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Battle for Britain’s Morrisons hots up as Apollo enters fray

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The $8.7 billion battle for Britain’s Morrisons intensified on Monday when a third private equity group entered the field sending the supermarket group’s share price racing ahead of the value of an offer it recommended on Saturday.

New York-headquartered Apollo Global Management, which last year missed out on buying Morrisons rival Asda, said it was examining a potential offer but had not approached its board.

Private equity groups have embarked on a spending spree on assets around the world in the last six months, flush with cash after they largely sat out the pandemic. Morrisons, set up 122 years ago as a market stall in Bradford, northern England, is a target.

On Saturday, Morrisons said its board had recommended a takeover led by SoftBank-owned Fortress Investment Group that valued Britain’s fourth-largest supermarket chain at 6.3 billion pounds ($8.7 billion).

The offer from Fortress, along with Canada Pension Plan Investment Board and Koch Real Estate Investments, exceeded a 5.52 billion pound proposal from Clayton, Dubilier & Rice (CD&R), which Morrisons rejected on June 17.

While the Fortress offer was on Monday described as “good value” by abrdn – a number 15 investor in Morrisons according to Refinitiv data – it was less than the 6.5 billion pounds asked for last week by JO Hambro, a top 10 shareholder.

Fortress’ offer gives Morrisons an enterprise value of 9.5 billion pounds when including net debt of 3.2 billion pounds.

Its shares were up 11.4% at 267.1 pence at 1523 GMT – ahead of the 254 pence value of the Fortress deal, indicating investors expect higher offers. Morrisons had no comment on Apollo’s statement.

Analysts have speculated that other private equity groups and Amazon, which has a partnership deal with Morrisons, could also bid. Amazon has declined to comment.

While Britain has always been a key destination in Europe for private equity investments, volumes have peaked this year as Brexit and sterling weakness coupled with the coronavirus crisis hit company valuations.

Like its peers Tesco, Sainsbury’s and Asda, Morrisons enjoyed a surge in sales in the last 18 months, as hospitality was forced to shut, but the cost of ramping up online delivery hit profits.

KINGMAKERS

Ultimately, shareholders will decide Morrisons’ fate.

As things stand there is only one firm bid on the table and investors will vote on the Fortress deal.

Morrisons’ three biggest investors Silchester, Blackrock and Columbia Threadneedle, which Refinitiv data showed having stakes of 15.2%, 9.6% and 9.4% respectively, are effectively the kingmakers. None has commented.

Legal & General Investment Management (LGIM), another top 10 Morrisons shareholder, said investors needed more information about the value of its property so they could make a considered decision.

Under UK takeover rules Fortress’ offer resets the clock for CD&R to clarify its intentions, with a previous deadline of July 17 extended.

Analysts at Barclays said CD&R could pay more than the agreed offer from Fortress, pointing out that CD&R has a bigger UK retail footprint than Fortress as it owns the Motor Fuels Group petrol forecourt chain. Also CD&R might be able to bid more if sale and leasebacks of Morrisons stores form part of its plan.

Fortress has ruled out material store sales and says it likes to empower existing management teams – an approach that could prove popular with the government after the pandemic showed the importance of retaining food production locally.

A spokesman for Prime Minister Boris Johnson said takeover proposals were a commercial matter for the companies involved.

Morrisons owns 85% of its nearly 500 stores and has 19 mostly freehold manufacturing sites. It is unique among British supermarkets in making over half of the fresh food it sells.

British supermarkets are once again attractive because of their cash generation and freehold assets. The funds believe the stock market is not recognising the grocers’ value in the wake of the pandemic.

Last year Apollo lost out on buying Asda to brothers Zuber and Mohsin Issa and TDR Capital. That deal valued Asda at 6.8 billion pounds.

Shares in Tesco and Sainsbury’s were up 3.1% and 2.4% respectively, with speculation swirling that they could also attract approaches. Both companies declined to comment.

($1 = 0.7232 pounds)

(Reporting by James Davey; additional reporting by Carolyn Cohn, Simon Jessop and William James; Editing by Kate Holton, Guy Faulconbridge, Kirsten Donovan and Emelia Sithole-Matarise)

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Canada’s economy shrank for 2nd month in a row in May – CBC.ca

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Canada’s gross domestic product shrank by 0.3 per cent in May, the second consecutive monthly contraction as most industries slowed down.

Statistics Canada reported Friday that most industries shrank, especially construction, manufacturing and retail.

Even Canada’s red hot real estate sector shrank for the second month in a row. The real estate and rental and leasing sector was down 0.4 per cent in May after falling by 0.8 per cent in April. That’s the first two-month streak of declines since March and April of 2020.

“As housing sales and construction levels gradually return to more sustainable levels, this area of the economy could be a drag on growth in coming months,” TD Bank economist Sri Thanabalasingam said.

Agriculture and forestry, mining and oil and gas extraction, utilities and the public sector all expanded slightly.

All in all, the total value of all the goods and services produced by Canada’s economy was just shy of $1.98 trillion during the month. That’s still two per cent below the slightly more than $2 trillion that the economy was worth in February 2020.

The numbers for May come at the time when Canada’s economy was on the downslope of the third wave of COVID-19, and much of society was on some sort of lockdown or reduced capacity. But there are signs that a rebound has happened since.

Preliminary data for June suggests the economy grew by 0.7 per cent during the month. And July may have been even better — credit and debit card data suggests that consumers returned to spending on high-contact services including in-person dining, recreation activities and travel that had long been restricted to them, Thanabalasingam said.

June’s uptick means the economy will expand by about 0.6 per cent in the second quarter overall. That’s about a 2.5 per cent annual pace — much slower than the 6.5 per cent pace the U.S. economy clocked in the same period, but much better than the 8.3 per cent contraction seen in countries that use the euro.

Thanabalasingam said the data for May and June show just how up and down the economy may go from here on out.

“It may not be smooth sailing for the rest of the recovery,” he said.

“The delta variant is wreaking havoc around the world, leading to a retightening of restrictions in some countries. Canada has so far avoided the worst of this virus, but cases are rising in some provinces. A fourth wave could lead to another stalling in the recovery, though with relatively high rates of vaccination a full reversal appears less likely.”

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Canada’s Imperial Oil posts 7% fall in quarterly profit

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Canada‘s Imperial Oil Ltd reported a 7% fall in second-quarter profit on Friday, impacted by planned turnaround activity and weaker realized margins in its downstream refining business.

However, the company continued to post strong output from its largest asset, the Kearl oil sands mine in northern Alberta, which hit a new monthly production record in June.

Due to improved reliability Imperial is switching to one turnaround a year at Kearl, cancelling maintenance planned for this fall, and raised 2021 full-year production guidance to 265,000 barrels per day (bpd) from 255,000 bpd previously.

Like its peers Imperial has been benefiting from an increase in global oil prices, although fresh lockdowns and restrictions in some parts of the world to deal with rising cases from the Delta variant of the coronavirus have dented market optimism.

“We’re not out of the woods yet,” Imperial Chief Executive Brad Corson told an earnings call. “We saw another quarter of increasing commodity prices, but with continued slow recovery in demand.”

Calgary-based Imperial, which is majority-owned by Exxon Mobil Corp, said its net income fell to C$366 million ($294.16 million), or 50 Canadian cents per share, in the second quarter ended June 30, from C$392 million, or 53 Canadian cents per share, in the previous quarter.

Downstream recorded net income was C$60 million in the second quarter, compared with net income of C$292 million in the first quarter, the company said.

Total production averaged 401,000 barrels of oil equivalent per day in the quarter ended June 30, down about 7% from the first due to planned oil sands turnarounds.

Imperial’s shares were last down 3% at C$33.82 on the Toronto Stock Exchange.

($1 = 1.2442 Canadian dollars)

(Reporting by Sahil Shaw in Bengaluru and Nia Williams in Calgary; Editing by Krishna Chandra Eluri and Chris Reese)

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Your Cover Letter’s Third Paragraph — Getting the Reader to Act

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If you don’t ask, you don’t get.

 

In the 1992 movie Glengarry Glen Ross, Alec Baldwin’s character, Blake, gives a shape-up or ship-out speech to a group of real estate salesmen. He turns over a blackboard on which two sets of letters are written. One set of letters is “ABC.” Blake then shouts, “A-B-C. A, always; B, be; C, closing. Always be closing! Always be closing!”

 

To shorten your job search, envision you’re looking for your next client. Finding your next client is a sales process; therefore, you need to A-B-C. When you’re in A-B-C mode, you move through an employer’s hiring process much faster than passive job seekers.

 

A-B-C isn’t only for when you’re at the interview stage, intending to close the deal (obtaining a job offer). To get your network to inform you of job opportunities, get past gatekeepers, and especially to get that covenant interview, you need to A-B-C, which is why your cover letter’s last paragraph needs to be a call to action.

 

Here are 3 examples:

 

With my 15+ years of sales management experience, I know I can quickly get up to speed as ACME Inc.’s next Sales Director. I’d welcome the opportunity to speak with you regarding my qualifications. Next Wednesday, I’ll reach out to schedule a call to discuss my thoughts on who to raise ACME Inc.’s ROI by 25% before year-end. I look forward to speaking with you.

 

I’m inspired by Callister Inc’s success in supporting homegrown businesses. I have several ideas for marketing strategies to increase profitability among your customer base and how I can grow your reach. I look forward to the opportunity to share my thoughts with you.

 

I’m looking forward to discussing my skills and my 10+ years of international hotel management experience. I’ve several suggestions I’d like to pass by you on how Grand Budapest Hotel can increase its occupancy rate, a challenge all hotels face during the current pandemic. Please contact me at (555) 916-225-5887 or mary.smitters@hotel.com any time. I’ll be in touch next Friday to follow up.

 

Your closing paragraph needs to:

 

  • Be decisive. Decisiveness projects confidence, which is not to be confused with arrogance. Confidence is a massive turn-on with employers.Before the hiring manager can feel (hiring comes down to gut feel) you can do the job, they need to feel that you feel you can do the job.
  • Write to what you can do for the employer, not what they can do for you.
  • Offer a teaser. To use another movie analogy, think of Marlon Brando’s words in The Godfather, “I’m gonna make him an offer he can’t refuse.” This sets the foundation for what’ll be discussed and therefore puts you in the driver’s seat.
  • Mention you’ll follow up. (Then DO IT!)

 

The last point is a job search game-changer. Many career experts claim following up is overly aggressive. The way I see it, not following up makes you passive, which is a form of being lazy. I’m repeating myself; employers don’t hire lazy.

 

There’s been a few instances where I’ve been overwhelmed with resumes. Those who called me almost always got an interview. I can recall three times where I hired the person based on a “follow-up” phone conversation.

 

A few weeks back, a Regional Sales Director for a large pharmaceutical company told me when hiring a sales representative, he only grants interviews to those who follow up. This makes sense since sales success requires being comfortable making calls.

 

Bottom-line: Following up by phone will set you apart from your competition.

 

Of course, if the job posting says “No phone calls please.”, which is uncommon, you need to respect such instruction.

 

Regarding signing off, use any of the following:

 

  • Sincerely
  • Best regards
  • Sincere regards
  • Yours truly
  • Respectfully

 

As I’ve mentioned in an earlier column, there’s no universal hiring methodology. Don’t stress over small details, such as how to sign off. Throughout your search, focus on communicating how you’re able to bring results (value). Such focus will have you A-B-C.

 

If you’re wondering what the other set of letters Blake had written on the blackboard, they were AIDA — Attention, Interest, Decision, Action. This is what your cover letter needs to do.

 

______________________________________________________________

 

Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers advice on searching for a job. You can send him your questions at artoffindingwork@gmail.com.

 

 

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