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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the

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Speaker 1: Bloomberg Intelligence podcast. Catch us live weekdays at ten am.

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Speaker 1: He's done on Applecarplay and Android Auto with the Bloomberg

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Speaker 1: Business App. Listen on demand wherever you get your podcasts,

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Speaker 1: or watch us live on YouTube.

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Speaker 2: There is a mega deal in the mining industry today.

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Speaker 2: The UK's Anglo American has agreed to buy Canada's Tech Resources.

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Speaker 2: This is going to create a more than fifty billion

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Speaker 2: dollar company and it is one of the biggest mining

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Speaker 2: deals we've seen in about ten years. And here to

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Speaker 2: break it down for us, as Richard Burke, Bloomberg Intelligence

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Speaker 2: Senior analyst, Basic Materials, You've got a busy day here, Richard,

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Speaker 2: thanks so much for coming and we appreciate it. The

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Speaker 2: company is presenting this as a zero premium transaction. Just

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Speaker 2: tell us what that is.

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Speaker 3: Okay.

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Speaker 4: So what they've done is it's a merger of equals

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Speaker 4: and it's kind of interesting even though it's label mergers

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Speaker 4: equal that American Angle shareholders are gonna end up owning

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Speaker 4: about two thirds of the company roughly, and Tech has

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Speaker 4: got shareholders gonna end up owning a third of company

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Speaker 4: well it's gonna be headquarter in Canada. The board is

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Speaker 4: gonna be fifty to fifty the city and the management

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Speaker 4: is gonna be fifty to fifty. So even though it's

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Speaker 4: kind of you know, no premium, merger equals kind of

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Speaker 4: you know that the governance issues kind of point to

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Speaker 4: merger equals and that's really probably structured in order to

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Speaker 4: get approved by the Investment Act, Canada Investment Act. And

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Speaker 4: also the Kevil family that owns Tech has two classes

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Speaker 4: share holders, class Class A and Class B. Class A

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Speaker 4: is super voting rights. He's owned, he owns the majority

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Speaker 4: of those shares, so he has to approve this deal.

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Speaker 4: In the past, he you know, glenn Core when Glencourt

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Speaker 4: tried to buy them about two years ago, he kind

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Speaker 4: of veto the deal. So the deal and go through.

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Speaker 4: So there's kind of a unique structure this deal to

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Speaker 4: kind of you know, fit it through final approval makes sense.

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Speaker 5: Okay.

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Speaker 6: So there's also language in the statement of this so

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Speaker 6: called merger of equals that would allow both firms to

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Speaker 6: consider unsolicited proposals and for the deal to end if

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Speaker 6: there's a better offer. Does that mean they're angling for

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Speaker 6: some counter offer from someone else?

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Speaker 4: Well, I think it would be a hard press, I

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Speaker 4: doubt in order to get it through the Canadian Investment Act,

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Speaker 4: which you know, coppers now being considered a critical material,

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Speaker 4: critical mineral. H Canada has said they don't want to

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Speaker 4: see ay their mining companies go away. So would somebody

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Speaker 4: come in who can pay that much be wanting or

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Speaker 4: to PHP or Rio Tinto be wanting to move their

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Speaker 4: headquarters from where they're at to Canada. I highly doubt it. So,

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Speaker 4: but I think you have to put that language in

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Speaker 4: the deal that hey, we're open.

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Speaker 5: To so it's like boiler plate language.

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Speaker 4: Plate and also prevent that, you know, get sued by

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Speaker 4: shareholders that you have to go out and looked at

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Speaker 4: for all fields.

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Speaker 3: Right.

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Speaker 2: Do you think that this deal though, between Anglo American

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Speaker 2: and Tech is going to be the thing that sort

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Speaker 2: of ignites more M and A in this industry.

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Speaker 4: I think, you know, they used to be all saying

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Speaker 4: I used to cover oil and gas industry years ago

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Speaker 4: before more focused on those mining there's you used to

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Speaker 4: be on saying it's cheaper draw on Wall Street and

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Speaker 4: then drill up in the field. And that seems to

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Speaker 4: be happening in if you look at how much it

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Speaker 4: costs to you know, get a new copper deposit up

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Speaker 4: and running. Also, how many years were permitting and all

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Speaker 4: the other things that happens. You can see that maybe

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Speaker 4: you sit down and look at this and say, okay,

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Speaker 4: maybe cheaper draw out you know mine on Wall Street.

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Speaker 4: Then go out and make.

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Speaker 6: The mind okay, before this deal is announced, we've seen it.

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Speaker 6: Both companies have tried to simplify their businesses. Tech sold

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Speaker 6: the majority of its coal business to glen Core. Anglo

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Speaker 6: American exited the platinum business and is trying to sell

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Speaker 6: its coal mines and wants to get rid of its

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Speaker 6: de Beer's diamond unit. Is that going to continue that

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Speaker 6: effort and will it be harder or easier to do

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Speaker 6: that as part of this giant company.

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Speaker 7: Well, they're both going to.

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Speaker 3: Angle.

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Speaker 4: Is going to continue to try to sell coal business

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Speaker 4: and sell the beers. They think they're going to get

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Speaker 4: it done before the deal closed. The deal is supposed

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Speaker 4: to close full eighteen months. They said, those are you know,

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Speaker 4: and Tech was you know two three years ago. There

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Speaker 4: was a big push for green companies. Coal is viewed

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Speaker 4: as very dirty and things like that. Right, we've seen

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Speaker 4: companies trying to get out of that business to kind

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Speaker 4: of be shareholders, especially over in Europe, a bigger push

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Speaker 4: much than in the US. So I still see those

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Speaker 4: actions continuing.

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Speaker 2: It's being built as a merger of equals. But I'm

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Speaker 2: wondering if one party here is getting a better deal

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Speaker 2: than the other, because if you look at Anglo American,

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Speaker 2: if this happens for them, they're going to get that

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Speaker 2: high quality copper asset, right which is really coveted in

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Speaker 2: the industry. Would you agree that Anglo Americans sort of

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Speaker 2: has a better end of the bargain here.

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Speaker 4: Well, the question is Tech has had problems bringing a

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Speaker 4: new mind on QB, cuber broad Online. And the question

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Speaker 4: is somebody one of the investors I was talking this morning, goes, well, yes,

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Speaker 4: if QB gets fixed and everything runs, it looks like

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Speaker 4: a great deal for Angle. But are you buying a

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Speaker 4: fixer upper or no? You know, and Tech, honestly, you know,

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Speaker 4: they've been very good operators in cold business. They've got

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Speaker 4: act exit a cold business. They haven't been as good

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Speaker 4: operators in the copper business. So to bring in some expertise,

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Speaker 4: Angle has a little more expertise in the copper business.

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Speaker 4: It may help them, you know the value there.

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Speaker 6: Richard, you mentioned that Canada needs to approve this deal.

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Speaker 6: I believe the regulators in China and the US need

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Speaker 6: to as well. Which countries are going to be hardest

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Speaker 6: to get approval from?

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Speaker 4: Well, I think it all depends. You know, a year ago,

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Speaker 4: I would say said Canada. But given that China probably

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Speaker 4: considers copper critical mineral. Now that me and giving the

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Speaker 4: how the geopolitics that are going on in the world,

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Speaker 4: it may be there's going to be everybody taking a

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Speaker 4: kind of a very measured look at this deal before

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Speaker 4: it gets approved.

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Speaker 5: Stay with us. More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us Live

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Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get podcasts, or watch us live on YouTube.

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Speaker 5: All right, let's go back to the Dell story.

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Speaker 6: I look at the shares, and the shares are on

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Speaker 6: a downtrend right now, at least for this morning, down

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Speaker 6: two and a half percent for one hundred and nineteen dollars. Woojenhoe.

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Speaker 6: We've been promising that he'd come over and make us

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Speaker 6: smarter on this. Wujinho is senior technology analyst at Bloombrick Intelligence,

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Speaker 6: the CFO of Von McGill, stepping down after two years

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Speaker 6: in the role. What does the share price drop reflect exactly,

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Speaker 6: wujin Is it fear that a key member of the

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Speaker 6: management team is leaving and others might follow her?

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Speaker 5: What do you think is going on?

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Speaker 8: Yeah, hey, hey, scyle, So I think it's it's more

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Speaker 8: along the lines of the timing of her departure. Keep

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Speaker 8: in mind that these guys reported two weeks ago that

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Speaker 8: could have been a time where she could have announced

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Speaker 8: her resignation, and the analyst date is about a month away.

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Speaker 8: There's another time she could have set the numbers straight

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Speaker 8: there and then resign there. So it's just a more

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Speaker 8: of a timing aspect of it than anything else. I

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Speaker 8: think what brings a little bit of confidence to the

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Speaker 8: shares is that the company reaffirmed the third quarter guidance

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Speaker 8: as well as a full year guidance for all intent

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Speaker 8: and purposes, and that's backed by the COO, Jeff Clark

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Speaker 8: and the CEO of Michael dell.

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Speaker 2: Usihon why did Miguil leave? Do we know why? Did

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Speaker 2: she resign No one.

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Speaker 8: Knows, you know. On the analyst callback last night, the example,

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Speaker 8: the reasoning was more along the lines up She's been

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Speaker 8: at Dell for over thirty years and she went through

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Speaker 8: multiple she took Dell through multiple transitions, and it seemed

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Speaker 8: like a case of burnout. I mean, it's really tough

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Speaker 8: to say what the personal reasonings may be. But we

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Speaker 8: don't think there's another jobs that she may be going after,

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Speaker 8: given that she is going to be sticking around for

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Speaker 8: an interim period. But it may have been more for

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Speaker 8: personal reasons than anything else.

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Speaker 6: Okay, so it may have been more for personal reasons

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Speaker 6: than anything else. Tell us a little bit more about

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Speaker 6: Della's prospects right now. You mentioned that they read from

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Speaker 6: their guidance, so that should be something somewhat soothing to investors.

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Speaker 6: And they had just reported earnings where they beat earning estmates,

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Speaker 6: yet the stock was down nonetheless, Does that mean that

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Speaker 6: perhaps there's a little bit of rebalancing here in terms

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Speaker 6: of expectations for what del can achieve going forward.

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Speaker 8: Yeah, so let's let's address both. Let me address the

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Speaker 8: CFO search first. You know, as I noted in my

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Speaker 8: comments yesterday, my written comments yesterday. Look, they have a

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Speaker 8: deep bench right and and the person coming in to

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Speaker 8: take the interim role. You know, I think David Kennedy

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Speaker 8: he's going to He's the CFO of their Consumer Solutions Group,

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Speaker 8: which pretty much handles the PC group, so he's just

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Speaker 8: easily slide right in. As well as Jeff Clark being

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Speaker 8: a steady hand on the CEO role. He knows the

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Speaker 8: finances of the company. Well, you know, are they going

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Speaker 8: to look INTERNALLYI er, accidentally, I don't know. I mean,

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Speaker 8: I wouldn't be surprised if they just appoint Kennedy as

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Speaker 8: a CFO, you know, ultimately, but we'll see, we'll see

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Speaker 8: what happens now. You know, you actually bring a pretty

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Speaker 8: good question, right. The company is evolving. You know, if

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Speaker 8: we think about the company's business model, AI just came

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Speaker 8: out of nowhere, you know, prior, you know, right after

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Speaker 8: Yvonne uh took the cf C CFO role, and that

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Speaker 8: business is going to be as large as a traditional

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Speaker 8: services ser server business in about in about a year

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Speaker 8: or so. And however, that comes with lower margin. So

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Speaker 8: there is going to be a margin aspect of the

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Speaker 8: business that the new CFO will need to manage going forward.

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Speaker 8: On top of that a pretty I guess, a stable

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Speaker 8: but competitive PC market going forward.

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Speaker 6: Stay with us. More from Bloomberg Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten a m. Eastern Apple Cocklay and Android

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Speaker 1: you get your podcasts, or watch us live on YouTube.

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Speaker 2: I want to move over now and talk about our

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Speaker 2: big take on Bloomberg today. It's a good one. Puts

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Speaker 2: forth this idea that the Trump administration is going to

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Speaker 2: war with established climate science when you consider mass firings,

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Speaker 2: regulatory rollbacks. There have been funding cuts, ongoing program closures, etc. Etc.

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Speaker 2: Eric Rost and Bloomberg Climate Reporter, one of the authors

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Speaker 2: of this report on the Bloomberg terminal. And Eric, thanks

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Speaker 2: so much for joining us here in the studio. Just

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Speaker 2: sort of break down for us all of these changes happening.

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Speaker 2: How do they actually impact the US's ability to gather

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Speaker 2: data in this area.

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Speaker 9: Yeah, I'll start with that last part, right, Whether you

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Speaker 9: are a mayor of a city, or head of an

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Speaker 9: insurance company, or head of an I culture company, everyone

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Speaker 9: throughout the economy public and private sector needs good information

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Speaker 9: to make good decisions, and the US in recent decades

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Speaker 9: has had the global leadership role in developing the kinds

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Speaker 9: of data that everybody needs in order to see what's coming,

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Speaker 9: to set insurance rates, to understand whether we should build

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Speaker 9: a house here, to understand if this floodplane is going

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Speaker 9: to be a bad place to build houses. And so

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Speaker 9: that's the data we're talking about here, is actionable data

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Speaker 9: that people in the economy have come to rely on

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Speaker 9: to make decisions. To cite one of the many examples

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Speaker 9: we talk about in the story.

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Speaker 7: The US produces it's supposed to be.

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Speaker 9: Not more than every four years national Climate Assessment, which

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Speaker 9: is a huge amount of time and a huge amount

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Speaker 9: of time, and they take, you know, years to develop,

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Speaker 9: hundreds of people to write, and thousands of papers that

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Speaker 9: they're based on. And you see these reports cited in

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Speaker 9: Travelers earning calls and Chipotle earning calls, and reports in Marriott.

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Speaker 9: You know, brands we see every day understand the material

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Speaker 9: and understand the needs of this material. I'm not putting

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Speaker 9: words in their mouth. I'm just pointing out that they

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Speaker 9: say things like this. Those were taken away from public view.

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Speaker 9: So I think that's an interesting place to start on

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Speaker 9: because like, yeah, the government, like any government, can be

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Speaker 9: cut right and save money, and it's just the nature

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Speaker 9: of bureaucracy. But why are some of the most authoritative

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Speaker 9: and well vetted scientific reports ever written being taken away

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Speaker 9: from public view where they've been for many years?

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Speaker 6: All good questions. I'm sure that we won't get answers

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Speaker 6: to them right away either. So what does it mean

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Speaker 6: if you're a company like Travelers and you're relying on

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Speaker 6: that data?

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Speaker 5: Do you can you go to private sources for that

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Speaker 5: kind of information?

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Speaker 7: Does that exist? It's that's a great question.

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Speaker 9: Uh, And if we had like another two hours, i'd

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Speaker 9: love to you know, because we've spent a lot of

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Speaker 9: time uh in the last few years on the private sectors.

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Speaker 9: Uh uh, you know, filling a hole in useful climate

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Speaker 9: data that that businesses, uh, the businesses needs.

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Speaker 7: So the short answer is, yes, some.

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Speaker 9: Of uh this this this data, a lot of it

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Speaker 9: is like translated into the language of risk for companies.

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Speaker 7: It does exist.

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Speaker 9: The bigger concern is, like, that's a tiny fraction of

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Speaker 9: what we're talking about here, you know, we're talking about

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Speaker 9: you know, very sophisticated uh computer models that like the

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Speaker 9: entire world relies on to make sense of you know,

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Speaker 9: observation we see and weather stations and in you know,

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Speaker 9: in other sources and a particularly you know, I don't know,

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Speaker 9: I'll get in trouble for saying this, but this could

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Speaker 9: be described as like the most boring kind of data

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Speaker 9: is also some of the most important, and that is

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Speaker 9: unsexy data. Unsexy data. It's like continuous monitoring data. It's

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Speaker 9: you know, it's very important for some kinds of data

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Speaker 9: that you have a complete, unbroken record.

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Speaker 7: The most iconic one in.

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Speaker 9: This space is the CO two measurements from Hawaii and

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Speaker 9: Manta Loa that have been going on since the late

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Speaker 9: nineteen fifties and are largely responsible for the discovery of

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Speaker 9: global warming. Like that data set, one of the most

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Speaker 9: famous data sets ever collected, was slated for closure in

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Speaker 9: the recent White House budget.

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Speaker 5: Stay with us more from Bloomer Intelligence coming up after this.

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Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live

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Speaker 1: weekdays at ten am Eastern on Apple Cocklay and Android

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Speaker 1: Auto with the Bloomberg Business app. Listen on demand wherever

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Speaker 1: you get your podcasts or watch us live on YouTube.

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Speaker 2: But I want to talk now about the FED because

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Speaker 2: that's what we keep doing here as we lead up

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Speaker 2: to next week's meeting and Wall Street's betting on the

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Speaker 2: FED handing us our first interest rate cut of the year.

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Speaker 2: How large of a cut is still up for debate.

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Speaker 2: But what's it going to mean for banks, especially those

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Speaker 2: regional banks. Well, who better to talk about it than

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Speaker 2: John Buren is CEO of Flushing Financial and he joins

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Speaker 2: us here now in our studios. John, good to see.

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Speaker 3: You, Great to be here.

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Speaker 2: I'm just curious because I know that smaller banks can

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Speaker 2: usually be more nimble when there's policy change. What are

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Speaker 2: you looking for from the FED next week and how

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Speaker 2: are you positioning your bank to take advantage of whatever

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Speaker 2: it is they do.

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Speaker 3: Well, we're in a great position. If the FED cuts rates,

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Speaker 3: our funding call us go down and demand starts to

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Speaker 3: pick up. So we've been dealing with for about two

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Speaker 3: years with a pretty much a inverted yield curve, and

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Speaker 3: that is not the best place for banks to be.

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Speaker 3: So banks tend to, particularly community banks, tend to borrow

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Speaker 3: a little bit on the short side and lend a

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Speaker 3: little bit more on the long side of the yield curve,

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Speaker 3: So having a more positively sloped yield curve would be

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Speaker 3: very very helpful. So if the FED reduces rates, that

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Speaker 3: reduces the shorter end of the yield curve. So we're

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Speaker 3: hopeful to see more than one, but we've got high

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Speaker 3: expectations for the one in September for sure.

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Speaker 7: And is it an impact for us?

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Speaker 6: As Alexis mentioned, this will be the first rate cut

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Speaker 6: of the year, so there's been a lot of anticipation

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Speaker 6: that bar and costs will come down. What kind of

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Speaker 6: preparations have your customers, your clients made for this rate cut?

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Speaker 6: I mean, are they ready to go when that rate

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Speaker 6: cut comes through?

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Speaker 9: Oh?

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Speaker 3: I think they've been ready for a while. They've been

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Speaker 3: holding back on investments clearly. So we've seen over the

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Speaker 3: course of these past couple of years really very very

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Speaker 3: low rate of investment, a very very low rate of

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Speaker 3: companies building more planted going into longer term investments. The

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Speaker 3: commercial real estate market is very, very very slow at

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Speaker 3: this point in time, so we have an expectation that

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Speaker 3: if those rates start to come down, that that will

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Speaker 3: generate a significant amount of business.

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Speaker 2: A lot of your business does come from the small

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Speaker 2: business and commercial side, right versus individual or residential. But

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Speaker 2: I'm wondering if those two markets are sort of in

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Speaker 2: lockstep with each other. Have they been?

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Speaker 3: Oh, they clearly are. I think, you know, I think

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Speaker 3: a reduction in rates will help housing costs as well

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Speaker 3: and possibly spark another round of refinance activity, which is

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Speaker 3: always very important in the real estate market.

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Speaker 6: You're very much exposed to multi family house lending, two

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Speaker 6: companies that are invested in that space. What can you

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Speaker 6: tell us about where things stand right now, because there's

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Speaker 6: an affordability crisis not just in New York but across

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Speaker 6: the nation, and I'm wondering how that plays out on

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Speaker 6: your customers and what that means for their demand for loans.

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Speaker 3: So the the multi family market has been pretty pretty

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Speaker 3: calm over the past couple of a couple of years,

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Speaker 3: between the raid environment and also the situation with respect

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Speaker 3: to you know, concerns about multi family in general. So

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Speaker 3: where we're at right now is that the that the

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Speaker 3: market is such that a reduction in rates will clearly

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Speaker 3: spark some refi activity, clearly spark some more investment in

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Speaker 3: the in the market. Now we're dealing also with concern

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Speaker 3: and concerns about the UH, the environment with respect to

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Speaker 3: the UH mayoral mayoral election, possible freeze on rates. But

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Speaker 3: when you look at it from a banking perspective, most

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Speaker 3: of the difficulties in this market have been non banks,

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Speaker 3: and banks that have done well in terms of their

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Speaker 3: UH stress testing their loans initially watching their capitalization rates

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Speaker 3: are really really in good shape. We have not seen

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Speaker 3: that predicted disaster that was going to take take place

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Speaker 3: in commercial real estate, and reduction and rates will just

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Speaker 3: help help to move us in a positive direction.

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Speaker 2: What is the regulatory landscape like for the for the

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Speaker 2: regional banks right now?

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Speaker 7: It has?

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Speaker 2: Has it been a friendly one for you over the

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Speaker 2: past few months.

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Speaker 3: It clearly is showing signs of improving. You know, for example,

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Speaker 3: h M and A activity is moving along very very quickly,

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Speaker 3: much more quickly than under the under the prior administration.

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Speaker 3: You know, clearly there's been a lot of discussion about

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Speaker 3: even reducing even increasing the UH. The cap on if

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Speaker 3: the I c averages is certainly out there as a

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Speaker 3: discussion item. So we're starting to see a much more

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Speaker 3: business friendly environment. Not all of it is in place yet,

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Speaker 3: but those pieces when they come together and particularly when

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Speaker 3: you know when the interest rate piece comes together. If

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Speaker 3: we see more than one and we're here in December

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Speaker 3: with reinterest rate cuts, I think that's a real impetus

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Speaker 3: for major, major economic activity.

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