Hedge Funds Plan to Seek Higher Price for SafewayHedge Funds Holding About 8% of Grocery-Store Chain Plan to Seek Higher Price in CourtHedge funds holding about 8% of Safeway, which was sold last month for about $7.5 billion, plan to seek a higher price in court for the grocery-store chain, the latest exercise of an increasingly popular legal tactic known as appraisal rights.Merion Capital LP has the largest position among the funds, people familiar with the matter said. Pennsylvania-based Merion owned 10.5 million shares of Safeway as of Sept. 30, according to a regulatory filing, or more than 4% of the company.Magnetar Financial LLC, Muirfield Capital Management LLC and Brigade Capital Management LP are among the other funds owning Safeway shares and planning to exercise the rights, some of the people said. All told, holders of 17.7 million shares — worth about $575 million at the buyout price—have notified the company that they plan to seek an appraisal, one of the people said.The dissenting investors have about four months to file a formal claim. They could also change their mind and accept the buyout price.Albertsons, controlled by Cerberus Capital Management LP, paid $32.50 a share for Safeway, the country’s second-largest grocery chain by market share. The deal, which was announced last March, closed Jan. 30 after a lengthy antitrust review.In an appraisal, a judge determines the fair value of a company’s shares at the time of a deal’s closing. Investors also get paid interest on their stakes while the cases are pending.
After Hours Summary: CLF +10.5%, IDTI +6.9%, RTEC +6.8%, SSYS -27.4%, RCII -13.5%, LMNX -2.6% following earnings/guidance
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings: CLF +10.5%, IDTI +6.9%, RTEC +6.8%, ADVS +5.8%, FN +3.9%, LLNW +3.6%, OI +2.8%, AGNC +1.4%
Companies trading higher in after hours in reaction to news: ESPR+8.3% (announced that the FDA has removed the peroxisome proliferator-activated receptor (PPAR) partial clinical hold on ETC-1002),OCN +5.6% (Kingstown Capital Partners disclosed a 9.5% active stake in 13D filing), ADVS +5.8% (to be acquired by SS&C Technologies (SSNC) for $44.25 per share; co also reported earnings), CRC +3.7% (Soroban Capital Partners disclosed a 9.98% active stake in 13D filing), SUN +0.8% (announced 10% increase in quarterly distribution to $0.60 from $0.5457 per unit)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings: SSYS -27.4%, RCII -13.5%, LMNX -2.6%, APC -0.9%, XL -0.3%, HIG -0.2%
Companies trading lower in after hours in reaction to news: RSH -37.6% (co disclosed it received a second notice of default from Salus Capital), ZIOP -13.4% (co intends to commence an underwritten public offering of $75 mln of shares of its common stock), ONTX -6.6% (announced that, pending regulatory approvals and appropriate financing, co hopes to initiate trial enrollment for rigosertib in higher risk myelodysplastic syndrome during the second half of 2015), SABR -2.2% (announced a secondary public offering of 20 mln shares of common stock by existing stockholders TPG Global and Silver Lake Management Company), PEGI -2.1% (announced the commencement of an underwritten public offering of up to $350 mln of shares of its Class A common stock by itself and a selling shareholder), PBF -1.4% (announced an underwritten secondary offering by Blackstone Group and First Reserve Management funds, of their remaining ~3.8 mln shares of Class A common stock)
Hedge Funds Plan to Seek Higher Price for Safeway
Hedge Funds Holding About 8% of Grocery-Store Chain Plan to Seek Higher Price in Court
Hedge funds holding about 8% of Safeway, which was sold last month for about $7.5 billion, plan to seek a higher price in court for the grocery-store chain, the latest exercise of an increasingly popular legal tactic known as appraisal rights.
Merion Capital LP has the largest position among the funds, people familiar with the matter said. Pennsylvania-based Merion owned 10.5 million shares of Safeway as of Sept. 30, according to a regulatory filing, or more than 4% of the company.
Magnetar Financial LLC, Muirfield Capital Management LLC and Brigade Capital Management LP are among the other funds owning Safeway shares and planning to exercise the rights, some of the people said. All told, holders of 17.7 million shares — worth about $575 million at the buyout price—have notified the company that they plan to seek an appraisal, one of the people said.
The dissenting investors have about four months to file a formal claim. They could also change their mind and accept the buyout price.
Albertsons, controlled by Cerberus Capital Management LP, paid $32.50 a share for Safeway, the country’s second-largest grocery chain by market share. The deal, which was announced last March, closed Jan. 30 after a lengthy antitrust review.
In an appraisal, a judge determines the fair value of a company’s shares at the time of a deal’s closing. Investors also get paid interest on their stakes while the cases are pending.
Cue the Lawsuits: FCC Moving to Block State Broadband Laws
Federal officials are moving forward to preempt laws in two states that limit the ability of local officials to build broadband networks, a long-expected move that will likely spark a fight with state lawmakers.
The FCC is expected to approve two petitions later this month from officials in Wilson, N.C., and Chattanooga, Tenn., who have been barred from expanding their local broadband networks. North Carolina and Tennessee are among 19 states that have restrictions on local communities against building or expanding competitive broadband networks.
“Many communities have found that existing private-sector broadband deployment or investment fails to meet their needs. They should be able to make their own decisions about building the networks they need to thrive,” FCC Chairman Tom Wheeler said in a prepared statement.
The action is part of a broader effort by federal officials to address Americans frustrated by the increasing monthly cost of Internet service, especially while the quality sometimes doesn’t increase along with it.
Last week, the FCC upped the U.S. definition of broadband to 25 Mbps in an effort to push broadband providers to offer faster service. The agency is also expected to approve new net neutrality rules later this month which would re-regulate Internet lines and prohibit broadband providers from blocking or degrading Internet traffic, as well as ban them from offering fast-lane service to companies.
The move wasn’t a surprise, as FCC Chairman Tom Wheeler has made noises for more than six months that he was interested in preempting state laws that limit the ability of states to prevent local officials from building their own broadband networks. President Obama echoed those remarks earlier this month during his rollout of his State of the Union speech.
It also sets up a classic states’ rights debate over how much Washington should be able to step in and make decisions about what communities can do. Congressional Republicans have already been complaining about the move, and the states are expected to legally challenge the decision almost immediately.
Municipal broadband advocates — including President Obama — argue that locally operated networks can give consumers more choices for broadband or video service at lower costs. Communities often build the networks in areas where commercial broadband providers are unwilling to expand because it is unlikely they’d be able to profitably offer service. Some communities are also choosing to partner with companies like Google to build competitive networks in areas where traditional Internet providers already offer service.
States appear to have put restrictions on local communities from building municipal networks for two main lobby groups: Large Internet providers that aren’t interested in having more competition and lawmakers worried that taxpayers would be on the hook for millions of dollars if locally owned networks were to fail.
Critics of municipal broadband networks point at what happened in Provo, Utah, when local officials found themselves unable to profitably offer Internet service and sold their network to Google two years ago.
The FCC action will only apply to Tennessee and North Carolina, though it would “provide precedent” for possible future actions in other states, a senior FCC official said in a call with reporters Monday. FCC officials on the call declined to speak on the record.
Another senior FCC official said the agency expects states to challenge the decision, but the agency is “very confident” that it will prevail.
Anadarko Petroleum misses by $0.46, misses on revs
Reports Q4 (Dec) earnings of $0.37 per share, excluding non-recurring items, $0.46 worse than the Capital IQ Consensus of $0.83; revenues fell 4.8% year/year to $3.18 bln vs the $3.96 bln consensus.
* Q4 sales volumes of natural gas, crude oil and NGLs totaled 79 mln BOE, or an average of 854,000 BOE per day.
* Anadarko organically added 503 million BOE of proved reserves in 2014 before the effects of price revisions and incurred oil and natural gas exploration and development costs of ~$8.8 bln.
* The co estimates its proved reserves at year-end 2014 totaled ~2.86 billion BOE, with 69 percent of its reserves categorized as proved developed.
At year-end 2014, Anadarko's proved reserves were comprised of 49 percent liquids and 51 percent natural gas.
Closing Market Summary: Energy Sector Paces Broad Advance
The stock market began the new trading week on a higher note. The S&P 500 spiked 1.3% while the Nasdaq (+0.9%) and Russell 2000 (+0.9%) underperformed.
Overall, the Monday session was fairly quiet with the market spending some time on each side of its unchanged level. The S&P 500 began with a slim gain, but relative weakness among high-beta biotechnology and chipmaker names kept heavily-weighted health care (+0.6%) and technology (+1.0%) sectors on the defensive. The S&P 500 tried to overcome that weakness, but was rebuffed by its 100-day moving average in the 2,010 area. However, a second effort in the late afternoon sent the S&P 500 well above the 100-day average to end the day.
All ten sectors finished in the green with energy (+3.0%) spending the entire session in the lead. The sector benefitted from a 2.8% advance in crude oil ($49.59/bbl) while also drawing strength from ExxonMobil (XOM 89.58, +2.16). Shares of XOM jumped 2.5% in reaction to better than expected earnings thanks to a $1 billion non-cash windfall resulting from deferred tax items and a favorable ruling for expropriated Venezuela assets.
Elsewhere among cyclical sectors, financials (+1.6%) and industrials (+1.5%) displayed relative strength throughout the day after posting respective losses of 7.0% and 3.7% in January. Meanwhile, the top-weighted technology sector (+1.0%) spent the day behind the broader market, but narrowed the gap during afternoon action.
For the most part, large cap tech names fared well, but Google (GOOGL 532.20, -5.35) and Facebook (FB 74.99, -0.92) lost 1.0% and 1.2%, respectively. Similarly, chipmakers struggled as a group, which limited the PHLX Semiconductor Index to an uptick of 0.3%.
The underperformance of semiconductor names kept the Nasdaq behind the broader market, but so did biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 319.58, -2.07) lost 0.6% while the health care sector advanced 0.6%.
Similar to health care, the utilities sector (+0.4%) underperformed while consumer staples (+1.3%) and telecom services (+2.5%) fared well.
Treasuries registered modest losses with the 10-yr yield climbing three basis points to 1.68%.
Economic data included Personal Income/Spending data, ISM Index, and Construction Spending:Tomorrow, the Factory Orders report for December will be released at 10:00 ET (consensus -2.0%).
- Personal income increased 0.3% for a second consecutive month in December following a negative revision (from 0.4%) in November while the consensus expected personal income an increase of 0.3%
- Personal spending declined 0.3% after increasing a downwardly revised 0.5% (from 0.6%) in November while the consensus expected a decrease of 0.3%
- The ISM Manufacturing Index dropped to 53.5 in January from 55.1 in December while the consensus expected a decline to 54.7
- Production growth decelerated as the related index fell to 56.5 in January from 57.7 in December. The drop coincided with a decline in new orders (52.9 from 57.8) and a large contraction (46.0 from 52.5) in unfilled orders
- Construction spending increased 0.4% in December after declining an upwardly revised 0.2% (from -0.3%) in November while the consensus expected an increase of 0.8%
- Nasdaq Composite -1.3% YTD
- S&P 500 -1.9% YTD
- Russell 2000 -2.4% YTD
- Dow Jones Industrial Average -2.6% YTD
Stratasys sees FY14 revs of $748-750 mln vs $763.55 mln Capital IQ Consensus Estimate, adj EPS of $1.97-2.03 vs $2.25 Capital IQ Consensus Estimate; sees FY15 EPS and revs below consensus (80.08 +0.59)
>>>FY14:
Co expects to report fiscal year 2014 revenue in the range of $748 to $750 million (vs $763.55 mln Capital IQ Consensus Estimate), and non-GAAP net income in the range of $102 to $105 million, or $1.97 to $2.03 per diluted share (vs $2.25 Capital IQ Consensus Estimate).
During December 2014, Stratasys updated the goodwill impairment analysis of its MakerBot reporting unit. As a result, the Company expects to recognize a non-cash, non-tax-deductible goodwill impairment charge of approximately $100 to $110 million in the fourth quarter.
Stratasys projects preliminary fourth quarter revenue growth of approximately 38% over the same period last year, including organic revenue growth of 25%. However, the fourth quarter was impacted by slower growth of MakerBot product and services revenue during the period. MakerBot revenue is estimated to have grown by approximately 7% in the fourth quarter over the prior year, and is estimated to represent approximately 12% of preliminary total Stratasys revenue for the fourth quarter.
>>>FY15:
In 2015, the Company estimates total revenue in the range of $940 to $960 million (vs $1.01 bln Capital IQ Consensus Estimate), with non-GAAP net income in the range of $109 to $118 million, or $2.07 to $2.24 per diluted share (vs $2.92 Capital IQ Consensus Estimate).
Projected Non-GAAP net income is expected to be derived disproportionately from the second half of fiscal 2015, driven by the projected timing of revenue and operating expenses.
Co has decided to implement an investment plan with the goal of enabling the Company to offer a broader range of products and solutions with increased global and industry-specific coverage, especially within areas related to manufacturing, and create stronger customer relationships. The investment plan is designed to implement broad product development and infrastructure which would support annual revenues of $3 billion in 2020.
As a result of its new investment plan, Stratasys expects incremental annual operating expenditures of 2% of anticipated revenues for coming two to three years, with total operating expenses in 2015 to be in the range of 46% to 47% of anticipated revenues. Additionally, the Company expects to incur capital expenditures in the range of $160 to $200 million in 2015. The Company also expects an effective tax rate of 5% to 10%.
Long term goals reiterated:
Annual organic revenue growth of at least 25%; Non-GAAP operating income as a percentage of sales of 18-23%; Non-GAAP effective tax rate of 10-15%; Non-GAAP net income as a percentage of sales of 16-21%
ng
worth a look, if similarities continue we could see $60 in the next 2 months....
Investor whirlwind Bill Ackman, coming off one of his best and most tumultuous years, is slowing down — for a couple of months.
Ackman’s $18.3 billion Pershing Square hedge fund firm ended 2014 with a near-zero cash balance — making it unlikely that the firm is out there building a new activist stake right now.
Ackman made headlines in 2014 for unconventional — and profitable — strategies in activist investing. His 40 percent return last year has fueled rumors in recent weeks that he is making a run at every troubled blue-chip name out there, from IBM to McDonald’s.
But corporate America can rest easy for the moment. Ackman doesn’t have a cash hoard to plunk down right now.
Just $500 million — or about 3 percent of Pershing’s assets — were in cash as of Dec. 31, according to a year-end investment summary he shared with the funds’ investors last week.
To take the $1 billion-plus stakes he has become famous for, Ackman would have to sell some of his other holdings — which he doesn’t like to do. After raising almost $3 billion in an IPO last year, he has repeatedly suggested he would no longer be forced to do that.
Historically, Pershing Square has also maintained a huge cash position to finance potential investor redemptions. But following the IPO, almost half of the fund is unredeemable — so-called permanent capital.
That has allowed Ackman to fully invest the proceeds — which he did last year.
That’s not to say the hedge fund mogul isn’t scouring the earth for his next target.
When the Actavis Allergan $66 billion stock/cash deal closes in March or April, he’ll have to figure out what to do with at least $4 billion in cash.
Albert Frère to step down from GBL
Albert Frère, Belgium’s richest man and the longstanding chief executive of conglomerate Groupe Bruxelles Lambert, is to step down from the group he helped turn into Europe’s second largest holding company.
The octogenarian will quit the family controlled GBL — which has stakes in companies ranging from drinks group Pernod Ricard to energy group GDF Suez — at its upcoming annual meeting in April.
Mr Frère, who is worth more than $4bn, oversaw GBL’s evolution from a predominantly Belgium-facing business into a holder of some of France’s largest and most famous companies.
The change at the top had been planned for some time according to the board’s vice-chairman Paul Desmarais, who represents the other family that controls GBL. Managing directors Ian Gallienne and Gérard Lamarche, who have run the company day-to-day since 2012, will continue to oversee the group.
A self-made man, Mr Frère made his riches by buying up steelmakers in the 1950s and 1960s. When Belgium’s government nationalised the sector in 1979, his companies accounted for just under half of the industry.
After buying a stake in GBL in 1982, Mr Frère proved more than willing to sell off its stakes in Belgium’s national champions to other larger European rivals. This strategy proved controversial domestically, but left Mr Frère’s company with stakes in some of Europe’s largest blue-chips.
According to the latest filings, GBL owns a fifth of the cement group Lafarge, and 7.5 per cent of Pernod Ricard. It also owns 3 per cent of Total, France’s largest oil company — a byproduct of its merger with the former Belgian oil company Petrofina, in which GBL had a large stake.
Mr Frère will remain a shareholder of Pargesa holdings, the Swiss vehicle through which he controlled GBL in conjunction with the Desmarais family.
Mr Desmarais said in a statement that Mr Frère, who will turn 89 on Wednesday, was the “driving force” behind the GBL’s rise. “During all these years, I was able to appreciate his professional and human qualities as well as his extraordinary business sense which allowed GBL to become one of the most important quoted European holding companies.”
In recent years, GBL had expressed interest in turning away from holdings in “mega-cap” companies to focus on building bigger stakes in smaller companies, in order to exert more control on their governance.
Shares in GBL, which has a market capitalisation of €11.9bn, have risen 10 per cent over the past 12 months to €73.66.