WSJ : Apollo Global Management in Talks to Buy Apollo Education

Apollo Global Management in Talks to Buy Apollo Education

Deal with private-equity firm could be worth about $1 billion

Private-equity firm Apollo Global Management LLC is in advanced talks to buy struggling education company Apollo Education Group Inc., according to people familiar with the matter.

A deal between Phoenix-based Apollo Education and Apollo Global Management, a New York private-equity firm, could be worth about $1 billion, some of the people said, with one of them adding an agreement could be reached in the next few weeks. Apollo Education had been in discussions with a number of private-equity firms since late last year, but Apollo Global Management is the only one still in the running now, this person said.
It is possible, as always, in such situations that there will be no deal, and another buyout firm could re-emerge.

Apollo Education, which is unaffiliated with the buyout firm, said Monday that its board is in talks that “could potentially lead to a change of control of the company.” It didn’t name a possible buyer or give other details of the sales process.

Apollo Education, operator of the University of Phoenix, disclosed the talks as it reported its third loss in four quarters in the latest sign of stress in the for-profit college industry. In recent years, such institutions have seen enrollment slide amid scrutiny of their recruiting, career outcomes and student-loan default rates. Shares of a number of the companies, especially Apollo Education, have been battered as a result.

In October, the Defense Department said it had barred the University of Phoenix system from recruiting on military bases and prevented troops from using federal money for classes. Earlier last year, the company, which operates on-campus and online classes, disclosed probes by the U.S. Federal Trade Commission and the California Attorney General’s office into its marketing and other business practices. The company has said it intended to cooperate fully with the agencies’ requests for information.

In the fiscal quarter ended Nov. 30, Apollo Education posted a loss of $60.8 million, or 56 cents a share. Excluding restructuring charges and other items, it had a per-share profit of 29 cents, short of the 31-cents-a-share estimate of analysts polled by Thomson Reuters.

Revenue fell 18%—more than analysts had expected—to $586 million as total degree enrollment slid 22%.

Apollo Education’s shares were down 3.2% at $6.38 in afternoon trading, giving up an earlier gain of as much as 17% as news of the disappointing results appeared to outweigh the prospect of a sale of the company. That brought the stock’s loss over the past 12 months to 76% and gave the company a market value of about $700 million.

Following The Wall Street Journal’s report on the talks with Apollo Global Management, the stock shot up again after the end of regular trading.

Apollo Education, which is controlled by Chairman Peter Sperling and a trust, said that a sale could boost its strategic initiatives including an international expansion and a plan to transform the University of Phoenix and improve outcomes for its students.

The value of other companies in the for-profit education sector has been tumbling. DeVry Education Group Inc.’s stock is down about 50% over the past year, for example. Last year, a bankruptcy judge approved Corinthian Colleges Inc.’s plan to liquidate its assets. In 2014, Education Management Corp. handed ownership to creditors in an out-of-court restructuring.

Apollo Global Management, founded by veterans of junk-bond pioneer Drexel Burnham Lambert, is known for a willingness to invest in struggling industries and companies. For example, last year it pursued—though never closed—a deal for property mogul Nicholas Schorsch’s troubled real-estate empire.

>>> US Close Dow+0.32% S&P+0.09% Nasdaq-0.12% Russell-0.41%

Closing Market Summary: Indices Begin Week on a Flat Note

The stock market began the week on a flat note with the S&P 500 adding 0.1% while the tech-heavy Nasdaq (-0.1%) trailed the benchmark index. Falling oil prices in the face of global growth concerns continued to weigh on the overall sentiment, short-circuiting a rebound attempt.

Looking overseas, China's Shanghai Composite surrendered 5.3% despite reporting economic data that was largely in-line with analyst expectations. In economic data, China's December CPI increased 0.5% month-over-month (expected 0.4%), moving its year-over-year growth to an increase of 1.6%, as expected. Additionally, December's Producer Price Index fell 5.9% year-over-year versus an expectation of a 5.8% decrease. Despite the slide in Asia, investor sentiment improved once the attention shifted to Europe. However, a morning retreat in crude oil weighed on the stock market as a whole. By the end of the energy-component's pit session, WTI crude had slipped 5.3% to end at $31.41/bbl.

On the leaderboard, commodity-sensitive energy (-2.1%) and materials (-1.6%) claimed the bottom two rungs followed by health care (-1.2%), industrials (+0.1%) and financials (+0.4%). Looking at the flipside, consumer staples (+1.0%), consumer discretionary (+0.9%), telecom services (+0.8%), and technology (+0.6%) lead the pack.

The health care space underperformed the other countercyclical sectors throughout the day as drug wholesalers faced pressure. McKesson (MCK 163.55, -18.84) fell 10.3% after the company narrowed its guidance for FY 2016, citing weaker pricing on generics in the second half of the fiscal year. Fellow drug wholesalers AmerisourceBergen (ABC 94.06, -9.90) and Cardinal Health (CAH 79.27, -4.59) also declined, falling 4.0% and 5.5%, respectively. Elsewhere in the space, biotechnology demonstrated relative weakness evidenced by a 3.5% dive in the iShares Nasdaq Biotechnology ETF (IBB 291.69, -10.51).

Looking at energy, Dow components Exxon Mobil (XOM 73.69, -1.00) and Chevron (80.77, -1.36) outperformed the sector but still sustained substantial losses, with respective declines of 1.3% and 1.7%. Independent oil and gas companies were hit harder by plummeting oil prices with Anadarko Petroleum (APC 37.75, -2.81) and ConocoPhillips (COP 41.12, -2.17) sporting losses of 6.9% and 5.0%.

In Treasuries, the benchmark note moved closer to its morning low as the afternoon session progressed with the yield on the 10-yr higher by six basis points at 2.17%. 

Investor participation was above average with more than a billion shares changing hands at the NYSE floor.

No economic data was released today and tomorrow's data will be limited to the November Job Opening and Labor Turnover Survey, which will be released at 10:00 ET. 

  • Russel 2000 -8.2% YTD
  • Nasdaq -7.4% YTD
  • S&P 500 -5.9% YTD
  • Dow Jones Industrial Average -5.9% YTD

>>> Alcoa beats by $0.03, reports revs in-line; sees 2016 aluminum demand up 6%;

--> +2% after hours

Alcoa beats by $0.03, reports revs in-line; sees 2016 aluminum demand up 6%; business separation in 2H16 on track

* Reports Q4 (Dec) earnings of $0.04 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus of $0.01; revenues fell 17.8% year/year to $5.25 bln vs the $5.28 bln Capital IQ Consensus.
- Organic growth in aerospace and acquisitions increased revenue 7%, which was more than offset by a 25% revenue decline from lower alumina and aluminum prices, the impact of divested, curtailed or closed facilities, and unfavorable currency.
- The Value-Add businesses reported strong performance, while the Upstream remained profitable despite lower alumina and aluminum prices. Every segment delivered productivity gains.
- Strong productivity gains were more than offset by lower alumina and aluminum prices. In 2015, the Midwest transaction price for primary aluminum fell $657 per metric ton, or 28%, and the Alumina Price Index dropped $154 per metric ton, or 43%.
* In 2016, Alcoa expects a global aluminum deficit of 1.2 million metric tons and a global alumina deficit of 2.8 million metric tons due to global curtailments. The Company also projects record global aluminum demand in 2016 of 60.5 million metric tons, up 6% over 2015. Global aluminum demand is expected to double between 2010 and 2020; so far this decade, global demand growth is tracking ahead of this projection.
* Alcoa's plan to separate into two publicly traded cos is expected to be completed in the second half of 2016.

>>> U.S. bombs 'millions' in ISIS currency holdings


Washington (CNN)In an extremely unusual airstrike, the U.S. dropped bombs Sunday in central Mosul, Iraq, destroying a building containing huge amounts of cash ISIS was using to pay its troops and for ongoing operations, two U.S. defense officials told CNN.

The officials could not say exactly how much money was there or in what currency, but one described it as "millions."

Two 2,000-pound bombs destroyed the site quickly. But the longstanding impact may be even more significant. The officials said the U.S. plans to strike more financial targets like this one to take away ISIS's ability to function as a state-like entity.

This is a similar expansion to the target list as happened several weeks ago, when U.S. warplanes began hitting ISIS oil trucks.

The U.S. considers the Mosul strike extremely sensitive, as the building is in an area where civilians are also located, and there was a significant risk of civilian casualties.

Officials would not say how the U.S. learned of the location. But after getting intelligence about the so-called "cash collection and distribution point," U.S. aircraft and drones watched the site for days trying to determine when the fewest number of civilians would be in the area.

Because civilians were nearby during the daylight hours, and ISIS personnel were working there at night, the decision was made to strike at dawn on Sunday.

U.S. commanders had been willing to consider up to 50 civilian casualties from the airstrike due to the importance of the target. But the initial post-attack assessment indicated that perhaps five to seven people were killed.

In recent weeks, the U.S. has said it will assess all targets on a case-by-case basis and may be more willing to tolerate civilians casualties for more significant targets.

>>> Top US Admiral Fired For Questioning Obama Purchase Of Mansion In Dubai

Top US Admiral Fired For Questioning Obama Purchase Of Mansion In Dubai

{http://awdnews.com/top-news/top-us-admiral-fired-for-questioning-obama-purchase-of-mansion-in-dubai}

A stunning new Foreign Intelligence Service (SVR) report circulating in the Kremlin today states that one of the United States Navy’s top commanders was relieved of his command a few hours ago after he sent out an “email/posting” revealing that President Barack Obama was in the process of purchasing a multi-million dollar seaside luxury villa in the United Arab Emirates city (UAE) of Dubai.

According to this report, the Commander of the US Navy’s Carrier Strike Group 15, Rear Admiral Rick Williams, posted a “pointed” query on 8 January [since deleted] to the US Naval Institute’s “Readiness Kill Chain” “recipients/responders” list as to why Navy security and intelligence personal had been dispatched from Naval Support Facility Thurmont (aka Camp David) to Dubai on what he termed an “Obama house hunting mission”.

Within 18 hours of Admiral Williams posting this query, this report continues, the US Navy's Third Fleet Commander, Vice Admiral Nora Tyson, acting on direct orders from her Commander-In-Chief, President Barack Obama, fired Admiral Williams stating her action was “due to a loss of confidence in his ability to command” because of “allegations of his misuse of government computer equipment”.

When further questioned by Russian Today journalists via email to provide more details about Admiral Williams firing, this report notes, the Pentagon failed to reply—but then began releasing “anonymous” stories to the US press that Admiral Williams had been viewing pornography on his computer.

To such an absurd claim that Admiral Williams (or any US Navy officer or seaman in fact) could view pornography on their computers, SVR analysts in this report note, is an impossibility due to the US Navy/Marine Corps Intranet (NMCI), which not only blocks such sites, but also requires each single user to log in with their own unique password and username and whose records are meticulously kept and reviewed on a daily basis (thanks to Edward Snowden)—and which one would logically think one of the highest ranking officers in the US Navy would surely be aware of.

As to the “Obama house hunting mission” Admiral Williams was making his query about before being fired, this report continues, SVR intelligence “assests” in the UAE identified it as being a luxury seaside villa located in the Palm Jumeirah development of Dubai being offered for sale at the price of $4.9 million (18 million United Arab Emirates Dirham), and which a deposit on it was made this past week by the Washington D.C. based global public affairs company Podesta Group.

Important to note about the Podesta Group, this report notes, is that its leader is Tony Podesta, who aside from being one of the most powerful oligarchs in the US, is a close personal friend of President Obama too.

Equally important to note about the Podesta Group’s purchasing of this Dubai luxury seaside mansion for President Obama, this report says, is that is being legally represented in this purchase by the equally powerful Washington D.C. based global law firm DLA Piper—both of whom have long been identified as being the nexus power brokers behind Saudi Arabia’s massive multi-million dollar “PR machine” operating behind the scenes corrupting the entire United States political establishment.

To if Saudi Arabia itself is behind the purchase of this luxury seaside villa in Dubai for President Obama this report doesn’t state—but to the cost of it being to high after it cost the job of one of America’s top Naval Commanders is beyond dispute.

Les Echos - Télécoms : l'opérateur Coriolis lorgne l’activité entreprises de Bou

Télécoms : l'opérateur Coriolis lorgne l’activité entreprises de Bouygues

EXCLUSIF - L’opérateur va entamer des discussions avec Orange et Bouygues. Il pourrait ainsi changer de dimension.
Une semaine après l’officialisation de « discussions préliminaires » sur un mariage entre Orange et Bouygues Telecom , les concurrents commencent à s’intéresser à ce qu’ils pourraient récupérer dans l’affaire. Le rapprochement entre le numéro un et le numéro trois du marché va nécessiter des cessions d’actifs afin que la transaction soit acceptée par les autorités de la concurrence. C’est ce dont discutent les deux parties actuellement. Coriolis veut les aider à faire leur choix.
L’opérateur alternatif, qui n’a pas de réseau en propre, va entamer cette semaine des discussions avec l’opérateur historique pour racheter les activités entreprises de Bouygues Telecom. Compte tenu de la position dominante d’Orange dans le monde de l’entreprise (avec une part de marché estimée à 70 %), la vente de cet actif fera très probablement partie des « remèdes » à apporter pour préserver la concurrence en cas de mariage.
L’amende record de 350 millions d’euros infligée par l’Autorité de la concurrence en décembre illustre l’attention portée à ce marché par les régulateurs et leur souhait de le voir s’animer davantage. C’est un très gros morceau pour Coriolis. Fin 2014, Bouygues Telecom comptait 1,7 million de clients professionnels, et 800 salariés dédiés à cette activité. Si la société ne communique pas de chiffres précis, analystes et observateurs du marché y évaluent ses revenus à près de 700 millions d’euros (entreprises et petits artisans).

Un chiffre d'affaires de 300 millions d'euros
De quoi faire tripler de taille Coriolis, dont le chiffre d’affaires se « limite » aujourd’hui à un peu plus de 300 millions d’euros, et seulement la moitié dans l’univers professionnel, avec 70.000 entreprises clientes. «  Nous sommes présents depuis plus de 20 ans sur ce marché, nous avons une vraie crédibilité », se défend Pierre Bontemps, le pdg et fondateur de l’entreprise. Coriolis se renforce depuis quelques années sur le segment des entreprises avec la création de nouvelles offres fixes et mobiles pour les PME et les grands comptes.
Avec l’actif de Bouygues Telecom, l’opérateur alternatif changerait complètement de dimension. « Nous aurions la taille critique pour offrir une véritable alternative au quasi duopole futur sur le marché entreprises avec Orange-Bouygues Telecom et SFR. Nous pourrions utiliser le positionnement de challenger de Bouygues Telecom pour nous développer et animer davantage le marché », souligne Pierre Bontemps, qui lorgne sur une part de marché de 20 % à moyen terme.
Rester un opérateur virtuel
Pas question pour autant de récupérer une partie du réseau de Bouygues : Coriolis veut rester un opérateur virtuel et utiliser les infrastructures des autres pour construire ses offres. Pour le financement d’un éventuel rachat, qui se chiffrerait en centaines de millions d’euros, l’opérateur assure avoir sécurisé d’importantes lignes de crédit auprès des banques. Il faut dire que le projet ne date pas d’hier : les dirigeants avaient commencé à y travailler au printemps, lorsque Numericable-SFR avait fait une offre de rachat à Bouygues.
Coriolis n’est pas le seul à lorgner sur un tel actif. SFR ne serait pas contre augmenter sa part de marché dans l’entreprise. D’autres candidats pourraient aussi se faire connaître prochainement. En se dévoilant dès maintenant, Coriolis espère faire partie des heureux élus, quitte à ne pas être le seul.