AutoStore, Norway’s Biggest IPO in Two Decades, Valued at $12.4 Billion

SoftBank-backed AutoStore will be Norway’s most valuable new listing for two decades when it goes public on Euronext’s Oslo Stock Exchange later on Wednesday.

The company raised 2.7 billion crowns in cash from the issue of new shares, while existing owners such as Thomas H. Lee Partners, EQT and others sold stock worth 15.3 billion crowns.

Its share traded up 8.1% to 33.5 crowns at 07:12 GMT, a few minutes after trading started on the Oslo bourse.

“The money we get from the IPO will be used primarily to deleverage the debt to a level that is more normal for a public company,” CEO Karl Johan Lier told Reuters.

He plans to bring down the leverage ratio to around 2.5 from the current ratio of between 5 and 6.

Following the IPO, the free float of AutoStore shares will amount to about 17.4% of the overall equity.

Founded in 1996, AutoStore has 20,000 robots deployed across more than 35 countries to automate warehouses. The company, whose customers include ASDA, Gucci and Lufthansa, uses robots to store and retrieve products, allowing customers to store four times the inventory in the same space.

In April, Japan’s SoftBank bought a 40% stake in the Norwegian company for $2.8 billion, valuing AutoStore at about $7 billion at the time. SoftBank did not sell stock in the IPO.

“SoftBank is a very good partner, ready to help us drive more attention in the APAC region … they have a large network of companies that can potentially be AutoStore customers so we see a lot of potential with the relationship,” Lier said.

AutoStore is Norway’s most valuable new listing since the 2001 debut of Statoil, now known as Equinor, which was valued at 151 billion crowns at the time of its IPO.

Four cornerstone investors, Alecta Pensionsforsakring, FIL Investments, Mawer Investment Management and WCM Investment Management, had each committed to invest $200 million ahead of the IPO.

AutoStore reported net revenue of $182.1 million last year and expects revenue of about $300 million in 2021, rising to more than $500 million in 2022 with a project pipeline worth $3.4 billion across 2,000 projects.

Bankers from Carnegie, J.P Morgan, Morgan Stanley, ABG Sundal Collier, Citigroup, Jefferies, Mizuho, SpareBank 1 Markets and Moelis were involved in the deal.

For a look at all of today’s economic events, check out our economic calendar.

($1 = 8.3474 Norwegian crowns)

(Additional reporting by Gwladys Fouche in Oslo; editing by Richard Pullin, Stephen Coates and Louise Heavens)

Morrisons in Multi-billion Pound Bidding War: Shares Rocket to Five-year High

In 1956, William’s son, Ken Morrison, took over the operations of the small network of grocery stores that by that time bore the Morrisons name across the nearby Yorkshire towns, and it was his business acumen that took his father’s hard work into the massive empire that it is today.

For those who remember Morrisons’ foray out of Yorkshire which was greeted by amusing stereotype images of bags of coal for sale or a delicatessen counter that sold only pies when the first Morrisons supermarket that made its way south of Watford Gap Services on the M1 opened in Letchworth Garden City, it is no longer a laughing matter.

Morrisons is now the subject of a fierce bidding war as large institutions fight to buy it at multi-billion-pound sums.

Last week, it was assumed a done deal when the company came under acquisition talks from US private equity firm Clayton, Dubilier & Rice which wanted to buy Morrisons for a princely £5.5 billion, however since then, many more potential acquirers have got in on the action, resulting in an almost auction-like stand-off between potential investors.

Over the weekend, SoftBank-backed Fortress Investment struck a £6.3 billion deal to buy Morrisons, resulting in a massive rise in share price of over 28 points this morning to 266.8p. That’s an astronomical 11.23%.

It’s also a five-year high.

Confidence by investors has been massaged by Morrisons’ fortuitous position of being able to turn down massive offers as others materialize, and as a result, two weeks ago, the company’s share price rose by 35%, and has been steadily going up since.

Today’s rocketing value as a superior deal was sealed is further testimony to that.

As Omar has sung in 1993, It ain’t over till it’s over, and this is certainly the case today as Fortress’ bid of £6.3 billion is looking set to be challenged by another private equity firm, this time Apollo, which has admitted that it is considering a higher bid.

Apollo became the third potential suitor to declare an interest in Morrisons, announcing to the stock exchange on Monday that it was “in the preliminary stages of evaluating a possible offer for Morrisons”, in a move that could trump a £6.3bn bid by a consortium led by the US investment fund Fortress, the owner of Majestic Wine.

Whether any of these bids will result in a signed and sealed acquisition is yet to be known, particularly considering that Morrisons has a history of failed takeover bids behind it, however this time it is very different in that potential acquirers are literally tripping over themselves to outbid each other.

For example, in February 2014, it emerged that younger members of the founding Morrison family, who owned 10% of the company and who were thought to include two of Honorary President Sir Ken Morrison’s children, William Morrison Junior and Andrea Shelley, along with Sir Ken Morrison’s niece and her husband, Susan and Nigel Pritchard, had approached a number of private equity firms about taking the company private.

They were said to be extremely unhappy about the company’s disastrous financial performance, and the corporate strategy being undertaken by Dalton Philips.

At that time, straight-talking Yorkshireman Sir Ken Morrison blasted Dalton Philips and his new board of directors for destroying the company he inherited from his father. Sir Ken remarked disdainfully on Philips’s strategy to save the failing supermarket from the pressures of Aldi and other discounter stores.

Following on in this bold as brass tradition, Morrisons continued as a publicly listed firm and when the latest round of acquisition attempts approached it, the firm rejected Clayton, Dubilier and Rice’s £5.5 billion bid, deeming it to “significantly undervalue” the company, leading to a host of other bids that we now see.

Morrisons has a lot of freehold property, and some analysts think that private equity firms could be showing this much interest in Morrisons partly because of its property portfolio, which they would ‘sale and leaseback’ to generate cash to pay back to themselves.

With sensationalist mainstream media having touted that ‘Morrisons has been sold to Americans’ over the weekend, only to wake up this morning and find that it has not yet been sold and there are more bids, volatility is being stoked.

Will it sell and continue to show high share price rises, or will all talks fail and the share price go down to its relatively low level?

All currently hangs in the balance.


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Softbank CEO Son Says Share Buybacks Remain an Option for Firm

By Sam Nussey

“Buybacks are always on my mind as an important option but when and how big requires balanced thinking,” Son said at SoftBank’s annual shareholders’ meeting, adding that the group also needs to consider alternative uses of its capital.

Shares in SoftBank, which completed a record 2.5 trillion yen ($22.6 billion) buyback programme in May, have fallen amid weakness in tech stocks. That has helped widen its conglomerate discount – the gap between the value of its assets and share price – to about 50%.

SoftBank shares were flat at 7,699 yen on Wednesday. Further falls to 7,000-7,500 yen “may increase the expectation of a buyback”, Jefferies analyst Atul Goyal wrote in a note earlier this month.

Buybacks would increase 63-year-old Son’s own shareholding and make any management buyout easier to achieve.

“I believe our potential is much bigger than the discounted share price,” said Son, calling on shareholders to take a long-term view on the company.

The billionaire drew a historical comparison, saying that while credit is given to inventors like 18th century British steam engine pioneer James Watt, the capitalists that funded the railways are overlooked.

“Just as the Rothschilds were a central player in the industrial revolution, we’d like to become the key player in the information revolution,” said Son in reference to the prominent European banking dynasty.

He sought to put the focus on SoftBank’s role as a “capital provider for the information revolution” backing tech startups around the world but faced repeated questions at the meeting about its plans for repurchases.

“Aren’t you going to do more, are you still not doing it, how much will you buy – being so concerned about only this makes me a little sad,” Son said.

($1 = 110.7300 yen)

(Reporting by Sam Nussey; Editing by Muralikumar Anantharaman)

SoftBank Reports $37 Billion Vision Fund Profit on Coupang

Group net profit was 4.99 trillion yen in the year ended March. That compares with an 962 billion yen loss a year earlier after teetering tech bets

https://www.reuters.com/article/softbank-group-results-idINKBN22U0KM depressed the value of its portfolio.

Market enthusiasm for tech stocks drove the public listing of SoftBank-backed e-commerce firm Coupang and used-car trading platform Auto1 Group and the rising share price of ride-hailing firm Uber during the quarter.

Much of Vision Fund’s gain is on paper with the value of the portfolio locked up in the stock market amid concern over frothy valuations and a boom in special purpose acquisition vehicles (SPACs) which has drawn regulatory scrutiny.

($1 = 108.8600 yen)

(Reporting by Sam Nussey; Editing by Kim Coghill)

Softbank Leads $1 Billion Investment in Britain’s THG

The deal gives Softbank a stake of just under 10% in the Manchester-based company formerly known as The Hut Group, and an option to invest a further $1.6 billion into THG’s Ingenuity business.

THG owns beauty retailer Lookfantastic, makeup brand Illamasqua and beauty box service Glossybox, as well as supplements firm Myprotein.

The equity placing was priced at 596 pence per share and was oversubscribed, with THG raising a total of $320 million from other investors. THG shares soared as much as 14% at the open on Tuesday.

The cash injection comes less than a year after THG’s London listing and will be used to fund further acquisitions. The company also announced it agreed to buy Bentley Laboratories LLC, a New Jersey-based prestige beauty developer and manufacturer, for $255 million.

THG Ingenuity is THG’s technology arm that provides e-commerce services to other companies. If Softbank exercises its option to invest in that division, it would give the Japanese technology conglomerate a 19.9% interest in THG Ingenuity at a valuation of $6.3 billion.

The equity fundraising was led by Barclays, Citigroup, Goldman Sachs and Jefferies.

(Reporting by Nandakumar D in Bengaluru and Rachel Armstrong and Anna Irrera; Editing by Shailesh Kuber; Editing by Kim Coghill and Louise Heavens)

SoftBank, Franklin Invest $210 Million in OneTrust at Over $5 Billion Valuation

Including the investment, the total capital raised by OneTrust in it latest Series C round was $510 million. The firm, which counts Insight Partners, Coatue and TCV among its existing investors, has raised $920 million since it was founded.

Funding from SoftBank Vision Fund 2 opens up a strategic geographical position for OneTrust in Japan, the company said, as market demand accelerates in Asia Pacific and across the globe.

Japan’s SoftBank has made serial investments in multiple tech companies in the past few weeks, such as U.S. genetic diagnostics company Invitae Corp and Facebook-backed Indian social commerce startup Meesho.

On Wednesday, SoftBank made investments in Israeli cloud analytics firm Redis Labs and image recognition technology firm Trax.

Atlanta and London-based OneTrust’s platform, used by more than 8,000 companies to operationalize privacy, security and data governance, is backed by 140 patents and powered by OneTrust Athena, an artificial intelligence and robotic automation engine.

(Reporting by Sohini Podder in Bengaluru; Editing by Shinjini Ganguli)

SoftBank to Lead Nearly $1.2 Billion Investment in Diagnostics Firm Invitae

It said the investment, to be used for its growth initiatives, will be in convertible senior notes, which will bear 1.5% interest per year.

The company said the notes will have an initial conversion price of $43.18 per share of its common stock, representing a premium of 10.2% to Invitae’s closing price on Friday.

Earlier this year, SoftBank invested $900 million in gene sequencing firm Pacific Biosciences of California Inc.

San Francisco-based Invitae offers genetic testing services for a range of diseases, including skin and eye conditions, cancers as well as reproductive health in and outside the United States.

Shares of the company, which started operations in 2010, have more than tripled in the past twelve months, giving it a market valuation of $7.7 billion.

J. Wood Capital Advisors LLC and Perella Weinberg Partners LP were financial advisers to Invitae on the transaction.

(Reporting by Amruta Khandekar in Bengaluru; Editing by Shinjini Ganguli)

Nvidia Shares Jump 6% on Deal with SoftBank to Buy UK Chipmaker Arm; Target Price $600

Nvidia Corp, an American multinational technology company, announced to acquire UK-based chip designer Arm Limited from SoftBank in a transaction valued at $40 billion, sending its shares up about 6% in pre-market trading on Monday.

Under the terms of the transaction, NVIDIA will pay to SoftBank a total of $21.5 billion in NVIDIA common stock and $12 billion in cash, which includes $2 billion payable at signing. The number of NVIDIA shares to be issued at closing is 44.3 million, determined using the average closing price of NVIDIA common stock for the last 30 trading days, the company said.

Additionally, SoftBank may receive up to $5 billion in cash or common stock under an earn-out construct, subject to satisfaction of specific financial performance targets by Arm. NVIDIA will also issue $1.5 billion in equity to Arm employees.

SoftBank will remain committed to Arm’s long-term success through its ownership stake in NVIDIA, expected to be under 10%.

Nvidia’s shares rose about 6% to $514 in pre-market trading on Monday; the stock is up over 100% so far this year. Also, the SoftBank ended 8.96% higher at JPY 6,385 in Tokyo.

Executive comments

“AI is the most powerful technology force of our time and has launched a new wave of computing,” said Jensen Huang, founder and CEO of NVIDIA.

“In the years ahead, trillions of computers running AI will create a new internet-of-things that is thousands of times larger than today’s internet-of-people. Our combination will create a company fabulously positioned for the age of AI.”

Nvidia stock forecast

Twenty-nine analysts forecast the average price in 12 months at $546.00 with a high forecast of $650.00 and a low forecast of $260.00. The average price target represents a 12.21% increase from the last price of $486.58. From those 29 equity analysts, 24 rated “Buy”, four rated “Hold” and one rated “Sell”, according to Tipranks.

Nvidia had its price target raised by investment analysts at Royal Bank of Canada to $610 from $528. The brokerage currently has an “outperform” rating on the computer hardware maker’s stock. Jefferies raised their target price to $680 from $570.

Other equity analysts also recently updated their stock outlook. At last, Rosenblatt Securities increased their price target to $600 from $500 and gave the stock a “buy” rating. BofA Global Research upped their price objective to $650 from $600, UBS raised target price to $625 from $528, Benchmark increased their target price to $600 from $540, Goldman Sachs raised their target price to $585 from $528 and Mizuho upped their target price to $575 from $520.

We think it is good to buy at the current level and target $600 as 100-day Moving Average and 100-200-day MACD Oscillator signal a strong buying opportunity.

Analyst views

“We view the deal as transformative, positioning Nvidia (NVDA) not just to capture 80% of the ecosystem value in the data center, but also unify the compute ecosystem between the edge and data center. We think the merged company has a 5-year EPS power of $50, and increase our price target to $680, and bull-case to $1,000,” said Mark Lipacis, equity analyst at Jefferies.

“We model Nvidia Data Center processor revenues of $34 billion in 2025, and Data Center Ecosystem (software) of an additional $34 billion,” Lipacis added.

Upside and Downside risks

Upside: 1) Nvidia (NVDA) successfully acquires and integrates ARM expanding its data center TAM and controlling 80% of the DC ecosystem and unifying compute ecosystem from the edge to data centers. 2) Accelerated growth in Deep Learning applications across multiple end markets. 3) Conversational AI demand increases at a faster than expected rate, driving demand for NVDA solutions in the data center. 4) Accelerated growth from Automotive with proliferation of autonomous cars GPU upgrades and incremental demand driven by virtual reality applications. 5) Five-year Non-GAAP EPS: $50; P/E: 20x; Price target: $1000, highlighted by Jefferies.

Downside: 1) NVDA ARM deal is blocked by regulatory authorities. 2) COVID-19 outbreak extends beyond 2020 causing greater than expected demand destruction and supply chain constraints. 3) Slowing Datacenter capex spending. 4) Slower than expected sales of Automotive products. 5) Adoption challenges with GPU Accelerators in the Data Center. 6) Emerging competitive threats from INTC, AMD and other startups. 7) C2021E Non-GAAP EPS: $9; P/E: 44x; Price target: $400.

Check out FX Empire’s earnings calendar

Deutsche Telekom in Talks to Buy Out Shares in T-Mobile From Softbank

Deutsche Telekom, by revenue the largest telecommunications provider in Europe, announced that it is in talks to acquire stakes in its U.S. subsidiary T-Mobile from Japanese multinational conglomerate holding company Softbank.

The European telecommunications leader, Deutsche Telekom, that delivers services to more than 150 million global customers, owns over 40% stake in its U.S. subsidiary T-Mobile but it can vote shares owned by Japanese holding company SoftBank.

That brings its voting stake to 67%, ensuring overall financial control and allow the company to consolidate the financial statement of T-Mobile. Hoettges added that the negotiation is still in its nascent stage will inform when one has reached.

CEO Tim Hoettges’ comment

CEO Tim Hoettges on Friday said that the deal will be under a shareholder agreement and it has the right of first refusal.

According to Reuters, Hoettges, answering a question at Deutsche Telekom’s annual general meeting, said Softbank was seeking to sell down its stake due to “heightened liquidity needs arising from the demanding economic environment”.

He further noted that, under a 4-year shareholder agreement that entered effect when T-Mobile completed its acquisition of Sprint, Deutsche Telekom had the pre-emptive purchase right to ensure it retains control of its U.S. subsidiary, Reuters reported.

CEO also confirmed that the profit outlook was resilient to the coronavirus pandemic.

“Of course, we are also feeling the effects. From bad debts. Forgone roaming revenues and temporary shop closures,” Hoettges said, according to pre-released extracts of his video address to the event which is being held online.

“But we are confident that we will bounce back. Because digitalization is everywhere right now. And this brings us opportunities.”

Stock price outlook

According to Tipranks, three analysts forecast the average price in 12 months at $18.83 with a high of $19.28 and a low of $17.93. The average price target represents a 10.76% increase from the last price of $17.00.