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RaceTrac, a convenience store operator, will buy Potbelly sandwich chain for $566 Million
RaceTrac has agreed to purchase sandwich chain Potbelly Corp. for $566 million. This is a rare decision for a convenience-store operator to acquire a restaurant. According to a press release, RaceTrac family-owned convenience stores, RaceTrac RaceWay, and Gulf, will launch a tender to purchase all outstanding shares of Potbelly at $17.12 each. Potbelly directors and executives have all agreed to tender their shares. This represents around 11% Potbelly common stock. Potbelly's shares rose more than 30% to $17 per share on Wednesday following the announcement of the deal. The deal represents a 47% premium over the 90-day average volume-weighted price of the company. Industry experts say that convenience store chains often have franchise agreements with restaurants. However, it is rare that they buy a restaurant brand outright. RaceTrac in Atlanta, Georgia wanted to add a new restaurant to its convenience store portfolio. The two companies negotiated this deal without a formal auction, according to people familiar with the situation. In recent years, private equity firms have been among the most active purchasers of sandwich chains. Blackstone bought Jersey Mike's last year for $8 billion and Roark Capital which owns Jimmy John's will buy Subway for $9.55 billion in 2023. Sources added that the deal today could encourage other restaurants to look at convenience store chains as possible buyers. Potbelly's first location was in Chicago, Illinois in 1977. It now has over 445 locations. RaceTrac has more than 800 RaceTrac, RaceWay and Gulf locations in 14 States and approximately 1,200 Gulf locations throughout the U.S. In the announcement of the deal, both companies highlighted their common capabilities in real-estate, franchising and operations, as well as food innovation, marketing, and food innovation.
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LBMA calls the White House's tariff update on gold bar a 'welcome' development
The London Bullion Market Association stated on Wednesday that the White House's update to its tariff schedule was a "welcomed development" following challenges caused by a U.S. Customs decision on gold bars. The executive order issued by Donald Trump on 5 September updates the tariff schedules for some goods, including gold products. The White House called them reciprocal tariffs. The update will see gold bars imported into the United States from countries that are "aligned partners" under certain codes in the Harmonized Tariff schedule of the United States, including 7108.11.00 and 7108.12.50. It also includes 7108.13.10 7108.13.55 7108.13.70 7108.20.00, which will be subject to a 0% duty on all entries after September 8, 2025. The LBMA described the move as a "significant and beneficial step for the industry", following the uncertainty created by a recent U.S. Customs and Border Protection decision. CBP's website had suggested earlier in August that gold bars commonly traded could be subjected to country-specific duties, which led some traders to suspend shipments into the U.S. until further clarification. On August 11, Trump tried to calm the markets by posting on his Facebook page that "Gold won't be Tariffed!" He did not provide any further information. The association stated that it would continue to monitor developments, and will provide updates as necessary. It noted ongoing discussions with its members, market infrastructure providers, and authorities in Europe, the U.S. and the UK regarding tariffs on silver. The LBMA clarified that kilobars are classified under REACH, the UK's chemical regulation. According to the LBMA and the UK Health and Safety Executive, kilobars imported into the UK as investment products can be classified as "articles" and exempted from registration. LBMA stated that kilobars used for jewellery manufacturing, or other industrial purposes, can still be classified as chemical substances.
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US court is inclined to reject motion to disqualify Elliott's bid for Citgo parent
In a Wednesday filing, Judge Leonard Stark stated that a Delaware court was inclined to deny the motion filed by Gold Reserve last month to disqualify an affiliated hedge fund Elliott Investment Management's bid to purchase Citgo Petroleum, a Venezuelan-owned refiner. Next week, the court will begin the final hearing in the court-organized sale of shares to pay creditors who have been owed money for expropriations or debt defaults that Venezuela has made. The hearing follows the selection of the $5,9 billion bid by Elliott's Amber Energy affiliate as the best offer in the auction. This choice was met with objections by several parties, and Gold Reserve filed a motion to strike. The court officer who oversees the auction did not recommend a competing bid by Gold Reserve affiliate Dalinar Energy, even though it had been raised to $7.9 Billion last month. Gold Reserve, Venezuelan lawyers and other creditors objected to Amber's bid. They said that an agreement to pay $2.1billion to holders of Venezuelan bonds in default would deprive certain creditors of auction proceeds. The judge stated in his filing that parties attending the hearing should "focus instead on the merits" of the Amber Energy bid and its objections, as well as the Dalinar offer. During the four-day hearing that begins on Monday, experts, creditors and witnesses will present arguments in support of or against the bids. The court has said that a second set of testimony could be presented by October.
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ADNOC close to finalising EU remedies for Covestro deal, sources say
People familiar with the situation said that ADNOC, Abu Dhabi's state oil company, is preparing remedies to deal with an EU investigation on subsidy allegations in its bid of 14.7 billion euros ($17.2 billion) for Germany's Covestro. It will likely convert a proposed capital increase of 1.2 billion euros into a shareholder loan. This is ADNOC’s largest acquisition ever and the largest foreign takeover of an EU-based company by a Gulf State. The European Commission (the EU's competition watchdog) has warned that ADNOC could be benefiting from subsidies, such as a guarantee that is unlimited, and that foreign aid may also be involved with the capital increase at Covestro. ADNOC is likely to convert the Covestro equity increase into a shareholder loan, at rates of the market. People familiar with the matter said that the company plans to address EU concerns regarding unlimited state guarantees, just as UAE telecoms group e& did last year to gain EU approval for certain parts of Czech Telecoms Company PFF. e& has agreed to remove the unlimited state guarantee it had provided by ensuring its articles of incorporation do not differ from UAE bankruptcy law. People said that ADNOC would likely pledge to keep Covestro’s technology and intellectual properties in Europe. The Commission, which is currently investigating the deal in its Foreign Subsidies Regulations (FSR), targeting unfair foreign assistance for companies, has declined to comment. A spokesperson for XRG (the international investment arm of ADNOC) said that it would not comment on current discussions. ADNOC's Chief Executive Sultan Ahmed Al Jaber spoke with EU Antitrust chief Teresa Ribera via phone on Friday, according to the sources. ADNOC slammed EU regulators last week for their disproportionate and intrusive requests for information, which it warned could jeopardize the deal. (Reporting and editing by Foo Yunchee)
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Barrick's executive advises Mali president on gold dispute
An official from the mines ministry said on Wednesday that a senior Barrick Mining executive, who was representing the company during tense talks with Mali’s government, has now switched sides and is now an advisor to Mali’s president. Hilaire Diarra, formerly the general manager of Barrick’s Tongon Gold Mine (Ivory Coast), was appointed special counsellor by Mali’s president through a decree that was signed late August. On Wednesday, an official from the Mines Ministry confirmed that the document was authentic. This move is a blow to the Canadian company's attempts to negotiate control of the Loulo-Gounkoto complex of gold mines, which is one of the highest-profile examples in West Africa of resource nationalism by military governments who want to control their gold and uranium resources. Diarra and Barrick's spokesperson didn't respond to comments immediately. Since 2023, the Mali government has been in negotiations with Barrick over the implementation a new code of mining that increases taxes and gives government a larger share of the gold mines. Former Barrick executives have been recruited to try and outmanoeuvre Barrick. In June, a Malian court appointed provisional administrator took over the Loulo-Gounkoto complex six months after Barrick had suspended operations at the site due to an impasse in negotiations. Samba Toure, a former Barrick executive, is now part of the provisional management running operations at the complex. Barrick's financial reports show that Loulo-Gounkoto will produce 578,000 ounces gold by 2024. Since the provisional administrator has taken control, 1 metric tonne of gold or 35,274 pounds, have been sold. A source with knowledge of the situation said that current production levels are around 25% of normal output. Diarra, who is a Malian national and began his mining career in Loulo, flew to Bamako this year from Ivory Coast to negotiate for the Canadian miner. This source, along with two others, confirmed the information. Reporting by Portia Crowe and Divya Raagapal Editing Robbie Corey Boulet, Veronica Brown, and David Goodman
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Africa aims to raise $50 billion a year through a new climate solution initiative
A draft declaration following a climate summit of leaders in Addis Ababa on Wednesday showed that Africa aims to secure $50 billion per year for a continental climate solutions initiative. The initiative is sponsored by Ethiopian Prime Minister Abiy Ahmad. The 54-nation African continent, which was ravaged by landslides and floods, wants to continue with its climate commitments despite the United States withdrawing from the Paris Climate Agreement. In the draft declaration, it was stated that the push is to establish the Africa Climate Innovation Compact (African Climate Facility) and the Africa Climate Facility in order "to mobilize $50 Billion annually in catalytic financing for climate solutions". Ethiopian officials didn't respond to requests for more information immediately, but Abiy said at the opening ceremony of Monday's summit that the initiative should be aimed at delivering 1,000 solutions by 2030 to combat climate challenges. Ethiopia's tree-planting campaign, which began in 2019, as well as a new mega hydroelectric dam that was launched on Tuesday are evidence of Africa’s ability to lead the way in economic development and ecosystem protection. African leaders presided at the opening of this summit over an agreement between African development financiers (ADF) and commercial banks, to mobilize $100 billion in investments for green energy generation. The draft declaration of the summit stated that Africa needs more than $3 trillion by 2030 to achieve its climate goals, but has only received $30 billion between the years 2021 and 2012. The report called for greater international commitments and partnerships in order to close the funding gap. It also emphasized the importance of grants to enable adaptation to climate changes. Reporting by Duncan Miriri, Dawit Endeshaw and Alexandra Hudson
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EU unlikely to increase tariffs against India and China on Trump's request
EU sources say that the European Union will not impose tariffs on India and China, which are the two main buyers of Russian crude oil, as the U.S. president Donald Trump has asked the bloc to. This week, an EU delegation including the EU's Russia sanction chief flew to Washington to discuss the ways in which the two sides could coordinate sanctions against Russia for its full-scale invasion into Ukraine. Officials have said that Trump has urged the EU, to hit India and China up to 100% with tariffs to put pressure on Russian president Vladimir Putin who depends on energy revenues for his country's conflict in Ukraine. The European Commission has not responded to a comment request. The European Union has placed extensive sanctions against Russia In its last package, published in July, it also included two Chinese banks and a major Indian refinery. Sources said that the EU does not treat tariffs the same as sanctions, and only imposes these after a lengthy investigation to establish a legal basis. So far, the bloc has only imposed tariffs on Russian and Belarusian farm products and fertilizers in response to the Ukraine War. It was argued that the tariffs were necessary to avoid creating a dependency which could be exploited, and to protect EU fertiliser producers. An EU diplomat stated that there has been no discussion about possible tariffs with India or China. The EU is also in the process of finalizing a trade agreement with India that the bloc will not want to compromise. Trump's position towards India appeared to soften by Wednesday when he stated that he wanted to reset the trade relations with New Delhi. A second EU source stated that such tariffs are risky, and they could be too broad. It is easier to sanction certain entities and to open the door for them to be delisted if they stop doing business with Russia. Until now, the EU has only listed small, unknown entities that are often shell companies, used by Russia to funnel military goods or dual-use products to its military. The EU plans to list Chinese refineries and banks from two countries in central Asia in its 19th set of sanctions, which could come as early as Friday. (Reporting and editing by Ros Russell, Philip Blenkinsop and Julia Payne)
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US oil stocks rise as crude exports drop and fuel demand falls, EIA reports
The Energy Information Administration reported on Wednesday that U.S. crude oil and fuel stocks rose during the past week, despite a drop in demand and exports. The EIA reported that crude stockpiles increased by 3.9 millions barrels, to 424.6million barrels for the week ending September 5. This was compared to analysts' expectations of a drawdown of 1 million barrels. The EIA reported that crude stocks at Cushing, Oklahoma's delivery hub, fell by 365,000 barges in the past week. U.S. crude oil exports dropped by 1.1m barrels per day, to 2.8m bpd. Meanwhile, net crude imports increased by 668,000 barrels a day. "A substantial drop in crude exports, coupled with a slight drop in refining activities, has encouraged a good build in crude inventories." The implied demand for gasoline and distillates has been weaker, said Matt Smith of ship tracking firm Kpler. The surprise increase in oil inventories has slowed the gains made by oil futures. Brent crude futures, the global benchmark, were trading at $67.02 per barrel at 11:02 am EDT (1502 GMT), up 62 cents. U.S. crude was up 63 cents to $63.25. Refinery crude rundowns fell by 51,000 barrels per day, but utilization rates increased by 0.6 percentage points to 94.9%. Total product supply, which is a proxy of demand, decreased by 871,000 Bpd, to 19.8 Mbpd. Gasoline consumption fell by 609,000 bpd and reached 8.5 million bpd. Distillate product supply was down by 391,000 bpd at 3.4 million. John Kilduff is a partner at Again Capital. He said, "We're waiting to see just how much the gasoline demand will drop after summer driving in the U.S., and it appears that it will be significant." He added that given the recent economic data, which showed a marked slowdown in the labor markets, the weak gasoline demand could also be an indicator of a slowing U.S. economy and global potential. The EIA reported that gasoline stocks increased by 1.5 million barrels during the week, to 220 millions barrels. This was in contrast with the expectation of a 243,000 barrel draw. ? The data revealed that distillate stocks, which includes diesel and heating oil rose by 4.7 millions barrels last week, versus the expectation of a 35,000 barrel increase. (Reporting from Liz Hampton in Denver, and Georgina Mccartney in Houston. Editing by Marguerita Choy)
Citigroup sees loan book hit in climate action ramp-up, document programs
Citigroup could suffer billions of dollars of losses in its loan book if the world sped up efforts to take on climate change, according to a confidential analysis prepared by the U.S. bank that was reviewed .
The analysis was drafted by Citigroup last summer season as it prepared to make a submission to the Federal Reserve on how it plans to handle the impacts of climate change. Five other significant U.S. banks were also required to make confidential submissions using the exact same directions from the Fed.
might not establish just how much of the info in the document it reviewed made it to Citigroup's authorities submission, on which the bank decreased to comment.
The analysis stated that if efforts to fight environment change increase enough to put the world on a course to bringing greenhouse gas emissions down to no on a net basis by 2050, the bank would suffer $10.3 billion in loan losses over 10 years, more than the $7.1 billion in losses anticipated if those efforts did not speed up.
The workout presumed all 6 banks' balance sheets would not modification in that time.
While the estimated hit to Citigroup would be little in relation to the $730 billion wholesale loan book examined, the analysis provides uncommon insight into how the shift far from fossil fuels might affect a top Wall Street bank in an essential location of its service.
The losses would take place since a few of Citigroup's. debtors in the oil, gas and realty sectors would take a. monetary hit if the world was instantly placed on track to suppress. overall greenhouse gas emissions to zero on a net basis by 2050,. the document reviewed showed.
That highlights the challenges that Citigroup and other. banks that have actually vowed to cut their own emissions to net absolutely no. by 2050 face in handling their loan book direct exposure, stated Greg. Hopper, a previous Goldman Sachs Group run the risk of officer who is. now a senior fellow at the Bank Policy Institute.
When a company's pace of transition is too fast or too slow. with regard to the actual underlying market shift pace, it. can suffer losses, Hopper said.
A Citigroup spokesperson decreased to comment beyond what the. bank said in a report on climate change launched last month. That report stated its submission to the Fed had produced beneficial. insights into vulnerabilities, but did not include its analysis. of prospective losses.
Citigroup's shares were little bit changed on Wednesday. morning in New York, up 0.2% at $61.43.
To be sure, Citigroup's analysis is based on a. simulation with numerous assumptions and unpredictabilities, and the. opportunities of the scenario it analyzed happening are remote. That is because the 2050 net-zero target, which was consented to by. almost 200 countries in 2015 in order to limit worldwide warming to. 2 degrees Celsius (3.6 degrees Fahrenheit) above preindustrial. times, is not likely to be achieved without significant policy changes,. such as a worldwide carbon tax, researchers say.
The Fed had said it would publish anonymized, aggregated. findings from the 6 U.S. banks on their environment direct exposure by. the end of 2023, however it has yet to do so.
A Fed spokesperson said it had not requested quotes of. prospective losses and would not release any dollar figures. The. regulator initially said it wished to evaluate how ready banks. are to manage environment risks and it would not use the exercise to. enforce any capital requirements.
Fed Chair Jerome Powell has stated that the reserve bank will. not try to pursue policy changes to deal with environment change and. should rather stay with its mandate of handling threats to the. banking system.
That contrasts with the European Central Bank, which. actively promotes the energy shift and stated last September. that postponing it would raise credit threats for banks.
CYCLONE EFFECT
The Citigroup analysis likewise discovered that a serious hurricane in. the Northeast U.S. could set off a $63.5 million loss to a $49. billion loan portfolio in one year if the possessions were not. covered by any insurance coverage. The result on Citigroup's business. would be muted, the document stated.
For a typhoon in the Southeast U.S., assuming no insurance. protection, a $15 billion portfolio could take a hit of $142. million over 12 months. That would increase by $571 million if. the analysis considered persistent flooding, the file. kept in mind.
Financing in various regions and sectors assists a big bank,. such as Citigroup, restrict the effect of extreme weather condition occasions on. its loan book, said Clifford Rossi, a former Citigroup customer. providing risk officer who is now a University of Maryland. business professor.
JPMorgan Chase, the biggest U.S. bank, stated in its. 2023 climate report that geographic spread, brief loan durations. and insurance coverage cushioned its customer credit portfolio from. environment risks, so monetary losses due to extreme weather occasions. have actually not been product to the company.
The Fed developed directions for the climate danger. workout based on work carried out by the U.N.'s. Intergovernmental Panel on Environment Change and the Network for. Greening the Financial System, a union of central banks and. regulators focused on the problem.
Sarah Blossom Raskin, a former Fed board guv who is now a. Duke University law professor, said the workout did not go far. enough since it would have no bearing on regulative needs on. the banks.
This is the equivalent of the banks being guaranteed by. the Fed that the outcomes would be ... shredded, buried, and. cleaned far from any use whatsoever, she stated.
(source: Reuters)