FT : Christie’s raises $289m in its most successful auction since 2010

Christie’s raises $289m in its most successful auction since 2010
Brancusi bronze sells for record $57.4m as New York auction week kicks off

Halfway through what would be a nine-minute bidding war for a patinated bronze female head by Constantin Brancusi, paddle 281 shot above a standing-room-only crowd at Christie’s in midtown Manhattan.

The slow, steady auction for the ovoid sculpture of a sleeping woman’s face turned aggressive when, minutes in, Tobias Meyer, the former chief auctioneer for Sotheby’s, entered a $34m bid with a phone clutched to his ear. By the time the gavel came down, competition from five clients had sent the price of “La Muse endormie” to $51m — a record for the artist. With fees for Christie’s services, lot 32 fetched a cool $57.4m.

It marked a successful start to New York’s biannual contemporary and modern art auctions, after several years marred by thin supply and lacklustre bidding.

In total, the art broker tallied $258m of sales before premiums were added, well above the low end of its $207m-$307m presale estimate. With fees, Christie’s raised $289m with 78 per cent of the 55 lots sold — its most successful auction since 2010 and more than double the corresponding Impressionist and Modern Art sale last spring.

Guillaume Cerutti, the auctioneer’s chief executive, said it was a “fantastic start for the major collections that will be sold this week”.

“This will give confidence to the market,” he told the Financial Times after the auction. “Last year the consignors . . . were more cautious. They were waiting because of the economic conditions, the political conditions. This year we found the sellers were more confident . . . That’s what we witnessed tonight and it is what we hope will happen on Wednesday with our Contemporary sale.”

The solid showing by privately held Christie’s, which is controlled by French billionaire François Pinault, will calm nerves of collectors worried about the art market’s health after several trying years. To weather the market fragility, brokers have cut the guarantees offered to encourage consignors to put works up for sale, and have reduced staff.

Sotheby’s last week reported a narrower-than-expected first-quarter loss, and noted that the art market “is starting to show signs of strengthening”. Mr Cerutti of Christie’s added that it was “still a selective market”, with the group failing to sell 12 works on Monday.
Four works by Pablo Picasso sold throughout the night for a total of $82.5m with fees, including the oil on canvas “Femme assise, robe bleue” for $45m. The presale estimate, which excludes fees, was $35m-$50m. A Marc Chagall oil on canvas titled “Les trois cierges” realised a price of $14.6m, above the top end of its presale estimate, while a work from Fernand Léger sold for $11.4m with fees.

Mr Cerutti, who took the helm at the start of this year, joined Christie’s colleagues standing by a bank of phones during the night, taking bids from clients outside the room and engaging in lively bidding for an oil on board by Wassily Kandinsky. The piece — “Oben und links” — carried a presale estimate of $5m-$7m and sold for $7.2m at hammer price. With fees, it cost its buyer $8.3m.

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • XGTI +17.2%, WB +11.2%, GILT +7.4%, SINA +7.3%, VRAY +7.1%, MGIC +6.5%, CLBS +5.6%, BDSI +5%, SPHS +4.6%, VOD +4%, NNA +3.6%, CCUR +3.3%, VIPS +2.5%, NCSM +2.1%, WYY +2%, FATE +1.7%, HD +1.6%, GAIN +1%, CAPR +0.8%
Select oil/gas related names showing strength:
  • TOT +1.6%, BP +1.1%, RDS.A +0.9%, CHK +0.7%
Other news:
  • AKBA +16.1% (Akebia Therapeutics to sell vadadustat to Fresenius Medical Care)
  • ETSY +10.4% (TPG Group Holdings discloses 4.3% active stake, believes Etsy will be best served by a commitment from partners who are also focused on creating long-term value in both public and private companies)
  • CNDT +3.8% (Icahn, Greenlight, Sessa, Soros, Scopia among names that disclosed new positions in their quarterly filings)
  • ANTH +2.4% (commences screening in the RESULT Phase 3 clinical study of Sollpura for exocrine pancreatic insufficiency due to cystic fibrosis; Top line data expected end of 2017 or early 2018 )
  • JCP +2.3% (Saba Capital Management discloses new position)
  • MOMO +1.5% (Jericho Capital reports new position)
  • EPR +1.2% (CEO featured on Monday's Mad Money)
  • BIVV +1.1% (ValueAct, Sarissa, Baker Bros disclose new positions)
  • LOW +1.1% (in smypathy with HD earnings)
Analyst comments:
  • ALDR +4.2% (initiated with Buy at Needham)
  • DK +2.6% (upgraded to Buy from Neutral at Goldman)
  • SAGE +1.8% (initiated with Buy at Needham)
  • EDU +1.8% (upgraded to Buy from Neutral at Goldman)
  • AIG +1.1% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • DPS +1% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • ISRG +0.5% (initiated with a Buy at Goldman)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • PTX -31.9%, TEAR -15%, ETRM -12.3%, DKS -12%, IPDN -11.9%, VOXX -9.9%, HOTR -9.5%, SSYS -6.6%, PRKR -6.6%, EDIT -5%, AMRS -4.7%, OCN -3.8%, HTGM -3.8%, SBBP -3.4%, CYRN -2.2%, CRME -1.7%, NETS -1.4%,KMDA -1.2%
Other news:
  • KRNT -6.8% (announces the launch of an underwritten secondary public offering of 4.25 mln ordinary shares by its largest shareholder, Fortissimo Capital )
  • OMAM -4.6% ( announces the launch of a public offering of 17.3 mln of its ordinary shares by Old Mutual plc (ODMTY); OMAM agrees to repurchase 5 mln ordinary shares)
  • PFGC -2.2% (prices 14,092,206 common stock offering by selling stockholders The Blackstone Group at $27.50/share)
  • APD -1.8% (attributed to block trade pricing; also Pershing Square Capital / Bill Ackman disclosed decreased position and Senator Investment Group -- Alexander Klabin and Douglas Silverman -- closed out positions)
  • FISI -1.3% (commences underwritten public offering of $40 mln of its common stock)
  • EVH -0.8% (upsizes and prices secondary offering by selling shareholders of 7 mln shares of common stock at $24.65 per share)
Analyst comments:
  • NK -7.8% (downgraded to Sell from Neutral at Citigroup )
  • MELI -1.7% (downgraded to Neutral from Overweight at JP Morgan)
  • PFE -1.7% (downgraded to Sell from Neutral at Citigroup)
  • TAL -1.7% (downgraded to Neutral from Buy at Goldman)
  • MDC -1.2% (downgraded to Underperform from Market Perform at Wells Fargo)
  • CHD -0.6% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
  • VLO -0.5% (downgraded to Neutral from Buy at Goldman)

>>> TJX beats by $0.03, misses on revs with comps at high end of guidance; guide

TJX beats by $0.03, misses on revs with comps at high end of guidance; guides Q2 EPS below; raises low end of FY18 EPS, reaffirms comps (76.90)
  • Reports Q1 (Apr) earnings of $0.82 per share, $0.03 better than the Capital IQ Consensus of $0.79; revenues rose 3.2% year/year to $7.78 bln vs the $7.88 bln Capital IQ Consensus. Diluted EPS $0.04 above high-end of Company's plan primarily due to a benefit from an accounting change in share-based compensation as well as a benefit from foreign currency, which were both higher than expected.
  • Comps +1% vs. +0-1% guidance.
  • Co issues downside guidance for Q2, sees EPS of $0.81-0.83 vs. $0.92 Capital IQ Consensus Estimate; comps +1-2%.
  • Co issues guidance for FY18, raises EPS to $3.82-3.89 from $3.80-3.89 vs. $3.90 Capital IQ Consensus Estimate; reaffirms comp +1-2%.
  • "Comp store sales growth was once again driven by customer traffic. We achieved these results despite the unfavorable weather in parts of the U.S. and Canada compared to last year. We were pleased to see sales trends pick up as the quarter progressed. With our disciplined inventory management, our merchandise margin was up, which speaks to the resiliency and flexibility of our off-price retail model. Further, we are confident that we are gaining market share at each of our four major divisions. The second quarter is off to a solid start and we have excellent liquidity in our inventories."

FT : Universal signs streaming deal with Tencent

Universal signs streaming deal with Tencent
World’s largest music group looks to expand reach in China and find local artists

Universal Music has signed a licensing agreement with Tencent to stream its music into China and discover more local artists, becoming the last major western music label to reach a deal with the internet group as it looks to expand its reach in the world’s second-biggest economy.

The world’s largest music company, which is owned by French conglomerate Vivendi, also announced that it will set up a music studio in China that bears the Abbey Road name. The famous London studio, where The Beatles recorded almost all of their music, was acquired as part of Universal’s takeover of EMI and is one of its most valuable brands.

Universal follows Warner Music and Sony in partnering with Tencent, giving the Chinese conglomerate an effective monopoly on streaming of western mainstream music in its home market where more than 570m people stream music each month, according to market research firm Quest Mobile.

Tencent, which owns the country’s top-three streaming platforms QQ Music, KuGou and KuWo, says it has 15m subscribers, meaning it trails only Spotify and Apple Music in paying customers. The company has a market share of 56 per cent, according to iiMedia Research Group.

Tencent has been credited with helping to clamp down on rampant piracy in the China, making the market more appealing to western music groups.

Michael Nash, head of digital for Universal Music, said: “The digital opportunity in the China’s music market is truly extraordinary, with over half a billion people enabled with smartphones. Chinese consumers are clearly embracing licensed services, fuelling an expansion of China’s music economy.”

Cussion Pang, chief executive of Tencent Music Entertainment, added: “This strategic agreement will further strengthen our efforts in copyright protection and shift the industry towards the paid subscription model.”

>>> AccorHotels in exclusive talks to acquire minority stake in Groupe Noctis fr

AccorHotels in exclusive talks to acquire minority stake in Groupe Noctis from FCDE

AccorHotels [EPA:AC] and FCDE (Fonds de Consolidation et de Développement des Entreprises) announced that they are in exclusive talks about acquiring 100% of the latter’s minority interest in Groupe Noctis.
Laurent de Gourcuff, Groupe Noctis’ Chairman, CEO and majority shareholder, established the company in 2008 and has since grown it into a key player in the hospitality market covering three segments, namely events, catering and entertainment. It has almost 800 employees and a collection of exclusive venues in Paris, wider France and abroad. It treats its French and international customers to a choice of upscale and emblematic venues (Monsieur Bleu, Loulou, Pavillons des Etangs, YOYO, Château de Longchamp, Raspoutine, Castel, etc.), and organizes over 3,000 events a year.
The FCDE invested EUR 11m in Noctis over 2013 and 2014, to help it roll out its strategically important events business, in particular through acquisitions, enabling it to grow into one of the key groups in its market and build one of the most remarkable asset portfolios in Paris. Over the past four years, it has grown revenues by 250%.
It has signed agreements to open about 10 new venues including Restaurant Girafe (Cité de l’Architecture et du Patrimoine, Paris 16), Electric (Porte de Versailles, Paris 16), Compagnie 1837 (Saint Lazare train station, Paris 9), the rooftop restaurant at 52 Champs-Elysées (Paris 8). These projects will cement the group’s position in the hospitality market and rank it among the leading entertainment companies in Paris.
By investing in a top-tier Paris-based events, catering and entertainment specialist, AccorHotels is cementing its leadership in the City of Lights, a prominent destination for international and local customers seeking original and exclusive venues.
Through this strategic partnership, Noctis will be able to tap into AccorHotels’ unrivaled expertise in creating customer experiences, nurturing loyalty and providing top-of-the-range services with a personal touch for increasingly discerning clients – in particular to address French and international business clients’ requirements.
The operation under consideration will be submitted to employee representatives for consultation.
Laurent de Gourcuff, Groupe Noctis Chairman, CEO and founder: “The fact that the FCDE invested in our equity encouraged our business and financial partners, helped us transform our governance, added a more professional edge to our group’s management and opened the door to bank financing. The FCDE has been a very valuable partner for an entrepreneur such as myself, and has played a pivotal role in our development strategy’s success.
Now we’re starting a new, decisive chapter in our story, with AccorHotels’ investment in our equity. It’s the best partner to team up with to push ahead with our bold development plans, and we’ll be able to share a leading group’s expertise in serving upscale customers and extract synergies with their various business lines. We are very proud to be associated with AccorHotels, which, under the leadership of its President and CEO Sébastien Bazin, is pursuing a bold, demanding and ambitious strategy.”
Amélie Brossier, Member of the Board, CDG (the FCDE’s management company): “The market is consolidating and is increasingly dominated by a handful of strong players, and public authorities have kick-started several large-scale projects to promote Paris on the international scene. Laurent and his team have been rolling out their strategic vision to build Groupe Noctis in the midst of those trends and shown that they have sharp flair when it comes to spotting new, trendy celebration venues. The fact that we are signing this partnership agreement with AccorHotels today shows that this strategic vision, which the FCDE has been supporting since 2013, is the right one.”
Sébastien Bazin, Chairman and CEO, AccorHotels: “We’re very excited about teaming up with Groupe Noctis, which has come to rank among the leaders in a fiercely competitive environment in only a few years. It’s more than an enviable address book: Laurent de Gourcuff and his teams have built a portfolio of distinctive venues with strong characters that are promoting Paris on the international scene. This alliance blends naturally into our plans to transform and boost AccorHotels with a view to catering to increasingly discerning customers’ wants and needs beyond the travel universe. Its expertise and ours complement each other, and pooling our assets will put us in a position to tap into growth opportunities and synergies in France and beyond.”