Somewhat amazingly, given the army of advisers involved, Deutsche Boerse AG has elected to be called "DBAG" in the merger agreement
Buybacks Aren’t What They Used to Be
Investors aren’t rewarding companies that deploy the biggest buybacks as much as they once did
The corporate buyback binge continues at full tilt. But, perhaps with good reason, investors may be losing faith in its ability to propel share prices.
U.S. companies authorized $158 billion of new stock buyback programs in January and February, according to Birinyi Associates Inc. While there is no guarantee the rest of 2016 will maintain such a pace, it marked the best start to a year since the research firm started tracking this data in 1984.
February, in particular, stood out, as cash-rich companies said they would continue rewarding shareholders rather than investing. It was the fourth strongest month on record. Cisco Systems Inc. and Gilead Sciences Inc. led the pack with the heftiest announcements.
Even so, the S&P 500 Buyback Index, which contains stocks with the highest ratio of buybacks to market value, has fallen by 7% over the past year. That compares with a slight gain for the S&P 500 on a total-return basis.
The explanation may be that investors know how buyback booms end: When the market loses momentum, companies tend to get skittish about spending money on their own shares, even though they are on sale.
For example, in booming 2007 when the last bull market peaked, buybacks totaled $761 billion. That plunged to $387 billion in 2008 and just $149 billion in 2009, according to Birinyi.
Based on what companies have announced, and also some evidence of what they have spent, such a pullback hasn’t happened this time. But the fact that a company says it will repurchase stock doesn’t mean it will. In 2015, companies bought back about four-fifths of the authorized amount.
So, one explanation for the sputtering Buyback Index is that investors smell trouble. Another explanation is more benign: That investors are optimistic about the economy and are rewarding companies that plow money into productive assets.
After all, if a company can get a higher return on a dollar than one returned to investors, it should retain and spend it. Capital expenditures, research and development and even wage increases have largely taken a back seat in this bull market.
The buyback express isn’t slowing. But more investors want to switch trains.
From the bottom of the league to the top.
Revenue in the Iberian region grew 14.2 per cent year-on-year, the manufacturer said on Wednesday. Other decent performances came from the UK and Ireland, where they were up 8.3 per cent.
That was in sharp contrast to Asia-Pacific, where sales declined 4.1 per cent – a result, Geberit said, of the “very weak market environment in China.”
It wasn’t so long ago that countries like Spain, Portugal and Ireland were markets in decline – particularly so as overbuilding in the good years before 2007 was a big part of their problems. But those economies, and that of the UK, are now the fastest-growing in Europe.
Overall the Swiss group reported sales of SFr2.59bn last year, a 24.2 per cent rise year-on-year mainly attributable to its acquisition of Finnish rival Sanitec for $1.4bn early in the year. In the fourth quarter sales rose 32.4 per cent to SFr621.1m.
EDF chief's gambit suggests will get backing for Hinkley Point - RTRS
16-MAR-2016 17:19:21
Levy's letter seen as sign government ready to support EDF
Project would help protect France's nuclear industry
Final investment decision could come as early as March 30
By Geert De Clercq and Benjamin Mallet
PARIS, March 16 (Reuters) - An apparent ultimatum from the chief executive of EDF EDF.PA suggests he is confident that the French government will provide the additional financial support he wants for a plan to build nuclear reactors in Britain.
In a letter to staff last Friday, Chief Executive Jean-Bernard Levy warned he would not go ahead with the 18 billion pound ($25 billion) Hinkley Point project in southwest England without more help from the state. (Full Story)
His comments came just days after the shock resignation of his chief financial officer over the project, which places additional strain on a company with net debt of 37 billion euros ($41 billion). (Full Story)
Sources familiar with the company's thinking say the letter should be read as an attempt to mollify French unions who are resisting the Hinkley Point project, and also a sign that the government, which owns an 85 percent stake in EDF, has already agreed in principle to give this support.
Levy, who has spent years working with ministers and in state-owned firms, is seen as too politically astute to make such public statements without government clearance.
"Levy is playing his last card," a source close to EDF management said.
Asked whether the letter would have been cleared by the French presidency, he said: "That is very likely". Two other people with knowledge of the situation said they expected more state support for EDF that would allow Hinkley Point to go ahead.
EDF and President Francois Hollande's office declined to comment on whether the letter had been cleared.
Hinkley Point, scheduled to start producing energy in the middle of the next decade, will help keep the lights on in Britain by accounting for seven percent of power generation.
It is also vital for ensuring the survival of a French nuclear industry which employs around 220,000 people and the government has repeatedly said the project should go ahead.
EDF will have to start replacing its ageing nuclear plants in about 15 years. Meanwhile it has no domestic market for new nuclear and few other takers for new reactors abroad following the 2011 Fukushima nuclear disaster.
EDF has another powerful incentive -- the British government has guaranteed it will be able to sell electricity generated for around three times the current market price.
Several sources close to EDF expect a final investment decision will be made before the EDF shareholders meeting on May 12, and possibly at its March 30 board meeting.
DIVIDEND SAVING
Levy did not specify what form state support could take, but insiders say one option would be for the state to take future dividends in shares rather than cash. Such a move last month bolstered EDF's coffers by 1.8 billion euros. (Full Story)
"I have the impression this will be the solution," the source close to EDF management told Reuters.
A share dividend, which could be repeated for several years, is less politically sensitive than a capital increase for the state, which has already been forced to inject 5 billion euros into nuclear reactor builder Areva AREVA.PA -- its equity wiped out by years of losses.
Les Echos newspaper nevertheless wrote that BNP Paribas is already preparing a capital increase as a second option.
Two sources familiar with the situation said they were not aware of BNP preparing an operation. BNP declined to comment.
A third option would be for state-owned bank Caisse des Depots et Consignations (CDC) to take a minority stake in Hinkley Point.
EDF was forced to shoulder two thirds of the project itself because the only co-investor it could find was Chinese utility CGN for a one-third stake.
But the government has already suggested CDC could support EDF in another way -- potentially buying half of EDF's grid unit RTE to free up cash for Hinkley Point.
One source said a fourth option -- which would require European Commission approval -- would be to give EDF's French nuclear activities power price support similar to the UK Contract for Difference subsidy scheme for Hinkley Point, possibly by putting these activities in a separate legal unit.
But while Hinkley Point is a contract for new nuclear, EDF's nuclear fleet was built decades ago and accounts for a massive 75 percent of French power use. A fixed price for such a powerful player could raise the ire of EU antitrust authorities.
An EDF spokeswoman denied EDF is studying such an option.
REGN US- suspended in the us after being up 2.59% News pending...SAN FP hold 22.7% of the Comoany
Vista Equity Sets $10 Billion Upper Limit For New Fund
Vista Equity Partners Fund VI has attracted investor demand in excess of the fund’s hard cap
Vista Equity Partners, the private-equity firm that recently took software company Solera Holdings Inc. private, set a $10 billion upper limit for its sixth flagship buyout fund, said people familiar with the matter, potentially making it one of the largest technology-focused funds ever raised.
Vista on March 11 held an initial closing for the new fund, securing more than the $5.78 billion it raised for its fifth fund in 2014, said one of the people familiar with the fundraising.
Vista Equity Partners Fund VI LP has attracted investor demand in excess of the fund’s $10 billion hard cap.
At $10 billion, Vista’s newest fund would nearly match the $10.3 billion tech buyout firm Silver Lake raised in 2013 for its fourth flagship buyout fund.
Although Vista has targeted $8 billion for its new fund, up until February it hadn’t set an upper limit on the fund’s size. Typically, investors prefer private-equity firms set limits, or caps, on the size of their funds out of concern firms would be tempted to raise more money than they could prudently invest. Once a firm establishes a fund’s hard cap in legal documents, it generally can’t raise more than that amount without obtaining investor consent.
The new fund’s initial closing gives Vista fresh capital to pursue new deals as technology continues to draw private equity’s attention. Private-equity firms in 2015 backed 189 U.S.-focused technology deals totaling $42.7 billion, according to data provider Dealogic Ltd. In the previous year, private-equity firms backed 196 such deals totaling $28.66 billion.
Austin, Texas-based Vista is led by Chairman and Chief Executive Robert Smith and President Brian Sheth and has risen in prominence as an investor in software and technology-enabled companies. It generally backs companies with enterprise values of between $400 million and $5 billion, and its portfolio includes such companies as business software provider Tibco Software Inc. and cybersecurity company Forcepoint LLC.
Vista in March completed a take-private deal for Solera, which provides software for the automobile claims-processing industry. The deal, which was expected to be valued at $6.5 billion including debt, was one of the largest leveraged buyouts announced in 2015.
Vista’s 2014 flagship fund, Vista Equity Partners Fund V LP, is too early in its life to judge its performance. Vista Equity Partners Fund IV LP, launched in 2011, generated roughly 1.7-times its invested capital and around a 21.4% net internal rate of return as of Sept. 30, according to data from the Oregon Investment Council.
Vista isn’t the only tech-focused buyout firm raising capital for a large fund. Thoma Bravo, which owns software developer Compuware Corp., is seeking about $7 billion for Thoma Bravo Fund XII LP, according to a February Securities and Exchange Commission filing. Thoma Bravo focuses on software and technology-enabled services companies, but can also invest across a broad range of sectors.
As the two private equity shops battle for investor dollars and deals, questions are mounting as to whether or not there are enough investment opportunities these days to accommodate both players, people in the industry said. Vista Equity typically runs into Thoma Bravo as a competitor in three or four deals each year, two people with knowledge of the firms said. That is a small minority of the deals each firm looks at and closes annually, the people added.
As deal competition intensified in 2015, the aggregate value of announced private equity-backed information technology buyout deals hit $140 billion, the highest amount since 2006, according to research firm Preqin Ltd. IT deals made up 34% of the total value of private equity-backed buyouts in 2015, up from 13% in 2014, data from Preqin shows.