Shellanoo disclosed amid great mystery and fanfare, that it was planning to raise 100 million shekels ($26.5 million) or more, in an initial public offering on the Tel Aviv Stock Exchange by October, as previously reported by ExitHub.
In a twist of fate. now the group’s investors, including billionaire Roman Abramovich, music luminaries including Tiesto, Avicii, will.i.am, David Guetta, Sebastian Ingrosso (of Swedish House Mafia), Nicki Minaj, Benny Andersson (of music group ABBA), plus super agents Ash Pournouri and Gee Roberson (previously chairman of Geffen Records and now part of Maverick Management), and other celebrities and friends such as supermodel Bar Refaeli and her brother Dor, who co-founded Blindspot, can tell O.D. Kobo –anonymously– what they really think, using Shellanoo’s Blindspot app.
Shellanoo said it currently manages “over $200 million in assets.” The IPO was supposed to be managed by Poalim IBI-Management & Underwriting Ltd (TASE: PIU), Israel’s leading local investment bank.
“In a one-line statement to the bourse, Shellanoo – which last month said it would raise at least 100 million shekels ($27 million) in a share offering – did not give a reason for the cancellation and did not provide further details,” Reuters reported.
“The main criticism Israeli financial journalists raised is that the (pre-revenue) company’s leading app – the messaging app Blindspot – has only 1.4M active users who are mainly teenagers in Brazil and dozens of potential apps that will be released later on,” wrote SeekingAlpha contributor, Lior Ronen, a financial analyst and CEO of Finro.
“These dozens of new apps bring more of the same to already saturated markets like online dating, job hunting, used goods sales, social media and much more. The potential of these apps to gain substantial market share in the markets they target is tiny, while using a freemium model and in-app purchase revenue streams, make the potential revenues growth highly unlikely,” he added.
Relying on Blindspot, “which tried penetrating a boiling market of messaging, the company is light years away” from even relatively small players like Telegram, with 100M monthly active users (MAU), and Kakaotalk, with 48M MAU (not to mention big players such as WhatsApp, Facebook, QQ Mobile, WeChat, Microsoft’s LinkedIn, Skype, Viber, Line, or Blackberry) noted Ronen, as illustrated in his chart below.
Shellanoo said it had closed a $35 million round of funding in April 2015, in conjunction with the launch of its music sharing app Music Messenger.
Last year Shellanoo’s backer Abramovich was said to have acquired for 100 million shekels The Varsano luxury boutique hotel property, nestled within the trendy historical neighborhood of Neve Tzedek in Tel Aviv, which he is expected to turn into his Israeli hôtel particulier. The hotel business has already been permanently closed. He’s also said to be periodically scouting for new high-tech investment opportunities in Israel.
[caption id="attachment_6155" align="aligncenter" width="748"] The Roman Abramovich Hôtel Particulier (formerly Varsano) in Neve Tzedek, Tel Aviv.[/caption]
Shellanoo is the brainchild of Oded “O.D.” Kobo, a serial Israeli Internet entrepreneur born in Hong Kong. He started his IT career at the age of 20 by developing patented technology for the lottery industry. He later moved back to Asia to establish IT outsourcing facilities. He is a co-founder of Chinese Internet companies KGIM, SinoSheen and Koolanoo Group. KGIM, a holding group of multiple Internet companies, and a seed investment group once partnered with the Prime Minister of Qatar HH Al Thani, was later sold to East River Capital for $80 million. In 2012 he founded social media app Pheed, which was sold for $40 million in 2014 to Mobli Media, a company controlled by Mexican tycoon Carlos Slim. Kobo is a former board member of Camden Market Holdings (LSE: MKT), a real estate conglomerate based in London, controlled Israeli property tycoon and technology entrepreneur Teddy Sagi.
In December 2015, Shellanoo launched Blindspot, a new anonymous messaging app that gives people the opportunity to express their true feelings, without revealing their identity – unless they choose to.
“Blindspot is definitely one of our portfolio’s liveliest projects,” said O.D. Kobo, chairman of Shellanoo Group. The idea for Blindspot emerged from a 12-hour hackathon at Shellanoo’s headquarters in Israel. “When you remove the barrier of identity between people things start to get interesting,” says Kobo.
Blindspot is perfect for flirting or chatting. Users can message anyone in their contact list for one-to-one communication, sending text, images, voice-notes and video. Perhaps it’s the loud, cartoon-style design, the game-like interface, or simply the ability to message people anonymously. Whatever it is, Blindspot opens up a whole new world of communications.
Message recipients can easily block other users and can ask senders to reveal their identity at any time. Any user that is blocked by three people is removed from the app. Any misuse can be raised directly with Blindspot.
“What would you say to people you know if you were anonymous?” ask Dor Refaeli and Lee Greenberg, co-founders of Blindspot. “Most users want to flirt, play jokes on friends or share secretive information they would otherwise be scared to reveal. There’s so much fake comment on social media – it can be like an airbrushed version of life. We want people to have fun, and most of all we want people to be real with one another.”
Dor Refaeli (above, L) is the younger brother of Israel’s international supermodel Bar Refaeli (above, R). Funding terms and the equity share split between Shellanoo and Blindspot’s founders Refaeli and Greenberg were not disclosed.
(Upper) Photo: O.D. Kobo and his wife Etty (Instagram/Walla).]]>
American Finance Trust Inc. (AFIN) and American Realty Capital – Retail Centers of America Inc. (RCA), both publicly registered, non-traded real estate investment trusts (REITs) controlled by real estate powerhouse AR Capital, also known as AR Global, co-founded and led by Nicholas S. Schorsch and William M. Kahane, said they agreed to merge. The deal is valued at $1.4 billion, payable in a combination of AFIN common shares and cash, plus the assumption of certain debt.
The scandal-plagued real estate group has been seeking an exit, including a sale or consolidation of over half a dozen of its REITs since last year.
RCA is a REIT focused on the acquisition of core retail properties, with an emphasis on multi-tenant power and lifestyle centers across the United States. AFIN is a REIT focused on acquiring a diversified portfolio of commercial properties, with an emphasis on single tenant buildings with net-leases across the United States.
The deal is said to create a diversified REIT with a retail focus, with an enterprise value of $3.9 billion. It would own 494 properties, comprising 20.8 million rentable square feet of single-tenant net lease, power center, and lifestyle center assets, and would increase RCA’s weighted average remaining lease term from 5.3 years to 8.0 years for the combined company.
“We are pleased to announce today’s transaction which will bring together two high quality real estate portfolios and will create a best-in-class diversified REIT with a retail focus.”
Last month, another AR Capital affiliate, New York REIT Inc. (NYSE: NYRT), cancelled a previously announced merger with The JGB Companies to create an $8.4 billion NYC-DC REIT colossus. NYRT said it will sell off its individual assets and distribute the proceeds to shareholders.
The move comes a few months after affiliates American Realty Capital Healthcare Trust III Inc., and Healthcare Trust Inc., formerly operating as American Realty Capital Healthcare Trust II Inc., also started seeking strategic alternatives, including a sale, in the midst of a crowded field of REITs being put up for sale and exploring strategic options.
Other competing REITs recently being shopped include American Farmland Company (NYSE MKT: AFCO), AdCare Health Systems Inc. (NYSE MKT: ADK), KBS Legacy Partners Apartment REIT (non-traded), KBS Strategic Opportunity REIT (non-traded), Stratus Properties Inc. (NASDAQ: STRS), and InvenTrust Properties Corp. (non-traded, formerly Inland American), which announced the spin-off of its Highlands REIT Inc. earlier this year.
—Michael Weil, Chief Executive Officer of AR Capital/AR Global, AFIN, and RCA.
Both AFIN and RCA are advised and directly or indirectly owned and controlled by AR Capital LLC, AR Global, and AR Global Investments LLC (the successor business to AR Capital LLC, operating as AR Global), all of which, in addition to NYRT and the Healthcare Trusts, share certain executive officers and directors, as well as the same office space at 405 Park Avenue in Manhattan.
AR Capital, formerly operating as American Realty Capital, was co-founded in 2006 by Nicholas S. Schorsch and William M. Kahane. AR Global Investments LLC operates as a subsidiary of AR Capital LLC, a full service investment management firm providing advisory services to retail and institutional investors.
AR Capital’s AR Global is one of the largest alternative asset managers in the world, with over $18 billion of real estate and loans under management. AR Global’s investment programs include net leased properties in the U.S. and Europe, and domestic strategies focused on healthcare real estate, hotels, retail shopping centers, and New York City office buildings, as well as both real estate loans and corporate credit.
On November 9, 2015, private equity giant Apollo Global Management, LLC (NYSE: APO) and AR Capital, LLC announced that they have mutually agreed to terminate a planned transaction pursuant to which Apollo would have purchased for $378 million a controlling interest in newly formed AR Global Investments LLC, owning a majority of AR Capital’s asset management business.
A week later, on November 16, 2015, AR Capital announced the suspension and acceptance of new subscriptions to certain of its current investment programs effective December 31, 2015, “as a result of regulatory and market uncertainty.”
“Until there is greater clarity, we have decided to sit this one out,” said Kahane at the time, adding, “we do not intend to register any new product offerings nor pursue any of our existing offerings after December 31, 2015. Naturally, as the government’s position becomes clearer, we may reconsider our present posture on these issues.”
AR Capital’s decision came within days after the state of Massachusetts charged Realty Capital Securities (RCS) with fraudulently securing proxy votes to support real estate deals sponsored by AR Capital, which is owned by Schorsch and Kahane.]]>
Forbes. Aside from PhilWeb, he is the chairman and CEO of real estate company Alphaland (ALPHA) and mining company Atok-Big Wedge Co (AB), and a director of San Miguel Corp. (SMC), PAL Holdings (PAL) and Petron Corp (PCOR). He’s also the chairman of Alphaland Balesin Island Club (ABICI).
In Hong Kong, he’s a director of Shangri-La Asia and deputy chairman of the South China Morning Post, both listed on the Hong Kong Stock Exchange. He is also a director of UK-based Forum Energy PLC. His other past and present major holdings include Brixton Energy & Mining, Philex Petroleum, Philex Gold Holdings, Philex Gold Philippines, Silangan Mindanao Exploration Co., Silangan Mindanao Mining Co., and Petroenergy Resources.
Since June 30, when they closed at P24.40, PhilWeb shares started plunging after Duterte ordered a stop to online gambling at his first cabinet meeting. The company’s shares closed at P6.72 on September 5, after the announcement of Ongpin’s official divestment plans and temporary departure from the Philippines.
PhilWeb, originally known as South Seas Oil and Mineral Exploration Co. Inc. when it was founded in 1969, was renamed as South Seas Natural Resources Inc. in 1984. In 2000, it changed its business focus to become an Internet company and changed its name to PhilWeb.Com Inc., and was subsequently renamed as PhilWeb Corp. in 2002.
In 2003, the company received a license from the Philippine Amusement and Gaming Corporation (PAGCOR) to launch e-Games Stations consisting of Internet cafes exclusively dedicated to casino games, which become its primary business. With PhilWeb’s technology patrons can choose from more than 300 casino games, including baccarat, blackjack, various slot machine games, video poker and sports-betting.
PhilWeb’s subsidiaries include BigGame Inc., e-Magine Gaming Corp., PhilWeb Asia-Pacific Corp., PhilWeb (Cambodia) Ltd., and Guam Sweepstakes Corp., among others.
There are reportedly 268 operating e-Games cafes across the Philippines, the majority of which are owned and managed by independent operators.
“After having resigned as chairman of PhilWeb, and after having made several offers to PAGCOR, all of which have been either rejected or ignored, it has become obvious to me that, while I remain a shareholder of PhilWeb, there is no chance that PhilWeb will be allowed any favorable reception on any proposal to PAGCOR,” said Ongpin. “Regrettably, it appears that I have no other choice but to totally exit from the company for it to have a chance to survive.”
ONLINE GAMBLING AND GAMING M&A ACTIVITY
The move comes a few months after Montreal, Canada-based Amaya Inc. (NASDAQ: AYA; TSX: AYA), the world’s biggest publicly listed online gambling company and owner of PokerStars, said it hired Barclays to explore a sale, as its chairman and CEO David Baazov, considered the “king of online gambling,” was forced to resign amid accusations of insider trading.
Three months ago, private equity firm CVC Capital Partners acquired Italian gaming and payments operator Sisal Group SpA from private equity firms Apax Partners, Permira and Clessidra for €1 billion.
Earlier this year, CVC Capital acquired a majority stake in German gaming company Tipico for close to €1.5 billion ($1.68 billion). In December 2014, CVC acquired Sky Betting and Gaming for £800 million, consisting of five core brands Sky Bet (sports betting), Sky Vegas (online in-browser casino), Sky Casino (premium online casino, live table games), Sky Poker (online poker) and Sky Bingo (online bingo). CVC also made previous investments in British sports betting operator William Hill (2002 IPO exit, at 314% ROI) and the IG Group, a digital trading and betting platform.
“Sports betting contributed substantially to Sisal’s revenues (in 2015), with the Italian market growing by 24.7 percent compared with 2014,” said gaming industry analyst Joss Wood. “The March (2016) revenue figures issued by regulator AAMS show Sisal ranked fourth for online sports betting with monthly revenue of €23.4 million ($26.8 million).”
“Gaming companies with a larger online presence are likely to see higher revenue and EBITDA growth over the next 12-18 months than those more focused on traditional land-based business, as the gradual shift online continues, mobile phone and tablet penetration rises, and fast-growing demand for online games increases,” said Moody’s vice president and senior analyst, Donatella Maso.
UK-based William Hill Plc has the biggest online exposure by revenue, while pure online operator Sky Bet (Sky Betting & Gaming) has the most significant presence by percentage of total revenue. Conversely, Ladbrokes Plc is one of the largest gaming companies in the UK but its digital division still lags its peers and it reported negative EBIT in 2015, according to Moody’s.
While SNAI SpA’s revenues have surpassed Sisal’s following its acquisition of Cogemat SpA and it has gained leadership positions in retail sport and horse betting, “Sisal will remain more profitable mainly due to its more favorable product mix,” Maso said.
SNAI is Italy’s second-largest gaming company after International Game Technology. SNAI is also the leader in sports and horse betting and the third-largest concessionaire of amusement with prize machines and the second-largest of video lottery terminals by turnover.
The online sector’s fundamentals are expected to remain positive for at least the next two to three years, which will support high single-digit growth rates despite regulatory and tax pressures.
Potential legalization of online gambling or further liberalization of the rules that already govern it in some European markets and US states offer growth opportunities for large online gaming operators, which could offset uncertainty in regulatory regimes.
Europe, in particular, continues to see the creation of an increasing number of new regimes that permit licensed and regulated betting, notably through interactive platforms, and which is gradually removing the once dominant monopolistic approach favoring the lottery sector, according to the European Gaming & Betting Association (EGBA).
The continuing growth of professional sport and associated betting markets on a global scale, as a direct result of consumer demand driven by technological advances, has provided both business sectors with clear fiscal benefits and further strengthened their symbiotic relationship, says the EGBA. This has manifested itself in a range of mutually beneficial commercial ventures through direct sponsorship of sporting events, sportspeople and clubs, along with numerous indirect benefits to both products from media advertising deals around sport (where legislative frameworks permit).
In recent years, online gaming markets — including sports betting, poker, casino, bingo, lottery — have grown rapidly to €36.9 billion in 2014 from approximately €6.6 billion in 2003, and are expected to grow to approximately €42.8 billion by the end of 2018, says Moody’s.
The online gambling sector offers growth opportunities for European gaming companies in 2016-17 versus traditional brick-and-mortar operations, despite likely pressure from increasing taxes and regulation, says Moody’s Investors Service.
The recent wave of M&A is likely to continue as operators look to become bigger and more diversified to offset rising costs and compete more effectively. Operators will also increasingly look to develop technology platforms in-house, such as William Hill’s Project Trafalgar, to limit their reliance on third-party providers and reduce customer acquisition and marketing costs, Moody’s added.
Photo: Roberto V. Ongpin, Chairman of Alphaland and Atok-Big Wedge; Former Chairman of PhilWeb Corp.]]>
Royal Dutch Shell plc (NYSE: RDS-A) said it has agreed to sell 100 percent of its record title interest in four Gulf of Mexico Green Canyon blocks, referred to as the Brutus/Glider assets, to privately-held startup EnVen Energy Ventures LLC, for $425 million in cash. The deal is expected to close in October.
The Brutus/Glider assets include the Brutus Tension Leg Platform (TLP), the Glider subsea production system, and the oil and gas lateral pipelines used to evacuate the production from the TLP. The Brutus/Glider assets have a combined current production estimate of approximately 25,000 barrels of oil equivalent per day (boe/d).
The move comes three months after Shell temporarily shut in all wells flowing to its Brutus platform after a release of oil from a subsea infrastructure at Glider field was detected. “Shell estimates that 2100 barrels of oil were released. There are no drilling activities at Brutus, and this is not a well control incident,” the company said in May.
BSEE Responds to Shell Gulf of Mexico Brutus/Glider Oil Release
The U.S. Bureau of Safety and Environmental Enforcement (BSEE) said it was “responding to a two mile by thirteen mile sheen in the Gulf of Mexico, approximately 97 miles south of Port Fourchon, Lousiana,” after Shell Offshore reported that “a sheen was observed in the area of its Glider Field, a group of four subsea wells located in Green Canyon Block 248.”
“According to the Coast Guard, the skimming has been concluded due to no visible recoverable oil being found by either aerial or surface assets,” said Offshore Energy Today. “The joint response mobilized more than 150 people, five on-water recovery vessels for skimming, and aerial assets to respond to the sheen.”
BSEE Gulf of Mexico Regional Director Lars Herbst formally established an Investigative Panel on May 16. The seven-member panel is comprised of BSEE engineers, inspectors, and investigators. The panel will conduct a thorough investigation of the incident in order to identify the causes and any contributing issues that led to the release. The panel will make recommendations in its final report on how to strengthen existing safety and environmental management systems, and identify any reforms to existing regulations that may be needed. The focus of these recommendations is to prevent a similar incident from occurring.
“BSEE will not approve production restart of these subsea fields until all safety concerns and applicable regulations have been met,” it emphasized in May. “BSEE is committed to ensuring environmentally responsible oil and gas operations on the Outer Continental Shelf,” noted BSEE Director Brian Salerno.
The oil release came “nearly a month after the BSEE released new rules aimed at preventing loss of life and environmental harm resulting from a potential failure at an offshore well,” said UPI, adding that, “those new rules came almost six years to the day after the disaster at the Deepwater Horizon rig in the Gulf of Mexico.”
EnVen Energy Ventures, formerly known as Pisces Energy LLC, is led by Steven A. Weyel, founder, chairman and CEO. He’s an experienced operator of major oil producing basins around the world, with 35 years of global experience as an entrepreneur, executive officer and director of public and private companies. He previously served as COO at Energy XXI (Bermuda) Ltd., which he co-founded, and he also co-founded EnerVen LLC in 2001, serving as its COO and president until mid-2005. He began his career with Baker Hughes in 1976 where he rotated through a variety of assignments. EnVen was founded in 2008 and is based in Houston, Texas. The company’s affiliate EnVen Energy Corp. raised $24.5 million through a private placement managed by FBR Capital Markets & Co., according to a Form D filed with the SEC in November 2015.
Royal Dutch Shell was formed in 1907, although its history dates back to the early 19th century. The company is headquartered in The Hague, the Netherlands. The parent company of the Shell group is Royal Dutch Shell plc, which is incorporated in England and Wales.
Shell is a leading, global deep-water operator, with a strong development pipeline and production on-stream in the Gulf of Mexico, Brazil, Nigeria, and Malaysia as well as exploration and appraisal opportunities. Shell currently produces approximately 600,000 boe/d and plans to increase production to more than 900,000 boe/d by the early 2020s from already discovered, established reservoirs.
“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,” said Shell chief executive Ben van Beurden. “Shell is firmly on track to deliver a $40 billion underlying operating cost run rate at the end of 2016,” he added.
Shell’s second quarter 2016 CCS earnings attributable to shareholders were $0.2 billion compared with $3.4 billion for the same quarter a year ago, the company reported. BG Group plc has been consolidated within Shell’s results, following its acquisition on February 15, 2016. Second quarter 2016 CCS earnings attributable to shareholders excluding identified items were $1.0 billion compared with $3.8 billion for the second quarter 2015, a decrease of 72%.
Compared with the second quarter 2015, CCS earnings attributable to shareholders excluding identified items were impacted by the decline in oil, gas and LNG prices, the depreciation step-up resulting from the BG acquisition, weaker refining industry conditions, and increased taxation. Earnings benefited from increased production volumes from BG assets.
Shell Gulf of Mexico Green Canyon Oil Reserve, Brutus/Glider Location Map (Courtesy: Bureau of Safety and Environmental Enforcement – BSEE).]]>