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New Boeing CEO Calhoun is hardened company disaster supervisor

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(Reuters) – Beleaguered Boeing Co (BA.N) is placing its future within the fingers of a turnaround veteran who has led a number of firms in disaster, minimize his enamel at engine maker Common Electrical Co (GE.N) and has spent a decade on the board of the world’s largest planemaker.

Newly appointed Chief Government David Calhoun, 62, was made Boeing’s chairman two months in the past within the midst of the disaster that has rocked the corporate since airliner disasters in Indonesia and Ethiopia led to the grounding of its best-selling 737 MAX.

This isn’t his first style of company upheaval.

Calhoun grew to become chairman of the Caterpillar Inc (CAT.N) board shortly after federal brokers raided its headquarters in 2017, headed a Common Electrical unit that included jet engines after the Sept. 11, 2001 assaults, and turned spherical media analysis firm Nielsen to go public. He has additionally been a longtime government at Blackstone non-public fairness group.

“Having seen him run GE’s aviation enterprise after 9/11, I do know he can execute below stress,” former GE chief government Jeff Immelt instructed Reuters by electronic mail when requested about Calhoun, including that Calhoun would restore buyer belief in Boeing.

As Calhoun tackles the MAX disaster, he additionally faces questions from European regulators over a deal to purchase the industrial arm of Brazil’s Embraer in a serious strategic transfer.

Calhoun, who has co-written a ebook on enterprise, “How Firms Win,” says being candid is a part of being a pacesetter, an strategy which many critics say was absent from Boeing’s initially guarded strategy to considerations in regards to the 737 MAX.

“The second you get into the workplace til the second you allow, each interplay is judged,” he stated in a video printed in 2014 by the Jack Welch Administration Institute.

“You attempt to cover something from everyone and I feel your physique language turns into completely obvious.”

But in his quick time as Boeing chairman, Calhoun has confirmed his potential to power adjustments behind the scenes, as seen by his position within the departure of Kevin McAllister as chief government of Boeing’s planemaking arm in October. The removing was silent and swift, foreshadowing Dennis Muilenburg’s ouster this week.

Some insiders noticed McAllister – one other GE veteran – as a scapegoat for the MAX disaster. Others say he paid the value for distractions together with extensively publicized cracks within the firm’s older 737NG jets, which caught the board off guard. The 737 MAX was not impacted by the cracking problem.

The reckoning got here at a casual board dinner in Texas led by Calhoun in late October. As administrators wound up a two-day summit a day later, Calhoun and Muilenburg took McAllister apart and instructed him he was out, two individuals briefed on the assembly stated.

FILE PHOTO: Nielsen CEO David Calhoun (C) is congratulated after his firm’s IPO opened, on the ground of the New York Inventory Alternate January 26, 2011. REUTERS/Brendan McDermid

In an indication that the board was already claiming a brand new voice below just lately appointed chairman Calhoun, having break up the CEO and chairman roles, the decisive dinner dialog that led to the shake-up came about with out Muilenburg, the individuals stated.

Boeing declined touch upon confidential board discussions.

McAllister and Muilenburg couldn’t be reached.

PRESSURE FOR CHANGE

Now, Calhoun should restore frayed relations with regulators, proceed to handle a money squeeze from the disaster and produce to market the brand new 777X jet at a time of powerful regulatory scrutiny.

His expertise on the Boeing board will permit Calhoun to “take the reins in brief order with out the necessity for an extended interval of familiarization,” stated Timm Schulze-Melander, industrials specialist at European analysis home Redburn.

As a long-time board member who discovered the trade at GE, Calhoun shares the qualities of each an insider and outsider – worrying some who query whether or not he’s the recent blood Boeing must overhaul what typically appears a smug company tradition.

“Boeing wants a revamp of its company governance. The board must be fired,” stated Paul Njoroge, a Toronto-based funding skilled who misplaced his household within the Ethiopia crash.

“I don’t suppose (Calhoun) goes to vary the tradition of Boeing,” he added.

A former Nielsen government referred to as Calhoun a “hard-nosed” chief who doesn’t heat to dissent, however who can encourage.

“(Boeing) may want somebody as powerful as Dave. I don’t suppose he can be a great supervisor over a protracted time frame. As a disaster supervisor, he may have the ability to get it carried out,” the individual stated.

Regardless that Calhoun sat on Boeing’s board all through the event of the MAX, some argue he has the tenacity to drive by reform.

FILE PHOTO: Nielsen CEO David Calhoun (2nd L) is congratulated after his firm’s IPO opened on the ground of the New York Inventory Alternate, January 26, 2011. REUTERS/Brendan McDermid

“It’s onerous to usher in someone who doesn’t know aviation or have credibility with airways,” stated Lundquist Group managing director Jerrold Lundquist, a advisor who first met Calhoun within the 1990s and who believes he’s what stricken Boeing wants.

“It’s powerful to return in chilly. To a point that could be a trade-off they need to make,” Lundquist stated.

Reporting by Tim Hepher in Paris, Allison Lampert in Montreal and Kenneth Li in New York. Further reporting by Chibuike Oguh and Ankit Ajmera; Writing by Peter Henderson and Tim Hepher; Enhancing by Lisa Shumaker and Grant McCool

Our Requirements:The Thomson Reuters Belief Ideas.

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SoftBank turns towards WeWork’s dad or mum CEO Neumann: sources

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(Reuters) – Japan’s SoftBank Group Corp (9984.T), the largest investor in WeWork proprietor The We Firm, is exploring methods to exchange Adam Neumann as chief government of the U.S. office-sharing start-up, 4 folks aware of the matter mentioned on Sunday.

FILE PHOTO: Adam Neumann, CEO of WeWork, speaks to visitors throughout the TechCrunch Disrupt occasion in Manhattan, in New York Metropolis, NY, U.S. Might 15, 2017. REUTERS/Eduardo Munoz -/File Photograph

The uncommon showdown between SoftBank and considered one of its largest investments comes after We Firm postponed its preliminary public providing (IPO) final week, following pushback from perspective traders, not simply over its widening losses, but additionally over Neumann’s unusually agency grip on the corporate.

This was a blow for SoftBank, which hoped for We Firm’s IPO to bolster its income because it seeks to woo traders for its second $108 billion Imaginative and prescient Fund. It invested in We Firm at a $47 billion valuation in January, but inventory market investor skepticism led to the startup contemplating a possible valuation within the IPO earlier this month of as little as $10 billion, Reuters reported.

Administrators on We Firm’s seven-member board which are aligned with SoftBank are deliberating learn how to exchange Neumann as CEO, the sources mentioned. Benchmark Capital, one other huge investor in We Firm, would additionally like Neumann to step apart, one of many sources mentioned.

No problem to Neumann has but been tabled, the sources mentioned. A We Firm board assembly to debate Neumann’s future might be held as early as this week, one other of the sources mentioned.

One possibility that SoftBank is contemplating is asking Neumann to develop into interim CEO whereas a headhunting agency is employed to search out an exterior alternative, the primary supply mentioned.

The sources requested to not be recognized as a result of the matter is confidential. We Firm and SoftBank declined to remark, whereas Neumann and Benchmark Capital couldn’t be instantly reached for remark. The Wall Avenue Journal first reported on SoftBank exploring methods to exchange Neumann as CEO.

As co-founder of the We Firm, Neumann holds particular voting shares that allow him to dismiss dissident board administrators and shoot down any problem to his authority. Nonetheless, SoftBank may select to not again We Firm’s IPO or present it with extra funding. It has already funded the cash-burning start-up to the tune of $10 billion, and was discussing committing one other $1 billion to the IPO.

We Firm mentioned final week it’s aiming to develop into a publicly traded firm by the tip of the 12 months.

In an indication of the deteriorating relations between SoftBank and WeWork, Neumann didn’t take part in a gathering of executives of corporations backed by SoftBank that occurred in Pasadena, California, final week and was organized by SoftBank CEO Masayoshi Son, based on two folks aware of the matter.

Reporting by Anirban Sen in Bengaluru and Joshua Franklin in New York; Extra reporting by Greg Roumeliotis in new York and Rishika Chatterjee in Bengaluru; Modifying by Sonya Hepinstall and Daniel Wallis

Our Requirements:The Thomson Reuters Belief Ideas.

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After LSE’s sharp rebuff, HKEX begins investor attraction offensive

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LONDON (Reuters) – Hong Kong Exchanges and Clearing (0388.HK) is embarking on a three-week attraction offensive with London Inventory Trade (LSE.L) traders because the Asian buying and selling home tries to salvage its proposed $39 billion takeover provide.

FILE PHOTO: The title of Hong Kong Exchanges and Clearing Restricted is displayed on the entrance in Hong Kong, China January 24, 2018. REUTERS/Bobby Yip/File Photograph

LSE’s board is refusing to have interaction with HKEX after emphatically rejecting its method on Friday. The LSE described HKEX’s provide as essentially flawed, saying it could not meet its strategic targets and got here with a excessive threat of being blocked by regulators.

LSE has stated it desires to stay with its plan of shopping for knowledge and buying and selling firm Refinitiv for $27 billion.

However HKEX has vowed to press on, and has arrange conferences with a collection of LSE’s high traders over the following few weeks, in response to two individuals acquainted with the matter, elevating the possibilities that it might make a hostile provide.

One top-25 investor advised Reuters that they had a gathering booked with HKEX later this month and that there might be a hostile method. Others stated they have been eager to listen to extra moderately than dismissing the deal instantly in favor of the Refinitiv tie-up.

“We’d count on there to be some synergy (within the HKEX deal) each when it comes to company overheads and expertise,” stated James Bevan, chief funding officer at CCLA. He added that whereas he was broadly supportive of the Refinitiv deal, he had some considerations in regards to the knowledge agency’s development technique.

HKEX has till Oct. 9 to make a agency provide or stroll away.

HKEX declined to touch upon the deal past its assertion on Friday that it could proceed to have interaction with LSE shareholders and that its provide was of their greatest pursuits.

LSE didn’t reply to a request for touch upon Sunday.

REGULATORY RISK

A supply near HKEX stated the Asian buying and selling home was assured some LSE traders have been fascinated by their provide and that it had an opportunity of success. They identified that round 15 of the highest 20 LSE shareholders additionally had stakes in HKEX.

However the previous decade has seen a collection of makes an attempt at cross-border change offers fail, thwarted by regulators and politicians even when each firms have favored the deal.

HKEX says it has had “constructive” preliminary discussions with regulators and policymakers. Nevertheless, regulatory sources in Britain and Italy – the place LSE owns Borsa Italiana – stated that they had but to carry substantive talks with HKEX on the deal.

HKEX will probably be relying on its lead banker – Moelis’s Caroline Silver – to assist it pull off what can be a significant coup if it succeeds.

One of the vital outstanding change bankers, Silver labored on LSE’s takeover of Borsa Italiana in 2007 when at Morgan Stanley, and represented London Metallic Trade when HKEX purchased it in 2012.

“Her modus is kind of easy: she is aware of everyone within the change and monetary infrastructure world, she understands the markets … and he or she runs a really disciplined course of,” stated Martin Abbott, London Metallic Trade’s former chief govt.

Further reporting by Sinead Cruise, Carolyn Cohn and Huw Jones; Writing by Rachel Armstrong; Enhancing by Dale Hudson

Our Requirements:The Thomson Reuters Belief Rules.

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PG&E evaluating proposal from hedge funds Knighthead Capital, Abrams Capital

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FILE PHOTO: PG&E works on energy strains to restore harm attributable to the Camp Hearth in Paradise, California, U.S. November 21, 2018. REUTERS/Elijah Nouvelage/File Photograph

(Reuters) – Energy producer PG&E Corp (PCG.N) mentioned on Friday it’s evaluating a proposal from hedge funds Knighthead Capital Administration and Abrams Capital Administration to offer fairness capital commitments supporting a plan to reorganize the corporate.

“The Firm has acquired the financing proposal from Abrams and Knighthead and is evaluating it, together with the backstop dedication letters and associated supplies, in session with the Firm’s advisors. The Firm will reply to the proposal sooner or later,” PG&E mentioned in a press release.

Shareholders Knighthead Capital and Abrams in a letter to PG&E on Thursday proposed elevating $15 billion in fairness to fund a deliberate reorganization of the facility producer, which is going through big liabilities from California wildfires.

The proposed fundraising, a rights providing of latest shares, is the most recent effort to rescue PG&E, which sought Chapter 11 chapter safety earlier this 12 months after extreme wildfires in 2017 and 2018 resulted in additional than $30 billion in liabilities.

Knighthead and Abrams pledged to buy a portion of the provided fairness if shares are left unsold by way of a so-called backstop dedication.

Reporting by Kanishka Singh in Bengaluru; Modifying by Leslie Adler

Our Requirements:The Thomson Reuters Belief Rules.

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Vivendi in talks to promote 10% of Common Music Group to Tencent

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PARIS (Reuters) – Vivendi (VIV.PA) is in talks to promote a 10% stake in its prized and profitable Common Music Group (UMG) to Chinese language tech firm Tencent (0700.HK) because it seeks to develop its presence in Asia.

FILE PHOTO: The emblem of Common Music Group (UMG) is seen at a constructing in Zurich, Switzerland July 25, 2016. REUTERS/Arnd Wiegmann/File Photograph – RC1EE289B960

UMG is the world’s largest music label forward of Sony Music Leisure and Warner Music, and is dwelling to artists similar to Girl Gaga, Taylor Swift, Drake and Kendrick Lamar.

The French media conglomerate stated on Tuesday that the deal would give UMG a preliminary fairness valuation of 30 billion euros ($33.6 billion) – higher than some had forecast – and that Tencent had an possibility to purchase an additional 10% of UMG.

Vivendi shares surged 7% as analysts welcomed the progress made on the sale of a stake in UMG and the valuation.

A cope with Tencent would increase UMG’s presence within the tightly managed Chinese language market and match nicely with the Chinese language firm’s Tencent Music Leisure (TME.N) unit.

“The valuation seems to be good, and the progress made on the UMG deal can also be optimistic,” stated Gregory Moore, fund supervisor at Keren Finance, which owns Vivendi shares.

Vivendi’s Chief Government Officer Arnaud de Puyfontaine stated final month that proceeds of the sale of as much as 50% of UMG can be used for bolt-on acquisitions and “vital” share buybacks.

Managed by billionaire Vincent Bollore, Vivendi is in search of to money in on the rising public thirst for subscription and ad-based music streaming companies, which have propelled UMG’s income over the past 4 years.

“Along with Tencent, Vivendi hopes to enhance the promotion of UMG’s artists, with whom UMG has created the best catalog of recordings and songs ever, in addition to establish and promote new abilities in new markets,” Vivendi stated in an announcement.

Vivendi first informed markets it might promote a part of UMG a 12 months in the past however had made little progress till asserting final month that it had chosen funding banks to begin a proper sale means of a minority stake, which must be finalised by the beginning of subsequent 12 months.

Funding banks have estimated the enterprise is value something between 17 billion to 44 billion euros.

Vivendi additionally stated on Tuesday that it was persevering with the method to promote additional minority stakes in UMG to different companions.

($1 = 0.8925 euros)

Reporting by Sudip Kar-Gupta; Enhancing by Kirsten Donovan

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Unique: Nike explores sale of surfwear model Hurley – sources

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FILE PHOTO: The Nike swoosh emblem is pictured on a retailer in New York Metropolis, New York, U.S., September 4, 2018. REUTERS/Carlo Allegri/File Picture

(Reuters) – Nike Inc (NKE.N), the world’s largest sportswear maker, is exploring choices for its surfwear model Hurley Worldwide, together with its attainable divestment, in line with folks acquainted with the matter.

Nike’s potential retrenchment from the surfwear market is emblematic of the stance of most main shopper firms in direction of the sector. Surf manufacturers have misplaced their attraction amongst non-surfing customers, who now desire boutique manufacturers and retro streetwear.

Among the many choices that Nike is contemplating for Hurley is an outright sale of the Costa Mesa, California-born model, the sources stated, requesting anonymity as a result of the deliberations are confidential.

It isn’t clear how a lot Nike may fetch by promoting Hurley. Nike declined to remark.

Nike bought Hurley from founder Bob Hurley in 2002 for an undisclosed sum in an effort to develop past athletic-focused attire and into different sportswear for browsing, skating, and snowboarding.

Bob Hurley based the corporate in 1979 and achieved notoriety within the 1970s for shaping the surf board for world champion Wayne “Rabbit” Bartholomew.

In the previous couple of years, the burgeoning urge for food for clothes related to the seashore life-style and tradition waned, to the purpose that former world chief Quiksilver filed for chapter in 2015 earlier than being taken over by personal fairness agency Oaktree Capital Administration (OAK.N).

Mainstream trend has dropped surfwear in favor of athleisure, whereas rising trend is popping towards city streetwear manufacturers like Carlyle-backed Supreme, and reversion seems to be just like the revived sportswear model Fila and Champion.

Final yr, Boardriders Inc, the corporate behind Quiksilver, Roxy and DC Sneakers that’s owned by Oaktree, acquired its struggling Australian rival Billabong, proprietor of its namesake model together with different life-style manufacturers similar to Aspect and VonZipper.

Reporting by Harry Brumpton and Joshua Franklin in New York; Modifying by Christopher Cushing

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Uber to kick off investor road show with IPO terms on Friday

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(Reuters) – Ride-hailing company Uber Technologies Inc will unveil terms for its initial public offering on Friday, telling investors it will seek to be valued at between $80 billion and $90 billion, according to people familiar with the matter.

The valuation sought is less than the $120 billion valuation that investment bankers told Uber last year it could fetch, and closer to the $76 billion valuation it attained in its last private fundraising round last year.

Uber’s moderation of valuation expectations reflects the poor stock performance of its smaller rival Lyft Inc following its IPO last month. Lyft shares ended trading on Thursday down 22 percent from their IPO price amid investor skepticism over its path to profitability.

Uber will unveil on Friday an IPO price range of between $44 and $50 per share, based on which it would raise between $8 billion and $9 billion, the sources said. This would rank it as the largest IPO since that of Chinese e-commerce giant Alibaba Group Holding Ltd in 2014.

In addition, some Uber insiders will also sell their own shares in the IPO, the sources said. Reuters reported earlier this month that all the Uber shares sold in the IPO could be worth around $10 billion.

Uber also plans to unveil on Friday its last sale of stock as a private company, the sources said. The identity of the investor involved in the private placement could not immediately be learned.

The investor roadshow will kick off in earnest on Monday, setting the stage for Uber to debut on the New York Stock Exchange in early May.

For the roadshow, Uber’s top executives will travel the Unites States and make a stop in London to drum up investor interest in the IPO, sources said.

The sources asked not to be identified because the matter is confidential. Uber declined to comment. The price range was reported earlier by Bloomberg News.

Two other IPOs this month, those of online scrapbook company Pinterest Inc and video conferencing company Zoom Video Communications Inc, have performed much more strongly than Lyft. Uber, however, has chosen to still value itself conservatively.

“People are more cautious than they were 4 weeks ago,” said Duncan Davidson, general partner at Bullpen Capital, an early-stage venture capital investment firm.

Uber operates in more than 70 countries. In addition to ride hailing, its business includes bike and scooter rentals, freight hauling, food delivery, and an expensive self-driving car division.

The ride-hailing startup has disclosed it has 91 million users, but growth is slowing and it may never make a profit. Uber in 2018 had $11.3 billion in revenue, up around 42 percent over 2017, but below the 106 percent growth the prior year.

During the IPO roadshow, Uber’s chief executive, Dara Khosrowshahi, will be tasked with convincing investors that he has successfully changed the company’s culture and business practices after a series of embarrassing scandals over the last two years.

Those have included sexual harassment allegations, a massive data breach that was concealed from regulators, use of illicit software to evade authorities and allegations of bribery overseas.

Uber is reserving some shares in the IPO for drivers who have completed 2,500 trips among other criteria.

AUTONOMOUS DRIVING

Last week, Uber’s autonomous vehicle unit raised $1 billion privately from a consortium of investors, including top Uber shareholder SoftBank Group Corp, giving the company a much-needed funding boost for its self-driving ambitions.

Last year, Uber settled a legal dispute over trade secrets with Alphabet Inc’s Waymo self-driving vehicle unit. Waymo, in its lawsuit, had said one of its former engineers who became chief of Uber’s self-driving car project took with him thousands of confidential documents.

FILE PHOTO: Uber’s logo is displayed on a mobile phone in London, Britain, September 14, 2018. REUTERS/Hannah Mckay

One advantage Uber will likely seek to play up to investors is that it is the largest player in many of the markets in which it operates. Analysts consider building scale crucial for Uber’s business model to become profitable.

Lyft, which was valued at $24.3 billion in its IPO, has focused only in the U.S. and Canadian markets.

“Investors are now asking for more clarity on how ride-sharing companies will monetize data they are collecting and if this is a scalable business,” said Jordan Stuart, a client portfolio manager for Federated Kaufmann funds who often purchases stock in IPOs.

Reporting by Joshua Franklin in New York and Heather Somerville in San Francisco; additional reporting by Jennifer Ablan in New York; editing by Bill Rigby, Meredith Mazzilli and Chris Reese

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