Today - Friday, July 3, 2015
- Adding to their list of woes, Greeks can no longer use their PayPal (PYPL, EBAY) accounts, Quartz reports.
- Capital controls have effectively crippled the online payment service, which relies on traditional banks and credit cards to transfer money.
- Another area seeing a revival is Bitcoin (COIN, OTCQB:BTCS). New customers depositing at least €50 with BTCGreece, the only Greece-based Bitcoin exchange, rose by 400% between May and June. The average deposit quadrupled to around €700.
- Sycamore Partners is preparing an offer for Belk (OTCPK:BLKIA, OTCPK:BLKIB) that could value the U.S. department store chain at $3B-$3.5B, including debt, Reuters reports.
- It was not immediately clear what competition Sycamore faced for Belk, but the latter is expected to make a decision on whether to sell the company this month.
- Previously: Belk hires Goldman Sachs to prep for sale (Apr. 02 2015)
- Previously: Reuters: Belk seeking a sale (Apr. 02 2015)
- Putting to rest a year-long merger saga, Dollar Tree (NASDAQ:DLTR) has finally been given FTC approval to buy Family Dollar (NYSE:FDO) on condition they sell 330 Family Dollar stores.
- Following the $9.2B merger, Dollar Tree will control more than 13K stores across the U.S. and Canada, vaulting the company ahead of Dollar General (NYSE:DG) to become North America's biggest discount retailer, with more than $18B in annual sales.
- Dollar Tree expects the deal to close on Monday.
- Previously: DLTR, FDO ink deal with FTC; merger on track for July close (Jun. 16 2015)
Thursday, July 2, 2015
- Heinz completes its purchase of Kraft Foods (NASDAQ:KRFT), creating the third largest food and beverage company in North America and fifth largest worldwide, and will begin trading Monday under the ticker KHC.
- Berkshire Hathaway (BRK.A, BRK.B) and Brazilian investment firm 3G Capital, which together bought Heinz in 2013, now own 51% of Kraft Heinz and control six of its 11 board seats, including one for Warren Buffett; Alex Behring, 3G's managing partner, is KHC's chairman.
- KHC will pay a $0.55/share cash dividend on July 31, in lieu of the dividend declared on June 22 by KRFT to its shareholders.
- Frequent assurances by U.S. airline executives that they would maintain "discipline" when adding seats on competitive routes were a red flag for antitrust regulators eyeing possible collusion between the four largest air carriers - American Airlines (NASDAQ:AAL), Delta Air Lines (NYSE:DAL), United Continental (NYSE:UAL) and Southwest Airlines (NYSE:LUV) - antitrust experts say.
- At a meeting last month in Miami of the International Air Transport Association, at least three senior airline execs stressed the need for "discipline" - "The word 'discipline' is a no-no," says one antitrust expert, who adds that the Justice Department probe should not be a surprise.
- Another antitrust expert thinks the investigation's actual goal could be to prod the airline industry to reduce prices and give travelers more of the benefit of the recent sharp fall in fuel prices.
- Cowen airline analyst Helane Becker says the DoJ collusion claims are without merit, and recommends buying the best airline stocks on the weakness caused by the news; her top picks remain UAL, DAL, LUV and Alaska Airlines (NYSE:ALK).
- U.S. and European regulatory resistance could force GE to seek other deals and perhaps more share buybacks, as two of the company's moves to focus on higher-margin products are now in doubt over concerns they will hurt competition.
- GE executives today met with European authorities in Brussels to ease concerns that its planned acquisition of Alstom's power equipment business would leave Europe with two gas turbine players.
- "Alstom is in that core of what they're trying to become," says Oakbrook's Peter Jankovskis. "If you can't lock up Alstom, your path for generating earnings is going to have to change."
- If Alstom falls through - and GE has said the deal could add $0.15-$0.20 to EPS in 2018 - analysts say GE likely would pursue other acquisitions to boost its core industrial businesses, buy back more shares, or a combination of both.
- Yesterday, the U.S. government sued to block GE's appliances sale to Electrolux, saying it would stifle competition for items such as stove tops, ranges and ovens.
- Should the appliances sale to Electrolux collapse, GE could seek buyers such as LG Electronics, Samsung Electronics, Chinese manufacturers or Mexico's Mabe, in which GE holds a stake, or P-E companies.
- Western Union (NYSE:WU) has tanked today, now -7% to its lowest point since mid-February, following the news that PayPal is swallowing money transfer provider Xoom for $890M, giving PayPal a big entree into international transfers.
- Citigroup is down on Western Union's prospects, for one: "Xoom has been a formidable competitor to Western Union’s online business, which although small (~5% of Western Union overall revenues), has represented nearly half of the growth in Western Union’s C2C segment in recent quarters."
- With nearly $2B in cash, Western Union could make a counter-bid -- and Xoom has traded slightly above PayPal's offer price today -- but it might not be able to win a bidding war with eBay.
- Evercore downgraded WU to Hold following the deal, as well.
- Following "lengthy discussions regarding a contractual dispute," Hertz (NYSE:HTZ) has ended its car-hire agreement with low-cost Irish airline Ryanair (RYAAY +0.5%). The company promises "existing bookings will be fully honored and that future bookings can be made directly at the Hertz, Thrifty and Firefly websites."
- Ryanair notes Hertz alleged the airline's agreements with GDS distribution firms represented a breach of contract, something it disagrees with. Ryanair "will now pursue Hertz for breach of contract and damages." The Ryanair/Hertz deal was set to last until 2020.
- The airline will issue an RFP for a new car-hire service provider, but adds it won't be able to offer car-hire services on its site for about 3 month while it looks for Hertz's replacement.
- Mondelez (MDLZ -0.6%) is in talks with multiple potential buyers to sell its Carte Noire French coffee brand, and thus placate European antitrust regulators following its deal with D.E. Master Blenders (DEMB) to create Jacobs Douwe Egberts, the world's biggest coffee company.
- The EC approved the Jacobs Douwe deal on the condition Mondelez unload Carte Noire, and DEMB sell its Merrild coffee unit. Italy's Lavazza struck a deal to buy Merrilld last month.
- Reuters states Carte Noire is valued around €1B ($1.11B). Mondelez received $4.21B in cash and a 44% JV stake in the Jacobs Douwe deal.
- "Straight up, we made some mistakes and we want to own that,” Whole Foods (WFM +0.1%) co-CEO Walter Robb and co-founder John Mackey say in a two-minute video apology.
- WFM is under fire after NYC inspectors found several stores were mislabeling packaged foods in the "worst case of overcharging" they had ever seen; inspectors weighed 80 items from eight WFM stores and found inaccurate labeling on every item, according to the city’s Department of Consumer Affairs.
- Robb and Mackey say the overcharges were unintentional, the company is taking steps to fix the problem, and customers will be refunded for the full price of any product that has labeling errors.
- Whirlpool (WHR -1.4%) has reached a preliminary accord with Italian trade unions not to lay off staff or close down plants in the country.
- The company had been in heavy talks for more than two months following its original restructuring plan to cut almost 2,000 Italian jobs.
- Previously: Whirlpool catches flak in Italy over job cuts (May. 20 2015)
- "I’m committed to the company and will remain that way," Electrolux (OTCPK:ELUXY) CEO Keith McLoughlin told reporters in a conference call, a week after a report suggested he would leave the company.
- McLoughlin said confusion may have arisen because Electrolux is looking for an executive to run its North American operations, not the group.
- Previously: Electrolux CEO to resign (Jun. 25 2015)
- Ronald Boire became permanent CEO of Sears Canada (NASDAQ:SHLD) just a few months back, but now he's headed to Barnes & Noble (NYSE:BKS) as that company's CEO, effective September 8, after the spinoff of the company's education unit.
- Current CEO Michael Huseby will become executive chairman of Barnes & Noble Education.
- Chief Merchandising Officer Jaime Carey is promoted to COO, effective immediately.
- Source: Press Release
- Tesla (NASDAQ:TSLA) +2.8% premarket after saying it delivered 11,507 Model S sedans in Q2, a 52% Y/Y and 15% Q/Q increase as well as a company record.
- But the company will need an uptick of growth in H2 if it is to meet CEO Elon Musk's ambitious sales goal of 55K deliveries for the full year.
- TSLA does not release monthly sales; its practice of releasing quarterly sales started last quarter because it believed "inaccurate sources of information are sometimes used by others to project the number of vehicle deliveries."
- The company is owned by a consortium of investors, including Haim Saban, Madison Dearborn, TPG, and Thomas H. Lee Partners. The group purchased the Spanish-language broadcaster in 2007 for about $13.7B, including debt.
- The WSJ earlier reported an IPO could raise $1B or more and value the company at as much as $20B. For now, the company filed a placeholder amount of $100M. It will trade on the Big Board under the symbol "UVN."
- Univision about broke even last year on $2.9B in revenue.
- More cross-border shipments and the euro's weakness are presenting more opportunities for delivery firms in Europe, and UPS (NYSE:UPS) and FedEx (NYSE:FDX) are jumping on them.
- FedEx recently submitted regulatory filings to the European Commission to move ahead with its $5B deal to acquire TNT Express (OTCPK:TNTEY), while UPS is building new distribution centers specifically designed for pharmaceuticals and medical products, along with other expansions.
- According to a study by Center for Retail Research, e-commerce sales across the EU's eight main economies are expected to grow more than 40% over two years to $289.6B in 2016, while the U.S. is expected slow 30% over the same period to nearly $400B.
Wednesday, July 1, 2015
- Will Powell, Sears Hometown and Outlet's (NASDAQ:SHOS) COO since 2012, is the company's new CEO. He replaces Bruce Johnson, who announced plans to step down in April.
- In addition, SHOS has named director E.J. Bird its new chairman. Bill Harker recently stepped down as chairman following a 3-year run.
- Brazilian food giant JBS (OTC:JBSAF) says its U.S.-based pork subsidiary agrees to acquire Cargill's U.S.-based pork business for $1.45B.
- Included in the acquisition are two meat processing plants in Iowa and Illinois that processed a total of 9.3M hogs in 2014, as well as five feed mills and four hog farms.
- JBS first entered the U.S. pork market in 2007 with its acquisition of Swift, and bought Pilgrim's Pride in 2009.
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