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Hong Kong Exchanges and Clearing proposes merger with LSE

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An aerial view of the London Stock Exchange Paternoster Square

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Hong Kong Exchanges and Clearing Limited (HKEX) said Wednesday it has made a proposal to the board of London Stock Exchange Group Plc (LSE) to “combine the two companies,” in a deal which values the LSE at about £29.6 billion ($36.6 billion).

The HKEX said the deal would be funded by a combination of existing cash and a new credit facility. It cautioned, however, that its statement to the market should be considered as an announcement to make a possible offer and is not confirmation of a firm intention to bid.

The statement from HKEX said a further announcement will be made “as and when appropriate.”

HKEX has proposed £20.45 a share in cash as well as 2.495 newly issued HKEX shares. LSE shares rallied shortly after 10:00 a.m. London time, rising by 8.5% before giving up some of the initial gains. 

HKEX said it expected key LSE management to keep their jobs and work for the new owners.

“The board of HKEX believes that the two businesses are highly complementary and as such, looks forward to working with the relevant authorities to deliver a clear path to completion,” the HKEX said.

HKEX added that the proposed deal would only go ahead if LSE backs down from its plan to buy Refinitiv. The data group, which is majority owned by the private equity group Blackstone, was last year spun out of the news wire service Reuters.

LSE had announced plans to spend $27 billion on Refinitiv in order to provide a complete one-stop-shop to banks and brokers who need a platform for trading, hardware and a continuous flow of data and news. It was considered a strategy that would directly challenge Bloomberg’s terminal and data package.

HKEX is already the owner and operator of the London Metal Exchange, the world’s largest market in options and futures contracts on base and other metals. It bought the LME in 2012 for £1.4 billion.

—Reuters contributed to this article.



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Buffett watchers eager for big acqusition in Berkshire Hathaway letter

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Warren Buffett

David A. Grogan | CNBC

Berkshire Hathaway’s Warren Buffett on Saturday will publish his much-awaited shareholder letter.

The annual missives, which are logged here on Berkshire’s website going back to 1977, are considered required reading for investors large and small.

And this year, investors will be eager to see whether Berkshire has gotten any closer to the “elephant-sized” acquisition that has eluded Buffett over the last several years.

The “Oracle of Omaha” told CNBC this time last year that despite Berkshire’s lackluster performance of late, he was keen to make an eye-popping acquisition for the portfolio.

There was only one problem, according to Buffett: prices were too high to justify a big purchase.

“That disappointing reality means that 2019 will likely see us again expanding our holdings of marketable equities,” Buffett said 12 months ago. “We continue, nevertheless, to hope for an elephant-sized acquisition. Even at our ages of 88 and 95 – I’m the young one – that prospect is what causes my heart and Charlie’s to beat faster.”

But since Buffett’s 2019 comments, the S&P 500 has climbed even higher, buoying price multiples and generating more than 23% in returns.

Typically profuse with investment advice and folksy anecdotes, Buffett’s letter gives Wall Street a glimpse into how he and partner Charlie Munger view the stock market — expensive or cheap, pessimistic or optimistic.

That type of commentary, in particular, has been of greater importance to Berkshire investors in recent years as some grow impatient for Buffett to deploy his $120 billion cash hoard and stun investors with a glossy new takeover bid.

Few would dare challenge Buffett’s ability to gauge market prices after a lifetime of savvy value stock picking.

His hallmark and lifelong quest for outcast, but cash-rich companies has led Berkshire to compounded annual gains in per-share book value of a robust 18.7% since 1965, according to Buffett’s most recent letter, double that of the S&P 500 and the envy of anyone hoping to retire early.

But investors have grown antsy in recent years as the S&P 500 continues to lap Berkshire equity. The S&P 500 has outperformed Berkshire on a one-year, three-year, five-year and 10-year basis as pricey, high-growth tech stocks led (and continue to lead) to stock market records.

“I’m a patient guy, but when you underperform one, three, five, 10, 15 years versus the index and you’re sitting on all this cash, it’s frustrating,” said Trip Miller, founder of Gullane Capital and a current Berkshire investor. “I’d pay us shareholders a nice $50 billion special dividend and restock the elephant over the next 24 months. It doesn’t seem like you can find something that size anyway.”

“I’m just really frustrated by it because that’s dragging down the returns,” he added.

To be sure, Buffett’s investment lieutenants, Todd Combs and Ted Weschler, have expanded the classic, cash-generating Berkshire into new sectors, including a big stake in Apple four years ago.

That stake has been one of Berkshire’s best performers since then. Apple’s 193% return since the start of 2017 is well ahead of peer Berkshire names like Coca-Cola (up 59%) or Bank of America (up 66%). All of those are far ahead of Kraft Heinz — a rare big miss for Berkshire — which has posted a negative return of 64% over the same period.

“Berkshire’s underperformance mostly reflects three things: 1) Kraft Heinz worked out much, much worse than expected; 2) Berkshire’s long-term investing skill is less obviously useful when capital is cheap and acquisition prices are high; and 3) bad-and-deteriorating disclosure makes investors even more reliant on the Buffett persona (which is regrettably finite) than on fundamentals,” KBW analyst Meyer Shields told CNBC.

Where some, like Miller, see Berkshire’s hesitation and underperformance, others like Shields note that Buffett’s patience has served him well in the past.

“I think one of Buffett’s strengths is not going along with the crowds when acquisitions are over-priced,” he wrote in an email. “We saw the same underperformance during the tech bubble (which also featured irrational exuberance that subsequently became even more irrational before correcting), and the right thing – then and now – is to do nothing rather than to confuse relative and absolute returns.”

CNBC’s Fred Imbert contributed reporting.

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US-Taliban Reduction in Violence to Start Friday Ahead of Broader Deal – NBC Chicago

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A seven-day reduction in violence between Afghan, Taliban and American forces will begin Friday in Afghanistan, a senior state department official confirmed. If that agreement holds, it would lead to the signing of a long-awaited, broader U.S.-Taliban agreement that could see U.S. troops withdraw from the country after 18 years of conflict, NBC News reports.

Secretary of State Mike Pompeo confirmed in a statement that the U.S. was “preparing for the signing to take place on February 29.”

The reduction in violence is seen as a test of the Taliban’s resolve to end the conflict in Afghanistan, which is America’s longest war. If properly implemented, a Taliban representative and U.S. Special envoy Zalmay Khalilzad will sign the U.S.-Taliban agreement in Doha later this month, a senior state department official said.

The militants had previously rejected the idea of a full-blown cease-fire with Afghan forces, leading U.S. special envoy Zalmay Khalilzad to pursue a deal to “reduce” violence.

Read the full story on NBCNews.com





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Bullied boy who ‘wanted to die’ has ‘best day ever’ as Disney fund hits £150,000 – World News

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The mum of a bullied schoolboy filmed saying he wanted to die has enjoyed the “best day of his life” after an astonishing worldwide reaction.

Nine-year-old Quaden Bayles, who has dwarfism, was the target of cruel jibes and heartbreaking footage of him crying hysterically was widely shared onlne after his mum posted it on Facebook.

Since then he’s been inundated with messages of support, including one from Hollywood actor and fellow Australian Hugh Jackman, and a fund to send Quaden to Disneyland has raised more than £150,000.

His mum Yarraka Bayle said he was overwhelmed by the goodwill shown.

She told 7News: “He said it was going from the worst day of his life to the best day of his life. I think that sums it up perfectly.”

The heartbreaking video Yarraka shared showed the impact bullies had on her son

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After learning about Quaden’s ordeal, Australian actor Jackman said in a video posted on Twitter: “Quaden, you are stronger than you know mate, and no matter what, you’ve got a friend in me.

“So, everyone lets please be kind to each other – bullying is not OK.”

The X-Men star then urged bullies to be kinder, saying: “Life is hard enough, so let’s remember, every person in front of us is facing some kind of battle, so let’s just be kind.”

Quaden’s mum Yarraka said she was overwhelmed by the response

Brad Williams, who set up a GoFundMe page to raise cash for the schoolboy, described him as “a wonderful human being who deserves joy”.

He said he wants to fly Quaden and his mum to the US, get them a nice hotel, and bring them to Disneyland.

His appeal stated: “Let’s show Quaden and others, that there is good in the world and they are worthy of it.”

Donations have flooded in from around the world.

Yarraka with her son, who has been targeted by cruel bullies

The emotional clip which sparked the appeal showed Quaden in tears as he make comments including ‘what’s the point’ and ‘I just want to die right now’.

Yarraka, from Brisbane, says: “I’ve just picked up my son from school, witnessed a bullying episode, rang the principal and I want people to know – parents, educators, teachers – this is the effects that bullying has.

“This is what bullying does, so can you please educate your children, your families, your friends.

“This is the impact bullying has on a nine-year-old kid that just wants to go to school, get an education and have fun but every single freaking day, something happens.

Donations have flooded in from around the world

Actor Hugh Jackman has shared a message of support

“Another episode, another bullying, another taunt, another name calling.”

As her son pulls at his neck, Yarraka breaks down herself, saying: “I want people to know how much it is hurting us as a family. I want people to educate their children.”

Quade buries his head in the car seat and Yarraka explains that this reality is the side she usually chooses to keep private but ‘we can’t do it anymore’.

She says the bullying has driven her child to suicide attempts after people point out his differences in public wherever they go.

The parent adds that the constant battle makes her feel as though she is ‘failing as a parent’.

“It’s every single f***ing day and we’re sick of it,” she says.

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Top news stories from Mirror Online

“Your child could be the bully that pushes a kid over the edge and, God forbid, we lose another child to suicide because of the bullying.

“I used to tell him ‘just ignore it’. Well no, f***ing ignoring it doesn’t solve the problem, how does that address the problem if you choose to ignore it? It needs to be addressed straight away and that’s exactly what I’m doing now.”

The video was posted to Facebook with the caption: “This is the serious impacts of bullying! I seriously don’t know what else to do.”

* Samaritans (116 123) operates a 24-hour service available every day of the year. If you prefer to write down how you’re feeling, or if you’re worried about being overheard on the phone, you can email Samaritans at  jo@samaritans.org





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