JOHANNESBURG (Reuters) – Wal-Mart, the world's biggest retailer, may scale back its $4 billion bid for Massmart by nearly half, a move that could keep the South African firm listed in Johannesburg.
Wal-Mart is now considering taking more than a 50 percent stake, rather than a full buyout, Massmart said in a statement on Thursday. The offer price was still 148 rand per share, Massmart said.
Shares of Massmart initially fell more than 2 percent on the news before recouping some losses. The shares were down 0.5 percent at 140.76 rand as of 0909 GMT, underperforming a 0.8 percent gain in Johannesburg's blue-chip Top-40 index.
Wal-Mart has been under increasing fire from its shareholders to revive its ailing U.S. stores, and some analysts have said it should concentrate on fixing its business at home before spending big on expansion.
"Wal-Mart is investigating potential options for and the merits of retaining Massmart's listing," Massmart said.
"These investigations could lead to Wal-Mart making a partial offer to acquire in excess of 50 percent."
The revised bid may also reflect dissatisfaction among Massmart's shareholders at the deal, said Syd Vianello, an analyst at Nedcor Securities.
"I think what they are saying is: If this deal is so good for Wal-Mart why should we be selling?"
"I think because of an increasing, call it, resistance to exit completely it looks like they have to go the route of a partial offer and retaining the listing on the JSE so that shareholders will be allowed to maintain their exposure to the company."
Wal-Mart last month said it was in talks to acquire all of Massmart, a $4 billion deal that would give the U.S. retailer a big presence in fast-growing Africa and boost its emerging markets strategy.
The bid values Massmart at 26.3 times its 12-month adjusted earnings per share, according to Thomson Reuters data.
Massmart sells general merchandise, electronics and food via a low-margin, high-volume model. It runs nearly 290 stores and nine different retail and wholesale chains.
It has also been one of the most aggressive of South Africa's retailers in expanding into the continent.
Wal-Mart's intention to scale back its bid comes two weeks after HSBC pulled out of talks to buy a majority stake in South Africa's Nedbank.
(Reporting by Gugulakhe Lourie and David Dolan; Editing by Michael Shields)
LONDON (Reuters) – Royal Dutch Shell Plc (RDSa.L) and Italy's Eni SpA (ENI.MI) beat analyst forecasts with sharply higher third-quarter profits on Thursday, boosted by higher oil and gas prices and underpinning a strong sector trend.
Shell, Europe's largest oil company by market value, said net income on a current cost of supply (CCS) basis rose 18 percent to $3.52 billion.
However its underlying result was up 88 percent on a year ago after stripping out one-off items and over $1 billion in non-cash charges, mainly related to writedowns in the value of refining assets.
Italian rival Eni reported a 47.5 percent rise in adjusted, or underlying, net profit.
Analysts, who usually ignore non-cash charges and one-offs and prefer to focus on underlying performance, said both companies' results were well ahead of forecasts.
Big oil companies are being helped by a 12 percent rise in crude prices compared with the third quarter of 2009, while U.S. natural gas prices were 29 percent higher and British gas prices doubled. Average global refining margins also rose.
ConocoPhillips (COP.N), the third-largest U.S. oil company, said on Wednesday its quarterly profit more than doubled, beating analysts predictions.
Industry leader Exxon Mobil (XOM.N) is due to report third-quarter results later on Thursday and analysts have forecast a 53 percent rise in net income to $7.26 billion.
Shell's CCS earnings strip out unrealized gains or losses in the value of inventories related to changes in oil prices, and are comparable with net income under U.S. accounting rules.
Shell also contributed to its rebound with a 5 percent rise in oil and gas production in the quarter to 3.1 million barrels of oil equivalent per day (boepd), just ahead of forecasts.
Eni said output rose 1.5 percent.
Shell Chief Executive Peter Voser said the company would continue to sell non-core assets, especially in retail and refining, and promised a rationalization of some of the Anglo-Dutch group's natural gas assets in North America.
Shell shares traded up 1.1 percent at 0922 GMT, in line with the rise in the STOXX Europe 600 Oil and Gas index (.SXEP). Eni shares were up 2.6 percent.
(Editing by Michael Shields and David Holmes)
NEW YORK (Reuters) – Wall Street is set for a slightly higher open, ahead of weekly jobless claims, and with the Federal Reserve's decision on monetary easing still the market's main focus.
* At 4:48 a.m. ET, futures for the Dow Jones, S&P 500 and Nasdaq were all up 0.1 percent.
* The FTSEurofirst 300 (.FTEU3) index of leading European shares was up 0.4 percent at 1,085.35 points with France Telecom (FTE.PA) among the companies to gain after reporting results.
* The dollar slipped on Thursday, relinquishing some of the gains made earlier this week as U.S. Treasury yields pulled back from a recent rise as investors continued to recalibrate expectations for U.S. monetary easing.
* Most leading economists expect the Federal Reserve to buy between $80 billion and $100 billion worth of assets per month under a new program to bolster the struggling economy, a Reuters poll found on Wednesday.
* Weekly initial jobless claims will earn a close look, in part because the next Fed policy-setting meeting is before the October employment report, making initial claims one of the last jobs-related indicators the Fed might take into account. The number of U.S. workers filing new claims for benefits is expected to have ticked up slightly, to 453,000 from 452,000, according to a Reuters survey of 46 economists.
* Exxon Mobil (XOM.N), the largest publicly traded oil company, is expected to report higher quarterly profit and production as crude oil prices rose from a year-ago and natural gas output climbed.
* Royal Dutch Shell (RDSa.L) beat all analyst forecasts by reporting an 18 percent jump in third-quarter profits thanks to higher oil and gas prices, setting a trend for the sector. The shares rose 1 percent.
* Potash Corp (POT.TO), the world's largest fertilizer maker and object of BHP Billiton's (BLT.L) $39 billion hostile bid, reports quarterly results.
* Other companies due to report include 3M (MMM.N), Motorola (MOT.N) and Colgate-Palmolive (CL.N)
* U.S. stocks fell on Wednesday as investors scaled back expectations of how aggressively the Fed would act to stimulate the economy.
* However, they finished off lows as Broadcom (BRCM.O) led a rally in techs after posting a rise in fourth-quarter revenue.
* The Dow Jones industrial average (.DJI) and The Standard & Poor's 500 Index (.SPX) fell 0.4 and 0.3 percent, respectively. The Nasdaq Composite Index (.IXIC) gained 0.2 percent.
* Shares of Las Vegas Sands Corp (LVS.N) rose 3.5 percent to $42.50 on Wednesday after it posted results. Visa Inc (V.N) fell 1.3 percent after the bell following results. (Reporting by Brian Gorman; Editing by Karen Foster)