Panmure Gordon confirms Bob Diamond’s £15.5m takeover
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Lossmaking stock broker and investment bank Panmure Gordon has accepted a takeover offer from Bob Diamond’s investment firm Atlas and the investment vehicle of the Qatari royal family, it confirmed today.
Panmure’s directors unanimously recommended the bid of 100p per share, a 68.1 per cent premium to the company’s undisturbed share price which values it at £15.5m.
Atlas Merchant Capital, which was created by the former Barclays chief executive, will control a majority stake in Panmure after the acquisition, with QInvest maintaining its current 43 per cent.
The company has already received commitments to vote in favour of the deal from 60 per cent of shareholders.
Panmure’s name dates back more than a century but it has struggled in recent years, and fell to a £16.7m loss in 2015, the last full year for which it has released results. The company’s shares have dropped more than 60 per cent over the last five years, and have shed more than 95 per cent of their value since the financial crisis.
Tamim Al-Kawari, QInvest chief executive, said:
We have been major investors in Panmure Gordon for more than seven years and are excited about this opportunity to work with Atlas to develop the business, alongside its management team and employees, and to assist it in fulfilling its potential.
Matthew Hansen, Atlas head of UK and Europe, said:
We believe there is significant opportunity for Atlas, in partnership with QInvest, to apply our operational skills and financial services expertise to enhance Panmure Gordon’s strong reputation and build a larger, successful boutique investment bank. This long term stabilisation and development can only realistically be achieved as a private company, out of the glare of the public market and the effects of share price movement.
Panmure Gordon chairman Andrew Adcock said:
The independent Panmure Gordon directors believe that the cash consideration will be attractive in providing Panmure Gordon shareholders with an oportunity to exit at a significant premium t othe current share price. Against the backdrop of a challenging macro-economic environment, with the resultant market volatility which has in recent years impacted Panmure Gordon’s business, the independent Panmure Gordon directors believe that the scheme price reflects a fair and reasonable offer.
Tullow Oil Announces Fully Underwritten $750m Rights Issue
Tullow 25 for 49 fully underwritten rights issue of 466,925,724 new ordinary shares to raise gross proceeds of ~GBP607m, co. says in statement.
- Tullow Oil proposed rights issue at price of 130p/shr
- Tullow will host a conference call for investors and analysts at 9.00 a.m. UK time Friday
- Rights issue is subject to shareholder approval
- Without proceeds of the rights issue, and under a worst-case scenario, company says there is the possibility it will breach its leverage covenant in its $3b RBL facility and $225m corporate debt facility for measurement period ending Dec. 31, 2017 and thereafter
- It is the company’s intention to refinance the RBL facilities in 2017 and as part of refinancing the company will seek to agree with lenders a covenant profile that will ensure it remains in compliance with the leverage covenant
- Deal underwritten by Barclays, JPMorgan acting as joint global coordinators and bookrunners; Morgan Stanley is joint bookrunner; BNP Paribas, Crédit Agricole CIB and SocGen are co-bookrunners; DNB Markets, ING, Natixis, Nedbank are co-lead managers
Asia Mid-Session Market Update: Investors digest dovish Fed hike, hawkish BOE hold, and deleveraging steps in China
***US Session Highlights***
- (US) FEB HOUSING STARTS: 1.29M V 1.26ME; BUILDING PERMITS: 1.21M V 1.27ME; increases in single family starts (highest since 2007) and permits offset declines in multifamily
- (US) INITIAL JOBLESS CLAIMS: 241K V 240KE; CONTINUING CLAIMS: 2.03M V 2.05ME
- (US) MAR PHILADELPHIA FED BUSINESS OUTLOOK: 32.8 V 30.0E; new orders rise to highest reading since 1987
- (US) JAN JOLTS JOB OPENINGS: 5.626M V 5.56ME; quits rate 2.2% v 2.0% prior
- (EU) ECB's Nowotny (Austria): ECB strategy for tightening policy will be different from the US Fed; ECB could raise rates before QE ends - Handelsblatt interview
***US markets on close: Dow -0.1%, S&P500 -0.2%, Nasdaq flat***
- Best Sector in S&P500: Financials
- Worst Sector in S&P500: Utilities
- Biggest gainers: ORCL +6.2%, FTR +4.2%, NRG +2.5%, TDG +2.3%, BEN +2.1%
- Biggest losers: BIIB -4.7%, ILMN -3.9%, NEM -3.8%, RIG -3.5%, INCY -2.8%
- At the close: VIX 11.2 (-0.4 pts); Treasuries: 2-yr 1.34% (+3bps), 10-yr 2.52% (+1bps), 30-yr 3.14% (+3bps)
***US movers afterhours***
- VSLR: Reports Q4 -$0.41 v -$0.42e, R$41.8M v $39.2Me; Guides Q1 MW installed 43-46 MWs- Guides FY17 MW installed 210-230 MWs; +7.3% afterhours
- VRX: ValueAct bought 3M shares from $10.81-10.88/shr on March 14th, adding to existing position (stake increased to 5.2% from 4.4%); +4.3% afterhours
- SXC: Said to explore a sale - financial press; +4.1% afterhours
- ADBE: Reports Q1 $0.94 v $0.87e, R$1.68B v $1.64Be; +4.0% afterhours
- VRAY: Reports Q4 -$0.25 v -$0.34e, R$16.1M v $13.7Me- Guides FY17 Rev $45-50M, primarily from 7 to 8 MRIdian Linac Systems; -3.0% afterhours
- SNAK: Delays filing 10K; -8.3% afterhours
- CAL: Reports Q4 $0.33 v $0.40e, R$639.5M v $632Me; Guides initial FY17 $2.10-2.20 v $2.39e, Rev $2.7-2.8BB v $2.71Be; -8.6% afterhours
- STLD: Guides Q1 $0.77-0.81 v $0.62e; Raises dividend 11% to $0.155 (implied yield 1.7%)
***Politics***
- (US) Pres Trump tweets: "Great progress on healthcare. Improvements being made - Republicans coming together!"
***Asia Key economic data:***
- (NZ) NEW ZEALAND FEB BUSINESS MANUFACTURING PMI: 55.2 V 52.2 PRIOR (4-month high)
- (NZ) NEW ZEALAND MAR ANZ CONSUMER CONFIDENCE INDEX: 125.2 V 127.4 PRIOR; M/M:-1.7% V -1.0% PRIOR
- (SG) SINGAPORE FEB NON-OIL DOMESTIC EXPORTS M/M: +1.4% V -0.1%E; Y/Y: 21.5% V 12.5%E
- (CL) CHILE CENTRAL BANK (BCCH) CUTS OVERNIGHT RATE TARGET BY 25BPS TO 3.00%; AS EXPECTED
***Asia Session Notable Observations, Speakers and Press***
- Asian equities traded mixed, tracking a more subdued session in the US where some of yesterday's flows that followed less hawkish than anticipated Fed were reversed. After a slump in Financials on flatter post-FOMC yield curve, the sector outperformed, while Utilities came in. Australia stocks were weighed down by materials names, even as gold stocks tracked the price of the metal higher. Hang Seng outperformed on strength in gaming stocks.
- FX majors were also relatively contained to narrow ranges. EUR/USD saw a pronounced move higher in late US session after comments from Australia Central Bank's Nowotny suggesting ECB could start to raise rates before its QE program is complete. GBP/USD consolidated its post-BOE spike as the decision mentioned price pressures. Dissenter Forbes also clarified his surprise call for a 25bp hike, noting growth and inflation data suggest BOE interest rates should rise. USD/JPY came off its recent lows with a 20pip rise after 3 days of declines. AUD and NZD were both up about 0.1% against USD, paring yesterday's sell-off after soft Australia employment and New Zealand GDP data.
- In China, PBoC's reverse repo operations were more tame at CNY60B v CNY80B overnight, and the weekly net drain rose to CNY120B from CNY110B last week. Chinese press report indicates overnight 10bp increase in reverse repo and MLF rates is part of policymakers deleveraging efforts in key sectors of the economy that include steel, coal, non-ferrous metals, and real estate.
- Russian aluminum giant Rusal was out with Q4 results that showed rising profitability and better margins, but lower anticipated aluminum demand growth for 2017 at 5.0% vs 5.5% in 2016. China demand forecast was a healthy 6.7% vs non-China's 3.3%.
- US State Sec Tillerson kicked off his trip to Asia with a visit to the DMZ. Overnight, he noted that diplomatic efforts on North Korea of past 20 years have failed and a different approach is needed.
China
- (CN) China National Energy Administration (NEA): Feb power consumption +17.2% y/y to 448.6B Kwh
- (CN) China banks Feb net forex sales $10.1B for clients - Chinese press citing FX Regulator SAFE
- (CN) Certain banks in Beijing City said to suspend housing mortgage - financial press
- (CN) China final draft of its annual work report included pledge to contain rising home prices in 2017 - Chinese press
- (CN) China said to start debt deleveraging in key sectors of economy, including steel, coal, non-ferrous metals, real estate - Chinese press
Australia/New Zealand
- (NZ) Credit Suisse: RBNZ to begin removing accommodative policy settings starting in May 2018 - press
- (NZ) ASB: Next week's RBNZ policy statement to remain neutral - press
Korea
- (KR) BOK Dep Gov Jang: US interest rate is an important reference index, but our policy stance takes consideration of our own condition - Korean press
***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.4%, Hang Seng +0.3%, Shanghai Composite -0.2%, ASX200 +0.4%, Kospi +0.4%
- Equity Futures: S&P500 +0.2%; Nasdaq +0.2%; Dax +0.6%; FTSE100 +0.2%
***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0760-1.0775 JPY 113.25-113.50; AUD 0.7665-0.7685; NZD 0.6975-0.6990
- Apr Gold -0.1% at $1,226/oz; Apr Crude Oil +0.3% at $48.87/brl; May Copper -0.2% at $2.67/lb
- SPDR Gold Trust ETF daily holdings fall 2.3 tonnes to 837.1 tonnes; first decline since Mar 10th
- (CN) PBOC SETS YUAN MID POINT AT 6.8873 V 6.8862 PRIOR
- (CN) PBOC to inject combined CNY60B v CNY80B prior in 7,14, and 28-day reverse repos; Drains net CNY120B this week v drained CNY110B prior
- (AU) Australia MoF (AOFM) sells A$700M in 3.25% 2029 Bonds; avg yield: 3.037%; bid-to-cover: 3.75x
- (CN) China MOF sells 91-day bonds, avg yield 2.7441%
***Asia equities / Notables / movers by sector***
- Consumer discretionary: SXL.AU Southern Cross Media Group -3.8% (Morgan Stanley cuts rating); MYR.AU Myer +5.3% (Macquarie raises rating); 1929.HK Chow Tai Fook Jewellery Group Ltd -0.6% (acquisition); 7453.JP Ryohin Keikaku Co. +2.1% (Muji cleared of China food claims); 9681.JPTokyo Dome Corp. -3.4% (FY16/17 result)
- Financials: 000002.CN China Vanke Co +2.2% (agreement between China Evergrande and SZMC)
- Industrials: 1366.HK Jiangnan Group +6.9% (FY16 result); 293.HK Cathay Pacific Airways +1.6% (cut costs); 2333.HK Great Wall Motor -6.9%, 000625.CN Chongqing Changan Automobile -0.8% (concern on deeper discounts weighing on earnings); 6448.JPBrother Industries +1.7% (Mitsubishi initiates with overweight); 4042.JPTosoh Corp. -2.0% (guidance)
- Technology: 6502.JP Toshiba Corporation +5.0% (Japan govt not consider public fund for co); 903.HK TPV Technology +7.7% (FY16 result)
- Materials: ORE.AU Orocobre +4.7% (sold projects from Argentine unit); 486.HK RUSAL +2.0% (Q4 result)
- Energy: 1088.HK China Shenhua Energy +1.8% (Feb result)
- Utilities: 9501.JP Tokyo Electric Power Co -1.4% (to decommission units)
M
Closing Market Summary: Stocks Stall on ThursdayWednesday's bullish momentum lingered at the opening bell on Thursday, but the energy faded fast as investors came up short on reasons to extend the stock market's record high level. The S&P 500 and the Dow closed with losses of 0.2% and 0.1%, respectively, while the Nasdaq finished flat.
News from Washington did little to encourage the notion that tax reform will be a quick and easy process; President Trump's proposed budget was met with resistance and three House Republicans voted against the GOP health care bill in a committee vote, casting doubt on the legislation's chances on the floor of the House.
Crude oil also played into the cautious tone as the energy component failed to sustain yesterday's positive momentum, squandering a solid pre-market gain. WTI crude finished the day just above its flat line at $48.75/bbl while the energy sector (-0.6%) closed solidly lower.
Biotechnology names weighed on the health care space (-0.9%) after Biogen (BIIB 278.96, -13.68) shares were downgraded at both Morgan Stanley and Leerink Partners on Thursday morning. The company lost 4.7% while the iShares Nasdaq Biotechnology ETF (IBB 298.61, -3.78) tumbled 1.2%.
The rate-sensitive utilities sector (1.1%) fell all the way to the bottom of the day's leaderboard as selling pressure in the Treasury market left yields modestly higher; the benchmark 10-yr yield increased by four basis points to 2.54%.
Most of the remaining sectors finished lower, including industrials (-0.4%), materials (-0.6%), telecom services (-0.3%), and real estate (-0.3%). However, the financials and technology sectors, which together comprise around 35.0% of the broader market, offset most of the negative influence with gains of 0.3% and 0.2%, respectively.
The technology sector centered its advance around Oracle's (ORCL 45.73, +2.68) latest earnings report in which the company reported better than expected earnings, issued upbeat guidance, and increased its dividend. On the other hand, the financial sector's uptick was likely a belated response to yesterday's rate hike. Since the FOMC announcement, investors heard from the Bank of Japan, Swiss National Bank, and the Bank of England. All three held pat, underscoring the Fed's hawkish tilt when compared to other central banks.
The consumer discretionary (+0.1%) and consumer staples (+0.1%) sectors also performed relatively well, finishing just above their flat lines as retailers showed strength; the SPDR S&P Retail ETF (XRT 42.43, +0.13) closed higher by 0.3%. Homebuilders also helped the consumer discretionary sector, evidenced by the 1.9% increase in the iShares U.S. Home Construction ETF (ITB 32.52, +0.59). The strength followed the release of the February Housing Starts report, which came in roughly as expected.
In addition to Housing Starts, Thursday also saw Initial Claims, March Philadelphia Fed, and January JOLTS:
- Housing starts increased to a seasonally adjusted annualized rate of 1.288 million units in February, up from a revised 1.251 million units in January (from 1.246 million). The consensus expected starts to increase to 1.260 million units. Building permits decreased to a seasonally adjusted 1.213 million in February from a revised 1.293 million (from 1.285 million) for January. The consensus expected a reading of 1.251 million.
- The key takeaway from the report is that there was strength in the single-family sector for both starts and permits. Single-family starts increased 6.5% to 872,000 while single-family permits increased 3.1% to 832,000.
- The latest weekly initial jobless claims count totaled 241,000 while the consensus expected a reading of 242,000. Today's tally was below the unrevised prior week count of 243,000. As for continuing claims, they declined to 2.030 million from the revised count of 2.060 million (from 2.058 million).
- The key takeaway from this report is that initial claims continue to run at low levels that point to the likelihood of healthy nonfarm payroll gains in the Employment Situation Report for March.
- The Philadelphia Fed Survey for March declined to 32.8 from an unrevised 43.3 in February while economists polled by had expected a reading of 25.0.
- The key takeaway from the report is that the index has increased for eight consecutive months and remains comfortably above the 0.0 dividing line between expansion and contraction.
- The January Job Openings and Labor Turnover Survey showed that job openings increased to 5.626 million from a revised 5.539 million (from 5.501 million) in December.
On Friday, investors will receive February Industrial Production (consensus 0.2%) at 9:15 ET, while February Leading Indicators (consensus 0.5%) and the University of Michigan Sentiment Index for March (consensus 96.8) will cross the wires at 10:00 ET.
- Nasdaq Composite +9.6% YTD
- S&P 500 +6.4% YTD
- Dow Jones Industrial Average +5.9% YTD
- Russell 2000 +2.1% YTD
Drew Gillanders, a top European hedge fund manager, is set to join the London arm of Point72 Asset Management, the family office of Steven Cohen, the billionaire trader who founded SAC Capital.
According to people familiar with the move, Mr Gillanders will start work at the firm after a six-month gardening leave. He is expected to be a portfolio manager focused on the healthcare and consumer sector, these people added.
Until recently, Mr Gillanders was working as a merger arbitrageur at Och-Ziff Capital Management, a rival to Point72, where he was frequently identified as one of the top traders in his field. Och-Ziff has suffered a decline in assets under management and suffered a net loss in 2016 after getting hit by a record US fine for paying bribes in Africa.
Och-Ziff and Point72 declined to comment. Mr Gillanders did not respond to multiple attempts to reach him. Bloomberg earlier reported on Mr Gillanders’ departure from Och-Ziff.
Mr Gillanders previously worked with Mr Cohen at SAC Capital before he joined Och-Ziff. Steven Cohen has attempted to rebuild his image with Point72, which exclusively manages his money since it cannot expand by accepting money from external investors because of the insider trading conviction in 2013 of SAC Capital. Mr Cohen was not charged with any offence, but he is banned until 2018 from overseeing client money
Gapping down
In reaction to disappointing earnings/guidance:
In reaction to disappointing earnings/guidance:
- GES -13.6%, ARTX -13.4%, TROV -8.6%, INO -6.8%, PLX -6.3%, CNAT -5.3%, CVRS -2.9%, INSY -2.8%
- KPTI -2.7%, TTNP -2.5%, BCEI -1.7%, GV -1.7%, KNDI -1.2%
Other news:
- IPI -12% (prices a 43.54 mln share underwritten public offering of common stock for gross proceeds of about $52.3 mln)
- AVID -6.5% (Postpones conference call to discuss Q4 financial results)
- PEN -4.1% (Commences an underwritten public offering of 1.3 mln shares of its common stock)
- ELF -1.3% (Files for $175 mln offering of common stock by selling stockholders)
Analyst comments:
- BIIB -2.3% (downgraded to Equal-Weight from Overweight at Morgan Stanley)
- CIEN -1.6% (downgraded to Neutral from Buy at Goldman; removed from Conviction Buy List)
- SIRI -1.5% (downgraded to Hold from Buy at Wunderlich)
- MASI -1.2% (downgraded to Neutral from Overweight at Piper Jaffray)
- UTHR -1% (initiated with a Underperform at Credit Suisse)
Gapping up
In reaction to strong earnings/guidance:
In reaction to strong earnings/guidance:
- XCO +17.2%, GALE +15.3%, PRTO +11.8%, FRSH +11.7%, IDRA +11.5%,ALRM +10.3%, GPRO +10.2%, SKLN +8.2%, ITEK +7.2%
- JASO +6.6%, CLRB +6.2%, ORCL +6.2%, SAEX +5.8%, MCRB +5.2%, SNOA +4.8%, RMTI +3.6%, CPRX +3.2%, SYNC +3.2%
- WSM +3.1%, RTK +2.7%, CALL +1.9%, YRD +1.4%, EVOK +1.3%, BTG +1%
M&A news:
- KGC +1.2% (Confirms that it has received an unsolicited proposal from Virtu Financial (VIRT) for $18.50-$20.00 per share in cash)
Select EU financial related names showing strength:
- BBVA +4.3%, SAN +4.2%, ING +2.6%, DB +2.3%, CS +1.8%
Select metals/mining stocks trading higher:
- SWC +2.7%, AG +2.6%, BBL +1.8%, FCX +1.6%, BHP +1.5%, VALE +1.5%
- SSRI +1.4%, PAAS +1.4%, CLF +1.3%, GOLD +1%, AEM +1%
Other news:
- HTBX +13% (receivse a 3 year, $982k grant from the Florida Department of Health 2016-17 Zika Research Grant Initiative to further develop and test gp96-based Zika vaccine)
- MCRB +5.2% (Seres Therapeutics and FDA reach agreement on key design elements of a new SER-109 Phase 2 study)
- CTSO +3.9% (enters into a partnership with Dr. Reddy's Laboratories (RDY) for the South African market)
- TLND +3.2% (upsizes and prices offering by selling shareholders of 3,289,662 ADSs at $28.50 per share)
- TSLA +3% (Announces offerings of $250 mln of common stock and $750 mln aggregate principal amount of convertible senior notes due in 2022 in concurrent underwritten registered public offerings)
- DO +2.3% (Updates on injunction vs. Petrobras (PBR) regarding the Ocean Valor)
- EXK +2.3% (announces that exploration drilling on the Terronera property)
- AMRN +2.2% (reports REDUCE-IT Cardiovascular outcomes study remains on schedule to reach onset of target final primary major adverse cardiovascular event near the end of 2017)
- BKS +1.7% (Board authorizes new stock repurchase program of up to $50 mln of its common shares)
- SPWR +1.7% (Enters into a Project Supply Agreement with Next Era Energy Resources
- SAP +1.4% (in sympathy with ORCL earnings)
- EQC +1.3% (Board adds $150 mln to buyback program)
Analyst comments:
- LC +3.2% (upgraded to Buy from Neutral at Guggenheim)
- GBT +2.6% (Initiated with an Overweight at Cantor)
- ABX +1.6% (upgraded to Outperform at RBC Capital Mkts)
- GG +1.6% (upgraded to Sector Perform at RBC Capital Mkts)
- DAL +1.3% (upgraded to Outperform from In Line at Evercore ISI)
- LITE +1.2% (upgraded to Neutral from Sell at Goldman)