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Speaker 1: P and L Podcast. I'm Pim Fox. Along with my

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Speaker 1: the Bloomberg P and L Podcast on iTunes, SoundCloud and

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Speaker 1: at Bloomberg dot com. I want to talk about the

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Speaker 1: treasury market and what happened to the foreign buyer. I

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Speaker 1: am so happy to bring in Jim Vogel, interest rate

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Speaker 1: strategists at ft N Financial, A fantastic analysts. I read

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Speaker 1: his reports every day. Jim, I would love to get

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Speaker 1: your take first off on whether we're starting to see

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Speaker 1: foreign investors come back to the U. S. Treasury market

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Speaker 1: after abandoning it in December. Not yet on a large scale.

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Speaker 1: What we're really seeing is some buying when we get

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Speaker 1: these odd currency fluctuations, but it's not enough necessarily to

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Speaker 1: say that the foreign buyers are back. So, in other words,

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Speaker 1: even though there is a higher proportion of indirect buyers

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Speaker 1: at some of the recent auctions, in other words, that's

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Speaker 1: usually a category that includes foreign money, but also that

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Speaker 1: includes hedge funds. It's been increasing, but it doesn't necessarily

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Speaker 1: represent that China and Japan are coming back. No, not

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Speaker 1: yet in the kind of support that the treasury market

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Speaker 1: became accustomed to over the last five to six years. Hey, Jim,

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Speaker 1: could you just comment on what's going on with the

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Speaker 1: US dollar? And and and am I correct in thinking

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Speaker 1: that we saw this big searche in dollar since the

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Speaker 1: November election and that after the new year we still

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Speaker 1: saw some strength. But then they started to be conversation

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Speaker 1: aations about you know, how long things would take in

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Speaker 1: taxes and interest? Right, what can you tell us about

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Speaker 1: the sort of trajectory of the dollar. The dollar is

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Speaker 1: still going to regain some of its strength, but it

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Speaker 1: was way too strong in December because for a while

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Speaker 1: people feared that the Fed was falling behind the potential

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Speaker 1: of the Trump slash Republican stimulus that everybody was talking about.

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Speaker 1: It became part of the Trump trade, and so on

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Speaker 1: that basis, if the FED was behind, then they would

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Speaker 1: have to catch up, say with a big increase or

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Speaker 1: a quick increase at the March meeting. That thinking from

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Speaker 1: December has totally wilted, particularly after we saw average hourly

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Speaker 1: earnings growth revisions last week. So there's this debate right

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Speaker 1: now that's been going on, which is, are we headed

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Speaker 1: toward an inflationary reflationary time period or are you going

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Speaker 1: to see treasury yields go back down in the wake

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Speaker 1: of disappointing growth. Where are you weigh on this? Uh,

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Speaker 1: We're going to stabilize inflation once we move past a

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Speaker 1: couple of other uh, the next couple of months that

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Speaker 1: are going to see increases in the indexes. And but

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Speaker 1: we are not really set for say the ten year

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Speaker 1: to go back to the two percent level when people

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Speaker 1: were less concerned about inflation. Uh. It's still an early

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Speaker 1: days in the Trump administration, and the people that believe

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Speaker 1: tips are the right place to be are hurting this week,

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Speaker 1: but they have certainly been winning and are ready to

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Speaker 1: commit more capital to that market. How much does the

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Speaker 1: foreign bid that we were talking about earlier play into

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Speaker 1: your thesis? For the most part, do we see the

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Speaker 1: overseas UH fixed income investor staying focused primarily in the

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Speaker 1: European market. Right now. We do not see them as

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Speaker 1: major players in the US, except when there's a risk

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Speaker 1: style event that may come over from EU banking or

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Speaker 1: other matters such as that. So we're back up for

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Speaker 1: a little bit. No, when you say that they're focused

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Speaker 1: on on the on the EU, are they looking to

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Speaker 1: buy German debt French debt now that yields have risen there?

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Speaker 1: I mean where where are they focused? Yeah, for the

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Speaker 1: most part, they're focused on Germany and France, and then

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Speaker 1: everything else keys off those relationships there. And so the

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Speaker 1: big news in addition to the treasury rally this week

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Speaker 1: is that both German and French tenure yields have returned

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Speaker 1: to roughly their two month average. Do you see the

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Speaker 1: rally continuing unfortunately for a bit longer, Yes, because we

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Speaker 1: still have to retain firmer footing, and when we have

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Speaker 1: the big sell off in December, we totally bypassed this

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Speaker 1: area between two thirty and two thirty five. There are

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Speaker 1: no technical indicators for traders to go, oh, finally we've

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Speaker 1: reached here and now we can start selling again. And

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Speaker 1: until we just sort of leach out some of this

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Speaker 1: dollar trade and a couple of other points, we can

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Speaker 1: stay below to th D seven on tens UH into

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Speaker 1: next week. Jim, what do you think is a likely

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Speaker 1: outcome for year and ten year treasury yields? We're still

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Speaker 1: in the two five to fifty camp. We don't see

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Speaker 1: to the extent that rates spike in the at some

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Speaker 1: point as we look at FED or possibly UH stimulus

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Speaker 1: from the fiscal side in Washington, they could go up to,

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Speaker 1: say to sixty, but we believe they'll come back down

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Speaker 1: because there's people are looking at the federal UM picture

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Speaker 1: on a linear basis and not with all the different

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Speaker 1: ramifications that follow any particular Washington UM fiscal move. The

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Speaker 1: other really big topic that people have been talking about

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Speaker 1: in the bond world is whether the Federal Reserve will

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Speaker 1: start to unwind their four point five trillion dollar balance sheet.

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Speaker 1: There's been discussion about whether they'll start doing that as

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Speaker 1: soon as early later this year. There's also been discussion

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Speaker 1: about whether they focus more on their mortgage holdings or

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Speaker 1: their treasury holdings. Where do you weigh in on this?

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Speaker 1: We believe that we will look far more at their

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Speaker 1: treasury holdings. Uh, there are four hundred billion dollars of

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Speaker 1: treasuries that have to be reinvested in two thousand and eighteen.

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Speaker 1: So that's the far more immediate um UH horizon that

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Speaker 1: requires a policy decision, and we think they'll be looking

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Speaker 1: at it very closely in the second half of this

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Speaker 1: year to at least communicate to the market a fairly

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Speaker 1: detailed plan. Kim, is there any plan for if the

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Speaker 1: economy is currently at its peak, end will either plateau

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Speaker 1: or we will see a slowdown? Uh, there is nothing

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Speaker 1: in the broader numbers that indicate that we've peaked. The

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Speaker 1: sort of the worst trend that we've got is the

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Speaker 1: fourth quarter personal consumption grew at two and a half

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Speaker 1: percent versus the six quarter average of two point eight.

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Speaker 1: But but that's still quite reasonable given um the FEDS

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Speaker 1: goal of continued um solid growth in the US economy.

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Speaker 1: That's still ahead of their formal forecast. So you think

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Speaker 1: that things are kind of just going to be steady

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Speaker 1: throughout the year, What do you think? What's what's the

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Speaker 1: biggest potential surprise on the horizon that could change your view? Uh.

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Speaker 1: The biggest that would be a more coherent action plan

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Speaker 1: from Washington, where the White House and Congress are moving

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Speaker 1: together very quickly. Um to say accomplished, say corporate tax

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Speaker 1: reform in significant detail, not necessarily pass it, but have

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Speaker 1: it out there on a two hundred day calendar, as

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Speaker 1: opposed to what people like to talk about in terms

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Speaker 1: of the one hundred day calendar. Interesting, very good. Thanks

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Speaker 1: for pinpointing that. Jim Vogel. He is interest rate strategist

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Speaker 1: for FTN Financial, joining us from Memphis at Tennessee. While

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Speaker 1: we want expertise in the world of technology media, well

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Speaker 1: turned to only one person, Paul Sweeney, US director of

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Speaker 1: Research and senior Media Internet Analyst for Bloomberg Intelligence. I

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Speaker 1: urge you to go to b I go on the

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Speaker 1: Bloomberg for a variety of detailed reports and insights into

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Speaker 1: a variety of industries. Paul Sweeney, where do you want

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Speaker 1: to start? You want to do Disney or you want

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Speaker 1: to do uh Time Warner and the A. T. T. Combo.

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Speaker 1: I think Disney is usually the most fun story to

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Speaker 1: talk about. And you know they had a kind of

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Speaker 1: a mixed quarter last night. Uh they beat on the

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Speaker 1: EPs line, but they missed on revenue and the ESPN numbers.

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Speaker 1: You know, we're still a little bit soft and uh,

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Speaker 1: and that's kind of a problem because their cost based

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Speaker 1: continues to go up. At ESPN, sports rights continue to

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Speaker 1: go up. In fact, they are in the first year

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Speaker 1: of new NBA contract, which is six million dollars of

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Speaker 1: incremental expenditures for them. So the cost of sports rights

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Speaker 1: continues to go up. And that's obviously you know, ESPN

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Speaker 1: has has the monopoly there, but the revenue trends remain

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Speaker 1: challenge at ESPN. They're dealing with chord cutting, they're dealing

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Speaker 1: with skinny bundles, and they have to figure out a

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Speaker 1: way to kind of tap into the digital growth opportunities

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Speaker 1: for ESPN. But ESPN still has a very steady and

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Speaker 1: desirable group of viewers. No, I mean, this isn't exactly

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Speaker 1: something that's going to go away. I know, it's it's

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Speaker 1: by far the most valuable cable network out there, and

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Speaker 1: it continues to grow revenue and profits continue to grow,

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Speaker 1: just at a slower growth rate um and so again

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Speaker 1: some investors at work, certainly, but it's you know, it's

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Speaker 1: it's half almost half the operating profit of the Walt

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Speaker 1: Disney Company. So it's a major driver of of the company.

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Speaker 1: So the question for the Walt Disney Company, like all

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Speaker 1: kick cable networks, is you know, how do they bring

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Speaker 1: their content direct to consumers? Uh, you know, through some

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Speaker 1: type of streaming service. UM. It looks like people are

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Speaker 1: on the margin cutting the cord. So you have to

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Speaker 1: think about new ways to reach your consumers with your content.

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Speaker 1: And you know, we've seen some examples like HBO has

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Speaker 1: taken Hbo direct to consumers. It's called HBO now and

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Speaker 1: you can subscribe to it directly, and you know, and

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Speaker 1: we're off to see, you know what ESPN decides to do.

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Speaker 1: You know, Paul, there's been some speculation that Disney might

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Speaker 1: spin off ESPN as its own entity. What do you

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Speaker 1: think the likelihood of that is. I think in a

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Speaker 1: near to intermediate term, that's very unlikely. Um. This is

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Speaker 1: still again half of the almost half of the operating

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Speaker 1: profit of the company here, so it's a major part

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Speaker 1: of the business. UM and it's still a extraordinarily valuable

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Speaker 1: part of the business. Throws off tremendous amounts of free

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Speaker 1: cash flow. But I think to the extent that they

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Speaker 1: ever get to the point where, you know, the growth rate,

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Speaker 1: you know, turns materially negative and it ends up being

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Speaker 1: a real drag on the valuation, which I don't think

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Speaker 1: it is now. Then clearly there will be an opportunity

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Speaker 1: to to spin this asset out, and there'll be a

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Speaker 1: lot of demand for that, but I don't think that's

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Speaker 1: anything in the near term. Paul, I wonder if there's

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Speaker 1: anybody that has access to the Internet that doesn't either

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Speaker 1: pay a telephone company or a k able company some money.

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Speaker 1: We're talking about like cable operators, whether it's Comcast or Charters, Spectrum, Verizon,

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Speaker 1: so on. Right. Well, and unless you're a millennial, so

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Speaker 1: the younger demos are in fact are kind of corded

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Speaker 1: never's if you will. They've never signed up to any

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Speaker 1: kind of pay TV service. Um. And so the question is,

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Speaker 1: you know, how do you reach those people? Um? And

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Speaker 1: there's actually that that percentage of the population is actually growing,

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Speaker 1: the folks that do not pay it's a small percentage today,

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Speaker 1: but it's growing. Where do they get their service? Where

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Speaker 1: do they get their connection to the internet? Just public WiFi? Well,

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Speaker 1: they'll get it, yeah, you're right, So they'll they'll either

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Speaker 1: get a public WiFi or maybe they'll just subscribe to

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Speaker 1: a standalone you know, uh, broadband connection through a cable

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Speaker 1: company or through a telephone company. But the question is

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Speaker 1: will they pay for a big video product, and that

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Speaker 1: you know, on the margin, the millennials tend not to

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Speaker 1: be doing that. But again, if you're isn't that what

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Speaker 1: T mobile I was gonna say, isn't that what T

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Speaker 1: Mobile was trying to do by giving away? We're not

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Speaker 1: giving away, but like getting you unlimited video for certain

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Speaker 1: types of video. Fair does Disney needed that kind of

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Speaker 1: more direct pipe into people's homes? I think they do

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Speaker 1: um and I think they're moving, but they're moving more

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Speaker 1: slowly than others are. And the reason to moving more

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Speaker 1: slowly is because they have more to lose. They get

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Speaker 1: almost seven dollars per subscriber per month for ninety millions

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Speaker 1: subscribers to ESPN. It's hard to walk away from that

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Speaker 1: order even potentially cannibalize that business. So that that's why

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Speaker 1: they've been more reluctant to do that versus some other companies.

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Speaker 1: But you know, you take a look at a T

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Speaker 1: and T. One of the big reasons that they bought

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Speaker 1: a Time Warner is because they have you know, so

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Speaker 1: many wire line and wireless customer relationships, but they don't

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Speaker 1: have any content and so that's why they stepped up

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Speaker 1: to pay eighty five billion dollars for Time Warner. Well,

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Speaker 1: talking about Time Warner, they have a strategy that perhaps

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Speaker 1: others will adopt, squeezing cable and satellite distributors for more

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Speaker 1: and more money. And this is one of the reasons

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Speaker 1: why they reported better than expected earnings. Correct. Yeah, the

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Speaker 1: numbers came in a very very strong for them, a

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Speaker 1: good good quarter for them, which is nice for a

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Speaker 1: T and t um. The big driver for Time Warner

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Speaker 1: was the fact that they did continue you to have

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Speaker 1: strong affiliate feed growth in their cable networks and that

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Speaker 1: about affiliate feed growth year of a year, which is

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Speaker 1: by far the best in the industry. What was driving

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Speaker 1: that is they just over the last two to three

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Speaker 1: years renegotiated most of their distribution contracts with the cable

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Speaker 1: companies and the satellite companies and they were able to

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Speaker 1: get big increases. The reason they were able to get

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Speaker 1: big increases is because they just invested a ton of

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Speaker 1: money in their programming, particularly sports programming, uh the NBA,

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Speaker 1: in the n c a A. Uh So they put

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Speaker 1: their money where their mouth is. And then they turned

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Speaker 1: around the distributors and they're like, Okay, we're giving you

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Speaker 1: better content. We want to get paid more, and they did.

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Speaker 1: Thank you so much. Paul Sweeney, director of North American

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Speaker 1: Research and media analyst for Bloomberg Intelligence. P and L

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Speaker 1: made Smarter. Pim Fox, I know that you've been looking to,

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Speaker 1: uh potentially buy a Jaguar Land Rover. If you want

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Speaker 1: to do it, you need to buy it soon because

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Speaker 1: it could cost seventeen dollars more than it costs Now.

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Speaker 1: I want to bring in somebody knows all about this.

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Speaker 1: Alan Baum, principle at Baum and Associates, a Michigan based

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Speaker 1: research firm that just did a study looking at how

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Speaker 1: much auto prices could increase as a result of the

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Speaker 1: border tax. Some pretty big numbers, huh, Allan, yeah, and

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Speaker 1: Tim that seventeen thousand may not to pass. That's what

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Speaker 1: the numbers say in terms of our analysis. Obviously, companies

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Speaker 1: will make their own decisions on what the how they

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Speaker 1: would price their product, right, But the point stands that

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Speaker 1: basically the border tax will make it a lot more

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Speaker 1: expensive for some companies, and more so than than others.

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Speaker 1: For example, Volvo or Mitsubishi or Volkswagen would face a

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Speaker 1: bigger challenge than say Ford or General Motors, right, And

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Speaker 1: it's based upon where they make their product, the price

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Speaker 1: of the product, and how much of the product, even

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Speaker 1: if it's made in the US, is imported. Um and

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Speaker 1: so Jaguars obviously and land Rover obviously on the far

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Speaker 1: end there because their products are imported and their high price. Well, Alan,

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Speaker 1: for the record, I'm I'm all. I'm a public transport person,

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Speaker 1: so I I just gaze into the windows of the showrooms.

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Speaker 1: But if I were to gaze under the hood, I

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Speaker 1: might find that most of what's in there, at least

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Speaker 1: some of it anyway, was be made in Cana the

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Speaker 1: in Mexico, right, because GM and other automakers are still

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Speaker 1: facing this uncertainty because of the president's vow to institute

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Speaker 1: this border tax. And from the Center of Automotive Research,

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Speaker 1: they say that's seventies six percent of the seating and

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Speaker 1: interior trim come from outside the US. Electronics more than

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Speaker 1: six engine. I mean, if you want to break system,

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Speaker 1: chances are it's you know, might come from overseas or

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Speaker 1: somewhere outside the US. What are they going to do

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Speaker 1: to change that? That's a big deal. And of course

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Speaker 1: it's based upon labor UH and scale and so you

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Speaker 1: want to do UH, you know, for the kind of

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Speaker 1: investment that you're gonna be making there, you're gonna make

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Speaker 1: large volumes and so yes, that is clearly the the issue.

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Speaker 1: The other thing that that our study showed is a

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Speaker 1: company like Sword UH that makes small and midsize cars

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Speaker 1: UH in Mexico, as opposed to f C A UH

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Speaker 1: and UH and GM both make large pickups. A company

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Speaker 1: like Ford is better off because the value of the

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Speaker 1: products they're shipping from Mexico is less than that of

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Speaker 1: f C A UH and UH and GM. So that's

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Speaker 1: why you've seen Forward perhaps being a little more supportive

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Speaker 1: of this concept, although obviously all auto companies would prefer

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Speaker 1: to have their cost reduced um particularly their tax rates,

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Speaker 1: which seems to be something that's that's being considered, and

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Speaker 1: not have their taxes increased in the form of this

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Speaker 1: border tax. You know, I gotta say, on one level,

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Speaker 1: your study shows exactly why some people want this border tax,

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Speaker 1: because it essentially would incentivize these overseas companies to either

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Speaker 1: move jobs here removing the potential tax, or else not

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Speaker 1: be competitive in the same way. I mean, isn't that

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Speaker 1: exactly the point? Well, yeah, I mean, I'll be slee.

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Speaker 1: Mr Trump is is being responsive to the issues in

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Speaker 1: his campaign. The companies, of course, are less excited by

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Speaker 1: that because this is a global industry. They've been working

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Speaker 1: on that premise for years. Uh. And if we talk

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Speaker 1: about the Detroit Three, they are in fact making fewer

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Speaker 1: and fewer of their vehicles, not just in the US

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Speaker 1: but in North America because they're looking at ways to

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Speaker 1: improve their position across the globe. And the companies that

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Speaker 1: are based in Japan and Germany are in fact coming

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Speaker 1: here to produce because they're looking to do the same thing,

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Speaker 1: except in reverse, and that is increase their position here

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Speaker 1: in North America. Would that be a much more intelligent

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Speaker 1: way to move in your in your estimate, Well, those

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Speaker 1: have been the rules of the game. That's what automakers

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Speaker 1: and for that matter, businesses across the board have been doing,

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Speaker 1: uh to to capitalize. I mean, you know, the obvious

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Speaker 1: growth in the automotive market in terms of volume is

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Speaker 1: not in North America, and for that matter, it's not

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Speaker 1: in Western Europe China. It's in China, and it's in

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Speaker 1: Eastern Europe, and so that's that's where the development is

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Speaker 1: coming now. The difference, of course, is the North American market,

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Speaker 1: particularly US, remains incredibly profitable relative to those markets, and

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Speaker 1: so obviously companies are very interested and attached to this market,

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Speaker 1: which of course is a good thing for us here

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Speaker 1: in the US particularly. I was just gonna say, particularly

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Speaker 1: if you're making pickup trucks and SUVs, that's correct. On

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Speaker 1: the other hand, uh, you uh, you don't want to

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Speaker 1: be making one set of products for North America and

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Speaker 1: one set of products for the rest of the world.

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Speaker 1: I seem to remember a bankruptcy or two that happened

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Speaker 1: in a few years back where that was part of

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Speaker 1: the problem. Thank you very much. Alan Baum is a

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Speaker 1: principle at Baum and Associates based in Michigan, doing a

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Speaker 1: lot of research on the automobile industry and visa. It

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Speaker 1: will be interest think to see how the Republican tax

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Speaker 1: plan actually moves forward, because they're getting a lot of

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Speaker 1: pushback from like, for example, automobile dealers. Will be interesting

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Speaker 1: also to see how much the foreign automakers have a

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Speaker 1: voice into the White House. Well, I'm gonna I'm gonna

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Speaker 1: give a round number. I'm going to give a round number,

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Speaker 1: well almost round number A hundred and two. That is

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Speaker 1: the ranking for company. It's not around number I said.

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Speaker 1: It's not around number A hundred and fifty. Maybe it

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Speaker 1: would be the round number, but it is okay, a

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Speaker 1: hundred fifty second place. Molus ranks in global equity. Tell

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Speaker 1: people what right is a boutique firm? And somehow they

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Speaker 1: managed to win the assignment to manage the most coveted

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Speaker 1: I p O of this century arguably. I want to

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Speaker 1: bring in Ruth Avid. She's an IPO and deals reported

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Speaker 1: for Bloomberg in London. Ruth, how did Bollas get this. Hi,

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Speaker 1: that's a great question, since everyone has been trying their

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Speaker 1: hardest to get on this deal. And I think you

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Speaker 1: know you've you've heard of banks going and pitching this

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Speaker 1: for months, and we had something last month saying that

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Speaker 1: ever Cohen Mollis had been shortlisted. But keep in mind

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Speaker 1: that these are just the boutique banks that are getting

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Speaker 1: on the mandate, right, they're also speaking to the global

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Speaker 1: investment banks, so the Goldman Sachs and hsbcs and city

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Speaker 1: groups of the world to get more of them in.

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Speaker 1: I mean, you're talking about a company that says it's

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Speaker 1: going to have a valuation of two trillion dollars, So

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Speaker 1: you'd imagine even if they list like a five percent stick,

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Speaker 1: that's a hundred billion I p o. And, as you said,

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Speaker 1: probably the largest of the century. Um, it's gonna take

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Speaker 1: a lot of banks and a lot of people to

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Speaker 1: get it over the line. Can you give a little

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Speaker 1: detail of the people involved in making this decision and

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Speaker 1: how this is going to affect the other investment banks.

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Speaker 1: I think investors are taking into account of fact that

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Speaker 1: this is a big coup for Mulist and there's going

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Speaker 1: to be you know, I mean it is the It

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Speaker 1: is the government which will have a big say in

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Speaker 1: who gets the mandates and what kind of do we

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Speaker 1: know the people? For example, I mean do we know

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Speaker 1: the key people involved in making this happen? I mean

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Speaker 1: this is a relationship business. Yes. I mean if you're saying,

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Speaker 1: is ken Molly's pitching strongly? Yes, and he's doing a

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Speaker 1: great job at it, Like I just want to know

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Speaker 1: more about him. You want to know, like who did

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Speaker 1: he who do you have dinner with? Exactly? Just or well,

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Speaker 1: so I know a lot of the people came from

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Speaker 1: ups for example originally, Ruth. What I'm curious about is

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Speaker 1: what how much are the fees potentially that we're talking

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Speaker 1: about here, I mean, just to give a sense of

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Speaker 1: just how much bankers were salivating over this deal. So

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Speaker 1: typically I po fees are about two point five to

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Speaker 1: three percent of the deals size. But that's just you know,

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Speaker 1: that's just the overall numbers and not something to get

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Speaker 1: too excited about. Because state deals, and this is one

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Speaker 1: thing that whether it doesn't matter what market you're in,

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Speaker 1: a government deal is going to pay you much less

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Speaker 1: than a private company. So it's more of the prestige,

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Speaker 1: right and it's more of them, like oftentimes the underwriters

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Speaker 1: that would not be moreless, but the other big banks

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Speaker 1: managed to make money by getting commissions from the investors

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Speaker 1: that they bring in. So you'd imagine that fees would

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Speaker 1: probably be on government deals they're less than a percentage,

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Speaker 1: and then they'd be split between so many banks. But

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Speaker 1: this is going to help moreless when they go and

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Speaker 1: pitch for other roles. I mean, this is the biggest

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Speaker 1: I p or the biggest deal that they've ever done. Well,

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Speaker 1: this is well, this is certainly helping their stock today.

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Speaker 1: I mean the stock is you know, a dollar five

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Speaker 1: or thirty six seven. This is a stock that was trading,

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Speaker 1: you know, in thirty four now we're up to thirty six.

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Speaker 1: It seems that there's a model, is it or a a reason?

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Speaker 1: Is it because was the people behind you know, just

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Speaker 1: can since he owns you know, he's party owner of

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Speaker 1: the of the company, does that have anything to do

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Speaker 1: that what made them select this particular? Ken Mollis, I

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Speaker 1: think the it's not just I mean, so I don't

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Speaker 1: think it is just a relationship story. I think it's

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Speaker 1: also them looking at the other banks that were pitching

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Speaker 1: and trying to figure out which one would be the

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00:24:24,280 --> 00:24:27,240
Speaker 1: best for what they want to do, which one would

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00:24:27,240 --> 00:24:30,199
Speaker 1: be the would fit with what the Saudi government is

433
00:24:30,200 --> 00:24:32,399
Speaker 1: saying best, because you know, for instance, we know that

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00:24:32,520 --> 00:24:35,159
Speaker 1: Rothschild and Lazard. I've also been speaking to them and

435
00:24:35,200 --> 00:24:37,400
Speaker 1: typically those are the kind of boutique banks that get

436
00:24:37,440 --> 00:24:39,719
Speaker 1: in there. But they weren't on this deal at all.

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00:24:39,720 --> 00:24:41,639
Speaker 1: I mean even last week last month when we were

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00:24:41,640 --> 00:24:44,520
Speaker 1: talking about banks being shotlisted, it was ever Coen Mollis.

439
00:24:44,600 --> 00:24:47,120
Speaker 1: So they probably wanted a bank that is not very

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00:24:47,160 --> 00:24:49,760
Speaker 1: well known and where they think even to an extent

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00:24:49,800 --> 00:24:52,240
Speaker 1: they may be able to avoid leaks and have them

442
00:24:52,280 --> 00:24:56,600
Speaker 1: working in secrecy on this that that probably wasn't so successful.

443
00:24:57,359 --> 00:24:59,560
Speaker 1: Um and and so now these banks are going to

444
00:24:59,640 --> 00:25:01,800
Speaker 1: be working the bigger investment banks when they come in

445
00:25:02,160 --> 00:25:04,840
Speaker 1: and managing everything and trying to get this deal off

446
00:25:04,840 --> 00:25:06,199
Speaker 1: the ground. But keep in mind, this is not going

447
00:25:06,240 --> 00:25:08,400
Speaker 1: to happen until the first or second quarter of two

448
00:25:08,400 --> 00:25:11,720
Speaker 1: thousand and eighteen. And that's an optimistic prediction. So the

449
00:25:12,080 --> 00:25:14,840
Speaker 1: great I mean, the investors are that are coming into

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00:25:14,880 --> 00:25:18,600
Speaker 1: the stock today are making a long term bed and

451
00:25:18,760 --> 00:25:21,280
Speaker 1: and well, I guess we'll have to see what happens

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00:25:21,320 --> 00:25:23,040
Speaker 1: you say that this want to take place until the

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00:25:23,040 --> 00:25:28,280
Speaker 1: first quarter. Well, yeah, first, second, third, yes, but it's

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00:25:28,400 --> 00:25:30,480
Speaker 1: it's not a two thousand seventeen deal, is what I'm

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00:25:30,480 --> 00:25:32,440
Speaker 1: trying to say. Yeah, got it. Yeah, it's already priced in.

456
00:25:32,560 --> 00:25:34,959
Speaker 1: Thank you very much for illuminating all this for us.

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00:25:34,960 --> 00:25:38,159
Speaker 1: Sir Ruth David I p O and deals reporter for Bloomberg.

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00:25:44,000 --> 00:25:46,480
Speaker 1: Thanks for listening to the Bloomberg P and L podcast.

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00:25:46,840 --> 00:25:50,640
Speaker 1: You can subscribe and listen to interviews at iTunes, SoundCloud,

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Speaker 1: or whatever podcast platform you prefer. I'm pim Fox. I'm

461
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Speaker 1: out there on Twitter at pim Fox. I'm out there

462
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Speaker 1: on Twitter at Lisa Abramo. It's one before the podcast.

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00:26:01,320 --> 00:26:12,399
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