FT : Blackstone breaks through $300bn barrier


Blackstone has become the first alternative investment manager to surpass $300bn in assets, underlining the scale of its fundraising activity just days after it announced a $14bn deal to buy real estate from GE Capital.
The US firm founded by Steve Schwarzman, and once known primarily for its private equity deals, reported $310bn in total assets under management in its first-quarter results on Thursday, up from $272bn in the same period last year.

Blackstone also reported that its economic net income — a measure of its profit — doubled to $1.6bn, compared with a year ago, after it sold assets in a buoyant market.
It will now pay a record dividend of $0.89 a share, leading to payout of more than $200m for Mr Schwarzman, the group’s chairman and chief executive.
These figures confirm Blackstone as the largest of a select group of US private equity firms that have accumulated assets since listing on public markets.
Carlyle, Blackstone’s next biggest rival, managed just under $200bn in assets at the end of last year.
In a sign of its prowess at raising funds from institutions, Blackstone’s so called ‘dry powder’ — the money it holds but has yet to invest — rose to a record $64.5bn during the quarter.
“Our limited partners entrusted us with $30bn of new capital in the quarter and $77bn over the last 12 months, shattering our own record for the alternative asset management industry,” Mr Schwarzman said.
In addition, the group’s fee-paying assets under management rose 10 per cent year on year to exceed $223bn — another record. At the same time, its performance fees, earned from its share of proceeds from deals, more than doubled to $1.67bn compared with the same period last year, reflecting the strong pace of sales of investments.

Shares in Blackstone and its peers are valued by analysts on the basis of the fees they charge for accumulating and managing assets.
Blackstone’s dominance has been driven by its specialisation in real estate, a sector in which its profits doubled to $638m during the quarter.

Its real estate assets rose in value by nearly 15 per cent year on year to $93bn versus a year ago.
Blackstone has $76bn invested in private equity but half of the nearly $27bn it invested over the first quarter was in asset classes that the group was not involved in when it went public in 2007.
It secured $16.5bn in funds for investment in real estate during the first quarter, a record amount and over half the amount raised in total.

>>> Pirelli minorities still eyeing higher offer

DEAL REPORTER

Pirelli minorities still eyeing higher offer

• Long investor placing cheap bets on rival bid
• Tyre division spin-off could entail extra value - minorities


Pirelli’s [BIT:PC] minorities are holding on to their positions with a view that China Chemical Corporation’s (ChemChina) EUR 15 bid leaves room for a higher price, according to a fund manager at a top ten shareholder and two minority investors.

There is trapped value in Pirelli that could be released by spinning-off its industrial tyre division, the shareholders said. Rival bidders could be enticed by this opportunity, they added.

A long-term shareholder said he was still buying shares slightly above the offer price to take advantage of any rival bid boost, knowing that he would suffer only a modest loss if one does not emerge. “It is like holding a very cheap call option”, he added.

Pirelli shares are trading at EUR 15.35 in Thursday’s morning session but were hovering around EUR 15.39 yesterday. The EUR 15 offer does not include a 0.367 dividend set to be paid on 20 May.

Another shareholder said he had reduced his holding after the offer was announced but was still maintaining some exposure as he thought a higher price was still possible.

Pirelli’s largest competitors Bridgestone [TYO:5108], Michelin [SCA:EPA] and Continental [FRA:CON] have all been rumoured as potential rival bidders for the Italian tyre manufacturer.

Meanwhile, the top ten shareholder noted there was some frustration among minorities because they believe Pirelli is worth more if the benefits of a reorganisational plan are taken into account.

Pirelli had acknowledged to its shareholders that it was evaluating strategic options for its industrial unit before ChemChina’s offer emerged, but minorities will not be able to share its benefits if the takeover is successful, he noted.

Pirelli could unlock EUR 3 to EUR 5 worth of value if it turns into a pure-play premium tyre manufacturer by spinning off its industrial business, the top ten shareholder believed. The first shareholder reckoned ChemChina was not paying a full price for Pirelli considering the upside potential coming from the spin-off.

But, ChemChina’s bid looks fair after considering the execution risk and time required to put in place the company’s reorganisation, the second shareholder argued.

The Chinese company has indicated it will take a few years to spin off the division and merge it with its existing industrial tyre unit Aeolus Tyre [SHA:600469]. In this timeframe the positive outlook on the European automotive sector could change, as the favourable EUR/USD exchange rate that supports the bullish sentiment will not last indefinitely, the third shareholder added. This means that giving Pirelli a fair value of EUR 20 could be an overstatement, he also noted.

The offer values the company at a premium to the sector average despite the stock posting double-digit gains since the start of the year, and the company tripling its value from 2011, this shareholder pointed out. The offer values Pirelli at 6.94x EV/EBITDA while its peers trade at an EV/EBITDA average of 6.8x, according to Dealreporter analytics.

Pirelli’s industrial business posted revenues of EUR 1.55bn in 2014, down 1.5% on the previous year excluding the impact of forex fluctuations.

Meanwhile, Pirelli’s controlling shareholder Camfin will take part in the reorganisational plan by reinvesting part of the proceeds coming from the sale of its 26.2% stake in the company.

Hopes for a ChemChina’s bump are frustrated by the bidder’s offer not being conditional to a Pirelli delisting, as the reorganisational plan can be executed also with the company still on the market, although at a slower pace, a source close to the controlling shareholder Camfin noted.

If ChemChina realises that placing a bump significantly outstrips the costs of slowing down Pirelli’s reorganisation and having lower access to its cash, the prospect of an increased offer becomes more concrete, he noted.

Potentially minorities could get a bump if the offer completes without ChemChina being able to reach a delisting threshold but chances that the bidder would improve its offer at this stage are low, the first shareholder believed.

ChemChina needs 66.7% of Pirelli’s share capital to be in the position of merging the company with one of its holding vehicles and delist it. The bidder has already secured around 30% of votes, after Edizione signed a binding agreement to tender its stake in the mandatory offer. Edizione can terminate the agreement in the event of a rival bid.

The offer values Pirelli at around EUR 7.3bn based on the outstanding number of ordinary and saving shares, and will be financed by a jumbo loan guaranteed by JPMorgan.

>>> The Kooples receives unsolicited offers but has no plans to appoint adviser

The Kooples receives unsolicited offers but has no plans to appoint adviser yet - CEO

The Kooples, the privately owned retail company has received many unsolicited offers but is not currently for sale, co-chief executive officer and co-founder Emmanuel Stern said.

The company has been approached by European, US and Asian private equity funds and strategic players but it has not hired any advisers and does not plan to do so at the moment, the CEO said.

“We met several funds but nothing has been decided now. We remained focused this year on our US expansion and on the wholesale and ecommerce development,” Stern said.

No binding offers has been made yet at this stage, he added.

LBO France, owner of a 20% stake in the company, is believed to have been approached by several parties including Permira and General Atlantic, according to an earlier report.

LBO France has not put its stake on sale but could welcome a sale if a generous offer came along, especially from an investor that would be able to double or triple the revenues worldwide, a source said.

Meanwhile, LBO France has reportedly entered into exclusive talks with Zannier for the acquisition of IKKS, the France-based international fashion retailer.

The report cited several sources as saying that the deal could value the target at nine times EBITDA or between EUR 500m and EUR 600m. IKKS generates an EBITDA of EUR 60m on annual revenues of EUR 310m.

Zannier will retain a minority stake in IKKS, the source said. Rothschild is advising Zannier and LBO France does not use any financial advisors but uses KEA Consultants for strategic advisory and Eight Advisory for the Audit. Deal should close end of June, another source said.

The Kooples reported sales of EUR 100m when LBO France acquire its 20% stake in 2011. The company now generates an EBITDA of EUR 38m on annual revenues of EUR 220m, it was earlier reported.

The company’s majority owners are co-CEOs Emmanuel Stern and Nicolas Dreyfus, co-founder and Chairman Laurent Elicha, and co-founder Alexandre and Raphael Elicha. This news service previously reported that The Kooples will seek a new investor by 2016 to accelerate its Asian expansion.

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: BSPM +17.2%, TZOO +13.8%, TGLS +12.1%, NFLX +11.3%, TCPI +6.9%, PM +5%, UN +4.2%, LFC +3.8%, UNH +3.1%, BX +3%, CPSS +2.8%, SHW +2.8%, UFPI +2.6%, GWW +1.7%, C +1.6%

Select metals/mining names showing strength: KGC +2.6%, HMY +2.5%, GOLD +2.2%, IGLD +1.5%, BHP +1.4%, RIO +0.7%, SLV +0.7%, GDX +0.5%

Other news: MNOV +33.6% (announces that FDA Grants Fast Track Designation for the co's MN-001 (tipelukast) for the Treatment of NASH with Fibrosis), INVE +28.5% (announced it has entered into an agreement with Cisco (CSCO) to provide solutions for the Internet of Everything), LLEX +16.8% (Wallington Investment Holdings discloses 22.1% active stake in 13D filing),CLRX +15.2% (CollabRx and Medytox Solutions (MMMS) have entered into a definitive merger agreement), PNRA +10.4% (increased share repurchase authorization to $750 mln; authorized $500 mln of new debt to repurchase shares; signed letter of intent to sell and refranchise 73 company-owned cafes; also upgraded to Mkt Perform from Underperform at Raymond James), ONCY +8.9% (cont strength), NBY +8.4% (announces signing a distribution agreement with AmerisourceBergen for Avenova), AEZS +7.1% (files additional patent application to strengthen IP protection of Zoptarelin Doxorubicin), TCPI +6.9% (announced that Ellis Yan has decided not to renew his employment agreement as CEO contract to expire on June 30, 2015), MCP +4.2% (cont strength), MDCO +4.1% (FDA Advisory Committee votes 9 yes, 2 no, 1 abstain to recommend approval of cangrelor injection), MNGA +3.9% (Signs JV for Major Expansion of Subsidiary), OMED +3.8% (announced the presentation of Demcizumab data from its Phase 1B clinical trial to treat non-small cell lung cancer), STEM +3.1% (nnounces it has completed transplanting the six patients comprising the first cohort of its Phase II Pathway Study), CRH +2.4% (benefitting from Lafarge/Holcim deal moving fwd), VVUS +2% (files lawsuit against Teva (TEVA) for infringement of Qsymia patents), RPRX +1.8% (announces November 30, 2015 PDUFA goal date for NDA), CNHI +1.7% (cont strength), ALLT +1.5% (receives four orders from Tier-1 operators to enable delivery of Security-as-a-Service and comply with regulation), ATRS +1.4% (has settled all litigation between Antares and Medac Pharma, Inc. and its parent, medac GmbH), AZN +0.9% (AstraZeneca's MedImmune and Immunocore announce that they have entered into a second collaboration)

Analyst comments: FOMX +2.6% (initiated with a Buy at Guggenheim), DATA +1.6% (initiated with a Buy at Stifel), COH +1.3% (upgraded to Overweight from Equal Weight at Barclays), BJRI +0.9% (initiated with a Buy at Guggenheim), LOW +0.9% (upgraded to Overweight from Neutral at Piper Jaffray)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: MEA -12.6%, SNDK -7.1%, TSM -4.5%, DEO -2.2%, WBS -1.8%, KEY -0.8%

Select EU financials trading lower: DB -2.7%, ING -1.6%, HSBC -1.5%, SAN -1.4%

Select oil/gas related names showing early weakness: HERO -6%, HOS -3%, NADL -2.4%, OAS -2.1%, SDRL -2%, PBR -1.5%

Other news: IMDZ -8.7% (prices 15,350,000 ordinary shares at $28.25 per share), FNRG -7.4% (issues response to MoxReports Research Report Dated April 15, 2015), PCRX -6.4% (announces receipt of a subpoena from the U.S. Department of Justice), CPLP -6% (plans to offer 12.8 mln common units representing limited partnership interests in a public offering), GPOR -3.7% (to acquire Paloma Partners III, reports first quarter 2015 production and provides firm transportation update ), MTDR -3.7% (commenced an underwritten public offering of 7 mln shares of its common stock), CPST -3.3% (filed for $100 mln mixed securities shelf offering), HZNP -1.9% (priced 15.35 mln share public offering of common stock at $28.25 per share), NBG -1.7% (cont uncertainty in Greece), AMAT -1.6% (SNDK peer), ASML -1.5% (SNDK peer), MU -1.5% (SNDK peer)

Analyst comments: COR -1.1% (downgraded to Hold at Evercore ISI, downgraded to Sector Weight at Keybanc Capital Mkts), NOK -1% (downgraded to Neutral from Buy at Citigroup; downgraded to Neutral from Outperform at Credit Suisse among others
)

(BN) JDS Uniphase Activist Sandell Seeks Sale-Friendly Spinoff Rules

JDS Uniphase Activist Sandell Seeks Sale-Friendly Spinoff Rules
2015-04-16 13:00:00.0 GMT


By Beth Jinks
(Bloomberg) -- Sandell Asset Management Corp., the activist
shareholder that pushed JDS Uniphase Corp. to split into two
businesses, is urging shareholders to demand friendlier
governance rules at the unit being spun off, to ease a future
takeover.
In an open letter, Sandell asks JDS Uniphase investors to
challenge bylaws at Lumentum -- the optical-components business
-- that may prevent shareholders from calling a special meeting
or having a say should a buyer seek to acquire the separated
company.
“This flies in the face of the recent actions of many
other companies” that have announced public spinoffs and
subsequently taken steps to see that those entities don’t
contain “shareholder-unfriendly entrenching devices,” Sandell
wrote. The letter refers to companies such as EBay Inc., Gannett
Co., Manitowoc Co. and DuPont, which have announced public
spinoffs that have governance packages with fewer takeover
defenses.
JDS Uniphase said in February it expects to complete the
spinoff in the third quarter after announcing in September it
would split into two businesses -- one focusing on optical
components and commercial lasers and the other selling network-
testing equipment. Sandell has been publicly urging the company
to also seek a buyer for the optical-components unit while
moving toward a spin.
The company’s shares climbed 2.5 percent Wednesday to
$13.52, giving it a market value of about $3.1 billion. Sales at
the Communications and Commercial Optical Products unit
accounted for about 46 percent of JDS’s total annual revenue
last year of $1.74 billion.
Created in 1999 through the $7.05 billion merger of two
companies, Uniphase Corp. and Canada’s JDS Fitel Inc., JDS
Uniphase at the time became the biggest maker of components for
the fiber-optic equipment used in telecommunications networks.
Sandell was founded by investor Thomas Sandell in 1998.
Activist investors buy stakes and agitate management and
directors of targeted companies to make changes they believe
will boost returns for shareholders.

For Related News and Information:
JDS Uniphase Activist Sandell Urges Vote Against CEO
JDSU Activist Sandell Planning to Escalate Unit Sale Campaign
JDSU Breakup Plan Said to Follow Push From Investor Sandell
Uniphase, JDS Fitel Complete US$7.05 Billion Merger

To contact the reporter on this story:
Beth Jinks in San Francisco at +1-415-617-7141 or
bjinks1@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net
Elizabeth Wollman, Jillian Ward

>>> DuPont sends letter to shareholders highlighting management's strength, urgi

DuPont sends letter to shareholders highlighting management's strength, urging shareholders to vote for co's director slate at upcoming meeting

Letter highlights stated:
  • "Your Board of Directors and management are overseeing this successful strategy, and we are committed to maintaining DuPont's strong record of returning capital to shareholders.
  • This is a critical moment in DuPont's history. Next generation DuPont is emerging as a dynamic science company delivering sustainable, profitable growth and increasing shareholder returns. We strongly believe that we have the right Board and the right strategy to shape next generation DuPont and continue building value for you, our shareholders.
  • Your vote for ALL DuPont directors is a vote to continue a strategy that is working. We ask that you review this letter carefully and then vote on the enclosed WHITE proxy card for ALL DuPont directors."