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Argentine Tycoon Elsztain in Takeover Battle for British Falkland Islands Conglomerate

Argentine Tycoon Elsztain in Takeover Battle for British Falkland Islands Conglomerate

FIH is quoted on London’s AIM Alternative Investment Market and incorporated in the United Kingdom, with operations in the Falkland Islands and the UK. Its business activities in the Falklands are conducted by the Falkland Islands Company (FIC), established by Royal Charter in 1852. FIC’s activities include retailing, property, insurance, hotels, shipping and fishing agency services. It is the largest retailer in Falklands with a 60% market share. FIC owns nearly 400 acres of land, with the potential for residential or commercial development. The company also owns 40 residential properties which are available to rent to individuals or business users such as Oil Services companies, Ministry of Defence contractors, and fishing companies. In the UK the group operates a long established passenger ferry service across the mouth of Portsmouth harbour, Portsmouth Harbour Ferry Company (PHFC). In 2008 the group acquired MOMART, a London-based market leader in the handling and storage of fine art and antiquities. Dolphin, which controls a 2.54 percent stake in FIH, said it has written to the board of FIH to request information to enable it to evaluate making a cash buyout offer, at a significant premium to a takeover bid by Staunton Holdings Limited of 300 pence per share, reflecting a total price of £37 million. Staunton’s current bid represents a premium of approximately 27.39 percent to the closing price of 235.5 pence on February 9, 2017, the day prior to its offer. Edmund Rowland, the executive chairman of FIH, is the son of controversial British Conservative Party donor David Rowland. Guernsey, Channel Islands-based Staunton is controlled by the family’s Rowland Purpose Trust 2001. On Friday, March 17, FIH shares closed down 1.53% at 322.50 pence, bringing its total market capitalization to roughly £40 million. Dolphin is said to be seeking to engage in a friendly buyout, with London-based stockbroker Arden Partners plc acting as its financial adviser. However, Staunton and its Blackfish Capital Management affiliate, which together own a 25 percent stake in FIH and are its largest shareholder, said that “it has not entered, and does not wish to enter, into any dialogue with Dolphin in relation to a possible offer.” In addition, Staunton lowered the acceptance condition of its offer from a minimum of 90 percent of FIH shareholders’ approval, to 50 percent. FIH operations in the Falkland Islands date back more than 160 years, when the Falkland Islands Company was granted its Royal Charter. From its early days as a major landowner and sheep farmer, controlling almost half the land area of the islands, the company has steadily widened its activities to provide a broad range of essential services. The company’s main areas of activity embrace retailing (including food, clothing, electrical goods, home furnishings, gifts and DIY), residential and commercial property, the sale and hire of 4×4 vehicles, travel services including flight bookings, airport transfers and luxury coach and walking tours for tourists, insurance, agency services for cruise ships and fishing vessels, and the provision of freight and shipping services to and from the Islands. Dolphin’s Elsztain, who stands atop one of the largest business empires in Latin America, is chairman of Argentina´s largest real estate company IRSA Inversiones y Representaciones SA (ADR)(NYSE: IRS); Argentina´s largest shopping mall owner and developer IRSA Propiedades Comerciales SA (formerly Alto Palermo SA) (NASDAQ: IRCP); Argentina’s leading public-private mortgage bank Banco Hipotecario SA (BCBA: BHIP); leading agri-business company CRESUD (NASDAQ: CRESY); BrasilAgro Sp (ADR)(NYSE: LND; SAO: AGRO3); BACS Banco de Crédito & Securitización SA; and Austral Gold (ASX: AGD) an Australian precious metals mining and exploration company with a portfolio of assets in South America, among others. In addition, Elsztain is the chairman of IDB Group, one of Israel’s preeminent business groups, holding leading corporations in key business sectors alongside an ever-growing, global presence through diverse portfolio companies and joint ventures. Photo: Eduardo Elsztain, Chairman of IRSA, CRESUD, BrasilAgro, Banco Hipotecario and IDB Group.]]>

Brookfield $BAM Buying $5.2B Petrobras Pipeline, @Shell Exiting Argentine Gas Stations

Brookfield $BAM Buying $5.2B Petrobras Pipeline, @Shell Exiting Argentine Gas Stations

Petrobras (NYSE: PBR) (BM&F Bovespa: PETR3, PETR4) agreed to sell its 1,560 miles natural gas pipeline Nova Transportadora do Sudeste for $5.2 billion, to a consortium led by Canada’s private equity giant Brookfield Asset Management Inc. (NYSE: BAM) (TSX: BAM.A), with the participation of British Columbia’s pension fund, China’s CIC, Singapore’s sovereign wealth fund GIC, and private equity firm First Reserve. The deal is subject to approval by the board of directors of Petrobras and Brazilian government authorities. So far this year, Petrobras had sold $3.9 billion in assets, of a total $15.1 billion target for divestments expected by the end of this year. Downsizing efforts have accelerated since May, when Pedro Parente was appointed as CEO of Petrobras, which is burdened with over $120 million in debt, the largest of any global oil firm. Brookfield, Canada’s largest private equity and alternative asset manager, has roughly $225 billion in assets under management. The firm invests in the property, power, and infrastructure sectors. Brookfield is based in Toronto, Canada with additional offices across North America, South America, Europe, Asia, and Australia. Brookfield, formerly known as Brascan Corp, was founded in 1899 as a builder and operator of electricity and transport infrastructure in Brazil, reflected in its earlier name which combined “Brasil” and Canada. The move would follow Brookfield’s agreement last month, to buy Brazilian engineering conglomerate Grupo Odebrecht’s 70 percent stake in water and sewage group Odebrecht Ambiental for $1.65 billion. Odebrecht Group, Brazil’s fourth largest private group, is a global conglomerate consisting of diversified businesses in the fields of engineering, construction, chemicals and petrochemicals. In June 2015, Brazilian authorities arrested the group’s chief executive Marcelo Odebrecht, in connection with an ongoing probe into bribes paid by Petrobras, which has seen Brazil’s former President Dilma Rouseff recently impeached, and her predecessor Luiz Inácio Lula da Silva, embroiled in the scandal. In March 2016, Marcelo Odebrecht was slapped with a 19-year prison sentence, for paying over $30 million in bribes to executives of Petrobras, in exchange for contracts and influence. In January, Brookfield acquired a 57.6 percent stake in power generator Isagen SA (Bolsa Colomb: ISAGEN) from the Government of Colombia for $1.99-billion, the largest privatization deal in the country in nearly a decade. WELL-OILED INTER-AMERICAN CROSS-BORDER ENERGY DEALS In July, Petrobras agreed to sell a 66% stake in its offshore exploration block BM-S-8 license in the Santos basin, to Norway’s Statoil ASA, for $2.5 billion. The divestiture included a substantial part of the Carcara oil discovery, said to be one of the largest in the world in recent years. Meanwhile, last week Anglo-Dutch global oil and gas operator Royal Dutch Shell plc (NYSE/LSE: RDS-A) chief executive Ben van Beurden indicated at a conference in New York that the company is in the middle of a strategic review of its downstream assets in Argentina, as part of a global $30 billion divestment program. Shell Argentina subsequently clarified in a statement that “in response to the global circumstances of our industry and the objectives behind our combination with BG, we are conducting a strategic review only of our downstream business and assets in the country,” which include its Dock Sud refinery in Buenos Aires, retail gas stations, chemicals, propane gas, aviation and maritime fuels, and lubricants. Shell’s 676 gas stations in Argentina, bring its market share to 19 percent, the second largest after state-owned YPF SA, which has 1430 stations with a 40 percent market share. argentina_gas_stations_mkt-share_sept-2016 “Upstream assets aren’t included in the review as shale investments are a priority for the company. Shell does not want to lose its presence in Argentina, and has a strong commitment to the country,” added Joel Glotzer, a Shell spokesperson in Argentina. Juan Jose Aranguren, Shell’s previous CEO in Argentina for 12 years and an energy industry veteran with nearly four decades of experience, was one of the foremost business critics of former President Christina Kirchner. He was a key adviser of current President Mauricio Macri, and became Argentina’s new Energy Minister, now in the public eye due to electricity and gas rate hikes which the new administration is struggling to implement in the face of strong resistance. The appointment of Teófilo Lacroze as CEO of Shell in Argentina, replacing Aranguren in March, brought about a new era as the company is changing its global business strategy, in the midst of a new local ecosystem and more conducive dialogue and relationships with government authorities. “I see myself more in a scenario where the external relationship with the authorities involves greater dialogue and building the future, with more internal focus on developing the sector, both downstream (products leaving the refinery and reaching the final consumer) in which we want to grow above average, as well as upstream (required for crude exploration and extraction), to move from a pilot stage to production,” Lacroze said earlier this year. Two weeks ago, Marcelo Mindlin, controlling shareholder and president of Pampa Energia (NYSE: PAM), the largest integrated electricity company in Argentina, which bought 67.19 percent of Petrobras Argentina (PESA) in May for $892 million, became PESA’s president. Pampa’s acquisition of PESA included 269 gas stations, a refinery in Bahia Blanca, shares in Transportadora Gas del Sur (TGS), thermal and hydroelectric power plant Genelba Picún Pichi Leufu, several petrochemical plants in Bahia Blanca and Santa Fe, and a series of oil basins. Pampa also controls Transener, the largest network of high voltage transmission in Argentina, and Edenor, the largest electricity distributor in Argentina. Mindlin is a former founding partner of IRSA, and vice chairman of Cresud, APSA (formerly Alto Palermo SA), Dolphin Fund Management and Hoteles Argentinos. In 2012, through their Axion Energy unit, the Argentine Bulgheroni Group‘s Bridas Corp., a joint venture with China’s state owned enterprise CNOOC (China National Offshore Oil Corporation), acquired over 600 Esso service stations from Exxon Mobil, for $800 million. In 2011, Oil Combustibles, controlled by Cristóbal López, acquired a Petrobras refinery in Santa Fe, Argentina, togehgter with 365 gas stations for $110 million. Oil Combustibles is currently in the midst of insolvency procedures (“concurso de acreedores”). “Lower oil prices continue to be a significant challenge across the business, particularly in the Upstream. We are managing the company through the down-cycle by reducing costs, by delivering on lower and more predictable investment levels, executing our asset sales plans and starting up profitable new projects,” Shell’s van Beurden said in late July, after reporting that Shell Q2 earnings plunged 72 percent. At the end of August, after an oil spill in the Gulf of Mexico 97 miles south of Louisiana under investigsation by the U.S. Bureau of Safety and Environmental Enforcement, Shell agreed to sell four Green Canyon offshore blocks, referred to as the Brutus/Glider assets, to EnVen Energy Ventures LLC, for $425 million in cash. Two weeks ago, Compañía de Petróleos de Chile COPEC SA (SNSE: COPEC), one of the largest companies in Chile, agreed to acquire MAPCO Express Inc., with 348 convenience stores, from Delek US Holdings Inc. (NYSE: DK) for $535 million in cash. Delek US is a diversified downstream energy company with assets in petroleum refining, logistics and convenience store retailing. A week earlier, Canadian Alimentation Couche-Tard Inc. (TSX: ATD.A ATD.B), one of the world’s largest company-owned convenience store operators, agreed to acquire San Antonio, Texas-based CST Brands Inc. (NYSE: CST) for $4.4 billion. CST operates over 2,000 locations throughout the Southwestern United States with an important presence in Texas, Georgia, the U.S. Southeast Region, New York and Eastern Canada. CST also controls the general partner of CrossAmerica Partners (NYSE: CAPL), a gas distributor to more than 1,100 locations in the United States. In July, Dallas, Texas-based Alon USA Energy Inc. (NYSE: ALJ), an independent refiner and marketer of petroleum products, retained JPMorgan to explore strategic alternatives including a sale of the company or some of its assets. Alon is the largest 7-Eleven licensee in the United States and operates approximately 300 gas stations and convenience stores in Texas and New Mexico. Alon’s largest shareholder is Delek US Holdings Inc., with a stake of roughly 48% which it acquired from Israel’s Alon Group for $572 million in April 2015. In June, Canada’s largest retailer, Loblaw Cos. Ltd (TSX: L), said it is seeking to sell its “gas bar” operations for CAD $400 million (USD $308 million). Loblaw’s gas station network is one of the largest in Canada, consisting of 212 retail fuel sites with adjacent grocery stores. Photo: Argentine President Mauricio Macri with Marcelo Mindlin, President of Pampa Energy, at World Economic Forum in Davos, in January 2016.]]>

Argentine Tycoon Elsztain in Takeover Battle for British Falkland Islands Conglomerate

Cresud's $CRESY IDB Hires JPMorgan to Find Exit for Israeli Clal Insurance

Reuters is said to have invested nearly 2.5 billion shekels ($665 million) in IDB, acquired the heavily indebted IDB group from former Israeli tycoon Nochi Dankner when it was structured as a six-layer pyramid with one holding company controlling another and had 16 billion shekels in debt. IDB and Discount combined now reportedly have debt of 5.6 billion shekels. After Elsztain took effective control of IDBD in October 2015, his Buenos Aires-based leading agribusiness Cresud (NASDAQ: CRESY; BASE: CRES) started consolidating IDBD within its financial reports, as of its fiscal quarter ending December 31, 2015. Discount Investment Corp., founded in 1961, remains one of the largest and most prominent holding companies in Israel. It has holdings in companies that are market leaders in their specific fields, including Cellcom, the largest cellular operator in Israel (41.8%); Shufersal, the largest grocery retail chain in Israel (52.9%); Property and Building Corporation, one of the largest real-estate groups in Israel (76.5%); and Elron, a high-tech operating investment company (50.3%). In July 2016, China National Chemical Corp. (ChemChina), agreed to buy out IDB Holding Corp. subsidiary Koor’s remaining 40% stake in Tel Aviv-based Adama Holding Ltd., one of the world’s leading crop protection companies, for $1.4 billion, consisting of $230 million in cash and the assumption of $1.17 billion in debt. The deal valued Adama’s equity at $3.5 billion. Discount Investment Corp. said it would report a capital gain of 690 million shekels ($178.5 million) from the sale to ChemChina, a state-owned enterprise established through a reorganization and consolidation of China’s former Ministry of Chemical Industry Ministry subsidiary companies. With revenues of $45 billion in 2015, ChemChina is China’s largest chemical company. It has more than 140,000 employees, of which 48,000 are outside China. IDB is required to sell its stake in Clal to abide by Israeli regulatory requirements that prohibit holding companies from owning both financial and non-financial businesses. The latest move follows two failed attempts by IDB to sell its 55 percent stake in Clal, one of Israel’s biggest insurers, to Chinese investors. “We are spending a lot of money, time and effort to achieve … a sale,” Elsztain said at a news conference this week, to mark four years since he invested in IDB. “A forced sale will make a tremendous loss to shareholders,” he added, according to Reuters. IDB had an agreement with Israel’s capital markets and insurance regulator that if it did not sell Clal by early 2016, it would have to sell its majority stake in the company piece-by-piece, in tranches of up to 5 percent every four months. The matter is now pending a decision by the Tel Aviv District court. Delek Group (TASE: DLEKG; ADR: DGRLY), another Israeli conglomerate and Israel’s dominant energy company, also faced certain challenges trying to sell its majority stake in insurance company Phoenix Holdings Ltd (TASE: PHOE). However, last month Delek said it signed a binding agreement to sell its 52.3 percent stake in Phoenix to Chinese conglomerate Fujian Yango Group (SZSE: 671), for 1.95 billion shekels ($516 million) in cash. The deal is now subject to regulatory approval. Photo: Eduardo Elsztain, Chairman of IDB, Discount Investment Corp, IRSA, CRESUD, BrasilAgro and Banco Hipotecario.]]>

Argentine Tycoon Elsztain in Takeover Battle for British Falkland Islands Conglomerate

ChemChina Buys Out IDB's Final 40% Adama Stake for $1.4B, Boosting Elsztain Holdings

China National Chemical Corp. (ChemChina), agreed to acquire Koor’s remaining 40% stake in Tel Aviv-based Adama Holding Ltd., one of the world’s leading crop protection companies, for $1.4 billion, consisting of $230 million in cash and the assumption of $1.17 billion in debt. The deal values Adama’s equity at $3.5 billion. Discount Investment Corp. Ltd. (DIC) (TLV: DISI), the parent company of Koor, and a constituent of the TA-100 Index, said it would report a capital gain of 690 million shekels ($178.5 million) from the sale to ChemChina. Discount Investment shares jumped 22.55% closing at 10.90 shekels in Tel Aviv, in their biggest gain in years. Discount Investment Corporation Ltd. is a holding company based in Israel, controlled by IDB Holding Corp. Ltd., both of which are controlled by their chairman, Argentine tycoon Eduardo Elsztain. ChemChina, through its subsidiary China National Agrochemical Corp., had first acquired 60% of Adama from Koor for $2.4 billion, in October 2011. ChemChina is a state-owned enterprise established through a reorganization and consolidation of China’s former Ministry of Chemical Industry Ministry subsidiary companies. With revenues of $45 billion in 2015, ChemChina is China’s largest chemical company. It has more than 140,000 employees, of which 48,000 are outside China. The move comes a month after the China Securities Regulatory Commission (CSRC) published a proposed amendment to Chinese securities regulations, now allowing transactions in which a foreign entity may be combined with one that is publicly-traded in China. The deal paves the way for Adama’s contemplated combination with Sanonda, ChemChina’s smaller agrochemical production subsidiary publicly-traded on the Shenzhen Stock Exchange, through a reverse merger, with the combined company gaining access to China’s capital markets. Sanonda’s shares, which have been suspended from trading since the intended combination with Adama was first announced in August 2015, are expected to resume trading on August 4, 2016. Subject to receiving all required regulatory and corporate approvals, Adama’s combination with Sanonda is expected to be completed in the first half of 2017, resulting in a publicly-traded, fully integrated entity. “These recent developments enable Adama to move forward with the execution of its combination with Sanonda, which together with its rapidly progressing commercial and operational build-up in China, form a key step towards the realization of its China strategy,” said Adama’s spokesperson Nina Zoukelman. “Adama, which has delivered market-leading performance over the past few years, is now well poised to cement its unique strengths and create a leading, China-global crop protection company.” “Following the combination with Sanonda, the combined company will continue to be run by Adama’s global management team, with China becoming a significant geographical business cluster, and it will retain the Adama name and brand. The combined company will continue to be headquartered in Israel and remain committed to its Israeli and global business culture, as well as the continued growth of its Israeli operations. Adama’s bonds will continue to be publicly-traded on the Tel Aviv Stock Exchange,” Zoukelman added. Adama Agricultural Solutions Ltd. (formerly Makhteshim Agan Industries Ltd.) is an Israeli manufacturer and distributor of branded off-patent crop protection products including herbicides, insecticides and fungicides. The group has manufacturing facilities worldwide with key facilities in Neot Hovav, Beer Sheba, Ashdod and Brazil. In addition, the group has smaller plants in Colombia, Poland, Spain and Greece. With one of the most comprehensive and diversified portfolios of differentiated, high-quality products, Adama’s approximately 4,900 people reach farmers in over 100 countries across the globe, providing them with solutions to control weeds, insects and disease and improve their yields. The company was founded in 1945, when Zvi Zurr and Michael Pikarski established the Agan Cooperative for the development of chemical products. They were later joined by Israel Tamir and Eliyahu Teomim. In 1954 the cooperative was dismantled and incorporated as Agan Chemical Manufacturers for the development and production of herbicides. Zurr left Agan and relocated to the Negev where, in 1952, Makhteshim Chemical Works, producer and distributor of insecticides and fungicides, was established with funding from the Nir Company of the Histadrut Labor Federation. In 1973, Agan relocated once again to larger facilities in Ashdod, and established a partnership with Makhteshim for worldwide distribution of their products. In 1997, the two companies merged to form Makhteshim Agan Industries Ltd. Discount Investment Corporation Ltd. (TLV: DISI), founded in 1961, remains one of the largest and most prominent holding companies in Israel. DIC has holdings in companies that are market leaders in their specific fields, including Cellcom, the largest cellular operator in Israel (41.8%); Shufersal, the largest grocery retail chain in Israel (52.9%); Property and Building Corporation, one of the largest real-estate groups in Israel (76.5%); and Elron, a high-tech operating investment company (50.3%). IDB Group is one of Israel’s preeminent business groups, holding leading corporations in key business sectors alongside an ever-growing, global presence through diverse portfolio companies and joint ventures. IDB Development Corp. Ltd., founded in 1981, is the parent company through which IDB Holding Corp. steers IDB Group’s activities. The group’s main arms are its investment arm Discount Investment Corp. Ltd. (TLV: DISI), and its insurance and finance arm Clal Insurance Enterprises Holdings Ltd. In addition to IDB and Discount Investment Corp., Eduardo Elsztain is chairman of IRSA Inversiones y Representaciones SA (ADR)(NYSE: IRS), IRSA Propiedades Comerciales SA (formerly Alto Palermo SA) (NASDAQ: IRCP), Banco Hipotecario SA (BCBA: BHIP), CRESUD (NASDAQ: CRESY), BrasilAgro Sp (ADR)(NYSE: LND; SAO: AGRO3), BACS Banco de Crédito & Securitización SA, and Austral Gold (ASX: AGD) an Australian precious metals mining and exploration company with a portfolio of assets in South America, among others. IDB Holding Corp. was voluntarily delisted from the Tel Aviv Stock Exchange in August 2015. In October 2015 the group controlled by Eduardo Elsztain (IRSA, Dolphin Fund and IFISA) took effective control of IDB Development Corp. (IDBD), and as such CRESUD (NASDAQ: CRESY; BASE: CRES) started consolidating IDBD in its financial reports as of the quarter ending March 31, 2016. CRESUD’s shares closed up 3% on NASDAQ at $16.06 on Friday, prior to the Adama sale announcement today. This was the highest price CRESUD’s shares traded in five years, bringing the company’s market value to roughly $795 million. According to industry analysts the stock is “uptrending” with “very positive momentum,” and is said to have a price target of $20.15. CRESUD, based in Buenos Aires and founded in 1936, is a leading Argentine agricultural company engaged in the production of basic agricultural commodities with a growing presence in the Brazilian agricultural sector through its investment in BrasilAgro, as well as in other Latin American countries. Its business model focuses on the acquisition, development and exploitation of agricultural properties having attractive prospects for agricultural production and/or value appreciation, and the selective sale of such properties where appreciation has been realized. CRESUD is also engaged in the Argentine real estate business through its subsidiary IRSA, one of Argentina’s largest real estate companies. Photo: Eduardo Elsztain, Chairman of IDB, Discount Investment Corp, IRSA, CRESUD, BrasilAgro and Banco Hipotecario.]]>