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November 19, 2022 – rdspinvestments

November 19, 2022

6 biggest deal reports this week: Estee Lauder, Hasbro

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Stock Markets Nov 19, 2022 11:54AM ET

6 biggest deal reports this week: Estee Lauder, Hasbro© Reuters.

Here are the 6 most head-turning deal dispatches from the past week, as covered first on InvestingPro+.

1. Estee Lauder (NYSE:) has agreed to buy Tom Ford for $2.8 billion. The company will pay about $2.3 billion, in addition to $300 million in deferred payments to sellers starting from July 2025, as well as including a $250 million payment from Marcolin S.p.A. to extend the long-term global eyewear license for the brand.

D.A. Davidson analyst Linda Bolton Weiser thinks the Tom Ford deal is a “huge positive for EL.” EL had to buy Tom Ford, Bolton Weiser argues, because “if Kering (EPA:) had acquired Tom Ford, Kering could have brought the beauty business in-house at some point in the future, removing one of EL’s highest growth revenue streams.” Bank of America analyst Bryan Spillane raised the price target on EL stock to $230 per share from the prior $218 and weighed in positively on the deal.

2. 8×8 Inc (NASDAQ:) has been approached about a takeover by a strategic buyer, according to a source cited by StreetInsider. The buyer is said to have hired bankers to explore a deal. It is unclear if 8×8 is entertaining the approach or has hired its own advisors. 8×8 is an integrated cloud communications platform that has had its fair share of takeover speculation over the years. In 2017, the company unsuccessfully explored a sale although its stock was trading at over 4 times the current level at that time.

3. Hasbro Inc (NASDAQ:) has decided to put most of Entertainment One up for sale, according to Bloomberg, citing people familiar with the matter. The company appointed JPMorgan and Centerview Partners to steer the process after receiving takeover interest.

4. Opiant Pharmaceuticals Inc (NASDAQ:) said it has agreed to be acquired by Indivior Inc, a subsidiary of Indivior PLC (OTC:) (LON:), for $20.00 per share in cash, plus contingent value rights (CVRs) representing, if achieved, potential additional payments over a period of seven years of up to $8.00 per share. The companies say the upfront payment represents a premium of approximately 111% to Opiant’s closing share price on November 11, 2022.

5. Standard General’s proposed acquisition of Tegna Inc (NYSE:) has cleared its security review, according to Bloomberg. A filing says U.S. security agencies have “no objection” to the deal, which still needs to clear antitrust and FCC review. Earlier this month Standard General’s acquisition of Tegna drew Department of Justice queries over potential TV price hikes, according to Bloomberg, citing people familiar with the matter. Antitrust officials are also concerned about information sharing.

6. Diamondback Energy Inc (NASDAQ:) agreed to an acquisition of Northern Midland Basin assets through its deal to purchase all leasehold interest and related assets of Lario Permian, LLC, a subsidiary of Lario Oil & Gas Company, and certain associated sellers, in exchange for 4.18 million shares of Diamondback common stock and $850 million of cash.

Senad Karaahmetovic contributed to this article.

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Fed’s Bostic: Ready to ‘move away’ from large rate increases at next meeting

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Economy Nov 19, 2022 02:05PM ET

Fed's Bostic: Ready to 'move away' from large rate increases at next meeting© Reuters. FILE PHOTO: Atlanta Fed President Raphael Bostic speaks at a European Financial Forum event in Dublin, Ireland February 13, 2019. REUTERS/Clodagh Kilcoyne/File Photo

By Howard Schneider

WASHINGTON (Reuters) – Atlanta Federal Reserve President Raphael Bostic said Saturday he is ready to “move away” from three-quarter-point rate hikes at the Fed’s December meeting and feels the Fed’s target policy rate need rise no more than another percentage point to tackle inflation.

“If the economy proceeds as I expect, I believe that 75 to 100 basis points of additional tightening will be warranted,” Bostic said in remarks prepared for delivery at the Southern Economic Association. “I believe this level of the policy rate will be sufficient to rein in inflation over a reasonable time horizon.”

That would set the Fed policy rate at a range between 4.75 and 5%, slightly below the peak rate expected by investors. It is currently set in a range between 3.75% and 4%.

The Fed at its December meeting is expected to raise rates by half a percentage point after using three-quarter point increments at its last four meetings, a view endorsed by Bostic as well as a range of other Fed officials recently.

Bostic said that given the inflation surprises of the past year, it is possible the “landing rate” might be higher than he currently anticipates, and that he was going to be “flexible in my thinking about both the appropriate policy stance and the pacing.”

But at some point, he said, the Fed would need to pause and “let the economic dynamics play out,” given that it may take what he estimate as anywhere from 12 to 24 months for the impact of Fed rate increases to be “fully realized.”

“Being more cautious as policy moves deeper into restrictive territory seems prudent,” Bostic said, even if it turns out to be the case that rates have to be raised again later.

One thing the Fed should guard against, Bostic said, is any temptation to cut rates before inflation is “well on track” to fall to the Fed’s 2% target, even if the economy were to “weaken appreciably.”

“We want the public and markets to clearly understand our aims, and the fact that we are going to be unwavering in the pursuit to bring underlying inflation back toward our 2% objective,” Bostic said.

Recent inflation data have come in lower than expected. But key price increase measures have still been running at 2 to 3 times the Fed’s target level.

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10 hot insider, hedge fund dispatches this week: Buffett, Burry

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Stock Markets 13 hours ago (Nov 19, 2022 04:40PM ET)

10 hot insider, hedge fund dispatches this week: Buffett, Burry© Reuters.

Insider and hedge fund activity can serve as useful bellwethers for investors. Here are some of the biggest such moves from the past week, as first reported on InvestingPro+.

Hedge fund moves to watch:

1. “Big Short” fund manager Michael Burry’s Scion Asset Management revealed he has added five new companies to his portfolio. Burry, best known for his short position against the housing market ahead of the financial crash in 2008, added new stakes in Aerojet Rocketdyne Holdings Inc (NYSE:), Charter Communications (NASDAQ:), CoreCivic (NYSE:), Liberty Latin America Ltd (NASDAQ:), and Qurate Retail Group (NASDAQ:).

Burry has previously tweeted out a number of warnings to investors regarding a further decline in the stock market. In the second quarter, he ditched his entire portfolio, which included a stake in Facebook (NASDAQ:) parent Meta Platforms, replacing them with a position in Geo Group (NYSE:).

Aerojet climbed 4.8% for the week; Charter slipped 4.6%; Corecivic rose 12.9% for the week; Liberty broke even; and Qurate added 5.8%.

2. Activist investor TCI Fund Management has called on Alphabet (NASDAQ:) (NASDAQ:) to cut costs by lowering its headcount and reduce losses in its self-driving unit Waymo, saying the Google parent needs to adjust to an era of slower growth. The fund, an investor in Alphabet since 2017 with a $6 billion stake, said the company had “too many employees and cost per employee is too high.” Alphabet Class A shares were up 2.5% for the week.

3. Warren Buffett’s Berkshire Hathaway (NYSE:) (NYSE:) took a new 5,795,906-share stake in Louisiana-Pacific (NYSE:). Louisiana-Pacific shares rose 4.4% for the week; Berkshire-Hathaway Class B shares ticked fractionally higher.

Biggest insider trades:

4. Porch Group Inc (NASDAQ:) COO, Matthew Neagle, bought 315,000 shares in the company on 11/10/22 at $1.0462. Shares jumped 58.8% to $1.62.

5. Coty (NYSE:) Director, Olivier Goudet, bought 200,000 shares in the company from 11/10/22-11/14/22 at prices from $7.3476-$7.5597. The stock climbed 2% for the week.

6. Datadog (NASDAQ:), Inc. Director, Matthew Jacobson, bought 296,965 shares in the company, or $20 million worth, at prices from $66.9713 – $67.8625. Shares were bought through ICONIQ. Shares were off 5.9% for the week.

7. WW International (NASDAQ:), Inc. saw several insider buys: Director, Raymond Debbane, bought 75,000 shares on 11/10/22 at $4.2674; Director, Jonas Fajgenbaum, bought 29,250 shares on 11/10/22 at $4.2694; and Director, Denis Kelly, bought 10,000 shares on 11/10/22 at $4.23. Shares sank 11.5% for the week.

8. Cronos Group (NASDAQ:) director, Jason Marc Adler via Gotham Green Fund, bought 280,860 shares from 11/15-22-11/16/22 at $2.9656-$3.0963. Shares gained 1.3% for the week.

9. Vishay Precision Group (NYSE:) Director, Wes Cummins, buys 25,000 shares, or $1 million worth, from 11/15/22-11/16/22 at $38.88-$39.54. The stock was up 5.1% for the week.

10. Ardelyx (NASDAQ:) Director, David Mott, bought 567,000 shares, or $1 million worth, on 11/17/22 at $1.7648 following a news of a positive FDA panel outcome for an Ardelyx kidney disease drug. Shares surged 58.8% for the week to end at $2.08.

Sam Boughedda and Reuters contributed to this article.

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U.S. says Russia’s Ukraine invasion offered preview to potential global tyranny

U.S. says Russia's Ukraine invasion offered preview to potential global tyranny© Reuters. U.S. Defense Secretary Lloyd Austin speaks during a news briefing after participating a virtual Ukraine Defense Contact Group meeting at the Pentagon in Arlington, Virginia, U.S., November 16, 2022. REUTERS/Tom Brenner

By Phil Stewart

(Reuters) -Russia’s invasion of Ukraine has offered a preview of “a possible world of tyranny and turmoil,” U.S. Defense Secretary Lloyd Austin said on Saturday in a speech to a security forum in Canada.

Austin’s remarks were some of his strongest to date on the importance to the international community of helping Kyiv prevail after nearly nine months of war, and they were delivered at what may be an inflection point in the conflict.

After a series of battlefield defeats, Russia is aiming punishing missile strikes at Ukraine’s energy infrastructure that could leave millions of civilians exposed to the winter cold. Moscow hopes to exhaust Ukraine’s missile defenses, and buy time to reset its forces, Pentagon officials say.

Austin said Russia was breaking the laws of war.

“These aren’t just lapses. These aren’t exceptions to the rule. These are atrocities,” Austin said.

“Russian missile barrages have left innocent Ukrainians without heat, water, and electricity. We’ve seen schools attacked. Children killed. Hospitals bombed. Centers of Ukrainian history and culture reduced to rubble.”

Moscow denies that its armed forces deliberately target civilians or civilian infrastructure.

The United States and its allies have helped provide arms, intelligence and training to Ukrainian forces, while stopping short of directly intervening in a war against nuclear-armed Russia.

Austin said the United States wouldn’t get dragged into Russian President Vladimir Putin’s “war of choice,” but warned of the risks of global nuclear proliferation if Moscow were to prevail.

“Putin’s fellow autocrats are watching. And they could well conclude that getting nuclear weapons would give them a hunting license of their own,” Austin said. “And that could drive a dangerous spiral of nuclear proliferation.”

Just days after U.S. President Joe Biden and Chinese President Xi Jinping held talks on Monday, Austin said that Beijing, like Moscow, sought “a world where might makes right.”

Austin said Chinese aircraft were flying near self-ruled Taiwan in record numbers almost daily, while the number of what he called “dangerous intercepts” by China of U.S. or allied forces at sea or in the air were increasing.

Tensions between Taipei and Beijing have risen since China staged war games near the democratically-governed island in August after a visit by U.S. House Speaker Nancy Pelosi.

Beijing, which views Taiwan as a Chinese province, has long said it would bring the self-governed island under its control and has not ruled out the use of force to do so.

The government in Taipei rejects Beijing’s claims and says only Taiwan’s people can decide its future.

Austin said the United States was drawing on the lessons of Ukraine to “bolster the self-defense capabilities of our Indo-Pacific partners.”

“We’re helping them to become more agile and resilient,” Austin said.

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