Today - Tuesday, March 31, 2015
Monday, March 30, 2015
11:25 PM| Comment!
- After a quick review, Wells Fargo is in late-stage talks with OMD and Organic (both parts of Omnicom Group (NYSE:OMC)) to expand their relationship and give OMC business that's currently handled by Interpublic Group's (NYSE:IPG) UM.
- OMD already leads on media planning/buying for Wells Fargo, but it's likely to take on Interpublic's digital and search responsibilities, as well as increasing planning/buying on multicultural ads.
- Organic is expected to take digital creative business share from Interpublic's MRM.
- The bank spent more than $170M in media in 2014.
- Royal Dutch Shell (RDS.A, RDS.B) plans to delay drilling a $100M-plus exploration well off Australia's northwest coast, in the latest example of reduced activity in the area due to the plunge in crude oil prices.
- Shell had expected to start drilling its Cronus-1 well this quarter in the Browse Basin, targeting a large gas discovery that has been called a "multi-trillion cubic feet" gas prospect, which lies north of BHP's Argus field and north-east of ConocoPhillips' Poseidon discovery.
- Wells by Japan's Inpex and South Africa’s Santos planned off Western Australia's coast also have been deferred recently.
- Shell is still drilling development wells as planned at its $12B Prelude floating LNG project in the Browse Basin, and is a 25% partner in Chevron's $54B Gorgon LNG venture.
- BNSF Railway says it is cutting the speed of crude oil trains in some urban areas to as slow as 35 miles/hour, a 30% reduction, to improve safety following recent high-profile derailments in the U.S. and Canada.
- BNSF, owned by Berkshire Hathaway (BRK.A, BRK.B), says it also is stepping up efforts to find and repair defective wheels before they can cause derailments.
- The company says it already has doubled the frequency of track inspections near waterways, and now will inspect the track 2.5x more often than regulations require.
- BNSF hauls much of the oil produced in the Bakken region.
- A lawsuit in Oklahoma highlights a new worry for energy companies: the possibility of being forced to pay for damages from earthquakes if the tremors can be linked to oil and gas activity.
- Oklahoma has experienced 585 quakes of 3.0 or greater magnitude last year, more than the state had in the previous 30 years combined and the most of any state in the contiguous U.S. - even California.
- The tremors under investigation in Oklahoma and other oil-producing states have been too small to cause major damage, but the prospect of facing juries over quake-related claims is reverberating throughout the energy industry, which fears lawsuits and tighter regulations could increase costs and stall drilling.
- In financial statements, major area operators such as Continental Resources (NYSE:CLR) have flagged potential financial risks if earthquakes lead to stricter regulations; in Arkansas, BHP and Chesapeake Energy settled a case by five homeowners in 2013 for an undisclosed sum, and in Texas, a lawsuit against EOG Resources (NYSE:EOG) for quake-related damages is pending.
- Separately, a Bloomberg article today says CLR and its CEO, Harold Hamm, have tried to put pressure on scientific inquiries that linked Oklahoma earthquakes to fracking wastewater.
- The FDA approves Novartis' (NYSE:NVS) Jadenu (deferasirox), a new formulation of Exjade (deferasirox), for the treatment of patients at least two years old with chronic iron overload due to blood transfusions and patients at least 10 years old with chronic iron overload in non-transfusion-dependent thalassemia syndromes.
- Jadenu is a once-daily oral iron chelator (it removes iron from the body) in tablet form that can be swallowed whole with or without a light meal. This simplifies the administration of deferasirox which, in Exjade's case, has to be dissolved in liquid for precisely three minutes (timer needed), then immediately drunk at least 30 minutes prior to food, preferably at the same time each day.
- Exjade, the most prescribed chelator in the U.S., generates almost $1B ($926M the past four quarters) in sales for Novartis.
- In the tense back-and-forth skirmishes between Vivendi (OTCPK:VIVHY) Chairman Vincent Bolloré and the activists at P. Schoenfeld Asset Management, the latest shot is from PSAM, accusing Bolloré of loading up on an undervalued firm.
- Bolloré's most recent purchase of Vivdendi stock raised his stake to 10.2% after a €632M buy.
- “The Bolloré Group very recently doubled its stake in Vivendi to approximately 10% ... thus benefiting from Vivendi’s undervaluation and the absence of a detailed capital allocation plan,” PSAM says.
- “Mr. Schoenfeld has been writing to us since 2013 urging us to break up the group,” says a Vivendi spokesman. “The latest attack seems to be an attempt to destabilize Vivendi management.”
- PSAM has pressed for a sale of Universal Music and a €9B special dividend; a proxy fight might come at the April 17 annual meeting.
- Vivendi closed up 1.8% at Euronext Paris; ADRs up 0.8% today.
- Previously: Vivendi: Hedge fund's activism may end in violating law (Mar. 27 2015)
- Bloomberg reports Tesla's (NASDAQ:TSLA) Chinese sales rose 130%-150% M/M in March. JL Warren previously reported Chinese Model S registrations fell 45% M/M in February to 260.
- China was a weak spot for Tesla in Q4; Elon Musk blamed salesforce miscues. Tesla has been working to address range anxiety among would-be buyers, and (through a $2,000 option) provide more luxurious rear seats for wealthy Chinese accustomed to being chauffeured.
- TSLA +1.3% AH to $193.10. Earlier today, Musk (in addition to disclosing an April 30 product launch) reiterated he's confident about Tesla's long-term Chinese prospects.
- Hercules Offshore (NASDAQ:HERO) discloses it was hit by a delisting notice from Nasdaq, which warns that the Company has 180 days, or until Sept. 21, to regain compliance with the minimum bid price requirement.
- To regain compliance, the minimum bid price of HERO's common stock must meet or exceed $1/share for a minimum of 10 consecutive business days during the 180-day grace period.
- After seeing some ratings success with a pair of live TV musical events, NBC (NASDAQ:CMCSA) has set its 2015 entry: A take on 1975 musical The Wiz, which it will produce along with Cirque du Soleil.
- After the TV event -- set for Dec. 3 -- the production will make a Broadway revival for the 2016-2017 season. No cast has been connected to the project yet.
- The Wiz won out over other contenders to be produced, including The Music Man and A Few Good Men.
- The network's Carrie Underwood-anchored presentation of The Sound of Music logged 19M viewers in 2013, and its Peter Pan (with Allison Williams and Christopher Walken) marked more than 9M viewers this fall, but NBC may be eyeing different measures of success: Live events show some advertiser-friendly resistance to DVR time-shifting, persistently growing more common with broadcast series (and allowing for more ad-skipping).
- Fox (NASDAQ:FOXA) is getting in on the trend: It's got a live TV production of Grease planned for Jan. 31.
- Ensco (NYSE:ESV) -2.7% AH after disclosing it received a notice of early termination for its DS-4 drilling rig operating in the Gulf of Mexico, in the latest example of the severe downturn in the contract drilling market.
- BP is employing the drillship at a $560K dayrate with a contract set to expire in July 2016, and is utilizing ESV's DS-3 drilling rig in the Gulf at a $480K dayrate with a June 2016 expiration.
- ESV says it is marketing DS-4 to potential customers for new contracts beginning after the estimated termination date.
- Thanks in large part to the low-cost Moto G (now Brazil's top-selling smartphone), Lenovo's (OTCPK:LNVGY) Motorola Mobility unit has doubled its Brazilian smartphone share to 18% (per IDC), a figure that trails only Samsung's 43%.
- Google originally launched the Moto G with a 4.5" display and a $179 unsubsidized price in 2013. A second-gen model contains a 5" display and a similar price, though it goes for $260 in Brazil due to taxes/tariffs. A second-gen version of the cheaper Moto E (4.5" display) will sell for $120 in the U.S., and $200 in Brazil.
- Motorola's Brazilian success highlights the one-time mobile giant's success at improving its fortunes by focusing on cheap Android phones that are a cut above many comparably-priced products in terms of design/build quality. IDC estimates Lenovo (aided by Motorola) had a 6.6% global Q4 smartphone unit share on the back of 24.7M shipments. Motorola's shipments rose 118% over the whole of 2014.
- Blackstone Group (NYSE:BX) is down 1.8% in late trading as it's putting up $1.2B-plus to buy three hotels from a Paulson & Co. consortium, The Wall Street Journal is reporting.
- The hotels -- the Ritz Carlton and J.W. Marriott in Orlando, Fla., and the J.W. Marriott in Scottsdale, Ariz. -- aren't small properties, with more than 2,500 rooms and 472K square feet of meeting space in total.
- The sales consortium includes Paulson, Winthrop Realty Trust (NYSE:FUR) and Capital Trust (now the Blackstone Mortgage Trust, BXMT).
- It's the dissolution of the CNL Hotels & Resorts portfolio that the group had picked up via foreclosure and distressed sales, and could mark a jump-start to transactions in the group-travel segment.
- Vaalco Energy (NYSE:EGY) -15% AH after saying its first exploration well on Block 5 offshore Angola was found to be water-bearing, and the well will be plugged and abandoned.
- The well was drilled to a total vertical depth of 1,829 meters; given the disappointing results, EGY says it will not go forward with earlier plans to drill to 2,250 meters for geologic and geophysical correlation.
- EGY says it completed the seismic processing of 2,025 sq. km of 3D data in the outboard portion of Block 5,and has identified several new pre-salt and post-salt leads as future exploration targets to be evaluated.
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