>>> Foncière des Régions unit FMU to buy UK hotels from Starwood for GBP 858m, p

Foncière des Régions unit FMU to buy UK hotels from Starwood for GBP 858m, plans EUR 300m capital hike
03 MAY 2018
Following its acquisition of two prime portfolios in Germany and Spain, Foncière des Régions [FDR:PA], through its dedicated hotel subsidiary Foncière des Murs [FMU:PA], has signed an agreement to buy an iconic portfolio of 14 four and five-star hotels from Starwood Capital for GBP 858m (EUR 976m).
The properties are all located in the largest cities of the United Kingdom. Separately, Foncière des Régions has agreed to sign long-term FRI leases for 13 of the properties with InterContinental Hotels Group (IHG), who will rebrand and operate the hotels as part of its luxury and upscale brands portfolio following closing. For Foncière des Régions, a leading European real estate operator, this landmark transaction represents its first entry into the British market.
Foncière des Régions will now have a presence in the United Kingdom, the top hotel real estate investment market and fourth most popular travel destination in Europe (38 million tourists in 2017, an increase of 4%).
This portfolio is entirely made up of high-end hotel real estate (four and five-star hotels) and comprises a total of 2,638 rooms in prime locations at the heart of major British cities: nine are located in England (Birmingham, Leeds, Liverpool, London, Manchester, Oxford, Wotton and York), four are in Scotland (Edinburgh, Glasgow), and one is in Wales (Cardiff).
These property assets are of very high quality. Having recently benefited from various programmes of work (GBP 182m was invested between 2014 and 2018), they offer strong potential for growth and good levels of profitability (EBITDAR margin above 30% of the turnover).
This transaction marks a major step in Foncière des Régions' hotel business development strategy, strengthening its move towards more upmarket real estate and the geographical diversification of its portfolio in this sector.
IHG, one of the world’s leading hotel companies will, after closing, rebrand and operate the hotels as part of its luxury and upscale portfolio under long-term, fixed-term FRI leases with variable rents (including a guaranteed minimum). Foncière des Régions and its partner will thus support the upscaling of this portfolio, with a target yield of 6% at cruise speed.
To finance this transaction, Foncière des Murs, a subsidiary of Foncière des Régions, has in particular planned an increase of its share capital in the amount of c. EUR 300m, to be subscribed by all its major shareholders. The detailed terms and conditions of this share capital increase shall be detailed at a further stage, in particular in the prospectus submitted to the AMF’s approval.
"Foncière des Régions is continuing its strategy to move upmarket in the hotel real estate industry. This acquisition is an opportunity to duplicate the development strategy already rolled out in France, Germany and Spain, where Foncière des Régions is the preferred partner of active operators on these markets. This transaction will help Foncière des Régions cement its leading position on the hotel real estate investment market in Europe", explains Dominique OZANNE, Deputy CEO of Foncière des Régions.
"A resolutely European player that combines working, traveling, and living on a daily basis, Foncière des Régions is launching itself on a new market, while consolidating its strategy: to select the best markets, surround ourselves with the best partners, and use all of our skills and expertise to create value for all of our stakeholders", says Christophe KULLMANN, CEO of Foncière des Régions.
The announcement can be read here.

>>> Xerox attracts interest from Apollo Global

Xerox attracts interest from Apollo Global - report
03 MAY 2018
Xerox Corp [NYSE: XRX] has received an expression of interest from the PE fund Apollo Global Management [NYSE: APO], a newswire reported, citing sources privy to the process.
A deal with Apollo will halt Xerox's planned USD 6.1bn sale to Fujifilm Holdings [TYO:4901] of Japan, Reuters noted.
According to the report, Xerox's appointment of John Visentin as the company’s new CEO increased Apollo’s interest.
Link to original source.

>>> Newell Brands Waddington Group suitor Novolex in final acquisition talks

Newell Brands Waddington Group suitor Novolex in final acquisition talks - report
03 MAY 2018
Novolex, the Hartsville, South Carolina-based packaging company backed by PE firm Carlyle Group [NASDAQ: CG], is in final talks to acquire New Jersey-based Newell Brands’ [NYSE:NWL] Waddington Group, a newswire reported. Waddington, a manufacturer of disposable cutlery and drinkware for the food service sector, is worth USD 2bn, Reuters said, citing three sources close to the process.
A deal could be announced within days, according to the report.
Newell shares rose 0.5% to USD 27.19 on Wednesday, which gave the company a market capitalisation above USD 13bn.
According to previous reports, suitors for Waddington included Faerch Plast A/S, backed by Advent and WellspringCapital-backed Hoffmaster.
Goldman Sachs and JPMorgan Chase are running the sale.

>>> Avon Products beats by $0.04, misses on revs (2.50)

Avon Products beats by $0.04, misses on revs (2.50)
  • Reports Q1 (Mar) earnings of $0.02 per share, excluding non-recurring items, $0.04 better than the Capital IQ Consensus of ($0.02); revenues rose 0.9% year/year to $1.31 bln vs the $1.36 bln Capital IQ Consensus.
  • Active Representatives and Ending Representatives declined 4% and 1%, respectively, largely due to declines in Brazil

>>> KKR beats by $0.24, beats on revs; Board approves plan to convert from partn

KKR beats by $0.24, beats on revs; Board approves plan to convert from partnership to corporation on July 1
  • Reports Q1 (Mar) after tax economic net income of $0.42 per share, excluding non-recurring items, $0.24 better than the Capital IQ Consensus of $0.18; revenues rose 1.8% year/year to $382.2 mln vs the $337.44 mln Capital IQ Consensus. After-tax Distributable Earnings was $304 million, or $0.37 per adjusted unit eligible for distribution.
  • KKR's Board of Directors unanimously approves plan to convert from a partnership to a corporation, effective July 1, 2018. KKR expects to pay an annualized dividend of $0.50 per common share as a corporation and announces an increase in its available share repurchase authorization to $500 million, effective immediately.
  • As of March 31, 2018, Assets Under Management and Fee Paying Assets Under Management were $176 billion and $120 billion, respectively, up 28% and 12%
  • Peers: BX, CG

>>> US Early premarket gappers

Early premarket gappers
Gapping up:
  • NSIT +20.2%, KKR +11.5%, LOGI +8.4%, MTGE +7.2%, AAC +6.2%, DATA +6.2%,EXEL +6.2%, OMF +6%, DXCM +5%, CZR +4.8%, KHC +4.3%, FMC +4.2%, MIC +3.9%,GIL +3.8%, BAND +3.4%, LADR +3.3%, HCC +3.3%, QGEN +2.7%, FMI +2.5%, MTOR+2.3%, CLLS +2.2%, MET +2.1%, CI +2.1%, BZH +2%, EZPW +1.8%, ZNGA +1.4%,XRX +1.4%, FIVN +1.3%, CXW +1.3%, CFX +1.3%, NYLD +1.1%, TEP +1.1%
Gapping down:
  • AKAO -29.8%, PACB -17.5%, CERN -7.8%, CRUS -7.3%, HOLX -6.9%, SPOT -6.8%,WPX -6%, AIG -5.6%, HOS -5%, TSLA -5%, TUSK -4.5%, FEYE -4.3%, SQ -4.2%, LGCY-3.8%, FIT -3.6%, NXPI -3.1%, HABT -3%, AI -2.5%, TYL -2.3%, DDD -2.3%, CLR-1.8%, HGV -1.8%, AUY -1.7%, AFG -1.6%, MEDP -1.4%, XPO -1.2%, AWK -1.1%,HZN -1.1%, PANW -0.9%

>>> MSCI beats by $0.05, reports revs in-line; maintains FY 2018 guidance for ad

MSCI beats by $0.05, reports revs in-line; maintains FY 2018 guidance for adj. EBITDA of $645-665 mln
  • Reports Q1 (Mar) earnings of $1.31 per share, excluding non-recurring items, $0.05 better than the Capital IQ Consensus of $1.26; revenues rose 16.6% year/year to $351.32 mln vs the $349.01 mln Capital IQ Consensus.
  • Operating revenues for first quarter 2018 increased $38.5 million, or 23.5%, to $201.9 million, compared to $163.4 million for first quarter 2017. The $38.5 millionincrease was primarily driven by a $28.0 million, or 48.6%, increase in asset-based fees, and an $11.0 million, or 10.8%, increase in recurring subscriptions.

>>> Xerox misses by $0.05, beats on revs

Xerox misses by $0.05, beats on revs (29.38)
  • Reports Q1 (Mar) earnings of $0.68 per share, $0.05 worse than the Capital IQ Consensus of $0.73; revenues fell 0.8% year/year to $2.44 bln vs the $2.39 bln Capital IQ Consensus.
  • Xerox is not providing 2018 guidance due to the pending Director Appointment, Nomination and Settlement Agreement with Carl Icahn and Darwin Deason, among others.
  • Special Dividend
    • In connection with the combination, subject to applicable law, Xerox will declare a special one-time cash dividend of $2.5 billion, in the aggregate, to the holders of record of Xerox common stock on the record date for the special dividend. The amount of the special dividend is currently estimated to be approximately $9.80 per share of Xerox common stock (based on the shares of Xerox common stock outstanding as of March 31, 2018). The special dividend will be paid immediately prior to the Closing and funded by a new borrowing as discussed below under "Bridge Facility". Fujifilm will not be a shareholder of Xerox as of the record date for the special dividend and therefore will not receive any payment in respect thereof.

FT : XPO Logistics eyes up to $8bn in deals

XPO Logistics eyes up to $8bn in deals
Services group is in talks with about 12 companies and has increased its tech spending

XPO Logistics, which grew to an $11bn transportation and supply chain rival to FedEx and UPS through small acquisitions, is gearing up for as much as $8bn worth of new deals to consolidate the fragmented industry, its chairman and chief executive said on Wednesday.

The Connecticut-based group, which has more than 95,000 employees in 32 countries, ended a four-year deal spree in 2015 to integrate its purchases and roll out new technology with an aim of securing leading positions in faster-growing corners of the market such as ecommerce and “last mile” deliveries of heavy goods.

Now, said Brad Jacobs, taking on new debt could give it a “war chest” of $6bn-$8bn, and since last year it has narrowed a list of hundreds of potential targets to about a dozen with which it is in discussions.

“It could be one big deal or two smaller deals,” he said, “but the base case is that by the end of the calendar year we’ll have completed one or two of these.” Between 2007 and 2015 XPO examined 2,000 companies before eventually buying 17 of them.

With revenues equal to less than 2 per cent of its $1tn addressable market, Mr Jacobs said, XPO saw “a lot of runway” to take market share from rivals, particularly smaller groups lacking its international reach, which multinational clients value.

The US remains XPO’s largest market, accounting for about 60 per cent of its sales, followed by France with 13 per cent and the UK with 12 per cent. It is under-represented in Germany, Mr Jacobs said, but it had not picked its acquisition targets to fill a single gap in the map; almost all operate in several countries.

His comments came as XPO reported first-quarter earnings that showed an 18.4 per cent advance in revenues to $4.2bn and a jump in net income from $19.5m to $66.9m, driven by ecommerce demand and growth in freight brokerage.

“If you look at all the markets we operate in, none are in recession right now. Two to three per cent average GDP growth around the world is really good for us,” he said.

Healthy markets had also encouraged XPO to “front-load” its capital expenditure in the first quarter of the year, he said, as it stepped up spending on its fleet and technology, allowing it to integrate with voice assistants such as Alexa, use drones to check its warehouse stock, and predict how many ecommerce packages will be returned by consumers.

XPO reaffirmed its target of adjusted earnings before interest, tax, depreciation and amortisation of at least $1.6bn for the full year, with cumulative free cash flow for 2017 and 2018 reaching about $1bn.

Its shares, which have risen 92 per cent in the past year, ended the day down 2 per cent at $93.59, before the earnings were released after the market close.