NY Post : Brexit derails Lionsgate-Starz merger

Brexit derails Lionsgate-Starz merger

The widely expected merger between Lionsgate and Starz has been derailed because of the Brexit currency chaos, The Post has learned.

One of the banks being lined up to provide the financing was forced to withdraw from the deal after the British pound fell about 10 percent versus the dollar over two days, one source told The Post.

“It fell apart over the weekend,” the source said. “Brexit hurt the financing. It’s dead.”

The person cautioned that the deal could be resuscitated if economic conditions improve.

Rumors of a likely deal between the Hollywood studio and the premium pay-TV channel gained steam in the last couple of weeks — pushing shares of both companies higher.

Shares of Lionsgate, the studio behind “Hunger Games” and “Divergent,” rose 5.8 percent on June 23, to $21.72, as whispers of an impending deal raced from Tinseltown to Wall Street.

On the same day, Starz shares gained 5.5 percent, to $29.33.

Brexit, the vote by Britons to leave the European Union, has cast a cloud of uncertainty over the British pound, as the UK will have to rework treaties and tariffs with the EU.

The pound hit a 31-year low on June 27 versus the dollar.

Lionsgate owners include Liberty’s John Malone, who also controls Starz.

Starz has been searching for a partnership for some time and has piqued the interest of CBS and AMC Networks, among others, although neither of those lodged a bid for the firm in the latest round of talks.

Telecom giant AT&T, which owns DirecTV, has been keeping a close eye on the process, too, but it hasn’t made a bid yet, another source said.

AT&T’s name has cropped up recently in media M&A circles, as it is also eyeing a Yahoo bid.

The expected Lionsgate-Starz merger isn’t the first time the two companies attempted a hookup.

The two were hoping to execute a deal in February, but Lionsgate’s poor quarterly results and the lackluster showing of “The Hunger Games: Mockingjay Part 2” sank its stock price and the plan was scuppered.

Lionsgate and Starz have much to gain from a get-together — both stocks are off significantly year-to-date and are trading near their respective 52-week lows.

Lionsgate stock is down 37.9 percent year-to-date. Its shares closed Tuesday at $20.11.

Starz has slipped 17.9 percent year-to-date. It closed Tuesday at $27.52.

Lionsgate and Starz did not comment.

>>> ECB happy to stay put after Brexit vote as markets regain pose-sources - Reu

  • ECB IN NO RUSH TO EASE POLICY AFTER BREXIT VOTE IF MARKETS REMAIN CALM - SOURCES
  • 29-Jun-2016 13:29:48 - ECB WILL AWAIT ACTUAL EVIDENCE OF POST-BREXIT SLOWDOWN BEFORE ANY ACTION - SOURCES
ECB happy to stay put after Brexit vote as markets regain pose-sources - Reuters News

FRANKFURT, June 29 (Reuters) - The European Central Bank is in no rush to ease its monetary policy in response Britain's vote to leave the European Union, taking comfort in a calmer-than-feared market reaction, several sources have told Reuters.
The Brexit vote has hit the shares of euro zone banks and is likely to act as a drag on the euro zone economy, as ECB President Mario Draghi told EU leaders on Tuesday. It is also raising fundamental questions about the future of the EU.
But conversations with around a dozen officials familiar with the ECB's thinking showed that the bank found some reassurance in the market rebound this week and was happy to take a wait-and-see stance, given the lack of hard evidence about the actual impact of Brexit.

(BGR) Rolls Royce is developing futuristic ships that will one day sail across o

Rolls Royce is developing futuristic ships that will one day sail across oceans autonomously
With so much talk about a future filled with self-driving cars, it’s easy to forget that general advances in autonomous software technologies can also be applied to boats. That being the case, Rolls Royce recently announced that it’s been working on technology that might someday make it possible for gargantuan cargo ships to sail themselves across oceans.

In a white paper published a few days ago, Rolls Royce explained how their vision of “remote and autonomous shipping” may become a reality as early as 2020. The initiative is part of Rolls Royce’s Advanced Autonomous Waterborne Applications (AAWA) program.


Speaking on the matter, Rolls Royce VP of innovation Oskar Levander explained: “This is happening. It’s not if, it’s when. The technologies needed to make remote and autonomous ships a reality exist. The AAWA project is testing sensor arrays in a range of operating and climatic conditions in Finland and has created a simulated autonomous ship control system which allows the behavior of the complete communication system to be explored. We will see a remote controlled ship in commercial use by the end of the decade.”
Indeed, as Rolls Royce envisions it, we’re just a few years away from an environment where a lone operator would be able to remotely control an entire fleet of ships from a central command console. And because this is the future we’re talking about, Rolls Royce envisions the console being an advanced holographic display as evidenced by the renderings above and below.
Some of the anticipated benefits of remote and autonomous shipping include an improved safety profile and the ability for crew members to focus on more pertinent tasks. For instance, the company explains how these ships of the future would be able to use advanced sensors and companion drones that would effectively serve as advanced scouts capable of identifying important travel issues that humans might otherwise not notice.
So while Rolls Royce at the moment is working on decreasing the role of humans in the shipping process, the company eventually believes that fully autonomous shipping may be possible within two decades. Before that, the company is confident that remote controlled ships will become operational by 2020.
A few more photos from Rolls Royce’s press release can be viewed below.

>>> Monsanto: No formal update on Bayer proposal

Monsanto: No formal update on Bayer proposal

"While there is no formal update on the Bayer proposal, I have been personally in discussions with Bayer's management over the last several weeks, along with others regarding alternative strategic options," added Grant. "We continue to recognize the potential value these types of combinations can create as they accelerate innovation and increase choice for farmers across a broader set of crops, geographies and production practices, while improving the sustainability of agriculture around the world. That is why we remain open and will continue to actively engage in constructive dialogue to pursue value enhancing strategic options."

>>> General Mills beats by $0.06, beats on revs; guides FY17; raises cost reduct

General Mills beats by $0.06, beats on revs; guides FY17; raises cost reduction, margin expansion target; raises dividend 4% (65.76)

  • Reports Q4 (May) earnings of $0.66 per share, excluding non-recurring items, $0.06 better than the Capital IQ Consensus of $0.60; revenues fell 8.6% year/year to $3.93 bln vs the $3.86 bln Capital IQ Consensus.
    • Pound volume reduced net sales growth by 7 percentage points, and net price realization and mix reduced net sales growth by 1 point. Foreign currency exchange effects reduced net sales growth by 1 point. On a constant-currency basis, net sales decreased 8 percent. The impact of one less week and the net impact of acquisitions and divestitures subtracted 9 points of growth.
    • Gross margin declined 20 basis points, reflecting higher input cost inflation in the quarter. Adjusted gross margin declined 130 basis points. Operating profit increased 26 percent to $532 million. Total segment operating profit decreased 18 percent to $654 million.
  • Guidance:
    • Overall, the company expects this focused approach will result in fiscal 2017 organic net sales growth ranging from flat to down 2 percent compared to 2016, but deliver a 6 to 8 percent increase in constant-currency total segment operating profit. Fiscal 2017 adjusted operating profit margin is expected to increase by ~150 basis points, with constant-currency adjusted diluted EPS growing 6 to 8 percent from the base of $2.92 earned in fiscal 2016 The company estimates a 1-2 cent headwind to fiscal 2017 adjusted diluted EPS from currency translation, though this figure does not reflect recent fluctuations in the British pound (so ~$3.08-3.14 ex-Pound impact, may not compare to $3.04 est).
    • Looking ahead to fiscal 2018, General Mills expects modest organic net sales growth and the full benefit of its margin expansion efforts will drive adjusted operating profit margin to 20 percent, resulting in a low double-digit constant-currency increase in adjusted diluted EPS.
  • General Mills now expects its previously announced cost-reduction and organizational efficiency initiatives -- including Projects Century, Catalyst, and Compass, as well as administrative cost reductions delivered through zero-based budgeting -- to generate total annual savings of $600 million by fiscal 2018, up from the previous target of $500 million.
  • The company also announced it is undertaking further efforts to prioritize investments, reduce complexity, and streamline its operations to drive profitable sales growth. As a result, General Mills is increasing and accelerating its previous margin expansion target. The company now expects to achieve an adjusted operating profit margin of 20 percent by fiscal 2018, an increase of 400 basis points over fiscal 2015 levels.
  • Co raises quarterly dividend 4% to $0.48 from $0.46 -- eighth increase in General Mills' quarterly dividend rate since 2010

FT : Volkswagen diesel emissions scandal far from over

Volkswagen diesel emissions scandal far from over

New US settlement does not resolve several investigations, and bill for the affair could rise

The latest chapter in the Volkswagen diesel emissions scandal ends with a cliffhanger.
Europe’s largest carmaker on Tuesday agreed with US authorities to pay up to $10.03bn to buy back or fix almost half a million cars equipped with software to cheat during official emissions tests. VW has also agreed to pay a $2.7bn fine to environmental authorities for excess pollution, invest $2bn in green vehicle technology and offer $603m to 44 US states and two other territories to resolve legal claims.

But the settlement reached in the US — where regulators uncovered the VW scandal last September — is not the end of the story, warn analysts. “This is a major win and a step in the right direction, but the fat lady is not warming her vocals,” says Mike Tyndall at Citi.
In April, VW set aside €16.2bn to pay for the costs of the affair, prompting the German company to report the biggest annual loss in its history for 2015. A key risk is that VW has to increase this €16.2bn number, although it says there are no plans to do so.
If the US owners of cars made by VW group accept the terms of the deal, that will settle a class-action lawsuit relating to 475,000 2 litre diesel engine vehicles that were fitted with illegal defeat devices to understate emissions of harmful nitrogen oxides in official tests.
But VW still faces civil and criminal investigations in the US and elsewhere that could lead to fines, and it is also under pressure in the EU to pay compensation to European owners of cars caught up in the scandal.
The US Department of Justice said the settlement only “partially” resolves claims under the country’s clean air act, and the deal has no bearing on a civil lawsuit it filed against VW in January. Nor does the settlement include 85,000 3 litre diesel vehicles that were also fitted with defeat devices.
“While this announcement is an important step forward, let me be clear: it is by no means the last,” said deputy attorney-general Sally Yates on Tuesday. “We will continue to follow the facts wherever they go.”
In Europe, where 8.5m VW group cars were fitted with defeat devices, a key risk for the company is that the US settlement is used as a precedent to demand similar treatment.
Elzbieta Bienkowska, the EU commissioner responsible for industry, has called for “comparable” compensation to the US for European owners of VW cars fitted with defeat devices to restore customer trust.
In the US, affected car owners will be given a minimum of $5,100 each in compensation by VW. If that were applied to the affected cars in Europe, VW would have an additional bill of $43bn.
But this figure is not considered realistic by analysts. “There’s no way [VW] would agree to anything approaching that figure,” says Stephen Reitman, analyst at Société Générale.
VW has argued the US settlement is unique, owing to how limits on NOx emissions are tougher in the US compared to the EU.
As a result of the EU’s less onerous rules, fixing VW’s European cars affected by the scandal is relatively straightforward compared to the US.
Moreover, VW is under limited pressure as far as a consumer backlash is concerned following the affair. From January to May, the 12-brand group that includes VW and Audi delivered 4.2m cars worldwide, up 0.8 per cent compared to the same period last year. In Europe, deliveries rose 3.7 per cent.
Mr Tyndall says he is confident the €16.2bn that VW has set aside should cover all scandal-related costs.
However, he admits there are major uncertainties. “They’ve done a mea culpa in the US — the rest of the world is open to debate,” he adds.
He points out hedge funds are still trying to recover billions of euros in losses from Porsche, arising from market manipulation allegations first made in late-2008. The case has long weighed on the stock of VW, which owns Porsche.
Mr Tyndall’s worry is not that VW’s scandal costs will escalate per se, but that the affair “could drag on and on and on” like the Porsche case.
Analysts at BNP Exane Paribas estimate VW’s scandal costs could be as high as €23.7bn.
This calculation includes €2bn of civil fines and €2.5bn of criminal penalties in the US, plus €5bn of costs in Europe, split evenly between legal claims and efforts to restore trust with car owners by fixing vehicles and paying compensation.

A VW insider admits the company’s €16.2bn provision only “partially” covers civil and criminal fines in the US and does not include legal claims in Europe. He adds the company cannot be more precise because it does not know what these costs will be.
Chief among the factors that could put a cap on VW’s costs is this: the $10.03bn set aside to buy back or fix cars in the US affected by the scandal assumes that 100 per cent of all eligible owners sell their vehicles at their second hand price immediately before the affair broke in September last year.
One person familiar with the matter estimates up to 90 per cent of customers could choose to have their vehicle fixed, rather than bought back.
If the owner of an Audi with a September 2015 value of $44,000 accepts a fix, plus a $10,000 compensation payment, VW saves tens of thousands of dollars.
Multiply that by hundreds of thousands of cars and VW’s bill drops “many billions lower,” says this person. “You do the math.”