ARM’s next-gen chip design puts the focus on artificial intelligence
ARM tipped its hand today with the announcement of DynamIQ, a new technology it says will lay the groundwork for its next generation of mobile processors. Like other mobile chip makers, the company’s got a lot to contend with when it comes to future-proofing its offerings, and certainly ARM’s making some pretty big claims for what it’s calling its “biggest micro-architectural shift since […] 2011”
Central to the company’s speed boasts are its focus on future artificial intelligence, an aspect of technology that will continue to grow more central to mobile computing over the next several years, both through the proliferation of smart-assistants, autonomous vehicles and beyond.
The chipmaker certainly isn’t being modest in its AI claims, with a stated 50x boost in performance for the technology over the next three to five years, a number it says is potentially “conservative […] as its only building out projections based on AI algorithms they know about or have access to.”
Nor is ARM understated in its planned ubiquity for the technology. As with offerings from other mobile chip makers, the company is targeting a wide range of different computing platforms that move well beyond mobile. And certainly it’s well positioned to deliver on that front, having already proven itself a versatile component maker during the explosion of IoT devices over the past several years.
The company is positioning DynamIQ chips for cars (accounting for the added workload of autonomous vehicles) and connected home devices, in addition to smartphones and the like. Microsoft has already laid some of the groundwork for additional applications back in December when it announced that it would be bringing its apps to the company’s mobile processors, in an attempt to get hardware makers to build a wider variety of devices for the operating system.
Redmond also gave ARM a little bit more love last week when it announced that it would allow for Windows Server OS to run on the company’s chips. That news was a bit of a preview of today’s announcement, as the DynamIQ architecture sees the company pushing even further into server/cloud computing hardware, along with newfound networking applications.
ARM’s not giving exact dates for the technology’s anticipated arrival, only stating that it expects its hardware partners to ship an additional 100 billion ARM-based chips by the year 2021, having shipped roughly half that number between 2013 and 2017.
Altice to acquire Teads for EUR 285m
Altice N.V. (Euronext: ATC, ATCB) has entered into an agreement to acquire Teads, the No. 1 online video advertising marketplace in the world with an audience of more than 1.2 billion unique visitors including 720 million via mobile.
Teads Overview
Teads, founded in 2011, is the inventor of outstream video advertising and No. 1 video advertising marketplace in the world. Publishers work with Teads to create brand new video inventory and manage their existing inventory, monetizing it through their own sales force, Teads sales force, or programmatic buying.
Teads' native video advertising solutions encompass a series of formats inserted deep into media content, like the inRead playing inside articles. It is changing the game within the video advertising market by creating unprecedented levels of premium inventory, which did not exist before.
Brands and agencies can access this top-tier, premium inventory, available on the web and on mobile, through programmatic or managed services. Through its managed services capabilities, the Teads team execute on their clients behalf using its platform.
Teads revenue grew by 44% in 2016 to an estimated EUR 187.7m.
Acquisition Rationale
The acquisition combines the highly complementary strategic assets of Teads and Altice.
- Teads Relationships with 94 of the top 100 advertisers globally
- Partnership with 500+ premium publishers globally and 8,000 vertically specialized publishers
- Powerful digital publisher platform with leading global reach
- R&D innovation center (Montpellier, France and New York, U.S.) with more than 100 engineers and programmers
- Highly entrepreneurial management team and powerful digital sales engine
- Strong standalone financial profile
Altice
- Unique first-party data sets with c.50 million unique fixed and mobile customers globally (over 30 million of which are in the U.S. and France)
- Market leading data analytics capabilities enhanced by recent Audience Partners acquisition
- Global and multi-local advertising sales organization
- Large international advertising business with revenue in excess of EUR 700m per year
This acquisition is another critical component for Altice's global advertising strategy. Altice will provide clients with data-driven, audience-based advertising solutions on multiscreen platforms including TV, digital, mobile and tablets. It will also provide an open and intelligent advertising platform to the media industry, programmers and multichannel video programming distributors.
Together with sophisticated return on investment analysis capabilities, leveraging multiscreen subscriber data information, this puts Altice in a unique position to grow its global advertising platform and better monetize its core telecommunications access and content business.
Importantly, the combination is expected to provide immediate commercial and financial benefits to Altice's advertising business, in particular as it relates making unique first-party data available to Teads in the US and France.
Transaction Details
The acquisition values Teads at an enterprise value of up to EUR 285m on a cash and debt free basis. Teads announced record results for 2016, reporting 44% organic revenue growth year over year. The company was EBITDA positive for the fourth year in a row. Since Teads spends only a nominal amount on capital expenditures, the acquisition is immediately accretive to Altice's operating free cash flow before taking into account the expected synergies and strategic benefits of the transaction.
The acquisition purchase price is subject to Teads achieving certain revenue targets in 2017. 75% of the acquisition purchase price will be due at closing. The remaining 25% earn-out is subject to Teads' 2017 revenue performance and will become payable in early 2018.
The senior management of Teads, including Executive Chairman Pierre Chappaz and Chief Executive Officer Bertrand Quesada, will continue to lead the business going forward and have agreed to reinvest a significant portion of their proceeds. Pierre Chappaz will join Altice's Management Board responsible for all of its advertising activities.
The acquisition is subject to certain competition reviews and is expected to close in mid-2017.
Michel Combes, CEO of Altice, said: "Convergence of telecoms, content, and advertising is at the core of our business. There is significant incremental value to be generated from our assets. Teads, a powerful business in itself, with major presence in Altice footprint notably in the U.S. and France, will enable us to offer a truly unique value proposition to brands and agencies on the one hand and the media industry, programmers and distributors on the other. It is that value proposition - data-driven, measurable and multiscreen - which will enable us to significantly grow our advertising business. We are very excited to partner with Pierre, Bertrand and their talented team."
Pierre Chappaz, Founder and Executive Chairman of Teads, said: "We are excited to start this new phase of Teads and become part of the internationally renowned Altice team. Since our inception we have strived to offer our clients with superior advertising solutions based on measurable performance and technological innovation. As part of Altice, we will be able to offer even more tailored, data-driven solutions and take our value proposition from the digital world to a multiscreen platform, which includes TV, digital, mobile and tablets. It is this differentiated offering which will allow Altice and Teads to uniquely prosper in the global advertising market."
AkzoNobel bidder PPG prepares revised offer - report
21 MAR 2017
PPG Industries [NYSE:PPG] is actively working on a revised takeover offer for Dutch coatings company AkzoNobel [AMS:AKZA], sources familiar with the situation said in a newswire report. The value of the new bid is not known, Bloomberg reported.
Pittsburgh-headquartered PPG earlier this month offered EUR 83 per share or EUR 20.9bn for Akzo but the unsolicited approach was turned down, the report noted.
Elliott Management Corp, a major long-term shareholder in Akzo, has been pressing the business to engage with PPG and consider carefully any new offer, sources cited in the report said.
As previously reported, PPG is expected to offer up to EUR 95 per Akzo Nobel share, according to a report by Dutch daily De Financiële Telegraaf that cited United First Partner, the investment and advisory group.
U.K. wholesaler Palmer & Harvey owes tens of millions of pounds to both Imperial Brands and Japan Tobacco, which are considering taking equity stakes in the co., Sky News says, citing people it didn’t name close to P&H.
- P&H, largest distributor to U.K. convenience stores, gets about 40% of revenue from Tesco, which may shift those contracts to Booker, a P&H rival it’s taking over, and some of wholesaler’s debt is secured by such contracts
- P&H spokeswoman confirmed to Sky it’s in talks with lenders, shareholders
- Barclays, Santander, GE Capital are part of P&H’s lending syndicate
- Sainsbury agreed to give financial support to P&H, which distributes tobacco products to its supermarkets
- Imperial Brands spokesman tells Sky it’s aware of P&H’s refinancing negotiations and is in talks with co. over range of options
- Japan Tobacco declines to comment
- NOTE: P&H distributes 15,000 products including alcohol, candy, groceries, snacks and beverages
Deutsche Bank AG to issue up to 687.5 million new shares , around 8 billion euros
Kraft Heinz: the next meal ticket --> https://ig.ft.com/kraft-heinz-merger/
Lex analysis of the tasty options left on the Buffett-3G table
The financial engineers who run Kraft Heinz value returns on acquisitions through a “risk-adjusted” lens. The bigger the reward, the more the American food group and its backers, 3G Capital and Warren Buffett, are willing to venture out on a limb. Likely paybacks vary widely from target to target.
A Lex analysis shows the group’s swashbuckling, if futile, pursuit of Unilever made sense. Kraft Heinz, with an enterprise value of nearly $150bn, would have got a bang for its buck with the similarly-sized, Anglo-Dutch group. A tie-up could have boosted earnings per share by perhaps as much as a fifth (at least before the recent rally in Unilever shares). More modest businesses may now be more receptive to the overtures of Kraft Heinz. But rewards will be commensurately humble.
The deep pockets of the company’s Brazilian and Nebraskan patrons get disproportionate attention. However, Kraft Heinz stock itself represents formidable firepower. The forward P/E ratio based on 2018 estimated earnings is 22 times, a premium to most potential targets. Issuing shares then comes out to a rough cost of capital of less than 5 per cent, probably less than the company’s cost of debt. The group has said it wishes to keep its investment grade credit rating. With such a high valuation multiple, using its stock as big chunk of its M&A currency is a plausible choice.
Snack company Mondelez, once part of Kraft, is thought to be one object of Kraft Heinz’s affections. Assuming it pays a 25 per cent premium, offer a quarter of the price in its own shares and knocks off a quarter of Mondelez’s overheads, Kraft Heinz’s earning per share could jump by a tenth. In this, as in other deals, cost cuts should cover the premium.
Two other rumoured targets, Colgate-Palmolive and Clorox, happen to trade at higher respective multiples than Kraft Heinz. Each also represents a way to diversify into personal care and household goods.
For the reputedly number-focused Kraft Heinz, risk then is not just about deal tactics and valuation but also strategic direction.
Asia Mid-Session Market Update: RBA minutes balance rising property prices and slower wage growth; Strong performance by Macron in France debates lifts EUR
***US Session Highlights***
- (US) Fed's Kashkari (dove, dissenting vote): job market showing more signs of slack and we are still short on inflation; The economy is growing more slowly than we would like - CNBC interview
- (US) Fed's Evans (dove, voter): Three rate hikes in 2017 is possible; could be more or less - Fox Business interview
- (US) Fed's Harker (hawk, FOMC voter): Would not rule out more than three rate hikes this year; all meetings are live for rate decisions; Would like to get well north of 1% rates before halting bond reinvestments, maybe close to 1.5% - CNBC interview
- (US) House Intel Chair Nunes: there was not a wiretap of Trump Tower; it is possible there was other surveillance against Trump and his aides - hearings on Russia interference in elections
- (US) FBI Director Comey: confirms that FBI is investigating Russian govt efforts to interfere in election, including potential links between Trump campaign and Russia - press
***US markets on close: Dow flat, S&P500 -0.2%, Nasdaq flat***
- Best Sector in S&P500: Materials
- Worst Sector in S&P500: Financials
- Biggest gainers: CF +3.8%, NVDA +3.2%, CAT +2.7%, BHI +2.5%, IFF +2.5%
- Biggest losers: KSS -4.8%, FSLR -4.7%, M -3.8%, JWN -3.1%, GPS -2.7%
- At the close: VIX 11.3 (+0.1 pts); Treasuries: 2-yr 1.30% (flat), 10-yr 2.47% (-3bps), 30-yr 3.09% (-2bps)
***US movers afterhours***
- FSM: Announces possible delay in filing its annual financial results; -2.5% afterhours
- GEL: Offering 4M Common Units (3.4% of outstanding); -5.7% afterhours
***Politics***
- (FR) France Elabe poll: Macron was most convincing in presidential debate; Melenchon 2nd; Le Pen and Fillon tied for 3rd
- (US) Pres Trump: Preparing executive order to put coal miners back to work; Working to remove regulations in auto industry
***Asia Key economic data:***
- (AU) AUSTRALIA Q4 HOUSE PRICE INDEX Q/Q: 4.1% (biggest increase in 5 years) V 2.5%E; Y/Y: 7.7% V 6.3%E
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 112.0 v 113.1 prior
- (NZ) NEW ZEALAND FEB CREDIT CARD SPENDING M/M: -1.4% V 0.4% PRIOR; Y/Y: 5.3% V 7.1% PRIOR
- (NZ) New Zealand Feb Net Migration: 6.0K v 6.4K prior (6-month low)
***Asia Session Notable Observations, Speakers and Press***
- Asian equity markets traded mixed and mostly in narrow ranges, tracking another flattish day on Wall St. Bullish sentiment has been tempered by uncertainty regarding Pres Trump's pro-business tax agenda as the cabinet continues to wrestle with Congressional inquiry into Russia election ties as well as negotiation on Obamacare repeal legislation that needs to get passed before tax reform can begin. Modest safehaven bid of US Treasuries continued on Monday as yield curve flattened and financials struggled.
- In Asian hours, futures are pointing to more optimism attributed to initial response from Elabe poll in France that showed Macron as the most credible candidate in today's debate, potentially defusing concerns of a populist revolt propelling Le Pen to a surprise victory in May. EUR/USD bounced on the poll release, rising some 50pips to 1.0770, while USD/JPY reversed some of the early pressure to rise over 40pips above 112.70.
- Outside of the political risks, the absence of meaningful economic data has otherwise contributed to a fairly lackluster session. Release of RBA March meeting minutes produced a brief ripple in AUD with an initial 10pips rise to session highs of 0.7735 followed by steady retreat to 0.77 handle. RBA expanded on its statement with growing concern over home prices, improved global conditions, and forecast commodity prices to remain firm for longer than expected. On the other hand however, RBA was more downbeat about sustained momentum in wage inflation following latest disappointing labor data, while also maintaining focus on uncertainty in policies of China and US. Traders will look ahead to tomorrow's speech from RBA's Debelle for any more clarity, though analyst consensus of a neutral RBA over the near term is likely to be maintained.
China
- (CN) China Ministry of Commerce (MOFCOM) and National Development Reform Commission (NDRC) may announce rules this year restricting outbound investment
- (CN) China Vice Foreign Minister Zheng Zeguang: Premier Li's upcoming visit to Australia and New Zealand will send a positive message to the world that the nations are bundled with free trade
Japan
- (JP) Japan Chief Cabinet Sec Suga: Japan to actively engaged in macro and FX talks at G-20
- (JP) Japan said to mull shortening period between auction and issuance of some JGB's - financial press
Australia/New Zealand
- (AU) RBC: Today's RBA minutes erred more on the hawkish side - SMH
- (NZ) NZ Institute of Economic Research (NZIER) shadow board: RBNZ should keep interest rates at 1.75% with a tightening bias
Korea
- (KR) South Korea Acting President Hwang Need to closely monitor financial markets - press
***Asian Equity Indices/Futures (00:30ET)***
- Nikkei -0.3%, Hang Seng +0.2%, Shanghai Composite +0.2%, ASX200 -0.1%, Kospi +1.0%
- Equity Futures: S&P500 +0.2%; Nasdaq +0.2%; Dax +0.2%; FTSE100 +0.2%
***FX ranges/Commodities/Fixed Income (00:30ET)***
- EUR 1.0720-1.0770; JPY 112.30-112.80; AUD 0.7700-0.7740; NZD 0.7040-0.7065
- Apr Gold -0.5% at $1,228/oz; May Crude Oil +0.4% at $49.11/brl; May Copper -1.0% at $2.63/lb
- SPDR Gold Trust ETF daily holdings fall 3.8 tonnes to 830.3 tonnes; 3rd straight decline
- iShares Silver Trust ETF daily holdings rise to 10,342 tonnes from 10,303 tonnes prior
- (CN) PBOC SETS YUAN MID POINT AT 6.9071 V 6.8998 PRIOR; weakest Yuan setting since Mar 15th; 3rd straight weaker setting
- (CN) PBOC to inject combined CNY80B v CNY100B prior in 7,14, and 28-day reverse repos
- (KR) South Korea MoF sells 10-yr pre-issuance Govt bond at 2.2%
***Asia equities / Notables / movers by sector***
- Consumer discretionary: 1107.HK Modern Land China -10.0% (FY16 result); HVN.AU Harvey Norman +3.3% (denies speculation about ASIC review of reporting); TGA.AU Thorn Group -7.5% (guidance)
- Consumer staples: 1432.HK China Shengmu Organic Milk -3.8% (FY16 result)
- Financials: 1528.HK Red Star Macalline Group -6.6% (FY16 result); 1238.HK Powerlong Real Estate Holdings +5.5% (FY16 result); SPO.AU Spotless Group +48.6% (bid by Downer)
- Industrials: 3836.HK China Harmony Auto Holding -7.5% (guidance); AZJ.AU Aurizon -0.9% (UBS cuts rating); 6448.JP Brother Industries +4.2% (Goldman Sachs raises rating)
- Technology: 698.HK Tongda Group Holdings -3.1% (FY16 result); 1357.HK Meitu -10.3% (regulator requests trading records); 6502.JP Toshiba Corporation +3.2% (Westinghouse Electric bankruptcy consideration)
- Materials: 2068.HK China Aluminum International Engineering Corp +14.2% (FY16 result); 5423.JP Tokyo Steel Mfg -4.9% (maintains steel prices); NHC.AU New Hope Corporation +4.9% (H1 result)
- Energy: 2386.HK Sinopec Engineering Group Co +4.7% (JPMorgan raises rating)
- Healthcare: VRT.AU Virtus Health -3.7% (Morning star cuts rating); BKL.AU Blackmores +13.4% (China has indefinitely delayed new cross-border e-commerce laws)
- Telecom: TPM.AU TPG Telecom +5.6% (affirms guidance)
After Hours Summary: Christopher & Banks (CBK) up on insider buy, Calithera Biosciences (CALA) down on stock offeringAfter Hours Gainers:
Companies trading higher in after hours in reaction to news: CBK +13.3% (CEO Joel Waller discloses the purchase of 20k shares at $1.26), WCST +0.9% (Enters into a Capital Increase Agreement with Guizhou Sun Seven Stars Technology Company Limited), VRX +0.7% (FDA sets PDUFA date of August 24, 2017 for its decision on the New Drug Application for latanoprostene bunod ophthalmic).
After Hours Losers:
Companies trading lower in after hours in reaction to news: CALA -7.2% (Commences 4.5 mln common stock offering), AKAO -3.9% (Chief Medical Officer Ian R. Friedland, M.D. to resign), OCUL -3.7% (CFO W. Bradford Smith resigns effective March 31 to pursue other opportunities), LJPC -3.2% (commences $100 mln common stock offering), FSM -2.5% (Announces possible delay in filing its annual financial results), GBDC -2.4% (To make a public offering of 1.75 mln shares of its common stock), GEL -1.9% (Commences registered underwritten public offering of 4 mln common units), KEYS -1.5% (Launches underwritten public offering of $400 mln of common shares).
Exclusive - Iran struggles to coax Bank of England to open clearing accounts: sources
The Bank of England is seen in the City of London, Britain,
Iran has asked the Bank of England to set up special clearing accounts for its banks, but has so far been rebuffed in its effort to resolve an impasse that has left it excluded from banking in London more than a year after sanctions were lifted.
Tehran has been hoping for swift reintegration into global trade after its deal in 2015 aimed at curbing Tehran's nuclear programme in return for the lifting of international sanctions. Its failure to persuade Western banks to accept its business has been one of the main choke points preventing its rehabilitation.
Banking sources from both Iran and the West, and Iranian political sources close to the talks, said Tehran has approached the Bank of England to seek clearing accounts directly with the UK central bank.
Such accounts, for Iran's own Central Bank or for the British subsidiaries of Iranian banks, would allow them to make and receive payments in sterling, business so far rejected by commercial banks.
"That would send a huge message to the market. What commercial bank is practically going to stop Bank of England payments? None," said one Western source.
However, the sources said the BoE seems uninterested in resolving the problem for now.
"The Bank of England has proved resistant to intervening in any kind of positive way in order to assist trade between Iran and UK," said the Western source.
A senior Iranian banking official in Tehran said: "The Bank of England has suspended anything related to Iran, even the latest scheduled meeting was cancelled. Everything has been put on hold."
A Bank of England spokesman declined to comment. Iran's Central Bank officials were not available to comment.
The sources all spoke on condition of anonymity as talks between Iran and the bank have not officially been made public.
Although EU and United Nations sanctions over Iran's nuclear programme were lifted a year ago, the United States still has separate measures in place over Iran's missile programme, and the new U.S. administration has promised a hard line.
The risk of falling afoul of U.S. measures has been enough to persuade Western banks to steer clear, including in London, where Iran is particularly keen for a presence in the main global financial centre outside of the United States.
Even Iran's embassy in London has so far been unable to open a British bank account.
Three Iranian banks have subsidiaries with licenses to operate in Britain: Melli Bank Plc, Bank Sepah International Plc and Persia International Bank Plc. But none has been able to persuade a commercial bank to clear its payments in sterling, the British currency.
"TOTALLY UNACCEPTABLE"
"It is totally unacceptable that a UK bank which has a banking licence, which is in good standing with its regulators, is unable to access the sterling system," said Sue Millar, partner with law firm Stephenson Harwood that represents those three UK-based arms of Iranian banks, as well as Bank Saderat Plc, which remains on the U.S. blacklist.
Iran considers the failure of Western countries to allow it back into the international financial system to violate the spirit of the 2015 nuclear deal. It says Britain in particular, given its large capital markets, should do more to ensure Iranian banks operating there legally are treated fairly.
The issue is particularly sensitive within Iran for the future of the nuclear deal's architect, President Hasan Rouhani, a pragmatist elected in a landslide in 2013 on a promise to reduce Iran's economic isolation. He faces re-election in May against hardliners who say his deal has never yielded the promised economic benefits.
The UK government, eager to boost trade with new markets like Iran after last year's vote to leave the European Union, has struggled to convince British banks to boost trade with Iran, sources have told Reuters.
British trade minister Liam Fox told a parliamentary committee last week he had commissioned work from his department to look at how to normalise "effective payment channels" with Iran to try to open up trading opportunities.
An official close to Rouhani said while the British government had promised to do more, so far there had been no progress. The senior Iranian banking official added that meetings between Iranian and British government officials had yielded no change in the commercial banks' policies.
"They (banks) are worried about Trump's Iran approach - and now that Iran has been 'put on notice', the process will be much more difficult," the official said, referring to remarks made in Washington last month by then U.S. national security advisor Michael Flynn threatening an unspecified response after an Iranian ballistic missile test.
In response to questions from Reuters, the British government said it was committed to working closely with all parties, including UK banks and industry groups, to help open opportunities for trade between Britain and Iran.
"This will be a vital part of Iran's re-integration into the international community and we will continue to work to strengthen and expand our trading relationship for mutual benefit," said a statement attributed to a government spokesperson.
"IRANOPHOBIA"
In April last year, Iran's Supreme Leader Ayatollah Ali Khamenei accused Washington of undermining the nuclear deal by scaring investors away from Iran.
"On paper America lets foreign banks deal with Iran, but in practise they create Iranophobia so no one does business with Iran," Khamenei said at the time.
In addition to concern over the remaining U.S. sanctions, banks are wary of business with Iran because of the high cost of ensuring that any transactions comply with rules.
Iran is one of just two countries, along with North Korea, declared "high risk and non-cooperative jurisdictions" by the Financial Action Task Force (FATF), a global group of nations that monitors money laundering.
Iran is implementing an "action plan" to have that designation lifted, and the watchdog has set a June 2017 deadline to evaluate its progress. Meanwhile, the FATF still advises countries to tell their banks to impose extra due diligence on transactions with Iranians. The FATF's guidance cites in particular the risk of funding terrorism.
Banking officials said reintegrating Iranian banks into the financial system would take time, and may require support from the government to help allay the cost to commercial banks of taking on added risk and performing additional checks.
"When you have had such broad ranging sanctions over such a long period of time, it is completely unrealistic to re-enter this space without considerable risk analysis. That may involve creative risk sharing," said Justine Walker, director financial crime with industry lobby the British Bankers' Association.
"So, industry will be looking at some kind of tie up with government."
For Iranians hoping to trade abroad, that means waiting.
"As a businessman, I cannot open an account in Britain's major banks. How am I supposed to do business with the world?" said the chief executive of an import-export company in Tehran, who asked not to be identified.