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VIPsight - 2nd Quarter 2017 <click here>

 

 

VIPsight - News

 

August 2017

Fresenius: Focus on external growth

ACTIONS CORNER

Just a few weeks after the extraordinary meeting of shareholders of Akorn, Inc. approved the merger agreement with Fresenius Kabi, the group announced the next acquisition initiative. Fresenius Medical Care plans to acquire all outstanding shares of NxStage for USD 30.00 per common share, valuing the company at approximately USD 2.0 billion. NxStage has approximately 3,400 employees and develops, produces and markets medical devices for use in home dialysis and care setting. The acquisition is expected to support Fresenius` strategic initiative of vertical integration and care coordination as well as the home dialysis business. The transaction is expected to close in 2018.

With the acquisitions of Quironsalud, Akorn, Merck KGaA´s biosimilar business and now NxStage, Fresenius shows a strong bias towards external growth.

 

August 2017

Pfeiffer Vacuum: Request for an extraordinary shareholders meeting received

COMPANIES

Following two unsolicited takeover bids earlier this year and a turbulent AGM in May, Pfeiffer Vacuum informed about a request to convene an extraordinary shareholders´ meeting by Pangea GmbH, which is an investment vehicle of the Busch-group. According to the company, the agenda of the meeting is supposed to include the recall of two members of the supervisory board, including the chairman of the supervisory board, and the election of two new members. In addition, the meeting shall decide on the appointment of a special auditor to examine the conduct of the management board and the supervisory board in connection with the takeover bids, as well as the takeover of Nor-Cal Products, Inc., by Pfeiffer Vacuum.

While the message concludes with the information, that the company will consider the proposal and convene a meeting if the statutory requirements are met, a second release states on the same day that the chairman of the supervisory board Dr. Michael Oltmanns will resign form this position, effective October 25, 2017.

 

July 2017

Deutsche Börse: Insider allegations reach new level

ACTIONS CORNER

Deutsche Börse announced that it received a notification of hearing from the public Prosecutor`s office in Frankfurt, notifying the company that it intends to formally involve the company in the ongoing investigation proceedings against its CEO Carsten Kengeter. The allegations relate to an alleged violation of the insider trading prohibition in December 2015 and an alleged omission to make an ad hoc notification in January 2016.

The public prosecutors holds out the prospect to fully terminate proceedings against Mr. Kengeter by mutual agreement, but at the same time it would impose two fines of EUR 5.5M and EUR 5M on the company. Deutsche Börse said it continues to believe that the allegations made are unfounded in all respects.

 

July 2017

Drillisch: Takeover of 1&1 Telecommunication paves the way for the formation of a new player in the German telecommunications market

ACTIONS CORNER

On July 25^th, 2017, the extraordinary general meeting of Drillisch approved capital increase from EUR 70.2M to EUR 188.9M. In return for the issuance of the new shares to United Internet, Drillisch will receive the 92.25 percent of the outstanding shares of 1%1 Telecommunication and thereafter will own 100 percent of this company.

The move paves the way for the formation of a new player in the German telecommunications market, combining the mobile and fixed-network business of United Internet with Drillisch´s mobile business. Drillisch said at the AGM that via the combination it can make a better use of the German network capacity of Telefonica. In total, Drillisch expects synergy effects of EUR 150M and more, beginning with the year 2020, while the one off expenses of the deal shall be approximately EUR 50M.

Following the capital increase, United Internet will own 73.1 percent of the share capital of Drillisch.

 

July 2017

DIC Asset: Increasing relevance of asset management and a successful refinancing indicate a healthy earnings performance

ACTIONS CORNER

At this year´s AGM, DIC Asset had to present a net loss for the business year 2016 to its shareholders. However, last year´s results have been impacted by one off effects of EUR 56M related to a refinancing of most of the financial debt of the group. Accordingly, the net loss for 2016 amounted to EUR 29M. However, looking forward, the refinancing of nearly one billion Euro with a new duration of seven years basically cut the interest expenses by half to approximately EUR 20M p.a. and reduced annuities, thus lowering future expenses and liquidity needs.

At the same time, the company reported progress regarding the buildup of the real estate asset management business, which increased from EUR 3.2M in the prior year to EUR 3.5M in 2016 and is expected to advance further in the current business year. In addition, the company might realize some benefits from its holding of 25.05 percent in WCM Beteiligungs- und Grundbesitz AG, which is subject to a takeover bid. The board of DIC indicated a positive view on the takeover bid for WCM.

 

July 2017

Commerzbank: Ceberus acquires substantial shareholding

Capital News

On July 26^th, Cerberus announced a shareholding of 5.01 percent in Commerzbank AG, thus confirming prior market speculations. The news reflects regained institutional interest in the bank. Following the acquisition of Dresdner Bank, Commerzbank had to deal with a severe crisis, requiring massive capital injections by shareholders and the German government to keep the bank afloat.

The investment by Cerberus can be interpreted as a signal for a new confidence in the company, but the intentions of the new investors need to be seen. Apart from the 5 percent holding by Cerberus, the German government still owns 15 percent, while Blackrock and Capital Group are other important shareholders in the bank.

 

July 2017

Audi, BMW, Mercedes, Porsche, VW: How to destroy confidence

Politics

Recent weeks saw a constant flow of bad news for the German car manufacturers. Manipulation software, environmental problems, diesel bans in major cities, declining sales of diesel cars, recalls, and even criminal allegations created a climate of uncertainty with customers and shareholders. It looks like every solution found for one particular issue in this painful process was followed by several new bad news. The most recent severe topic are cartel allegations. According to newspaper articles, several car makers are believed to have disclosed on a voluntarily basis details of cartel activities to the relevant authorities.

At this point in time there has been no clear statement by any of the car makers confirming these reports, though. Nonetheless, investors are concerned as is clearly indicated by share prices. Hence, as a car manufacturer it is important these days that one can rely on strong and understanding friends. Following the announcement of VW´s recent quarterly results, Goldman Sachs left the preference shares on its “Conviction Buy List”. This decision is a clear statement. But it is also consequent, since preference shares carry only marginal governance rights. So one might argue it simply doesn`t matter, does it?

 

July 2017

Südzucker: Set to be released into the wild….

COMPANIES

A major discussion topic at this year´s Südzucker AGM has been the end of the European sugar quota and beet price regulations, effective September 30, 2017. At this point in time, it is still unclear what is going to happen when the markets are liberalized and subject to (relatively) free competition. However, what became very apparent at the meeting is that Südzucker is well aligned to benefit from the new environment. Effectively, more than 40 percent of Group turnover have been subject to this regulation so far, restraining the company, but also the competition.

The company cautioned the expectations of the audience with reference to the expected future sugar price volatility. But it should be noted as well that as a consequence of the European regulation Südzucker controls substantial underutilized capacities it can set into full production without having to make substantial investments. The result is likely to be additional sugar going into exports, potentially up to a 20 percent or more production increase, which could generate an additional earnings impact.