1.ZOOM: A slump in Zoom Video Communications Inc’s share price likely limited its ability to sweeten a nearly $15 billion all-stock offer for call center software firm Five9 and led to the deal’s collapse, Wall Street analysts said on Friday.
Five9 shareholders on Thursday voted down the sale to Zoom, denting the company’s efforts to diversify its offerings as growth slows in its virtual conferencing business after a boom during the pandemic.
While some analysts expected Zoom to raise its offer to address Five9 shareholder worries about the price, others said an almost 30% drop in Zoom shares since July on the back of slowing growth only dampened the prospects.
Under the deal terms, Five9 shareholders would have received 0.5533 Zoom share for each share held. The terms then implied a 12.8% premium over Five9’s market price.
“The deal was negatively perceived from the beginning given the small premium and all-stock structure,” Jefferies analyst Samad Samana said in a note to clients. “ZM’s stock declining 28% since the announcement only compounded the issues and likely made revising the terms difficult as well.”
The deal – which would have been Zoom’s biggest-ever purchase if completed – was also opposed by shareholder proxy advisory firms ISS and Glass Lewis. The firms had recommended that Five9 shareholders vote against the deal, citing growth concerns and dual-class shares.
“While we think the deal made strategic sense for both companies over the long term, the variable deal tied to volatile (Zoom) shares was not an economically attractive deal for (Five9) shareholders at this time,” Piper Sandler analysts said.
Analysts at Barclays blamed the fall in Zoom’s share price and possible regulatory scrutiny for the deal falling through.
2.SOFT BANK:-SoftBank-backed Indian hotel aggregator Oyo Hotels is seeking a valuation of $10 billion to $12 billion, a source close to the matter told Reuters, as it filed for a local listing that could be the first for a hospitality firm since 2019.
The aggregator, which Japanese conglomerate SoftBank counts among its biggest bets, had hinted at an initial public offering (IPO) in 2019 shortly before the pandemic battered the travel industry.
The IPO comes as travel restrictions are being eased worldwide and the tourism sector sees a rebound, with stuck-at-home people heading out on vacations.
The offering will consist of a fresh issue of shares of up to 70 billion rupees ($942.8 million) and an offer for sale of as much as 14.30 billion rupees, according to a copy of its draft red herring prospectus dated Sept. 30.
The hotel-booking startup, officially known as Oravel Stays, said in the IPO document that it incurred net losses every year since incorporation, and that its ability to achieve profitability may be delayed due to the economic fallout from the pandemic.
The company’s net losses, however, narrowed to 33.82 billion rupees for the year ended March 2021, from 105.86 billion rupees in 2020.
Oyo’s offer for sale comprises equity shares aggregating up to 13.29 billion rupees by SVF India Holdings, a firm incorporated in Cayman Islands to hold the investments on behalf of SoftBank Vision Fund L.P.
3.QANTAS-Qantas Airways Ltd said on Friday it would restart some international flights a month earlier than planned after the Australian government said fully vaccinated Australians could enter and leave the country freely from November.
Qantas will operate three weekly return flights between Sydney and London and three weekly return flights between Sydney and Los Angeles starting Nov. 14 and add more flights if there is enough demand, the airline said.
Passengers will be required to quarantine at home for seven days upon arrival in Australia. The Australian government on Friday indicated that some of its eight states and territories would open earlier than others.
“We welcome the federal government’s decision and the work by the New South Wales government to facilitate the home quarantine approach that makes this feasible,” Qantas Chief Executive Alan Joyce said. “We look forward to other states and territories getting on board.”
New South Wales is home to Australia’s most populous city, Sydney.
Qantas said it had already sold out some of its international flights for December and it had seen strong demand for London and Los Angeles.
The airline grounded its international fleet in March 2020 and has operated only freight and repatriation flights since, with the exception of a short-lived quarantine-free travel bubble with New Zealand.
4.TOYOTA:–A group of 12 major foreign automakers, including Toyota Motor Corp, Volkswagen AG , Hyundai Motor Co and Nissan Motor Co, urged U.S. House of Representatives Democrats to reject a proposed $4,500 tax incentive for U.S-made electric vehicles by union workers.
A House panel this month approved legislation to boost EV credits to up to $12,500 per vehicle, including $4,500 for union-made vehicles and $500 for U.S.-made batteries.
The U.S. units of foreign automakers said in a letter sent to House Speaker Nancy Pelosi and other Democrats on Thursday that the proposal “would unfairly disadvantage American workers who have chosen not to join a union and produce more than half of all vehicles in the United States and the vast majority of American-made EVs.”
Others signatories include Honda, BMW, Kia, Mazda, Daimler AG’s Mercedes-Benz, Subaru and Volvo Cars which is owned by Geely.
Late Thursday, six Democratic lawmakers who are co-chairs of the House labor caucus led by Representative Thomas Suozzi, urged Pelosi to retain the $4,500 incentive for union-built EVs.
“Every foreign-owned automotive manufacturer employs a union workforce in their home country, but those same companies consistently choose to invest in right-to-work states that are hostile to collective bargaining agreements,” they wrote.
5.EXXON MOBIL: Exxon Mobil Corp signaled on Thursday that higher oil and gas prices would boost third-quarter earnings by as much as $1.5 billion over the second quarter.
Natural gas prices in the United States have more than doubled this year and oil prices are up 52% as energy demand recovers from the COVID-19 pandemic.
Exxon also has been cutting costs and laying off personnel following a historic loss in 2020. Lower costs coupled with the recent rebound in oil and gas have driven profit sharply higher.
Natural gas prices should give the U.S. oil producer the largest increase in operating profit in the quarter, the company signaled in a corporate filing. Profit from natural could rise between $500 million-900 million this quarter over last, it said.
U.S. natural price prices were trading at almost $6 per million British Thermal units on Thursday.
Healthier refining margins could add from $500 million to $700 million in operating profits this quarter. Exxon quarter results will be posted on Oct. 29.
Chemical margins, on the other hand, could cut operating profit by between $200 million and $400 million in the quarter, the company said in the filing.