NY FCRC meeting today: Took comments and everyone was in support but the Bronx Borough President said he had an issue regarding the staff retention numbers. NYC DOITT had Spoken to Altice previously and Altice said they don’t want to negotiate 2 times, speaking to NY PSC so the FCRC will vote Wednesday on conditional approval until after NY PSC approves, agreed with parties that will have up to 30 days to approve staff retention numbers post NY PSC approval and then order will become effective from NYC FCRC. (we are checking as to whether merger may become effective with out order in place from NYC FCRC).
Parrot’s CEO is building a new kind of T-shirt
You never know what you’re going to get when you sit down with Parrot CEO Henri Seydoux. The executive is every bit as unpredictable as the company he runs – and just like Parrot’s products, he always puts on a good show.
Seydoux’s panel at Disrupt NY today was largely focused on the company’s drone business. But it took some interesting zigs and zags along the way, particularly toward the end when he let the audience in on some of his more interesting plans for the future, including a rethink of one of the most ubiquitous articles of clothing out there.
“I am working on a T-shirt,” Seydoux told the audience. “I’ve been working on it for two years.” The executive added that he hoped to be showcasing the product at this event a few years from now.
Seydoux didn’t offer much in the way of specifics, due most likely to the project’s relative infancy, but added confidently, “I’m working on a T-shirt that you’ve never seen before.” The exec confirmed the product backstage – we mostly just wanted to make sure we were hearing things right, given Parrot’s previous focus on drones, audio accessories and you know, things that aren’t T-shirts.
If nothing else, the product conforms to Seydoux’s vision of setting the company’s sights on fun projects to engage consumers before branching out into other spaces as it has done with its agricultural drones.
“You start to do things for consumers because it’s easy,” he explained. “With this you can exist. [And then] you have the possibility to divert yourself into very difficult areas.”
LSE/Deutsche Boerse not approached by CME - sources
* "No sound whatsoever" from CME, person says
* Stronger rationale for CME move for Deutsche Boerse
CME Group has approached neither London Stock Exchange (LSE) nor Deutsche Boerse regarding a possible acquisition, according to two people briefed on the matter and a source familiar with LSE’s position.
As reported, sector bankers previously said US exchange operator CME could see reason to bid for Deutsche Boerse or LSE, as could rival Intercontinental Exchange (ICE). ICE on 4 May withdrew its indication of interest in LSE, but analysts have said a bid from CME should not entirely be ruled out. Since ICE’s withdrawal, CME has in several reports been tipped as a potential interloper in the European exchange merger.
CME has not approached Deutsche Boerse to request information or propose any talks, said the first person, briefed on the German group’s situation. CME has made “no sound whatsoever”, added the second person, briefed on LSE’s position.
CME, LSE and Deutsche Boerse declined to comment.
Under the UK’s Takeover Code Rule 2.2, the Takeover Panel can require potential rival bidders to announce their intentions in certain circumstances.
However, the Panel has not asked CME for any such information, a person briefed on the US company’s position said. The Takeover Panel did not return calls for comment.
ICE walking away from LSE could potentially reduce CME’s incentive to bid for one of the European exchange operators, the source and the second person agreed.
Had it acquired LSE, ICE would have added significant scale, but this competitive threat to CME is now reduced, the second person added. One would also have expected CME to announce its intentions, or to see some leaks on its preparations by now if the company was preparing an approach, the source and the second person argued.
LSE and Deutsche Boerse first flagged their potential merger on 23 February.
Given acquisitions in the exchange operator industry are complex and time-consuming, CME should already have launched an approach as its timeline for a potential bid is ticking away, it was said.
LSE and Deutsche Boerse expect their merger to close in late 2016 or early 2017, according to the deal announcement.
The person briefed on Deutsche Boerse’s position would not speculate on CME’s intentions but pointed to a recent comments from the US company’s chairman Terry Duffy.
Duffy in a 28 April video interview with Bloomberg declined to comment on any specific M&A situations but said his company had already put itself in a strong position if the LSE/Deutsche Boerse merger closes and could compete with any exchange.
If CME made a move on either of the European operators, it would likely have the stronger business case for buying Deutsche Boerse, two sector bankers agreed.
The US company would likely find Deutsche’s derivatives business Eurex and its post-trade unit Clearstream attractive, the first argued. The German company’s smaller cash equities business compared with LSE could also make it a better fit for CME, he added.
As with ICE, CME’s case for buying LSE would be weakened if the UK votes in June to leave the European Union, the second banker argued. Both US companies have reduced scope to reduce tax bills via cross border mergers inversions following US Treasury rule changes announced last month, he said.
Still, a CME bid for Deutsche Boerse would likely meet even tougher hurdles than a takeover of LSE, both sector bankers and a third agreed. Local German regulators and politicians could be inclined to block a hostile bid for the Frankfurt-based company, the first and third said. Unlike LSE, Deutsche Boerse is not “in play” as it is effectively the acquiring party in the planned merger, the second added.
Though billed as a merger of equals, Deutsche Boerse’s shareholders will control 54.4% of the UK TopCo resulting from the planned LSE tie-up.
Oil: What the Saudi Shake-Up Means
The removal of Saudi Arabia’s oil minister isn’t bearish in and of itself for oil prices because policy was already set by the palace, but the pace of reforms bears much more watching
Oil-market watchers need to know which way the political wind blows in the Middle East’s petrostates.
Even so, a literal shift in the wind in far-off Canada had far more impact on oil prices than a seemingly major move in top exporter Saudi Arabia. Once analysts got over the shock of Saturday’s news that the kingdom’s longtime oil minister Ali al-Naimi had been ousted, they focused on the wildfires that have taken about 1 million barrels of daily production offline near Alberta’s Fort McMurray. Cooler weather and possible rain depressed prices.
Mr. al-Naimi’s ouster might seem like a far more bearish factor since it is widely acknowledged that he was overruled by Crown Prince Mohammed bin Salman at last month’s Doha summit. The young reformer, seen as the power behind the throne, reportedly nixed any agreement on a production freeze that excluded a similar commitment from Iran. That country, recently freed from international nuclear sanctions that hobbled its exports, was opposed from the outset to any such deal.
But some context is necessary. First, Mr. al-Naimi, the face of Saudi energy policy for decades, was headed for retirement already. The shake-up encompassed many other ministries as part of a broad overhaul.
Second, Saudi energy policy has always fluctuated between economic and political prerogatives. The latter seems ascendant at the moment, but oil watchers already knew that. A new face—and Khalid al-Falih, the new minister and outgoing head of Saudi Aramco is actually not so new—doesn’t mean a change in course.
Saudi internal politics still has huge implications for oil prices, of course. It is just that the latest headlines won’t be a big driver of them.
Volkswagen: Why Turnaround Hopes Are Building
Hints emerging German car maker may tackle governance obstacles under new strategy plans
The tunnel has been long and the fumes noxious, but light is dimly emerging in the investment case for Volkswagen.
For years investors have seen the potential for the company to increase shareholder returns by improving the profitability of the VW-branded business, its largest revenue-spinner and spiritual core. For years hopes have been dashed as the company has responded to modest growth by hiring armies of staff, particularly in Germany.
To give just one example, in 2014 VW spent more on research and development than any company in any sector globally, according to brokerage Evercore ISI. Yet it isn’t viewed as a leader in automotive innovation—quite the contrary following last year’s emissions scandal.
The root of the problem has been clear: a supervisory board dominated by labor interests. German supervisory boards are always split between union and shareholder representatives, but a fifth of VW’s shareholder seats are also filled by local government officials who usually side with the unions.
The big question for shareholders is whether this balance of interests could change. After months of gloom, the past few weeks have brought three glimmers of hope.
The most dramatic is an open letter from a London-based activist investor, TCI Fund Management, arguing for a more transparent management-pay deal that prioritizes profits and returns. Hedge-fund manager Chris Hohn, who has amassed a 2% stake over four years, argues that the “old executive management team knew they would be paid a lot of money simply for protecting jobs and increasing wages.” The shares have risen about 7% since the note was published Friday, suggesting some investors think a vocal independent shareholder can prod the new management team into changing approach.
The second development is a U-turn on dividends from Porsche SE, the family holding vehicle that owns 52% of Volkswagen’s voting shares (and little else). Four days after slashing its payout in line with VW’s, the company said it would pay a much higher dividend than initially planned.
The Porsche and Piëch families, which hold half the shareholder seats on VW’s supervisory board, haven’t publicly supported reform. But their apparent dependence on Porsche SE’s dividends could be a hint that some share investors’ frustrations.
Finally, the Qatari sovereign-wealth fund, which owns 17% of VW’s voting stock and has little interest in protecting German jobs, is reportedly seeking more power. It currently has two seats on the supervisory board, but none on the “presidium”—the steering committee that convenes before board meetings to discuss key issues.
Nothing is guaranteed. And it is hard to see why the local government that owns 20% of VW’s voting stock would readily change its stance.
But long-suffering investors don’t have to wait long to find out. Volkswagen’s new “strategy 2025”, due to be unveiled this summer, could offer promise both in terms of cost-cutting and, possibly, governance reforms. That would finally give fuel to the company’s stalling recovery engine.
Eurozone Asked to Consider More Concessions on Greece’s Debt
Finance ministers to discuss extending maturities, limiting repayments and capping interest rates
BRUSSELS—Eurozone countries should extend maturities, limit annual repayments and cap interest rates on Greece’s second bailout, along with other measures, according to a document being discussed by Athens’s creditors Monday.
The document was prepared by the eurozone’s bailout fund, European Stability Mechanism, and reviewed by The Wall Street Journal. It says implementing all the proposed debt relief measures would bring Greece’s debt to 74% of gross domestic product by 2060, provided Athens fully implements its bailout program and if economic growth and government funding costs develop as expected.
Without these debt relief measures, Greece’s debt would be at 105% of GDP under such a scenario, according to the document.
The measures proposed in the document mostly focus on loans given to Greece under its second bailout from the now-defunct European Financial Stability Facility. Greece still owes the facility €130.9 billion.
Average maturities on these EFSF loans should be extended by an average five years to 37 1/2 years, the document says.
Annual payments on the principal of the European Financial Stability Facility loans should be fixed at 1% of GDP until 2050, while interest rates should be capped to 2% of the loans until then, the document says. Any outstanding debt and interest payments would then be split into equal installments to be repaid after 2050.
The document suggests two other measures. National central banks in the eurozone as well as the European Central Bank should give any profits they have made on Greek bonds back to Athens. Those payments would amount to around €8 billion, the document says.
On top of that, Greece should be allowed to use any leftover money from its third bailout of €86 billion to repay early loans from the International Monetary Fund. IMF loans carry higher interest than money borrowed from the eurozone bailout fund.
The document says that eurozone countries could choose to just implement some of the proposed measures. However, Greece’s debt will remain higher if not all measures are implemented.
Greece’s debt may rise to as much as 258% of gross domestic product by 2060 or fall to as low as 63% of GDP, according to an official analysis of the country’s debt trajectory that heralds tough talks ahead on potential measures to ease Athens’ payment burden.
The so-called debt sustainability analysis was drawn up by Greece’s European creditors. The wide divergences in the debt predictions are due to different forecasts on how much Greece’s economy will grow in the coming decades and how much money it can put aside to pay down debt.
Under all but the most optimistic scenarios, the document points to serious concerns over Greece’s ability to repay its debt, which stood at 176.9% of GDP at the end of last year. The results of “this analysis point to serious concerns regarding the sustainability of Greece’s public debt in the long term,” the document says.
The document was distributed to officials from eurozone finance ministries Monday morning for discussion later in the day.
To reach a deal, the ministers will also have to bring on board the IMF, one of Greece’s biggest creditors. The IMF has consistently had more pessimistic forecasts for Greece’s debt ratio and demanded far-reaching measures to cut the country’s payment burden. Here it has clashed with Germany, which has opposed further debt relief.
“Today we will only have a first discussion on what, when, if and how the debt sustainability or debt relief measures could take place,” said Jeroen Dijsselbloem, the Dutch finance minister who presides over the group of ministers, on his way into Monday’s meeting.
The debt sustainability analysis looks at four different scenarios for Greece’s economy and assesses how the country’s debt-to-GDP ratio will fare in each case for the decades up to 2060.
*FRANKFURT CUM-CUM PROBE OPENED IN WAKE OF COMMERZBANK REPORT