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Speaker 1: This is what the Flux. I'm Brett and I'm Justin

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Speaker 1: and it's Monday, the twenty.

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Speaker 2: Eighth of July. Does it wait? We spoke last week

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Speaker 2: about the battle between Employment Hero and its investor Slash

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Speaker 2: Friends Slash now Fox Seek. The Federal court has decided

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Speaker 2: that Seek cannot block Employment Hero from its APIs at

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Speaker 2: least until further court orders are issued, which could take

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Speaker 2: months or even years.

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Speaker 1: Buys Employment Hero even more time, b Man, it does flexa.

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Speaker 1: As we come to the end of the month, it

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Speaker 1: is the perfect time to be checking your credit score.

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Speaker 2: Did it go up this month?

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Speaker 1: Did it go down?

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Speaker 2: Because it can be updated every single month.

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Speaker 1: So if you want to know how your credit card behavior,

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Speaker 1: how your loans, how your utilities might be impacting your

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Speaker 1: credit score, make sure you download the Flux app and

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Speaker 1: check it out.

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Speaker 2: Three gigantic stories today, jus boy, let's do it for

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Speaker 2: our first. BAPCOORPS, the company behind autobarn Person and Miters,

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Speaker 2: has issued a major profit warning and three directors have

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Speaker 2: quit and its share price has nose dived.

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Speaker 1: It must have been a very busy day at babcoor

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Speaker 1: hqb Man, So tell me more.

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Speaker 2: All right? So Bapcoorp is a major Australian auto parts

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Speaker 2: retailer that's been around since nineteen seventy one and operates

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Speaker 2: over eleven hundred stores.

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Speaker 1: We'd been talking at Autobarn and Berson and minors stores as well.

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Speaker 1: But Ben Man, you may remember back in March this year,

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Speaker 1: Bunnings announced plans to aggressively expand into auto parts. I

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Speaker 1: do three hundred new products across the three hundred stores.

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Speaker 2: Huh. And at the time Bapcourt didn't seem to phase

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Speaker 2: by Bunning stepping on their toes. But now babcour has

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Speaker 2: warned of multiple hits all at once. Yep.

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Speaker 1: The retail sales have dropped three and a half percent

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Speaker 1: due to competitor activity ahem Bunnings. Yep number two. They

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Speaker 1: suffered major contract disputes up to forty five million bucks

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Speaker 1: and also suffered losses on some businesses that they sold

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Speaker 1: over Man And if this wasn't bad enough, three of

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Speaker 1: the Bapcourt directors that dropped the mic and just walked

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Speaker 1: out the door.

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Speaker 2: Next minute, that COR's share price dropped thirty percent, reducing

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Speaker 2: their market cap to just over one point two billion dollars.

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Speaker 1: And be Man, that one point eighty three billion dollar

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Speaker 1: acquisition offer they received last year is looking quite good

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Speaker 1: right now?

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Speaker 2: Oh it is too, So what is the key learning here?

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Speaker 1: Rejected takeover bid can come to haunt aboard, especially when

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Speaker 1: things take a turn for the worst.

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Speaker 2: Last year, Bapcoor's board knocked back at one point eight

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Speaker 2: three billion dollar bid from Bain Capital be Man.

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Speaker 1: They rejected the offer, arguing it undervalued the company.

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Speaker 2: Fast forward and the share price has tanked nearly thirty percent.

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Speaker 1: Not only that, be Man, but the business is under

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Speaker 1: enormous pressure from Buddings.

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Speaker 2: So juzzy boy. It's a reminder that when you reject

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Speaker 2: a takeover offer, you need to prove that you can

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Speaker 2: deliver more value independently.

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Speaker 1: And be Man is that the only company to reject

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Speaker 1: a takeover offer and suffer the consequences?

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Speaker 2: Well, I remember when Premier Investments tried to acquire Maya

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Speaker 2: back in twenty seventeen.

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Speaker 1: Yep Meyer rejected it and tried to execute on its

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Speaker 1: turnaround strategy alone and failed.

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Speaker 2: Now not only do Premier Investments have board seats at Maya,

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Speaker 2: they just sold their apparel brand's portfolio to Maya for

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Speaker 2: nine hundred million bucks. So be man.

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Speaker 1: Sometimes an acquisition. Bird in the hand is worth two

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Speaker 1: in the bush.

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Speaker 2: For our second story, Paramount has finally merged with sky

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Speaker 2: Dance in an eight billion US dollar deal after almost

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Speaker 2: two years of negotiation.

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Speaker 1: So what I feel like this deal could be turned

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Speaker 1: into a movie itself?

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Speaker 2: Be man? What is going on here all right, juziboy?

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Speaker 2: Some background. Paramount Global is the media and entertainment behamoth

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Speaker 2: that owns a heap of global entertainment brands.

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Speaker 1: We'd be talking Paramount plus, streaming service, CBS, MTV, Nickelodeon,

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Speaker 1: Showtime and Pman even Network ten here in Australia.

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Speaker 2: On the other hand, sky Dance has produced Mission Impossible,

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Speaker 2: Top Gun, Maverick, and plenty of other Hollywood blockbusters and

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Speaker 2: The Man.

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Speaker 1: Back in twenty twenty three, the owners of Paramount expressed

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Speaker 1: interest in selling the biz.

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Speaker 2: So this potential merger has been on and off and

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Speaker 2: on and off the cards since about December, between twenty

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Speaker 2: three when it all first started.

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Speaker 1: And the negotiations collapsed in June twenty twenty four.

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Speaker 2: They resumed in July twenty twenty.

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Speaker 1: Four, and now finally in July twenty twenty five. The

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Speaker 1: eight billion US dollar merger has been approved by the

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Speaker 1: US Federal Communications Commission.

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Speaker 2: Despite many hiccups along the way that were overcome. But juziway,

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Speaker 2: before you think about all the eight billion US dollars

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Speaker 2: of cash in a suitcase changing hands, there was actually none?

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Speaker 2: And why is that? Because it was an all star

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Speaker 2: our merger? Juzzy boy?

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Speaker 1: Interesting? So what is the key learning here?

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Speaker 2: An all stock merger is when one company acquires another

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Speaker 2: by offering shares instead of cash.

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Speaker 1: Meaning ownership changes hands that no money does.

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Speaker 2: In this case, the acquiring company, Skydance, pays for the

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Speaker 2: deal using stock.

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Speaker 1: They issue new stock in exchange for control of Paramount.

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Speaker 2: Meaning Paramount's existing shareholders will end up owning a chunk

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Speaker 2: of the new combined company.

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Speaker 1: And the man Why do companies do this well.

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Speaker 2: Firstly, and probably the main reason, it's a lot cheaper

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Speaker 2: because there's no need to borrow money or exchange cash

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Speaker 2: to get it done.

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Speaker 1: Secondly, it aligns incentives because everyone now wants the new

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Speaker 1: company to succeed.

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Speaker 2: And finally, it really signals confidence because Skydance is betting

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Speaker 2: that the future of the company will be worth more

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Speaker 2: than the two were worth separately. But be man, it

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Speaker 2: is not a risk free nop. If the new company stumbles,

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Speaker 2: those Skydance shares won't be so valuable.

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Speaker 1: For our third and final story, LVMH has seen it's

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Speaker 1: share price for more than eight percent after investors got

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Speaker 1: major tariff and performance anxiety.

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Speaker 2: Well, has LVMHOR lost its luxury crown? Juzzy boy, go on?

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Speaker 1: So we know Elvi mahe the French a luxury conglomerate

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Speaker 1: that stands for Louis Vuitton, MUA Hennessy.

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Speaker 2: And within this huge conglomerate there are more than seventy

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Speaker 2: luxury brands or Maissons as they like to call them.

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Speaker 1: Love your French. We'd be talking Louis Vuitton, Dior, Givonci, Fendi, Celine, Kenzo,

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Speaker 1: tag Koya, and also luxury drinks like moe Verve Hennessy.

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Speaker 2: The big man.

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Speaker 1: ELVI maschis warned that its first quarter earnings were ugly.

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Speaker 2: We're talking a first half net profit fall of twenty

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Speaker 2: two percent. And how did this happen? Well, sales of

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Speaker 2: their wine and spirits business will hit hardest.

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Speaker 1: YEP suffered a nine percent drop, apparently because of weakening

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Speaker 1: cognac demands.

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Speaker 2: Who knew so many people like KGNAC in the first place,

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Speaker 2: doesn't boy yep.

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Speaker 1: They also claimed that the tourists were a reason for

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Speaker 1: the drop in that revenue, but their fashion and leather

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Speaker 1: goods also fell by five percent. Next minute, investors hitting

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Speaker 1: the cell button and Elvi Major share price fill more

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Speaker 1: than eight percent. And here's the thing.

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Speaker 2: Elvia Major CEO seems to think that its brands are

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Speaker 2: actually still performing very well, relatively speaking relative to the

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Speaker 2: poor economy. Interesting, So what is the key learning here?

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Speaker 1: Luxury brands like we Mage don't live quarter to quarter.

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Speaker 1: They play the long game.

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Speaker 2: While this latest earnings dip did spook some investors, lvmhor

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Speaker 2: reckons this isn't a sign of a collapse, more of

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Speaker 2: a global pause. Luxury consumers are not abandoning luxury, they reckon,

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Speaker 2: They're just being more selective.

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Speaker 1: For example, b Men, during the two thousand and eight

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Speaker 1: two thousand and nine global financial crisis, a personal luxury

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Speaker 1: goods market declined eight percent, according to Baine.

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Speaker 2: And then between twenty ten and twenty nineteen, the luxury

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Speaker 2: market sector grew at a compound and your growth rate

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Speaker 2: of about seven percent.

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Speaker 1: So be man in a luxury market, the smart move

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Speaker 1: isn't to chase every dip like a typical retailer.

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Speaker 2: No, it's to stay aspirational and wait for your customers

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Speaker 2: to come crawling back when the economy comes back. Floxam.

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Speaker 1: With only a few days left of July, now is

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Speaker 1: the time to check the credit score this month.

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Speaker 2: Did it go up?

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Speaker 1: Did it go down?

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Speaker 2: Have you been spending and repaying?

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Speaker 1: It's all in the Flux app in our credit health toll.

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Speaker 2: Thanks for listening and we'll see you on Wednesday.