NY Post : The company that makes Ugg boots is under attack

The company that makes Ugg boots is under attack

If the company that owns Ugg boots doesn’t step into line, its board could get kicked to the curb.

Activist investment fund Marcato Capital, which has been prodding Ugg’s struggling parent Deckers Outdoors to sell itself, threatened to wage a proxy battle to replace all of its board directors if they don’t act soon.

Although Deckers began a strategic review in April, Marcato boss Mick McGuire griped in a Tuesday letter that its board showed a “lack of transparency” in the proceedings.

Ugg boots, whose sheepskin styles account for 80 percent of Deckers’ sales, have wavered in popularity in recent years since exploding on the scene in the early aughts. The brand tried to raise prices in 2012 amid a sheepskin supply crunch but shoppers balked.

Facing a supply glut last year, the brand started selling its boots at Macy’s, downmarket from Ugg’s usual retailers such as Nordstrom and Neiman Marcus.

Following the slip-ups of Deckers’ premier boot brand, Marcato Capital amassed a 6 percent stake in Deckers in February, pushing it to pursue a sale.

McGuire bemoaned Decker’s “history of underperformance” he said was brought on by “wasteful capital allocation,” heavy corporate spending and a “failed retail expansion strategy.”

The hedge fund previously offered to settle for “limited representation” on the board to help with the sales process the company announced in April, but that offer so far has been refused.

“While we typically seek to work constructively with boards to implement change, we view this situation differently,” McGuire wrote.

Shares of Deckers, which are up 48 percent since Marcato initiated its stake in February, popped 1.2 percent to $67.72 Tuesday.

“We appreciate the views of our stockholders,” Deckers said in a statement. “As previously announced on April 25, 2017, our board of directors is reviewing a broad range of strategic alternatives to enhance stockholder value.”

McGuire’ bravado comes less than a month after he won three board seats at Buffalo Wild Wings and forced the exit of longtime CEO Sally Smith.

NY Post : Nestle plans share buyback after pressure from billionaire

Billionaire Dan Loeb has already managed to extract a few sweeteners from Nestle.

The world’s largest packaged foods company, under pressure from Loeb’s hedge fund to sell off assets, said Tuesday it will begin a nearly $20 billion share buyback program beginning next month, which will extend over the next three years.

The chocolate conglomerate also said that it will train its focus on “high-growth” food and beverage categories such as coffee and bottled water.

Nestle’s announcement comes just two days after Loeb’s hedge fund Third Point disclosed a $3.5 billion stake in the company — its largest investment ever.

Loeb bemoaned the company’s “staid” corporate culture in a letter sent to investors Sunday evening. Still, the hedgie appeared to offer support for recently-appointed CEO Ulf Mark Schneider, citing his “impressive track record” in his previous role as CEO of a German medical supply company.

The hedge fund’s eight-page letter may have been enough to get the ball rolling.

Loeb said Nestle should re-evaluate its brand portfolio, applauding its already-announced plans to consider a sale of its US candy business. Loeb also pushed for the company to consider share buybacks and selling its 29 percent stake in L’Oreal.

Representatives for Third Point declined to comment.

Shares of Nestle were up 1.3 percent at $89.32 in afternoon trades.

NY Post : Race to offer consumers a ‘quad play’ making M&A mayhem

The race to offer consumers a “quad play” — phone, TV, broadband and wireless — is making for M&A mayhem.
Comcast and Charter Communications, the country’s two largest cable operators, have reset the deal agenda for cable and telecom companies by entering into exclusive negotiations with Sprint.
Talks between the cable behemoths and Sprint, the smallest of America’s Top 4 wireless telecoms, are now in their second month, according to reports initially published by the Wall Street Journal.
The revelation undermined expectations that Sprint was about to tie the knot with T-Mobile, the country’s third-largest wireless carrier.
Cable’s barging in on those wireless discussions didn’t sit well with T-Mobile investors. On Tuesday, the stock fell 3.4 percent, to $61.01 a share. Meanwhile, Sprint gained 2.1 percent, to $8.18, on news that it’s being courted by the cablers.
The courtship’s timing follows by barely a month an announcement that Comcast and Charter would partner on their own wireless network.
That was also a surprise, considering the two companies already have agreements with wireless leader Verizon to offer cell phone plans.
Those plans allow the companies to piggyback on Verizon’s cellular network through a so-called mobile virtual network operator (MVNO) agreement.
Adding to the confusion is what many perceive as posturing by cable and telecom participants as their wired and wireless offerings converge.
“This cable conversation could be an effort on Sprint’s part to bring T-Mobile to the table,” Merrill Lynch’s David W. Barden wrote in a Tuesday update. “[But] it could just as easily be a ploy by cable companies to extract better MVNO terms from Verizon.”
Added BTIG’s Walter Piecyk, “These early deal salvos could lead to any number of potential combinations, based on the personalities involved.”

>>> What to look at today - 28th of June 2017

Dow -0.46% S&P -0.81% Nasdaq -1.61% Russell -0.93-%
US Market closed lower pushed by heavy tech (-1.6%). notable jump in long-term rates on Tuesday as sovereign bond markets came under selling pressure in the wake of a morning remark from ECB President Mario Draghi that the threat of deflation is gone. The yield on the 10-yr Treasury note jumped six basis points to 2.20%, which contributed partly to the selling activity in richly-valued technology stocks and the underperformance of rate-sensitive areas like the S&P 500 utilities sector (-1.3%). Financials traded better than the mkt +0.5%. Energy outperformed (-0.2%) with WTI +2% @ $44.25. IBB -2.7% underperformed after last week strong performance. Outside of real estate (-0.4%), the remaining laggards--consumer discretionary (-0.7%), industrials (-0.8%), materials (-0.7%), and consumer staples (-0.9%)--finished roughly in line with the broader market. US After Hours KBH +1%, AVAV -6%, CAMP -3% following earnings/guidance... oil/gas names lower following API data. In Asia, sentiment has turned more cautious as investors sold both Equities and Treasuries in US session, while the Vix jumped above 11. Euro spiked up over 1 big figure overnight on much less dovish comments from ECB President Draghi. USD/JPY is pulling back to 112 handle after rising above 112.40, while Nikkei225 has reversed its opening gains. PBoC adviser: Anticipates no further tightening of monetary policy in H2. Japan top banks sold off their JGB holdings to lowest level on record.

Nikkei -0.40% Hang Seng -0.46% CSI -0.48% Shanghai -0.29%

Eur$ 1.1362 CNH 6.8014 CNY 6.80005 JPY 112.15 GBP 1.2809 CHF 0.9597 RUB 59.2325 WTI$ 44.03 -0.47%

S&P -0.09% EuroStoxx -0.65% Dax -0.70% FTSE -0.21% SMI 0.05%

Macro :
- Buffett Renews Attack on Health Bill as ‘Relief for Rich Act’
- API Said to Report U.S. Crude Stocks Rose 851K Bbl Last Week
- Apollo Said to Hit $23.5b Target for Largest Buyout Fund: WSJ
- Aramco Needs Better Transparency Ahead of Share Sale: Study

Keep an eye on :
- ABN NA : Dutch State Sells 65m ABN Amro Shares; Sees Proceeds of EU1.48b
- ACS SM : ACS Renews Financing Agreement With Banks for EU2.15b
- AIR FP : Airbus to Provide Value-Added Analyticals From Its Data Business
- ATC NA : Altice Said to Be Interested in Buying Lightower Fiber: CTFN
- BAS GY : BASF, Norilsk in Talks on Supplies for Electric Car Batteries
- BLSN SW : Baloise Buys Digital Home-Moving Services Platform Movu
- BRBY LN : ISS Said to Advise Voting Against Burberry’s Pay Report: FT
- BNP FP : BNP Paribas Wealth to Hire More in Asia; Focus on Organic Growth
- DBK GY : Deutsche Bank Said to Face Possible $60 Million Derivative Loss
- DBHN GY : Deutsche Bahn to Sell Electricity to Private Customers: Welt
- GAM SW :  GAM Holding Shareholder Offers About 4.73m Shares in Placing, Offering Prices at CHF13.15: Terms
- GIS US : General Mills Options Imply a 3.3% Move Into 4Q Earnings
- LHA GY : Lufthansa CEO Says U.S. to Remain Backbone of International Ops
- NESN VX : Nestle Plans CHF20b Buyback After Being Targeted By Loeb
- NUVA GY : Noratis Sets Placement Price at EU18.75 Per Share
- PHIA NA : Philips to Buy Spectranetics for $38.50/Shr in Cash
- PHIA NA : Philips annonce €1.5bil share buy back (46.1mil shares), will start in Q3 2017, good progress in selling down Philips lighting stake.
- SCMN VX : Swisscom CEO Says 2Q Market Dynamic Similar to Prior Months: FuW
- SOI FP : Soitec Holders to Sell 2.27m Shares
- TIS IM : Tiscali Board Approves EU13m Reserved Capital Increase
- DG FP : Vinci to Buy Back Up to EU150m of Its Shares Through Sept. 27
- VOW3 GY : VW Reaches Settlement With Ex-Manager Amid Diesel Scandal: HB

>>> Asian Update

Asia Mid-Session Market Update: China Beige Book and CASS think tank see robust Q2 growth


***US Session Highlights***
- (US) APR S&P / CASE-SHILLER 20-CITY M/M: 0.28% V 0.50%E; Y/Y: 5.67% V 5.90%E; HOUSE PRICE INDEX (HPI): 197.19 V 195.38 PRIOR
- (US) JUN RICHMOND FED MANUFACTURING INDEX: 7 V 5E
- (US) JUNE DALLAS FED MANUFACTURING ACTIVITY: 15.0 V 16.0E; new orders 6 v 0 prior
- (US) JUN CONSUMER CONFIDENCE: 118.9 V 116.0E
- (US) FDA to take new steps to improve prescription drug competition; to expedite review of generic drug applications
- (CN) Trump administration reportedly mulling tougher stance on China trade which could include steel tariffs - press
- (US) Fed's Harker (hawk, voter) still supports one more rate hike this year; inflation weakness likely temporary
- (US) Sen Cornyn (R-TX): Senate will vote on healthcare bill this week; expects to have support to get it done
- Stocks fell across the board today, with technology showing the largest losses, as the Nasdaq dropped 1.6%. The S&P was not far behind; it had its lowest close in 6 weeks. Investors have begun to take note of the downward movement, as the VIX increased 10% to 11.06, its highest close in 2 weeks. Financials rose 0.5% on the day, the only sector posting gains.

***US markets on close: Dow -0.5%, S&P500 -0.8%, Nasdaq -1.6%***
- Best Sector in S&P500: Financials
- Worst Sector in S&P500: Technology
- Biggest gainers: SIG +4.6%; DRI +2.9%; CHK +2.8%
- Biggest losers: ARNC -9.0%; STX -6.8%; NFLX -4.1%
- At the close: VIX 11.1 (+1.2pts); Treasuries: 2-yr 1.37% (+1bps), 10-yr 2.20% (+6bps), 30-yr 2.74% (+4bps)

***Politics***
- (US) President Trump: I just finished a great meeting with the Republican Senators concerning HealthCare. They really want to get it right, unlike OCare! - tweet
- (VE) Venezuela President Maduro: Supreme Court building in Caracas suffered a "terror attack" by police helicopter - press
- (JP) Japan chief cabinet secretary Suga: Defense Min Inada will continue to perform his duties; Remarks were reported to PM Abe, have no impact on timing of cabinet reshuffle - press

***Key economic data***
none seen

***Asia Session Observations***
- Sentiment has turned more cautious as investors sold both Equities and Treasuries in US session, while the Vix jumped above 11. Euro spiked up over 1 big figure overnight on much less dovish comments from ECB President Draghi. USD/JPY is pulling back to 112 handle after rising above 112.40, while Nikkei225 has reversed its opening gains.
- Takata briefly resumed trading, plunging over 40%; Toshiba is also struggling to close its chip unit sale on resistance from WDC.

***Speakers and Press***
China
- (CN) PBoC adviser: Anticipates no further tightening of monetary policy in H2 - Chinese press
- (CN) Bank of China (BOC) economists see China 2017 GDP around 6.8% - press
- (CN) China Beige Book International (CBB) Q2 survey: Economy continues to improve
- (CN) China Academy of Social Sciences (CASS): Q2 GDP estimated at 6.8% v 6.9% in Q1; 2017 GDP seen around 6.7% v around 6.5% official target - Chinese press

Japan
- (JP) Japan PM Abe reportedly considering abandoning plans to balance the budget by FY20 in exchange for looser debt-to-GDP ratio target - press
- (JP) Japan top banks sold off their JGB holdings to lowest level on record - Nikkei

Australia / New Zealand
- (AU) Former RBA board member Edwards: RBA may raise interest rates as many as 8 times in 2018-19 - AFR
- (NZ) According to latest RBNZ data, property investors borrowing in May fell to NZ$1.5B from NZ$2.5B y/y
- (NZ) RBNZ Gov Wheeler: Outlook for growth remains positive - statement of intent outlining priorities

Korea
- (CN) China National Petroleum Corporation (CNPC) suspends fuel sales to North Korea over concerns that it won’t get paid

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.3%, Hang Seng -0.4%, Shanghai Composite +0.1%, ASX200 +0.3%, Kospi -0.2%
- Equity Futures: S&P500 -0.1%; Nasdaq -0.3%, Dax flat, FTSE100 +0.1%

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.1330-1.1355; JPY 112.05-112.35; AUD 0.7580-0.7615; NZD 0.7260-0.7285
- Aug Gold +0.5% at 1,253/oz; Aug Crude Oil -0.2% at $44.14/brl; Sept Copper +0.2% at $2.66/lb
- (US) Weekly API Oil Inventories: Crude: +0.9M v -2.7M prior
- (CN) PBOC SETS YUAN MID POINT AT 6.8053 V 6.8292 PRIOR; strongest Yuan fix since June 19th
- (CN) PBoC: To skip today's open market operation (OMO); 4th consecutive skip
- (CN) China MOF sells 3-yr bonds at 3.4349% v 3.42%e; bid-to-cover 2.73x
- (AU) Australia sells A$800M in 2027 bonds; avg yield 2.4791%; bid-to-cover 3.5x

***Asia equities notable movers***
Australia
- Sirtex Medical (SRX) +14.9%; To cut staff by 15%; to write off A$90M in R&D, performing within FY17 guidance
- Nine Entertainment (NEC) +6.1%; Raises FY17 Reported EBITDA to A$200-210M; Sees FY17 reduction in the licensing fees that it has to pay, equal to ~A$33M (guided A$158-187M on May 2nd)
- AusNet Services (AST) +2.5%; Raised at Credit Suisse

Japan
- FujiFilm (4901) -1.1%; Files to delay financial results to July 31st
- Toshiba (6502) -1.2%; CEO: Western Digital is unfairly obstructing the chip unit sale; Looking to resolve dispute at an early stage

Hong Kong
- Yanzhou Coal (1171) +2.6%; Raised at HSBC
- Kenford Group holdings (464) -7.1%; Reports FY17 (HK$) Net loss 22.2M v 22.5M y/y; Rev 495.4M v 522.9M y/y

>>> US After Hours Summary: KBH +1%, AVAV -6%, CAMP -3% following earn


After Hours Summary: KBH +1%, AVAV -6%, CAMP -3% following earnings/guidance... oil/gas names lower following API data

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: KBH +0.8%

Companies trading higher in after hours in reaction to news: ALQA +22.8% (indicated higher after Celgene affirms increased active stake pursuant to June 23 securities purchase agreement), ARRY +2.5% (light volume; modestly rebounding)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: AVAV -5.8%, CAMP -2.9%

Companies trading lower in after hours in reaction to news: GMRE -8.4% (commences public offering of 3.5 mln shares of its common stock; provides update to Lubbock acquisition; Surgery Partners to only guarantee ~52% of the rent payments)

A few oil/gas names are lower following API data/oil futures drop (light volume): WLL -1.8%, CLR -1.6%, RIG -1.5%, ESV -1.3%, OAS -1.1%, MRO -0.8%, COP -0.5%

>>> August crude oil futures drop $0.55/barrel to $43.62/barrel foll

August crude oil futures drop $0.55/barrel to $43.62/barrel following weekly API storage data... now $0.26 at $43.64/barrel

  • The API reported a build of 0.851 mln barrels of oil, for the week ending June 23 vs. last week's draw of 2.72 mln barrels
  • Gasoline showed a build of 1.35 mln barrels and distillates showed a build of 0.678 mln barrels
  • Aug crude is now up $0.90 at $43.53/barrel