RTR - Fidelity moves to end DuPont proxy battle - sources

(Reuters) - Fidelity Investments, a major investor in DuPont (DD.N), has put pressure on activist fund Trian Fund Management LP and the chemical conglomerate to reach a settlement in what it sees as a detrimental proxy fight, according to people close to the matter.

Fidelity, whose 2.5 percent stake makes it DuPont's sixth largest shareholder, has not publicly revealed what sort of compromise it was seeking. Yet its unusual intervention as peacemaker could influence other mutual fund investors in DuPont and pre-empt what could be this year's biggest battle over board representation.

In a filing with the U.S. Security and Exchange Commission last Wednesday, Trian disclosed that on March 11 it received a call from one of DuPont's largest stockholders encouraging Trian and the company to resolve the proxy contest and avoid a costly and disruptive conflict. It did not disclose the name of that investor, but those familiar with the matter said it was Fidelity, the second largest U.S. mutual fund company.

A Fidelity spokesman declined to comment. DuPont and Trian reiterated their positions, but declined to comment on Fidelity's involvement.

"Since 2009, DuPont has been executing a transformational strategy that is delivering superior results," a DuPont spokeswoman said.

"In direct contrast, Trian has a singular, value-destructive agenda to break up and add excessive debt to DuPont, which we believe would put shareholder value at risk," she added.

A Trian spokeswoman rejected the criticism.

"We have met recently with many of DuPont's largest stockholders and our ideas clearly resonate with them," she said. "We believe that Trian's presence on the board will help to drive sales, margins, and earnings growth at a company where EPS (earnings per share) is expected to be lower in 2015 than in 2011 for the fourth year in a row."

Trian, which owns a 2.7 percent stake in DuPont, is pushing for the appointment of four of its own directors at the company's annual shareholder meeting on May 13. The slate includes Trian's co-founder and Chief Executive Officer Nelson Peltz, who has requested a seat on the board since earlier this year.

DuPont, which has a market capitalization of $65 billion, named two of its own nominees, Ed Breen and Jim Gallogly, as directors last month. In an attempt to end the proxy war, the Wilmington, Delaware-based company has said it is prepared to accept one of the fund's nominees, but has refused to add Peltz to its board. [ID:nL3N0WP50E]

DuPont had said it would spin off its performance chemicals business. Peltz also wants the company to separate its volatile but cash flow-strong materials businesses from its nutrition and health, agriculture, and industrial biosciences divisions.

DuPont has rejected the proposal, stressing that keeping its businesses together would allow the company to benefit from its science platform, global scale, market access and brand.

SHAREHOLDERS DIVIDED

Over the past few weeks, both camps have been lobbying with DuPont's top 30 to top 40 investors, the sources said.

A Reuters poll of investors who hold about 48 million DuPont shares representing 5 percent of the company, found them split on Trian's board representation.

"We bought DuPont before this happened, and we do think this is, at minimum a distraction, at maximum a dislocation to the plan that is in place," said Robert Zagunis, managing director of Jensen Investment Management, which owns 1.8 million DuPont shares. "We want this to be resolved, and with DuPont winning the proxy."

Others disagreed. "We think the board needs to make decisions in the boardroom to maximize value. Trian brings one perspective for them," said Aeisha Mastagni, an investment officer for California State Teachers' Retirement System, which held about 3.6 million shares as of Feb. 28.

Makor - Lafarge/Holcim conversation with proxy adviser

Over the weekend bloomberg reports that Holcim Ltd.’s second-biggest shareholder, Eurocement Holding AG, plans to vote against the Swiss company’s merger with Lafarge SA, even after the cement makers last week agreed on new terms and management changes to placate investors.
We conversed with a proxy adviser that will work for both Holcim and Lafarge.
We understand that the proxy adviser has tried in the recent past to get a comment as to Eurocement’s intention to vote without success, we understand from our conversation that the potential lack of support from Eurocement is not a surprise.
Further, the proxy believes Harris acts as an activist at times and a long term value investor
Holcim expects to ask its shareholders for merger approval at a shareholders' meeting. The next meeting could be early May.
There is only ONE vote by Holcim shareholders for the capital increase. With this vote they vote for the merger. No additional votes.
Holcim need to get twothirds support from their shareholders.
In 2014 only 66,94% of the Holcim issued share capital was present /represented at the General Meeting, in 2013 only 61.2%
At similar percentages, 23pct is needed to block the merger.
Eurocement has c11pct and thus would need to find an additional 12pct support to block the merger
Meaning, Eurocement and Harris votes are not enough to block the capital increase/merger. Broad Holcim shareholder support would be needed for it to fail and consensus seems to be in favour of a merged entity

FT : Prada profits sink amid Asian and European sales slowdown


Profits at Prada tumbled 28 per cent last year as sales took a hit in Europe and Asia-Pacific, prompting the luxury Italian fashion house to implement cost-cutting measures.
Net income at the company fell from €628m to €451m in the year ended January 31, missing analysts’ estimates of €468m. This was the first time Prada reported a drop in annual net profit since it listed in Hong Kong four years ago. Revenues fell 1 per cent to €3.55bn.

Prada blamed the “ongoing economic uncertainty” for the slowdown. Sales grew in the Americas and Japan, but the gains in the world’s third-largest economy were not enough to fully offset declines across the region, with sales in Asia-Pacific, its biggest market accounting for 35.7 per cent of sales, dropping 3.1 per cent. They fell 4.9 per cent in Europe.
Chinese president Xi Jinping has been cracking down on political graft, waste and ostentatious lifestyles, causing large sales declines in Hong Kong and Macau. Greater China sales fell 6.3 per cent.
After several years of soaring revenues and profits, a sales slowdown in the wake of dampening Asian consumer enthusiasm, volatile exchange rates and geopolitical instability is taking its toll on the once unstoppable luxury sector. French rival conglomerate LVMH, which owns luxury brands such as Louis Vuitton and Christian Dior, also noted weakness in mainland China and Hong Kong when it announced its annual results in February.
Prada was also hit by its tax rate, which rose to 31.2 per cent last year from 30.9 per cent.
Analysts at Barclays said the figures capped a challenging year, which saw the group miss “all its initial targets owing to a difficult retail environment and increasing competition in leather goods”. Sales of leather goods fell 4.9 per cent to €2.2bn.
To prop up margins, Prada said it was conducting “a major overhaul” in certain production processes, “the effects of which will be visible next year”, cutting costs in light of the slowdown in growth, including those also associated with opening new stores.

Shareholders reacted positively, with Prada’s Hong Kong-listed stock rising 2.2 per cent in early trading.
The Barclays analysts, however, retained an “underweight” rating, noting Prada trades at a 20 per cent premium to its peers “despite the lower earnings growth potential.”
Prada shares had gained 14.6 per cent this year as of market close on Friday, compared with a 3.7 per cent rise in the benchmark Hang Seng index. The stock was down 1 per cent at HK$50 during afternoon trading in Hong Kong on Monday.

WSJ : Abu Dhabi’s IPIC Eyes More Energy Investments

Abu Dhabi’s IPIC Eyes More Energy Investments

Wealth fund aims to take advantage of currently depressed energy prices


ABU DHABI—An Abu Dhabi-backed wealth fund is seeking to take advantage of currently depressed energy prices to acquire more exploration and production assets globally, its managing director said.

International Petroleum Investment Co. will continue to invest in the energy sector despite the slide in oil prices but the focus is now on upstream assets, Khadem Abdulla Al Qubaisi told The Wall Street Journal.

“When the oil prices are coming down to $50 or $40 or $30 a barrel, the spending will continue but you will shift a little bit,” Mr. Qubaisi said. “Is there a major change here, a big change? No, we will continue [spending],” he said.

But “there is more focus towards E&P due to the low oil-price environment. We are in the due diligence [process] for some companies. IPIC started global and will continue as a global player, not as Middle Eastern,” Mr. Qubaisi said. He declined to name the companies that IPIC is currently reviewing for potential investments.

IPIC, which is a state-owned fund with a main mandate to invest in energy-related assets, is however not keen on investing in refining and marketing due to the low margins in that area at the moment, Mr. Qubaisi noted.

To that extent, he said the company is also “restructuring, optimizing” its existing assets in Spain’s Cepsa and Austria’s OMV due to the current situation in the market, but didn’t provide more details.

Cepsa, an energy company fully-owned by the Abu Dhabi fund since 2011, plans to focus primarily on its E&P and petrochemical business units as part of its strategic plan posted on its website. IPIC has a 24.9% stake in OMV.

An oil slump since the middle of last year due to a supply glut has weighed on the growth plans of most energy-related entities, pushing them to cut costs and realign their strategies amid expectations that crude prices are likely to remain low in the near future.

>>> FX positionning ... interesting

FX positionning ... interesting

The latest Commitment of Traders (COT) report from the US CFTC shows that leveraged players* increased their net short EURUSD positions on the IMM (CME) in the week ending Tuesday March 4. During that period, EURUSD rallied from around 1.0600 to briefly test above 1.1000.

The leveraged short is now the largest it has been since June 2006, which is as far as Bloomberg charts the data back to. The previous largest net position was in June 2012. The position then unwound and EURUSD rallied around 14-big figures.