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EXPLOSION AT TOWER HILL UNDERGROUND STATION IN LONDON -- WITNESSES
Early premarket gappers
Gapping up:
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Gapping down:
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ACTIVIST INVESTOR CEVIAN TOOK PART IN THYSSENKRUPP TKAG.DE CAPITAL INCREASE -SOURCE
Gemalto could consider entry of financial sponsor to fend off potential hostile takeover - advisers
- Any process unlikely ahead of new strategic plan in 1Q18
- Advent/Oberthur potential bid would be unwelcome
- Gemalto may be considered 'strategic' by French government
Gemalto [AMS:GTO], the Amsterdam-based digital security company, could fend off a potential hostile takeover from a strategic player through the entry of a financial sponsor that would support the current management, according to sector advisers.
In July, shares in the group, which is listed in Paris and Amsterdam, dropped 20% following its fourth profit warning since October last year due to a double digit decline of its US Payment and SIM Businesses.
Gemalto’s battles have left it vulnerable to takeover approaches from peers including Advent-owned French smart card maker Oberthur, the bankers and a lawyer familiar with the company said.
To protect itself from any hostile approaches, Gemalto and its management could sell a minority stake to a tech-oriented private equity fund or a long term institutional investor such as a Canadian pension fund, the first banker said. Such an investor would require a willingness to invest in the company’s future strategy without changing its internal structure, this banker said.
Any potential sale process is unlikely before 2018, a second banker said. Gemalto needs to sort out management changes and build a business case that shows a private equity firm can create value from it first, he added.
In another scenario, Gemalto could consider a bid from a consortia of two or three large private equity funds due to its challenges, the second banker said. Such private equity players would be based in the UK, US or France and could include Cinven, Carlyle, Apollo, KKR, and Ardian.
Blackstone could also table a bid for the asset, as reported by this news service. Any private equity would require reassurance on the lifespan of some of Gemalto’s core business, such as contact payment cards, the same report noted.
A deal with Oberthur is being explored by bankers, a third banker familiar with Gemalto said. Synergies would come from cost reduction and R&D unit combinations, he added.
Yet such a deal would face regulatory hurdles as both players operate in the same market, several of the bankers said. Gemalto is the number one player for smart cards followed by Oberthur as number two, the second banker noted. However, since the arrival of Asian competitors into the market, regulators could take a more relaxed view of local consolidation, the third banker said.
Gemalto would also balk at accepting a takeover offer from Oberthur, a lawyer, a person briefed on the situation, the first and third bankers said. Gemalto fought hard to buy Safran’s [EPA:SAF] Identity and Security subsidiary Morpholast year, and losing out to Oberthur was very painful, a fourth banker said.
Gemalto and Advent-sponsored Oberthur were frontrunners for Morpho, which was eventually acquired for a EUR 2.4bn by Advent last year, as reported. Gemalto would also have concerns about job losses and management changes in a sale to Oberthur, the bankers agreed.
Gemalto is in the process of reviewing options, the person briefed noted, ruling out any possibility of a sale to a peer.
In July, shares in the group, which is listed in Paris and Amsterdam, dropped 20% following its fourth profit warning since October last year due to a double digit decline of its US Payment and SIM Businesses.
Gemalto’s battles have left it vulnerable to takeover approaches from peers including Advent-owned French smart card maker Oberthur, the bankers and a lawyer familiar with the company said.
To protect itself from any hostile approaches, Gemalto and its management could sell a minority stake to a tech-oriented private equity fund or a long term institutional investor such as a Canadian pension fund, the first banker said. Such an investor would require a willingness to invest in the company’s future strategy without changing its internal structure, this banker said.
Any potential sale process is unlikely before 2018, a second banker said. Gemalto needs to sort out management changes and build a business case that shows a private equity firm can create value from it first, he added.
In another scenario, Gemalto could consider a bid from a consortia of two or three large private equity funds due to its challenges, the second banker said. Such private equity players would be based in the UK, US or France and could include Cinven, Carlyle, Apollo, KKR, and Ardian.
Blackstone could also table a bid for the asset, as reported by this news service. Any private equity would require reassurance on the lifespan of some of Gemalto’s core business, such as contact payment cards, the same report noted.
A deal with Oberthur is being explored by bankers, a third banker familiar with Gemalto said. Synergies would come from cost reduction and R&D unit combinations, he added.
Yet such a deal would face regulatory hurdles as both players operate in the same market, several of the bankers said. Gemalto is the number one player for smart cards followed by Oberthur as number two, the second banker noted. However, since the arrival of Asian competitors into the market, regulators could take a more relaxed view of local consolidation, the third banker said.
Gemalto would also balk at accepting a takeover offer from Oberthur, a lawyer, a person briefed on the situation, the first and third bankers said. Gemalto fought hard to buy Safran’s [EPA:SAF] Identity and Security subsidiary Morpholast year, and losing out to Oberthur was very painful, a fourth banker said.
Gemalto and Advent-sponsored Oberthur were frontrunners for Morpho, which was eventually acquired for a EUR 2.4bn by Advent last year, as reported. Gemalto would also have concerns about job losses and management changes in a sale to Oberthur, the bankers agreed.
Gemalto is in the process of reviewing options, the person briefed noted, ruling out any possibility of a sale to a peer.
A three-year strategic plan, including details of its M&A strategy, such as expansion in the US, was expected to be announced in 4Q17, but this has been postponed to 1Q18 due to deteriorating results from its US Payment and removable SIM card businesses, the person briefed said.
Scrutiny by the French government could also make a trade sale more complicated, the first banker and the lawyer agreed. Gemalto, which makes software for mobiles, bank cards and passports, is a strategic asset for the French State, they suggested.
The French state holds more than 8% stake through French state-controlled investment bank Bpifrance. But, a deal may not be a concern to the French government as Gemalto has operations around the world, the second banker argued.
In 1H17, Gemalto posted revenues of EUR 1.4bn (8% lower vs 1H16), with gross profit s lower by EUR 84m at EUR 502m. The reduction in gross profit for the Payment, SIM and related services was partially offset by the increase from the other businesses, according to a company report.
Gemalto declined to comment.
Scrutiny by the French government could also make a trade sale more complicated, the first banker and the lawyer agreed. Gemalto, which makes software for mobiles, bank cards and passports, is a strategic asset for the French State, they suggested.
The French state holds more than 8% stake through French state-controlled investment bank Bpifrance. But, a deal may not be a concern to the French government as Gemalto has operations around the world, the second banker argued.
In 1H17, Gemalto posted revenues of EUR 1.4bn (8% lower vs 1H16), with gross profit s lower by EUR 84m at EUR 502m. The reduction in gross profit for the Payment, SIM and related services was partially offset by the increase from the other businesses, according to a company report.
Gemalto declined to comment.
CARREFOUR - bid spec out there again
Alstom to pay special dividend in Siemens rail merger -sources - Reuters
26-Sep-2017 11:15:40
MUNICH/PARIS, Sept 26 (Reuters) - French transportation and manufacturing group Alstom ALSO.PA plans to pay its shareholders a special dividend if a deal to merge with Siemens' SIEGn.DE rail business goes through, two sources familiar with the matter told Reuters on Tuesday.
The special dividend would even out the value of Siemens and Alstom, which has too much cash on its balance sheet, to smooth the intended 50-50 joint venture, one of the people said.
"Will there be a special dividend? Yes," said the second person.
Nestlé Gives Loeb What He Wants: New Margin Targets, Faster Buybacks
Swiss food and drinks firm faces pressure from activist investor Dan Loeb
LONDON— Nestlé SA NSRGY 1.06% set a new profit-margin target and said it would accelerate share buybacks amid pressure from activist investor Dan Loeb.
The announcement Tuesday, ahead of a much-awaited investor day in London, comes after Mr. Loeb’s Third Point LLC built a 1.3% stake in the Swiss consumer-goods giant and has pushed for a formal profit-margin target and other shareholder-friendly moves.
The Vevey-based company said it would strive for a trading operating profit-margin target of 17.5% to 18.5% by 2020 on an underlying basis, or stripping out restructuring, impairment and other one-time charges. In July, Nestlé reported an underlying trading operating-profit margin of 15.8% for the half year, flat from a year earlier on a reported basis and up 10 basis points at constant currency.
Nestlé also said it is making changes to the $20.8 billion share-buyback program it announced in June. While the buybacks will still be made in the three years to 2020, they will be spread out evenly over this time rather than being back loaded in 2019 and 2020 as previously announced.
Mr. Loeb in a June letter to investors urged Nestlé to adopt a margin target saying savings made in recent years had failed to fuel faster organic sales or earnings growth. He said Nestlé’s margins were at the low end of its peers, who are mostly targeting high-teens to low 20s margins.
The hedge fund founder has also pushed Nestlé’s Chief Executive Mark Schneider to sell the company’s stake in L’Oréal SA, LRLCY -0.44% launch share buybacks and take on more debt, and consider selling as well as buying new assets.
Mr. Schneider, a longtime health-care executive, took the reins at Nestlé at the start of this year and since then has announced several changes aimed at jump-starting growth. Nestlé has repeatedly missed an internal sales target, prompting its new CEO in February to say he is scrapping these. A few months later he said Nestlé would look to sell its U.S. confectionery arm, which houses brands like Crunch and Butterfinger.
After Mr. Loeb in June publicly disclosed his $3.5 billion stake in Nestlé and listed his demands, Mr. Schneider announced the share buyback, and clarified that Nestlé would focus on investing in the high-growth areas of petcare, coffee, infant nutrition and bottled water while also pursuing growth opportunities in consumer health care.
In recent months Nestlé has made a string of small acquisitions, buying stakes in premium coffee chain Bluebottle, delivery startup Freshly and plant-based protein maker Sweet Earth. Last week is said it was cutting about 400 of the 550 employees at its Galderma skin care research and development facility in France as it pivots away from topical prescription creams for skin. A spokesman said about 100 of these employees would have the option of joining a new center focused on biologics and systemic treatments.
With Tuesday’s announcement, Nestlé has largely met three of Mr. Loeb’s four demands. The company didn’t address its 23.29% stake in L’Oréal , LRLCY -0.44% in focus following the death last week of Liliane Bettencourt, heiress to the L’Oréal fortune. Her death allows Nestlé or the L’Oréal family to increase their stakes in the cosmetics company in six months.
Mr. Loeb in June said it was a good time for the consumer goods company to sell its stake in L’Oréal, giving shareholders the ability to choose if they want to invest in Nestlé or a combination of the two companies. Tuesday, Nestlé didn’t immediately respond to a request for comment on the stake.
Microsoft and Facebook just laid a 160-terabits-per-second cable 4,100 miles across the Atlantic
Enough bandwidth to stream 71 million HD videos at the same time
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The Marea cable coiled onboard a ship
Photo: Microsoft
Microsoft, Facebook, and the telecoms infrastructure company Telxius have announced the completion of the highest capacity subsea cable to ever cross the Atlantic Ocean. The cable is capable of transmitting 160 terabits of data per second, the equivalent of streaming 71 million HD videos at the same time, and 16 million times faster than an average home internet connection, Microsoft claims. The cable will be operational by early 2018.
Called Marea, which is Spanish for “tide,” the 4,000 mile long subsea cable lies 17,000 feet below the ocean surface and extends between Virginia Beach, Virginia and the city of Bilbao in Spain. Marea also stretches a route south of most existing transatlantic cables. Because of this, Microsoft says the cable will provide resiliency for those living in the US and Europe by safeguarding against natural disasters or other major events that might cause disruptions to connections like those seen during Hurricane Sandy. More importantly to Microsoft and Facebook: both companies have large data center operations in Virginia.
“Marea comes at a critical time,” said Brad Smith, president of Microsoft. “Submarine cables in the Atlantic already carry 55 percent more data than trans-Pacific routes and 40 percent more data than between the US and Latin America. There is no question that the demand for data flows across the Atlantic will continue to increase.” For most of the route, the cable — made up of eight pairs of fiber optic cables enclosed by copper — lays on the ocean floor. Some parts are buried to protect from shipping traffic, usually in areas closer to the shore.
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The Marea Atlantic subsea cable stretches between Virginia and Bilbao in Spain
Image: Microsoft
In a blog post, Microsoft said the project was completed nearly three times faster than usual, in under two years. Marea’s cables are an “open” design, which will allow it to evolve as technology does, and as the population of internet users around the world jumps. The Marea cable also provides a path to network hubs in Africa, the Middle East, and Asia, where the next billion internet users are anticipated to come from.
Tech companies are increasingly moving into the infrastructure space, funding new cables themselves, rather than joining telecom consortiums which operate undersea cables already. Google has also invested in two cables that run from the US to Japan, South America, and other countries in Asia. With the Marea cable, Facebook and Microsoft’s investment gives them more control over the vast amounts of data they need to move quickly around the world. Both companies will benefit from improvements in cloud services for products like Microsoft’s Office 365, Azure, and Xbox Live, and Facebook’s Facebook, Instagram and Whatsapp.