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Alibaba to raise $20B in 2nd listing; investors urged to reject Walmart pay plan

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Alibaba to raise $20B in 2nd listing; investors urged to reject Walmart pay plan

TOP NEWS

* Alibaba Group Holding Ltd. plans to raise $20 billion through a second listing in Hong Kong in a bid to lure more domestic investors, Bloomberg News reported, citing people with knowledge of the matter. Alibaba reportedly is in discussions with financial advisers on the proposed offering. Sources said a second listing is meant to broaden the company's funding channels and strengthen liquidity. The company could make a confidential filing of a listing application with the Hong Kong Stock Exchange as soon as the second half of this year, the sources added. Alibaba did not immediately respond to a request for comment from S&P Global Market Intelligence.

* Two shareholder proxy advisory firms are urging Walmart Inc. investors to reject the company's executive remuneration packages and support a proposal seeking a strengthened boardroom structure that will address workplace sexual harassment, the Financial Times (London) reported. The news daily said Glass Lewis & Co. LLC is recommending that shareholders vote against Walmart's proposed remuneration plans for its senior executives, citing a "pay and performance disconnect." Institutional Shareholder Services Inc., or ISS, on the other hand, advised investors to vote for a motion that will call for better board oversight at the Arkansas-based retailer to avoid sexual harassment in the workplace but also backed the company's executive pay plan. ISS declined S&P Global Market Intelligence's request for comment, while Glass Lewis did not immediately respond to an email seeking comment. Walmart also declined to provide comment on the report apart from its statements in its proxy filings.

TEXTILES, APPAREL AND LUXURY GOODS

* Foot Locker Inc. reported that non-GAAP EPS for the first quarter of 2019 came in at $1.53, up from $1.45 in the year-ago period but below the S&P Global Market Intelligence consensus normalized EPS estimate of $1.60. Sales for the three-month period ended May 4 rose 2.6% year over year to $2.08 billion from $2.03 billion, with comparable store sales growth of 4.6%. Foot Locker opened 14 new stores, remodeled or relocated 13 locations and closed 34 sites during the quarter. It expects EPS for the full year to be up high single digits.

* Fashion tycoon Peter Simon, owner of U.K. retailer Monsoon Accessorize Ltd., plans to launch a company voluntary arrangement, or CVA, to keep the business afloat, The Sunday Times reported. Simon reportedly is pledging to inject a total of £34 million into Monsoon Accessorize and will negotiate rent reductions at about two-thirds of its 271 stores as part of the plan, which does not include immediate store closures. Under the capital injection, £25 million will be invested as part of the CVA, and another £9 million will be guaranteed if needed.

MULTILINE RETAIL

* Canadian Tire Corp. Ltd. said it partnered with textile computing company Myant Inc. to bring wearable computing and smart textiles into its brands, including Helly Hansen, Woods and Dakota. The three Canadian Tire brands will use Myant's Skiin Textile Computing platform, which integrates biometric sensors, heat generation technology and electroluminescence into everyday clothing.

E-COMMERCE

* Amazon.com Inc. quietly launched Presented by Amazon kiosks in four U.S. malls, specifically in Los Angeles; San Francisco; Las Vegas; and Skokie, Ill. The store format does not specify what merchandise it sells, but it is distinct from Amazon Books, Amazon 4-star and Amazon Go stores. According to a Business Insider report, it is unclear when the kiosks opened, especially since Amazon closed all its mall-based pop-up sites in April. Amazon did not immediately respond to a request for comment from S&P Global Market Intelligence.

* Reliance Brands Ltd. has added Giorgio Armani SpA's sports brand EA7, as well as U.K. labels All Saints and Kurt Geiger, to its portfolio ahead of the launch of its e-commerce program, The Economic Times (India) reported, citing sources. A mall executive reportedly said the Indian private equity firm is scouting for space for the three brands. Reliance Retail reportedly did not respond to an email seeking comment, while Armani, Kurt Geiger and All Saints did not reply to queries.

FOOD AND STAPLES RETAILING

* PJSC Magnit announced that it will divide its retail operations into two businesses — the retail chain unit and the real estate and noncore procurement unit. Magnit named Ruslan Ismailov as director of the retail chain business, effective May 27, while the director of the real estate and noncore procurement unit will be announced in due course. In addition, COO Artem Smolensky stepped down from the company with immediate effect for personal reasons.

* Woolworths Group Ltd. completed an off-market share buyback worth A$1.7 billion. The group said it bought back a total of 58.7 million shares for A$28.94 per share, representing a 14% discount to the market price of A$33.64. As expected, the Australian retailer used the proceeds from the sale of its gas business to U.K.'s EG Group, better known as Euro Garages Ltd., to return the capital gain to shareholders, Chairman Gordon Cairns said.

HYPERMARKETS AND SUPERCENTERS

* Metro AG expects at least eight parties to make second-round bids for its Chinese operations, Reuters reported, citing people directly involved in the matter. Two of the sources reportedly said the German supermarket operator has asked the shortlist of bidders to submit their offers by June 10 and that the process is expected to conclude in September. One of the sources reportedly added that Alibaba Group Holding Ltd. is working on a bid with Taiwanese hypermarket chain RT-Mart International Ltd., while three of the sources also noted that Walmart Inc. is on the list of second-round bidders. Alibaba reportedly declined to comment, while Walmart could not provide comment outside regular U.S. business hours. In an emailed statement to S&P Global Market Intelligence, Metro said discussions with potential partners are "progressing very well," and it will narrow its list of bidders for further talks. However, the company declined to provide further details.

HOUSEHOLD DURABLES AND SPECIALTY RETAIL

* Mattress Firm Inc. said its board has named John Eck as president and CEO, effective May 28. Eck will be joining from investment firm Rockdale Partners, where he served as a senior adviser and consultant for media and emerging technology platforms.

* Sharp Corp. is considering moving the manufacturing operations of its U.S.-bound products from China to Southeast Asia, the Nikkei Asian Review reported, citing Chairman Jeng-wu Tai. Confirming earlier reports, Tai reportedly said laptop production could be relocated to Taiwan or Vietnam if the U.S. pushes for 25% tariffs on another $300 billion of Chinese imports. The chairman added that the impact of the tariffs would be minor on Sharp, but the company sees that it can price its products more competitively by moving manufacturing sites.

The day ahead

Early morning futures indicators pointed to a lower opening for the U.S. market.

In Asia, the Hang Seng gained 0.38% at 27,390.81, while the Nikkei 225 rose 0.37% to 21,260.14.

In Europe, around midday, the FTSE 100 lifted 0.02% to 7,279.21, and the Euronext 100 fell 0.34% to 1,038.08.

On the macro front

The S&P Corelogic Case-Shiller home price index, the Federal Housing Finance Agency house price index, the consumer confidence report and the Dallas Fed manufacturing survey are due out today.

Click here to read about today's financial markets, setting out the factors driving stocks, bonds and currencies around the world ahead of the New York open.

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