Hong Kong (CNN)Boeing Australia on Wednesday announced plans to make a jet drone with artificial intelligence that can act as a “loyal wingman” for manned jet fighters.
Hong Kong (CNN)Boeing Australia on Wednesday announced plans to make a jet drone with artificial intelligence that can act as a “loyal wingman” for manned jet fighters.
Poker giant Stars Group Inc. agreed to buy Sky Betting & Gaming in a deal valued at $4.7 billion, moving deeper into sports betting to create the biggest publicly listed online gambling company.
Toronto-based Stars Group will pay cash and stock to owners CVC Capital Partners and Sky Plc, it said Saturday in a statement. The operator of PokerStars estimates it would get about a third of its revenue from sports, the fastest-growing online gaming segment, including recent acquisitions in Australia.
“Sky Betting & Gaming’s premier sports betting product is the ideal complement to our industry-leading poker platform,” Chief Executive Officer Rafi Ashkenazi said in the statement, calling the acquisition “a landmark moment” for Stars Group.
The agreement calls on Stars Group to pay $3.6 billion and approximately 37.9 million newly issued common shares based on the closing price of its common stock on April 20. Stars Group said it has obtained debt financing of approximately $6.9 billion, including $5.1 billion of first lien term loans, $1.4 billion of senior unsecured notes and a $400 million revolving credit facility. The proceeds will be used for the cash portion of the deal, as well as to refinance the company’s existing first lien term loan and repay SBG’s outstanding debt, it said.
After its failed attempt to take control of Sky-rival William Hill Plc, Stars Group is gaining a significant foothold in the U.K. — the largest regulated gaming market — and a trove of potential new customers for its online casino and poker offerings. The acquisition also helps accelerate Ashkenazi’s strategy to decrease reliance on the unstable poker business, which accounted for two-thirds of revenue last year.
“The strategic fit is very good, the valuation is reasonable for a fast-growing company,” said Simon Davies, an analyst at Canaccord Genuity in London. “And the combined company will be better placed to exploit the opening of the U.S. sports-betting market.”
Betting on sports in some form is legal in four U.S. states. That could change as the U.S. Supreme Court weighs New Jersey’s attempt to have a 1992 law banning sports betting struck down as unconstitutional. If the court agrees, it could trigger a wave of states legalizing betting on football, basketball and other competitions.
Private equity firm CVC agreed to acquire a controlling stake in Sky Betting from Rupert Murdoch’s Sky in 2014. Canaccord’s Davies says the betting company, which gets more than 80 percent of its revenue from mobile devices, “has performed spectacularly” despite concerns of a tighter regulatory environment in the U.K.
The deal will also bring Sky a cash infusion as it is targeted for takeover by both 21st Century Fox Inc. and Comcast Corp. While Fox awaits a U.K. regulatory decision on its bid, Comcast is preparing to formalize its own offer after making a preliminary one at a premium to Fox’s, setting the stage for a bidding war.
Ashkenazi signaled last year that he’d be on the hunt for targets after focusing on paying down debt from the 2014, $4.9 billion acquisition of PokerStars that made the company, then called Amaya, the world’s largest online poker business. Ashkenazi took over the top job from founder David Baazov — who resigned in August 2016 to fight insider-trading charges — and built up a new management team.
Morgan Stanley and PJT Partners Inc. acted as financial advisers to Stars Group, while Deutsche Bank AG, Goldman Sachs Group Inc., Macquarie Group Ltd. and Morgan Stanley provided the committed debt financing.
(An earlier version of the story corrected Sky Betting & Gaming’s name, and the month of the CEO change.)
The new owner’s offenses include the adoption of an on-mountain app that features Fahrenheit and inches, rather than Celsius and centimeters, and a season-pass pricing system that benefits globetrotting jet-setters at the expense of locals. Then there’s general discontent over the assimilation of a quirky, homegrown success story by an American corporate behemoth.
“They’re trying to cater to a wealthy, sheltered audience—I don’t know if that crowd really wants what we have,” says Cathy Zeglinski, a competitive athlete and family doctor who closed her Whistler practice last September, forced out by rising living costs and staff shortages in the town. “What we have is snow, extreme terrain,” she explains. “It's blustery, it's very hard to see. That’s why people come to Whistler—it's very extreme.”
This is the first season that Whistler Blackcomb was included in Vail’s $879 Epic Pass (now $899 for the 2018-2019 season), a program that gives holders unlimited access to the company’s 14 resorts in North America and Australia. The impact has been immediate. Other sites on the pass include Beaver Creek and Vail in Colorado and Park City in Utah, where snowfall was at the lowest levels recorded in 30 years.
That helped push a chunk of Vail's estimated 750,000 Epic Pass holders to look farther north this past season. More than 8 percent of holders visited Whistler Blackcomb, helping make it the most-visited mountain resort in North America, according to a March 13 Vail investor presentation.
Visitor numbers at Whistler set a record for the third straight year, thanks to visitors from the U.S., Mexico, Australia, and the U.K., Vail Resorts Chief Executive Officer Robert Katz said in a March 8 investor call. “That has been a pretty strong example, I think, of the power of the Epic Pass.”
Canadians aren’t as impressed. Whistler Blackcomb’s tickets are now priced with a base rate in U.S. dollars—unfortunate for Canadians who hold the second-worst-performing major currency this year. The exchange rate for the two currencies is published above ticket prices, which fluctuate daily.
Meanwhile, Vail canceled Whistler’s popular one- and three-day prepaid lift tickets, which were discounted exclusively for Canadians and Washington state residents. The move underscores a shift away from local, casual skiers to focus on so-called destination visitors, a category that spends three times more than its regional counterparts at Whistler annually.
“It irks you,” says Roger Schmidt, an engineer based in Ottawa who’s been skiing at Whistler since the 1970s. “I’m the victim of the exchange rate in my own country. Not everybody has the time or the resources to go away for a 10-day ski vacation every season. It’s like the message is, if you’re local, you can ski at the smaller hills.”
Vail also is facing an effort by some employees to unionize, a challenge that originated in the ski school, whose top instructors get paid roughly C$25 ($20) an hour for teaching five-hour private classes that can earn the company up to C$860 ($676) a day. Whistler Blackcomb was primarily responsible for a $2 million jump in Vail's ski school revenue for the three months ended January, according to the company's latest quarterly results.
Meanwhile, circulating within the community is the hashtag #FailVail and ominous-sounding epithets like VailBorg or simply, the Mountain.
“We knew there would be challenges as we integrated two large companies,” Vail said in an emailed response to questions. “We have worked and continue to work together toward building upon Whistler Blackcomb’s continued success.”
The majestic twin peaks of Whistler and Blackcomb are seamlessly connected by the world’s highest gondola and have consistently been rated the continent’s No. 1 ski resort. Locally, they occupy a unique place in Canadian ski lore.
Whistler Blackcomb’s roots trace back to a group of gutsy Vancouver entrepreneurs in the 1960s who foresaw Olympic potential in a region with no road access, electricity, or running water. The current mayor was a squatter in the early 1970s, posing nude with skis alongside fellow occupiers facing eviction.
In the 1980s, when snowboarding was still banned at most North American mountains, Blackcomb welcomed the sport. Prime Minister Justin Trudeau, who was a snowboard instructor there, calls it his favorite ski resort.
While the purpose-built faux alpine village—a creation of the same landscape architect who designed Vail— may look like an outlet mall, it's attracted an eclectic, polyglot mix of ski bums, free spirits, and well-heeled thrill-seekers united by a love of the resort’s singular terrain. The twin peaks' massive 8,171 skiable acres offers something for everyone, but it's the more than 2,200 acres of leg-burning black and double-black terrain that sets it apart. It’s enough to comprise a large ski resort on its own, and it offers some of the steepest, toughest runs on the continent.
More recently, an influx of wealthy transients has caused property prices to more than double in the past five years, according to the Real Estate Board of Greater Vancouver. Luxury boutiques have replaced local businesses, and workers desperate for housing have to rent shared rooms for hundreds of dollars a month. The problems started long before the acquisition, but locals fear it's set to get worse. Residents of Park City, which was also purchased by Vail Resorts, have had similar concerns; brokers call it the "Vail Effect."
Vail responded in an email, saying the company houses 31 percent of its work force at Whistler Blackcomb. Pete Sonntag, the resort's chief operating officer, said in an interview in August 2017 that Vail may consider funding new construction to expand affordable housing.
Tourism Whistler’s CEO, Barrett Fisher, has said the town’s focus should be to attract the “right guests” appreciative of its mountain culture. “Business is booming, but so too is the level of local angst surrounding this growth,” she wrote in an open letter, acknowledging transportation, housing, and staffing pressures that back-to-back years of record visits have caused.
Katz, Vail’s CEO and a former private equity investor, has defied a broader industry decline to build North America’s largest ski resort owner and operator. He’s done that by acquiring rival mountains and then luring snow hounds to the slopes by offering unlimited access to a smorgasbord of resorts. The more often people visit, the thinking goes, the more they’ll spend.
When Katz first introduced the Epic Pass encompassing five resorts a decade ago, he slashed the price of access to less than half the price of a season pass at most rival resorts. At the time, the move was seen as crazy. But the Epic Pass upended the industry, making snow sports more accessible and also driving a consolidation that's put 39 resorts in the hands of just three corporations—Vail being the largest.
Vail is pouring money into Whistler Blackcomb to boost capacity, announcing a C$66 million investment—the largest single-year amount in the resort’s history—to fund a new gondola and upgrade lifts. It’s also declared a focus on high spenders. In its investor presentation last month, it cited efforts to target high-net-worth customers with personalized “luxury-focused content based on income.”
More upscale visitors will come who are “probably not coming to experience the terrain challenges of the mountains,” says G.D. Maxwell, a semi-retired columnist for local who’s lived in Whistler since 1992. “They like easy cruising, good food, and expensive shops.” In other words, the Canadian resort will increasingly come to resemble its Colorado parent. “Vail bought the No. 1 resort in North America and is now going to teach it how to be the No. 3,” Maxwell says.
Tycoon Sanjeev Gupta could start building Formula 1-inspired electric vehicles in India and Australia early next decade, adding automobiles to a roster of global businesses that span steel-making to banking.
Gupta’s GFG Alliance, which aims to model the budget, lightweight city cars on a design developed by former McLaren Racing and Brabham technical director Gordon Murray, will build EV plants as part of his worldwide push into the auto supply chain.
“We are talking about city cars, about small, light, very, very economic cars,” he said in an interview in Sydney. “We will launch both in India and in Australia.”
GFG has been selected as preferred bidder for Indian auto parts maker Amtek Auto Ltd., and acquiring its assets will give it a platform for further expansion in the second-most populous nation, Gupta said.
India almost doubled sales of EVs in 2017, though they account for only about 0.1 percent of total new vehicle sales, according to Bloomberg New Energy Finance. Demand for private passenger EVs is seen increasing from the mid-to-late 2020’s as cheaper models enter the market and the nation installs charging infrastructure. Toyota Motor Corp. and Suzuki Motor Corp. are among manufacturers developing plans to begin EV sales in India.
In Australia, the demise of its car industry has created an opportunity, according to Gupta, who’s relocated there following local deals including the purchase of the steel and iron ore assets of Arrium Ltd. from receivers. The closure of the country’s last auto plants in recent years has offered potential opportunities to acquire parts of assembly lines or body shops, he said.
Acquiring a mothballed plant or equipment would speed GFG’s entry into production, meaning it could begin as soon as 2020, though such a time-frame would be ambitious, according to Gupta. “Launching a car is not a joke, it’s a big undertaking,” he said in the interview last week. “If we are to do something with an existing plant then it’ll be faster.” Capital expenditure to enter production may be less than $500 million, “but not much south of that,” he said.
Murray’s iStream design applies motor-sport principles to reduce the weight of a regular vehicle and claims to cut the cost of an assembly plant by as much as 80 percent with a simplified production process. The ex-F1 designer also plans to move into production, including for external customers, according to an October statement. Gordon Murray Design Ltd. declined to comment on Gupta’s plans.
Motorcycle maker Yamaha Motor Co. has produced prototypes using Murray’s iStream platform, including the MOTIV compact city car presented at a 2013 motor show in Tokyo, a two-seater sports vehicle and an SUV. Yamaha is considering bringing one of the concepts to market, the company’s then-Chief Executive Officer Hiroyuki Yanagi, now chairman, said in October.
Lighter cars will offer better battery range — meaning motorists need to recharge less frequently, while the design allows producers to manufacture vehicles in smaller volumes than the sector’s dominant players, according to Gupta.
GFG, which produces automobile components in the U.K., has made a bid for AR Industries, a French manufacturer of aluminum wheels and is constructing a two million wheels a year plant in Scotland, next to its smelter in Fort William.
Gupta’s GFG has led an acquisitions spree since 2013 that’s included deals in Europe, the U.S. and Australia for businesses including steel mills, aluminum smelters, energy producers and automobile components manufacturers. The group has committed more than $3 billion to the investments, according to a statement.
Permira, the London-based private equity firm, will pay about A$1.3 billion ($1.1 billion) for I-Med, according to people with knowledge of the matter, who asked not to be identified because the details are private. The transaction, Permira’s first in Australia, is expected to close in the first quarter, the statement shows.
EQT invested in I-Med in 2014 alongside Singapore sovereign wealth fund GIC Pte and Canada’s Caisse de Depot et Placement du Quebec, expanding its network to include 204 clinics and more than 3,500 employees. EQT had scrapped an earlier sale process and decided to keep the business, I-Med Chief Executive Officer Steven Rubic said in a memo to staff last month.
Representatives for Permira and EQT declined to comment.
Permira funds have been operating in Asia for more than a decade with offices in Tokyo, Hong Kong, Seoul and Shanghai, according to its website. During that period, it has invested more than $3 billion in companies including Galaxy Entertainment Group Ltd., Sushiro Global Holdings Ltd. and Tricor Holdings Ltd.
Permira’s equity for the investment likely to come from its latest dedicated global buyout fund, its 7.5 billion-euro Permira VI.
South Korea’s Hyundai Electric & Energy Systems Co. is building a 150-megawatt lithium-ion unit, 50 percent larger than Musk’s, that the company says will go live in about three months in Ulsan near the southeast coast.
With battery prices tumbling by almost half since 2014, large-scale projects are popping up around the world. Developers have announced lithium-ion battery projects with total capacity of 1,650 megawatts per hour in 2017, four times the amount for all of 2016, according to Bloomberg New Energy Finance.
“Musk has set a benchmark on how quickly you can install and commission a battery of this size,” Ali Asghar, a BNEF senior associate, said in an interview. Falling costs are “making them a compelling mainstream option for energy-storage applications in many areas around the world, and projects even bigger than Tesla’s are now under construction.”
Though Musk’s Palo Alto, California-based Tesla Inc. is best known for making electric cars, the company sells its lithium-ion batteries to utilities eager for cost-effective ways to integrate renewable sources of power like solar and wind into their electric grids.
Musk agreed to up the stakes for South Australia, the mainland state with the biggest exposure to clean energy, by providing 100 megawatts of power, roughly the size of an electricity shortfall the region suffered in a February blackout.
His nimbleness in delivering the entire project before the summer deadline has won him fans among local politicians. South Australian Premier Jay Weatherill, who features a photo of Tesla’s giant battery on his Twitter profile, used Musk’s star power to help sell his pitch for the state to be a world leader in renewable energy.
With the battery sending power to the national energy market on Friday, Musk beat a Twitter bet that he could deliver the storage system within 100 days — or he would foot the bill. The entrepreneur also met a target set by the state government of installing the battery by the start of summer, Dec. 1, South Australian Premier Jay Weatherill said in a statement.
The battery-storage industry is becoming increasingly important in places like South Australia, which has less access to traditional fossil-fuel sources like coal and gas than the rest of the nation. Instead, the region gets 41 percent of its electricity from renewable energy, one of the highest penetrations of wind and solar in the world.
Smoothing out the intermittent nature of those sources when the wind dies down and the sun stops shining has traditionally rested with natural gas “peaker” plants that can fire up to meet demand at night and in the early morning. Now with the cost of batteries falling, large projects can be deployed within three months to meet that need.
Big renewable-energy companies AES Corp. and AltaGas Ltd. have already dabbled in the large-scale energy-storage market. Others such as NextEra Energy Inc. and E.ON will soon produce battery packs that are cost-competitive, said Sam Jaffe, a battery analyst at Cairn Energy Research Advisors in Boulder, Colorado.
While Tesla’s head start on the competition is a coup for Musk, rivals will be able to deploy batteries in similarly rapid time-frames, especially as the market becomes increasingly competitive, according to consultancy Wood Mackenzie Ltd. Over time, the rapid deployment of battery projects will give way to greater competition over costs, according to Saul Kavonic, a Wood Mackenzie analyst based in Perth.
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“Such rapid installation times should not become a defining feature of batteries’ competitive technology advantage in a well-structured market, but rather battery costs and flexibility that will improve with time,” Kavonic said.
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