News Archive


Russian government says Aeroflot to support struggling carrier VIM Airlines

MOSCOW (Reuters) – Russian state-controlled airline Aeroflot (AFLT.MM) will help private carrier VIM Airlines after it asked for financial aid from the state, the Russian government said in a statement on Thursday.

VIM Airlines, also known as VIM-AVIA, has canceled or delayed dozens of flights for the past few days as it requested state aid to keep it afloat.

The statement said Aeroflot’s board of directors was to meet on Thursday to discuss ways to support the operations of VIM airlines but did not say how much it would contribute.

A source in the air transportation industry told Reuters that Aeroflot, which is majority state-owned, would spend some 1.85 billion roubles ($31.92 million) to support VIM Airlines.

Aeroflot did not mention VIM Airlines in a statement on the outcome of its board meeting on Thursday. Its press service has not commented on the issue.

Rosaviatsiya, Russia’s aviation watchdog, has said that VIM Airlines owes six banks some 7 billion roubles.

Russia’s Investigative Committee, the state body which probes major crimes, said in a statement on Thursday that VIM Airlines’ director general and chief accountant had been detained on suspicion of fraud.

The committee added that the airline’s owners had left the country.

A VIM Airlines spokesman was not immediately available to comment.

Reporting by Anastasia Lyrchikova and Gleb Stolyarov; Writing by Gabrielle Tétrault-Farber; Editing by Adrian Croft

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/G-rspIX4m3M/russian-government-says-aeroflot-to-support-struggling-carrier-vim-airlines-idUSKCN1C32UP

Abbott wins U.S. antitrust approval to buy Alere with conditions

WASHINGTON (Reuters) – Abbott Laboratories has won U.S. antitrust approval to buy Alere Inc on condition that it sell two point-of-care medical testing businesses, the Federal Trade Commission said on Thursday.

Canada also announced on Thursday that it had approved the proposed transaction on similar terms.

Alere’s shares were up 3.5 percent at $50.61 in mid-afternoon trading on Thursday while Abbott was up 3 percent at $53.72.

Abbott first offered to buy Alere in February 2016, but the deal ran into trouble because of issues related to the diagnostic maker’s accounting and sales practices. The company finally agreed to buy Alere in April for about $5.3 billion, down from an initial $5.8 billion offer.

Alere also agreed Thursday to pay more than $13 million to resolve Securities and Exchange Commission charges that it committed accounting fraud and made improper payments to foreign officials.

To win the U.S. antitrust approval, the FTC required Abbott to sell two types of point-of-care medical testing device businesses, which can be used in doctors’ offices, hospitals and homes.

The companies agreed to divest a blood gas testing system that measures the oxygen and carbon dioxide in the blood and a cardiac marker system used to determine quickly if a patient is having a heart attack or congestive heart failure.

Siemens Aktiengesellschaft will buy the blood gas testing business, as well as two Alere facilities in Ottawa. Quidel Corp will buy the heart function testing system business as well as an Alere facility in San Diego.

The deal will help Abbott expand in point-of-care diagnostic testing, a market that is growing as physicians increasingly adopt rapid tests that speed up treatment.

Point-of-care tests provide results to doctors in a matter of minutes and can be conducted in the physician’s office, an ambulance or even at home. Alere makes tests for infections such as HIV, tuberculosis, malaria and dengue.

Last year, Abbott agreed sell its medical optics division to Johnson Johnson for $4.3 billion, and closed its $25 billion acquisition of St. Jude Medical this January.

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/r7-l_hsirTs/abbott-wins-u-s-antitrust-approval-to-buy-alere-with-conditions-idUSKCN1C32OE

Wall St. edges up on healthcare, tax plan hopes

(Reuters) – Wall Street edged higher on Thursday, with the SP 500 poised to close at a record on gains in McDonald’s and healthcare names, while investors continued to hope President Donald Trump will be able to make progress on tax reform.

Shares in the world’s biggest fast food chain (MCD.N) rose 2.36 percent, their biggest single-day percentage gain in more than two months, after Longbow Research upgraded the stock to “buy.”

Financials .SPSY, up 0.03 percent, and the Russell 2000 index of smallcap stocks , up 0.17 percent, which are expected to be among the beneficiaries of a tax reduction, turned higher after trading lower in the early portion of the session.

But gains were tempered with equities at record highs and valuations elevated. The forward price-to-earnings ratio (P/E) on the SP stood at 17.9 compared with its long-term average of 15.1 while the forward P/E on the Russell is 26.3 against an average of 21.3.

“The market is doing what it has been doing a lot of this year, it doesn’t surge to new levels, it just crawls to new levels,” said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute in St. Louis.

“People are comfortable owning stocks, but for us, these valuations are pretty stretched, especially for something like smallcaps.”

U.S. Treasury Secretary Steven Mnuchin said Trump’s proposal for a cut in the corporate income tax rate to 20 percent was “not negotiable.”

The plan, which called for tax cuts for most Americans, also drew criticism for favoring business and the rich and potentially adding trillions of dollars to the deficit.

A Commerce Department report showed the economy grew a bit faster than previously estimated in the second quarter, but the momentum probably slowed in the third as Hurricanes Harvey and Irma temporarily curbed activity. The storms also pushed up initial claims for state unemployment benefits for the week, the Labor Department said.

The Dow Jones Industrial Average .DJI rose 37.11 points, or 0.17 percent, to 22,377.82, the SP 500 .SPX gained 1.84 points, or 0.07 percent, to 2,508.88 and the Nasdaq Composite .IXIC dropped 7.07 points, or 0.11 percent, to 6,446.19.

The healthcare index .SPXHC led SP gainers, rising by a third of a percent.

AbbVie (ABBV.N) was the biggest boost to the SP, rising more than 5.6 percent after announcing a global resolution of intellectual property-related litigation with Amgen (AMGN.O).

Abbott (ABT.N) also rose almost 3 percent after the U.S. FDA approved the company’s glucose monitoring device. The company also won U.S. antitrust approval to buy Alere Inc (ALR.N) on condition that it sell two point-of-care medical testing businesses.

Advancing issues outnumbered declining ones on the NYSE by a 1.22-to-1 ratio; on Nasdaq, a 1.33-to-1 ratio favored advancers.

Reporting by Chuck Mikolajczak; Editing by Nick Zieminski

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/N9yug5m51G8/wall-st-edges-up-on-healthcare-tax-plan-hopes-idUSKCN1C31IQ

Roku connects with investors in debut, shares up 16.6 percent

(Reuters) – Shares of Roku Inc (ROKU.O), a Fox-backed video streaming firm, rose as much as 16.6 percent in their market debut on Thursday, giving the U.S. IPO market a much-needed shot in the arm.

The U.S. IPO market is struggling to finish 2017 on a high note even though it has already raked in more money so far this year than it did in 2016. (reut.rs/2hina3u)

Snapchat owner Snap Inc (SNAP.N), and meal-kit delivery company Blue Apron Holdings Inc (APRN.N), which listed in the first-half of the year are trading well below their listing prices.

At $16.33, Roku had a market capitalization of $1.55 billion.

A pioneer in helping consumers cut the cord from traditional cable, Roku made one of the first devices to offer streaming content such as Netflix over TVs.

But the market has since become more competitive, with Apple Inc (AAPL.O), Alphabet Inc’s Google (GOOGL.O), Amazon.com Inc (AMZN.O) and others offering their own devices.

To compete better, the California-based firm has opened its platform to more TV apps than its peers, including Amazon Prime Video, Hulu and Google Play, allowing it to offer over 3,000 channels internationally.

The company licenses its software to companies such as Sharp and Hitachi and gets a cut of the advertising revenue from media companies with apps on its platform.

In six months ended June 30, Roku had around 15.1 million active accounts, with around 6.74 billion hours of content streamed, the company said in a filing with the U.S. Securities and Exchange Commission.

Those numbers however haven’t translated into profitability as the company pumps in cash into marketing and RD.

In the quarter ended June 30, the company posted a net loss of $15.5 million, bigger than $14.1 million loss in the year-ago quarter.

“I don’t like that they are losing cash but, if you wait for a cash flow positive tech company, you may have to wait for a full solar eclipse to come around again,” Brian Hamilton, chairman and founder, data firm Sageworks said.

Roku’s shareholders include Menlo Ventures, Fidelity and Rupert Murdoch’s Twenty-First Century Fox.

The 15.67 million Class A share offering was priced at $14 per share, the upper end of Roku’s proposed $12 to $14 range, raising about $219.35 million in proceeds. (bit.ly/2hfyLzZ) (bit.ly/2xz1hH8)

Reporting by Aparajita Saxena in Bengaluru; editing by Patrick Graham and Sriraj Kalluvila

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/AsgMtSOP5zg/roku-connects-with-investors-in-debut-shares-up-16-6-percent-idUSKCN1C31HO

Aramco listing reshapes Saudi Arabia’s OPEC oil policy

DUBAI/LONDON (Reuters) – Saudi Arabia’s plans to float state oil titan Aramco are prompting the country to think the unthinkable.

Late last year, Saudi Arabia tried to get fellow oil producers around the world to agree to reduce production. Before an OPEC meeting in Vienna in November, Saudi officials were armed with an unprecedented bargaining chip: if there was no deal, the kingdom would quit the exporter group altogether.

The strategy was approved at the highest level of the Saudi government, said sources familiar with the matter.

It was not only aimed at ensuring the smooth workings of the world’s energy supply. It was also driven by a desire to push up oil prices to maximize the valuation of Saudi Aramco ahead of the listing, said the sources who declined to be named as the information is confidential.

In the end, the world’s biggest oil exporter did not have to enact that option. OPEC members along with non-OPEC producers including Russia agreed a deal in December to cut output by about 1.8 million barrels per day.

But the fact such a move was considered shows how Aramco’s initial public offering (IPO) – expected to be the biggest in history – is forcing the kingdom to rethink its OPEC policies.

Riyadh’s stance represented a shift, OPEC sources said, from its decades-old role of advocating restraint and seeking to convince fellow members like Algeria, Venezuela and Iran that prices rising too fast benefited alternative energy providers.

“Saudi Arabia is now the main price hawk,” said a high-level OPEC source. He added he was surprised how quickly the kingdom shifted from its policy of prioritizing market share, by pumping oil at full tilt, to supporting production cuts following its decision to list Aramco.

The Saudi energy ministry and OPEC did not immediately respond to requests for comment.

The IPO also raises questions over Saudi Arabia’s future role in OPEC, as the kingdom would become the only member with a national oil firm listed abroad. That in turn raises questions over the future of OPEC itself given the kingdom has been the group’s driving force since its inception almost 60 years ago.

Until now, Aramco – which oversees Saudi Arabia’s vast reserves – has always been a tool in the country’s OPEC policies, to reduce or increase production.

Once a stake in Aramco is floated, however, the company will have to take into account the interests of outside investors, according to industry sources.

Listing rules and anti-trust legislation, particularly in the United States, also preclude price-fixing, which Aramco could be accused of if it continued to follow Saudi Arabia’s OPEC policy of adjusting output to manage prices, the sources said.

“Aramco is the instrument used to manage the market even though its not involved in making the policy,” said Fareed Mohamedi, chief economist at U.S.-based Rapidan Group.

Saudi Aramco declined to comment on the potential risks of investors suing it post-IPO if it followed Saudi OPEC policies.

NORWEGIAN PATH

Saudi authorities aim to list around 5 percent of Aramco by the end of 2018 on both the Riyadh stock exchange and one or more international markets, with London, New York and Hong Kong in the running.

The IPO is the centerpiece of Vision 2030, an ambitious reform plan to diversify the Saudi economy beyond oil which is championed by Saudi Crown Prince Mohammad bin Salman.

The prince has said he expects the IPO to value Aramco at a minimum of $2 trillion, and Saudi officials and investors say the valuation will be directly impacted by oil prices.

Saudi officials have said they want to see $60 per barrel this year, with banking sources suggesting the IPO might be timed to happen with crude trading at $60-$70 per barrel. Prices have been around $50 for most of this year and were above $58 this week.

Listing its national oil firm represents unknown territory for Saudi Arabia and OPEC. But Norway, which has listed its state oil company Statoil, might offer some guide to the path ahead.

The Nordic nation, which still owns 67 percent of the oil firm, has refrained from joining any international steps in regulating oil output since 2002, months after listing in New York and Oslo in 2001.

Over the past year, Saudi officials have met officials from Norway and Statoil to discuss how best to restructure Aramco’s business operations ahead of the IPO, according to several industry sources familiar with the meetings.

The sources cited U.S. anti-trust laws as the main reason why Norway does not join accords on production, such as the deal agreed in December.

A Statoil spokesman said the company had not advised Saudi officials on the IPO in any official capacity. Its CEO Eldar Saetre also told Reuters in February that it was not officially advising Aramco, but said it was “sharing” its experience.

Statoil referred queries about Norway’s position regarding international output accords to the ministry of energy. The ministry said there was no link between Norway not joining OPEC cuts and the fact that Statoil is a U.S. listed company.

LOSING MARKET SHARE

While Prince Mohammad, the likely future ruler of Saudi Arabia, is determined to proceed with the IPO, there are still concerns inside the government and Aramco about the wisdom of the move, according to Saudi and industry sources. Some conservatives oppose the idea of Riyadh relinquishing any control over its oil’s crown jewel.

Saudi officials have said that production decisions are a sovereign matter that will remain with the government – which will still own the bulk of Aramco post-IPO – but did not explain how this policy would be compatible with a listed company.

One Saudi-based industry source said Aramco would have to act like other listed oil company such as Chevron or ExxonMobil. If it wanted to cut production, it would have to demonstrate to the investors that they would financially benefit from the move.

Inside Aramco, some executives do not believe that Saudi Arabia’s OPEC policies in preparation for the IPO will benefit the company in the long term, according to several sources.

They point to the fact that OPEC’s output cuts have eaten into Aramco’s market share in Asia, the world’s biggest oil-consuming region.

Since January, Riyadh has cut production by more than it was required to help OPEC achieve a full compliance with cuts and boost prices as other members were slow to reduce output.

The kingdom, previously China’s biggest crude supplier, has been overtaken by Russia while Iraq has eclipsed it as India’s number one source.

Additional reporting by Nerijus Adomaitis in Oslo; Writing by Dmitry Zhdannikov; Editing by Pravin Char

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/jx4LHEQrUC0/aramco-listing-reshapes-saudi-arabias-opec-oil-policy-idUSKCN1C31H0

Toshiba $18 billion sale of chip unit signed, but discord emerges immediately

TOKYO (Reuters) – Japan’s Toshiba Corp said on Thursday it had signed an $18 billion deal to sell its chip unit to a consortium led by Bain Capital LP, overcoming a key – albeit not its last – hurdle as it scrambles for funds to stave off a potential delisting.

But in an inauspicious sign, a Tokyo news conference on the deal was canceled, with Bain saying the consortium could not form a consensus on whether to brief media – underscoring fears that the 8-member group contained too many competing interests for it to work well.

The sale of the unit – the world’s second biggest producer of NAND chips – was agreed last week after a tortuous auction process but the signing was delayed because consortium member Apple Inc demanded new terms on chip supply, sources familiar with the matter have said.

“This consortium has so many members that it is going to be hard to come to consensus and agree on who’s going to take the initiative,” said Hideki Yasuda at Ace Research Institute, but he added that if the sale was successfully completed it would reduce a lot of risks for Toshiba.

Although the news conference was canceled just minutes before it was due to begin, the head of Bain Capital in Japan, Yuji Sugimoto, said the disagreements over the briefing had no bearing on the contract. He did not disclose which members had objected to the news conference.

  • Seagate to give $1.25 billion of $18 billion deal to buy Toshiba chip unit

The deal – which must also overcome legal challenges – will see Toshiba reinvest in the unit and together with Hoya Corp, a maker of parts for chip devices, Japanese firms will hold more than 50 percent of the business – a keen wish of the Japanese government.

A Japanese state-backed fund and bank have also expressed their interest in investing in the future subject to certain conditions, Toshiba said in a statement.

CRITICAL NAND

Pressure from the Japanese government, changing alliances among suitors and a slew of revised bids has drawn out the auction over nine months – heightening the risk that the deal may not close before the end of Japan’s financial year in March as regulatory reviews usually take at least six months.

If the deal does not close before then, Toshiba – hurt by liabilities at is now bankrupt nuclear unit Westinghouse – is likely to end a second consecutive year in negative net worth, putting pressure on the Tokyo Stock Exchange to strip it of its listing status.

The sale also faces legal challenges from Western Digital, Toshiba’s chip venture partner and rejected suitor, which is seeking an injunction to block any deal that does not have its consent.

Western Digital, one of world’s leading makers of hard disk drives, paid some $16 billion last year to acquire SanDisk, Toshiba’s chip joint venture partner since 2000. It sees chips as a key pillar of growth and is desperate to keep the business out of the hands of rival chipmakers.

The acrimonious squabbling over Toshiba’s chip unit also highlights the critical importance of NAND memory chips, as data storage is key to most next-generation technologies from artificial intelligence and autonomous driving to the Internet of Things.

In addition to Apple, Bain’s consortium includes South Korean chipmaker SK Hynix, as well as Dell Inc [DI.UL], Seagate Technology Plc and Kingston Technology – all of which want access to NAND technology.

Seagate said in statement that with its participation, it expects to enter into a long-term supply agreement that ensures sufficient raw NAND for its solid state drives or SSDs, which are faster and lighter than hard disk drives.

Under the deal, Toshiba will have 40.2 percent of voting rights in the chip unit and Hoya will own 9.9 percent. The four U.S. tech firms will not have voting rights.

In a move to address anti-trust concerns that may come up in a regulatory review, Toshiba said SK Hynix would be firewalled from accessing proprietary information that belonged to the chip unit and for 10 years, would not be permitted to own more than 15 percent of voting rights.

Reporting by Makiko Yamazaki; Additional reporting by Kentaro Hamada, Taro Fuse, Junko Fujita, Sam Nussey and Naomi Tajitsu; Editing by Edwina Gibbs

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/RdMugmSO9Ko/toshiba-18-billion-sale-of-chip-unit-signed-but-discord-emerges-immediately-idUSKCN1C30P1

U.S. economy accelerates in second quarter; hurricanes expected to slow growth

WASHINGTON (Reuters) – The U.S. economy expanded a bit faster than previously estimated in the second quarter, recording its quickest rate of growth in more than two years, but the momentum likely slowed in the third quarter due to the impact of Hurricanes Harvey and Irma.

Gross domestic product increased at a 3.1 percent annual rate in the April-June period, the Commerce Department said in its third estimate on Thursday. The upward revision from the 3.0 percent rate of growth reported last month reflected a rise in inventory investment.

“The destruction caused by Hurricanes Harvey and Irma and the resulting disruption … are expected to be a drag on third-quarter growth,” said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan. “Nonetheless, the economy remains on track.”

Economic growth last quarter was the quickest since the first quarter of 2015 and followed a 1.2 percent pace in the January-March period. Economists estimate that Harvey and Irma, which struck Texas and Florida, could cut as much as six-tenths of a percentage point from GDP growth in the third quarter.

Harvey was blamed for much of the decline in retail sales, industrial production, homebuilding and home sales in August. Further weakness is anticipated in September because of Irma.

Rebuilding efforts are, however, expected to boost GDP growth in the fourth quarter and in early 2018. Signs of increasing inventory investment by businesses could soften the storms’ punch to the economy.

In a separate report on Thursday, the Commerce Department said wholesale inventories jumped 1.0 percent in August after rising 0.6 percent in July. Inventories at retailers shot up 0.7 percent after being unchanged in July. The department also said the goods trade deficit fell 1.4 percent to $62.9 billion in August.

That leaves an upside risk to growth estimates for the July-September quarter, which are below 2.5 percent.

“The data available so far suggest that the firming in real inventory accumulation between second quarter and third quarter could be significant and could add over a full percentage point to growth in the third quarter,” said Daniel Silver, an economist at JPMorgan in New York.

Harvey and Irma continue to impact the labor market and are expected to cut into job growth this month. In a third report, the Labor Department said initial claims for state unemployment benefits increased 12,000 to a seasonally adjusted 272,000 for the week ended Sept. 23.

Still, the labor market remains strong. Claims have now been below the 300,000 threshold, which is associated with a robust labor market, for 134 straight weeks. That is the longest such stretch since 1970, when the labor market was smaller.

Economists had expected that the second-quarter GDP growth rate would be unrevised at 3.0 percent.

Prices for longer-dated U.S. Treasuries were trading lower and the dollar .DXY slipped against a basket of currencies. Stocks on Wall Street were mixed.

ROBUST CONSUMER SPENDING

With GDP accelerating in the second quarter, the economy grew 2.1 percent in the first half of 2017. Even so, economists believe growth this year will fall short of President Donald Trump’s ambitious 3.0 percent target.

Trump on Wednesday proposed the biggest U.S. tax overhaul in three decades, including lowering the corporate income tax rate to 20 percent and implementing a new 25 percent tax rate for pass-through businesses such as partnerships to boost the economy.

But the plan gave few details on how the tax cuts, which could cost about $1.5 trillion over a decade, would be paid for without increasing the budget deficit. That sets up what is likely to be a bruising battle in the U.S. Congress.

“The plan’s price tag would also result in an increase in the national debt, which could make it difficult to pass as is. Odds are the proposal will be scaled back,” said Ryan Sweet, senior economist at Moody’s Analytics in Westchester, Pennsylvania.

Growth in consumer spending, which makes up more than two-thirds of the U.S. economy, was unrevised at a 3.3 percent rate in the second quarter as an increase in spending on services was offset by a downward revision to durable goods outlays.

Amid robust consumer spending, businesses accumulated a bit more inventory than previously reported to meet the strong demand. Inventory investment added just over one-tenth of a percentage point to GDP growth in the second quarter. It was previously reported to have been neutral.

Growth in business spending on equipment was unchanged at a rate of 8.8 percent, the fastest pace in nearly two years.

Investment on nonresidential structures was revised to show it increasing at a 7.0 percent pace, up from the previously reported 6.2 percent rate. There were minor revisions to government spending, exports and imports.

Investment in homebuilding was weaker than previously reported, with outlays falling at a 7.3 percent rate rather than at a 6.5 percent pace.

Graphic: here

Reporting by Lucia Mutikani; Editing by Paul Simao

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/6Echu9__lKc/u-s-economy-accelerates-in-second-quarter-hurricanes-expected-to-slow-growth-idUSKCN1C31QR

Exclusive: Lyft close to selecting IPO adviser

SAN FRANCISCO (Reuters) – Lyft Inc is close to hiring an initial public offering (IPO) advisory firm, in the first concrete step by the second biggest U.S. ride service company to become publicly listed, according to people familiar with the matter.

Lyft’s IPO preparations come as its larger competitor, Uber Technologies Inc, is attempting to recover from a range of scandals. In August, Uber’s new CEO Dara Khosrowshahi set a new tentative timeline for Uber’s IPO of between 18 and 36 months.

An IPO would offer Lyft access to capital beyond its traditional route of private investments. The San Francisco-based company has been in discussions this month with Google owner Alphabet Inc (GOOGL.O) about securing an investment, Reuters has reported.

The IPO advisory firm will help Lyft’s management select underwriters and plan the offering, which could come as early as next year, the sources said this week, asking not to be identified because the deliberations are confidential. The timing of the plans could still change, the sources added.

The ride-hailing company has already finished the interviews for picking the IPO advisory firm and is expected to make a decision shortly, the sources said. IPO advisory firms work independently from the investment banks and do not sell shares in an IPO.

  • Lyft IPO could benefit diverse group of investors

Lyft declined to comment.

Top investment banks face a dilemma with regards to whether they should be underwriters on Lyft’s IPO, since many of them, such as Goldman Sachs Group Inc (GS.N) and Morgan Stanley (MS.N), are already lenders to its chief rival Uber. A bank that aligns itself with Lyft could potentially find itself shut out from a much larger IPO by Uber down the road.

VALUATIONS

Like Uber, Lyft offers a mobile app that enables passengers to request rides on their smartphones. It was founded in 2012 by technology entrepreneurs John Zimmer and Logan Green, three years after Uber.

Lyft was valued at $7.5 billion in its latest funding round in April, when it raised $600 million in fresh funding from investors such as private equity firm KKR Co LP (KKR.N). This $7.5 billion valuation was up from $5.5 billion more than a year earlier, in a fundraising round in which General Motors Co (GM.N) participated.

Uber, which was valued at $68 billion in its last funding round, is the largest private company backed by venture capitalists in the world.

Uber and Lyft have been losing money as they compete at all costs to grow their user base with low fares for customers and incentives for drivers.

Both IPOs would test investor tolerance for a lack of profitability when it comes to iconic technology unicorns. Many such companies have chosen to remain private because of concerns that an IPO would assign them a lower valuation than their latest fundraising round.

Snapchat owner Snap Inc’s (SNAP.N) $3.4 billion IPO earlier this year was the largest by a U.S. technology company in three years, although its shares have since underperformed, as its quarterly earnings have fallen short of analyst expectations.

Lyft said last month it was available in 40 states and reached 94 percent of the U.S. population. Unlike Uber, its service is so far only available in the United States.

Lyft formed a self-driving car division over the summer and has announced partnerships with companies such as Ford Motor Co (F.N).

Uber has also continued to expand, despite a series of setbacks, including allegations of sexual harassment from a former employee, a video that was released of co-founder and former CEO Travis Kalanick harshly berating a driver, a lawsuit from Alphabet’s self-driving car unit accusing Uber of stealing intellectual property, and a succession of executive departures.

Reporting by Liana B. Baker in San Francisco; Editing by Muralikumar Anantharaman

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/owzByEbeRnQ/exclusive-lyft-close-to-selecting-ipo-adviser-sources-idUSKCN1C3114

Toshiba signs deal to sell chip unit to Bain-led group for $18 billion

TOKYO (Reuters) – Japan’s Toshiba Corp (6502.T) said on Thursday it had signed an $18 billion deal to sell its chip unit to a consortium led by Bain Capital LP, overcoming a key – albeit not its last – hurdle as it scrambles for funds to stave off a potential delisting.

The sale of the unit – the world’s second biggest producer of NAND chips – was agreed last week but the signing was delayed because consortium member Apple Inc (AAPL.O) demanded new terms on chip supply in return for funding, sources familiar with the matter have said.

Bain’s consortium also includes South Korean chipmaker SK Hynix (000660.KS), as well as Dell Inc [DI.UL], Seagate Technology Plc (STX.O) and Kingston Technology.

Pressure from the Japanese government, changing alliances among suitors and a slew of revised bids has drawn out the auction over nine months – heightening the risk that the deal may not close before the end of Japan’s financial year in March as regulatory reviews usually take at least six months.

If the deal does not close before then, Toshiba – hurt by liabilities at is now bankrupt nuclear unit Westinghouse – is likely to end a second consecutive year in negative net worth, putting pressure on the Tokyo Stock Exchange to strip it of its listing status.

The sale also faces legal challenges from Western Digital (WDC.O), Toshiba’s chip venture partner and rejected suitor, which is seeking an injunction to block any deal that does not have its consent.

Western Digital, one of world’s leading makers of hard disk drives, paid some $16 billion last year to acquire SanDisk, Toshiba’s chip joint venture partner since 2000. It sees chips as a key pillar of growth and is desperate to keep the business out of the hands of rival chipmakers.

Reporting by Kentaro Hamada, Taro Fuse and Makiko Yamazaki; Writing by Naomi Tajitsu; Editing by Edwina Gibbs

Article source: http://feeds.reuters.com/~r/reuters/businessNews/~3/ODDgye2_Fl8/toshiba-signs-deal-to-sell-chip-unit-to-bain-led-group-for-18-billion-idUSKCN1C30P1