GMCR - CNBC's Kate Kelly tweets: in case you missed it "big @GMCR holder Eminence Capital [7.2% stake] is calling for a takeover bid of more than JAB's $92/share, thinks competing bids may emerge
Japan govt said to be considering allowing its pension fund to invest directly in stocks in efforts to reduce fees - Japan press
- The GPIF doubled its target allocations for equities in October 2014 under PM Abe's push to promote risk-taking and foster confidence in financial markets Fund made a historical shift last year, abandoning its stance to stack up its portfolio predominantly with domestic government bonds
- In Oct 2014: GPIF confirmed that it would cut JGB allocation to 35%; raise foreign stock allocation to 25%; raise foreign bond allocation to 15%; raise domestic stock allocation to 25%.
Merger Market
IVG Immobilien’s asset portfolio could be the next target of real estate consolidation in the German market should it decide against a listing, three bankers and a lawyer following the situation said.
It is questionable whether IVG could sell its whole portfolio in the current market, which is why it is opting for a dual-track process, the first banker said. A sale at a premium to NAV would require convincing investors of its superior portfolio quality, as previously reported.
An asset sale would not be an easy route as the company may still be viewed in the market as distressed given its ownership by a group of financially motivated shareholders “with an IRR (internal rate of return) clock ticking” and a motive to sell, a third banker said. IVG emerged from insolvency proceedings in September 2014.
Companies previously reported as valuation benchmarks for an IVG IPO could also be buyers of parts of the portfolio, including Alstria [ETR:AOX], TLG Immobilien [ETR:TLG] and DIC Asset [ETR:DIC], the third sector banker said.
DIC Asset teamed up with KKR in January 2015 to create a joint venture called German Estate Group which could show interest in IVG’s portfolio, the third banker said. The JV launched its first German investment with a EUR 160m purchase of two properties in Munich in July this year. Alstria’s CEO, Olivier Elamine, told the local press in November that he was monitoring the situation when asked about interest in IVG.
Patrizia Immobilien [ETR:P1Z] could also be a buyer as it has been highly acquisitive in the commercial space, purchasing EUR 1bn worth of office buildings in Hesse in 2014 and EUR 800m worth in the same state the year prior, the third banker noted.
Austrian commercial property companies CA Immobilien Anlagen [VIE:CAI] and Immofinanz [VIE:IIA] might also look to broaden their portfolio inside Germany, the third banker said.
Alternatively, IVG’s assets could also be bought by investment funds interested in adding real estate to their portfolio, the lawyer said. Family offices could be also buyers, the first banker said.
At the average price/NAV multiple of Alstria, Deutsche Euroshop [ETR:DEQ], TLG and DIC of 1.03x, IVG’s core portfolio would be worth EUR 1.24bn based on its EUR 3bn asset value, as previously reported. This would be based on a typical sector loan-to-value (LTV) ratio of 60%.
Portfolio streamlining
However, any transaction depends heavily on other deals in the space, such as the ongoing situation between Deutsche Wohnen [ETR:DWNI] and Vonovia [ETR:VNA], the second banker said. Germany’s cartel office approved Vonovia's Deutsche Wohnen buy on Monday (7 December).
An IPO could be the prudent option for IVG as it would allow the company to sell all assets at once, reducing the need for separate due diligence for different buyers and properties, the first banker said. On the other hand, sellers would need to consider the required IPO discount, he said.
It is too early to speculate whether IVG’s core portfolio could be broken down further in a strategic sale scenario, a person familiar with the situation said. A transaction may not take place before 2017, as it is dependent on market conditions and a satisfactory valuation, the person said.
Non-core assets are already in the process of being sold, in order to streamline the target portfolio, the person familiar said. A dual-track process will not need to wait for these to finish, he added.
Vonovia could also decide to buy IVG, the second banker suggested. However, this would involve a crossover of asset classes, since Vonovia is a residential property specialist.
IVG is regrouping its core office property portfolio into a new vehicle, a company spokesperson said. With new management in place to run the portfolio, its legacy – including any concerns about its previous insolvency – should not be an issue, the first banker said.
The parent company will carve out its core portfolio into an independent subsidiary and establish this under its own name in 2016, as previously reported. It makes sense for IVG to restructure the company in order to give itself a clearer profile in the market, a fourth banker said.
Goldman Sachs and Deutsche Bank are running a dual-track process, according to press reports. The largest of IVG’s assets is its Frankfurt office building The Squaire, the first banker said. It was reportedly valued at USD 1bn, and its sale was called off by IVG in January 2015.
Following the carve-out process, IVG Immobilien will purely be a financial holding with three subsidiaries: IVG Caverns, IVG Institutional Funds (Triuva) and the asset portfolio, the person said.
Rock Investment is Xavier Niel
From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: Dec 8 2015 20:01:02
Subject: Fwd:>>> Telecom Italia - Rock Investment discloses 10.2% stake - 13D filing The Repo
Rock Investment discloses 10.2% stake - 13D filingThe Reporting Persons entered into the Option Agreements (as defined in Item 6) for strategic investment purposes. The Reporting Persons will routinely monitor and review a wide variety of investment considerations with respect to the Issuer, including, without limitation, the Issuers operations, assets, prospects and business development, the Issuers management and board of directors, the Issuer's capital structure, Issuer-related competitive and strategic matters and general economic, financial market and industry conditions, and will also routinely monitor and review potential responses on the part of the Issuer to such considerations, including, without limitation, potential investment opportunities and strategies and potential strategic transactions. The Reporting Persons have discussed, and expect to continue to discuss, any or all of these matters with representatives of the Issuer's management or board of directors, with other shareholders of the Issuer and with other interested stakeholders.The Reporting Persons may, as a result of this monitoring, review and discussions, acquire additional securities of the Issuer or otherwise increase their economic exposure to the Issuer, sell securities of the Issuer or otherwise reduce their economic exposure to the Issuer, make proposals to the Issuer or other shareholders of the Issuer concerning the composition of the Issuers board of directors, potential strategic transactions involving the Issuer or respond to proposals from other shareholders of the Issuer concerning potential strategic transactions involving the Issuer. - Source TradeTheNews.com
Rock Investment discloses 10.2% stake - 13D filing
The Reporting Persons entered into the Option Agreements (as defined in Item 6) for strategic investment purposes. The Reporting Persons will routinely monitor and review a wide variety of investment considerations with respect to the Issuer, including, without limitation, the Issuers operations, assets, prospects and business development, the Issuers management and board of directors, the Issuer's capital structure, Issuer-related competitive and strategic matters and general economic, financial market and industry conditions, and will also routinely monitor and review potential responses on the part of the Issuer to such considerations, including, without limitation, potential investment opportunities and strategies and potential strategic transactions. The Reporting Persons have discussed, and expect to continue to discuss, any or all of these matters with representatives of the Issuer's management or board of directors, with other shareholders of the Issuer and with other interested stakeholders.
The Reporting Persons may, as a result of this monitoring, review and discussions, acquire additional securities of the Issuer or otherwise increase their economic exposure to the Issuer, sell securities of the Issuer or otherwise reduce their economic exposure to the Issuer, make proposals to the Issuer or other shareholders of the Issuer concerning the composition of the Issuers board of directors, potential strategic transactions involving the Issuer or respond to proposals from other shareholders of the Issuer concerning potential strategic transactions involving the Issuer. - Source TradeTheNews.com
PBR - Reportedly offering to sell up to 10% of Libra offshore oil field - press
Cartier's watches lose their sparkle in China
The gold and diamonds of Cartier jewelry are so popular with women that the brand founded in Paris in 1847 is finding it difficult to market watches to men.
The world's biggest jewelry and watch brand in terms of combined sales generates more than two thirds of profits for Swiss parent Richemont, but watch revenues have dwindled relentlessly while jewelry sales have boomed.
Like other high-end watchmakers Cartier is suffering from a drop in demand in big markets such as Hong Kong, mainland China, Russia and the United States. But some of Cartier's problems are specific to the brand, setting up a challenge for Cyrille Vigneron when he takes over the leadership next month.
Improving Cartier's image as a watchmaker in China, where wealthy women love its red boxes but men prefer pure watch brands such as Rolex, Patek Philippe or Vacheron Constantin, may be top of his to-do list.
"Cartier is popular among fashion-focused customers in Hong Kong. Consumers will regard it as a piece of jewelry when they hear the brand, it is particularly popular among ladies," said Lam Tung-hing, general manager of the Hong Kong retail operations of Oriental Watch Holdings Ltd.
"For men, first time luxury watch buyer will choose to buy Rolex, which is practical and good looking."
Cartier and Richemont declined to comment on the brand's strategy to improve watch sales.
Richemont said last month that watch sales were down mid-single digits in the six months to September, dragged down by its biggest markets, Hong Kong and the United States. It had already stated a similar decline for Cartier watches in the full year to March. Shares have fallen over 12 percent this year.
Comparisons with competitors are hard to make. Rolex is privately owned and at LVMH, watch and jewelry sales rose 10 percent during the first nine months but it does not give a separate watch figure. Swatch Group shares have fallen 18 percent, partly due to competition from smartwatches and the drop in demand from China.
Watch exports from Switzerland, where Cartier and other watches are made, fell 3.2 percent during the first ten months of 2015 with shipments to Hong Kong down 22.7 percent and rising just 0.1 percent to the United States.
Pierluigi Fedele, who is responsible for watchmaking at the Swiss union Unia, downplayed any talk of a crisis.
“There is no real crisis in the Swiss watch industry today. Exports are down a bit, but probably still above 20 billion Swiss francs for the whole year,” he said.
NO MORE CHINESE GIFTS
But he noted the subdued Asian market was causing problems for some companies and a few had laid off staff. Cartier said last year it introduced shorter working hours for some employees and would not say if the measure was still in place.
Some analysts estimate that the high-end watch market in mainland China is down 60 percent since its 2012 peak.
This is partly due to the government’s crackdown on the tradition of gifts-for-favors which often involved watches. Richemont also highlighted difficulties in Macau where the casino industry is suffering from the crackdown on corruption, the weak yuan and Chinese government restrictions on travel.
The strong franc has made Swiss exports more expensive while Tiffany & Co forecast a bigger fall in full-year profit than previously expected as a strong dollar kept tourists from spending in its showpiece U.S. stores.
Last month’s terrorist attacks in Paris are also expected to further dent tourists’ travels to Europe to buy luxury goods during the pre-Christmas period which, for some brands, represent up to a quarter of annual sales.
NEW IDEAS
But for Cartier, whose sparkling creations adorned royal heads around the globe in the early 20th century and more recently Kate Middleton's at her wedding to Prince William, the challenges are bigger than for most.
Exane BNP Paribas analyst Luca Solca said Cartier is particularly exposed to China.
“Cartier is facing a relatively subdued luxury market, as the bulk of the other mega-brands. Additionally, Cartier is suffering from the step back in the Chinese watch market / gifting practices. You could argue Cartier has not been the strongest innovator in recent years,” he said.
Lack of innovation has been a problem and Vigneron, who replaces Stanislas de Quercize, a 25-year Richemont group veteran who stepped down last month, will need to focus on this.
Many of Cartier's new watches have been based on existing versions with innovation focused on the most expensive models. In January, Cartier unveiled its first new model in eight years, the Clé watch, but so far only gold models costing more than 10,000 euros are available.
According to a person close to the Richemont group who declined to be named, about 90 percent of buyers of Clé since its launch have been women.
“The way to be successful is, first of all, with product innovation because in a subdued environment that is the way you can maybe get the consumer to buy a new watch," said Bernstein analyst Mario Ortelli.
The company is also a relative newcomer in "in-house" watch movements, the mechanisms that make a watch tick and are beloved of collectors.
When Swatch Group, the world's largest watchmaker, started phasing out delivery of watch movement components to the rest of the industry, competitors were forced to develop their own manufacturing tools, now an important part of the prestige of high-end watches.
Lam says in China Cartier chased the mass market on the mainland and paid less attention to the top technical design required by buyers in Hong Kong.
"Many local collectors will have a question mark as the design appeared as not as good," he said.
MORE SOCCER, LESS POLO
In marketing as well, Cartier could do with a few fresh ideas. While Omega's name is omnipresent at the Olympic Games and each new James Bond movie and Rolex cultivates its image as a sports brand, Cartier relies on its signature panther and other more traditional attributes.
It has sponsored polo for more than 30 years but competitors such as Hublot have been a bit more adventurous by doing deals with soccer teams and ski schools in resorts such as Courchevel.
Richemont thinks Vigneron, a music composer and guitar player who was rehired at Cartier after heading LVMH’s operations in Japan, is the right man to lead Cartier back to growth.
"He is known for thinking out of the box," said one Cartier employee based in London. "I think a lot of people have high hopes for him."