came forward in the light of the #MeToo movement.
In announcing his leave in November, Mr. Lasseter, 61 years old, said: “I especially want to apologize to anyone who has ever been on the receiving end of an unwanted hug or any other gesture they felt crossed the line in any way, shape, or form.”
Since then, Mr. Lasseter has disappeared from public view. Disney employees said they haven’t heard from him and don’t know where he is.
He left immediately before the debut of Pixar’s Oscar-winning “Coco” and has been absent as the studios ready two high-profile releases: Pixar’s “The Incredibles 2,” out June 15, and Disney Animation’s “Ralph Breaks the Internet: Wreck-It Ralph 2” in November. Other projects that have moved forward without his involvement include “Toy Story 4” and “Frozen 2,” scheduled for 2019.
In considering a redefined role for Mr. Lasseter, Disney leadership appears to be attempting to maintain the benefit of his creative input without the liabilities that could come from his being in charge of thousands of employees, as he previously was.
Day-to-day management duties, including hiring or firing capabilities, would be removed or contained in the scenario being considered, the person familiar with the matter said. Reining in Mr. Lasseter’s managerial oversight could be complicated, however, as his power came less from his official title than his unofficial position as Disney’s most-valued creative employee, people who worked with him said.
It is still possible he could leave altogether or come back with his old job unchanged, the person added.
His absence has been felt in every corner of Disney’s animation business, current and former employees say. Though he personally directed only five movies, the last one in 2011, he consulted on every movie at Pixar and Disney Animation, weighing in anywhere from every few weeks to every few months depending on how smoothly production was running, employees said. Approval from Mr. Lasseter was necessary to move past key benchmarks in writing, storyboarding, production and editing.

Now Disney is relying primarily on a panel of artists, producers and executives at each studio to make creative decisions, according to current and former employees, a more diffuse approach than Mr. Lasseter’s arrangement.
Other experienced creative hands are helping to lead upcoming movies in Mr. Lasseter’s absence. Andrew Stanton, director of “WALL-E” and “Finding Dory,” is filling that role on “Toy Story 4,” whose director, Josh Cooley, hasn’t previously made a feature.

WSJ : Prime Perks: Amazon Dangles Discounts for Whole Foods Shoppers

Prime Perks: Amazon Dangles Discounts for Whole Foods Shoppers
New deals are designed to lure the estimated 40% of the grocer’s shoppers who aren’t Prime members

Amazon is offering new discounts for Prime members shopping at its Whole Foods grocery stores, adding another perk to its membership program after a 20% price hike.

The online retail giant said it would knock 10% off already discounted items and each week cut prices on other products throughout the store. This week’s deals, for example, include half off wild-caught halibut, buy-one, get-one free 12-pack case of sparkling water and $2.99 for a pound of organic strawberries.

The new deals are available immediately at Florida stores and will be rolling out to its more than 460 stores nationwide this summer. Cem Sibay, vice president of Amazon Prime, said the 10% discount will apply to hundreds or even thousands of already discounted items in each store, while the weekly rotation of deals will typically number in the single digits.

“It’ll be a good mix of produce, meats and seafood,” he said.

The discounts come as analysts estimate Prime’s growth rate may be slowing. Amazon for the first time last month revealed it has over 100 million Prime members world-wide. Still, analysts think the company has largely saturated wealthier U.S. households, triggering the company to look for additional growth for the program elsewhere.

Adding more discounts at Whole Foods could make the Prime program worthwhile for some shoppers and keep them in the fold, as well as draw in some of the roughly 40% of shoppers who aren’t yet members, according to Morgan Stanley. Analysts at the bank say grocery discounts “can go a long way toward justifying Prime membership…even at $120 a year.”

The Making of a Giant

Amazon increased the annual price of Prime last month for only the second time. The program, which includes unlimited two-day shipping and video content, started off at $79 annually in 2005. Executives attributed this year’s price hike to the cost of delivering the program as it adds to the offerings.

Prime consists of a bundle of benefits, Mr. Sibay said. “So no one benefit really drives a price increase.”

Amazon also recently added a new option to get in-car delivery for Prime members and began offering a Prime Book Box that delivers a curated subscription of children’s books at a discount.

Amazon has also widened the scope of Prime to low-income consumers by adding programs costing $5.99 a month for those who obtain government assistance with cards typically used for the food-stamp program and Medicaid assistance.

To get the new Whole Foods discounts, Amazon said Prime customers can sign in to either scan a bar code generated by the grocer’s app or enter their phone number to qualify for the discounts. Prime customers with Amazon reward credit cards qualify for an additional 5% off via cash back.


The Whole Foods Prime discounts are the latest in a round of changes announced by Amazon since its August acquisition of the grocery chain. It has also added one- and two-hour delivery in some markets, slashed some prices, added lockers to most stores and introduced Whole Foods’ private label foods to its own website.

Corrections & Amplifications
Amazon.com Inc. introduced Prime in 2005 for $79 annually. An earlier version of this article incorrectly said that the service was introduced in 1995 for $75 annually. (May 16, 2018)

>>> BFM : Orange et Free songent à s’allier

Orange et Free songent à s’allier
16/05/2018 à 08h39
Orange et Free songent à s’allier
Les deux opérateurs envisagent de partager une partie de leurs réseaux mobiles pour accélérer le déploiement de la 4G. Une manne pour Orange, une nécessité pour Free. Et une manière de prolonger leur accord d’itinérance signé en 2012.

http://bfmbusiness.bfmtv.com/entreprise/orange-et-free-songent-a-s-allier-1446040.html

Les deux opérateurs envisagent de partager une partie de leurs réseaux mobiles pour accélérer le déploiement de la 4G. Une manne pour Orange, une nécessité pour Free. Et une manière de prolonger leur accord d’itinérance signé en 2012.
Free n'a plus le choix. Après les mauvais résultats publiés ce mardi, il doit désormais reconquérir des clients et investir dans ses réseaux. D'autant qu'en janvier dernier, le gouvernement et le régulateur des télécoms, l’Arcep, ont imposé aux quatre opérateurs des obligations drastiques pour la couverture en très haut débit, la 4G. Leurs investissements vont augmenter de 30% en deux ans, passant de 7 à 9 milliards d’euros. D’ici 2020, Orange, SFR et Bouygues devront installer 5000 antennes supplémentaires. Free, arrivé sur le marché il y a six ans, devra ainsi rattraper son retard et en installer environ 10.000.
Sauf que son modèle économique ne lui permet pas de dépenser 1 milliard d’euros en plus en trois ans. Avec 1,5 milliard d'euros dépensés chaque année, soit 30% de son chiffre d’affaire, l’opérateur ne peut pas aller plus loin. "L’investissement n’a jamais été aussi haut et les marchés s’en inquiètent, a expliqué le directeur général de Free, Maxime Lombardini, le mois dernier lors d’une audition devant le Sénat pour justifier la perte de 20% de l’action du groupe ces derniers mois. La mutualisation est une évidence pour déployer plus vite". Il y a quelques mois, l’opérateur a même essayé de rejoindre le réseau commun à Bouygues et SFR, en vain, selon des sources concordantes.
2000 à 3000 antennes par an
Depuis six ans, Free loue à Orange son réseau mobile pour combler son manque d'antenne. Cet accord prend fin en 2020, en même temps que les obligations gouvernementales devront être remplies. Free doit investir et envisage de partager une partie du réseau d’Orange pour limiter la facture. Selon plusieurs sources, les deux groupes échangent régulièrement sur ce sujet, et ce depuis deux années. Mais les négociations ne devraient commencer qu’après l’été.
"Le sujet est sur la table, confirme une source proche des pouvoirs publics. D’autant que le régulateur les encourage vivement". Concrètement, il s’agirait pour les deux opérateurs de déployer ces antennes supplémentaires ensemble dans les zones peu denses où Free n’est pas. Entre 2000 et 3000 antennes par an, d’ici 2020, pourraient être déployées à deux dans les petites villes de quelques milliers d’habitants, sur deux tiers du territoire.
Les deux opérateurs se tiennent par la barbichette. Free a besoin d’Orange pour remplir ses objectifs de couverture. Et inversement, il est le plus gros client de l’opérateur historique. L’accord d’itinérance du réseau a déjà rapporté 3 milliards d’euros depuis 2012 et encore 500 millions par an pour porter à plus de 4 milliards d’euros en 2020. Au-delà de cette échéance, l’accord tombera. "Une mutualisation du réseau est une manière de prolonger cet accord", reconnait un bon connaisseur du secteur.
Eviter d’être entre les mains d’Orange
Un schéma a priori gagnant pour tous. Sauf que chacun veut contrôler le système. Orange propose un accord global sur un nombre d’antennes à partager moyennement une rémunération d’environ 200 à 300 millions d’euros par an. Mais Free, soucieux de vouloir contrôler son réseau, préfère une alliance au cas par cas selon ses besoins locaux. "Ils ne veulent pas se mettre dans les mains d’Orange, explique un bon connaisseur de l’entreprise. Ils préfèrent des accords pragmatiques". Sauf qu’Orange, en position de force, met la pression: "sans notre réseau, le leur ne tient pas pour fournir de la 4G".
Free voit bien que le partage des réseaux mobiles de SFR et Bouygues, commencé en 2013, lie les deux opérateurs à jamais. Certes, ils économisent ensemble 300 millions d’euros par an et SFR a rattrapé en deux ans son retard sur la 4G. Mais ces deux opérateurs n’ont leur propre réseau que sur 6% du territoire désormais. Cet accord pèse sur leur indépendance. Lors de la tentative de rachat de Bouygues par Orange, cela a été l’un des sujets les plus compliqués à traiter. "C’est un tel degré d’implication que c’est impossible à détricoter, explique un ancien dirigeant de SFR. Ça empêche à l’un ou l’autre d’être vendu". A tel point qu’il n’y a en réalité, plus que trois réseaux mobile en France. Et bientôt deux ?