Toshiba Receives Takeover Offer from CVC Capital Partners
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Japanese technology group Toshiba has received a takeover offer from private equity firm CVC Capital Partners. Toshiba Corp said it would obtain further details on the offer and examine it carefully, confirming a report in the Nikkei business daily. The latter had reported that CVC wanted to acquire Toshiba for a good 20 billion U.S. dollars and take it off the stock exchange. CVC's offer comes after some of Toshiba's shareholders have questioned the group's corporate governance in recent months. In March, shareholders approved a proposal from Effissimo Capital Management. The major shareholder had proposed appointing investigators to probe whether last year's shareholder meeting was conducted fairly. Foreign shareholders have played an increasingly important role at the Japanese conglomerate since Toshiba raised billions of dollars in 2017 to strengthen its balance sheet following the bankruptcy of its U.S. nuclear subsidiary Westinghouse Electric.
Positive signals from the U.S. helped Swiss equities to make gains on Tuesday. On the first trading day after the long Easter weekend, the SMI gained 0.6 percent to 11,183 points. Cyclicals such as ABB (+1.6%) or Lafargeholcim (+1.8%) benefited from this. Sika (+1.1%) was additionally supported by a price target increase by Jefferies analysts, who also confirmed their buy recommendation. Swatch (+1.4%) and Richemont (+2.8%) were also sought after. The luxury goods industry is also likely to see an upswing as pandemic-related restrictions are eased in more and more countries and travel as well as purchases in brick-and-mortar stores become possible again. Credit Suisse fell 0.4 percent after warning of losses. The bank expects a loss of 900 million francs in the first quarter on a pre-tax basis. Swisscom shares were down 5.1 percent, or 26.10 francs, largely due to the dividend discount of 22 francs.
European equity markets rose Tuesday, following Wall Street's lead the day before, as investors continue to anticipate a sharp rebound in the global economy in 2021 led by the United States. The Stoxx Europe 600 index gained 0.7% to 435.3 points. In Paris, the CAC 40 and the SBF 120 gained 0.5% each. In Frankfurt, the DAX 30 gained 0.7% and the FTSE gained 1.3% in London. The International Monetary Fund (IMF) raised its growth forecasts for the world economy on Tuesday, thanks in particular to a stronger than expected recovery in the United States. The IMF now expects global growth of 6% this year and 4.4% in 2022. Credit Suisse (-0.4% in Zurich) will book a charge of 4.4 billion Swiss francs (3.97 billion euros) in the first quarter, which will result in a pre-tax loss, having been affected by the fall of the American hedge fund Archegos Capital Management. The Swiss bank also said it was suspending its share buyback program and cutting its dividend. British oil and gas group BP (+3.5%) expects to have reached its $35 billion net debt target in the first quarter of 2021, thanks to disposal proceeds and favorable business trends. Air France-KLM (+1.6%) on Tuesday launched the first stage of its recapitalization by unveiling a €4 billion package of measures to strengthen the equity of its subsidiary Air France, including the French government's capital increase. In addition to the conversion of the 3 billion euro shareholder loan from the French government into supersubordinated debt securities, Air France-KLM plans to launch a capital increase of up to 1 billion euros in which the government will participate, while ensuring that its stake remains below 30% of the capital.
The New York Stock Exchange ended lower on Tuesday, following a hesitant session after new all-time highs reached the day before in reaction to encouraging economic indicators. At the close, the Dow Jones Industrial Average (DJIA) gave up 0.3% to 33,430.24 points. The broader S&P 500 Index lost 0.1% to 4,073.94 points. The Nasdaq Composite ended down a tiny 0.05 percent at 13,698.38 points. On Monday, the Dow Jones gained 1.1% to reach a new all-time high of 33,527.19 points. The S&P 500 index had also reached a new high, rising 1.4% to 4,077.91 points. U.S. pharmaceutical supplier Catalent is ramping up production of Moderna's Covid-19 vaccine (+2.9%) to ensure adequate supply for the U.S. as vaccination in the country ramps up. Catalent has reached an agreement with Moderna that will boost production this month to about 400 vials per minute, according to sources close to the matter. Illumina gained 8% as the genetic sequencing company said it expects revenue growth of at least 25% in its 2020-2021 fiscal year. U.S. automaker General Motors (+1.5%) announced Tuesday that it will build its Silverado electric SUV at its Factory Zero assembly site in Detroit, Michigan, alongside its GMC brand's electric Hummer. Amazon's market share (-0.1%) in online advertising rose from 7.8% in 2019 to 10.3% in the United States last year, according to a new report from research firm eMarketer. The group is expected to account for 10.7% of the U.S. online advertising market this year, rising to 11.9% in 2022 and 12.8% in 2023, eMarketer forecasts. Private equity firm KKR (stable) has closed a new $15 billion fund, KKR Asian Fund IV, to capitalize on growth in Asian economies.
Moderate losses on the Chinese stock exchanges and small increases on the other places characterize the picture on Wednesday on the stock markets in East Asia. For the first time after the Easter holidays is traded again in Hong Kong, where the HSI is down 0.7 percent. The Shanghai Composite comes back similarly strong. In Tokyo, the Nikkei index can recover somewhat by 0.3 percent to 29,776 points from its strong previous day minus. In Seoul (+0.3%), Samsung Electronics is slightly down against the broad market.
The U.S. 10-year yield lost nearly 6 basis points to 1.650% after tightening in response to strong U.S. employment figures released Friday.
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