2024-07-08 20:45
July 8 (Reuters) - Private equity firm Bain Capital is nearing a deal to acquire Envestnet (ENV.N) New Tab, opens new tab, a U.S. financial software vendor with a market value of about $3.5 billion, people familiar with the matter said on Monday. If the negotiations conclude successfully, a deal with Bain could be announced as soon as this week and would value Envestnet at close to its current stock price, the sources said. Envestnet shares are hovering at around $63. The sources requested anonymity because the matter is confidential. Envestnet and Bain did not immediately respond to requests for comment. Envestnet provides technology tools to financial advisers and wealth managers. Its clients include more than 108,000 advisers, 16 of the top 20 U.S. banks, and several top wealth management and brokerage firms, according to its website. Last year, Envestnet added three new directors to end a board challenge from activist investor Impactive Capital that had been pushing the company to improve its performance by cutting costs. Envestnet is currently in a leadership transition. In January, CEO Bill Crager said he would step down from this role and continue with the company as a senior adviser starting in April. The company previously explored a sale in 2022 after being approached by potential buyers. Reuters reported in April that Envestnet was again up for sale. Sign up here. https://www.reuters.com/markets/deals/bain-capital-nears-deal-buy-envestnet-sources-say-2024-07-08/
2024-07-08 20:42
ENNA, Italy, July 8 (Reuters) - A severe drought in Sicily has nearly dried up the Mediterranean island's only natural lake which has long served as a vital resting station for birds migrating between Africa and Europe. Sicily has suffered months of below-average rainfall, with the Italian government declaring a state of emergency over the crisis, which has devastated crops and desiccated pastures. Lake Pergusa, part of a natural reserve close to the central Sicilian town of Enna, has shrunk dramatically because of a lethal mix of hot weather and low rains, scientists said. "The lake is no longer there. The part of the water that was visible has completely disappeared, apart from this puddle," said Giuseppe Maria Amato, from environmentalist group Legambiente, pointing to a pool of water. Sicily has long grappled with climate change-related high temperatures, setting a European heat record in 2021 of 48.8 degrees Celsius (119 degrees Fahrenheit), and a number of towns have had to introduce water rationing. Drought crises have hit elsewhere in Europe in recent years, including in France and Spain, especially affecting the Mediterranean area where the average temperature is now 1.5C higher than 150 years ago. "Lake Pergusa is an indicator of what Sicily is suffering due to climate change," Amato said, saying a lack of maintenance and a poor sewage system were exacerbating the emergency. The lake's surface normally covers 1.8 square km (0.7 square miles) and has no rivers flowing in or out of it. It appears in the Roman poet Ovid's Metamorphoses where it is described as a place of beauty and "eternal spring". "TRULY CATASTROPHIC" But such times are long gone. Scientists believe the drought risks to permanently damage biodiversity around the lake which along with the migratory birds is home to fish, molluscs and micro-invertebrates. "The total drying-up and a failure to replenish the water in the autumn would be truly catastrophic. We have to recognise that climate change is having an impact. It is beginning to cause irreversible damage," said climate specialist Luigi Pasotti. Pasotti said just 250 mm (9.8 inches) of rain fell in the last 12 months on Sicily, an underdeveloped region where agriculture is crucial for the economy. Lake Pergusa is not directly involved in supporting local agriculture but water shortage is harming the sector in central areas, where farmers are struggling to refill their reservoirs that are running dry or operating at very low levels. Fruit crops, such as peaches and olives, risk failing, forcing business to buy water at very high prices which can soon prove unsustainable, local farmers' associations said. Gerardo Forina, the head of agricultural lobby Coldiretti around Enna, said the situation was "absolutely terrible," especially for livestock breeders. "We face the risk of having to slaughter animals due to the lack of water," he said. "I cannot remember a year as dry as this one." Sign up here. https://www.reuters.com/business/environment/sicilys-only-natural-lake-drying-up-island-grapples-with-drought-2024-07-08/
2024-07-08 20:39
Kgosientsho Ramokgopa wants "exponential" renewables growth Predecessor had been opposed to swift green energy switch Solar and wind projects have been caught up in delays South Africa in the top 15 greenhouse gas emitters PRETORIA, July 8 (Reuters) - South Africa's new energy minister vowed on Monday to accelerate the shift to renewable energy from coal, breaking with a predecessor who opposed swift decarbonision and pledged to keeping burning coal for a long time. Kgosientsho Ramokgopa, who now runs the newly-created Energy and Electricity Ministry, was addressing journalists as Africa's most industrial nation celebrated more than 100 days with no power cuts - a record over years of crippling blackouts. "I am going to be ultra-aggressive on the ... renewable energy. You are going to see an exponential share," he told a news conference in the capital Pretoria, adding that he wanted to signal to investors "our intention to go that route". Owing to its reliance on coal-fired power stations run by state provider Eskom, South Africa is among the world's top 15 greenhouse gas emitters - pushing out more than Britain, Turkey or France - and has the highest carbon intensity among the Group of 20 largest economies, according to watchdog Climate Transparency. "We are going to be the leaders on this continent in relation to renewables," Ramakgopa said. It cut a very different tone from predecessor Gwede Mantashe, who had repeatedly urged resisting international pressure to rush into green energy, questioning its viability. President Cyril Ramaphosa chose his new cabinet at the end of last month, after weeks of horse-trading with other parties following the ruling African National Congress's unprecedented majority loss in a May election. Previously, energy had been tied to mines, under Mantashe, but Ramaphosa hived it off and merged it with Ramokgopa's electricity ministry, in what analysts saw as a move to decouple energy from coal. With 400,000 square kilometres (about 150,000 square miles) of semi-desert and a vast coastline battered by strong winds, South Africa also has some of the world's most abundant renewable energy potential. Yet policy uncertainty has discouraged investment, and activists bemoaned a government decision last year to delay decommissioning several coal-fired power stations well into 2030, citing energy security. Ramokgopa admitted South Africa's switch to green energy had "taken a bit longer than what is necessary," and said his priority would be meeting business people to discuss "the hurdles that undermined ... their appetite to participate." Sign up here. https://www.reuters.com/sustainability/climate-energy/south-africa-energy-minister-vows-change-with-aggressive-renewables-rollout-2024-07-08/
2024-07-08 20:38
LONDON, July 8 (Reuters) - Britain's renewables industry has called on the new Labour government to increase the country’s renewable auction budget by hundreds of millions of pounds to help meet its offshore wind target and wider goal to decarbonise the power grid. Labour swept to victory in Britain’s election last week and the party has pledged to expand the country’s offshore wind capacity to 55 gigawatts (GW) by 2030, from around 15 GW now as part of wider climate goals. “The only way for the new government to stay on track to meet their targets is to amend the (auction) budget upwards,” said Tom Glover, UK Country Chair at RWE (RWEG.DE) New Tab, opens new tab which plans to build new British offshore wind projects. To spur investment, renewable project developers can bid for government-backed price guarantees for the electricity produced, called Contracts for Difference (CfDs), with the budget for this year’s sixth CfD auction set at 1 billion pounds ($1.28 billion), with 800 million pounds of this earmarked for offshore wind. “To increase investment in shovel-ready offshore wind projects this year, unlocking capital investment and lowering average household bills, the government should raise this (offshore wind pot) to 1.5 billion pounds” Nick Hibberd, markets and economics policy analyst at industry group Renewable UK said. The fifth auction, held in 2023 failed to tract any offshore wind projects as the incentives offered were deemed too low by developers, setting back progress towards meeting the former Conservative government's 50 GW by 2030 target. “(This year’s auction) is the last chance to be sure which projects will get CfDs for the projects to be delivered by 2030 so we really need to maximize the potential of this auction,” said Damien Zachlod, managing director at EnBW generation UK, which has joint ventures with BP (BP.L) New Tab, opens new tab to build British offshore wind projects. Ashutosh Padelkar, associate for GB Power & Renewables at consultancy Aurora, said the portion of auction funds dedicated to offshore wind would likely need to at least double to 1.65-1.95 billion pounds to support the 10 gigawatts of wind projects eligible to bid in the current round. “This would need to be followed through with similar ambition in the next (seventh) allocation round to ensure industry confidence,” he said. Britain's department for Energy Security and Net Zero did not immediately respond to a request for comment. ($1 = 0.7802 pounds) Sign up here. https://www.reuters.com/sustainability/climate-energy/british-renewable-industry-pushes-new-govt-increase-auction-budget-2024-07-08/
2024-07-08 20:37
NEW YORK, July 8 (Reuters) - A double whammy of record heat and hurricanes should test U.S. refiners' resilience in coming weeks, raising the risk of extremely volatile fuel prices in the middle of the peak travel season, analysts said. The Atlantic hurricane season from June through November is an annual threat for U.S. refineries. Half of the country's over 18-million-barrel-per-day refining capacity is located along the Gulf Coast, highly susceptible to tropical storms. The U.S. is the largest fuel market in the world. Refiners this year may have to brace for more storms than usual. Government forecasters expect up to seven major hurricanes in coming months, double the annual average of three major Atlantic hurricanes with wind speeds over 111 miles per hour. Citgo Petroleum Corp was cutting output at its 165,000 barrel-per-day Corpus Christi refinery on Saturday and plans to run the facility at minimum during Tropical Storm Beryl's passage over the Texas Coast, sources said. The largest ports in Texas also closed operations and vessel traffic in preparation for Beryl, which is expected to strengthen back to a hurricane before hitting the area early on Monday. The intensity and timing of Beryl, which at one point became the earliest Category 5 hurricane on record, signals an active and disruptive season ahead, said Neil Crosby, crude market analyst at Sparta Commodities. "Hurricanes remain the biggest wild card for gasoline prices," said GasBuddy analyst Patrick De Haan. "No better reminder of that than Beryl," he said. Evacuation orders ahead of storms can lift stockpiling and boost fuel demand, causing prices for gasoline, diesel and other refined products to move higher, De Haan said. If a major storm hits the Gulf Coast's refining system, it could remove as much as a million barrels a day of fuel supply and lead to extended outages or even permanent closures, according to the U.S. Energy Information Administration (EIA). Hurricanes heading for the Gulf Coast could also knock out a similar amount of crude supply, with the offshore Gulf of Mexico region housing around 14% of U.S. crude output. In 2021, U.S. oil and gas companies suspended more than 1.7 million barrels oil output in the aftermath of Hurricane Ida. Outages of around 1.5 million bpd of crude production and refining capacity can cause gasoline prices to jump by 25 cents to 30 cents, according to EIA. WARMER TEMPS In addition to hurricanes, refineries this year must contend with more problems related to scorching heat. The latest U.S. monthly temperature outlook foresees above average temperatures in large parts of the U.S. in July, typically the hottest month. Excessive temperatures have supersized effects on commodity supply chains, including oil and fuel, JPMorgan analysts wrote last month. Most refineries are designed to operate between 32 and 95 degrees Fahrenheit. Triple-digit temperatures could lead to equipment malfunctions and reduction in refining capacity. Extreme heat last year led to a 500,000 bpd reduction in Gulf Coast refined products output, the JPM analysts wrote. Similar effects are being felt this year. Unit upsets reported by Phillips 66 (PSX.N) New Tab, opens new tab at its Wood River refinery in Illinois last month were likely due to heatwaves, according to Kloza and other industry experts. SILVER LINING A robust maintenance season earlier this year allowed U.S. refineries to undertake major upgrades and perform detailed upkeep which had been repeatedly postponed due to surging post-pandemic demand and supply disruptions. That should, in theory, make refineries better prepared for the hurricane season, said Alex Hodes, oil analyst at brokerage StoneX. Slow demand in recent months has also helped refineries build fuel stockpiles, which should act as a buffer in case of outages. U.S. gasoline inventories have risen by about 4 million barrels since the beginning of April to near 231.7 million barrels by June 28, in line with the seasonal average of the past five years excluding 2020. Inventories of distillates including diesel and heating oil have grown by 3.7 million barrels from the start of April and were at 119.7 million barrels by June 28, slightly below the historical average excluding 2020, when inventories were sharply elevated by COVID-related demand destruction. "There's not much margin for error," said Tom Kloza, head of energy analysis at Oil Price Information Service. "I'm waiting to see what happens." Sign up here. https://www.reuters.com/markets/commodities/record-us-summer-heat-hurricanes-could-roil-fuel-prices-oil-refiners-sweat-2024-07-08/
2024-07-08 18:54
July 8 (Reuters) - Activist investor Elliott Investment Management on Monday warned of a proxy fight to push for leadership changes at U.S. budget carrier Southwest Airlines (LUV.N) New Tab, opens new tab. In a letter to Southwest's board, Elliott said while it is open to collaboration, it plans to "move expeditiously to give shareholders a direct say on the necessary leadership changes." The investment management firm, known for pushing changes to boost shareholder returns, has called for a reconstitution of Southwest's board with "new, truly independent" directors possessing expertise in airlines, customer experience and technology. It has also called for a leadership change citing Southwest's disappointing financial results. In a statement, Southwest said it remains open to constructive conversations with Elliott, including evaluating additional "strong and independent" director candidates. The airline, however, added the investment firm has focused on personal attacks on its leadership and board, conditioning any serious discussions on an immediate CEO change. In its letter, Elliott said the airline's performance is "unacceptable" and a leadership change is required to return it to its once-leading position in the industry. "Shareholders simply do not believe this board and management team are capable of devising and executing a bold new plan to turn around Southwest," it said. Elliott currently owns an 11% stake in the company, making it one of the largest investors. Last week, Southwest said the activist investor had made filings with antitrust authorities that would allow it to acquire an even larger voting power as early as July 11. It prompted the company to adopt a "poison pill", used by corporate boards to thwart hostile takeover bids, to deter Elliott from raising its stake. Elliott said it is not seeking control of Southwest, but added the airline's board has put its own "self-interest ahead of the company's" by adopting the "poison pill." It also criticized the appointment of aviation industry veteran Rakesh Gangwal to Southwest's board, calling it an attempt on the part of the board to "entrench itself and the current management team." "These actions...demonstrate how profoundly out of touch Southwest's board has become with shareholder sentiment and with the reality of the situation," Elliott said in its letter. Gangwal - who co-founded InterGlobe Aviation (INGL.NS) New Tab, opens new tab, the operator of India's largest airline IndiGo - has also served on the boards of US Airways Group, CarMax (KMX.N) New Tab, opens new tab and Office Depot, among others. "Rakesh's expertise in travel technology will be valuable as we continue to make investments that support our operations and strategic initiatives," said Gary Kelly, executive chairman of Southwest's board. Sign up here. https://www.reuters.com/business/aerospace-defense/southwest-airlines-adds-industry-veteran-gangwal-board-amid-pressure-elliott-2024-07-08/
