HoldCo Asset Management and its managed funds (collectively, “HoldCo”) own 677,769 shares of common stock of Universal Corporation (“Universal”, “UVV”), approximately 2.7% of its outstanding shares. On May 23, 2018, Universal announced, in part, that it was increasing its dividend by 36% and that it remained committed to its historical strategy of increasing the dividend every year (as has been the case for an impressive 47 consecutive years), that it had repurchased a significant amount of common stock during its fourth fiscal quarter, and that it expects to continue to return excess capital to shareholders through future share repurchases (collectively, the “Announcements”).
HoldCo applauds these recent actions taken by UVV which satisfactorily address the most significant concerns raised by HoldCo in a draft presentation provided to senior management three months ago and a final version of the presentation (the “Presentation”) provided to the board of directors two months ago. The Presentation, sent to the board of directors on March 29, 2018, conveyed HoldCo’s view that the market price for UVV’s common stock reflected an extreme undervaluation driven by four fixable problems, including those related to capital allocation, investor engagement, management and board incentives, and board oversight. In this same presentation, HoldCo proposed numerous actions to address these problems (the most important of which was a commitment by Universal to return all free cash flow to shareholders), stated its desire to reach a mutually agreeable resolution with the board, and stated that absent such a resolution HoldCo intended to nominate three directors to Universal’s board at the 2018 annual meeting. A copy of the Presentation, parts of which have been redacted in the spirit of sensitivity and goodwill towards management and the board of Universal, and which has not been updated to account for recent developments, can be found at the following link:
“Universal’s recent announcements demonstrate that management and the board are willing to listen to its shareholders and do the right thing, and it is no surprise to us that these announcements have already been embraced by the marketplace. While management still has more levers to pull as detailed in our presentation, this is a big step in the right direction,” said Misha Zaitzeff, a member of HoldCo’s general partner. Added Vik Ghei, also a member of HoldCo’s general partner, “In light of these positive announcements, HoldCo has determined that it will not launch a proxy contest at Universal’s 2018 annual shareholder meeting.”
A simplified timeline of relevant events detailing HoldCo’s involvement with Universal is provided below:
Beginning in late 2017, HoldCo’s flagship fund began purchasing shares of Universal’s common stock.
Following its purchase, HoldCo had multiple phone calls (and written exchanges) with Universal.
On March 1, 2018, four HoldCo representatives met with certain members of Universal’s senior management team in Virginia and walked Universal through a draft presentation detailing its concerns and suggestions regarding Universal.
On March 29, 2018, HoldCo sent the Presentation to Universal’s board of directors.
On May 16, 2018, four HoldCo representatives met with two members of the board of directors in JP Morgan’s offices in New York.
On May 17, 2018, HoldCo was contacted by JP Morgan’s Head of Shareholder Activism Defense, who had been retained by Universal.
On May 23, 2018, Universal made the Announcements (as described above).
On May 28, 2018, HoldCo notified Universal that, in light of Universal’s Announcements, it had determined not to nominate directors to Universal’s board at the 2018 annual meeting.
About HoldCo Asset Management
HoldCo Asset Management is an investment adviser located in New York City. HoldCo was founded by Vik Ghei and Misha Zaitzeff. HoldCo and its affiliates currently have approximately $900 million in regulatory assets under management. With respect to Universal, HoldCo is utilizing the services of the law firm Thompson Hine LLP.
This press release, or the Presentation, is not a solicitation of authority to vote your proxy at any meeting of Universal or otherwise. Please do not send us a proxy card as it will not be accepted or voted.
As of the publication date of this document and link to the Presentation, HoldCo has a long position in the common stock of the company referenced herein. HoldCo will profit if the price of Universal’s common stock increases. HoldCo may change its views about its investment position in Universal at any time, for any reason or no reason, and at any time may change the form or substance of any of its investment positions in Universal. If it does so, it will not be under obligation to inform anyone. HoldCo is under no obligation to maintain its existing investment position in Universal and is free to purchase additional common shares or sell a portion or the entirety of its common shares in Universal at any time and without informing anyone.
All content in this document represents the opinions of HoldCo as of the date of its publication. HoldCo has obtained all information herein from publicly available sources it believes to be accurate and reliable. However, such information is presented “as is,” without warranty of any kind whether express or implied.
All content of the referenced Presentation represent the opinions of HoldCo solely on the date (March 29, 2018) that the Presentation was provided to Universal’s board of directors (such date, the “Presentation Date”). HoldCo’s opinions may have changed following the Presentation Date and may today be substantially different than those expressed in the Presentation. HoldCo stresses that the Presentation was an imperfect but genuine effort to piece together public information to formulate answers to some of the most pressing questions that it had about Universal. In addition, HoldCo stresses that many facts (and the resultant conclusions) in the Presentation have changed since the Presentation Date including the fact that following the Announcements, Universal’s stock price has appreciated substantially and prices of securities that are compared to Universal in the presentation have also experienced material changes (and in certain cases, material declines). HoldCo obtained all information in the Presentation from publicly available sources on or around the Presentation Date they believed to be accurate and reliable and presented the data through various calculations and illustrations as it felt appropriate on the Presentation Date. However, such information is presented “as is,” without warranty of any kind whether express or implied, and Presentation may have errors.
This document is for informational purposes only and is not intended as an official confirmation of any transaction. All data and other information are not warranted as to completeness or accuracy and reflect HoldCo’s views as of this date (or in the case of the Presentation, as of the Presentation Date), all of which are accordingly subject to change without notice.
This document and referenced Presentation do not in any way constitute an offer or solicitation of an offer to buy or sell any investment, security, or commodity discussed herein, or any security in any jurisdiction in which such an offer would be unlawful under the securities laws of such jurisdiction.
HoldCo reserves all rights that it may against Universal, its subsidiaries, its affiliates and its representatives.
The information contained in this document (or in the Presentation) may include, or incorporate by reference, forward-looking statements, which would include any statements that are not statements of historical fact. These forward-looking statements may turn out to be wrong and can be affected by inaccurate assumptions or by known or unknown risks, uncertainties and other factors, most of which are beyond HoldCo’s control.
HoldCo and its employees are not tax lawyers or accountants and nothing stated herein should be used or relied upon without consultation with your advisors including tax lawyers and tax accountants.
Sunak to use budget to expand apprenticeships in England
LONDON (Reuters) – British finance minister Rishi Sunak will announce more funding for apprenticeships in England when he unveils his budget next week, the government said on Friday.
Employers taking part in the Apprenticeship Initiative Scheme will from April 1 receive 3,000 pounds ($4,179) for each apprentice hired, regardless of age – an increase on current grants of between 1,500 and 2,000 pounds depending on age.
The scheme will extended by six months until the end of September, the finance ministry said.
Sunak will also announce an extra 126 million pounds for traineeships for up to 43,000 placements.
Sunak’s March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown, but he will also probably signal tax rises ahead to plug the huge hole in the public finances.
Sunak is also expected to announce a “flexi-job” apprenticeship scheme, whereby apprentices can join an agency and work for multiple employers in one sector, the finance ministry said.
“We know there’s more to do and it’s vital this continues throughout the next stage of our recovery, which is why I’m boosting support for these programmes, helping jobseekers and employers alike,” Sunak said in a statement.
(Reporting by Andy Bruce, editing by David Milliken)
UK seeks G7 consensus on digital competition after Facebook blackout
LONDON (Reuters) – Britain is seeking to build a consensus among G7 nations on how to stop large technology companies exploiting their dominance, warning that there can be no repeat of Facebook’s one-week media blackout in Australia.
Facebook’s row with the Australian government over payment for local news, although now resolved, has increased international focus on the power wielded by tech corporations.
“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday.
“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”
Dowden said recent events had strengthened his view that digital markets did not currently function properly.
He spoke after a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.
“I put these concerns to Facebook and set out our interest in levelling the playing field to enable proper commercial relationships to be formed. We must avoid such nuclear options being taken again,” Dowden said in a statement.
Facebook said in a statement that the call had been constructive, and that it had already struck commercial deals with most major publishers in Britain.
“Nick strongly agreed with the Secretary of Stateâ€™s (Dowden’s) assertion that the governmentâ€™s general preference is for companies to enter freely into proper commercial relationships with each other,” a Facebook spokesman said.
Britain will host a meeting of G7 leaders in June.
It is seeking to build consensus there for coordinated action toward “promoting competitive, innovative digital markets while protecting the free speech and journalism that underpin our democracy and precious liberties,” Dowden said.
The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada, but Australia has also been invited.
Britain is working on a new competition regime aimed at giving consumers more control over their data, and introducing legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.
(Reporting by William James; Editing by Gareth Jones and John Stonestreet)
Britain to offer fast-track visas to bolster fintechs after Brexit
By Huw Jones
LONDON (Reuters) – Britain said on Friday it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.
Finance minister Rishi Sunak said that now Britain has left the European Union, it wants to make sure its immigration system helps businesses attract the best hires.
“This new fast-track scale-up stream will make it easier for fintech firms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.
Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.
Brexit cut fintechs’ access to the EU single market and made it far harder to employ staff from the bloc, leaving Britain less attractive for the industry.
The review published on Friday and headed by Ron Kalifa, former CEO of payments fintech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound ($1.39 billion) start-up fund.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.
Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.
The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.
It also recommends more flexible listing rules for fintechs to catch up with New York.
“We recognise the need to make the UK attractive a more attractive location for IPOs,” said Britain’s financial services minister John Glen, adding that a separate review on listings rules would be published shortly.
“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”
Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
A UK fintech wanting to serve EU clients would have to open a hub in the bloc, an expensive undertaking for a start-up.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” Swinburne said.
The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
($1 = 0.7064 pounds)
(Reporting by Huw Jones; editing by Jane Merriman and John Stonestreet)
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