National General sold for $4 billion

Allstate to acquire National General for $34.50 per share, in cash

Allstate (ALL) has agreed to acquire National General (NGHC) for approximately $4B in cash, or $34.50 per share.

The companies said in a release, “The transaction is expected to close in early 2021, subject to regulatory approvals and other customary closing conditions.

National General sold for $4B

National General provides a wide range of property-liability products through independent agents with a significant presence in non-standard auto insurance.

The company also has attractive Accident and Health and Lender-Placed Insurance businesses.

Gross premiums written were $5.6 billion, which generated operating income of $319 million in 2019.

National General shareholders will receive $32.00 per share in cash from Allstate, plus closing dividends expected to be $2.50 per share, providing $34.50 in total value per share.

Allstate will fund the share purchase by deploying $2.2 billion in combined cash resources and, subject to market conditions, issuing $1.5 billion of new senior debt.

Allstate expects to maintain its current share repurchase program.

National General’s board of directors has approved the transaction, which includes customary terms and conditions, including a breakup fee of $132.5 million.

A voting agreement has also been signed with entities controlling 40% of National General’s common shares to vote for the transaction.

MSD Capital, which owns approximately 7.4% of National General’s outstanding common shares, also supports the transaction.

NGHC closed at $20.41.

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Uber buys Postmates for $2.65B

 Uber to acquire Postmates for $2.65B in all-stock transaction

Uber and Postmates announced that they have reached a definitive agreement under which Uber will acquire Postmates for approximately $2.65B in an all-stock transaction.

Uber buys Postmates

This transaction brings together Uber’s global Rides and Eats platform with Postmates’ delivery business in the U.S.

Additionally, Postmates has been an early pioneer of “delivery-as-a-service,” which complements Uber’s efforts in the delivery of groceries, essentials and other goods.

For restaurants and merchants, Postmates and Uber Eats will together offer more tools and technology to connect with a bigger consumer base.

Following the closing of the transaction, Uber intends to keep the consumer-facing Postmates app running separately.

Uber currently estimates that it will issue approximately 84M shares of common stock for 100% of the fully diluted equity of Postmates.

The boards of directors of both companies have approved the transaction, and stockholders representing a majority of Postmates’ outstanding shares have committed to support the transaction.

The transaction is subject to the approval of Postmates stockholders, regulatory approval and other customary closing conditions and is expected to close in Q1 2021.

Uber consolidates its market position by buying Postmates

Like other travel- and transportation-related businesses, Uber’s ride-hailing segment has been negatively impacted by the COVID-19 pandemic, due to shelter-in-place orders throughout the United States.

On-demand delivery, however, has grown, with people relying on services like Uber Eats to get food without leaving their homes. According to its last earnings report, Uber’s ride-hailing gross bookings dropped, but its food delivery service saw gross sales growth of 54% during its first fiscal quarter.

UBER closed at $30.68.

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Optinose shares soar on its potential Covid-19 treatment

Optinose announces anti-COVID-19 product candidate

Optinose (OPTN) announced initiation of development of a new product candidate, OPN-019.

OptiNose, Inc. focuses on the development and commercialization of products for patients treated by ear, nose, and throat; and allergy specialists in the United States.

OPN-019 will combine the Company’s proprietary nasal Exhalation Delivery System technology with an antiseptic that has been recently shown in vitro to kill the virus that causes COVID-19.

Because components of the drug-device combination product candidate, including both the active drug and delivery device, are currently commercially available in the U.S., the Company expects to be able to rapidly progress to a meeting with FDA to discuss an IND and then onward to clinical trials.

OptiNose uses this device to deliver its medicine

The Company is focused on supporting the initial stages of development within its current operating expense plan and intends to seek grants, partnerships, and/or other sources of capital to fund future development.

The company offers XHANCE, a therapeutic product utilizing its proprietary optinose exhalation delivery system that delivers a topically-acting and anti-inflammatory corticosteroid for the treatment of chronic rhinosinusitis with and without nasal polyps. It is also developing XHANCE, which is in Phase IIIb clinical trial for the treatment of chronic sinusitis; and OPN-300 for the treatment of Prader-Willi syndrome, a rare genetic obesity disorder, as well as autism spectrum disorder. 

Note that this company is losing money and none of its products have been approved by FDA yet.

OPTN closed at $6.42, last traded at $8.70.

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DOJ issues guideline for online content

DOJ issues recommendations for Section 230 reform

The Department of Justice has released a set of reform proposals to update the outdated immunity for online platforms under Section 230 of the Communications Decency Act of 1996.

Responding to bipartisan concerns about the scope of 230 immunity, the department identified a set of concrete reform proposals to provide stronger incentives for online platforms to address illicit material on their services while continuing to foster innovation and free speech.

The department’s review of Section 230 over the last ten months arose in the context of its broader review of market-leading online platforms and their practices, which were announced in July 2019.

The department held a large public workshop and expert roundtable in February 2020, as well as dozens of listening sessions with industry, thought leaders, and policy makers, to gain a better understanding of the uses and problems surrounding Section 230.

The first category of recommendations is aimed at incentivizing platforms to address the growing amount of illicit content online, while preserving the core of Section 230’s immunity for defamation claims.

These reforms include a carve-out for bad actors who purposefully facilitate or solicit content that violates federal criminal law or are willfully blind to criminal content on their own services.

Additionally, the department recommends a case-specific carve out where a platform has actual knowledge that content violated federal criminal law and does not act on it within a reasonable time, or where a platform was provided with a court judgment that the content is unlawful, and does not take appropriate action.

A second category of proposed reforms is intended to clarify the text and revive the original purpose of the statute in order to promote free and open discourse online and encourage greater transparency between platforms and users.

One of these recommended reforms is to provide a statutory definition of “good faith” to clarify its original purpose.

The new statutory definition would limit immunity for content moderation decisions to those done in accordance with plain and particular terms of service and consistent with public representations. These measures would encourage platforms to be more transparent and accountable to their users.

The third category of recommendations would increase the ability of the government to protect citizens from unlawful conduct, by making it clear that Section 230 does not apply to civil enforcement actions brought by the federal government.

A fourth category of reform is to make clear that federal antitrust claims are not, and were never intended to be, covered by Section 230 immunity.

Over time, the avenues for engaging in both online commerce and speech have concentrated in the hands of a few key players.

It makes little sense to enable large online platforms (particularly dominant ones) to invoke Section 230 immunity in antitrust cases, where liability is based on harm to competition, not on third-party speech.

The action follows President Trump’s executive order seeking to weaken broad immunity enjoyed by Facebook (FB), Twitter (TWTR) and Google (GOOGL).

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Bitauto taken private at $16 a share

Bitauto enters definitive agreement for going-private transaction

Bitauto (BITA) announced that it has entered into an Agreement and Plan of Merger with Yiche Holding and Yiche Mergersub Limited, a wholly owned Subsidiary of Parent, pursuant to which the company will be acquired by an investor consortium led by Morespark Limited, an affiliate of Tencent Holdings (TCEHY) and Hammer Capital Opportunities Fund L.P. in an all-cash transaction that values the company’s equity at approximately $1.1B.

BitAuto taken private

Pursuant to the Merger Agreement, at the effective time of the Merger, each ordinary share of the company issued and outstanding immediately prior to the Effective Time will be cancelled and cease to exist in exchange for the right to receive $16 in cash without interest, and each outstanding American depositary share of the company will be cancelled in exchange for the right to receive $16 in cash without interest, except for

(a) certain Shares owned by affiliates of Tencent, an affiliate of JD.com (JD), and Bin Li, chairman of the board of directors of the company, which will be rolled over in the transaction ,

(b) Shares owned by Parent, Merger Sub, the company or any of their respective subsidiaries,

(c) Shares held by the ADS depositary and reserved for issuance, settlement and allocation upon exercise or vesting of company’s options and/or restricted share unit awards, and

(d) Shares held by shareholders who have validly exercised and not effectively withdrawn or lost their rights to dissent from the merger pursuant to Section 238 of the Companies Law of the Cayman Islands.

The Merger is currently expected to close in the second half of 2020 and is subject to customary closing conditions including the approval of the Merger Agreement by an affirmative vote of holders of Shares representing at least two-thirds of the voting power of the Shares present and voting in person or by proxy at a meeting of the company’s shareholders. those dissenting shares in accordance with Section 238 of the Companies Law of the Cayman Islands.

Bitauto Holdings Limited provides internet content and marketing services, and transaction services for the automobile industry in the People’s Republic of China. 

BITA closed at $14.33.

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White House selects vaccine finalists

Novavax sinks after White House omits as COVID vaccine finalist

The New York Times reports that Moderna (MRNA) is among the five finalists selected by the Trump administration as the most likely to produce a vaccine for the coronavirus.

Moderna (MRNA) is one of the finalists

By narrowing the field, the White House is betting it can identify the most promising vaccines at an early stage, speed along the process of determining which will work and ensure that the winner or winners can be quickly manufactured in large quanities, the Times said.

Pfizer is also one of the finalists

The announcement of the decision will be made at the White House in the next few weeks, government officials said.

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AstraZeneca is one of the five companies.

Dr. Anthony S. Fauci, the federal government’s top epidemiologist and director of the National Institute of Allergy and Infectious Diseases, hinted at the coming action on Tuesday when he told a medical seminar that “by the beginning of 2021 we hope to have a couple of hundred million doses.”

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Johnson & Johnson is also a finalist for Covid 19 vaccine

Finalists

A White House announcement is expected in the new few weeks. In addition to Moderna, the winners are AstraZeneca (AZN), Johnson & Johnson (JNJ), Merck (MRK) and Pfizer (PFE), according the Times.

Merck presents results from Phase 3 KEYNOTE-426 study, Stockwinners
Merck is the final company on the list.

B. Riley FBR

B. Riley FBR analyst Mayank Mamtani views the selloff today in shares of Novavax on the New York Times report that the company was not selected as a finalist for the White House’s “Operation Warp Speed” as overdone.

Mamtani reiterates a Buy rating on Novavax. NVAX closed down 11% to $44.25.

Novax did not make the final cut, shares tumble

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In the market for a used car? You are in luck

A Hertz bankruptcy will flood the market with used vehicles

If you are in the market for a used car, you are in luck. That is, if you have a place to drive to!

According to the Detroit Press, used car prices fell 34.4 percent in April alone. The paper offers solace to it’s readers by mentioning that  used car prices could go up soon due to a shortage of new cars caused by plant closures. The paper however, failed to mention the nearly half a million cars currently sitting ideal on Hertz car lots. With practically no one traveling these days, the need for rental cars has evaporated. Hertz (HTZ) and Avis-Budget (CAR) have suffered the most. Hertz has bigger problems than COVID-19 and that is it’s balance sheet.

There are several stories suggesting a Hertz bankruptcy is around the corner.

Hertz is near bankruptcy

According to Bloomberg, Hertz’s situation is a three-way standoff between Holders of Hertz’s asset-backed securities. They could delay pressuring Hertz to sell down its fleet for a short period of time, but they will need Hertz’s banks to promise to make them whole. The banks, in turn, may not want to take on such a risk, which requires them to bet that either the rental car business or used car prices return to some normal operating level.

A 2-year price chart of Hertz (HTZ), Stockwinners

Meanwhile, controlling shareholder Carl Icahn (IEP) holds a 39% equity stake in the rental company. Bloomberg says that he could put in more money to keep Hertz afloat, but this once again is dependent on a belief that the rental car business will recover to some extent in the very near future.

Carl Icahn

In a bankruptcy, Bloomberg notes, equity holders’ claims would be behind those of creditors, which is not an incentive for Icahn to put in more money at the moment.

Used car prices have fallen sharply due to Covid-19

A Hertz bankruptcy could flood the used car market with several hundred thousand cars, whose value is likely to take a substantial hit at a time when used car lots are already quite full and demand is low.

Companies now deliver used cars to your home for test drives

Bloomberg notes that used car prices dropped 11.4% from March to April, while sales were merely a quarter of pre-outbreak levels.

Meanwhile Hertz has started discounting its cars on its used car lots and Hertz Car Sales. In fact, you can pick up a car, and they will deliver it to your house for a test drive. We have seen discounts as high as 25% on some models.  The company carries brands like Ford, Chevrolet, Toyota and Nissan, to some luxury brands like Audi, Jaguar and Mercedes-Benz.

Cars are discounted by Hertz

One more footnote to this story: auto dealerships usually set their used car prices as a function of new car prices. With most of the domestic auto plants closed, price of new cars (2021 model year) will not be known anytime soon.

Companies in the space include: Copart (CPRT), CarMax (KMX), Carvana (CVNA), CarGurus (CARG), Penske (PAG). AutoNation (AN). 

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Chesapeake Energy may file for bankruptcy

Chesapeake Energy slides as company considers bankruptcy, strategic alternatives

Shares of Chesapeake Energy (CHK) are tumbling after the company warned that it might not be able to stay in business amid low commodity prices caused by a global price war and depressed demand due to the COVID-19 pandemic.

Chesapeake is near bankruptcy

EVALUATING STRATEGIC ALTERNATIVES:

On Monday, Chesapeake Energy announced that it filed its Form 10-Q for the three-month period ended March 31, 2020 and, in light of the unprecedented market environment, has withdrawn the financial outlook it previously provided on February 26, 2020.

The company also reinstated a “going concern” warning. “Fluctuations in oil and natural gas prices have a material impact on our financial position, results of operations, cash flows and quantities of oil, natural gas and NGL reserves that may be economically produced.

Historically, oil and natural gas prices have been volatile; however, the volatility in the prices for these commodities has substantially increased as a result of COVID-19 and the OPEC+ decisions […]

Historical oil prices represented in 2020 dollar, Stockwinners

If the current depressed prices persist, combined with the scheduled reductions in the leverage ratio covenant and an expected significant reduction in our borrowing base in our scheduled determination, then our liquidity and our ability to comply with our financial covenants during the next 12 months will be adversely affected,” Chesapeake said in the filing.

Boom to bust for CHK

“Based on our current forecast, we do not expect to be in compliance with our financial covenants beginning in the fourth quarter of 2020. Failure to comply with these covenants, if not waived, would result in an event of default under our revolving credit facility, the potential acceleration of outstanding debt thereunder and the potential foreclosure on the collateral securing such debt, and could cause a cross-default under our other outstanding indebtedness.

As a result of the impacts to the company’s financial position resulting from declining industry conditions and in consideration of the substantial amount of long-term debt outstanding, the company has engaged advisors to assist with the evaluation of strategic alternatives, which may include, but not be limited to, seeking a restructuring, amendment or refinancing of existing debt through a private restructuring or reorganization under Chapter 11 of the Bankruptcy Code.

However, there can be no assurances that the company will be able to successfully restructure its indebtedness, improve its financial position or complete any strategic transactions. As a result of these uncertainties and the likelihood of a restructuring or reorganization, management has concluded that there is substantial doubt about the company’s ability to continue as a going concern.”

REVERSE STOCK SPLITs NEVER WORK:

Chesapeake stock has lost about 50% of it’s value since a 1-for-200 reverse stock split took effect after the close of trading on April 14, 2020.

The company had implemented the reverse split to raise its share price enough to regain compliance with listing standards, but it was viewed as validation of investor concerns as the company struggled with falling commodities prices, high debt levels and the effects of the COVID-19 pandemic, the author added.

The company lost its way after Aubrey McClendon, a founder and former chief executive of Chesapeake Energy, died in a fiery car crash in 2016, a day after he was charged with conspiring to rig bids for oil and natural gas leases. Many believe he committed suicide.

Aubrey McClendon

McClendon — a key player in the U.S. shale boom — co-founded Chesapeake in 1989 and stepped down from the company in 2013. Chesapeake used to be the second-largest natural gas producer in the United States.

PRICE ACTION: In afternoon trading on Tuesday, shares of Chesapeake have dropped almost 22% to $10.13.

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Uber in talks to acquire GrubHub

Uber made all-stock offer to acquire GrubHub, WSJ reports

Shares of food delivery company GrubHub are sharply higher after the Wall Street Journal reported that Uber Technologies (UBER) approached GrubHub (GRUB) earlier this year with a takeover offer and the parent company of Uber Eats and its rival service operator continue to discuss a possible combination.

Uber may buy GrubHub, Stockwinners

Uber is seeking to acquire GrubHub in an all-stock deal that would reshape the meal-delivery business, but “it’s far from guaranteed the talks will produce a deal,” according to the report.

UberEats has 25% of the food delivery market, Stockwinners

Bloomberg’s Ed Hammond has separately reported this morning that Uber has made an offer to acquire GrubHub.

The companies are in talks about a deal and could reach an agreement as soon as this month, sources told Bloomberg. 

“While our Rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario,” said Uber CEO Dara Khosrowshahi.

Uber has a market cap of $57B

Uber Eats is a direct competitor to Grubhub, with Grubhub controlling  26.7% of the market while Uber holds a 25.2% market share. 

Grubhub has a market cap of more than $5.3 billion. Uber has a market cap of $57 billion.

GrubHub (GRUB) is seeking 2.15 Uber (UBER) share in exchange for each of its own shares in a potential takeover and Uber’s board is expected to review the latest GrubHub counter proposal, according to The Wall Street Journal, citing sources.

NEEDHAM

After Bloomberg reported that Uber (UBER) has approached GrubHub (GRUB) with a takeover offer, Needham analyst Brad Erickson said such a deal would be consistent with his bullish thesis that Uber Eats could eliminate as much as $500M of its roughly $1.2B in losses last year through such a GrubHub acquisition.

With Uber having exited India and seven other unprofitable markets, Erickson thinks investors would “further recognize a dramatically clearer picture towards food delivery profitability” if a GrubHub deal were to occur, he added. Erickson reiterates a Buy rating and $42 target on Uber shares.

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Amazon may buy AMC Movie Theatres

As AMC considers bankruptcy, Amazon may snap up the company

Amazon.com (AMZN) has held talks to acquire the troubled movie chain AMC Entertainment Holdings (AMC), but it is unclear if the discussions are still active, Jamie Nimmo of Daily Mail reports, citing sources.

The companies are thought to have held talks about a potential takeover of AMC by Amazon, the sources said.

Amazon may buy AMC

Buying a cinema chain would enable Amazon to control the screening of films, giving it greater dominance of the industry. Amazon’s interest in cinemas is not new. 

In 2018, Amazon looked at buying American arthouse cinema chain Landmark Theatres, but lost out to the eventual buyer, Cohen Media Group. Netflix was also reportedly in the running to buy Landmark.

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Amazon.com is in talks to buy AMC, Stockwinners

However, a takeover of AMC would be on a different scale as Landmark only had about 250 screens in the US, while AMC has about 1,000 around the world.

Amazon certainly has the means to buy AMC, whose stock market value has collapsed in recent years to just $420million.

In a sign of bad times in the movie business, earlier this month AMC Theatres (AMC) sent a letter to Universal Studios (CMCSA) chairman Donna Langley, saying that, going forward, AMC will not license any Universal films in any of its 1,000 globally effective immediately.

Amazon bought supermarket chain Whole Foods Market in 2017 in a sign that the company was willing to spend money buying non-web-based companies. 

Stockwinners offers stocks to buy, stocks to watch, upgrades, stock downgrades, earnings, Stocks to Avoid
Amazon bought Wholefoods in 2017

AMC was bought by Chinese conglomerate Dalian Wanda for $2.6 billion in 2012, but it bought back $600 million worth of shares in 2018 after Beijing cracked down on overseas investments by Chinese companies.

Under Wanda, AMC launched a major expansion plan, and in 2016 bought Odeon in the UK for £920 million from British financier Guy Hands’ private equity firm, Terra Firma, and US group Carmike Cinemas for $1.1 billion.

The deals turned AMC into the world’s largest cinema company, with 1,000 outlets and 10,000 screens around the world.

However, the expansion plan backfired and left AMC saddled with debts that are now close to $ 5billion. Last month, AMC raised $500 million from bond investors in an effort to stay afloat during the crisis. 

However, investors still questioned whether AMC could avoid bankruptcy, given its parlous financial state.

A group of AMC’s lenders reportedly hired lawyers to advise on restructuring options last month, underlining AMC’s financial strife. 

In Monday’s pre-market trading, AMC shares are up 70% to $7.00. AMZN closed at $2379.61.

Read our blog about AMC.

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Loral Space in ‘advanced talks’ to combine with Telesat

Loral Space & Communications declares $5.50 per share special dividend

Loral Space & Communications (LORL) announced that its board of directors has declared a special dividend of $5.50 per share for an aggregate dividend of approximately $170.5M.

The dividend is payable on May 28 to holders of record of Loral voting and non-voting common stock as of the close of business on May 14.

Loral declares a one time $5.50 special dividend, Stockwinners

Michael Targoff, Vice Chairman of Loral’s Board of Directors, explained that, “in an effort to maximize shareholder value, we have for some time been exploring, and are now in advanced discussions with our Canadian co-owner in Telesat, Public Sector Pension Investment Board, regarding the combination of Loral and Telesat into one public company.

Telesat to combine with Loral Space, Stockwinners

“Given the advanced state of the discussions regarding the combination transaction, it is now appropriate to pay to our shareholders a significant portion of the $243M cash distribution that we previously received from Telesat.”

“It is our intention,” Mr. Targoff continued, “to request that the Board declare an additional distribution to our shareholders in coordination with signing definitive agreements for the combination transaction.”

The company added: “Notwithstanding the advanced state of the discussions regarding the potential combination transaction, there can be no assurance as to whether or when Loral will be able to conclude the ongoing negotiations, that Loral will enter into any agreement that provides for a strategic transaction involving Telesat or Loral’s interest therein, that any strategic transaction will occur, or that any particular economic, tax, structural or other objectives or benefits with respect to any strategic transaction will be achieved.”

Loral Space & Communications Inc. offers satellite-based communications services to the broadcast, telecom, corporate, and government customers worldwide.

Telesat, formerly Telesat Canada, is a Canadian satellite communications company.  The company is now the fourth-largest fixed satellite services provider in the world. It owns a fleet of satellites, with others under construction, and operates additional satellites for other entities.

LORL is up 31% to $23.10.

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The real star war begins

AMC to no longer play Universal movies in its U.S. theaters

AMC Theatres (AMC) sent a letter to Universal Studios (CMCSA) chairman Donna Langley, saying that, going forward, AMC will not license any Universal films in any of its 1,000 globally effective immediately.

AMC will no longer play Universal movies, Stockwinners

“For much of the past four and a half years, I have been in direct dialogue with Jeff Shell and Peter Levinsohn of Universal about the importance of a robust theatrical window to the viability of the motion picture exhibition industry,” the letter reads.

“Throughout that time, AMC has expressed a willingness to consider alternatives to the current windowing strategy common in our industry, where the aim of such alternatives is to improve both studio profitability and theater operator profitability.

Universal stated it only pursued a direct-to-home entertainment release for “Trolls World Tour” because theaters were closed and Universal was committed to a lucrative toy licensing deal. We had our doubts that this was wholly Universal’s motivations, as it has been a longstanding desire by Universal to go to the home day and date.

Nonetheless, we accepted this action as an exception to our longstanding business practices in these unprecedented times.”

AMC noted that Shell was quoted in the Wall Street Journal saying that the success of “Trolls World Tour” demonstrated the viability of PVOD, and as soon as theaters reopen, the company expects to release movies on both theater and PVOD formats.

“Going forward, AMC will not license any Universal movies in any of our 1,000 theatres globally on these terms,” the letter said.

“Accordingly, we want to be absolutely clear, so that there is no ambiguity of any kind. AMC believes that with this proposed action to go to the home and theatres simultaneously, Universal is breaking the business model and dealings between our two companies.

Universal owns some blockbuster franchises, Stockwinners

It assumes that we will meekly accept a reshaped view of how studios and exhibitors should interact, with zero concern on Universal’s part as to how its actions affect us. It also presumes that Universal in fact can have its cake and eat it too, that Universal film product can be released to the home and theatres at the same time, without modification to the current economic arrangements between us. It is disappointing to us, but Jeff’s comments as to Universal’s unilateral actions and intentions have left us with no choice.

Therefore, effectively immediately AMC will no longer play any Universal movies in any of our theatres in the United States, Europe or the Middle East. This policy affects any and all Universal movies per se, goes into effect today and as our theatres reopen, and is not some hollow or ill-considered threat.

Incidentally, this policy is not aimed solely at Universal out of pique or to be punitive in any way, it also extends to any movie maker who unilaterally abandons current windowing practices absent good faith negotiations between us, so that they as distributor and we as exhibitor both benefit and neither are hurt from such changes.

Currently, with the press comment today, Universal is the only studio contemplating a wholesale change to the status quo. Hence, this immediate communication in response.”

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Cash for Cannabis

Members of Congress look for marijuana industry included in virus relief

Members of the U.S. House of Representatives have signed a letter to congressional leaders asking that cannabis businesses be included in future federal relief packages due to COVID-19.

The letter which was sent to House Speaker Nancy Pelosi, a Democrat, and Minority Leader Kevin McCarthy, said in part:

“Thank you for your efforts to address the needs of the American people during the COVID-19 outbreak.

As you draft the next COVID-19 relief bill, we write to ask that you address one of the shortcomings of the CARES Act-the exclusion of state-legal cannabis businesses and their employees.

The COVID-19 crisis response demands the full participation of the American people, businesses, and workforce. However, without relief, a very large population is left without the means to execute the required public health measures and continue to provide financially for their families.

The state-legal cannabis industry is a major contributor to the U.S. economy and workforce, employing over 240,000 workers across 33 states and four territories, and generating $1.9 billion in state and local taxes in 2019.

As states respond to the COVID-19 crisis by shuttering businesses to mitigate the virus’ spread, jurisdictions across the country have recognized cannabis businesses as “essential.”

Essential businesses, in many places, can operate during the pandemic provided they abide by required public health safety measures. Like other businesses with continued operations, cannabis businesses have met the moment by preserving access to treatment for patients with chronic conditions, donating protective clothing, and manufacturing equipment for medical use.

However, unlike other small businesses, cannabis businesses are not eligible for the CARES Act programs.”

Publicly traded companies in the space include Aphria (APHA), Aurora Cannabis (ACB), CV Sciences (CVSI), CannTrust Holdings (CNTTF), Canopy Growth (CGC), Cronos Group (CRON), General Cannabis (CANN), India Globalization Capital (IGC), Tilray (TLRY), Trulieve Cannabis (TCNNF) and Zynerba (ZYNE).

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L Brands shares tumble after buyer backs out of the deal

Sycamore Partners had agreed in February to acquire 55% of the company

Shares of L Brands fell sharply after Bloomberg reported that Sycamore Partners is seeking to terminate its agreement with the company regarding the Victoria’s Secret brand.

Bloomberg cites a court complaint filed by Sycamore in a Delaware court.

On February 20, L Brands and Sycamore Partners, a private equity firm specializing in consumer and retail investments, announced a strategic transaction that would position Bath & Body Works as a standalone public company and separate Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK into a privately-held entity.

Sycamore Partners is seeking to terminate its agreement to acquire a controlling stake in Victoria’s Secret from L Brands, Bloomberg’s Ed Hammond and Elizabeth Fournier report, citing a court filing. Sycamore in February had agreed to purchase 55% of the lingerie chain and take it private, leaving L Brands with a minority interest, the authors note.

Sales at Victoria’s Secret have been declining recently, Stockwinners

Before the pandemic disrupted the U.S. retail sector, Victoria’s Secret was struggling with plunging sales, and all of its U.S. retail locations are currently closed, the authors say.

Victoria’s Secret’s sales had been slowing for years , as the company wrestled with changing consumers tastes and how its customers shopper. 

Sycamore sues to cancel the deal, Stockwinners

L Brands, Inc. (LB) today announced that Sycamore Partners delivered a notice on April 22, 2020 purporting to terminate the Feb. 20, 2020 transaction agreement  (“Transaction Agreement”) relating to the sale of a 55% interest in Victoria’s Secret Lingerie, Victoria’s Secret Beauty and PINK (collectively, Victoria’s Secret) announced on Feb. 20, 2020. 

Sycamore Partners also filed a lawsuit in the Court of Chancery of the State of Delaware on April 22, 2020 seeking a declaratory judgment that its termination of the Transaction Agreement is valid. 

L-Brands has been under pressure to create value for share holders, Stockwinners

L Brands believes that Sycamore Partners’ purported termination of the Transaction Agreement is invalid.  L Brands will vigorously defend the lawsuit and pursue all legal remedies to enforce its contractual rights, including the right of specific performance. 

L Brands intends to continue working towards closing the transactions contemplated by the Transaction Agreement.

LB is down 21% to $9.57.

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Willis Towers Watson sold for $30B in stock

Aon plc to combine with Willis Towers Watson in all-stock transaction

Aon plc (AON) and Willis Towers Watson (WLTW) announced a definitive agreement to combine in an all-stock transaction with an implied combined equity value of approximately $80B.

The combined company, to be named Aon, will be “the premier, technology-enabled global professional services firm focused on the areas of risk, retirement and health,” the companies stated.

Willis Tower Watson merges with AON, Stockwinners

Aon will maintain operating headquarters in London, United Kingdom. John Haley will take on the role of Executive Chairman with a focus on growth and innovation strategy.

The combined firm will be led by Greg Case and Aon Chief Financial Officer Christa Davies.

AON merges with Willis Tower Watson

Under the terms of the agreement unanimously approved by the Boards of Directors of both companies, each Willis Towers Watson shareholder will receive 1.08 Aon ordinary shares for each Willis Towers Watson ordinary share, and Aon shareholders will continue to own the same number of ordinary shares in the combined company as they do immediately prior to the closing.

Upon completion of the combination, existing Aon shareholders will own approximately 63% and existing Willis Towers Watson shareholders will own approximately 37% of the combined company on a fully diluted basis.

Aon anticipates that the transaction will provide annual pre-tax synergies and other cost reductions of $800M by the third full year of combination, thereby allowing the firm to continue significant investment in innovation and growth. Potential revenue synergies due to complementary capabilities are expected but not included in the synergy estimates.

The transaction is expected to be accretive to Aon adjusted EPS in the first full year of the combination with peak adjusted EPS accretion in the high teens after full realization of $800M of pre-tax synergies.

Willis Towers Watson and Aon anticipate savings of $267M in the first full year of the combination, reaching $600M in the second full year, with the full $800M achieved in the third full year.

Free cash flow accretion is expected to breakeven in the second full year of the combination with free cash flow accretion of more than 10% after full realization of synergies.

The transaction is expected to generate over $10B of shareholder value creation from the capitalized value of the expected pre-tax synergies, based on the blended 2020 price to earnings ratio of Willis Towers Watson and Aon UK on 6 March 2020, net of $2.0B in one-time transaction, retention and integration costs.

WTLW last traded at $193.13. AON last traded at $192.15.

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