FT : Brookfield weighs options after IWG rejects fresh £2.5bn bid

Brookfield weighs options after IWG rejects fresh £2.5bn bid
Canadian asset manager has 3 days to seal deal for UK-listed serviced office group

Canada’s Brookfield Asset Management is weighing up its options after a second takeover offer for UK-listed IWG that valued the serviced office group at £2.5bn was rebuffed, with just three days to go before a UK takeover deadline.

According to people close to the situation, Brookfield’s fresh bid for the company valued shares in IWG at 280p.

One of these people said IWG’s largest shareholder and founder Mark Dixon was inclined to sell the company, but that IWG’s other directors have resisted Brookfield’s overtures.

IWG’s share price rose 4 per cent on Wednesday. Brookfield now has until 5pm on Saturday to either put a firm offer on the table or walk away, according to the UK Takeover Panel code.

Brookfield made its first all-cash approach for IWG, the world’s largest serviced office group, alongside private equity group Onex last month. The latest offer was made late last week.

IWG operates in about 3,000 locations in 100 countries. It is known for its Regus brand but also operates a series of flexible shared offices under the Spaces name, where it faces stiff competition from US start-up WeWork.

SoftBank-backed WeWork is valued at roughly $20bn and has been expanding aggressively into London over the past year, offering short-term flexible leases to businesses ranging from start-ups to large corporates.

IWG struggled in 2017, issuing a profit warning in October that caused its shares to fall by more than a third in a day. The group blamed a “Brexit effect” in London and global “disruption” as a result of natural disasters in the US for the expected lower earnings.

Mr Dixon told the Financial Times in October that he was unconcerned by competition from WeWork, which operates in fewer cities.

The serviced office sector suffered in the early 2000s after the collapse of the dotcom boom. The US arms of both Regus and rival HQ Global Workspaces both entered Chapter 11 bankruptcy protection.

Mr Dixon, who currently owns about 25 per cent of IWG’s shares, has been selling down his stake since 2005, including a near £100m share in June when market speculation was rife about a potential takeover.

For Brookfield, an acquisition would be its highest profile UK deal since it teamed up with Qatar’s sovereign wealth fund to acquire Songbird, the holding company whose sole asset is a majority stake in the Canary Wharf Group, for £2.6bn, in 2015. 

The Canadian asset manager is also pursuing a $15bn deal to buy the majority stake in US shopping mall owner GGP that it does not already own.

IWG and Brookfield declined to comment.

>>> Telenor in talks to sell eastern Europe assets - sources

(MergerMarket)
Telenor in talks to sell eastern Europe assets - sources

Norway-based telecommunications group Telenor [STO:TELO] is in one-to-one talks to sell its eastern Europe assets, a source familiar with and three sources briefed on the situation said.
The negotiations are at an advanced stage, with the buyer conducting due diligence, the source familiar and the first source briefed said.
As a rule, Telenor never comments on speculation and rumours, a Telenor spokesperson said.

The buyer is an unnamed US-based fund, the source familiar, and the first and second sources briefed said. The fund is a new investor to the region, the first source briefed added. The buyer is not KKR [NYSE:KKR], the source familiar and the first two sources briefed said.
In June 2017, Reuters cited Telenor’s Chief Executive Sigve Brekke as saying that the company had no plan to sell its portfolio in central and eastern Europe on the back of press reports suggesting that Telenor was considering selling its Serbian unit to KKR.

The sale comprises Telenor's assets in Bulgaria, Serbia and Montenegro, and is expected to fetch around EUR 2bn, the first and third sources briefed said. According to the source familiar and the second source briefed, the deal could also include Telenor’s Hungarian business.

There are different buyers for the assets individually, but Telenor would prefer to sell them all together, the first and third source briefed said, without elaborating further.

Discussions between KKR and Telenor stalled on mis-matched price expectations, a source briefed on those earlier talks said.
However, the move would definitely make sense for KKR, which owns Serbia-headquartered cable operator United Group, the same source said, adding that buying Telenor’s Bulgarian, Serbian and Montenegrin assets would enable KKR to create a very large and strong regional player. While the Hungarian business would not make sense for KKR, the sponsor could even buy all the assets together and sell the Hungarian business after the deal is closed, the same source said.
KKR did not return requests for comment.
Telenor Hungary had revenues of NOK 3.4bn (EUR 353m) and EBITDA of NOK 1.2bn in the first nine months of 2017. In the same period, Telenor Bulgaria had revenues of NOK 2.3bn and EBITDA of NOK 903m, and Telenor Serbia and Montenegro combined had revenues of NOK 2.9bn and EBITDA of NOK 1.1bn, according to Telenor’s 3Q17 interim report.
Telenor has a NOK 285.5bn market capitalisation.

>>> Prysmian/General Cable assigned case team amid pre-notification talks

MergerMarket

Prysmian/General Cable assigned case team amid pre-notification talks

Prysmian Group [BIT: PRY]’s proposed acquisition of General Cable [NYSE: BGC] has been assigned a case team amid the ongoing pre-notification discussions with the European Commission (EC), according to a source close to the situation.
The parties are now working on a draft Form CO, the source said. Data gathering is expected to be relatively simple since the companies have all the information they need to proceed with the filing, the source added.
Notification is therefore expected relatively shortly, though a firm timeline has not been determined yet, the source noted.
The companies announced on 4 December that they had entered a definitive merger agreement under which the listed Italian cables group will acquire General Cable for USD 30 a share in cash.
Though the EC is likely to zoom in on potential horizontal effects, the parties are confident that they will obtain the approval “very easily” given their limited geographical overlaps, as reported.
The deal will need approval also by US competition agencies, according to a regulatory filing.
Prysmian and General Cable did not return requests for comment.

>>> Ericsson - Stock +2.29% today - Chart look very interesting

ERICB +3.68% now with mkt slightly lower

From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 01/17/18 14:56:01
Subject: >>> Ericsson - Stock +2.29% today - Chart look very interesting

We are testing strong resistance today, higher levels since Jul 2017...still huge gap open 57/60.75 - 57.24 now...
Still very bullish on this one...5G, Cevian, etc...could be one of the good performers in 2018 after uggly perf in 2017

Have a look :

FT : Carillion’s board: misguided or incompetent?

Carillion’s board: misguided or incompetent?
The directors ticked all the good governance boxes, yet the contractor still collapsed

Following the collapse this week of Carillion, with less than £30m in the bank and liabilities of more than £2bn, the board of the construction company has been accused of being either deluded or just plain inept.

On paper, the directors looked well qualified to steer the outsourcer. As chairman, Philip Green was a former chairman of United Utilities, the UK’s largest listed water company. Not only had he run a large contracting company, he was also a fully paid-up member of the great and good as a former adviser to then prime minister David Cameron on corporate responsibility.

The directors did not lack experience, sitting on boards from Royal Dutch Shell to Premier Farnell.

Alison Horner, head of the remuneration committee, was formerly operations director at Tesco and a non-executive director of Tesco Bank. The head of the audit committee was an accountant, as were three other directors.

And none were entrenched. The chief executive, Richard Howson, who joined Carillion’s board in 2009, was the longest-serving member.

The board ticked all the boxes in terms of good governance. Carillion’s non-executive line-up included two women. The average age of directors was about 54 years, or 57 excluding Mr Howson (48), and Zafir Khan (also 48), the finance director appointed in January last year.

Yet just a year ago, the board cheerfully signed off statements from Mr Howson that debt would be below £300m within months.

With hindsight, the board fell into a series of textbook traps that have, over the years, felled many a construction and contract business:

Failing to halt acquisitions and the build up of liabilities
Signing off aggressive accounting policies that allowed revenues to be booked early and costs to be delayed
Not tapping shareholders for help and instead continuing to pay out dividends even as cash haemorrhaged out of Carillion
Signing off on hefty pay packets and bonuses for top executives even when they scored zero on key performance targets introduced to instil capital discipline
Allowing clawback conditions to be changed a year ago, striking out corporate failure as a reason to take back bonuses
The board had seemed to be everything UK investors might want for a youngish business in a youngish sector. Carillion may have been formed from the construction divisions of Tarmac, Wimpey, Alfred McAlpine and Mowlem, which have been around for decades, but the company itself was formed in 1999. It engaged well with investors, even those who had shorted Carillion stock. Notably, shareholders approved directors’ elections without a murmur.

It is worrying to think the construction company’s board was such a model of good governance. If the line up had been different, would another cast of characters have done any better?

And how many other supposedly well-run boards are presiding over impending corporate disasters elsewhere?