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- BREAKING: Major Energy Sector Shake-Up
Good Morning!
Welcome to Monday, Dec. 11. On this day in 1987, the legendary movie Wall Street, directed by Oliver Stone, was released in theatres.
Here’s what we have our eyes on today:
👉 Occidental makes $12 billion bid for CrownRock
👉 Macy’s receives $5.8 billion offer from two asset managers
👉 Central banks around the world have a big week
Let’s get into it!
OCCIDENTAL: Energy Giants Unite
In a strategic move, Occidental Petroleum has finalized plans to purchase CrownRock, a leading energy firm with extensive operations in the Permian Basin, in a $12 billion deal. This acquisition is part of a broader trend of mergers in the American energy sector, with a notable focus on the Permian, the most prolific oil production region in the U.S. The completion of this transaction is scheduled for the first quarter of 2024.
CrownRock has been instrumental in the development of a substantial 100,000-acre tract in the Midland Basin, a critical area of the Permian spanning across 20 counties in Texas. This region was responsible for producing 15% of the nation's crude oil in 2020, as per data from the U.S. Energy Information Agency.
Source: CNBC
To facilitate this acquisition, Occidental is set to issue debt worth $9.1 billion and raise around $1.7 billion through the sale of common stock. Additionally, Occidental has announced an increase in its quarterly dividend, boosting it from 18 cents to 22 cents per share starting next year.
🎯 GRIT TAKE: The acquisition of CrownRock is… upgrade to VIP to read the full GRIT take.
MACY’S: Power Play to Unlock Real Estate
Arkhouse Management and Brigade Capital Management have proposed a $5.8 billion acquisition of Macy’s.
The bid places the retail giant's value at $21 per share. Macy’s stock ended at just over $17 per share on Friday.
Arkhouse, a company focusing mainly on real estate investments, and Brigade Capital, a firm specializing in asset management, have indicated openness to increase its offer following thorough due diligence.
Source: WSJ
The current offer already represents a premium for the department store chain, which has been facing challenges in competing with online retailers.
Both firms are assumed to be more interested in real estate and intellectual property than the actual brick-and-mortar business.
RATES: Central Bank Finale
This week is crucial for global financial markets as numerous key central banks make their final interest rate decisions of the year, providing insights into potential rate reductions in early 2024.
The sequence of pivotal decisions will commence on Wednesday with the U.S. Federal Reserve, setting the stage for a significant "Super Thursday." On this day, the European Central Bank, Bank of England, Swiss National Bank, and Norway’s Norges Bank are all scheduled to convene.
Source: CNBC
It is widely anticipated that these central banks will maintain current interest rates, except Norway's central bank. This institution has previously indicated its intention to increase borrowing costs in December.
Headlines You Need To Know: 🎙
Steve Cohen pushes Point72 deeper into macro-trading
Tucker Carlson is launching his own streaming service
Fenway moves forward in final talks to invest in the PGA-Saudi deal
Penn leaders out after Alumni push
Shohei Ohtani signs a $700 million deal
Your cash is earning 5%. Is it time to move it?
North Carolina’s billion-dollar bet on an EV Outsider
Fraudulent Fintech 🕵️
This woman tricked JP Morgan Chase into giving her $175 million for her fake company.
Frank, founded by Charlie Javice, promised to revolutionize the student loan industry, claiming to assist millions of students.
Frank was launched with the promise of revolutionizing the student financial aid landscape. Its platform aimed to simplify the complex and often daunting process of applying for federal financial aid through the Free Application for Federal Student Aid (FAFSA). Frank offered to help students complete these forms quickly and efficiently, potentially unlocking access to millions in federal aid. This mission quickly garnered attention, positioning Frank as a beacon of hope in the otherwise convoluted world of student finance.
JP Morgan Chase, attracted by Frank’s potential, decided to buy the company for a staggering $175 million. But the deal soon turned sour. Post-acquisition, the truth began to unravel. Investigations initiated by JP Morgan Chase revealed alarming discrepancies. The supposed user base of millions was, in fact, significantly smaller.
Source: AP News
The majority of the accounts were found to be fabricated. Javice and her team created synthetic data to inflate the company's user numbers. They reportedly went as far as purchasing data from a third party to generate fake customer profiles, artificially boosting Frank's perceived market penetration and value. They did this for up to 4 million users.
Chart of the Day
📊 Credit Balances
U.S. delinquency rates are on the rise. This has been an upward trend since COVID.
Source: CNBC
GRIT Meme of the Day 😂
Tag GRIT Capital on social media for a chance to be featured in our meme or Tweet of the day in our GRIT daily newsletter! 👇
Source: @wallstreetoasis
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Sources:
1. CNBC (www.cnbc.com)
2. CNBC (www.cnbc.com)
3. CNBC (www.cnbc.com)
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