Netflix Outlines Methods to Stop Credential Sharing

Netflix provides update on sharing guidelines as 100M households share accounts

In an “update on sharing,” Netflix (NFLX) said that,

“Today, over 100 million households are sharing accounts – impacting our ability to invest in great new TV and films.

So over the last year, we’ve been exploring different approaches to address this issue in Latin America, and we’re now ready to roll them out more broadly in the coming months, starting today in Canada, New Zealand, Portugal and Spain.

Our focus has been on giving members greater control over who can access their account.

Set primary location: We’ll help members set this up, ensuring that anyone who lives in their household can use their Netflix account.

Manage account access and devices: Members can now easily manage who has access to their account from our new Manage Access and Devices page.

Transfer profile: People using an account can now easily transfer a profile to a new account, which they pay for – keeping their personalized recommendations, viewing history, My List, saved games and more.

Netflix Spain raises prices

Watch while you travel: Members can still easily watch Netflix on their personal devices or log into a new TV, like at a hotel or holiday rental.

Netflix Canada raises prices

Buy an extra member: Members on our Standard or Premium plan in many countries (including Canada, New Zealand, Portugal and Spain) can add an extra member sub account for up to two people they don’t live with – each with a profile, personalized recommendations, login and password – for an extra CAD$7.99 a month per person in Canada, NZD$7.99 in New Zealand, Euro 3.99 in Portugal, and Euro 5.99 in Spain.”

NFLX is up $1.26 to $364.15.

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ECB plays catch up, raises refinancing rate to 2 percent

ECB raises Main Refinancing Rate by 75bps to 2.00%

The ECB stated:

“The Governing Council today decided to raise the three key ECB interest rates by 75 basis points. With this third major policy rate increase in a row, the Governing Council has made substantial progress in withdrawing monetary policy accommodation.

The Governing Council took today’s decision, and expects to raise interest rates further, to ensure the timely return of inflation to its 2% medium-term inflation target.

Christine Lagarde: ECB President

The Governing Council will base the future policy rate path on the evolving outlook for inflation and the economy, following its meeting-by-meeting approach. Inflation remains far too high and will stay above the target for an extended period. In September, euro area inflation reached 9.9%.

In recent months, soaring energy and food prices, supply bottlenecks and the post-pandemic recovery in demand have led to a broadening of price pressures and an increase in inflation.

The Governing Council’s monetary policy is aimed at reducing support for demand and guarding against the risk of a persistent upward shift in inflation expectations. The Governing Council also decided to change the terms and conditions of the third series of targeted longer-term refinancing operations (TLTRO III).

During the acute phase of the pandemic, this instrument played a key role in countering downside risks to price stability.

Today, in view of the unexpected and extraordinary rise in inflation, it needs to be recalibrated to ensure that it is consistent with the broader monetary policy normalisation process and to reinforce the transmission of policy rate increases to bank lending conditions.

Accordingly, the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will be increased to 2.00%, 2.25% and 1.50% respectively, with effect from 2 November 2022.

Asset purchase programme (APP)

The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the APP for an extended period of time past the date when it started raising the key ECB interest rates and, in any case, for as long as necessary to maintain ample liquidity conditions and an appropriate monetary policy stance.

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Spectrum Brands shares soar on sale of it’s division

Spectrum Brands agrees to sell Hardware & Home Improvement segment for $4.3B

Spectrum Brands Holdings (SPB) announced it has entered into a definitive agreement to sell its HHI segment to ASSA ABLOY (ASAZY) for $4.3B in cash, which it said represents over 14 times HHI’s expected FY21 Adjusted EBITDA.

Upon closing of the transaction, Spectrum Brands expects to receive approximately $3.5B in net proceeds, subject to final tax calculations and purchase price adjustments.

Spectrum Brands expects to use the proceeds from this transaction to repay debt and reduce its gross leverage ratio to approximately 2.5x times in the near term.

Excess proceeds are expected to be allocated to invest for organic growth, fund complementary acquisitions and return capital to shareholders.

The company expects to maintain its quarterly cash dividend of 42c per common share, which will be subject to the company’s continued review from time to time.

The sale of HHI is expected to close following the receipt of certain regulatory approvals and customary closing conditions.

The results of operations of HHI will be reported as discontinued operations beginning in the fourth quarter of 2021. David Maura, CEO of Spectrum Brands, said, “I am exceedingly proud of the fact that our Hardware & Home Improvement business nearly doubled its EBITDA under Spectrum Brands’ ownership.

I am pleased to know that HHI has found a new home with a great partner, and I am confident that ASSA ABLOY will take it to its highest potential, bringing great value and innovation to consumers for generations to come.

We believe this transaction demonstrates the tremendous value of Spectrum Brands as an owner and steward of our businesses and places the Company in a strong position for the future by allowing us to further reduce our leverage levels, and enhance our capital allocation strategy.

Our remaining business will be more focused, allowing us to prioritize innovation to accelerate organic growth and pursue synergistic acquisitions to further drive value creation in Global Pet Care and Home & Garden, while continuing to look for strategic and organic ways to enhance the value of Home and Personal Care.

After the closing, we will become a more pure play consumer staples company with higher growth rates and strong margins.”

The company added: “Spectrum Brands will be a simplified business consisting of three focused business units with leading market share, strong growth opportunities and consistent performance.

The pro forma business generated $3.0B in net sales and $386 million in Adjusted EBITDA representing a 13.0% margin for the LTM period ended July 4, 2021.

Spectrum Brands will report its fourth quarter 2021 results in mid-November and expects to provide Fiscal 2022 Earnings Framework at that time.”

ASSA ABLOY AB is a Swedish company that provides door opening products, solutions, and services for the institutional, commercial, and residential markets in Europe, the Middle East, Africa, North and South America, Asia, and Oceania.  In addition, the company offers entrance automation products, services, and components, such as automatic swing, sliding, and revolving doors; industrial doors; garage doors; high-performance doors; docking solutions; hangar doors; gate automation products; components for overhead sectional doors and sensors; and high security fencings and gates. The company provides its products primarily under the ASSA ABLOY, Yale, and HID brands.

Spectrum’s Hardware & Home Improvement segment offers hardware products under the National Hardware and FANAL brands; locksets and door hardware under the Kwikset, Weiser, Baldwin, EZSET, and Tell Manufacturing brands; and plumbing products under the Pfister brand. Its Home and Personal Care segment provides home appliances under the Black & Decker, Russell Hobbs, George Foreman, Toastmaster, Juiceman, Farberware, and Breadman brands; and personal care products under the Remington and LumaBella brands.

The company’s Global Pet Care segment provides rawhide chewing, dog and cat clean-up and food, training, health and grooming, small animal food and care, and rawhide-free products under the 8IN1 (8-in-1), Dingo, Nature’s Miracle, Wild Harvest, Littermaid, Jungle, Excel, FURminator, IAMS, Eukanuba, Healthy-Hide, DreamBone, SmartBones, ProSense, Perfect Coat, eCOTRITION, Birdola, and Digest-eeze brands.

ASAZY is down 38 cents to $15.53 per share while SPB is up $15 to $94.

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U.S. opposition leads to cancelation of merger

Aon plc, Willis Towers Watson mutually agree to terminate combination pact

Aon plc (AON) and Willis Towers Watson (WLTW) announced that the firms have agreed to terminate their business combination agreement and end litigation with the U.S. Department of Justice.

The proposed combination was first announced on March 9, 2020.

“Despite regulatory momentum around the world, including the recent approval of our combination by the European Commission, we reached an impasse with the U.S. Department of Justice,” said Aon CEO Greg Case.

“The DOJ position overlooks that our complementary businesses operate across broad, competitive areas of the economy. We are confident that the combination would have accelerated our shared ability to innovate on behalf of clients, but the inability to secure an expedited resolution of the litigation brought us to this point.”

In connection with the termination of the business combination agreement, Aon will pay the $1B termination fee to Willis Towers Watson, Willis Towers Watson’s proposed scheme of arrangement has now lapsed, and both organizations will move forward independently.

Aon CEO Greg Case gives up on the merger, pays $1B breakup fee

Both firms will provide further financial updates and outlooks on their respective Q2 2021 earnings calls, which take place on July 30 for Aon and August 3 for Willis Towers Watson.

Aon plc, a professional services firm, provides advice and solutions to clients focused on risk, retirement, and health worldwide. AON is based in Ireland.

Willis Towers Watson Public Limited Company operates as an advisory, broking, and solutions company worldwide. Willis is headquartered in London.

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ECB sets a two percent target for inflation

ECB keeps key interest rates unchanged, revises forward guidance on rates

The ECB said: “In its recent strategy review, the Governing Council agreed a symmetric inflation target of two per cent over the medium term.

The key ECB interest rates have been close to their lower bound for some time and the medium-term outlook for inflation is still well below the Governing Council’s target.

In these conditions, the Governing Council today revised its forward guidance on interest rates. It did so to underline its commitment to maintain a persistently accommodative monetary policy stance to meet its inflation target.

In support of its symmetric two per cent inflation target and in line with its monetary policy strategy, the Governing Council expects the key ECB interest rates to remain at their present or lower levels until it sees inflation reaching two per cent well ahead of the end of its projection horizon and durably for the rest of the projection horizon, and it judges that realized progress in underlying inflation is sufficiently advanced to be consistent with inflation stabilizing at two per cent over the medium term.

This may also imply a transitory period in which inflation is moderately above target.

Having confirmed its June assessment of financing conditions and the inflation outlook, the Governing Council continues to expect purchases under the pandemic emergency purchase program – PEPP – over the current quarter to be conducted at a significantly higher pace than during the first months of the year…

The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively.”

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Central Banks flood markets with cash

  • Fed lowers federal funds target rate to 0%-0.25% on coronavirus outbreak
  • Fed, other central banks announce action to enhance U.S. dollar liquidity
  • Fed to up Treasury securities holdings by at least $500B, MBS by at least $200B
  • Expect added volatility in financial markets
Corona slowdown leads to drastic decisions, Stockwinners

The Federal Reserve said in a Sunday night statement, “The coronavirus outbreak has harmed communities and disrupted economic activity in many countries, including the United States. Global financial conditions have also been significantly affected.

Available economic data show that the U.S. economy came into this challenging period on a strong footing. Information received since the Federal Open Market Committee met in January indicates that the labor market remained strong through February and economic activity rose at a moderate rate. Job gains have been solid, on average, in recent months, and the unemployment rate has remained low. Although household spending rose at a moderate pace, business fixed investment and exports remained weak. More recently, the energy sector has come under stress.

Global inflation from 2007-2017, Stockwinners

On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent.

Market-based measures of inflation compensation have declined; survey-based measures of longer-term inflation expectations are little changed. Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. The effects of the coronavirus will weigh on economic activity in the near term and pose risks to the economic outlook.

In light of these developments, the Committee decided to lower the target range for the federal funds rate to 0 to 1/4 percent.

The Committee expects to maintain this target range until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals. This action will help support economic activity, strong labor market conditions, and inflation returning to the Committee’s symmetric 2 percent objective.”


The Federal Reserve said “To support the smooth functioning of markets for Treasury securities and agency mortgage-backed securities that are central to the flow of credit to households and businesses, over coming months the Committee will increase its holdings of Treasury securities by at least $500 billion and its holdings of agency mortgage-backed securities by at least $200 billion. The Committee will also reinvest all principal payments from the Federal Reserve’s holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities.

QE 4 initiated by the Feds on a Sunday night, Stockwinners

In addition, the Open Market Desk has recently expanded its overnight and term repurchase agreement operations. The Committee will continue to closely monitor market conditions and is prepared to adjust its plans as appropriate,” the central bank announced.


In an extraordinary move, the Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve, and the Swiss National Bank announced a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements.

The Federal Reserve stated: “These central banks have agreed to lower the pricing on the standing U.S. dollar liquidity swap arrangements by 25 basis points, so that the new rate will be the U.S. dollar overnight index swap rate plus 25 basis points.

To increase the swap lines’ effectiveness in providing term liquidity, the foreign central banks with regular U.S. dollar liquidity operations have also agreed to begin offering U.S. dollars weekly in each jurisdiction with an 84-day maturity, in addition to the 1-week maturity operations currently offered. These changes will take effect with the next scheduled operations during the week of March 16.

The new pricing and maturity offerings will remain in place as long as appropriate to support the smooth functioning of U.S. dollar funding markets. The swap lines are available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses, both domestically and abroad.”

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The Medicines Co. sold for $9.7B

Novartis to pay $85 per share in cash for each MDCO share

The Medicines Company (MDCO) announced that it has entered into definitive agreement in which Novartis (NVS) will acquire the company for $85 per share in an all-cash transaction, implying a fully diluted equity value of $9.7B.

Novartis to pay $85 per share in cash for each MDCO share, Stockwinners

The stock closed Friday down $1.21 to $68.55. See our previous blog post.

The purchase price represents a premium of approximately 45% to The Medicines Company’s closing share price of $58.65 on November 18, the last trading day prior to news reports of a potential transaction between The Medicines Company and Novartis.

Novartis receives positive CHMP opinion for Kymriah, Stockwinners
Novartis to pay $85 per share in cash for each MDCO share, Stockwinners , Stockwinners

The transaction was unanimously approved by the boards of both companies. Under the terms of the merger agreement, Novartis will commence a tender offer to purchase all outstanding shares of The Medicines Company for $85 per share in cash.

Following the completion of the tender offer, a wholly owned subsidiary of Novartis will merge with The Medicines Company and shares of The Medicines Company that have not been tendered and purchased in the tender offer will be converted into the right to receive the same price per share.

Completion of the transaction is expected in Q1 of 2020, pending the successful completion of the tender offer and other customary closing conditions.

Until that time, The Medicines Company will continue to operate as a separate and independent company. The company expects to file regulatory submissions for inclisiran in the U.S. in Q4 of 2019 and in Europe in the first quarter of 2020.

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Ford launches new business model in Europe

Ford to cut 12,000 jobs in Europe by end of 2020

Ford to realign its European operations, Stockwinners

Ford (F) said in a statement that it is launching a new business model and fresh vehicle line-up as part of the most comprehensive redesign in the history of its business in Europe.

The company also is on track to significantly improve its financial results in Europe this year, paving the way to sustainable profitability and its longer-term goal of delivering a 6% EBIT margin.

The new European operating model and resulting organization are effective July 1.

Three new business groups – Commercial Vehicles, Passenger Vehicles and Imports – are being established to facilitate fast decision-making centered on customer needs, Ford said.

Ford Kuga will now be manufactured in China instead of Europe, Stockwinners

Ford is freshening and expanding its vehicle line-up in Europe, introducing at least three new nameplates in the next five years as it continues to grow its utility vehicle portfolio, including the all-new Mustang-inspired fully electric performance utility.

The new nameplates are in addition to all-new Kuga, Puma and Explorer Plug-In Hybrid coming by early 2020.

Manufacturing efficiency is being improved through the previously announced proposed or confirmed closure or sale of six assembly and component manufacturing plants by the end of next year: Proposed closure of Bridgend Engine Plant in South Wales; Closure of Ford Aquitaine Industries Transmission Plant in France; Closure of Naberezhnye Chelny Assembly, St. Petersburg Assembly and Elabuga Engine Plant in Russia; Sale of the Kechnec Transmission Plant in Slovakia to Magna.

This Ford Mustang designed for the European market, Stockwinners

As a result, Ford’s manufacturing footprint in Europe will be reduced to a proposed 18 facilities by the end of 2020, from 24 at the beginning of 2019.

In the U.K., the Ford of Britain and Ford Credit Europe headquarters in Warley also will close later this year and operations consolidated in Dunton.

In addition, Ford is implementing shift reductions at its assembly plants in Saarlouis, Germany, and Valencia, Spain, as well as a more streamlined management structure and marketing and sales operations.

In total, approximately 12,000 jobs will be impacted at Ford’s wholly owned facilities and consolidated joint ventures in Europe by the end of 2020, primarily through voluntary separation programs.

Around 2,000 of those are salaried positions, which are included among the 7,000 salaried positions Ford is reducing globally.

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Fiat Chrysler Could Be Sold to Chinese

Chinese automakers weigh bids for Fiat Chrysler

Chinese automakers weigh bids for FCA. See Stockwinners.com Market Radar for details

Representatives of a Chinese automaker made a bid to purchase Fiat Chrysler Automobiles (FCAUat a small premium over its market value, which was rejected for not being high enough, Automotive News reports, citing sources.

In addition, other executives from large Chinese automakers have been conducting due diligence on a possible acquisition of FCA and FCA executives have traveled to China to meet with Great Wall Motor.

MORGAN STANLEY

After Automotive News reported that Fiat Chrysler had received and rejected a takeover offer from a Chinese company, Morgan Stanley analyst Adam #Jonas says that finding “a Chinese partner could make sense” for the company.

China is the world’s largest SUV market, while the Chinese government is encouraging investments in foreign companies, and investing in Fiat Chrysler would enable a Chinese company to quickly raise its U.S. market share, Jonas wrote.

Moreover, such a deal would enable Fiat Chrysler to avoid antitrust issues that would arise if it combined with another Detroit automaker, the analyst stated. He kept an EUR14 price target and an Overweight rating on the stock.

PRICE ACTION

Shares of Fiat Chrysler (FCAU) are up 9% to $12.65 per share. The issue has a 52-week trading range of $6.0500 – $12.68.


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Paysafe Sold for GBP2.96B

Blackstone, CVC Group to buy Paysafe for approximately GBP2.96B

Blackstone, CVC Group to buy Paysafe. See Stockwinners.com Market Radar to read more

The boards of Paysafe Group and Pi UK Bidco Limited, a newly-incorporated company jointly-owned by funds managed by Blackstone (BX) and funds managed and/or advised by CVC, announced that they have reached agreement on the terms of a recommended cash offer to be made by Bidco for the entire issued and to be issued ordinary share capital of Paysafe.

It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement.

Bidco reserves the right to elect, with the consent of the Takeover Panel and subject to the terms of the Bid Conduct Agreement, to implement the Acquisition by way of a Takeover Offer for the entire issued and to be issued ordinary share capital of Paysafe as an alternative to the Scheme. Under the terms of the Acquisition, each Paysafe Shareholder will be entitled to receive: 590p in cash her Paysafe share.

The Acquisition values the entire issued and to be issued ordinary share capital of Paysafe at approximately GBP 2.96 billion.

The Paysafe Independent Directors, who have been so advised by Lazard as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable.

In providing its advice to the Paysafe Independent Directors, #Lazard has taken into account the commercial assessments of the Paysafe Independent Directors. Commenting on the Acquisition, Martin Brand, Senior Managing Director of Blackstone, said: “We are delighted that our proposal has been recommended by the Board and excited by the prospect of working with management to develop Paysafe as one of the leading, global providers of online and mobile payment solutions.

Paysafe’s innovative alternative payment systems and risk management capabilities form a strong value proposition for consumers and merchants alike.

As a leading technology investor, #Blackstone believes that Paysafe is an ideal platform for continued innovation in the payments space, and look forward to supporting Paysafe’s growth both organically and through acquisitions.”

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Humira Approved for Pediatric Patients with AU

AbbVie receives CHMP positive opinion for Humira for pediatric patients with AU

Stocks to buy, stocks to watch, Stock upgrades, downgrades, earnings, Stocks to Avoid, Stocks to Buy on Margin, Stock to Follow

AbbVie (ABBV) said that the European Committee for Medicinal Products for Human Use of the European Medicines Agency has granted a positive opinion for #HUMIRA for the treatment of chronic non-infectious anterior uveitis in pediatric patients from two years of age who have had an inadequate response to or are intolerant to conventional therapy, or in whom conventional therapy is inappropriate.

The #CHMP opinion is based on results from the SYCAMORE clinical trial, a randomized controlled study of the clinical effectiveness and safety of HUMIRA combined with methotrexate versus methotrexate plus placebo for the treatment of active JIA-associated uveitis.

It was sponsored by the University Hospitals Bristol NHS Foundation Trust and coordinated by the Clinical Trials Research Centre at the University of Liverpool.

The Independent Data Safety and Monitoring Committee recommended unmasking the trial early after 90 randomized patients with active JIA-associated uveitis showed that HUMIRA combined with methotrexate controlled ocular inflammation better and was associated with a significantly lower rate of treatment failure than placebo.

The review of the marketing authorization application is being conducted under the centralized licensing procedure.

A marketing authorization decision is anticipated by September.

If approved, the authorization will be valid in all 28 member states of the European Union, as well as Iceland, Liechtenstein and Norway.

HUMIRA was approved by the European Medicines Agency for the treatment of non-infectious intermediate, posterior and panuveitis in adults in June 2016.

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Scripps, Discovery Deal Questioned by Analysts

Scripps, Discovery deal odds debated as reported talks boost media space

Shares of Scripps Networks (SNI) and Discovery Communications (DISCA) are on the rise following reports from both The Wall Street Journal and Reuters that the media companies are in talks to merge.

While research firm #Citi sees a deal as likely, Credit Suisse analyst Omar Sheikh believes the Journal’s initial report has “low credibility.”

MERGER TALKS

Yesterday, The Wall Street Journal said that Discovery Communications is in discussions to merge with Scripps Networks. A similar report from Reuters added that Viacom (VIAB) also had held talks to buy Scripps.

CREDIT SUISSE QUESTIONS DEAL CHANCES

Commenting on the news, Credit Suisse’s #Sheikh told investors that he believes the Journal’s report “looks vague,” and his initial view is that it has “low credibility.”

Combining the two portfolios of unscripted cable networks has some industrial logic, but previously reported discussions between the companies probably came to nothing because the price and structure of a transaction could not be agreed upon, the analyst contended, adding that he struggles to see what might have changed now. Sheikh reiterated an Underperform rating and a $24 price target on Discovery’s shares.

BULLISH ON DEAL

Citi analyst Jason #Bazinet, on the other hand, told investors that he views the reports as “credible” and finds it likely that Discovery and Scripps Networks reach an agreement. Furthermore, Bazinet argued that the pressures on the traditional cable network ecosystem are acute enough and valuations are low enough that he can see merits to this potential combination. Assuming a 20% premium is offered to Scripps, a deal would likely be about 10% accretive to Discovery, Bazinet noted, citing his M&A math.

Meanwhile, #JPMorgan analyst Alexia #Quadrani said she sees both a strategic and financial rationale for a merger between Scripps Networks and Discovery Communications, pointing out that a combined company would have greater leverage with domestic distributors and advertisers. Discovery could also help Scripps with its international rollout, #Quadrani contended, adding that there is potential for cost and tax synergies.

However, she believes that with no terms mentioned in any of the press reports on the deal talks, it is difficult to evaluate any potential transaction. Further, the analyst noted that the speculation “may end up just being chatter” coming out of last week’s media executive conference in Sun Valley. Nonetheless, Quadrani believes the press reports should have a “very positive influence” on media stocks, which she noted have been out of favor. The analyst expects to see particular outperformance from heavily shorted media names such as AMC Networks (AMCX).

PRICE ACTION

In Wednesday afternoon trading, shares of Scripps Networks have jumped almost 15% to $76.87, while Discovery Communications’ stock has gained 4% to $27.09 and AMC Networks is up 4% to $59.25.

Other media names, including 21st Century Fox (FOXA), Viacom and Disney (DIS), are also higher in afternoon trading.

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