News Archive


Britain says Fox bid for Sky risks giving Murdoch too much power


LONDON Britain intends to subject Rupert Murdoch’s takeover of European pay-TV group Sky (SKYB.L) to a lengthy in-depth investigation after finding the $15 billion deal risks giving the media mogul too much power over the news agenda.

Media Secretary Karen Bradley said she was persuaded that Twenty-First Century Fox’s (FOXA.O) bid could give the Murdoch family excessive influence over the media, after regulator Ofcom assessed the impact of the deal.

“The proposed entity would have the third largest total reach of any news provider – lower only than the BBC and ITN – and would, uniquely, span news coverage on television, radio, in newspapers and online,” Bradley said.

The Media Secretary said she would take a final decision on July 14, giving Fox two weeks to address her concerns. Shares in Sky rose on hopes a full investigation could still be averted by concessions over its 24-hour TV news channel.

Murdoch, 86, and his family have long coveted full control of Sky, despite the damaging failure of a previous attempt in 2011 when their British newspaper business became embroiled in a phone-hacking scandal which forced them to abandon that bid.

A public inquiry into the affair revealed deep ties between Murdoch and the political establishment, making the renewed bid potentially toxic for Prime Minister Theresa May’s government which is fighting for survival after losing its majority.

Bradley had asked regulators to examine whether Fox would have too much control of the media, and whether it would be committed to upholding broadcasting standards if allowed to buy the company which broadcasts in Britain, Ireland, Germany, Austria and Italy.

Fox said it was disappointed by the government’s rejection of its plans to maintain editorial independence of Sky News, and said a full investigation could push the deal’s completion date back to next June. “We will continue to work constructively with the UK authorities,” it said.

During the previous takeover attempt Murdoch proposed spinning off Sky News into a separate company. However, Ofcom said on Thursday it was concerned that separating Sky News could be counter-productive, given the potential difficulties in funding the service outside of the Sky structure.

“FIT AND PROPER”

The British government said on Thursday Ofcom had no concerns about Fox’s genuine commitment to broadcasting standards but wanted to look further into the impact a deal would have on the range of media providers in the country.

Britain’s political leaders have long sought the backing of Murdoch and his Times and Sun newspapers, sparking accusations that he uses his media empire to play puppet master in the corridors of power.

Tom Watson, deputy leader of the opposition Labour Party and a long-standing Murdoch critic, said the government was going through the motions and would ultimately approve the deal.

“The parties will offer up something new, which they always had in their back pockets, the secretary of state will accept them, as she always planned, and this merger will go ahead,” he said.

History shows, he said, that any concession by the Murdochs would not be “worth the newsprint” it was published on.

Ofcom also carried out a separate investigation as to whether a Fox-controlled Sky would be a ‘fit and proper’ owner of broadcast licences in Britain.

The regulator said allegations of sexual and racial harassment at Fox News in the U.S. were extremely serious and disturbing but had found no clear evidence to suggest senior executives at Fox were aware of the misconduct.

Fox tried to pre-empt government concerns over the impact on Sky’s editorial independence by proposing the creation of an independent board to run Sky News, the company’s influential 24-hour news channel.

But Bradley said she was minded to reject the proposal after Ofcom suggested that the undertakings were not strong enough.

“Sky will continue to engage with the process as the Secretary of State reaches her final decision,” the company said in a statement.

Launched in 1989, Sky used exclusive Premier League soccer to draw in customers to pay-TV and pioneered round-the-clock news to make it a major player politically and commercially.

It now broadcasts to 22 million homes, competing with the publicly-owned BBC and ITN, commercial TV’s news provider.

POSSIBLE REMEDY

The latest delay to the deal will come as a blow to the Murdoch family after they split their newspapers from television and film assets into two separate companies, even though they retained a grip on both due to their ultimate ownership.

Rupert’s son James, who is chief executive of Fox and is currently chairman of Sky, said in March that worries about his family exerting too much power were unfounded in an era of online providers such as Facebook, Buzzfeed, Netflix and Google.

Shares in Sky have been trading at a discount to the 10.75 pounds offer, indicating that although investors were not expecting outright rejection, there was still some concern about any undertakings required from Fox to get the deal through.

The stock was trading up 3 percent at 987 pence on Thursday afternoon in the belief that Fox would find a resolution. Analysts at Citi said Fox could even find a resolution before the July 14 deadline and avoid the lengthy referral.

“Ultimately this is a positive outcome for the Fox/Sky in the sense that it makes deal completion more likely,” they said.

“Concerns about broadcasting standards would have been almost impossible to work around while we believe the groups will be able to offer concessions that adequately address concerns about plurality.”

(Editing by Guy Faulconbridge/Keith Weir)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/gvZV6_FwBpU/us-sky-m-a-fox-idUSKBN19K1D9

BP takes $750 million hit for Angola exploration write-off


LONDON BP (BP.L) will book a $750 million charge for unsuccessful exploration campaigns in Angola, the company said on Thursday, a write-off that will weigh on its second-quarter results.

The British oil and gas company said it has decided to relinquish its 50 percent interest in Block 24/11 off the coast of southern Angola and that Katambi, a gas discovery made in the block in 2014, had been deemed uncommercial.

“The write-off is fairly chunky, even by BP’s standards, for one asset,” said Jack Allardyce, oil and gas analyst at Cenkos Securities.

The charge will not impact cash flow and will not attract tax relief, BP said.

A number of companies including France’s Total (TOTF.PA), Norway’s Statoil (STL.OL) and Maersk Oil have explored for oil and gas off Africa’s western coast in recent years but have made few commercial discoveries.

“The fact that (BP) are having a write-off in Angola’s Kwanza basin is not that surprising. Industry has not experienced significant success overall in the basin,” Jefferies analyst Jason Gammel said.

BP has made four fossil fuel discoveries in 2017 in Trinidad, Egypt and off Senegal, all of which were gas and which the company said were part of a strategic shift to less polluting fossil fuel.

“We are making disciplined choices throughout our business, including in exploration, and pursuing only opportunities that will deliver clear value for our shareholders,” Bernard Looney, head of BP’s upstream operations, said in a statement.

(Editing by David Clarke)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/PAEHMZffz8I/us-bp-exploration-idUSKBN19K28H

BHP chairman says $20 billion investment in shale was a mistake


SYDNEY BHP Billiton’s Chairman Jac Nasser said on Thursday BHP’s $20 billion investment in U.S. shale oil and gas six years ago was, in hindsight, a mistake.

BHP entered the shale business at the height of the fracking boom in 2011 and invested billions more developing the operations. The fall in oil prices since then has led to pre-tax writedowns of about $13 billion on the business. Activist shareholder and hedge fund Elliott Management, holding 4.1 percent of BHP’s London-listed shares, has been trying to gain support from other shareholders to persuade BHP to sell the shale oil and gas business.

“If you had to turn the clock back, and if we knew what we knew today, we wouldn’t do it, of course we wouldn’t do it, but go back and put yourself in our position at that time,” Nasser told a business seminar, referring to the shale purchase.

“We bought exactly what we thought we were buying, but the timing was way off.”

New York-based Elliott has directed a barrage of criticism at the global miner since releasing a list of changes in April it wants the company to implement.

Its list includes an exit from shale, removal of BHP’s dual London and Australian stock listings and greater emphasis on shareholder returns. Nasser would not comment on Elliott’s proposal. But he defended BHP’s performance, saying the company’s shareholder returns were up 486 percent since BHP merged with Billiton Plc in 2001.

BHP Chief Executive Andrew Mackenzie told a conference in May the company was considering divesting some shale acreage, although it believed the assets were “well-placed for the future.”

Australian wealth management group Escala and fund Tribeca Investment Partners have also campaigned for a revamp at BHP, calling for board changes and reviews of the energy operations. Nasser, a former head of Ford Motor Co. is scheduled to retire as chairman on Sept. 1. The appointment of Nasser’s successor, Ken MacKenzie, a former packaging industry executive, has been welcomed by Elliott as a “constructive step in bringing much needed change to the direction of BHP.”

(Reporting by James Regan in Sydney; Editing by Barbara Lewis and Adrian Croft)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/MvTI6SPctpM/us-bhp-shale-idUSKBN19K1UZ

‘Hammer, hammer, hammer’: Canada lobbies U.S. before NAFTA talks


CINCINNATI, Ohio In the baking Ohio heat Canada’s trade minister is trying to save NAFTA, one encounter at a time.

Francois-Philippe Champagne is in Cincinnati for a meeting-packed June day as part of a concerted Canadian outreach campaign ahead of talks to renegotiate the North American Free Trade Agreement.

U.S. President Donald Trump describes the 1994 pact as a disaster and has threatened to walk away from it.

Concerned that any moves to abandon NAFTA or curb trade could cost thousands of jobs, the Liberal government of Prime Minister Justin Trudeau wants to remind Americans how important bilateral trade is while seeking allies to press the Canadian cause if threats emerge.

Since Trump’s inauguration, Canadian politicians and officials have made almost 160 trips, meeting 14 cabinet members, almost 200 lawmakers and more than 40 state governors and lieutenant governors. (Graphic: tmsnrt.rs/2tpGUdU)

Mexico, the pact’s third partner, has been leading a similar campaign.

“We have to hammer, hammer, hammer away at this and when we’re exhausted, hammer again,” said one person involved in the Canadian effort.

Champagne’s message is simple: “We are your largest client.”

Every day some 400,000 people and C$2.4 billion ($1.82 billion) worth of trade cross the border. Crimping that flow will hurt both nations, says Ottawa.

In all of Ohio, more than 300,000 jobs depend on trade with Canada, Champagne notes. To help drive home the point, Canadian officials drill deep into the data.

For example, their analysis shows that in Ohio’s first congressional district, 17,269 jobs depended on Canada-U.S. trade and investment, with exports exceeding $1 billion.

Champagne, who flew in late the night before, starts his day at Cincinnati’s members-only Queen City Club, where he hosts a breakfast with a dozen local leaders.

“Sometimes as friends and neighbors we take each other for granted,” he tells the group. “Let’s make sure we don’t put things in place that would disrupt supply chains.”

Reuters was granted exclusive access to the meetings during Champagne’s trip.

Lawyer Daniel Ujczo, who specializes in Canada-U.S. affairs, tells Champagne his clients’ biggest complaint is red tape that makes it hard to transfer specialists across the border.

“I don’t think companies will see a NAFTA win unless we address this,” he adds.

LEARNING THE NUMBERS

Shortly afterwards Champagne tells a business forum of around 150 people that the greater Cincinnati area sends 20 percent of its exports to Canada.

Diplomats hand out leaflets underlining the closeness of trade ties. In the car heading for his next appointment, Champagne reflects on the audience and tells aides: “They don’t know many of the numbers.”

That feeling is only underlined at a lunch with local politicians. William Seitz, a Republican member of Ohio’s House of Representatives, admits afterwards his constituents know little about free trade.

“Folks don’t understand as well as they should that when we erect barriers to trade with foreign countries, we are increasing prices for domestic consumers,” he says.

Champagne is willing to use any hook to make a connection. He studied in Cleveland and in every meeting notes a local politician once called him “a son of Ohio”.

Later in the day he presents an honorary certificate to Joey Votto, the Canadian star of the Cincinnati Reds baseball team.

“You’re our best export,” Champagne says as cameras click.

As his car speeds from the Reds stadium to another appointment in the late afternoon, he says: “It’s been a great day … We’ve made a small difference.”

Officials track the number of trips and how many people they meet, but say ultimately what counts is whether their new-found allies will step up to defend trade with Canada.

When Trump announced in April he might tear up NAFTA, “you had many Republican senators calling the White House and calling Trump to say ‘This is crazy’,” said another person involved in the campaign.

Some of the callers had already been approached by Canada as part of the effort to contact influence-makers, that person said.

The outreach effort is not intended to convey a threat, says David MacNaughton, Canada’s ambassador to Washington.

But he adds: “It doesn’t take a rocket scientist to figure out that at some point, if they keep doing things that harm Canadian companies, that it’s going to be difficult for us to resist doing the same.”

Canada initially chose to focus on 11 states, selected for their economic and political importance.

These include Indiana, home of Vice President Mike Pence. The Canadians are “talking to people who talk to Pence”, one official tells Champagne.

A few days after the trip, Public Safety Minister Ralph Goodale is in Minneapolis, Minnesota, at an exclusive reception to build awareness of bilateral ties.

“When the relationship is without any great problems, people tend to go to sleep on both sides,” he tells Reuters.

Attendees include Neel Kashkari, President of the Federal Reserve Bank of Minneapolis, and Joc O’Rourke, chief executive officer of phosphate giant Mosaic Co.

Asked about the Canadian message, O’Rourke says most companies want freer or fairer trade. Pressed as to whether they will stand up for Canada, he replies: “They will of course stand up for what is in their best interest.”

Goodale acknowledges the outreach does not guarantee success, but adds: “our trade will do better, and our relationship will do better, the more vigorous and outgoing we are”.

Foreign Minister Chrystia Freeland quipped last month that “if you’re an American official or legislator, it’s been hard to avoid a Canadian”, but Goodale is not worried Canada might be wearing out its welcome.

“They are so big I think it will be a long time before we have overdone it,” he says.

(For a graphic on Canada’s NAFTA lobbying push, click tmsnrt.rs/2sUcbEq)

(Reporting by David Ljunggren; Editing by Tomasz Janowski)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/4yFyeezUEZA/us-usa-trade-canada-outreach-idUSKBN19K0GE

High-tech dashboards signal big changes for auto parts suppliers


SAN FRANCISCO Peer at the instrument panel on your new car and you may find sleek digital gauges and multicolored screens. But a glimpse behind the dashboard could reveal what U.S. auto supplier Visteon Corp found: a mess.

As automotive cockpits become crammed with ever more digital features such as navigation and entertainment systems, the electronics holding it all together have become a rat’s nest of components made by different parts makers.

Now the race is on to clean up the clutter. here:reuters.com,2017:newsml_RC11EA315070:656503749/tag:reuters.com,2017:binary_RC11EA315070-BASEIMAGE?action=downloadmediatype=picturemex_media_type=picturetoken=%22lQidIVhfMdhJExh%2BrXgLdTn2%2Bh1ScdMCyfbfQ%2BHdRaQ%3D%22

Visteon is among a slew of suppliers aiming to make dashboard innards simpler, cheaper and lighter as the industry accelerates toward a so-called virtual cockpit – an all-digital dashboard that will help usher in the era of self-driving cars.

What’s at stake is a piece of the $37-billion cockpit electronics market, estimated by research firm IHS Market to nearly double to $62 billion by 2022. Accounting firm PwC estimates that electronics could account for up to 20 percent of a car’s value in the next two years, up from 13 percent in 2015.

Meanwhile, the number of suppliers for those components is likely to dwindle as automakers look to work with fewer companies capable of doing more, according to Mark Boyadjis, principal automotive analyst at IHS Markit.

“The complexity of engineering ten different systems from ten different suppliers is no longer something an automaker wants to do,” Boyadjis said.

He estimates manufacturers eventually will work with two to three cockpit suppliers for each model, down from six to 10 today.

DIGITAL MAKEOVER

One of Visteon’s solutions is a computer module dubbed “SmartCore.” This cockpit domain controller operates a vehicle’s instrument cluster, infotainment system and other features, all on the same tiny piece of silicon.

So far this year, the Detroit-based company has landed two big contracts for undisclosed sums. One, announced in April, is with China’s second-largest automaker, Dongfeng Motor Corp. The other is with Mercedes-Benz, Reuters has learned. Mercedes did not respond to requests for comment. Another unnamed European automaker plans to use the system in 2018, according to Visteon.

Visteon is going all in on cockpit electronics, having shed its remaining automotive climate and interiors businesses in 2016. The bet so far is paying off. The company secured $1.5 billion in new business in the first quarter, helped by growth in China. Visteon’s stock price is up more than 50 percent over the past year.

It’s a major turnaround since Visteon was spun off from Ford Motor Co a decade ago. Visteon filed for bankruptcy protection in 2009 before emerging a year later.

“You have to be changing and adapting fast. If not, you’re not going to keep up in this market,” said Tim Yerdon, Visteon’s head of global marketing. “It’s about reinventing yourself to stay ahead.”

DASHBOARD DEALS

Visteon’s makeover hints at the coming battle between suppliers fighting for real estate in the digital cockpit. The trend is already triggering acquisitions, as companies look to boost their offerings to automakers.

Visteon in 2014 bought Johnson Controls’ electronics business, which was also developing a domain controller. In March, Samsung completed its $8-billion purchase of infotainment company Harman. France’s Faurecia, a top seating and interiors supplier, last year purchased a 20 percent stake in Paris-based infotainment firm Parrot Automotive SAS in a deal that could make Faurecia the biggest shareholder by 2019.

Deal-making in the wider automotive sector has been at a fever pitch over the past two years fueled by the race to develop autonomous vehicle technology. Activity in the sector was worth $41 billion in 2016, according to PwC.

Analysts say German automakers are taking the lead in consolidating functions within the dashboard. Audi was the first to debut a virtual cockpit last year that combined its instrument cluster and infotainment system.

CHEAPER, LIGHTER, SMARTER

Streamlined dashboards can lead to cost reductions for manufacturers, who can save as much as $175 per car with an integrated cockpit, according to Munich-based management consulting firm Roland Berger.

They can also help with fuel efficiency. That’s because vehicles are lighter when there are fewer behind-the-scenes computers, known as electronic control units (ECUs). Vehicles today contain 80 to 120 ECUs, numbers expected to fall sharply in coming years.

But perhaps the biggest motivation for fancy cockpits is sales. Drivers accustomed to the seamless technology of their smartphones are finding today’s dashboard offerings clunky and non-intuitive. A J.D. Power study released this month found the most complaints from new vehicle owners stemmed from audio, communications, entertainment and maps systems.

Better cockpits could prove crucial to attracting younger consumers, who are not showing the same enthusiasm for cars, or even driving, that their parents did. Research company Mintel found that 41 percent of millennial car buyers are interested in having the latest technology in their vehicles.

Disjointed dashboards “are one of the most noticeable gaps in user experience – what you see right in front of you,” said Andrew Hart of UK-based consultancy SBD Automotive.

On many car models, he said, audible warning systems to alert the driver to a potential collision are not in sync with the radio, meaning your favorite song could drown out the warning beep.

“That’s a crazy example of something when you don’t consolidate ECUs,” Hart said.

Industry watchers say this and other safe-driving features are among the systems ripe for integration. Additional targets include rear-seat entertainment systems and so-called heads-up displays that project data such as the car’s speed onto the windshield for easy viewing.

Back in Detroit, Visteon says it is in talks with carmakers in China and Europe for its domain controller, a technology it hopes can give it an edge over rivals such as Delphi, Robert Bosch [ROBG.UL], Continental, and Denso.

While it isn’t clear who will prevail, electronics suppliers are seeing their products take on new importance as vehicles become more connected.

Five years ago, the dashboard was “a plastic molded cockpit that we stuffed electronics into,” said Yerdon, Visteon’s marketing chief. “Now it’s more about an electronic architecture that’s experience-driven, and we mold plastic around it.”

(Editing by Marla Dickerson)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/HQbSBjpREX8/us-autos-dashboard-idUSKBN19K0G3

Exclusive: Universal president says founder Okada ‘unfit’ for board in private letter


TOKYO The president of Japan’s Universal Entertainment Corp (6425.T) said the company’s founder Kazuo Okada is “unfit” to be the director of a public company, in a private letter to a shareholder seen by Reuters.

The June 21 letter was written by Jun Fujimoto ahead of an annual meeting of Universal shareholders on Thursday at which Okada is scheduled to lose his position as chairman of the board, according to the company’s disclosed slate of candidates.

The board shake-up comes after Universal made allegations that Okada misused company funds.

Okada could not be reached for comment. David Krakoff, Okada’s lawyer in an unrelated U.S. lawsuit, did not respond to calls and emails seeking comment. Universal said it could not comment on letters to or from Fujimoto as an individual and declined to make him available for an interview.

Peppered with criticism of Okada, the letter offers a glimpse into the mindset of Fujimoto, 59, as he pushes ahead with an attempt to sideline Okada, 74, in a rare Japanese boardroom coup.

“I think Chairman Okada is unfit to be in management of a public company,” Fujimoto said in the letter, which was written in Japanese. “I’m confident that I can prove that with irrefutable physical evidence.” He did not say what that evidence was.

The ouster of Okada is expected to take center stage at Thursday’s meeting where shareholders will vote on a slate of directors that includes Okada’s wife, Takako, but not Okada himself. Universal is also bringing back a former finance executive and adding an external director to the board.

Those changes were made possible by the resignation of Okada in May as director of Okada Holdings Ltd, a company based in Hong Kong that owns 69 percent of Universal’s stock and therefore holds sway over appointments to Universal’s board.

Okada stepped down as the result of a rift with family members, who control a majority of Okada Holdings’ stock, Reuters reported on Wednesday.

Fujimoto was responding to a letter from shareholder Tsuyoshi Hosoba, who had unsuccessfully sued Universal directors in 2015 alleging they breached their fiduciary duties on a series of matters, including in relation to $40 million in payments from affiliates of Universal in 2010 to a Philippine consultant, who was working on the company’s $2.4 billion casino on Manila Bay.

Okada, Fujimoto and Universal have denied any wrongdoing related to the payments, which have been the subject of regulatory scrutiny in the U.S. and the Philippines.

Hosoba declined to comment.

Earlier this month, Universal announced it had launched an internal investigation into Okada and another director, accusing them of misappropriating some $20 million of company funds over three transactions in 2015.

Hosoba said in his letter that he wanted to work with Fujimoto to “clean up” the company and offered to cease further legal action if Fujimoto “told the truth” about the payments and took steps to bolster corporate governance.

In response, Fujimoto rejected Hosoba’s request to cooperate but urged him to consider the steps he was taking to improve the company’s compliance and the risks directors and executives were taking in investigating the “extremely powerful” Okada. Fujimoto criticized Hosoba’s threat of legal action as misguided.

In the letter, Fujimoto said the investigation into Okada would look at transactions going back five years. That means the review would not include the $40 million paid to the Manila-based consultant in 2010.

The U.S. Federal Bureau of Investigation has been probing the $40 million to determine if it was aimed at helping Universal gain tax and ownership concessions for its casino in the Philippines, according to the people with knowledge of the probe.

Universal and Okada filed a defamation lawsuit against Reuters in 2012 for its reporting on the payments. The Tokyo District Court ruled in 2015 that Universal’s case was without merit. Last year the Tokyo High Court upheld that ruling, dismissing Universal’s appeal. Universal has appealed to the Supreme Court of Japan.

(Editing by Bill Rigby and Lincoln Feast)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/k25xQtSJoOM/us-universal-ent-okada-board-exclusive-idUSKBN19K04P

Investors call on Mylan chairman, director to step down


NEW YORK An investor group led by New York City’s comptroller called for Mylan NV’s (MYL.O) Chairman Robert Coury and Director Wendy Cameron to step down, as part of a campaign against the firm’s executive pay packages and high prices for an allergy treatment.

More than a third of the investors voting at the generic drugmaker’s annual meeting last week cast votes against Coury, while over half voted against Cameron – who heads Mylan’s compensation committee, a letter reviewed by Reuters shows.

“We believe Mylan’s independent directors must act swiftly – or risk further erosion in shareowner confidence and value,” the investors wrote in the letter to Mylan’s independent directors.

“Mylan’s share price is already down nearly 50 percent since its April 2015 peak and the company remains under legal, regulatory and public scrutiny for its EpiPen pricing practices,” they added in the letter.

Mylan could not be immediately reached for comment.

The company has been grappling with a growing backlash from U.S. consumers over the price of its life-saving allergy treatment EpiPen after it shot up to more than $600 for a two-pack of the device from less than $100 in 2007. [nL2N1HB1KX]

While the sharp price spike spurred congressional, Justice Department and other government investigations, the shareholder campaign against Mylan’s board picked up steam after Chairman Coury’s nearly $100 million pay package was disclosed earlier this year. [nL1N1J41AU]

The investor group, including New York City and State pension funds and the California teachers pension fund, have asked for Coury to forfeit most of the pay he received last year. It also urged Mylan to hire an independent chairman and reconstitute its board with a majority of independent directors.

The investors agitating against Mylan’s board had a steep threshold to cross as more than two-thirds of the shares voted, as well as more than half of Mylan’s outstanding shares, would have needed to be cast against the directors for them to lose.

Neil Dimick and Mark Parrish, directors on the company’s compensation committee, had just under 50 percent of the shares voted cast against their re-election.

Investors also cast more than a quarter of the shares voted against Chief Executive Heather Bresch.

Mylan announced the vote totals from the meeting in a filing with regulators on Wednesday. The company had previously only said that all its directors had been re-elected.

More than 80 percent of the company’s shares voted were cast against the company’s 2016 executive pay packages. That vote was a non-binding, advisory measure.

New York City comptroller Scott Stringer, who oversees the city’s pensions and is one of the leaders of the campaign against the drugmaker’s board, said the board needed to act swiftly to restore investor confidence.

“This board’s oversight failures have hurt investors, consumers and American taxpayers. We need to see change,” Stringer said in a statement.

(Reporting by Michael Erman; Editing by Sandra Maler and Himani Sarkar)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/qHS-mxJNEgk/us-mylan-nl-meeting-idUSKBN19J2XV

Meal-kit maker Blue Apron goes public, demand underwhelms as Amazon looms


Blue Apron Holdings Inc (APRN.N), the biggest U.S. meal kit provider, raised $300 million as it went public on Wednesday, a third less than it had hoped, as Amazon.com’s (AMZN.O) industry-changing deal to buy Whole Foods Market Inc (WFM.O) weighed on the sector.

New York-based Blue Apron said late on Wednesday its initial public offering of 30 million shares of class A common stock was priced at $10 per share, at the low end of the $10 to $11 per share range issued earlier in the day.

It lowered the estimate from a range of $15 to $17 after potential investors expressed concerns about the $13.7 billion Amazon deal as well as Blue Apron’s marketing costs and lack of profitability, people familiar with the matter said. They requested anonymity because the pricing negotiations were confidential.

Blue Apron is the first U.S. meal-kit company to go public. Smaller peers and their venture capital investors were hoping it would pave the way for them to also go public or be acquired at rich valuations.

The IPO values Blue Apron at $1.89 billion, below the $3.2 billion implied by its previous estimate and the $2.2 billion by its last private fundraising round two years ago.

Amazon already has a small meal-kit business, delivering ingredients and recipes to customers in a handful of U.S. cities. The Whole Foods deal announced in mid-June would hand the e-commerce company a ready-made distribution system for food delivery in the form of brick-and-mortar grocery stores.

“Amazon’s deal for Whole Foods earlier this month added to concerns, but Blue Apron’s high marketing costs were a negative factor. Snap Inc’s (SNAP.N) IPO earlier this year has shown investors that growth at all costs is a mistake,” said Kathleen Smith, principal of Renaissance Capital LLC, a manager of IPO-focused exchange-traded funds.

Snap went public in March and surged in its first day of trading, but shares are now just above their IPO price after declining revenue growth and widening losses raised questions about whether the Snapchat app owner would ever be profitable.

Like other meal-kit companies, Blue Apron has spent heavily on marketing to compete for customers who often switch service providers, or cancel their subscriptions altogether.

The company spent roughly 18 percent of its $795.4 million revenue in 2016 on marketing, posting a net loss of $54.9 million. It has also faced steep costs of building out delivery infrastructure for fresh food.

While meal kits have not been a focus for Amazon, it started investing in the sector earlier this year and has launched a partnership with Martha Stewart’s meal kit service, Martha Marley Spoon, to deliver Stewart-designed meals in New York, San Francisco, Dallas and Philadelphia, Boston, Washington, Seattle and Los Angeles.

Amazon has not specified its plans for Whole Foods stores, but industry insiders believe they could serve as distribution points for fresh food delivery. Amazon’s significant investment in automation is also likely to give it a leg-up in managing costs.

“With Amazon as their potential main competitor, this may make that long-term profit target more difficult than before the (Whole Foods) merger,” said Eric Kim, co-founder and managing partner of venture capital firm Goodwater Capital.

A meal-kit delivery company hoping to follow Blue Apron was Sun Basket, which Reuters reported earlier this year had hired banks to prepare for an IPO.

Green Chef and Home Chef are two other meal-kit companies reviewing options, including a sale or raising funds, Reuters has reported.

The challenge of balancing marketing and operational costs with affordable pricing has already claimed victims in the industry. Startup Maple said it was shutting down earlier this year, while SpoonRocket made a similar announcement last year.

Shares in the broader consumer sector have shown signs of weakness in the past month. The SP index of consumer discretionary companies .SPLRCD rose 13 percent over the first five months of 2017, but is down about 2.5 percent since its peak on June 2.

VALUED AT A DISCOUNT TO E-COMMERCE FIRMS

Online sales represented only $12 billion, or 2.2 percent, of the U.S. restaurant market in 2016, but are expected to grow about 22.6 percent annually from 2017 to 2020, Blue Apron has said, citing a Euromonitor study it commissioned.

During an IPO road show last week, Blue Apron sought to convince investors it was well positioned to benefit from growing consumer interest in cooking and where their food comes from. Following the negative investor feedback, Blue Apron slashed its pricing estimate.

The IPO puts Blue Apron’s valuation at roughly 1.6 times the revenue, according to Goodwater Capital. While that would represent a discount to e-commerce companies which on average command 3.1 times 2017 revenue, it would still mark a premium to grocery players, which trade at roughly 0.7 times 2017 revenue, Goodwater said.

Bessemer Venture Partners, Stripes Group and Fidelity are among Blue Apron’s investors.

Blue Apron shares are expected to begin trading on the New York Stock Exchange on Thursday under the symbol APRN.

Goldman Sachs, Morgan Stanley, Citigroup and Barclays are among the underwriters to the IPO.

(Reporting by Lauren Hirsch and Angela Moon in New York; Additional reporting By Aparajita Saxena in Bengaluru; Editing by Meredith Mazzilli and Richard Chang)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/smx2G9WU1zs/us-blueapron-ipo-idUSKBN19J1C5

Dollar upended by rates reversal, stocks unfazed for now


SYDNEY The dollar shuddered to its lows for the year on Thursday as a drumbeat of hawkish comments from major central banks signalled the era of easy money might be coming to an end for more than just the United States.

Support for the dollar eroded as investors realised the U.S. Federal Reserve might not be the only game in town when it came to higher interest rates.

In Britain, Bank of England Governor Mark Carney surprised many by conceding a hike was likely to be needed as the economy came closer to running at full capacity.

The Bank of Canada went further, with two top policymakers suggesting they might tighten as early as July.

That followed comments earlier in the week from European Central Bank President Mario Draghi that stimulus might need to be toned down so it does not become more accommodative as the economy recovers.

ECB sources tried to hose down the talk but could not stop the euro hitting a one-year high against the U.S. dollar.

“If we want to know what the ECB is planning, we will choose a carefully scripted Draghi speech over anonymous sources every time,” said Westpac currency strategist Sean Sallow.

“Backed by the Eurozone’s strong current account surplus and the contrast with a Fed which could pause on rate hikes for a while, the euro looks to be on target for $1.1500-1.1600.”

On Thursday, the single currency had already pressed on to $1.1409 having climbed three percent in as many days.

The euro also surged to a 16-month top on the yen as investors doubt the Bank of Japan will be in any position to begin winding back its stimulus for a long time to come.

The Canadian dollar vaulted to C$1.3027, having enjoyed its biggest daily gain in three months, while sterling rebounded to $1.2964.

Against a basket of major currencies, the dollar sank to its lowest since October at 95.801 as volatility returned with a vengeance.

Traders at Citi called the currency reaction “extraordinary” with turnover as much as twice the daily average on Wednesday.

FUTURE HEADWINDS

“Central banks will be very cautious in their approach,” said Martin Whetton, a senior rates strategist at ANZ.

“But once they start tightening in concert, and their bloated balance sheets start unwinding, it is fair to say that bonds, equities, house prices and other asset markets will face stiffer headwinds than they have for a long time.”

The squall had already driven German short-term yields to their highest in a year, while yields on U.S. 10-year Treasuries were up 11 basis points so far this week at 2.23 percent.

Yet the prospect of higher interest rates also bolstered banking stocks and helped the SP 500 score its biggest one-day percentage gain in about two months on Wednesday.

The Dow rose 0.68 percent, while the SP 500 gained 0.88 percent and the Nasdaq 1.43 percent.

Financials gained further after hours as the Fed approved plans from the 34 largest U.S. banks to use extra capital for stock buy backs and dividends.

Asia followed on Thursday with Japan’s Nikkei adding 0.5 percent and Australia 0.8 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.8 percent to its highest since May 2015.

The weaker U.S. dollar helped boost commodities in general, with gold up 0.3 percent to $1,253.09 an ounce.

Oil recouped a little of its recent steep losses after a weekly decrease in U.S. production offset a surprise build in crude inventories in the world’s top oil consumer. [O/R]

On Thursday, U.S. crude firmed 27 cents to $45.01 per barrel and Brent added 28 cents to $47.59.

(Reporting by Wayne Cole; Editing by Eric Meijer Shri Navaratnam)

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/EHzBTH0uJrI/us-global-markets-idUSKBN19K031