– BG Group (BG/ LN): Both Shell and BG Group reported preliminary results for 4Q15: i) Despite reiterating guidance for the 2016 dividend, cost savings and capital spending reductions, Shell’s quarterly results missed vs consensus due to weaker-than-expected downstream results, with 4Q15 net income of $1.6-1.9b about 11% below consensus; and ii) BG reported largely in line results, with average E&P production volume of 704kboed ahead of guidance of 680-700kbde, FY15 net income of at least $2.3b vs 2.3b consensus. Although crude prices keep crashing, these comforting BG numbers (with focus on production growth) further add to Shell’s deal rationale (whose own production numbers are falling) and Shell looks to be better off with BG rather than without it. We have spoken to Shell’s proxy solicitor who had interesting colour for the crucial Shell vote next week, please contact us at firstname.lastname@example.org to get their comments.
– Ten Cate (KTC NA): In a mailed press statement, Van Herk (3.2% holder) said yesterday it has decided to accept Gilde’s increased offer, although it believes it still doesn’t fully reflect the value and growth potential of the company. In a separate Dutch press article, it was reported that that Gilde won’t comment on the percentage that it considers it necessary to declare the offer unconditional, but according to a source it is “a sufficient move towards the 95%.” Adds that Gilde will not leave a large group of shareholders in the cold. With markets imploding, almost all but 1 shareholder (Kempen with 5%+ stake) laying over to tender, and Gilde not making the 95% threshold a make or break threshold (but language focused on getting towards 95%), this deal is on course to get successful by the end of this week, with Gilde expecting to get 80-90% of shares getting tendered.
– Delhaize NB (DELB BB) / Ahold (AH NA): After Delhaize and Ahold notified the deal to the Belgian competition authority late last week, this is another solid deal which is progressing ahead of initial guidance: we like the situation and would have the spread as a) only timing risk associated with FTC 2nd request (2nd request was issued in Aug 2015, and although US supermarket deals take notoriously long to be reviewed, there is de minimum blocking risk with expected (conditional) FTC approval in 2Q16), and b) low but still potential for bump as Delhaize shareholders seem to disproportionately benefiting less from this ‘merger’ (no cash consideration, shift of HQ and top management to Netherlands, lower %ownership in pro-forma company). Would have the spread going into the Mar/Apr-16 EGMs.