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(Bloomberg) — At 7:30 a.m. on Wednesday morning, Anglo American Plc Chairman Stuart Chambers wrapped up a board meeting from the company’s London headquarters, on the street where its iconic De Beers business had called home for almost a century.

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The directors had spent the past hour discussing an overnight request from BHP Group to extend the deadline for its $49 billion takeover bid, set to expire later in the day. Halfway through their meeting, phones lit up with what would prove to be BHP’s final move in the six-week tug-of-war: a statement making its case for a deal, and a public plea for more time.

But Anglo’s directors reached a unanimous decision. There would be no more chances.

The board’s verdict all but assured Anglo’s continued survival — at least for now. But it’s also fired the starting pistol on a new chapter for the 107-year-old company and its South African boss, Duncan Wanblad, who must now make good on a dramatic turnaround plan while under the scrutiny of predatory rivals, as well as shareholders who have just watched a 39% takeover premium walk out the door.

“I don’t want anything to get in the way of getting this done,” Wanblad said Thursday. “We want to demonstrate early progress, and continuous progress. It will get done.”

The CEO has been in the job for just over two years. He inherited a company that was riding high, buoyed by strong commodity markets, but things quickly soured as weaker prices laid bare a series of problems across the company’s sprawling portfolio that had been bubbling below the surface.

Read: Anglo’s Stumbles Make It Prey for Mining’s Biggest Predator

Now he’s promised to save Anglo by breaking it apart, with an ambitious plan to exit platinum and coal, and either sell or spin off De Beers. Wanblad still needs to find a solution to a huge, half-built fertilizer project in the northeast of England that he championed before becoming CEO. And he’ll need to do it all while looking over his shoulder: BHP can come back in six months if it chooses. And the businesses that Anglo has committed to hive off are the same ones that have long deterred other suitors.

“The pressure is on Anglo,” said Liberum analyst Ben Davis. “If they don’t deliver, they are done. Even if they do deliver, they are probably done.”

Discussed Defense

In the weeks after the takeover bid first became public, both companies appeared to be on the back foot. BHP was left fumbling after an initial mishandling of South Africa — including a hastily arranged dash by CEO Mike Henry in the midst of the country’s most tightly contested election since the end of apartheid — while Anglo was caught without an alternative strategy of its own to offer shareholders.

The London-based miner knew its plunging share price could make it a target, and had been discussing for months with its bankers how to defend against an unwanted bid. And yet when BHP Chairman Ken MacKenzie phoned his counterpart Chambers on April 16, it still came as a shock.

The proposal would remain a secret for another week, until a Bloomberg report forced Anglo to confirm the approach. From there, the clock started ticking: under UK takeover rules a bidder has one month to make a binding offer or walk away, unless the target agrees to allow more time.

Read More: BHP Abandons $49 Billion Bid After Anglo Refuses More Talks

This account of how BHP’s ambitious plan to create a new copper-mining giant fell apart is based on conversations with a dozen people close to the two companies, who asked not to be identified discussing private information.

From Anglo’s perspective, the biggest hindrance to a deal was always BHP’s requirement that the company first exit its South African platinum and iron ore units, and the larger miner’s apparent dismissal of the country where Anglo was founded, and where mining remains one of the biggest employers and the state pension fund manager is Anglo’s second-biggest shareholder.

Move Faster

But first the company needed a plan of its own. Investors who had already grown frustrated with Anglo’s poor performance and wanted details about its business review that had been underway for almost a year.

Faced with a growing clamor to move faster and explain to shareholders why they wouldn’t just want to take BHP’s offer, Wanblad and his team spent much of the second week of May thrashing out the final details of a plan.

The CEO was supposed to be in Miami on May 14 along with nearly all his peers — including BHP’s Henry — for one of the industry’s biggest conferences.

Anticipation built ahead of the event as the mining world looked forward to the opposing CEOs sharing a stage. But Wanblad canceled his plans at the last minute, choosing instead to unveil Anglo’s new strategy from the company’s London HQ.

Read More: Anglo Goes for Bold Breakup Plan in Move to Fend Off BHP

The scale of the restructuring both shocked and impressed investors, going further than many had expected.

So far, investors appear to be backing the CEO. Anglo shares have barely reacted to BHP’s walking away and remain well above the levels seen before the bid became public.

But there remain huge questions over whether Wanblad and his team can deliver. And the last-minute nature of the plan has also left some investors queasy. When Wanblad was asked on the day what he planned to do with a small manganese business in South Africa, his answer seemed to be: we haven’t got that far yet.

Video Calls

In the week that Anglo was finalizing its plan, the company received a second, higher offer from BHP. Again, the larger miner asked that Anglo first spin off its stakes in Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. Again, Anglo’s board said no.

It was only after a third proposal that the board indicated it was willing to talk. BHP made its new offer on May 20, and Anglo two days later agreed to extend the deadline for a binding offer by one week.

Optimism in the BHP camp surged that a deal could be close, especially after Anglo’s bankers contacted BHP’s advisers on May 23 to sign non-disclosure agreements.

But the promised talks amounted to very little: Video calls last Friday between advisers for the two sides were stilted and accomplished little. Anglo sent BHP a long letter outlining its concerns over the potential loss of value for its shareholders as a result of the spinoffs, and the BHP team spent the weekend working before sending over a final proposal with some additional commitments on South Africa. But Anglo had heard enough. By around lunch time on Wednesday it was clear the deal was dead.

Anglo felt confident in drawing the line based on conversations with its investors, people familiar with the matter said. One of BHP’s key tactics was an attempt to apply pressure on Anglo via the other company’s shareholders, but the strategy didn’t play out.

South Africa’s Public Investment Corp. issued a statement saying that BHP’s proposal needed to be reworked, while BlackRock Inc., Anglo’s biggest holder, kept its cards close to its chest.

While the deal never became publicly acrimonious, there was a growing resentment within both camps, and the two sides have largely appeared to talk past each other in public. Most of the negotiations were handled by advisors, entirely virtually. The company’s respective chairmen spoke on several occasions. Wanblad and Henry never met or spoke.

Copper Growth

The primary appeal for BHP’s failed bid was Anglo’s copper mines in Chile and Peru, at a time when all the world’s biggest miners and their investors are positioning for a prolonged period of tight metal supply and rising prices.

Under the company’s own plan, copper will remain the centerpiece, alongside iron ore, which it produces in South Africa and Brazil.

Of the businesses that Wanblad has promised to hive off, coal will probably be the easiest. Anglo’s steelmaking coal mines are highly sought after by rivals, and Glencore Plc is among potential bidders, according to people familiar with the matter.

But the rest of the radical transformation appears fraught with pitfalls.

Anglo’s restructuring is “a seismic reshaping of the company,” said Iain Pyle, a fund manager at abrdn, who holds Anglo shares. “It may need patience to sell the less obviously attractive assets in a way that creates value.”

Of all of Anglo’s businesses, De Beers probably poses the biggest challenge. The one-time monopoly plays an outsized role in the diamond industry even though its market share is only about 30%. In addition to mines, it also has a retail network, a synthetic diamond making business and its own luxury jewelry brand.

Read More: Anglo Ditching De Beers Is Hard Blow for Troubled Diamond Market

There are also few natural buyers. Rivals like Rio Tinto Group once coveted the business, but now the industry’s big players have all turned their back on diamonds — selling De Beers was top of BHP’s to-do list after a takeover. Any deal would also need to account for the government of Botswana, which owns 15% of De Beers.

The diamond market imploded last year and the company is keen to wait for a recovery before looking to sell. Despite its challenges, the internal view is that De Beers should command a price that reflects its status as a trophy asset.

Unable or Unwilling

Wanblad also needs to oversee the distribution of Anglo’s shares in Johannesburg-listed Amplats to the company’s existing investors, to complete its exit from platinum. Anglo believes the demerger would avoid scrutiny by South Africa’s antitrust authorities, which was one of its biggest concerns under BHP’s plan. However, many Anglo shareholders could be unable or unwilling to hold stock in the South African firm, causing an outflow of capital and a likely decline in the share price at the beginning of Amplats’ independent life.

Perhaps the most controversial element in Wanblad’s plan is a decision to keep a giant fertilizer mine that Anglo is building in the UK, although he has slowed spending on the site. The Woodsmith project, which would have cost $9 billion in total, is unpopular with many investors given uncertainties about the market and the amount of capital its sucked from the business. The company wants to bring in a partner, to lower its share of the bills and risk.

Wanblad will have to reassure investors that he is the right leader to carry out such a drastic shake up of Anglo.

The CEO has already tested investors’ patience at times since taking the helm. Shareholders were particularly furious at being blindsided in December by the sudden announcement that Anglo was cutting 20% of its copper production.

Should Wanblad stumble, BHP and others are likely to be back and shareholders will be less forgiving.

“Anglo may well remain a target, especially for its copper assets,” said Pyle. “We may yet see bidders come back once Anglo has done some of the hard work reshaping the group themselves”

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Investing.com– Anglo American PLC (LON:AAL) was downgraded by Jefferies after a takeover attempt by mining giant BHP Group Ltd (ASX:BHP) fell through this week, with the brokerage citing potential risks as the copper miner undertakes a major restructuring.

Jefferies downgraded Anglo’s London shares to Hold from Buy, and also cut the stock’s price target to 2,700 pence from 3,200 pence. The new PT represents an upside of about 9% from current levels.

BHP dropped its $49 billion bid for Anglo this week after the London-listed copper miner rejected a last-minute request for more time to hash out a better deal.

The key point of contention in the deal was BHP’s demands that Anglo offload its South African platinum and iron ore businesses, which Anglo found problematic.

Jefferies analysts said that Anglo must now execute its own proposed restructuring, which includes a demerger of the South African business, a sale or spin-off of its De Beers diamond unit, a sale of its metallurgical coal business and a review of its nickel business.

While the demergers and reviews do represent potential value, with Jefferies predicting a potential share price of 30.77 to 32.59 pounds from the de-mergers, it largely depends on Anglo’s ability to execute the restructuring without “significant value leakage.”

De Beers presents the greatest risk, given that the diamond unit could be sold or spun-off at a much lower valuation, which could also be the case for the metallurgical coal unit.

A demerger of Anglo’s South African assets is also expected to be rife with political and financial complexities, given that the assets face high regulatory risk in South Africa.

Jefferies’ downgrade of the stock was based on these risks, with the brokerage forecasting that Anglo’s restructuring will likely take longer than expected, at least 18 months.

But Jefferies analysts said they still expected a “considerably higher share price” from Anglo in the long-term.

Anglo American: Jefferies downgrades to Hold as $49 bln BHP offer falls through

Sony stresses PlayStation user engagement as hardware sales taper off

Investors relieved BHP walked from $49 billion Anglo takeover deal

Anglo American (AAL.L) has rejected BHP Group’s (BHP) request to extend the discussion deadline on its $49 billion takeover offer. BHP has until 5 p.m. BST Wednesday to commit to an offer.

Yahoo Finance’s Seana Smith and Brad Smith discuss the deal and its potential impact on the commodities landscape.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Melanie Riehl

Video Transcript

Anglo American officially rejecting BHPS request to extend the deadline for talks on its $49 billion takeover offer.

The deal deadline will remain at 5 p.m. London time today.

You’re taking a look at the stock reaction here.

Uh, pre market.

We’re seeing BHP group here flat, just barely to the downside.

Anglo American down by about 1.9% amid a wave of consolidation that we’ve seen in the broader energy sector and specifically oil and gas landscape right now, looking at Anglo American under just a bit of pressure off nearly 2% in pre market.

Now this comes after, like you were just saying they rejected the BHP’s request here for more time.

So what happens next?

So BHP has until 5 p.m. London time today to commit to an offer offer or walk away for six months.

And R BC analyst uh Marina Clara was out with a quick reaction here, noting the Anglo was already below the implied value of BH BS latest offer.

So she sees further pressure as the probability of an acquisition is repriced in terms of what could happen next.

Talk about a possible hostile takeover, she’s saying that BHP is unlikely to go hostile, given the complexity of this deal.

So again, you’re looking at BHP here in pre market up just over 1%.

On the flip side, you’ve got Anglo American those shares off nearly 2%.

But again, BHP has until 5 p.m. London time today to commit to an offer or walk away for six months, right?

And just to further clarify, I should have said commodities landscape consolidation that we’ve seen because this is really more on the multinational mining elements of, uh, some of the commodities, uh, of of course, are, as Anglo American would say in their tag line, improving people’s lives.

So, uh, ultimately, at the end of the day, this would kind of consolidate things like diamonds, platinum, copper, iron ore and so forth.

In some of the mining efforts there

(Bloomberg) — Anglo American Plc said it won’t give BHP Group any further time to commit to a takeover offer, threatening to end a $49 billion pursuit by the world’s biggest mining company.

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The decision sets up a dramatic climax to the five-week battle between two of mining’s biggest names, just hours before a 5 p.m. deadline. Anglo has repeatedly rebuffed proposals from BHP to partly break up and then acquire the 107-year-old company, but last week agreed to a one-week extension to a UK deadline in order to extend talks. BHP must now decide whether to make a firm offer without the support of Anglo’s board in the coming hours, or walk away for six months.

Anglo is opposed to BHP’s complicated deal structure and the two sides have been unable to find a solution. BHP made a last-minute push to pressure Anglo’s board earlier on Wednesday, citing commitments it has made to help get the deal approved in South Africa and saying it believed the risks were manageable.

Read: BHP Asks for More Time in Last-Minute Plea to Anglo

Just over three hours later, Anglo said its biggest concerns have still not been addressed.

“BHP has not addressed the board’s fundamental concerns relating to the disproportionate execution risk associated with the proposed structure and the value that would ultimately be delivered to Anglo American’s shareholders,” it said. “The board has therefore unanimously concluded that there is no basis for a further extension.”

Anglo’s shares retreated as much as 7.6% after its statement before paring the losses to trade 1.7% lower. The stock is trading about 17% below the implied value of the most recent BHP proposal.

Bloomberg has previously reported that BHP had no intention of going hostile with an offer directly to Anglo’s shareholders, which would also require it to buy the whole of Anglo, including the South African businesses.

A successful takeover would create a commodities powerhouse that towered over its closest rivals, significantly increasing BHP’s copper production at a time when miners and their investors are positioning for a prolonged period of tight metal supply and rising prices. The bid has also cemented the return to large-scale M&A among the largest mining companies, after a string of disastrous deals left BHP and its rivals on the sidelines for over a decade.

If BHP walks away, the pressure will be on Anglo and Chief Executive Officer Duncan Wanblad to show that its turnaround strategy can generate more value than BHP was offering. The company, which was left vulnerable after a series of setbacks over the past year, has outlined a plan to exit coal, diamonds and platinum and slow down spending on a massive UK fertilizer mine.

Read more: BHP and Anglo Remain Split on South Africa as Time Runs Out

Anglo’s objections to BHP’s proposal have centered on South Africa, which has loomed front and center of a potential deal ever since Bloomberg first reported the takeover approach. It is home to some of Anglo’s biggest operations, employing tens of thousands of people, and the company has deep political and social ties to the country.

Anglo is concerned that BHP’s demand that it first exit Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. could leave the newly independent Johannesburg-listed companies to carry the cost of any concessions imposed by South Africa, reducing their value and ultimately penalizing the current Anglo investors who would receive the shares in the spinoffs. The multistep deal would require several layers of approval in South Africa, where deals are subjected to “public interest” assessment and authorities have a record of extracting substantial concessions from companies.

As a result, Anglo, which this month rushed out a radical restructuring plan of its own, wanted BHP to either change the structure or commit to cover any future costs to its own shareholders.

BHP said in its statement earlier on Wednesday it was confident the deal would be approved and that the risks are “quantifiable and manageable,” based on similar transactions.

BHP said it’s also willing to discuss paying a break-up fee if the deal isn’t approved, without giving a proposed figure.

It has agreed to share in the costs of any additional employee-ownership requirements of the South African businesses and make commitments on issues like charitable spending and local procurement in South Africa. BHP noted that it had “already factored the costs associated with these risks into the offer ratio of its proposal.”

Several of Anglo’s biggest shareholders said last week that they supported the company’s efforts to persuade BHP to change the structure of its takeover proposal or compensate for the risks it presented. Elliott Investment Management has also emerged as one of Anglo’s biggest shareholders, but has yet to comment publicly on the BHP proposals.

(Updates with context and shares.)

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International Distributions Services (IDS.L)

Royal Mail owner International Distribution Services said it has agreed to a £3.57bn ($4.56bn) takeover offer from Czech billionaire Daniel Kretinsky’s EP Group.

The offer consists of 360p in cash, plus a final dividend of 2p per share and a special dividend of 8p per share. Including debt, the deal values IDS at £5.28bn.

IDS said if the deal goes through Royal Mail would continue its universal service obligation to one-price-goes-anywhere first-class post six days a week, and keep the company’s branding and UK headquarters.

It also said it would protect existing employment rights of all IDS staff, and that there is “no intention to make any material changes to overall headcount or reductions in the number of frontline workers” beyond existing plans.

Nvidia (NVDA)

Heavyweight chip maker Nvidia surged by almost 7% to a new high this last session and is the number one trending ticker in pre-market trading as the AI darling eyes Apple’s (AAPL) spot as the world's second most valuable company by market cap, behind Microsoft (MSFT).

Nvidia shares soared to a record high on Tuesday, putting it close to overtaking Apple with Nvidia now valued at $2.8tn, just shy of Apple's $2.9tn. Shares finished the day above $1,140.

The milestone moment comes after Elon Musk’s artificial intelligence startup xAI said Sunday that it raised $6bn in a Series B funding round, sending Nvidia stock up as much as 8% the following trading day.

"The market has been struggling to keep up with the company's ever improving growth trajectory. At a mid-thirties forward earnings multiple, this still doesn't feel like bubble territory," said Derren Nathan, head of equity analysis at Hargreaves Lansdown.

The stock has now jumped by a third since the start of May, and by 137% over the year to date.

Anglo American (AAL.L)

BHP (BHP.L) has called for further extension to a bid deadline to allow for more talks over a £39bn takeover of rival Anglo American.

Under UK takeover rules, the Sydney-based company faces a deadline of 5pm UK time on Wednesday to make an offer for Anglo or walk away for 6 months.

"BHP believes a further extension of the deadline is required to allow for further engagement on its proposal,” it said.

The mining company said that it was ready to offer a break fee to Anglo American if the deal was blocked due to anti-trust reasons or if it failed to gain regulatory approval.

“BHP is confident that the measures it has proposed to the board of Anglo American provide a viable pathway to resolve the matters raised by Anglo American and would support South African regulatory approvals,” it added.

Anglo previously claimed the offers were too risky and complex. The latest bid valued it at £38.6bn. It came after BHP had put forward two prior bids, valuing Anglo at £31.1bn and £34bn respectively.

American Airlines (AAL)

Shares in American Airlines sunk over 15% after the company cut its guidance on second profit as softer demand is expected to dent revenue.

The Texas-based carrier now expects second-quarter adjusted earnings in the range of $1.00 to $1.15 per share, compared with its previous forecast of between $1.15 and $1.45 per share.

It forecast total revenue per available seat mile, a proxy for pricing power, to be down about 5% to 6% from a year ago. That compares with a decline of 1% to 3% expected earlier.

The airline also announced that its chief commercial officer, Vasu Raja, will leave the company next month. He has been in the role since April 2022.

American Airlines said its vice chair and chief strategy officer Stephen Johnson will take on Raja’s brief with immediate effect.

Jefferies, which had upgraded the company earlier this year over cost controls, said it was downgrading the stock to "hold" as "the strategy has not gone as planned."

Watch: Nvidia aiming beyond chips with AI ecosystem

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(Bloomberg) — BHP Group is seeking more time to discuss its $49 billion takeover plan with Anglo American Plc and outlined a series of commitments to the smaller company, with just hours left to go until a crucial deadline.

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The two miners are at an impasse over the proposed structure of BHP’s deal, which requires Anglo to first spin off its holdings in two South African companies before a takeover. Anglo says that the plan creates too much risk for its own investors, who will be left holding shares in the spinoffs.

Read More: BHP and Anglo Remain Split on South Africa as Time Runs Out

BHP outlined a list of proposals it says will ensure that Anglo’s shareholders don’t “disproportionately” bear the cost of the deal. BHP also said it’s prepared to discuss a break fee, which would be payable if it didn’t secure regulatory approvals.

However, the latest statement didn’t appear to address the biggest concerns cited by Anglo and its shareholders, regarding the potential loss of value in the South African businesses as a result of the spinoffs.

Anglo’s shares fell 1.3% to £25.25 as of 8:15 a.m. in London, to trade about 16% below the value implied by BHP’s most recent proposal.

On the measures it outlined on Wednesday, BHP said it has “already factored the costs associated with these risks into the offer ratio of its proposal.”

The measures included commitments to share in the cost of any requirements to increase employee share ownership of the South African businesses, maintain funding for Anglo’s charitable commitments and support local procurement in South Africa. BHP said it will maintain these measures for at least three years.

Anglo has repeatedly rebuffed proposals from BHP to partly break up and then acquire the 107-year-old company, but last week agreed to a one-week extension to a UK deadline in order to extend talks. BHP now has until 5 p.m. London today to commit to a firm offer or walk away for six months.

From the moment BHP’s takeover approach first became public, South Africa has loomed front and center of a potential deal. It is home to some of Anglo’s biggest operations, employing tens of thousands of people, and the company has deep political and social ties to the country.

The structure of BHP’s proposal — which required Anglo to first spin off its South African platinum and iron ore units — has remained a crucial sticking point. Anglo wanted BHP to either change the structure or commit to cover any future costs to its own shareholders — who will end up owning the listed South African companies — as a result of the multi-step deal.

Earlier this month, Anglo rushed out a radical restructuring plan of its own.

“BHP believes a further extension of the deadline is required to allow for further engagement on its proposal,” it said in a statement Wednesday. The company said it “believes that the proposed measures it has put forward provide substantial risk protection for Anglo American shareholders and supplement the significant value uplift that Anglo American shareholders will receive from the potential combination.”

While the two sides have been getting closer on value, they have made little progress on the structure of the deal, Bloomberg reported Tuesday.

The outcome of this week’s talks could have far-reaching implications for the mining industry. BHP is already the sector’s most powerful company, and a successful deal would leave it towering over its biggest rivals.

The bid has also cemented the return to large-scale M&A among the largest mining companies, after a string of disastrous deals left BHP and its rivals on the sidelines for over a decade.

Why BHP Is Targeting Anglo in Mining Mega Deal: QuickTake

(Updates with details throughout and shares in fifth paragraph)

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Sterling has jumped to hit its highest level against the euro in almost two years amid expectations of sharper interest rate cuts in Europe.

The pound was trading at its strongest level against the euro since August 2022 on Wednesday morning, rising as much as 0.3pc.

The latest rise follows weeks of sterling strengthening against the common currency. It has gained almost 0.6pc against the euro over the past month on expectations that the Bank of England will be cutting interest rates less sharply than policymakers in the EU.

Higher interest rates draw in money from around the world as investors seek higher returns, pushing up a currency.

Traders are expecting the European Central Bank to be one of the first major banks to start cutting interest rates, with the first to come as soon as next month.

ECB chief economist Philip Lane this week told the Financial Times: “Barring major surprises, at this point in time there is enough in what we see to remove the top level of restriction.”

Markets are pricing in at least two reductions by the ECB this year.

The Bank of England, meanwhile, is only expected to cut rates once this year. It follows strong services inflation figures last week, which spooked traders who pushed back their prediction for the first reduction in interest rates from 5.25pc from June to November.

The upcoming election has also meant few people are expecting an imminent interest rate cut. Since becoming independent in May 1997, the Bank of England has never cut rates immediately before a general election.

Read the latest updates below.

06:39 PM BSTSigning off…

Thanks for joining us today. We’ll be back in the morning from around 7am to cover the latest in the markets but in the meantime, do check out our wider Business coverage.

06:12 PM BSTEuropean Commission to postpone Chinese electric car tariff decision

The European Commission will postpone its decision on Chinese electric vehicles tariffs until after the European elections on June 9, German magazine Spiegel reported today, citing sources familiar with the matter.

The provisional tariffs, expected to be announced by June 5, could represent billions of dollars in new costs for Chinese electric car makers.

The delay aims to keep the issue out of the election campaign phase, Spiegel said.

The investigation, officially launched on October 4, can last up to 13 months. The Commission can impose provisional anti-subsidy duties nine months after the start of the probe.

The European Commission has warned three Chinese electric vehicle makers that they have not supplied sufficient information for its anti-subsidy investigation, two people familiar with the case told Reuters earlier this month.

06:10 PM BSTSony Music in talks to buy Bohemian Rhapsody and other Queen hits

Sony Music is in talks to buy Queen’s music catalogue and merchandising rights, in a deal that could total $1bn (£790m), according to a report.

Bloomberg said that Sony is working with an unnamed investor on the purchase of hits such as Bohemian Rhapsody and Killer Queen. The transaction could be one of the largest-ever deals of its kind.

It follows a wave of artists cashing in their back catalogues.

In February, Sony bought half of Michael Jackson’s music catalogue for at least $600m, two years after buying Bruce Spingsteen’s back catalogue for a reported $500m.

Sony Music is the second largest of the “Big Three” record companies, behind Universal Music Group.

A spokesman for Queen declined to comment. Sony Music was approached for comment.

Freddie Mercury and Brian May of Queen performing on stage in an archive photo – Phil Dent/Redferns05:37 PM BSTHome ownership for young adults rebounds

Home ownership amoung young people has rebounded to its level in 2010, but is still much lower than in the 90s, according to new data from the Institute for Fiscal Studies (IFS).

Jonathan Cribb, an IFS economist who specialises in retirement and savings, writes:

Homeownership for young adults fell continuously from 2000 through to 2015, most significantly during and immediately after the Great Recession. This fall was concentrated in particular on middle-income people.

Since 2015, there has been a gradual recovery in homeownership for young adults, rising by 6 percentage points back to 39pc by 2022–23, the same level it was in 2010–11. This recovery has also been concentrated on middle-income people.

The reasons for the recovery are not immediately clear, though it is noticeable that disposable incomes of young adults have grown markedly faster since 2015 than those of the population as a whole.

Despite the positive news since 2015, it is clear that the recovery is partial at best, with homeownership rates for 25- to 34-year-olds still 20 percentage points lower than in 2000.

05:28 PM BSTLondon stocks fall on interest rate worries and the end of a takeover bid

London’s blue-chip stocks dropped today for the sixth straight session as traders pared back bets on the timing of Federal Reserve interest rate cuts, while Anglo American fell after Australian resources giant BHP Group walked away from its $49bn (£38.5bn) takeover pursuit.

Anglo shares fell 3.0bn. Earlier in the day Anglo rejected BHP’s last-ditch request for more time to discuss a takeover offer, dismissing it as highly complex.

The blue-chip FTSE 100 closed 0.9pc lower, in its longest losing streak since August 2023.

Meanwhile, the mid-cap FTSE 250 also ended 1.3pc lower, logging its worst day in over a month.

US Treasury yields rose after data showed a sharp improvement in US consumer confidence measure for May that prompted investors to lower their bets on a rate cut in September.

Fiona Cincotta, senior market analyst at City Index, said:

The rise in yields reflects sticky inflation concerns and higher interest rate expectations after stronger-than-expected U.S. consumer confidence data yesterday and hawkish commentary from Federal Reserve officials.

05:24 PM BSTEuropean shares suffer worst day in over six weeks as rate jitters persist

European shares declined today as worries that global interest rates will stay elevated for longer pushed bond yields higher, with fresh evidence of persistently high inflation in the region’s biggest economy only exacerbating such concerns.

The pan-European Stixx 600 index – which includes some UK heavy hitters – closed 1.1pc lower, touching a three-week low, clocking its biggest single-day fall since April 16.

There were steep declines in all major bourses in the region, with France’s Cac 40 index and Italy’s FTSE MIB leading losses with a roughly 1.5pc drop each.

The yield on the 10-year bund, considered Europe’s benchmark, rose to an over six-month high and was last at 2.685pc after German inflation increased slightly more than forecast to 2.8pc in May.

Dan Boardman-Weston of BRI Wealth Management said:

What you’ve seen over the last few weeks is that this “higher for longer” narrative in terms of interest rates has come back to the fore.

04:54 PM BSTFootsie closes down

The FTSE 100 closed down 0.9pc today. The biggest riser was mining company Fresnillo, up 2pc, followed by insurer Beazley, up 1.3pc. The largest faller was Ocado, down 12.3pc, followed by components supplier RS Group, down 4.5pc.

Meanwhile, the mid-cap FTSE 250 fell 1.1pc. The top riser was Ithaca Energy, up 8.4pc, followed by Royal Mailer owner International Distributions Services, up 4.3pc. The biggest faller was IWG, down 11.1pc, followed by National Express owner Mobico, down 6.7pc.

04:24 PM BSTOil giant ConocoPhillips buys rival in £18bn deal

US energy giant ConocoPhillips announced this afternoon that it will buy competitor Marathon Oil in an all-share transaction valued at $22.5bn (£17.7bn), including $5.4bn in debt.

The deal is the latest in a series of acquisitions in the US oil sector which run counter to calls to begin their energy transition as climate change takes hold.

It will enable ConocoPhillips to strengthen its position in shale oil and gas-rich regions such as the Bakken Basin in the northern US and the Permian Basin in the south.

The acquisition “further deepens our portfolio and fits within our financial framework, adding high-quality, low cost of supply inventory,” ConocoPhillips boss Ryan Lance said.

The deal represents a 14.7pc premium over Marathon Oil’s closing price on Tuesday.

The deal should see ConocoPhillips achieve savings of $500 million in the year after, according to a statement, largely due to reduced administrative and production costs.

In the UK, ConocoPhillips operates a major oil terminal in Teesside and a commodities trading unit in London.

04:14 PM BSTBritish chip giant Arm unveils new AI chip designs

Cambridge-based Arm Holdings today unveiled new chip blueprints and software tools to help smartphones handle artificial intelligence tasks, along with changes to how it delivers those blueprints that could help speed their adoption.

Arm’s technology powered the rise of smartphones and is increasingly found in laptops and in data centers, where chip designers have gravitated toward its energy efficiency.

Smartphones remain Arm’s biggest single market, where the company supplies intellectual property to arch rivals such as Apple and Android chip suppliers Qualcomm and MediaTek.

Earlier today, Arm launched new designs for central processing units (CPUs) that it said are better suited to AI work and new graphics processing units (GPUs). It will also provide software tools to make it easier for developers to run chatbots and other AI code on Arm chips.

But the bigger change is in how those products are sold. In the past, Arm mostly delivered its technology as either specifications or abstract designs that chip companies then needed to turn into a physical blueprint for a chip – which in turn is no small task when deciding how arrange billions of transistors, the tiny switches that make up chips.

For the new products, Arm worked with Samsung and Taiwan Semiconductor Manufacturing Company to deliver blueprints of physical designs that are ready for manufacturing.

Chris Bergey of Arm said the company is not trying to compete with its customers. It is instead trying to help them get to market faster while focusing on other increasingly important parts of both PC and phone chips, such as a neural processing units (NPU) that provide the best AI performance.

ARM boss Rene Haas holds the Nasdaq Opening Bell Crystal at Nasdaq MarketSite during the company’s second IPO, in New York last September – Richard Drew/AP Photo04:07 PM BSTIWG founder sells £68m stake in office company to pay off bank loan

The chief executive and founder of the shared workspace provider International Workplace Group (IWG) has sold a £68.5m stake in the company to pay off a bank loan. Adam Mawardi reports:

Mark Dixon offloaded 35m shares in the flexible workspace provider at 196p each through his wholly owned investment vehicle, Estorn.

The funds raised were used to repay a lending agreement between Estorn and Deutsche Bank’s Luxembourg business, according to an update shared with investors.

Mr Dixon remains the IWG’s largest shareholder following the sale, with 25pc of shares worth about £470m. According to the Sunday Times Rich List, published this month, his net worth is £923m, making him the 177th richest person in Britain.

Shares in the FTSE 250 company plunged as much as 10pc following the announcement.

It follows reports that Mr Dixon pledged 270m shares in IWG as collateral for a Deutsche Bank loan, the size of which has not been disclosed.

Last month IWG said revenue was flat at £912m during the first quarter of 2024 compared with the same period a year earlier.

Mr Dixon founded the IWG, formerly Regus, in Brussels in 1989 to provide desks for executives on the move after spotting businessmen holding meetings around coffee tables in hotels.

The WeWork rival, which is registered in Jersey, now operates 3,500 shared offices in 120 countries.

Mark Dixon of IWG, pictured in 2004 – Marina Imperi04:03 PM BSTOil prices volatile ahead of oil cartel meeting

Oil prices have been volatile today as traders attempt to second-guess a meeting of oil cartel Opec+, which is being held on Sunday.

Opec+, made up of the Organisation of the Petroleum Exporting Countries along with allies including Russia, will be discussing whether to extend voluntary cuts in production after soft demand.

Oil stocks among the Opec countries stood at 2.79bn barrels in March, up 20m barrels on the month and 34, barrels on the year, despite Opec+ cuts, according to preliminary data from Opec in its May oil market report.

“The physical market is well supplied while demand is slowing down,” a second Opec+ delegate said.

Inventories in non-Opec countries rose in March for the first time since November, the International Energy Agency (IEA) said, although in contrast to Opec, it reported Opec stocks at their lowest levels in 20 years.

The two forecasters produce their own estimates but tend to revise figures as more data becomes available, bringing them more in line.

Giovanni Staunovo, a commodity strategist at UBS, told Bloomberg:

Traders are likely following the momentum in the market and don’t want to get caught out short in case there are any surprises next week. Oil demand growth is healthy, and the fundamentals are solid enough to support prices.

03:39 PM BSTNational Express owner drops 6pc as after being slated for relegation from the FTSE 250

The owner of National Express have dropped over 6pc in trading today after a difficult year on the stock market means the transport company is likely to be removed from the FTSE 250.

Mobico shares have falled 47pc over the past year.

The result was that yesterday FTSE 250 indexers FTSE Russell put the company on its list of indicative deletions from the index.

A National Express coach at Victoria bus station – Justin Tallis/AFP03:25 PM BSTShares fall as outlook for rate cuts dims

Stock markets fell Wednesday as indicators and comments from central bankers further dented hopes for interest rate cuts, while oil kept rising after an attack on a ship in the Red Sea stoked supply worries.

Many investors sought to lock in recent gains ahead of a series of crucial inflation data reports at the end of the week in the eurozone and the United States.

A forecast-beating report Tuesday on US consumer confidence further added to evidence that the American economy is not slowing fast enough to allow the Federal Reserve to cut borrowing costs any time soon.

A higher-than-expected inflation report in Australia today soured the mood in Asian trading.

In addition, US Treasury yields – a proxy for interest rates – moved higher.

All three major US indexes opened lower in New York.

Providing more gloom, US central bank official Neel Kashkari warned that decision-makers had not ruled out a possible hike if they continue to struggle to bring prices down to their two percent target.

His comments come after several other Fed officials have recently said they were cautious about cutting too soon and wanted to see more data proving inflation was coming back down to two percent.

A person stands in front of an electronic stock board showing Japan’s Nikkei index at a securities firm in Tokyo yesterday – Eugene Hoshiko/AP Photo03:12 PM BSTPets at Home profits drop as pet owners hold back on toys

Shares in Pets at Home jumped this morning but are now slightly down compared to when the market opened as investors mull its latest results.

The results for the year to March 28 revealed a pre-tax profit of £105.7m, down 13.7pc on the same period last year.

It said profitability was “impacted by short-term availability issues as we transitioned to our new DC (distribution centre) and weaker performance of discretionary accessories”.

It comes after the group cut its profit guidance in January in the face of slowing retail demand.

Pets at Home reported that total group revenues grew 5.2pc to £1.5bn for the year.

Adam Vettese, analyst at investment platform eToro, said:

Inflation pressures have led to pet owners holding back on toys and accessories for their furry friends, profitable items which really affect Pets at Home’s bottom line.

The firm has said they have a plan to resolve this situation, partly caused by now rectified distribution issues, which shareholders will want to see progress on by the next update.

The dividend has been held steady and £25m buybacks have been announced for next year, which may be of some comfort to investors who have seen the share price get a 30pc haircut since July last year.

Pets at Home has revealed a dip in profits – Mike Egerton/PA02:53 PM BSTAbercrombie ups sales forecasts amid brand revamp

US retail chain Abercrombie & Fitch has upped its sales forecasts for the year, saying it now expects growth of around 10pc, rather than between 4pc to 6pc.

The company said sales in both its Abercrombie and Hollister stores bounced in the latest quarter, rising 29pc and 13pc respectively on a comparable store basis.

It follows a major turnaround in the fortunes of the business, which has been focusing on attracting a more diverse customer base with more classic styles, a bigger range of sizes and, recently, wedding attire.

Abercrombie has been repositioning itself, having once been known for posting male models at its store doors.

Former chief Mike Jeffries claimed in 2006 that this was because “good-looking people attract other good-looking people, and we want to market to cool, good-looking people”. “We don’t market to anyone other than that.”

Abercrombie used to use male models to help get customers into stores – Daniel Acker02:22 PM BSTDubai bidder makes final offer for Wood Group after series of rejections

Dubai-based oil services company Sidara has made a final offer of 230p per share for North Sea rival Wood Group, after its three prior bids were rebuffed.

Sidara said its fourth offer was at a 52pc premium to Wood Group’s share price before its first approach, adding that Wood had not engaged with it since then.

Sidara has until June 5 to say whether or not it is making a firm offer “unless this deadline is extended with the consent of Wood and the takeover panel”.

Sidara said it “does not believe that its proposal can be progressed unless the board of Wood engages with Sidara and an extension to the deadline is granted”.

It comes a year after Wood was involved in another takeover battle, with Apollo made a series of approaches.

01:59 PM BSTBingham-backed biotech bought in deal worth up to $3bn

A London biotech co-founded by Britain’s vaccine tsar Kate Bingham has been snapped up in a multi-billion pound deal, in a move bosses claimed could revolutionise the treatment of blindness.

US company Merck, which is known as MSD in the UK, said it would be paying an initial $1.3bn (£1bn) for Eyebio. The deal includes a potential further payment of $1.7bn if certain targets are hit.

MSD’s swoop comes three years after Eyebio was founded, with Dame Kate telling the Financial Times it was “astonishing” to have achieved such a high valuation in such a short space of time. Since the company was founded in August 2021, Eyebio has only raised $130m.

Dame Kate’s venture capital firm SV Health Investors set up the business together with scientists David Guyer and Tony Adamis. Dame Kate acts as chairman of Eyebio.

Her involvement in the company has boosted its profile, with Dame Kate having been among the leading architects for Britain’s vaccine rollout during the pandemic.

Dame Kate was brought in to steer the UK’s Vaccine Taskforce in early 2020 and was given a damehood in recognition for her success in acquiring Covid-19 vaccines. It meant the UK was the first Western country to start vaccinating citizens in late 2020.

Kate Bingham – Andrew Crowley01:34 PM BSTGerman workers handed record pay rise

German workers were handed a record pay increase at the start of the year, new figures from the country’s statistics office showed on Wednesday.

According to the data, there was a 3.8pc rise in real wages in the first three months of the year compared to the same period a year earlier.

It marks the biggest jump since at least 2008. The European Central Bank is monitoring inflationary pressures in the bloc amid expectations of an imminent interest rate cut.

The figures suggested that the increase was driven by one-off payments, and as workers caught up to losses incurred when consumer prices rose faster than their salaries.

12:56 PM BSTEvening Standard scraps daily print paper as it blames work from home

The Evening Standard is to stop printing a daily newspaper, blaming working from home and increased WiFi on the London Underground.

As James Warrington writes:

The London freesheet told staff on Wednesday it will scrap its daily print edition and become a weekly title instead.The Standard, which is owned by Russian-born billionaire Lord Lebedev, has been struggling for direction in recent years after being hammered by a collapse in commuting and a deep advertising downturn during Covid lockdowns.The rise of home working and increased mobile and WiFi signal on the London Underground have also hit its readership.In October, print circulation dropped below 300,000 for the first time since it became a free newspaper in 2009.

Read more here.

07:38 AM BSTOwning Royal Mail will come with ‘enormous responsibility’, Kretinsky says

Daniel Kretinsky has said IDS ‘must accelerate its transformation and investments into modernisation” after the board recommended his takeover offer.

Mr Kretinsky said: “IDS, and Royal Mail in particular, form part of the national infrastructure of the countries they operate in. More than that, Royal Mail is part of the fabric of UK society and has been for hundreds of years.

“The EP group has the utmost respect for Royal Mail’s history and tradition, and I know that owning this business will come with enormous responsibility – not just to the employees but to the citizens who rely on its services every day.

“The scale of the commitments we are offering to the company and the UK Government reflect how seriously we take this responsibility, to the benefit of IDS’ employees, union representatives and all other stakeholders.”

07:31 AM BSTGood morning

The board of Royal Mail owner International Distribution Services said it has agreed to a £3.57bn takeover offer from Czech billionaire Daniel Kretinsky.

Under the deal, Mr Kretinsky has agreed for Royal Mail to deliver first-class post six days a week for the next five years.

5 things to start your day

1) Labour’s business letter ridiculed after executives refused to sign | Lack of big-hitting names should be ‘a big concern’ for the party, critics warn

2) Ocado set to be axed from FTSE 100 | Pressure to list in New York grows as tech company faces relegation from blue-chip index

3) Shell plots job cuts in offshore wind division | The oil giant is continuing to shift from green energy

4) US immigration surge risks keeping interest rates high for months | Top Fed official ‘concerned’ about housing market pressures amid battle to tame inflation

5) How Google’s malfunctioning AI risks ruining the internet | In changing the way its search engine works, the tech giant threatens to become its own undoing

What happened overnight

On Wall Street, the Nasdaq managed to rise past the symbolic 17,000 barrier, and close above it for the first time as AI leader Nvidia hit a record high.

The Dow Jones Industrial Average fell 0.55pc, to 38,852.86, the S&P 500 gained 0.02pc, closing at 5,306.04, and the Nasdaq Composite gained 0.59pc, to 17,019.88.

The yield on benchmark 10-year US Treasury bonds rose to 4.54pc, from 4.473pc late on Friday.

Hong Kong shares fell at the beginning of Wednesday on concerns about the likelihood the Federal Reserve will cut interest rates at all this year.

The Hang Seng Index sank 0.86pc to 18,659.41, the Shanghai Composite Index dipped 0.05pc to 3,108.03, while the Shenzhen Composite Index on China’s second exchange eased 0.12pc to 1,726.93.

Tokyo stocks opened flat on Wednesday after shares on Wall Street ended mixed.

The benchmark Nikkei 225 index was up 0.03pc at 38,867.89 in early trade, while the broader Topix index was down 0.05pc at 2,767.17.

How are the major market averages (^DJI, ^IXIC, ^GSPC) feeling this morning after the Nasdaq’s big climb above 17,000 on Tuesday? Yahoo Finance’s The Morning Brief is here to help investors start their trading day off right as hosts Seana Smith and Brad Smith walk you through the top stories and market trends.

Hess Corp. (HES) shareholders approved the $53 billion buyout deal with Chevron (CVX). In other energy M&A news, ConocoPhillips (COP) is set to acquire Marathon Oil (MRO) in an all-stock deal valued at $17.1 billion. Tortoise Portfolio Manager Rob Thummel told Yahoo Finance that this deal came as a total “surprise.” Lastly, platinum miner Anglo American (NGLOY, AAL.L) rejected BHP Group’s (BHP) bid to extend their merger deadline.

Russell Investments President and Chief Investment Officer Kate El-Hillow sits down with the team in-studio to discuss the market’s momentum trade and the strength of this earnings season’s fundamentals.

This post was written by Luke Carberry Mogan.

Video Transcript

It’s 9 a.m. here in New York City.

I’m Brad Smith alongside Shana Smith and this is Yahoo Finance’s flagship show the Morning Brief Stock Futures right now.

They are in the red after the tech heavy NASDAQ, it closed above 17,000 for the first time here.

And ultimately, uh well, yeah, 35,000 is what we’re seeing here right now.

And ultimately dow Futures are singing the over 250 points with Wall Street poised to open lower this morning.

Treasury yields, pushing higher traders betting that the fed might actually not cut rates until November sticky inflation.

Will that is to blame the FS preferred inflation gauge PC is due out later this week and that will give investors a little bit more insight into the feds path forward.

Let’s get right to the three things that you need to know this Wednesday morning, your road map for the trading day YJ and for a and pro Superman and have more stock futures are falling after the NASDAQ closed above 17,000 for the first time.

Investors focus is shifting to a key inflation data later this week as expectations for the timing of rate cuts continue to see.

Saw with policymakers wary over sticky inflation.

We have to see if Friday’s PC print can help stops regain some momentum.

Plus investors are watching two major deals playing out in the energy space has shareholders voted to approve the $53 billion buy out by Chevron and Conical Phillips is acquiring marathon oil in an all stock deal valued at $17.1 billion.

Meanwhile oil prices are pushing higher and uh shares.

American Airlines under pressure while dragging down the airline sector this morning, American slashes Q two revenue, all the company navigates increased competition in the domestic market and a more cautious consumer.

The airline also announced it was parting ways with its chief commercial Officer.

Well, good morning, everyone.

Our top story this morning, futures pulling back this morning, the NASDAQ closing yet above another record high in Tuesday’s session, Wall Street tracking a rising treasury yields as investors keep their eyes on inflation concerns.

Dow futures.

They’re off more than 200 points in the S and P 500.

Also sliding here this morning.

We’re keeping a close tab, close eye on some of those futures activity.

As we mentioned the dow right now down by about 7/10 of a percent.

Yeah, the dow uh trading lower here, NASDAQ 100 also on track to to open the day in the red as well as the S and P got the S and P sliding below 5300, a few uh key levels here to watch.

But we also got to talk about some of the big deals that are taking place right now and some of the broader picture that’s going on and starting it off with some of the movement that we’re seeing within the energy space.

When you take a look at Chevron, a little bit of a move lower here and just by a fraction though off, just to the downside here, this coming after has shareholders actually approving Chevron’s deal to buy out the company.

Of course, this is a step forward.

But the question here is what exactly is going to happen to he guy on a stake and we know Exxon has very much been putting on the pressure and could have some plans here that could potentially cause the deal to implode.

So of course, that will be the focus here.

And then beyond that, you also got some news out of Conocophillips this morning, that’s moving lower by about 1% a deal here for marathon petroleum.

So again, some more consolidation within the energy space and that of course, could have uh I guess more ripple effects beyond just some of these bigger names and talk about further consolidation within energy.

Yeah, absolutely.

We’re also keeping a close tab on airlines here this morning as we’re taking a look at some of the, as we were toggling on over to these airlines, one of the huge things.

There we go.

Of course, they’re bound to be there.

Notably here, American Airlines, one of those major companies that we’re keeping tabs on here.

You’re seeing those shares down by about nine, nine and a quarter percent here pre market this after the Chief Commercial Officer is stepping down that person leaving the role.

And then additionally, you’ve got uh, more of a warnings for, uh, forecast for the, um, the forecast warning here that has come out from the company here.

So, uh, a lot of that being factored in at the same time, you’ve got some other movement in the space as well.

United catching a little bit of a bid upgrade there.

So we’ll continue to keep tabs on the airline space.

We’ll dive further out into that on today’s show.

But getting back to those two major deals in the energy space has shareholders officially voting in favor of the $53 billion deal to sell the company to Chevron.

And Koco Phillips has agreed to acquire marathon oil in a $17.1 billion all stock deal.

Yahoo finances and Es Farre has the breakdown on the sector.

Hey Innes.

Hey Brad.

Yes.

So first let’s start out with the shareholders which voted to approve the buy out by Chevron that was highly anticipated.

There are still a couple of steps though to this deal, in order for this deal to officially close.

First of all, the FTC regulatory approval has to go through and Chevron is expecting that to go through.

They have put out a statement.

Yes, there spoke spokesperson saying that they’re anticipating that FTC regulatory process to move through in conclusion in the coming weeks.

They also are anticipating that their preemption rights will be affirmed in arbitration.

This has to do with Exxonmobil, which Exxonmobil has taken these companies into arbitration because Exxonmobil is saying that they have the right of first refusal to that stake in Guyana, the very valuable crown jewel that hess has the reason.

The big main reason as to why Chevron wants to acquire Hess because of that stake in Guyana and that would be something that is in the coming months going to be happening with this arbitration.

And Chevron saying that they’re looking forward to completing the transaction and welcoming Hess to their company.

Still, the arbitration is pending here.

As far as the second deal is concerned, this is marathon oil and Conocophillips.

Conocophillips would be acquiring Marathon oil for $17.1 billion in an all stock deal a bit more than that.

If you include debt, this would also broaden Conic’s footprint domestically in the Texas region, in the North Dakota region.

Now, city analysts came out with their take on this.

They’re saying that this has been is not based so much on inventory and growth the way we’ve seen with this other consolidation that has taken on in this space with these bigger players, but this looks more about optimization and also lowering costs.

I spoke to other analyst this morning saying that this deal would be unlikely to face anti trust issues concerns because these companies together would still be smaller than the big major oil companies that we’ve been talking about in recent months.

They’re both considered independent oil companies and without downstream assets without refining distribution and retail guys.

All right, Anne, thanks so much for breaking that down for us.

We want to continue this conversation because oil deals and mergers that are in focus today.

This coming after has shareholders approving an all stock merger with Chevron Conocophillips agreeing to acquire Marathon oil deal making it the sector that rose in 2023 hitting the highest level in over a decade according to the US Energy Information Administration to break this all down.

Talk about some of the acquisitions that are taking place within this space.

We wanna bring in Rob Thumble.

He is the Tortoise Portfolio manager and managing director, Rob.

It’s great to see you here.

So let’s talk.

Let’s start with the Chevron and hes uh shareholder vote there from hes shareholders approving this deal to sold to Chevron.

Of course, this clears what is a major hurdle but other hurdles remain when you talk about Exxon’s involvement here, how exactly that could play out also FTC uh approval whether or not a deal is going to be approved.

So I guess how do you see what happens next?

And how likely is it?

Do you think that that Chevron is going to acquire house?

Yeah, that’s a good question.

So the next step is the FTC approval II I think you just saw ultimately the uh Exxon pioneer deal got, got through the FFTC process.

So you’d probably expect that the, that the Chevron S deal could, could obviously jump back over that hurdle.

But the biggest hurdle is as, and as, and you have been talking about which is, is the, the, what’s it gonna be the, the arbitration and the arbitration and the result of the arbitration drives everything.

If, if the, the arbiter rules uh that ex and CNN are entitled to, to a right of first refusal, then this deal will be, will be off because uh a a as everybody’s highlighted the crown jewel asset of this transaction is the guy on an asset.

And so, um now what’s the probability that’s really difficult to really handicap?

And, and the reason is this is nobody has read the joint operating agreement except for uh lawyers um at, at Exxon, at Co, at Hess and obviously probably a Chevron.

And so everybody, they have their interpretation.

I, I think ultimately though it’s probably good to have Chevron as a partner, I think Exxon would recognize that um as well as co um and, and so, II, I do think that the transaction can happen.

Um But, but it’s really predicated on, you know, probably a handful of words in this kind of super secret joint operating agreement that nobody’s been able to get their hands on.

So, without the Guyana assets, what is the evaluation of this, this price tag for the deal?

Well, well, it goes down a lot.

I mean, I mean, I, you know, I think, you know, he is up probably 20% since the, since the transaction was announced.

Um maybe even a little bit more than that, what I would say is, uh it’s not as if Guyana, Guyana is still worth uh uh a decent amount and, and, and that’s, that’s really the valuation is what’s the valuation?

And that, that’s really part of the arbitration is what is the value that Chevron is placing on Hess and, and does Exxon want to, and, and see want to pursue and pay that, that, that type of value?

But, but that takeover premium would come down.

Uh the he share price would come down if the transaction or if the arbitrator would rule in, in favor of Exxon um in, in this case sometime and, and we expect that sometime probably early next year.

I think the question is if, if Chevron is not able to acquire uh Guyana assets, does this deal then fall apart?

Would Chevron have any interest in Hes outside of the assets in Guyana?

I think the answer that’s no, I, I think Mike, we ceo of Chevron has made it very, very clear that without the Guyana asset, he he if the company is not interested in pursuing a uh uh the the acquisition and the merger with uh on without the guy on asset now, obviously, things can change.

But, but, but ultimately, uh the, the the guy on asset is the, is the critical asset uh for this transaction to occur.

So without it, I don’t think the transaction, uh All right, another transaction we’re tracking here this morning, Anglo American officially rejecting bhps request to extend the deadline for talks on its $49 billion takeover offer here.

I mean, just wanna get your reaction on this rejection here and what the signal is next.

Yeah, I’m not as familiar with that transaction but, but I can tell you there’s a lot of transactions going in the mineral space, in the, in the oil and gas space.

Uh and, and, and obviously valuation, I it is always probably the biggest hurdle when it, when it comes to a lot of these transactions.

So, so that’s probably the biggest driver of, of, of what, what’s causing this the uh potential disruption of this transaction.

All right, let’s talk about Conocophillips because that’s the other big deal that we’re talking about within the space.

Conocophillips and uh marathon petroleum, the merger there.

Talk to me just about one, what this is going to do to Conocophillips business here and then two, just what this tells us just about further consolidation, kind of go on what you were just talking about there before, but further consolidation within this space and the likelihood that this might remain a theme here for at least the quarters to come.

Yeah.

So this is a bit of a surprise and uh and I would say the reason and what I mean by that is I don’t think anybody probably had marathon oil being acquired by Conocophillips.

Um And, but, but when you look at it, uh it does make some sense.

So if you look at the marathon oil assets, they’re good, they’re not great.

But the management has really done a great job of the capital discipline and what that’s resulted in a is in a really high free cash flow yield for marathon oil.

So marathon oil actually has one of the highest free cash flow yields in the oil and gas space.

Um So that’s a bit attractive or that is attractive to somebody.

And, and obviously Conco Phillis is, is, has found it the most attractive at this point.

So when you merge these assets together, what, what Conocophillips gets is some good assets in, in uh you know, across the Bakken in North Dakota, across the Permian and the Eagle Ford in, in, in Texas.

But it gets a lot of free cash flow that it, that then uh can redeploy.

And I think what, what kind of go has done at Ryan Lance and the management have done, they’ve been really, really good at allocating capital.

And so now they’re just getting more cash to allocate whether that’s to shareholders or, or to future acquisitions.

Um, they, they’ve done a really, really good job of allocating capital and this just gives them more capital to allocate in the future.

Is this likely to, uh receive much regulatory scrutiny?

Do you think?

I think these all, all, all of these do, right.

But I, but I do think obviously less, it’ll, it’s a less uh less notoriety than a pioneer transaction or even a transaction.

But yes, it will go through the same process and uh and, and I, and I’m sure we’ll, we’ll go through the same uh rigor that all of these transactions have gone through at the FTC.

Really over the last three or four years, Rob Del Torres portfolio manager and managing director.

Thanks so much for taking the time here this morning, Rob.

Appreciate it.

Thank you.

Well, let’s go to the skies here.

American airline shares.

They are sinking this morning after cutting its sales outlook for the second quarter.

The airline also announcing its chief commercial officer will leave his role next month.

Yahoo Finance.

This pro superman has some of the details on this one for us stock sinking this morning.

Almost 10%.

Ross.

Yeah, yeah, you know the getting hit there and that revised outlook also seeing adjusted EPS for Q two in the one to dollar 15 range that was down for a dollar 45.

So big cut there for the current quarter.

Uh, the original points to some trouble here with summer travel when most airlines are sort of doing well.

Uh, now there are some issues that all airlines are dealing with.

Right.

Uh, Middle East tensions.

Consumers looking for more discounts than revenge traveler is sort of going away this, this summer.

But they still want to travel a little bit but they don’t want to spend uh exorbitant fees for it.

Uh And, but the American sort of revision revisions here with, with, with both profit and revenue, they seem worse than expected.

Plus he mentioned the chief commercial officer Vasu Raja leaving seems he made some bets on things like reducing long haul routes L A to New York which are really lucrative.

He started focusing more on the Sun Belt, which I think is good business but it’s not as lucrative as these bigger longer flights.

And the company needs some more general revenue.

They need more revenue.

It’s not, it’s not meeting expectations here for right now.

And it’s concerns why is this happening to American?

Is it just an American problem?

Yeah, and that is the question, is this an American problem or are we starting to see some of this weakness elsewhere?

When you take a look at some of the other larger domestic players we had, we had uh players like Ryanair talk about, uh, uh, consumers a bit more cautious but Delta, uh, United, they’re not warning about revenue.

They’re doing actually pretty, quite well these days.

I mean, I know Brad, you’re pretty close to Delta, you’ve heard the same as well.

So, I think it’s potentially an American issue.

Um, current CEO is known as a good operator, but they might need, uh, more of a sales stick to come in there and really kind of pump up uh sort of getting after that business consumer uh reestablished some of those longer haul flight routes which just take time and, and uh and from what I understand, they, they sort of diminished the New York to L A business, which was, which is a big business, but then also hard to build back up as you have.

Other, obviously Delta United are big there too.

So that’s sort of highlights some of the challenges Americans face right now.

Uh What’s one of the more prem airlines in the world?

Yeah, I mean, look when you think about the broader airline space here too, the, the larger thing for the summer travel is where companies have started to talk about where demand should be holding steady even as we’re kind of going towards this, this cruising altitude of normalization if you will versus what are some of the problems specific as you were laying it out to American Air versus some of the other airlines out there?

We still don’t know what the ultra low cost carriers are gonna have to navigate during this interim period of time as well.

But at least for this period, it seems like united, even as they had presented or at least given some of the updates going into the busy spring break and then summer travel season, they were seeing demand hold steady right now too.

So we’ll continue to track all of these.

But right now the American airline taking it on the Chin and a lot of the other major airlines down here as well.

In extended hours.

We’ll see where things open up process.

Thanks so much.

Well, we are just getting started here on the morning.

Retail round up Dick Sporting Goods are Ring after boosting his full year guidance and a Crombie shares, but they’re also in the green this morning after posting its strongest first quarter ever, we will speak with an analyst from U BS later on plus two shares are surging up just about a five for actually 12% for two in the back of its earnings report.

State t for a conversation with the company CEO that’s coming up on catalyst.

Next hour, all this and more.

You’re watching.

Yah Anglo American officially rejecting BHPS request to extend the deadline for talks on its $49 billion takeover offer.

The deal deadline will remain at 5 p.m. London time today.

You’re taking a look at the stock reaction here.

Uh pre market we’re seeing BHP group here flat just barely to the downside, Anglo American down by about 1.9% amid a wave of consolidation that we’ve seen in the broader energy sector and specifically oil and gas landscape right now, looking at Anglo American under just a bit of pressure off nearly 2% in pre market.

Now, this comes after like you were just saying they rejected the bhp’s request here for more time.

So what happens next?

So BHP has until 5 p.m. London time today to commit to an offer offer or walk away for six months.

And R BC analyst, uh Marina Collera was out with a quick reaction here noting the Anglo was already below the implied value of BH BS latest offer.

So she sees further pressure as the probability of an acquisition is repriced in terms of what could happen next.

Talk about a possible hostile takeover.

She’s saying that BHP is unlikely to go hostile given the complexity of this deal.

So again, you’re looking at BHP here in pre market up just over 1% on the flip side, you’ve got Anglo American those shares off nearly 2%.

But again BHP has until 5 p.m. London time today to commit to an offer or walk away for six months, right?

And just to further clarify, I should have said commodities landscape consolidation that we’ve seen because this is really more on the multinational mining elements of uh some of the commodities that of, of course are as Anglo American would say in their tag line, improving people’s lives.

So, uh ultimately, at the end of the day, this would kind of consolidate things like diamonds, platinum, copper, iron ore and so forth in some of the mining efforts there.

All right, let’s move on to the retail space.

A couple of big movers out today.

Let’s first start with Dick’s sporting goods jumping after raising its full year earnings guidance, the retailer seeing comp sales climbing over 5% in the first quarter up from a year ago, driven by heightened transactions.

So an increase in transactions, meaning more people are spending buying goods at the store to put it in plain English for everyone.

And again, you’re looking at the pre market trade up nearly 10%.

So why are they seeing this?

Right?

And we talked about some of the changes that have taken place under Ceo Lauren Hobart.

She has been expanding this new retail concept.

She’s renovating current stores.

She’s re relocating some stores as called the House of Sport location.

So it’s more of an experience.

These include batting cages, golf club repairs, management plans to boost spending on both e commerce and a physical location.

So those turnaround efforts, it looks like at least uh helping the stock, at least helping the business for now.

The retailer now expects the com sales are going to be up between two and 3% for the full year with EPS uh within a range of 3 30 1335 to 1375.

And again, you’re looking at a pop here ahead of the open.

Yeah, it’s really interesting here.

I mean, especially looking at the raise in the outlook, you just mentioned some of the specifics on there, but the demand profile that they’re seeing among consumers right now and that’s really pointing back to the products that they’re being able to bring into store here, product pipeline from some of their key brand partners in the vertical brand portfolio, they say has never been better.

So that points back to both the equipment and potentially on the apparel side uh where they’re seeing, for example, as they provide Nike’s recent Paris Innovation Summit highlighting breakthrough products across apparel and footwear that they look forward to bringing to their athletes.

Dick saying that in this release here and talking about some significant momentum that they’re forecasting about a differentiated product and compelling experience that they’re providing.

I just remember running around the track when I used to go into Dick’s sporting goods growing up, testing out out the shoes.

I mean, you gotta put it to the test and you just go for a quick sprint.

That’s the way to do it.

Let’s switch gears here and talk about Robin Hood that so is also turning check on Yahoo Finance this morning, announced a plan to repurchase as much as a billion dollars of its own shares over 2 to 3 year period.

Now, this buyback program is expected to begin in the third quarter.

This is significant because it’s the first uh stock buyback program announced by Robin Hood.

They’ve been rolling out a series of new features trying to cater to that new demand here for products.

So they’re looking to grow really beyond that start up phase, uh which is still pretty much referenced as, but this buyback really under how Robin Hood, I think is adopting a similar approach to kind of win over investors of those as other companies who are, who are a bit more mature, who have been around for a lot more time, obviously.

So they’re saying this as they’re very confident within the business, they’re looking to grow, they’re looking to reinvest, they’re looking to come up with new products.

And again, you’re looking at extended gains of nearly 1% here ahead of the open wave of buyback programs that we’ve seen first of their kind over the course of this earnings season here.

I think back to even as we were speaking with uh Kaufman from Fiver and their CEO yesterday, you’ve got fresh buybacks there.

You got a fresh buyback here on Robin Hood.

And so a lot of focus on, at least for the mindset of the investor that CEO S are trying to send and signal about the confidence of their business.

That’s typically where you see more of these announcements coming forward, especially if you see uh over an extended period of time, a lot of chop or volatility in shares and, and Robin Hood had seen that for a while coming into the start of this year.

But over the past year, take a look at that share price reaction here.

It’s up by about 100 32% fast past 52 weeks.

Uh But notably, I would be interested to see current quarter, uh, what they say after this quarter about what they’re seeing or saw within the broader kind of meme stock frenzy that once again reinitiated, I think that’s gonna be interesting to hear once they finally do report earnings again, but we’re gonna have to wait for that.

All right.

Well, you don’t have to wait for the opening bell on Wall Street.

That’s just around 3.5 minutes away.

So, keep right here on Yahoo financing.

You got much more of the early action ahead.

We’ll be right back.

All right, we’re taking a live look at the opening bells happening at the NASDAQ and the NYSC.

Hey, it looks like, uh, you’ve got the great folks at perspective ringing the opening bell at the NYSC.

Oh, and the winner of the Indie 500?

Joseph New Garden there, front and center ringing the opening bell at the NASDAQ.

You know, I went to Indianapolis for the first time this year and a lot of people are very happy about the Indy 500 there.

No surprise at all brings a lot of, yeah, it brings a lot of uh, a lot of cheddar to the um, local economy.

A lot of De Niro.

Yeah, money anyway.

No, I can’t say I am but I like cars.

So leave it there, checking out where things are opening here this morning.

We got the dow under a bit of pressure.

You got the S and P uh pulling back just a bit.

You can see falling there below 5300 on track to pull back there.

And the NASDAQ Composite closing at a record high closing about 17,000 this morning.

Uh giving back some of those late day gains and checking out some of the sector action, what we are seeing here this morning as we pull that up here, a bit of a mixed picture.

We talked a lot about, we have energy up on our screen because of some of the deals that are taking place here this morning ahead of the Open.

But again, you are seeing a lot of red, you have energy among the out performers.

I guess the best of the worst of the group here when it comes to the fact that we’re still looking at losses of about a half of a percent that along with communication services on the flip side though, if you got utilities under a pretty decent amount of pressure off just about 1% and real estate, a bit of a reversal here today from what we saw early in yesterday’s trading action that’s opening up just off, about 1%.

Jared By with a closer look at some of that movement that we’re seeing.

Jared.

Yes, it is off to the races for the NASDAQ.

So a very fitting opening bell there.

And by the way, I like cars too.

So I just wanted to show what the difference between the NASDAQ and the Dow mainly and also the S and P 500.

This is year to date.

And you can see we have accelerated to the upside right here.

But if we take a look at the dow, well, we just kind of exceeded these highs that we had in April.

Let’s see if I can draw on this.

There we go.

We got a little bit of a punch above, but then we dropped off pretty steeply and we’ve had some bigger losses.

We’ll take a look at that in a second.

Here is the S and P 500.

It is maintaining the highs and it is not broken through that big red candle that you can see there.

That was a bad day in the indices last week.

Uh We can also take a look at the transports pretty weak there and also the small caps.

Here’s the Russell 2000.

But I want to show you what’s happened with the bond market because I think this is really instructive and it’s counter intuitive what’s happening with the sector action.

So this is a year to date chart with the 10 year T note yield.

And over the last 10 sessions or so, we have screamed to the upside.

Now, we’re at the highest level since early May.

And in that time, I’m going to show you what has happened over the last seven days in the sectors.

Now we have tech and communication services.

Those are the only out performers.

Usually when you see going higher, you don’t see uh tech outperforming.

But that’s nevertheless, what is going on here.

And then you can see a lot of dark red real estate down 5% financials down four health care and energy down more than 3% and just peering inside the NASDAQ over the last seven days, you can see NVIDIA now up over 20% since its earnings release last week.

Um But I think uh we what we have here when the rest of the market is kind of fallen off a little bit.

You have this Invidia safety trade going on and maybe that’s what’s been holding up the market because if we take a look at the semi conductors over the last seven days, that is one of the few bright spots and there you have it again, NVIDIA leading the way.

So I’m going to take a brief look at what’s happening today and yes, all 11 sectors in the red here led to the downside by real estate and health care, but I’m going to be watching the Tenure Tino Yield and basically the US bond market for clues as to what might happen next in equities.

All right, Jared, thanks so much.

Let’s talk about the NASDAQ right now because it’s hitting its 12th or hit its 12th record close of the year.

A I really fueling the rally.

One of the biggest names in the story has been NVIDIA.

It’s contributed over 46% of the major averages returns a year to date according to Yahoo finance calculations.

Our next guest thinking that there might be some more room to run in the tech trade here to break it all down.

We wanna bring in Kate Hill Russell Investments, president and Chief investment Officer is here, Kate.

It’s great to have you.

So let’s talk about the ru the massive run up that we’ve seen in some of these tech names.

You talk about a lot of the fact that it’s been driven by only a handful of these larger cap tech plays.

What does that then tell us?

Do you think just about that momentum that we could see in the second half of the year, we still going to see some of this buying activity of these larger cap names?

Yeah.

Well, it’s always hard to call the end of a momentum trade, particularly when it’s supported by some good fundamentals.

And so you know, you’re hitting kind of a new high yesterday.

Yeah, I’d say, like, you know, continuing to add to that right now at these levels, you know, probably if you’re already a holder, you know, wouldn’t do, you know, as much.

But, you know, if you are, you know, you know, in it and, you know, trimming a little bit might make sense, particularly if you think that the A I, uh, trend or theme is a durable one.

And we do, and so you start to see some broadening out into other sectors.

And we’re seeing some of that, whether it’s in utilities, maybe that what we are seeing is the market opens, you know, today or some of the sectors that might be able to benefit from some of the A I productivity gains consumer and health care will probably be some of the first, you know, sectors to be able to see the benefit of it.

So we do see this, you know, still being a well supported trend that could continue.

Um you know, in the second half of the year, if we continue to see in future earnings periods, earnings growth as uh as we’re continuing to track up against whether or not we really do see a recession and a concerted consumer pull back here and no rate cuts then does no rate cuts matter to the markets.

Yeah.

Um I think a slow cut kind of scenario that might start at the back half of the year should be really good for risk assets, you know, cuts that are driven by obviously a recession, you know, have a very different impact.

But if you’re still seeing some, some strong growth and inflation starts to taper a bit and we’ll see what happens with core PC.

You know, at the end of the week is a signal, you’re having some cuts at the end of the year will be helpful but not necessary if you’re continuing to see some of the growth in earnings, even if it slows down a bit helpful.

To what extent, I mean, if, if we do see cuts, what does that then mean for future gains versus if we don’t see cuts?

Yeah, I mean, if you don’t see cuts but you don’t start to have some of this, you know, hawkish tone in terms of hikes.

I think you’re still focused more on the fundamentals and earnings and how companies are doing.

I think certainly more of an edge case if you start to see a concern about inflation coming up and the discussion on hikes coming back in that has a very impact on the market but no cuts at all with growth.

I don’t think it will have a big impact as people focus on the earnings and where we’re seeing the growth coming from, even if we did see some profit taking at these levels.

We were just talking about at the start of this segment some new record highs for the NASDAQ composite, if we did see rotation, where would that kind of flow into from your perspective?

Yeah, so, so I think it ends up being in, you know, consumers in health care, maybe absent some of the political considerations that will happen towards the back half of the year European financials, you know, is another area if you kind of shift out kind of globally where there might be some shifts.

But I think European financial is attractive right now.

Yeah, I mean, I think it’s just like the, the set up and you obviously have some challenges in in Europe from, you know, you know, maybe not as healthy as, as the US is and some cuts that could end up coming through.

But just from evaluation perspective, they could be in a, in a better position.

And I think there’s some, you know, cyclical kind of rotation that you could see there when you talk about the uh gap between the out performers and the underperformers is that set to widen.

If we don’t see the, if we don’t see the fed cut rates this year, I think if you have like higher for longer, it’s gonna start to hurt companies that handle this period.

Well, thinking that there was gonna be some relief coming and if you don’t see that both some of the higher leverage companies, small cap companies, but then even some of the consumers particularly low and middle income, it’s gonna start to pinch and I think that could, you know, start to hurt some of and widen the gap further when we talk about, uh, the performance that we will likely see here going forward.

And I guess what is going to be that massive driving factor we have earning season pretty much behind us now, is it, is it mostly going to be the fed that’s driving this intraday action and some of this volatility that we’ll see, at least in the short term, the shift to macro, you know, post earning season is definitely there.

Now, buybacks and other things now that that window is open may help support the market a bit, but it’s shifted back to to macro particularly as you start to have some of the, you know, the fed speakers, you know, coming in with a bit more of that hawkish to like people are, you know, focused on what’s going to happen.

Are we going to see these rate cuts?

Are we going to see this slowing kind of in the labor market that doesn’t, you know, it’s still a healthy labor market and healthy consumer.

But the back half of this year, if you start to see some slowing, I think that’s going to become a big part of the focus over the near term.

You mentioned the general election.

At what point do markets really start to pay attention to what’s being campaigned on?

What economic policies candidates are discussing.

Yeah, not until the, um, not until kind of the back half of the summer when you start to get the conventions and, and closer to the election, you know, at the end of the day and this won’t be a new thing like elections, you know, generally don’t move, you know, the, the market, you know, much in investors, you need to be focused on the policy shift, as you said and kind of which the administration and you know, whether the House and the Senate you stay aligned you or not.

But you know, right now we’ve got a lot more time.

It’s before it starts driving markets, Kate L Hillo, who is the Russell Investments, president and chief investment officer.

Thanks so much for joining us in studio.

Thanks so much.

Coming up everyone.

We’ve got a fresh pulse on the consumer and we’ve got a deep dive into Abercrombie and Fitch’s quarterly results.

On the other side of the break update, the stores don’t smell anymore.

They say at least that’s what our executive producers do.

Good vibes this morning for Apple Bank of America reiterated the company as the top pick, maintaining a buy rating and a price target of $230 on the stock B of A analysts are optimistic about the adoption of A I enabled phones.

They’re coming.

Dan Dan Yahoo Finance’s Dan Halley here to tell me whether or not these A I enabled phones are coming.

Are they, I think they call them in telephones.

Uh, that is, uh, yeah, in telephones you need to workshop that quotes.

Yeah.

Um, but I mean, look, this is something that Apple clearly has had to work on.

Uh, they don’t have any really generative A I capabilities right now that are doing anything.

Uh, they’ve been teasing this for some time.

Tim Cook has been teasing it, uh, on various, uh, earnings calls just because they’ve been left in the dust.

Microsoft has generative A I Google has generative A I meta uh Amazon, all of these companies are doing it.

Um uh some success, some floods here and there.

Uh but Apple has been the, the one kept out and so this is seen uh by a lot of analysts as potentially a kind of new driver for smartphone sales.

Now, do I feel that way?

Uh Not, not, well, I don’t, I, I, unless they show something at WW DC that’s like software driven that I think is gonna get people excited, then it’s not gonna do anything right?

People care about the camera, the screen and the battery.

Now beyond that, there’s gotta be some amazing software feature.

No one’s ever like, man.

Did you get that Siri update?

Have you ever heard anyone say that?

No, even when Siri came out, people were like, cool.

I’m sorry, I’m sorry.

Yeah, I just activated everybody’s phone.

Um But II I think if, if they can do something with the software that gets people actually excited, then it will be a driver.

Now, what does that look like?

I don’t know.

Right.

Because Samsung and Google already have generative A I capabilities on their own phones and it’s not really a reason for people to wanna buy them.

Right.

It’s more about the capabilities of the phones physically offer.

So I don’t necessarily know that this is going to be the driver that everybody hopes it’s going to be.

Uh unless it truly is something that Apple can say, look at how amazing this is compared to the rest of of what’s out there, this is going to get people to want to buy.

So Dan then how much is riding on the worldwide developers conference here next month?

Just in terms of if there’s any disappointment, what do you think the impact is or I guess what are analysts saying that the impact could potentially be here on Apple and the demand there for their phones at least in the near term?

Well, I think this is really uh a kind of setting up table stakes for like the future of of Apple and their software just because look, they’re already c is behind on this technology that’s changing things, right?

Microsoft showed with their uh their laptops that these are interesting technologies that can do a lot, right?

They have new features called things like recall uh that can kind of pull up anything you’ve been doing on your phone in the past, uh, you know, couple of years, uh, if you have the settings tweaked, right.

Uh, they’re, they’re doing cool, interesting things.

Um, Apple needs to offer that across everything, not just the iphone.

So if they don’t, if they disappoint, um, I don’t think it’s gonna get people to not buy an iphone.

Um, but I, I think it’s going to leave Wall Street and, and, and analysts saying, well, what gives is Apple, has Apple lost its edge?

And I think that’s more along the lines of what would happen is that the right way and going back to what you just said a minute ago, that Apple is very much viewed as maybe lagging when the comes to A I adoption in the A I race right now.

Is that the right way to view Apple at this point?

And I, I guess, is it a bit surprising just given the fact that you’ve covered the company for so long and it’s normally on the cutting edge when it comes to technological advances and adoption?

Yeah, I think, I think it’s a, I think when it comes to where they should be as far as at least having something uh to preview, right?

They’re, they’re behind, right?

But if you look at something like uh uh meta, they’re releasing these technologies as open source.

So it’s not really finding its way into too many products.

It’s more on the advertising side.

Um You know, Amazon, obviously, this is more about they have their uh Rufus uh A I assistant which is helpful but has its issues.

Um Google has launched Ja I it’s telling you to eat rocks, right?

So apple doesn’t want to do that, right.

That I think would be a bigger problem for apple and the perception of apple than it would be for, for something like Google.

Now, it’s a huge problem for Google because they’re supposed to be the source of trust online.

You don’t say let me Google this real quick because you don’t trust them, you do it because you do trust them.

So it’s a huge problem for Google.

Apple is all about fit and finish.

It’s all about delivering a product that people love and if they flo that, I think that would be a bigger problem than not having anything at all.

Nobody should be surprised that artificial intelligence is telling humans to eat rocks.

Yeah, I mean, look, eat rocks, eat paste.

It’s totally fine.

Uh And uh yeah, I mean, look, it’s not uh like you ever go to Google for anything important, you know.

So, well, we’re just going to leave it there.

Great with us here this morning for about 20 minutes into about 17 minutes into the trade.

You take a look at where things stand.

You’ve got the dow of nearly 400 points, a bit of a pullback here.

This morning, the S and P following further below 5300.

But the NASA take a look at that now off just around 7/10 of a first hand pulling back after, at another record high yesterday, above 17,000, we’re seeing a pull back just over 100 base points here this morning.

So again, some downward pressure across the board, we take a look at the sector action that’s reflected in the sector action to this morning.

All 11 of the S and P sectors here under a bit of pressure, real estate.

The worst performer of the group followed by financials and health care.

We’ll be right back.

Consumers still flocking to Abercrombie and Fitch name them shares.

Rallying on Wednesday after beating profit expectations and posting strong sales in the first quarter.

The company raising its full year sales outlook as demand across apparel and accessories continues to grow for a deeper dive into the results.

Yahoo Finance executive editor Brian Sozzi here with the breakdown.

Look, I I said name them but like I am one of them.

I made my my way in one of the stores like last week.

Yeah, this quarter, I just want to put this in context.

Um This is not going to be the norm from these retail earnings that are coming up.

We saw it when Walmart Report, we saw it from t reported a couple week ago, apparel is just soft and we saw it within Macy’s results.

So for Abercrombie again, to put up a, I would say mind blowing quarter is, uh, a very much an Abercrombie driven story.

So, what is this company doing?

Right.

It’s just getting its styles, right?

Uh, it’s keeping in its inventory under wraps.

This is a company that grew sales over 20% in the most recent quarter and its inventory was flat.

What is that telling you?

It’s that it’s just planning its business very well and it’s not overstocking items.

It’s putting new merchandise on the floor and the stuff is selling out.

Well, one area of the business that really caught me by surprise guys on the conference call moments ago was the wedding business is the business.

They recently launched Abercrombie and Fitch and it’s, uh, the Fran Hoitz CEO will talk to a little bit later on, uh, this afternoon saying it’s one of the hottest businesses they have right now can’t keep the stuff in stock and it’s not only that they’re coming in and buying wedding dresses, uh, from Abercrombie and Fitch or various wedding styles.

These are new customers in many cases to the Abercrombie brand and that is having that is sending customers to other areas of the store.

You know what?

That’s so interesting because it makes sense when you take a step back and think about it because it was really the millennial shopper who knew Abercrombie so well, decades ago, right?

And so now many of those people are in the age of, they’re getting married, they’re having weddings.

So why not buy at Abercrombie?

I didn’t even know I just pulled it up.

I pulled it up on my, on my computer right now.

I had no idea that they even had this business until you just said it.

But it makes sense because it also re the remaining committed to their loyal customers and they’re playing into that base that has worked well for them.

You see the film, you see the fitness.

Look, I saw, I saw the fit and I was upset because you were teasing this to us before.

And yeah, I didn’t see this coming at all.

They don’t have tuxes there though.

I was just there.

No tuxedos.

They’re not going to compete with the men’s warehouse.

But also interesting to uh Abercrombie noting on the conference call that they are now going to, I think now that their US business is solid.

Abercrombie’s working Hollister businesses finally start to turn they’re shifting their or shifting their sites to uh Europe, notably, uh Germany and the UK.

In fact, Fran Horowitz, uh saying she was just in the UK for and had their first annual board meeting there uh in, in quite some time.

So look for the company now to expand overseas a little more aggressively and thoughtfully and then also open up a good number of stores here in the US in the back half of the year we should clarify.

This is like wedding.

I’m still hung up on this wedding guest attire is what?

But they have stuff that you could wear for your wedding.

Walking down the aisle, rehearsal dinner, there’s a lot of stuff you could wear.

They get, yeah, get you geared up for your back.

I’m here to bring you this like a hashtag breaking news.

This one you can wear down the aisle, not me But yeah, if you wear head to toe, Abercrombie and Fitch, why not just live that wedding lifestyle and go out and buy one of these dresses you would, you, would you buy, would you get something from there?

Of course, why not?

I mean, it’s not bad.

Yeah, it’s not bad and it’s also a very affordable price point, especially when you compare it to some of the other.

I’m gonna put this to uh Ceo Fran Horace because I walk, walk by my latest, uh my recent my Abercrombie Fitch store, uh Roosevelt Mall and I didn’t see any of this stuff.

So I gotta ask her, what, where is this?

And why is not my store one?

Yes.

Yeah.

Maybe we should be buying more of these dresses.

I have no weddings to go to.

Nor am I getting married.

Not yet.

Nor do you need a dress any time any of that stuff on the wedding site.

But we’re gonna be asking Brian all of these tough questions.

We’re gonna have a deeper dive into the company’s latest earnings results.

Also the wedding business.

So has a heck of a lot of questions on that.

People come to my wedding.

That’s about it.

I mean, I know maybe one of my pets.

How about you?

Do you really want to come?

Good, uh Good gifts.

I give you for your another segment.

Great.

Thanks so much.

Coming up.

We are going to be taking a deep dive into the big deals in the energy space and what it means for the industry.

Plus the CEO of Chewy joining us here on set to talk consumer spending on pet some of the trends that he’s seeing within his business.

What it tells us about the health of the consumer that’s all coming up next on catalyst.

We’ll be right back.

(Reuters) – BHP Group said on Wednesday it did not intend to make a formal offer for Anglo American, walking away from its $49 billion takeover deal, after the London-listed rival refused to extend the bid deadline.

"We were unable to reach agreement with Anglo American on our specific views in respect of South African regulatory risk and cost," BHP said in a statement, adding that it did not get "key information" from Anglo to address these risks.

Anglo rejected BHP's last-ditch request for more time to discuss a takeover offer, dismissing it as highly complex, after the miner had granted BHP a one-week extension to its original May 22 deadline to submit a binding offer.

(Reporting by Yadarisa Shabong and Pushkala Aripaka in Bengaluru; Editing by Shinjini Ganguli)

ConocoPhillips (COP) is set to acquire Marathon Oil (MRO) in an all-stock deal valued at $17.1 billion. Tortoise Portfolio Manager Rob Thummel joins the Morning Brief to explain why this acquisition has come as “a surprise.”

Thummel commends Marathon Oil’s management team, stating that they “have really done a great job of being capital disciplined.” This disciplined approach has resulted in a high free cash flow yield, which Thummel believes will be one of the most significant benefits to ConocoPhillips through this acquisition. However, Thummel describes Marathon Oil’s actual assets as “good, not great.”

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Angel Smith

Video Transcript

All right, another transaction we’re tracking here this morning, Anglo American officially rejecting BHPS request to extend the deadline for talks on its $49 billion takeover offer here.

I mean, just wanna get your reaction on this rejection here and what the signal is next.

Yeah, I’m not familiar with that transaction but, but I can tell you there’s a lot of transactions going in the mineral space, in the, in the oil and gas space.

Uh and, and, and obviously, valuation is always probably the biggest hurdle when it, when it comes to a lot of these transactions.

So, so that’s probably the biggest driver of, of, of what what’s causing this, the uh potential disruption of this transaction.

All right, let’s talk about Conocophillips because that’s the other big deal that we’re talking about within the space.

Conocophillips and uh Marathon Petroleum, the merger there.

Talk to me just about one, what this is going to do to Conocophillips business here and then two just what this tells us just about further consolidation, kind of go on what you were just talking about there before, but further consolidation within this space and the likelihood that this might remain a theme here for at least a quarters to come.

Yeah.

So this is a bit of a surprise.

And, uh, and I would say the reason and what I mean by that is, I don’t think anybody probably had marathon oil being acquired by Conocophillips.

Um, and, but, but when you look at it, uh, it does make some sense.

So if you look at the marathon oil assets, they’re good.

They’re not great.

But the management has really done a great job of the capital discipline and what that’s resulted in a is in a really high free cash flow yield from marathon oil.

So marathon oil actually has one of the highest free cash flow yields in the oil and gas space.

Um So that’s a bit attractive or that is attractive to somebody and, and obviously, Conco Phillis is, is, has found it the most attractive at this point.

But it gets a lot of free cash flow that it, that then uh can redeploy.

And I think what, what kind of has done to Ryan Lance and the management have done?

They’ve been really, really good at allocating capital.

And so now they’re just getting more cash to allocate whether that’s to shareholders or, or to future acquisitions.

Um, they, they’ve done a really, really good job of allocating capital and this just gives them more capital to allocate in the future.

Is this likely to, uh, receive much regulatory scrutiny?

Do you think?

I think these all, all, all of these do?

Right.

But I, but I do think obviously less, it’ll, it’s a less, uh, less notoriety than a pioneer transaction or even a transaction.

But yes, it will go through the same process and uh and, and I, and I’m sure we’ll, we’ll go through the same uh rigor that all of these transactions have gone through at the FTC.

Really over the last three or four years, Rob Del Torres portfolio manager and managing director.

Thanks so much for taking the time here this morning, Rob.

I appreciate it.

Thank you.

(Updated – May 29, 2024 11:57 AM EDT)

Investing.com — U.S. stock futures fell Wednesday, with investors concerned that the Federal Reserve may keep interest rates elevated for longer than previously expected.

Here are some of the biggest U.S. stock movers today:

Nvidia (NASDAQ:NVDA) stock fell 0.25%, paring gains slightly after the tech giant’s hefty 7% gains the previous session.

American Airlines (NASDAQ:AAL) stock sank 15% after it cut its second-quarter earnings forecast on a more subdued outlook on travel demand. Peers Delta Air Lines (NYSE:DAL) and Southwest Airlines (NYSE:LUV) were also lower.

Robinhood (NASDAQ:HOOD) stock rose 0.5% after the trading platform unveiled a stock buyback of $1 billion.

Marathon Oil (NYSE:MRO) (MRO) stock rose 9% after energy giant ConocoPhillips (NYSE:COP), down 3.5%, agreed to buy the Houston-based company, in an all-stock deal worth $17.1 billion that would strengthen the company’s shale assets.

Salesforce (NYSE:CRM) stock rose 0.6% ahead of the release of the business software group's fiscal first quarter earnings after the bell, with Wall Street likely on the lookout for updates on the business software group's Data Cloud division.

Dick’s Sporting Goods (DKS) stock rose 16% after the retailer raised its full-year guidance after customers spent more on new sneakers and athletic gear at its big-box stores.

BHP Group (NYSE:BHP) ADRs rose 1% after the mining giant asked for more time to hold talks with Anglo American (JO:AGLJ), subsequently denied by Anglo, as a deadline for a formal offer loomed large. BHP no longer intends to make a firm offer.

CAVA Group (CAVA) was volatile after the Mediterranean food chain reported a decline in customer traffic in the first quarter, overshadowing the raising of its annual sales outlook. The stock erased a pre-open decline of over 6%.

UnitedHealth Group (NYSE:UNH) declined 4.5% after it warned about risks for its Medicaid business during a presentation. Peers Centene (NYSE:CNC), Molina Healthcare (NYSE:MOH), Humana (NYSE:HUM) and Elevance Health (ELV) also declined.

Toast (TOST) fell 6.5% after it updated its two to three year target for profit growth and expansion during an investor presentation, disappointing investors banking on faster growth.

Chewy (NYSE:CHWY) rose nearly 30% after beating first quarter EPS estimates and issuing strong guidance for the second quarter and full year.

Additional reporting by Louis Juricic

Midday movers: Marathon Oil, Dick's and Chewy rise; American Airlines falls

Meta identifies networks pushing deceptive content likely generated by AI

Regional lender Bank OZK plunges as Citi turns bearish over loan concerns

Mining company Anglo American has rejected calls from suitor BHP to extend a deadline to strike a takeover deal.

The pair have been in talks over a deal worth almost £39 billion since Wednesday May 22 amid efforts to agree on the structure for a potential takeover of Anglo American.

Australia’s BHP faces a deadline of 5pm on Wednesday to make a firm offer or walk away.

On Wednesday morning, BHP urged its smaller rival to grant it an extension amid continued discussions between the two companies.

It said it had put forward a number of “socioeconomic measures” in an attempt to ease concerns over its bid, and called for more time to discuss these with Anglo American.

BHP’s three takeover approaches all had a requirement for its rival to spin off its South African operations, resulting in heavy criticism from the government in Pretoria.

Anglo American also opposed this.

In a statement on Wednesday, BHP said: “BHP believes that the proposed measures it has put forward provide substantial risk protection for Anglo American shareholders and supplement the significant value uplift that Anglo American shareholders will receive from the potential combination.

“BHP believes a further extension of the deadline is required to allow for further engagement on its proposal.

“This announcement does not amount to a firm intention to make an offer and there can be no certainty that an offer will be made.”

However, later on Wednesday, Anglo American rejected the move and said there is “no basis” for an extension.

It said in a statement: “BHP has not addressed the board’s fundamental concerns relating to the disproportionate execution risk associated with the proposed structure and the value that would ultimately be delivered to Anglo American’s shareholders.

A mega-merger between the two companies would create the biggest copper miner in the world, with 10% of global output.

Anglo American’s vast reserves of copper are a key driver of the interest in the business, as the mineral is an important building block for low-carbon technologies such as solar farms and electric cars.

Earlier this month, Anglo American announced plans to break up major parts of the business and heavily slow down its development of a £7 billion North Yorkshire fertiliser mine.

Mining giant BHP has urged takeover target Anglo American to extend its deadline as talks continue between the two rivals.

The companies have been in talks over a deal worth almost £39 billion since Wednesday May 22 amid efforts to agree on the structure for a potential takeover.

Australia’s BHP faces a deadline of 5pm on Wednesday to make a firm offer or walk away from takeover talks.

The mining firm said it had put forward a number of “socioeconomic measures” in a bid to ease concerns over its bid and called for more time to discuss this with Anglo American.

BHP’s three takeover approaches all had a requirement for its rival to spin off its South African operations, resulting in heavy criticism from the government in Pretoria.

Anglo American also opposed this.

“BHP believes a further extension of the deadline is required to allow for further engagement on its proposal.

“This announcement does not amount to a firm intention to make an offer and there can be no certainty that an offer will be made.”

A mega-merger between the two companies would create the biggest copper miner in the world, with 10% of global output.

Earlier this month, Anglo American announced plans to break up major parts of the business and heavily slow down its development of a £7 billion North Yorkshire fertiliser mine.

LONDON, May 21, 2024–(BUSINESS WIRE)–

FORM 8.3

PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY

A PERSON WITH INTERESTS IN RELEVANT SECURITIES REPRESENTING 1% OR MORE

Rule 8.3 of the Takeover Code (the "Code")

1. KEY INFORMATION

(a) Full name of discloser:	Elliott Investment Management, L.P
(b) Owner or controller of interests and short positions disclosed, if different from 1(a): The naming of nominee or vehicle companies is insufficient. For a trust, the trustee(s), settlor and beneficiaries must be named.	Elliott International, L.P. Elliott Associates, L.P The Liverpool Limited Partnership
(c) Name of offeror/offeree in relation to whose relevant securities this form relates: Use a separate form for each offeror/offeree	BHP Group Limited
(d) If an exempt fund manager connected with an offeror/offeree, state this and specify identity of offeror/offeree:
(e) Date position held/dealing undertaken: For an opening position disclosure, state the latest practicable date prior to the disclosure	16th May 2024
(f) In addition to the company in 1(c) above, is the discloser making disclosures in respect of any other party to the offer? If it is a cash offer or possible cash offer, state "N/A"	Anglo American Plc

2. POSITIONS OF THE PERSON MAKING THE DISCLOSURE

If there are positions or rights to subscribe to disclose in more than one class of relevant securities of the offeror or offeree named in 1(c), copy table 2(a) or (b) (as appropriate) for each additional class of relevant security.

(a) Interests and short positions in the relevant securities of the offeror or offeree to which the disclosure relates following the dealing (if any)

Class of relevant security: Ordinary shs : AU000000BHP4	Ordinary
	Interests		Short positions
	Number	%	Number	%
(1) Relevant securities owned and/or controlled:	10,000	0.0002%	6,636,224	0.1309%
(2) Cash-settled derivatives:			8,508,361	0.1678%
(3) Stock-settled derivatives (including options) and agreements to purchase/sell:	5,000,000	0.0986%
TOTAL:	5,010,000	0.0988%	15,144,585	0.2986%

All interests and all short positions should be disclosed.

Details of any open stock-settled derivative positions (including traded options), or agreements to purchase or sell relevant securities, should be given on a Supplemental Form 8 (Open Positions).

(b) Rights to subscribe for new securities (including directors’ and other employee options)

Class of relevant security in relation to which subscription right exists:
Details, including nature of the rights concerned and relevant percentages:

3. DEALINGS (IF ANY) BY THE PERSON MAKING THE DISCLOSURE

Where there have been dealings in more than one class of relevant securities of the offeror or offeree named in 1(c), copy table 3(a), (b), (c) or (d) (as appropriate) for each additional class of relevant security dealt in.

The currency of all prices and other monetary amounts should be stated.

(a) Purchases and sales

Class of relevant security	Purchase/sale	Number of securities	Price per unit

(b) Cash-settled derivative transactions

Class of relevant security

Product description

e.g. CFD

Nature of dealing

e.g. opening/closing a long/short position, increasing/reducing a long/short position

Number of reference securities

Price per unit

(i) Writing, selling, purchasing or varying

Class of relevant security

Product descriptione.g. call option

Writing, purchasing, selling, varying etc.

Number of securities to which option relates

Exercise price per unit

Type

e.g. American, European etc.

Expiry date

Option money paid/ received per unit

DR (US0886061086)

Call option

Purchase

2,500,000

US$62.5

American

19/07/24

US$ 1.64583

(ii) Exercise

Class of relevant security

Product description

e.g. call option

Exercising/ exercised against

Number of securities

Exercise price per unit

(d) Other dealings (including subscribing for new securities)

Class of relevant security

Nature of dealing

e.g. subscription, conversion

Details

Price per unit (if applicable)

4. OTHER INFORMATION

(a) Indemnity and other dealing arrangements

Details of any indemnity or option arrangement, or any agreement or understanding, formal or informal, relating to relevant securities which may be an inducement to deal or refrain from dealing entered into by the person making the disclosure and any party to the offer or any person acting in concert with a party to the offer:

Irrevocable commitments and letters of intent should not be included. If there are no such agreements, arrangements or understandings, state "none"

None

(b) Agreements, arrangements or understandings relating to options or derivatives

Details of any agreement, arrangement or understanding, formal or informal, between the person making the disclosure and any other person relating to:

(i) the voting rights of any relevant securities under any option; or

(ii) the voting rights or future acquisition or disposal of any relevant securities to which any derivative is referenced:

If there are no such agreements, arrangements or understandings, state "none"

None

Is a Supplemental Form 8 (Open Positions) attached?

Date of disclosure:	17th May 2024
Contact name:	Michael Cross
Telephone number:	0203 009 1306

Public disclosures under Rule 8 of the Code must be made to a Regulatory Information Service.

The Panel’s Market Surveillance Unit is available for consultation in relation to the Code’s disclosure requirements on +44 (0)20 7638 0129.

The Code can be viewed on the Panel’s website at www.thetakeoverpanel.org.uk.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520106053/en/

Contacts

Elliott Advisors (UK) Limited

(Bloomberg) — BHP Group Chief Executive Officer Mike Henry said investors must decide whether his team or the rival one at Anglo American Plc is best positioned to deliver value from their respective restructuring plans.

Most Read from Bloomberg

Henry’s counterpart at Anglo, Duncan Wanblad, announced on Tuesday that the storied mining company will exit diamond, platinum and coal mining, as it fends off a £34 billion ($43 billion) bid from BHP. The BHP CEO said his company would remain “disciplined” in its pursuit of Anglo.

“Shareholders must decide which plan creates the greatest value, soonest,” Henry said at a mining conference in Miami. “Which team has the better track record of execution.”

Anglo has rejected two offers, saying that BHP’s condition to spin off South African assets before the takeover was unworkable. However, Anglo’s own plan to spin off its Anglo American Platinum Ltd. unit is “a pretty clear indicator that it is doable,” according to Henry, who cited previous spinoffs by both companies.

Read More: Anglo Goes for Bold Breakup Plan in Move to Fend Off BHP

Most Read from Bloomberg Businessweek

JOHANNESBURG/ LONDON (Reuters) -BHP Chief Executive Mike Henry said that Anglo American investors need to consider the merits of his company's bid for its smaller London-listed rival, seeking to drum up support for a proposal that has been rejected twice.

The CEO of the world's biggest listed mining group told investors at a metals and mining conference in Miami that Anglo shareholders must make a "determination" on the benefits of a combination of the two companies and which team they think has a better track record of executing projects and delivering returns to investors.

Anglo CEO Duncan Wanblad on Tuesday outlined plans to refocus on energy transition metal copper while spinning off or selling its less profitable coal, nickel, diamond and platinum businesses.

Henry, meanwhile, emphasised the merits of BHP's $43 billion bid and dismissed concerns that the proposed deal would be complex to execute.

"At the end of the day, it's going to be up to shareholders. They have to look at the plans, decide which one they believe is going to create the greatest value soonest," he said.

"And they have to make a determination as to the likelihood of execution of those plans, including which team they believe is more capable and has a better track record of execution. It's that simple."

The Anglo board argues that the proposed deal undervalues the company and is difficult to execute, with BHP planning to demerge two of Anglo's South African assets prior to a takeover.

BHP chief Henry, however, says the company has sufficient experience to execute complex transactions, having divested South32 assets in South Africa.

Henry said he was disappointed with the Anglo board's continued refusal to engage, adding that BHP would have preferred to continue talking in private.

"Our strong preference was to be able to hold these discussions with Anglo in private," Henry said. "Rather unfortunately, it got leaked."

While BHP is intent on growing its copper business, it would maintain its disciplined approach to capital allocation, Henry said, adding that the copper industry remains fragmented.

"We do not take capital discipline lightly, we will remain disciplined and we have demonstrated that in previous instances," he said.

($1 = 0.7953 pounds)

(Reporting by Felix Njini and Clara DeninaEditing by David Goodman)

The mining company raised its first offer after Anglo American said it “significantly undervalues” it.

(Bloomberg) — Anglo American Plc will exit diamond, platinum and coal mining in a massive restructuring designed to fend off a £34 billion ($43 billion) bid from rival BHP Group and turn itself into a copper giant.

Most Read from Bloomberg

Anglo’s hand was forced by BHP’s approach — which it has twice rejected — but the move also responds to pressure from shareholders to shed less profitable businesses and focus on the copper assets that are the envy of the industry. It leaves a much simpler company — and a potentially more attractive one to suitors.

The radical overhaul laid out by Anglo Chief Executive Officer Duncan Wanblad is to create a company much like the one his rival CEO Mike Henry proposed. As both men have a similar view of where value lies in Anglo’s sprawling empire, shareholders will now have to decide who they believe can best deliver.

Anglo is pinning its hopes on shareholders supporting its plan — and backing management to deliver it, rather than pushing to accept an offer from BHP. Investors see copper as the crown jewel because of its role in the energy transition and today’s move addresses what some of them were calling for. Activists Elliott Investment Management are among Anglo’s shareholders.

“There’s still a debate over whether this really offers shareholders more than BHP’s improved offer,” said Dawid Heyl, a Cape Town-based portfolio manager at Ninety One, a top shareholder. Heyl said that while it was a robust plan it would create a shrunken Anglo that “would be attractive to others as well.”

Anglo’s shares fell 2.5% to £26.38 in London trading, below the £27.53 that BHP is offering, in a sign investors see a lower chance of a successful BHP bid. Amplats, as the platinum business is known, fell as much as 10% in Johannesburg.

It’s now up to BHP to decide how to respond. Two offers have been rejected, though crucially its improved bid didn’t address one of the main obstacles: Anglo said BHP’s condition to spin off South African assets before the takeover was unworkable. Now Anglo is proposing to spin off Amplats, it could bolster BHP’s argument that it can be done.

“The outcome of Anglo’s strategic review will not have changed BHP’s plans, but they are probably actively assessing where they are now in light of this,” said Lachlan Shaw, an analyst from UBS Group AG.

Read More: What’s Anglo Worth? For Now It’s Less than the Sum of Its Parts

Anglo is now set to focus on copper mines and iron ore, its two biggest and most consistent earners and the businesses that BHP is most attracted to. Perhaps controversially, it will also stick with its Woodsmith fertilizer project in the north of England that some investors have pushed for it to quit. Still, it will dramatically cut spending there.

It will demerge or sell its De Beers diamond business, separate its Anglo American Platinum Ltd. unit and sell its coking coal mines in Australia.

The company will also either sell or shutter its relatively small nickel business in Brazil.

The move to dramatically shrink and simplify its business has been years in the making at Anglo, which has always been a hotchpotch of commodities. Yet the approach from BHP served as a catalyst for the company to speed up decisions it’s been sitting on for years.

Getting rid of Amplats and De Beers marks a turnaround from less than a decade ago when Wanblad’s predecessor planned on making them the cornerstones of the business.

Wanblad conceded today however that they are just too volatile. When they are good they are very good, but when they’re bad they drag down the entire company, hitting the returns shareholders get from the commodities they really covet such as copper. And the last year was especially tough for both.

Why BHP Is Targeting Anglo in Mining Mega Deal: QuickTake

De Beers — despite its status as a trophy asset — has looked increasingly out of place within the Anglo stable. The diamond market has become increasing volatile in recent years, whipsawing between boom and bust. The challenges posed by changing consumer habits require more and more spending on things like advertising, an area outside the comfort zone of many mining investors.

It will break the almost 100-year link between the two companies, with Anglo first becoming a major shareholder in 1926. Sovereign wealth funds have in the past expressed interest in the storied diamond producer.

Anglo will also look to exit Amplats, as its platinum unit is called. The business is currently listed in South Africa, with Anglo as a majority owner. Its coking coal business, which lies adjacent to BHP’s mines, will also be sold and Anglo said it has already received approaches.

While Anglo’s new plan has similarities to the one proposed by BHP, Wanblad was keen to point out that they were not completely leaving South Africa. It will keep its Kumba iron ore subsidiary. BHP had wanted Anglo to shed the South African assets before the takeover.

“They make us do the work then off they go,” Wanblad said. “We remain in South Africa, that’s a unique difference between what we and BHP are proposing to do.”

That may have made a difference for South Africa’s government as the new plan has already received a warmer welcome than BHP’s proposal.

Read: South Africa Minister Warms to Anglo Plan After Opposing BHP Bid

Anglo will also slow spending on a $9 billion fertilizer mine in northern England that’s been a focal point for investors and analysts pushing for an overhaul.

The company — which has been spending about $1 billion a year on the giant Woodsmith mine — will cut spending to about $200 million in 2025, and plans to spend nothing on it in 2026. It will also look to bring in one or more strategic partners. Investors are worried the mine will produce a relatively obscure fertilizer product called polyhalite, and Anglo will need to create a huge new global market for it almost from scratch.

–With assistance from Mark Burton and Paul-Alain Hunt.

(Updates with details)

Most Read from Bloomberg Businessweek

(Bloomberg) — South Africa’s mines minister struck a conciliatory tone as Anglo American Plc announced plans to separate its platinum unit as part of a major shakeup following its rejection of two approaches from BHP Group.

Most Read from Bloomberg

“It is their strategy and they must do anything that will optimize value,” Mines Minister Gwede Mantashe said by phone.

That marks a contrast with the senior official’s frostier reaction to rival BHP’s proposal, which involves spinning off both Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. before acquiring the miner’s prized assets outside South Africa.

The platinum unit known as Amplats fell as much as 10% in Johannesburg trading, after Anglo unveiled its restructuring plan on Tuesday.

The upheaval in South Africa’s key mining industry comes at a difficult time for the ruling African National Congress, which risks losing its majority in elections later this month for the first time since coming to power in 1994.

Read more: Anglo To Exit Diamonds and Platinum in Bid To Fend Off BHP

Under the turnaround plan outlined Tuesday by Anglo Chief Executive Officer Duncan Wanblad, the London-listed miner will exit platinum and diamond mines in South Africa, while retaining its Kumba iron ore subsidiary and a stake in a manganese business.

Wanblad said the company would have liked to make its announcement after the South African election and that it was “completely disrespectful” to do so now. Still, he said BHP had forced his hand by making an approach.

Anglo said it will demerge its 79% stake in Amplats “in a responsible and orderly way,” separate or sell its De Beers diamond business and divest its coking coal mines in Australia. The overhaul plans have been accelerated by BHP’s £34 billion ($43 billion) takeover proposal to acquire the 107-year-old firm.

Anglo has long ties to South Africa and was built on the riches of the country’s gold mines before moving into diamonds. In recent decades, however, the company has rapidly accumulated assets overseas including the South American copper mines that are so coveted by BHP.

Read More: BHP CEO Flies to South Africa to Push $39 Billion Takeover

Mantashe had signaled his opposition to BHP’s twice-rebuffed proposal for Anglo to demerge its controlling interests in its South African platinum and iron ore units, telling Bloomberg on April 25 that he “wouldn’t support” the idea.

Amplats – the world’s largest platinum producer – “will survive” as a standalone company, said Mantashe who also chairs the ANC. “It’s leading in the platinum business.”

Shares of Amplats were down 7% as of 11:03 a.m. in Johannesburg.

Anglo’s second-biggest shareholder, South Africa’s Public Investment Corp., will continue to engage with both companies after noting both Anglo’s accelerated strategy and its rejection of BHP’s improved offer, PIC Chairman David Masondo said by email. The PIC manages the pensions of South African government workers.

“The PIC is a long-term investor and any transaction presented will be assessed to ensure value creation for our clients,” said Masondo, who is also South Africa’s deputy finance minister.

The Congress of South African Trade Unions, the country’s biggest federation of labor groups, said it welcomed Anglo’s commitment to the country.

“We need a commitment that whatever changes Anglo plans include the needs of its loyal employees,” Cosatu said in a response to queries. “Anglo’s professed commitment to South Africa is welcome.”

The labor federation has previously said it opposed BHP’s bid.

–With assistance from Thomas Biesheuvel and Antony Sguazzin.

Most Read from Bloomberg Businessweek

Anglo American (AAL.L)

Anglo American has announced a group restructuring that includes the sale of several assets to boost its portfolio, a day after rejecting a mega takeover bid from Australian rival BHP (BHP.L).

As part of the split, the miner will divest or demerge its diamond unit De Beers, spin off its platinum-metals subsidiary Anglo American Platinum, and sell its steelmaking coal assets, while exploring options for putting its nickel operation on care and maintenance before divesting it.

The reorganisation will reduce costs by $1.7bn (£1.36bn), it said.

The announcement comes a day after the London-listed miner rejected a sweetened £34bn offer from BHP, saying it continued to significantly undervalue the company and was “highly unattractive” for its shareholders.

“We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction,” chief executive Duncan Wanblad said.

Investors still believe that BHP will lift its offer again and possibly add cash before 22 May, the deadline under UK rules to return with a binding offer or walk way.

"The language in the release suggests it's not the best and final offer," Todd Warren, a portfolio manager at Tribeca Investment Partners, told Reuters.

GameStop (GME)

Shares in GameStop, the video game retailer whose popularity among pandemic-era traders helped coin the idea of a meme stock, were surging in pre-market trading after a single post by a social media account named “Roaring Kitty”.

The internet persona, whose real name is Keith Gill, posted a picture on X of a video gamer leaning forward on their chair as if to indicate he’s taking the game seriously, making his first post on the platform since 2021.

Gill is a day trader whose videos during the meme-stock bubble encouraged millions of others into the market, in turn propelling stocks such as GameStop to record heights.

The tweet was enough to drive a rally in GameStop on Monday which caused losses approaching $1bn for short sellers, according to data from S3 Partners.

With GameStop soaring 74%, short-selling hedge funds suffered a mark-to-market loss of $838m in the brick-and-mortar video game retailer, data firm S3 Partners said.

Vodafone (VOD.L)

Vodafone has reported a 2.2% rise in organic earnings for 2024, meeting market forecasts, after it returned to top-line growth in the final quarter helped by gains in the UK and Germany.

The UK-listed company revealed an 11.3% decline in underlying profits last year to €11bn (£9.5bn) and a 2.5% fall in revenue to €36.7bn (£31.5bn).

It said revenues were hit by the disposals of Vantage Towers, Vodafone Hungary and Vodafone Ghana in the prior financial year and adverse exchange rate movements.

Germany returned to growth with service revenue increasing by 0.2% for the full year and 0.6% for the fourth quarter, the company said, but adjusted core earnings dropped by 5.8% due to higher energy and other inflationary costs.

"Much more still needs to be done in the year ahead," said chief executive Margherita Della Valle.

Free cash flow fell from €2.6bn to €1.8bn. Net debt, excluding the sold segments of Spain and Italy, was broadly flat at €33.2bn.

Mark Crouch, analyst at eToro, said: "Vodafone investors may have been bracing themselves for another tumultuous earnings report this morning and while this might not have them jumping for joy, there are signs the business has turned a corner."

Greggs (GRG.L)

Greggs reported sales growth of 7.4% as the bakery chain remains on track to open between 140 and 160 new stores in 2024.

The firm reported a 7.4% rise in like-for-like sales for the first 19 weeks of 2024, with total sales in the period hitting £693m.

Greggs added that its new range of iced drinks was “performing well”, with plans to roll it out further from the current 300 shops to up to 700 in the coming months.

Since the start of the year Greggs has opened 64 stores, and closed 37 — including relocations — giving a total of 2,500 shops trading nationwide.

Novavax (NVAX)

Shares of Novavax jumped as much as 50% as Wall Street cheered a new multibillion-dollar deal with French drugmaker Sanofi (SAN.PA) that kicked off a dramatic turnaround for the struggling vaccine maker.

Novavax signed a $1.2bn licensing agreement with Sanofi that includes commercialising a combined COVID-19 and flu shot.

The pharma company reported a first-quarter 2024 loss of $1.05 cents per share while revenues in the quarter came in at $94m, below expectations of $101m. Still, the top line rose 16% on a year-over-year basis.

It recorded $11.5m of revenues from royalties and adjuvant sales to licensing partners compared with the year-ago quarter’s revenues of $1m.

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(Bloomberg) — Pension giant AustralianSuper, BHP Group Ltd’s largest Australian shareholder, said capital discipline was of “utmost importance” for the mining industry as investors weigh the heavyweight’s twice-rebuffed efforts to woo smaller rival Anglo American Plc.

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Luke Smith, the senior portfolio manager who oversees the fund’s Australian mining investments, declined to comment on whether or not it would support a takeover, but confirmed it had engaged “more than once” with BHP.

The world’s biggest miner approached Anglo last month with a proposal aimed squarely at the iron-to-diamond producer’s Latin American copper deposits — only to be swiftly turned down. It has since tabled a sweetened $43 billion all-share bid but maintained a structure that would see Anglo doing much of the heavy lifting on a restructuring before the deal goes through — including spinning off two listed South African businesses.

Anglo rejected the latest approach, arguing the non-binding offer continues to “significantly undervalue” the company and its future prospects, while creating “significant uncertainty” for shareholders. It has now laid out a bold self-help plan that would see it divest diamonds, platinum and coal.

“If part of your strategy is copper then you follow and try and execute on that strategy,” Smith said in an interview in Melbourne. But capital discipline is “of utmost importance, and I think that’s at the forefront of people’s minds when it comes to any consolidation across the commodity landscape,” he said.

BHP has long been clear on its desire to expand in copper, eager to take advantage of rising demand for a metal key for renewable energy installations, expanding grids and electric vehicles. But the mining industry is also emerging from more than a decade of purdah after a string of frenzied, ill-timed and overly expensive acquisitions that burnt billions of investor dollars and left even the largest firms saddled with debt.

“I think we are in a much stronger environment from a capital allocation aspect of the mining industry,” Smith said. “There probably wasn’t the focus then that there is now on capital allocation. And not just from the companies, but from the stakeholders.”

Read More: BHP Seeks to Break Mining’s M&A Curse With Thorny Anglo Deal

Anglo’s shares ended Monday slightly below the value of BHP’s offer, indicating the market is not yet convinced a deal will get done. Still, among the miner’s smaller Australian investors, many said they saw room for maneuver that could yet help BHP clinch its prey.

“Obviously they haven’t got there with a good enough offer yet, so watch this space,” said Matthew Haupt, portfolio manager at Wilson Asset Management in Sydney, who is underweight BHP. “Another 5% to 7.5% bump, with a cleaner structure, could get a deal done.”

Jun Bei Liu at Tribeca Investment Partners in Sydney, also a BHP shareholder, said an increase of another 15% could make the difference and that she expected BHP to try to get there. Any short-term dip in the price as a consequence would be an opportunity to increase exposure.

“They’re not buying for the next couple of years, they’re really looking into the future of the copper shortage,” she said. “Yes, there’s every chance of overpaying and mining companies haven’t had a great record on this, but what they’re saying is that they believe their strategy.”

The company was unlikely to take an openly hostile approach, though.

“It’s a big transaction, which requires a lot of regulatory approval across many jurisdictions. So I just think that being aggressive is going to be very costly,” she said. “There’s a lot more uncertainty with what is already a very complex deal.”

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By Clara Denina and Felix Njini

LONDON (Reuters) -Anglo American laid out plans on Tuesday to refocus on energy transition metal copper while spinning out or selling its less profitable coal, nickel, diamond and platinum businesses, as it moves to fend off BHP Group's $43 billion takeover offer.

The announcement comes a day after the London-listed miner rejected its Australian suitor for the second time in less than three weeks, saying an increased proposal continued to significantly undervalue the company.

Anglo said on Tuesday it would divest its steelmaking coal assets, demerge its South African platinum unit, explore options for its nickel mines and divest or demerge diamonds business De Beers. The group expects the new configuration will lower costs by $1.7 billion.

"We expect that a radically simpler business will deliver sustainable incremental value creation through a step change in operational performance and cost reduction," Anglo CEO Duncan Wanblad said.

Anglo shares fell 3.2% to close at 26.19 pounds, after trading at the bottom of the London stock market's benchmark index FTSE 100.

Moving to drum up support for his proposal, BHP CEO Mike Henry said on Tuesday it was down to investors to weigh the merits of his company's offer for Anglo, adding he would have preferred to continue talking with Anglo in private.

"Our strong preference was to be able to hold these discussions with Anglo in private," Henry said. "Rather unfortunately, it got leaked."

BHP's 27.53 pound per share approach, raised from an initial 25.08 pounds, would require Anglo to sell its iron ore and platinum assets in South Africa, where it employs more than 40,000 people.

That has caused alarm in South Africa, where unemployment and a stagnant economy are major issues ahead of a May 29 election.

Wanblad said BHP's bid had forced him to accelerate plans for a spin-off of Johannesburg-listed Anglo American Platinum (Amplats).

Under Tuesday's plan, Anglo will keep its South African Kumba Iron Ore business, while Wanblad said the planned divestment of Amplats would be "completely different" in terms of time and complexity to the BHP proposal.

South Africa's mines minister Gwede Mantashe said on Tuesday he had no problem with Anglo's proposal, and that he hoped it would continue to resist BHP's bid.

Anglo is also exploring an initial public offering of its diamond business De Beers, two people familiar with the matter told Reuters on Tuesday, with one flagging London as the preferred venue. Anglo declined to comment.

The company also said on Tuesday it would slow the development of its Woodsmith fertiliser project in northeast England and seek strategic partners. First production at Woodsmith will be pushed back from 2027, Wanblad said.

The divestment of Anglo's steelmaking coal operations could move rapidly, he added, given available interest.

SELF-HELP

Anglo has been meeting investors since BHP's initial approach in April, and after a review of its assets initiated in February following a 94% plunge in annual profit.

One top 20 investor at Anglo, who said a deal with BHP was likely to lead to less copper being produced rather than the increase needed to accelerate the world's energy transition, welcomed Tuesday's proposal.

"At the moment, Anglo has lots of very interesting assets … but it is not a focused business, focused on a clear strategic goal," the shareholder said. "This plan offers clarity of purpose."

MKP Advisers said however that the concern with the "self-help plan" will be that it is "too little, too late".

"There is no timescale attached to most of the plans and it has been clear to most that many of the potential disposals across the portfolio are simply tough to execute," MKP said.

Activist fund Elliott, one of Anglo's top 10 shareholders after building up a $1 billion stake, declined to comment on the plan. It is expected to put out a statement later in the day, sources say.

Developments such as artificial intelligence and automation, and the energy transition that includes electric vehicles and renewable energy, have driven up demand prospects for copper cable used to conduct electricity.

Copper prices have risen 25% from this year's Feb. 9 low to $8,127 a tonne.

Ashwin Pillay, senior associate at law firm Charles Russell Speechlys, said the new plan addressed shareholder concerns that the value of Anglo's copper mines has been suppressed by less valuable operations such as the diamond division.

"Intriguingly, there is still an opportunity for BHP to raise their offer further, including by adding a cash component, which would sweeten the pot," he added.

($1 = 0.7966 pounds)

(Additional reporting by Melanie Burton in Melbourne, Sinead Cruise in London and Eva Mathews; Writing by Jan Harvey; Editing by Nivedita Bhattacharjee, Kirsten Donovan, Sonali Paul, Catherine Evans and Emelia Sithole-Matarise)

Anglo expects new structure to lower costs by $1.7 bln

Will keep South African Kumba Iron Ore business

Says revised BHP offer significantly undervalues Anglo

BHP CEO urges Anglo investors to consider takeover benefits

(Updates share prices, adds BHP CEO comment on leaks, paragraphs 5,7)

By Clara Denina and Felix Njini

LONDON, May 14 (Reuters) – Anglo American laid out plans on Tuesday to refocus on energy transition metal copper while spinning out or selling its less profitable coal, nickel, diamond and platinum businesses, as it moves to fend off BHP Group's $43 billion takeover offer.