Major International Business Headlines Brief::: 15 May 2018

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Major International Business Headlines Brief::: 15 May 2018

 


 

 


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*  Sinosteel to invest $1 bln in Zimbabwe, lift ferrochrome output

*  South African hospital operator Netcare boosted by domestic market

*  Britain's competition watchdog to look into Sibanye-Lonmin deal

*  South African rand falls as rising U.S. bond yields lift dollar

*  South Africa appoints interim board at troubled state firm Transnet

*  Glencore, Barrick expect prospecting licence for Tanzania nickel project

*  Shell, Eni trial on Nigeria corruption re-adjourned to June

*  Equatorial Guinea may strip Ophir of LNG project due to finance delays

*  Lonmin cuts H1 loss and trims spending ahead of Sibanye merger

*  Thor Explorations aims to lead Nigeria's new mining pack

*  Barclays boss Jes Staley fined £642,000 for 'conduct breach'

*  US ruling opens way for states-wide sports betting

*  Gap says sorry for T-shirts with "incorrect map" of China

*  CBS sues key investor over Viacom merger

*  Apple-Samsung patent battle revived in California court

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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Sinosteel to invest $1 bln in Zimbabwe, lift ferrochrome output

HARARE (Reuters) - China’s Sinosteel Corporation has agreed to invest $1
billion in Zimbabwe to build a power plant and increase ferrochrome output,
the southern African country’s president Emmerson Mnangagwa said on Monday.

 

Sinosteel president Andong Liu said the Chinese firm planned to build three
additional furnaces at its majority-owned Zimasco business, which would
raise ferrochrome output by 120,000 tonnes over the next five years to
300,000 tonnes per year.

 

Andong said he saw ferrochrome output from Zimasco at 500,000 tonnes
annually in ten years’ time.

 

Sinosteel also plans to build a 400 megawatt coalbed methane-fired power
plant in western Zimbabwe, the firm’s president added at a news conference
with Mnangagwa.

 

“We will continue to review our process to facilitate investment inflows as
well as ease of doing business,” Mnangagwa said after the signing of the
investment agreement.

 

Mnangagwa, who came to power in November after a de facto military coup
ended Robert Mugabe’s 37-year rule, has promised to rebuild the economy by
opening it up to foreign investors.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


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South African hospital operator Netcare boosted by domestic market

(Reuters) - Netcare, South Africa’s second-largest private hospital
operator, reported an 8.5 percent rise in half-year earnings on Monday,
citing a strong domestic performance and its exit from the UK.

 

The company said that the South African healthcare market has returned to
growth and it expects demand for private healthcare to remain resilient over
the medium to longer term because of an ageing population.

 

Adjusted diluted headline earnings per share (EPS) from continuing
operations, the main results metric in South Africa, rose to 87.7 cents for
the six months to March 31 and the company increased its interim dividend to
44 cents from 38 cents in 2017.

 

Netcare has been in Britain for a decade through a controlling stake in BMI
Healthcare but said in March that it would exit the UK because of difficult
trading conditions and belt-tightening by the UK’s National Health Service.

 

In South Africa, meanwhile, Netcare registered a 3.5 percent rise in patient
days, which represent customer stays in its hospitals. That helped to lift
cash generation in its home market to nearly 33 percent.

 

The growth in patient days is expected to continue into the second half,
Netcare said, but at a slower rate than in the first half.

 

Half-year group revenue rose 8.2 percent to 9.97 billion rand.

 

Netcare also said that regulators approved its purchase of Akeso Clinics, a
network of 12 dedicated mental healthcare facilities.

 

 

 

Britain's competition watchdog to look into Sibanye-Lonmin deal

(Reuters) - Britain’s Competition and Markets Authority (CMA) said on
Tuesday it would examine whether a takeover by South Africa’s
Sibanye-Stillwater of miner Lonmin, would lessen competition.

 

The 285 million pound ($386 million) deal would create the world’s No. 2
platinum producer.

 

($1 = 0.7385 pounds)

 

 

 

South African rand falls as rising U.S. bond yields lift dollar

JOHANNESBURG (Reuters) - South Africa’s rand was weaker early on Tuesday,
hurt by a stronger dollar which benefited from rising U.S. bond yields.

 

At 0610 GMT, the rand traded at 12.4100 versus the dollar, 0.6 percent lower
than its close on Monday.

 

The dollar index rose more than 0.2 percent against a basket of major
currencies.

 

The rand slipped late on Monday after setting a three-week high against the
dollar late last week.

 

The South African currency has been led by external factors in recent weeks,
but market attention this week is focused on local unemployment and retail
sales data.

 

Unemployment figures for the first quarter are due out on Tuesday, with
retail sales for March on Wednesday.

 

Investors will scrutinise the data for signs that an economic recovery has
built momentum since President Cyril Ramaphosa’s election in February.

 

Government bonds were also weaker in early trade, with the yield on the
benchmark instrument due in 2026 up 6 basis points to 8.400 percent.

 

South Africa is scheduled to hold a bond auction later on Tuesday.

 

 

 

South Africa appoints interim board at troubled state firm Transnet

JOHANNESBURG (Reuters) - South African Public Enterprises Minister Pravin
Gordhan has removed three board members at troubled state-owned logistics
firm Transnet and appointed an interim board, the Public Enterprises
Ministry said on Monday.

 

Transnet is one of a handful of state firms accused of irregularities in the
awarding of state contracts under former President Jacob Zuma.

 

New South African President Cyril Ramaphosa has promised to clean up
governance at companies such as Transnet in an effort to kick-start economic
growth and woo foreign investment, which slumped during Zuma’s nine years in
power.

 

Zuma denies allegations of corruption and mismanagement.

 

Popo Molefe, a veteran of the ruling African National Congress, will chair
Transnet’s interim board, the Public Enterprises Ministry said in a
statement.

 

“The previous board has not demonstrated appreciation of the seriousness of
issues at hand or the ability to deal with these decisively,” the ministry
cited Gordhan as saying.

 

“We have to hold directors of state-owned companies to a high standard of
corporate governance,” Gordhan added.

 

Three Transnet board members resigned earlier this month, after Ramaphosa
made Gordhan public enterprises minister in February.

 

 

Glencore, Barrick expect prospecting licence for Tanzania nickel project

LONDON (Reuters) - Global miners Glencore and Barrick Gold expect to receive
a prospecting licence for a nickel joint venture in Tanzania after the
government cancelled its retention licence, Barrick said.

 

The retention licence of the undeveloped Kabanga nickel project was one of
11 licences cancelled as part of enforcement of a new mining regulations
which were approved in January.

 

Retention licences are granted to mining companies that want to hold the
rights to a deposit, but cannot develop that area immediately due to
technical constraints, adverse market conditions or other economic factors.

 

“In order to transition to the new licence structure implemented in January,
the project partners have applied for a Prospecting Licence covering the
same area as the Retention Licence,” Barrick said in a statement.

 

The company said it had been in talks with Barrick and the government in
recent months over the Kabanga project. The companies expect to receive the
prospecting licence but did not provide a timeline.

 

Tanzania is seeking a bigger slice of the pie from its vast mineral
resources by overhauling the fiscal and regulatory regime of its mining
sector.

 

The cancelled retention licence was due to expire in 2019, Barrick said,
adding that a prospecting licence would be valid for four years.

 

 

Shell, Eni trial on Nigeria corruption re-adjourned to June

MILAN (Reuters) - The trial of top executives from oil majors Eni and Shell
over alleged corruption in Nigeria kicked off on Monday with a brief
procedural hearing and a decision to re-adjourn next month.

 

At the next hearing, set for June 20, the Milan court said it would assess
requests from third parties, including a series of international non-profit
organisations, to join the case.

 

At Monday’s hearing Domenico Cartoni Schittar, a lawyer representing the
Nigerian government, said he was stepping down from his role.

 

In comments in a signed document seen by Reuters, Cartoni Schittar said he
had given up on a mandate which he said had become “awkward”.

 

The long-running graft case revolves around the 2011 purchase by Eni and
Shell of Nigeria’s OPL-245 offshore oilfield for about $1.3 billion.

 

Milan prosecutors allege bribes were paid to win the license to explore an
oil block that holds an estimated 9 billion barrels of oil but which has
never entered into production.

 

Global Witness, a campaign group that has conducted its own investigations,
has described the case as one of the biggest corruption scandals in the
history of the oil industry.

 

Eni CEO Claudio Descalzi and former Shell Foundation Chairman Malcolm
Brinded are standing trial along with 11 other defendants and the two
companies.

 

All the accused have denied any wrongdoing.

 

The former Shell executives involved in the case have claimed a procedural
error was made when the original ruling to send the case to court was taken
and have applied to Italy’s Supreme Court to void it.

 

The Supreme Court is scheduled to judge that appeal on June 12.

 

 

Equatorial Guinea may strip Ophir of LNG project due to finance delays

LONDON/CAPE TOWN (Reuters) - Equatorial Guinea will force Ophir Energy out
of the company’s flagship liquefied natural gas (LNG) project and may scrap
it entirely unless long-delayed financing deals worth $1.2 billion are
presented to the government by December.

 

The ultimatum is a blow to UK-listed Ophir, which has set aside $150 million
of its own cash to develop west Africa’s first deepwater LNG project,
Fortuna, by 2022 despite the firm’s lack of a track record in LNG and small
balance sheet.

 

“We have a clear idea of who we would give the license to but at this stage
we are not prepared to comment,” Gabriel Obiang Lima, minister of mines and
hydrocarbons, told Reuters.

 

Ophir declined to comment.

 

Ophir’s license to the gas fields in offshore Block R expires in December.

 

Lima said another option is to scrap Fortuna and instead pipe gas from Block
R into an existing land-based LNG project on Bioko Island, 150 km (95 miles)
southwest.

 

Ophir partnered with specialists Golar LNG and oil services firm
Schlumberger to build the facility using a largely untested technology,
which promises, in theory, to slash production costs.

 

Most LNG plants are land-based but Golar’s design shrinks a typical
100-1,000 acre site into a single 1970s-built ship with four liquefaction
units bolted onto its sides.

 

Overlooked by Western banks due to Fortuna’s design and politically opaque
jurisdiction, Ophir and partners wooed Asian lenders instead but were left
scrambling after talks with Chinese players collapsed last year.

 

CLOCK TICKING

Despite quarterly pledges to proceed by Ophir Chief Executive Nick Cooper
last year, a loan deal has proven elusive, testing the government’s patience
and triggering a shareholder backlash as Ophir stock sank 33 percent in 12
months.

 

Investors are focused exclusively on Fortuna delays, said Michael Alsalem,
head of the London office at azValor, a top-10 institutional investor in
Ophir.

 

New talks with Asian lenders may yet yield a deal to get the project moving,
though hurdles remain.

 

For example, negotiations with Industrial and Commercial Bank of China
(ICBC) ran into difficulties owing to the bank’s list of demands, industry
and government-linked sources said.

 

ICBC wants the project’s planned annual output of 2.2 million tonnes sold to
China National Offshore Oil Corp, as well as for engineering, procurement
and construction (EPC) contracts for the project to be handed to
state-backed companies, the sources said.

 

As the world’s biggest energy consumer transitions from coal to gas, Chinese
lenders are stepping up investments in LNG projects, using loans as hooks to
secure LNG and drum up business for construction interests.

 

ICBC did not respond to a request for comment.

 

Ophir and partners have engaged a consortium of Singaporean lenders,
including state investor Temasek, sources said. Temasek declined to comment.

 

Lima said Ophir also has a third financing option which it has not yet
presented to the government, describing all bank talks as advanced.

 

“The problem is Ophir ... Ophir needs to make up its mind, decide which
financing it wants and execute it,” Lima said.

 

Sources say Japanese and South Korean banks are also being sounded out.

 

GUNVOR OFF-TAKE DEAL IN DOUBT

 

Struggles to fix loans have not only left the project’s commercial structure
in doubt, but jeopardised Geneva-based trader Gunvor’s claim to the LNG.

 

In a competitive tender last year, the trader beat Vitol, Royal Dutch Shell,
Trafigura and Centrica to bag between half and all of Fortuna’s supply for
10 years.

 

Despite that, Shell, Vitol and Trafigura are once again in talks to buy the
LNG, industry and government-linked sources said.

 

Gunvor, Vitol, Trafigura and Shell declined to comment.

 

But the companies also face competition from would-be lenders.

 

“Whoever pays is the boss,” Lima said, adding that a Chinese or Singaporean
lender would likely insist on claiming the LNG to maximise value from the
deal.

 

 

Lonmin cuts H1 loss and trims spending ahead of Sibanye merger

LONDON/JOHANNESBURG (Reuters) - Lonmin narrowed its first-half operating
loss and set out plans to cut spending as the platinum miner tries to keep a
takeover by Sibanye-Stillwater on track by conserving cash.

 

The proposed deal with precious metals producer Sibanye-Stillwater, vital to
Lonmin’s survival, is conditional upon Lonmin retaining a positive cash
balance by the time it is scheduled to close in the second half of the year.

 

Lonmin has been crippled by soaring costs and subdued platinum prices,
forcing it to raise cash from investors three times since 2009 and cut
thousands of jobs.

 

But the appreciation of the rand against the dollar is undermining Lonmin’s
efforts, the company said, as it pays costs in the local currency and
receives revenue in dollars.

 

“It remains a tough operating environment,” Chief Executive Ben Magara told
a results presentation in Johannesburg.

 

“Despite great mining and processing assets and being net cash positive for
11 successive quarters, Lonmin continues to be hamstrung by macro-economic
challenges, its capital structure and liquidity constraints.”

 

The London-listed miner reported a first-half operating loss of $32 million
for the six months to the end of March, compared with a loss of $181 million
a year earlier.

 

Net cash at the end of March fell to $17 million from $75 million a year
earlier and from $63 million at the end of December.

 

The company has about $47 million that is locked up to cover a smelter
outage that should be released and added back to net cash in the second half
of the year, easing its position.

 

JOB CUTS

Lonmin will cut 3,700 jobs in 2018 as part of the 12,600 employees it plans
to cut over the next three years, as it winds down high cost production,
Magara said.

 

Job cuts are a thorny issue in South Africa where unemployment runs at about
28 percent. The layoffs could also be a challenge in securing approval for
the merger from South Africa’s Competition Commission.

 

Magara stressed the importance of the approval of the transaction, saying
more jobs were at risk should it fail to close on schedule.

 

Shares in Lonmin, which have lost nearly all of their value, rose 6.5
percent by 1100 GMT.

 

“Looking to H2 as the smelter processes locked up material, we expect a
significant working capital release, driving a net cash inflow in the half.
This should reduce concerns over Sibanye walking away from the transaction,”
analysts at Peel Hunt said in a note. They have a “hold” rating on the
stock.

 

Credit waivers that prevented Lonmin from defaulting on its loans granted in
January are dependent on the company’s planned merger and the company still
faced liquidity challenges, its finance head said.

 

“This company’s ability to continue to as a going concern for the next 12-18
months has material uncertainties associated with it,” said CFO Barrie van
der Merwe.

 

To save more cash, Lonmin lowered its full year capital expenditure target
to 1.2-1.3 billion rand ($98 million-$106 million) from 1.4-1.5 billion.

 

It said unit costs for 2018 will be at the upper end of guidance but
maintained is full-year sales guidance.

 

In the three months to March 31, platinum production rose to 143,374 ounces,
up 3.9 percent from a year earlier.

 

($1 = 12.2525 rand)

 

 

Thor Explorations aims to lead Nigeria's new mining pack

LONDON (Reuters) - Canada-listed junior miner Thor Explorations aims to
bring Nigeria’s first large-scale gold mine online in early 2020, its CEO
said, as the West African country seeks to diversify its economy away from
oil and gas.

 

Following the commodity price crash of 2015-16, the World Bank in April 2017
said it was providing funds to help the Nigerian government develop its
neglected mining sector.

 

Projects under way include Thor Explorations’ Segilola Gold Project, located
in Osun State, which CEO Segun Lawson says aims to produce gold in the first
quarter of 2020 and has probable gold reserves of around 500,000 ounces.

 

“Thor is currently developing the country’s most advanced gold mine,” Lawson
said in a telephone interview. He says he has a mining and exploration
licence and is considering his options for raising $72 million to get the
mine into production.

 

Lawson bought the Segilola project in 2016 for $3.1 million in cash plus $6
million in Thor shares.

 

He promises rapid payback on the investment once production starts. Thor
Exploration’s stock has climbed 50 percent this year while gold prices have
only risen around 1 percent.

 

The World Bank has provided around $150 million to the Nigerian government
to kickstart non-oil sectors after the economy was hit by a fall in oil
prices, which are now recovering.

 

 

The Bank’s funding is meant to help the government formalise the artisanal
mining sector, improve environmental practices and support infrastructure
improvements for larger scale mines.

 

Mining provides only around 0.5 percent of GDP, according to World Bank
figures, as the sector has struggled to attract foreign investment and to
meet domestic needs, forcing costly imports.

 

The oil sector accounts for an estimated 8.7 percent of GDP and is critical
for foreign exchange and fiscal revenue.

 

The World Bank in emailed comments said gold “offers good prospects”
although many miners say other metals, such as iron ore, are more useful.

 

Martin Wood, CEO of Australian-listed Kogi Iron, would not put a date on
when the company could begin production in Nigeria, but said it was looking
for investors to provide around $350 million.

 

The company plans to build a steel plant using local iron ore and coal.

 

While a project in land-locked Kogi state, is not well-positioned to export,
it has the infrastructure to sell domestically and could envisage 100
percent profit margins, while reducing Nigeria’s import dependency, Wood
said.

 

 

Barclays boss Jes Staley fined £642,000 for 'conduct breach'

Barclays chief executive Jes Staley has been fined £642,430 by regulators
for breaching rules by trying to identify a whistleblower.

 

The Financial Conduct Authority and the Prudential Regulation Authority said
he failed to "act with due skill, care and diligence" in his response to an
anonymous letter received in June 2016.

 

The FCA and PRA began their probe into Mr Staley's conduct a year ago.

 

Barclays said it would cut his bonus by £500,000.

 

Directors delayed deciding how much Mr Staley's bonus would be docked until
the investigation was complete and they knew the penalty imposed.

 

Mr Staley said: "I have consistently acknowledged that my personal
involvement in this matter was inappropriate, and I have apologised for
mistakes which I made.

 

"I accept the conclusions of the board, the FCA, and the PRA, following
their respective investigations, and the sanctions which they have each
applied."

 

Mr Staley earned £2.35m in 2016 and received a bonus of £1.3m.

 

The fine amounts to about a fifth of his total compensation. It would have
been more than £900,000, but he was given a 30% discount for settling at an
early stage.

 

Many will think that Jes Staley has got off lightly. He still has his job
and the regulators stopped short of saying that he was unfit to continue in
post, which would have surely ended his career at Barclays and possibly in
banking altogether.

 

As chief executive of Barclays, Mr Staley should have been setting an
example of how to deal with whistleblowing. Instead, when he received
anonymous allegations against a senior member of staff, who was also a
friend, he set the bank's own internal investigations unit to work to
discover the identity of the whistleblower.

 

That matters, because after the credit crunch and bailout of the banking
sector, regulators introduced vigorous rules to encourage those with
concerns of wrongdoing to come forward. Mr Staley's actions directly
undermined that very safety valve.

 

Jes Staley now has the distinction of being the first boss of a major
financial institution to have been fined by the regulators and to have kept
his job.

 

Questions raised

The issue dates back to June 2016, when members of the Barclays board
received anonymous letters raising concerns about a senior employee who had
been recruited by the bank earlier that year.

 

The letters, which were treated as whistleblowing, raised concerns of a
personal nature about the senior employee, and Mr Staley's knowledge of and
role in dealing with those issues at a previous employer.

 

They also raised questions over the appropriateness of the recruitment
process followed by Barclays on this occasion.

 

Mr Staley asked the bank's security chief, Troels Oerting, to attempt to
identify the authors of the letters, which the chief executive thought were
an unfair personal attack on the senior employee.

 

Mr Oerting, who formerly worked for Europol, contacted US federal law
enforcement agencies to help track down the letter's origin, which had a US
postmark.

 

Regulators will keep an eye in future on how Barclays oversees
whistleblowing. They have told the bank to report to it every year to
explain how it handles any issues.

 

This includes making senior managers give personal assurances that
whistleblowing protocols are being followed properly.

 

Mark Steward, from the FCA, said: "Given the crucial role of the chief
executive, the standard of due skill, care and diligence is more demanding
than for other employees.

 

"Mr Staley breached the standard of care required and expected of a chief
executive in a way that risked undermining confidence in Barclays'
whistleblowing procedures."

 

Barclays, though, noted in its statement that there were no findings by the
FCA or PRA that Mr Staley acted with a lack of integrity nor any findings
that he lacks fitness and propriety to continue to perform his role.

 

The chairman, John McFarlane, said Barclays and its investors stood behind
Mr Staley: "The board has reiterated its support for Jes, as have
shareholders at last week's annual general meeting."--BBC

 

 

 

US ruling opens way for states-wide sports betting

The US Supreme Court has made a landmark ruling that could allow states
across the country to legalise sports betting.

 

It has endorsed a 2014 state ruling in New Jersey which permits sports
betting in casinos and at horse racing tracks.

 

The court also struck down a 1992 federal law banning sports gambling.

 

The news sent the share prices of gambling stocks in the US and UK surging,
including Britain's William Hill and Paddy Power.

 

Several major US sports bodies had opposed the move, including the National
Basketball Association.

 

The National Collegiate Athletic Association said it was a threat to the
"integrity of athletic competition".

 

However, Justice Samuel Alito wrote on behalf of the Supreme Court: "The
legalisation of sports gambling requires an important policy choice, but the
choice is not ours to make.

 

"Congress can regulate sports gambling directly, but if it elects not to do
so, each state is free to act on its own."

 

Winners and losers

Shares in UK-based bookmakers jumped on the ruling. Paddy Power Betfair's
share price rose 10.5%, 888 Holdings jumped 14%, William Hill's stock gained
9.4% and GVC Holdings rallied 6%.

 

In the US, shares in Churchill Downs, which owns horse race tracks and
casinos rose by 5.73%.

 

But Wynn Resorts, the Nevada-based hotels and casino operator, saw its share
price fall by 2% on the prospect of competition from new entrants to sports
betting.

 

The Supreme Court decision strikes down the Professional and Amateur Sports
Protection Act (PASPA) of 1992 that prohibited sports betting in most
states.

 

It is only allowed in only a few states, including Nevada, home to Las
Vegas, Delaware, Montana and Oregon.

 

Neil Wilson, chief market analyst at markets.com, said that William Hill
stands to gain the most following the ruling because it "can roll out
gambling operations pretty swiftly from Nevada, where it already operates
and has very strong market presence".

 

He added that the company also has a New Jersey operation "that is primed
and ready to start taking bets within days".

 

Paddy Power Betfair has a presence in the US through TVG, one of the
country's biggest online horse racing businesses.

 

Betfair bought TVG in 2009 for $50m before it went on to merge with Paddy
Power.

 

Paddy Power Betfair also operates an online casino and horse race betting
business in New Jersey.--BBC

 

 

Gap says sorry for T-shirts with "incorrect map" of China

US retailer Gap has apologised for selling T-shirts which it said showed an
"incorrect map" of China.

 

The design featured just the mainland and not territories that China also
claims, such as Taiwan.

 

A picture of the T-shirt was posted on Chinese social media network, Weibo,
generating hundreds of complaints.

 

The company said it respected China's "sovereignty" and would implement
"rigorous reviews" to prevent a repeat of the incident.

 

Gap is the latest in a string of foreign firms to face a backlash for not
adhering to China's territorial claims.

 

The post on Weibo said the T-shirt, which was being sold in Canada, did not
show Chinese-claimed territories, including south Tibet, Taiwan and islands
in the South China Sea.

 

Beijing considers self-ruling Taiwan to be a breakaway province, while Tibet
is governed as an autonomous region. China also claims a large part of
territory in the South China Sea, which neighbouring Asian countries
dispute.

 

Why is the South China Sea contentious?

In a statement Gap said it "sincerely apologised for this unintentional
error".

 

The clothing giant said the product had been pulled from the Chinese market
and destroyed. It was not clear what would happen to those being sold
outside the mainland.

 

Several other companies including Marriott and Delta Airlines have issued
similar apologies this year after information on their websites appeared to
conflict with China's territorial claims.

 

Last month, Beijing demanded a group of foreign airlines respect China's
sovereignty claims and change the way they refer to Taiwan, Hong Kong and
Macau.

 

The White House hit back, describing China's claims as "Orwellian nonsense"
and sharply criticised Beijing for trying to impose its "political
correctness on American companies and their citizens".--BBC

 

 

 

CBS sues key investor over Viacom merger

CBS has filed a lawsuit against its biggest shareholder, who is pushing to
merge the US broadcaster with Paramount film studio-owner Viacom.

 

The board of CBS wants to block National Amusements Inc (NAI), a company
owned by Sumner Redstone and his daughter Shari, from "interfering" in a
meeting to discuss the merger.

 

It also wants to dilute the shareholdings of NAI, which has voting control
at both CBS and Viacom.

 

NAI said it was outraged" at the move.

 

NAI is the parent company of both CBS and Viacom, which were separated by
Sumner Redstone in 2005.

 

Shari Redstone is attempting to reunite the two businesses - the second time
she has tried to do so since 2016.

 

The companies had been in discussions about a merger since February.

 

But on Sunday, a special committee set up by CBS to consider the deal
unanimously decided the deal was not in the best interests of its
shareholders.

 

CBS launched the lawsuit, claiming that "the company and its public
stockholders face a serious threat of imminent, irreparable harm in Ms
Redstone's potential response" to the decision not to merge.

 

Shares in CBS rose more than 2%.

 

Restraining order

NAI owns about 10% of CBS, but a dual class structure of shares gives it
greater voting power, which is at the centre of the dispute.

 

CBS said its independence is beneficial to shareholders and Ms Redstone had
"injected herself" into merger talks and undermined the current leaders of
the company.

 

The firm is seeking a temporary restraining order to prevent her from
"interfering" with a meeting on Thursday, when CBS plans to discuss issuing
a dividend that would dilute NAI's voting rights from 79% to 17%.

 

It said it was worried Ms Redstone might seek to change the board.

 

CBS cited a dispute in 2016 between NAI and Viacom, which led to the
company's chief executive being ousted and the appointment of new board
members.

 

It said: "At the request of the special committee, CBS has called the
special board meeting to discuss ways in which the board may protect the
company and its stockholders against Ms Redstone."

 

It said the special committee "has taken this step because it believes it is
in the best interests of all CBS stockholders, is necessary to protect
stockholders' interests and would unlock significant stockholder value".

 

It added: "If consummated, the dividend would enable the company to operate
as an independent, non-controlled company and more fully evaluate strategic
alternatives."

 

In a statement, NAI said it was "outraged by the action taken by CBS and
strongly refutes its characterization of recent events".

 

The company said it had no intention of forcing a deal that did not have the
support of both companies. NAI also said it believed the two companies had
agreed to economic terms.

 

"We intend to defend our position vigorously and look forward to presenting
our arguments in court," NAI said.--BBC

 

 

 

Apple-Samsung patent battle revived in California court

Apple and Samsung are facing each other in a California court for a third
trial involving the same set of five patents.

 

Apple was originally awarded $1.05bn (£772m) in 2012 after a jury found the
South Korean firm had infringed several of the iPhone's innovations.

 

That sum was reduced to about $400m after the first retrial and other legal
efforts by the Galaxy smartphone-maker.

 

But a fresh hearing became necessary after a Supreme Court ruling on how the
penalties were calculated.

 

Retrial judge Lucy Koh, who also sat in the first case, has said she intends
to apply a "Groundhog Day" rule.

 

This reference to the 1993 movie, in which a day repeats itself, restricts
the two companies to rehashing the evidence they presented before rather
than offering up new facts.

 

Jurors must also stick to the previous judgement that Samsung copied three
design patents concerning the look of the original iPhone, and two utility
patents involving its pinch-to-zoom feature and bounce-back scrolling
effect.

 

They may, however, decide to settle on a different award, based on the fact
the Supreme Court has provided them more latitude.

 

Neither Apple nor Samsung provided comment when asked.

 

The unbroken lines in this drawing of the iPhone represent the features
claimed by the design patent

A design patent is a 15-year registered monopoly right, which describes a
new, original and ornamental design for a manufactured object.

 

They are called "registered designs" in Europe and most parts of the world,
but "design patents" in the US.

 

In the current case, Samsung was found guilty of infringing three design
patents.

 

Two concern the front and rear look of the original iPhone's body.

 

The third covers the graphical user interface showing the layout of apps on
its homescreen.

 

Design dilemma

The retrial centres on several handsets that are no longer sold by Samsung,
including the Droid Charge, Mesmerize and Galaxy S2.

 

Samsung had objected to the size of the design patent portion of the
existing penalty, which had been determined by how much profit it had made
from selling the handsets.

 

It argued that consumers had not bought the phones for their aesthetics
alone, but also their functionality.

 

As such, it said, the amount should have been limited to the value of the
offending parts and not the complete devices.

 

In December 2016, eight Supreme Court judges sided with its argument, and
ruled that it was wrong that lower courts should always consider the
"relevant article of manufacture" in such cases to be the end product sold
to consumers.

 

Instead, the judges unanimously decided that an award could be based solely
on the value of the components involved.

 

However, the justices did not set out how this should be applied in
practice.

 

Instead, they referred the matter back to the federal court.

 

As a result, the California jury will still need to determine what was the
"relevant article of manufacture" in this case - the complete infringing
smartphones or just some of their parts.

 

Apple may say it should still be the former in this dispute, arguing that
the phones would have had no value without the designs of their bodies and
user interface.

 

Whatever the verdict, it is likely to set a precedent for other US-based
patent disputes.--BBC

 

 


 

 


 

INVESTORS DIARY 2018

 


Company

Event

Venue

Date & Time

 


 

 

 

 

 


 

 

 

 

 


 

Workers’ Day

 

01/05/2018

 


 

Africa Day

 

25/05/2018

 


Zimbabwe

Heroes’ Day

Zimbabwe

13/08/2018

 


Zimbabwe

Defence Forces Day

Zimbabwe

14/08/2018

 


 

 

 

 

 


 

 

 

 


 

 

 

 


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