Opening Bell – Mediclinic accepts buyout offer and Alibaba beats expectations

Mediclinic management accepted the fourth offer from Remgro, which has partnered with MSC Mediterranean Shipping Company SA to offer £5.04 per share for the shares it does not own already.

Alibaba managed to beat analyst expectations but showed flat revenue growth for the first time, with earnings also showing a significant decrease.

Here is the biggest news of the day.

• Mediclinic finally accepts an offer from Johann Rupert’s Remgro. Remgro, who is already the biggest shareholder in Mediclinic with a 45% stake, has partnered with MSC Mediterranean Shipping Company SA and has offered £5.04 for all the remaining shares in the company. This was the 4th offer made by Remgro after Mediclinic’s board rejected an offer of £4.63 in June. Mediclinic is listed on the London Stock Exchange, with a secondary listing on the JSE. The deal still needs to be approved by shareholders who represent 75% of the voting rights, and who might still put pressure on management to secure improved terms. The Public Investment Corporation holds 11% of Mediclinic.
• Alibaba beats expectations but struggles to continue growing. The company delivered earnings per share of $1.75 for the quarter compared to the expected EPS of $1.57. This is down 29% year-on-year. Revenue also beat expectations, coming in at $30.68 billion compared to the forecasted $30.05 billion. However, for the first time in the company’s history, it experienced flat year-on-year revenue growth. This is likely due to the strict recent Covid lockdowns in China and the stricter regulatory environment set in place for large businesses by the Chinese Communist Party, but it could also be an indication of a slowing Chinese economy.
• AMC plans to put lipstick on an APE. The company lost money in line with expectations, posting earnings per share of -$0.20 and revenue of $1.17 billion. They announced that instead of paying out their dividend, they would issue it in the form of 517 million preferred shares that will be listed separately under the ticker symbol “APE”. This seems to be a creative workaround to draw in dumb money after their proposal to issue more shares last year was met with resistance. The ticker refers to the WallStreetBets community, who refer to themselves as “apes” and rescued the company from bankruptcy. The community’s rampant speculation boosted AMC’s share price to lofty levels, and the company raised billions by selling out every last treasury share it had. After issuing the 517 million APE shares as a dividend, the company conveniently holds 4.5 billion more in reserve that it could sell in future to raise more funds.
• AngloGold Ashanti declares a dividend per share of US$0.29 for their half-year results. The company’s headline earnings were down 17%, from $363 million last year to $300 million. Their adjusted EBITDA remained largely flat at $864 million compared to $876 last year.