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   Strategies & Market TrendsSpeculating in Takeover Targets

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To: richardred who wrote (5352)10/5/2020 9:47:53 AM
From: richardred
   of 6156
* Weir Group Plc (WEIGF) said on Monday it had agreed to sell its oil and gas division to U.S. heavy equipment maker Caterpillar Inc (CAT) for $405 million in cash, as the engineering company focuses on its mining business.

Maybe a sign others in the group might join CAT?
I haven't seen CAT make a acquisition in a long time. The multi bullion dollar Bucyrus-Erie acquisition was a disaster. The ignored infrastructure group is moving today.

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From: richardred10/8/2020 9:37:51 AM
   of 6156
Morgan Stanley Will Acquire Eaton Vance in a Deal Valued at $7 Billion --
BY Dow Jones & Company, Inc.
— 8:52 AM ET 10/08/2020

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To: richardred who wrote (5972)10/8/2020 9:56:05 AM
From: richardred
   of 6156
IBM plans to spin off infrastructure services as a separate $19B business
8:16 am EDT•October 8, 2020

IBM, a company that originally made its name out of its leadership in building a myriad of enterprise hardware (quite literally: its name is an abbreviation for International Business Machines), is taking one more step away from that legacy and deeper into the world of cloud services. The company today announced that it plans to spin off its managed infrastructure services unit as a separate public company, a $19 billion business in annual revenues, to help it focus more squarely on newer opportunities in hybrid cloud applications and artificial intelligence.Infrastructure services include a range of managed services based around legacy infrastructure and digital transformation related to it. It includes things like testing and assembly, but also product engineering and lab services, among other things. A spokesperson confirmed to me that the deal will not include the company’s servers business, only infrastructure services.

IBM said it expects to complete the process — a tax-free spinoff for shareholders — by the end of 2021. It has not yet given a name to “NewCo” but it said that out of the gate the spun off company will have 90,000 employees, 4,600 big enterprise clients in 115 countries, a backlog of $60 billion in business, “and more than twice the scale of its nearest competitor” in the area of infrastructure services.

Others that compete against it include the likes of BMC and Microsoft. The remaining IBM business is about three times as big: it currently generates some $59 billion in annual revenues.

At the same time that IBM announced the news, it also gave some updated guidance for Q3, which it plans to report officially later this month. It said it expects revenues of $17.6 billion, with GAAP diluted earnings per share from continuing operations of $1.89, and operating (non-GAAP) earnings per share of $2.58. As a point of comparison, in Q3 2019 it reported revenues of $18 billion. And last quarter IBM reported revenues of $18.1 billion. Tellingly, the division that contains infrastructure services saw declines last quarter.

The market seems to like the news: IBM shares are trading up some 10% ahead of the market opening.

The move is a significant shift for the company and underscores a bigger sea change in how enterprise IT has evolved and looks to continue changing in the future.

IBM is betting that legacy infrastructure and the servicing of it, while continuing to net revenues, will not grow as it has in the past, and as companies continue with their modernization (or “digital transformation,” as consultants like to refer to it today), they will turn increasingly to outsourced infrastructure and using cloud services, both to run their businesses and to build the services that interface with consumers. IBM, meanwhile, is in a race competing against the likes of Microsoft and Google in cloud services, and so doubling down on that part of the business is another way to focus on it for growth.

But IBM, often referred to as “Big Blue”, is also using the announcement as the start of an effort to streamline its business to spur growth (maybe we’ll have to rename it “Medium Blue.”).

“IBM is laser-focused on the $1 trillion hybrid cloud opportunity,” said Arvind Krishna, IBM CEO, in a statement. “Client buying needs for application and infrastructure services are diverging, while adoption of our hybrid cloud platform is accelerating. Now is the right time to create two market-leading companies focused on what they do best. IBM will focus on its open hybrid cloud platform and AI capabilities. NewCo will have greater agility to design, run and modernize the infrastructure of the world’s most important organizations. Both companies will be on an improved growth trajectory with greater ability to partner and capture new opportunities –creating value for clients and shareholders.”

Its $34 billion purchase of Red Hat in 2019 is perhaps its most notable investment in recent times in IBM’s own transformation.

“We have positioned IBM for the new era of hybrid cloud,” said Ginni Rometty, IBM Executive Chairman in a statement. “Our multi-year transformation created the foundation for the open hybrid cloud platform, which we then accelerated with the acquisition of Red Hat. At the same time, our managed infrastructure services business has established itself as the industry leader, with unrivaled expertise in complex and mission-critical infrastructure work. As two independent companies, IBM and NewCo will capitalize on their respective strengths. IBM will accelerate clients’digital transformation journeys, and NewCo will accelerate clients’infrastructure modernization efforts. This focus will result in greater value, increased innovation, and faster execution for our clients.”

More to come.

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From: richardred10/9/2020 9:59:26 AM
   of 6156
The big deals keep coming.

AMD in advanced talks to buy Xilinx in over $30 bln deal - WSJ
BY Reuters
— 9:24 PM ET 10/08/2020

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To: richardred who wrote (5982)10/9/2020 11:40:47 AM
From: richardred
1 Recommendation   of 6156
Sold out of FARM position with a nice gain.

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To: richardred who wrote (5972)10/20/2020 10:32:56 AM
From: richardred
   of 6156
RE-CTG Speculation Latest Qtr. blew away estimates 3 fold. IMO the longer this company stays below six. The more likely this low hanging fruit gets picked. ASSURANCE GLOBAL SERVICES & WAX ASSET MANAGEMENT have been pushing the company hard. Even trying a unverified bid starting @ 6.50. IMO this company would also be good for a potential management led buyout.

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To: richardred who wrote (5992)10/20/2020 11:54:47 AM
From: richardred
   of 6156
RE-CTG Speculation I listened to the earnings call . BP/Hilcorp customer retained. IBM contract negotiations move forward to Nov. 27. Their IBM business will most likely be split with the announced IBM spinoff. The board saw, but no comments will be made on AGS filing. Higher margin solutions business makes up about 40% of the business. The company will sacrifice lower margin staffing business to concentrate on solutions and focused staffing business. Renewing staffing business that makes sense within the business plan. No guidance moving forward.

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To: richardred who wrote (5593)10/21/2020 11:35:30 AM
From: richardred
   of 6156
The trend of consolidation continues in the oil patch. Stock deals are still prevalent, and there's little money to be made on takeovers IMO. I had two previous deals that turned out to be takeunders. I exited all energy in my portfolio earlier in the year. I think it would take oil north of 50 for several quarters for me to get interested in quality survivors.

Pioneer Natural Resources Confirms Acquisition of Parsley Energy for $4.5 Billion
BY MT Newswires
— 9:02 AM ET 10/21/2020

ConocoPhillips in Talks to Buy Concho Resources in Big Shale Bet By
Ed Hammond
Kiel Porter
, and
Scott Deveau

October 13, 2020, 9:05 PM EDT Updated on October 14, 2020, 10:05 AM EDT

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To: richardred who wrote (5994)10/21/2020 11:56:13 AM
From: robert b furman
1 Recommendation   of 6156
Hi Rick,

I'm sticking with my energy positions and averaging down.

With the mergers really happening in numbers now, there is solid logic behind the view that mergers and acquisitions en mass are a bottoming action.

There may well be a laggard, but his is a good sign.

When the E&P's merge, they gain scale and can reduce headcount from duplication of employees.

A reduced overhead and economies in scale could well allow a more OPEC glut control and still be profitable.

Shale producers up to their neck in debt have pumped oil at maximum volume whether it made sense or not.

This looks very similar to the old Micron buys up memory makers and suddenly there were three memory makers Micron,SK Hynix , and Samsung.

Guess what, they all miraculously started making big money.

I'll grant you there are more supers ajjor oil companies out there than 3, but Shell, BP have removed themselves from Active drilling nd are aiming for lowering their carbon footprint as they shift to renewables.
Since Europe has a bad case of loving the renewables vs natural gas/LNG, I suspect ENI and Total are not far behind BP and Shell in leaving gas and oil exploration to the shale players and Saudi's.

The good news to me is the XOM's and CVX's are the low cost producers after the Saudi's.

Opec's emerging market members all have higher costs and even higher needed prices.

My bet is by this time next year, XOM and CVX will be up 25%-50%,and sporting excellent dividends - even if cut in half!

P.S. I talking my book here. <smile>


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To: richardred who wrote (5994)10/25/2020 10:49:24 AM
From: richardred
   of 6156
Another oil deal. Another one bites the dust. I like the Husky Energy name better than Cenovus. :+ ) , But they chose Cenovus upon completion.

Canada's Cenovus Energy to buy Husky Energy for $2.9 billion By Ann Maria Shibu, Reuters - 21 minutes ago

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