Cortefiel PE owners mandate Goldman Sachs to find buyer willing to refinance EUR 1.172bn loan - report (translated)
02 MAR 2017
Cortefiel PE owners CVC, PAI and Permira have mandated Goldman Sachs to sell the Spanish apparel retailer for EUR 1 plus debt, El Confidencial reported. According to the 1 March Spanish-language item, which cited several financial sources, the owners are looking for a buyer to refinance a EUR 1.172bn loan.
Cortefiel lenders, Banco Santander, CaixaBank, JPMorgan, Royal Bank of Scotland and Societe Generale among them, have mandated Houlihan Lokey to defend their positions, the report said. They fear that the company will need a debt write-off to survive, according to the report.
The 1.172bn loan - signed by the PE firms in 2006 to acquire Cortefiel and charged to the company; provisionally renewed in March 2016 and due in 12 months - is listed on the secondary debt markets at 76% of its nominal value, the report went on to say. This means that the market takes for granted that creditors will have to accept debt haircut of between 25% and 35% on the EUR 1.172bn outstanding, losing between EUR 300m and EUR 410m of the cash granted to CVC, PAI and Permira a decade ago, the report said.
Cortefiel closed its 2016-2017 results on Thursday (28 February), El Confidencial added without giving any further details.
R&D NewCo worth approx. CHF1.5bn, CHF10/share
Following publication of the Actelion offer prospectus and ahead of the start of the tender period (3-30 March), we have updated our provisional “R&D NewCo” valuation. We value the identifiable pipeline assets within R&D NewCo at CHF2.7/share and the royalty stream from J&J-acquired assets at CHF0.8/share. These combined with CHF1bn of cash (CHF6.3/share), result in a NewCo valuation of ca CHF9.8/share, allowing for the dilutive effects of the initial J&J 16% equity stake and subsequent 16% convertible note. We include our NPV assessment of R&D NewCo within this note. For access to our new NPV flexor (enabling the user to flex our assumptions by drug), please contact the Exane Pharma team. We increase our Actelion target price to CHF290 (from CHF280) to reflect our NPV assessment of NewCo.
arnes & Noble misses by $0.17, reports revs in-line; lowers FY17 guidance (9.90)
- Reports Q3 (Jan) earnings of $0.96 per share, $0.17 worse than the Capital IQ Consensus of $1.13; revenues fell 8.1% year/year to $1.3 bln vs the $1.29 bln Capital IQ Consensus. Retail sales, which include Barnes & Noble stores and BN.com, declined 7.5% to $1.3 bln for the quarter. Comparable store sales declined 8.3% for the quarter largely due to lower traffic, as well as the decline in coloring books, artist supplies and last year's best-selling album by Adele, which collectively accounted for nearly one third of the sales decline.
- Online sales increased 2.2% for the period. NOOK sales, which include digital content, devices and accessories, declined 25.7% to $38.4 mln for the quarter.
- For the quarter, Retail generated operating income of $135.0 mln, while NOOK incurred an operating loss of $6.2 mln, for a total operating income of $128.8 mln.
- Consolidated third quarter EBITDA was $157.8 mln, as compared to $169.0 mln a year ago. NOOK EBITDA losses of $2.4 mln improved $8.8 mln over the prior year, as the Company continues to reduce NOOK expenses. Retail EBITDA of $160.2 mln declined $19.9 mln on the sales decline.
- Co lowered FY17 guidance on January 5.
- Despite sales improvements post-holiday, trends softened in late January and into the fourth quarter.
- As a result, the Company now expects full year fiscal 2017 comparable store sales to decline ~7% (down from ~6%), and consolidated EBITDA to be in a range of $180 mln to $190 mln (down from $200 mln), excluding the impact of any charges related to its cost reduction initiatives and costs associated with the CEO departure. Fiscal 2017 Retail EBITDA is now expected to be in a range of $200 mln to $210 mln, while NOOK's EBITDA loss has improved and is now expected to be ~$20 mln, which includes previously announced transitional costs.
Gapping down
In reaction to disappointing earnings/guidance:
- SSI -25%, TDOC -10.5%, RMGN -10.2%, MEI -9.8%, JUNO -7.1%, PSTG -6.9%, PLNT -6.2%, PDLI -5.7%
- NKTR -4.8%, OPK -4.4%, KR -4.2%, SHAK -3.8%, BUD -3.8%, RTRX -3.5%, ABEV -3.5%, VGR -2.9%, ATHM -2.1%
- CIO -2%, PRTK -1.7%, FSIC -1.4%, GCP -1.3%, PFMT -1.1%, BOX -1%
Select metals/mining stocks trading lower:
- HMY -3.5%, MTL -3%, AU -1.8%, GFI -1.6%, ABX -1.6%
- GDX -1.5%, NEM -1.5%, SLW -1.3%, GOLD -1%, AG -0.9%
Other news:
- ADPT -29% (files to delay Form 10-K )
- PBYI -20.8% (after Roche's (RHHBY) Phase III APHINITY study for Perjeta met its primary endpoint treating breast cancer; also reported earnings)
- PTCT -18.5% (Ataluren Confirmatory Trial in nonsense mutation cystic fibrosis did not achieve its primary or secondary endpoints)
- AXTI -11.3% (prices its previously announced underwritten public offering of 4,615,385 shares of its common stock at a price to the public of $6.50/share)
- ARES -9.1% (commences a public offering of 7.5 mln common units representing limited partnership interests by a selling unitholder)
- AHP -5.8% (commences offerings of 1,150,000 shares of 5.50% Series B Cumulative Convertible Preferred Stock and 5.75 mln of its common stock)
- KITE -3.4% (commences 4.75 mln common stock offering; also downgraded to Neutral from Buy at Citigroup)
Analyst comments:
- AEO -0.5% (downgraded to Neutral at BofA/Merrill)
Gapping up
In reaction to strong earnings/guidance:
- MNST +13.7%, ONP +10.6%, NVGS +9.1%, CWST +6.9%, FOXF +6.8%, PEIX +6.6%, BLDP +6.5%, WTI +6.1%
- AMRC +5.8%, GKOS +5.4%, AVGO +5.3%, SSH +5.1%, JD +4.8%, ANF +4.5%, HIIQ +3.6%, BURL +3.2%, EPE +3.1%
- ALIM +3%, ANW +2.9%, HDSN +2.4%, ASM +2.3%, WSR +2.1%, ACIW +2%, AJRD +1.9%, JCAP +1.1%
Other news:
- AUPH +65.2% (announces its Phase IIb AURA-LV study in lupus nephritis met the complete and partial remission ("CR"/ "PR") endpoints at 48 weeks; AURORA Phase III trial with low dose voclosporin on track to commence in 2Q17)
- ALQA +12.7% ( Celgene [CELG] increases active stake to 22.2% (Prior 15.9%) -- Celgene purchased 4 mln shares in ALQA's 2/27 private placement)
- VRML +10.6% (announces a contracted agreement with Blue Cross Blue Shield of Michigan for OVA1)
- EXAS +7.7% (EXACT Sciences and Mayo Clinic study shows promise of new blood-based lung cancer test),
- KAO +2.5% (reviews its R&D Day agenda; Plazomicin NDA submission planned for the second half of 2017 )
- CAMT +2.5% ( announces that 'one of the world's leading CMOS Image Sensor manufacturers' placed multiple orders for inspection and metrology systems)
- VRX +1.6% ( corrects 'misleading report about Salix investigation' )
Analyst comments:
- SRPT +4.3% (upgraded to Outperform at Leerink Partners)
- ARMK +2.7% (added to Conviction Buy List at Goldman)
*GENFIT RISES; STREET INSIDER SAYS IN TALKS WITH NOVARTIS
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