By Milana Vinn

(Reuters) – The private equity owner of Intermedia Cloud Communications is exploring options including a sale that could value the communications services provider at more than $1 billion, including debt, according to people familiar with the matter.

Buyout firm Madison Dearborn Partners is working with investment bank Evercore on a sale process for Intermedia, which is expected to start in the coming weeks, the sources said, requesting anonymity because the discussions are confidential.

Intermedia is aiming for a valuation of more than 20 times its 12-month earnings before interest, taxes, depreciation, and amortization of about $50 million, the sources said.

Intermedia, Madison Dearborn and Evercore did not respond to requests for comment.

Founded in 1993, Intermedia provides cloud-based communications services, including voice calling, video conferencing and chat services to enterprise customers. The Sunnyvale, California-based company caters to customers across several industries, including healthcare, financial services, and retail.

In patient care, for instance, Intermedia has tie-ups with healthcare-technology firms such as Athenahealth, Allscripts, and Cerner, and its communications tools help connect in-office and remote employees with patients to provide virtual care.

Intermedia counts more than 135,000 small and medium-sized businesses among its customers, according to the company’s website.

Madison Dearborn Partners bought Intermedia in 2017 from Oak Hill Capital Partners for an undisclosed amount. The Chicago-based buyout firm has raised about $28 billion across eight funds and backed more than 150 companies since its founders established it as an independent firm in 1992, according to its website.

(Reporting by Milana Vinn in New York; Editing by Lisa Shumaker)

By Deborah Mary Sophia

(Reuters) -Ralph Lauren on Thursday forecast current-quarter sales largely below Wall Street expectations, as demand for its pricey sweaters, shirts and outdoor wear tapers amid a broad slowdown in U.S. luxury spending.

After a robust spending spree last year, affluent shoppers in the U.S. have now cut back on luxury goods purchases as sticky inflation and high interest rates have spooked even the wealthy.

Ralph Lauren saw a 10% drop in quarterly revenue in North America, joining luxury names from LVMH and Gucci-owner Kering to Canada Goose in reporting weaker demand in the region, also hurt by shrinking wholesale orders.

While Ralph Lauren’s core higher-income customers remained resilient, CFO Jane Nielsen said the company was cautious on North America where the sector was growing increasingly promotional.

But she added the market was expected to improve sequentially in the current quarter.

Meanwhile, sales in China surged more than 50% in the first quarter ended July 1, as demand picked up following the lifting of COVID-19 restrictions. That drove Asia revenues up 13% to $378 million.

However, China’s recovery has been slower than expected, with concerns mounting around consumer spending, in a hit to the luxury sector that had heavily banked on a sharp China rebound to bolster sales.

“Going into 2023, luxury brands were expecting the second half of the year to be better. But as the U.S. consumer has really slowed down on discretionary spending, that really has added to the conservatism (in forecasts),” said Jessica Ramirez, senior analyst at Jane Hali & Associates.

Shares were down marginally in early trading.

Ralph Lauren expects second-quarter revenue to be flat or rise slightly from a year earlier, compared to analysts’ estimate for a 3.3% rise. It reiterated annual sales forecast.

Net revenue rose slightly to $1.50 billion in the first quarter, while analysts had expected a marginal drop. Adjusted earnings of $2.34 per share also topped Refinitiv estimates of $2.13.

(Reporting by Deborah Sophia in Bengaluru; Editing by Milla Nissi)

By Diane Bartz

WASHINGTON (Reuters) – U.S. antitrust enforcers reviewing Kroger’s plan to buy rival grocery giant Albertsons are probing whether suppliers will be squeezed in a way that hurts small grocery chains, according to people who spoke to federal and state regulators.

Staffers for the Federal Trade Commission (FTC), which leads the probe into the $24.6 billion deal announced in October, have reached out to experts in farming, food deserts and smaller grocery chains, according to people who spoke with the agency. Staff from states probing the deal, led by Colorado, often joined the calls. It is unclear if the FTC will try to stop the transaction or when a decision would be reached. The agency declined comment. It is not unusual for a complex merger to undergo a year-long government review. Kroger said it was working with the FTC on a divestiture plan to resolve antitrust concerns. “Kroger and the FTC are focused on ensuring that any divested stores are positioned for success,” the company said in a statement. The two chains said they would sell up to 650 stores when the deal was announced. If the FTC sues to halt the deal, it would fit with the Biden administration’s aggressive antitrust posture and be in line with a broader government effort to ensure big companies do not strike deals that lead to higher prices that boost inflation. “I’m deeply concerned about their proposed merger because of what it could mean for consumers, workers, and the market,” said California Attorney General Rob Bonta, a long-time opponent of the deal. Between them, Kroger and Albertsons operate nearly 5,000 stores with more than 800 in California. FTC staff asked the National Grocers Association about the industry dynamic where big chains, like Walmart and potentially a larger Kroger, are able to demand better prices and special access to products, like cleaning supplies during COVID, said the group’s head of government relations, Chris Jones. “We’re not afraid of big, we’re just afraid of the market power abuses,” said Jones. FTC staff spoke with the group in April. Jones, who said the FTC has not deposed anyone in his trade group, is pushing for enforcement of a Depression era law that requires companies to give all customers the same price. FTC staff also spoke with officials from the Rocky Mountain Farmers Union early in the year and again in July, along with people from the Colorado attorney general’s office, said Director Dan Waldvogle. “What they’ve been doing a lot is trying to understand how our markets function,” said Waldvogle, who argues that big, powerful buyers hurt the small farms and ranches among his 17,000 members. The FTC reached out to the Center for Science in the Public Interest in May to better understand how Americans shop for groceries and what roles different food retailers play, said Sara John, a senior policy scientist at CSPI. She argues that 40 million people already live in areas with limited access to healthy food, and that the merger would exacerbate that issue. Meanwhile in Colorado’s Rocky Mountains, the tourist town of Gunnison worries because it has two full-service grocery stores, a Kroger-owned City Market and a nearby Safeway, owned by Albertsons, said the town’s Mayor Diego Plata. It is not known if either store is to be divested. Already, Plata said, the stores have trouble keeping staples like milk or certain vegetables in stock during the summer and he worries the deal would make it worse or that workers at Safeway, which is unionized, might lose benefits.

“Food access is already challenging,” he said.

(Reporting by Diane Bartz; Editing by Chris Sanders and Anna Driver)

CAIRO (Reuters) -Egypt’s annual headline inflation rose to a new all-time high of 36.5% in July, in line with analysts’ expectations, as food prices soared, data from the country’s statistics agency CAPMAS showed on Thursday.

Month-on-month, prices rose 1.9% in July, down from 2.08% in June.

Core inflation, which strips out volatile items like food and fuel, eased slightly to 40.7% in July from 41% in June.

Prices have climbed rapidly during a foreign currency crisis that has triggered three devaluations since March 2022. Many Egyptians have seen their living standards slide.

Headline inflation was 35.7% in June, also a record high.

The median forecast of 15 analysts polled showed annual urban consumer inflation rising to 36.5% in July. The previous high of 32.95% was recorded in July 2017.

Food and beverage prices rose by an annual 68.4% in July, CAPMAS said.

“Food prices were mainly impacted by a 9.1% monthly increase in fruit prices and 4.8% in vegetable prices, which are largely volatile and are excluded from core CPI,” said Sara Saada of CI Capital, which had forecast July inflation of 35.4%.

“We expect inflation to average c.32% in 2023, with possible upside on the continuation of the implementation of deeper fiscal reforms, including possible higher electricity tariffs and approving new telecom tariffs,” she added.

The IMF in December approved a $3 billion, 46-month Extended Fund Facility loan for Egypt after the Ukraine crisis exposed vulnerabilities in its economy.

The first six-month review, scheduled for last March, has been delayed pending the government fulfilling a pledge to adopt a flexible currency exchange rate and to sell more state assets.

Noaman Khalid of NBK said an unfavourable base effect from last year continued to push inflation upwards, even though the monthly rate dropped to 1.9%.

“If policy makers devalue the currency in the coming period in preparation to the IMF review, inflation could peak at 40% at the end of the year. Otherwise it should drop to 30% by December,” said Noaman. NBK had forecast inflation at 36.5%.

(Writing by Clauda Tanios; Writing by Patrick Werr and Aidan Lewis; Editing by Christopher Cushing, Miral Fahmy, Alex Richardson and Sharon Singleton)

(Reuters) – Digital World Acquisition and former U.S. President Donald Trump’s media company on Wednesday extended the deadline for their merger by over three months to Dec. 31, as they work to close the deal that has been delayed by regulatory scrutiny.

The move comes weeks after blank-check firm DWAC settled fraud charges with the U.S. securities regulator, clearing some of the uncertainty over its merger with Trump Media & Technology Group (TMTG) – the parent company of the Truth Social app.

Shares of the DWAC were 10% higher in extended trading.

The firm, which originally struck a deal to merge with TMTG in October 2021, had in June extended the deadline to Sept. 8.

Its settlement with the U.S. Securities and Exchange Commission was over allegations that DWAC misled investors by failing to disclose in filings that it had formulated a plan to acquire TMTG and was pursuing the acquisition before its initial public offering.

DWAC will pay an $18 million penalty if it closes the merger. The company in July named Eric Swider as its new CEO after ousting Patrick Orlando in March.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Anil D’Silva)

By Olivier Sorgho

(Reuters) – Zurich Insurance on Thursday reported a better-than-expected half-year operating profit, helped by its Life business and price hikes aimed at mitigating higher insurance claims from unpredictable weather.

Europe’s fifth-largest insurer posted a business operating profit (BOP) of $3.72 billion, little changed versus a year earlier, while analysts in a company-provided poll had on average forecast $3.62 billion.

BOP in its Life business grew 11%.

CEO Mario Greco told journalists that Zurich’s current trajectory meant the company now intends to exceed the group’s financial targets for 2025, which were announced in November.

Insurers globally have faced losses from unexpected events such as natural disasters, the war in Ukraine and COVID-19, and have responded by raising prices or restricting coverage to shield their profits.

Zurich said in a statement that it raised prices by about 6% in the first half.

“The things that we’ve done to reduce exposure to natural catastrophes in the U.S. I think have had a positive impact in the first six months,” finance chief George Quinn told journalists.

He added that the second half of the year is typically more challenging due in part to hurricane season in the United States.

Despite climate change hurting insurers, Zurich earlier this year quit the United Nations-convened Net-Zero Insurance Alliance, joining peers like France’s AXA, and Germany’s Allianz which have also departed.

Allianz on Thursday also beat profit expectations.

BOP at Zurich’s property and casualty business dropped 6%, due in part to a higher combined ratio – a measure of underwriting profitability in which a level below 100% indicates a profit.

That ratio for the unit grew to 92.9%, from 91.6% a year earlier.

(Reporting by Olivier Sorgho; Editing by Edmund Klamann and Sharon Singleton)

FRANKFURT (Reuters) -Members of the German pilots’ union VC have voted by a large majority to back a wage deal with Lufthansa, a spokesperson for the union told Reuters on Thursday.

This eliminates the risk of a pilots’ strike for now at the German flag-carrier.

After a chaotic summer 2022 due to walkouts over pay, the company negotiated a significant wage increase with VC.

Over the next three years, basic pay is to rise by at least 18% in three stages, according to a letter from Lufthansa to employees seen by Reuters.

Including lump-sum payments already agreed to last year and an additional inflation compensation bonus, captains are to see their wages go up by at least 25%. For co-pilots, the increase ranges from 33% to over 50%.

“By a clear majority of 65.5%, the Lufthansa pilots have spoken out in favour of the wage deal presented,” VC’s Marcel Groels said in a post on the social media platform LinkedIn.

Lufthansa added that pilots would also receive a guaranteed 10 free days a month to allow them to better plan their free time.

“This agreement is not easy for us economically,” said Lufthansa human resources head Michael Niggemann. “But the long running period creates planning stability for Lufthansa in coming years, especially for our intended growth in long-haul.”

(Reporting by Ilona Wissenbach, Writing by Rachel More, Editing by Thomas Escritt and David Evans)

By Rachel Savage and Brenda Goh

JOHANNESBURG/SHANGHAI (Reuters) – Hobbled by the impact of sanctions against founding shareholder Russia, the New Development Bank (NDB) set up by the BRICS countries needs to increase its local currency fundraising and lending, South Africa’s finance minister told Reuters.

South Africa will host leaders of the other BRICS nations – Brazil, Russia, India and China – as the bloc aims to widen its influence at a Johannesburg summit later this month.

Finance Minister Enoch Godongwana said boosting local currency usage among the NDB’s members will also be on the agenda, with the aim of de-risking the impact of foreign exchange fluctuations rather than de-dollarisation.

The greenback has gained against emerging market currencies since Russia invaded Ukraine and the Federal Reserve began raising interest rates to fight inflation in early 2022, making dollar debt more costly for those countries to service.

“Most countries that are members of the NDB have been encouraging (it) to provide loans in local currencies,” Godongwana said.

Established in 2015 as the flagship financial project of the bloc, the NDB’s ambition to serve emerging economies and de-dollarise finance have been curbed by economic realities and Moscow’s invasion of Ukraine.

“(It is) not doing as much as member countries require, but that is the strategic direction we are pushing the bank (in),” Godongwana said in a telephone interview last week.

Increasing local currency fundraising and raising capital from new members could help the NDB in tough times, cutting its dependence on U.S. capital markets where sanctions against Russia have driven up its borrowing costs, analysts said.

The NDB has expanded from its original core of five to eight and only makes loans in member countries.

Chief Financial Officer Leslie Maasdorp told Reuters in an interview at the NDB headquarters in Shanghai that the bank aims to increase local currency lending from about 22% to 30% by 2026, but that there were limits to de-dollarisation.

“The bank’s operating currency is dollars for a very specific reason, U.S. dollars are where the largest pools of liquidity are,” he said.

The bank is responsive to its members and will decide the mix of currencies it lends in based on their demands, Maasdorp said in emailed comments.

‘NO PARALLEL UNIVERSE’

Of more than $30 billion in loans approved by the NDB, two-thirds were in dollars, an April investor presentation showed.

That dependence became a liability when the United States imposed sanctions on Russia last year.

The NDB stopped loans to Russia, but this did not prevent a Fitch downgrade in July 2022 and its dollar borrowing costs have spiked by more than others.

A five-year $1.5 billion bond the NDB issued in April 2021 had a 1.125% coupon. Two years later, a $1.25 billion five-year bond had a 5.125% coupon. That is more expensive than other multilateral development banks with similar credit ratings, S&P Global Ratings analyst Alexander Ekbom said.

As a result of this risk premium, which Maasdorp put at about 25 basis points, the NDB has had to rein in new lending.

“Because of the capital market challenges of 2022, and in an endeavour to preserve the bank’s core financial ratios, there was indeed a slowdown,” Maasdorp said.

“You cannot step outside of the dollar universe and operate in a parallel universe.”

While the NDB has approved loans worth $32.8 billion for projects ranging from Mumbai metro lines to solar lighting in Brasilia, the loans on its balance sheet were worth less than half that amount at end-March.

In 2022, the bank disbursed only about $1 billion of loans.

So far, China is by far the NDB’s most successful local currency market. It issued 13 billion yuan ($1.8 billion) across three “panda bonds” last year and more than half of its lending there has been in yuan.

“The renminbi market has increased in significance,” said Ekbom of S&P Global Ratings, which rates the NDB “AA+”. “But that has been more because raising money in the U.S. dollar market has been unfavourable for them.”

Other markets have lagged behind, though the bank is hoping to raise up to 1.5 billion rand ($81 million) in debut bonds in South Africa on Aug. 15. It is also aiming to issue its first rupee bond in India by the end of 2023.

GROWING MEMBERSHIP

Nevertheless, the NDB, established with $10 billion in paid-in share capital from each BRICS country, wants to expand.

Bangladesh, the United Arab Emirates and Egypt have joined since 2021, bringing its membership to eight. Uruguay is part way through the process of joining, while Algeria, Honduras, Zimbabwe and Saudi Arabia have expressed interest.

By comparison, the Asian Infrastructure Investment Bank, which is backed by China and began operating in 2016, has 106 members, including 23 European countries and 45 outside of Asia.

Maasdorp said bringing in capital from new members is “very, very important” and would help the NDB realise its aspiration of becoming a leading emerging market institution, with the BRICS summit “a key platform” for talks with potential new members.

Attracting the large emerging market countries that would lend the NDB more clout and shore up its financial health could require governance changes, said Chris Humphrey, a development finance researcher at ODI, a think tank formerly known as the Overseas Development Institute.

Current bank statutes ensure that, even as it expands, its five founding shareholders will together retain senior leadership positions and majority voting power.

“From the point of view of some other developing countries, that might not be very attractive. They might… say, ok, is that not just another G7 with a different name?,” Humphrey said.

Maasdorp said that the NDB has a “unique” shareholder structure and the aim was to have as much consensus as possible within the bank on decisions but that a majority would prevail.

The voting structure had not been an obstacle to new members so far, he said, adding that they took comfort from the fact that the NDB was “very highly capitalised”.

($1 = 18.6877 rand)

($1 = 7.2132 Chinese yuan renminbi)

(This story has been refiled to add that think tank ODI was formerly known as Overseas Development Institute in paragraph 29)

(Reporting by Rachel Savage and Brenda Goh; Additional reporting by Tannur Anders in Johannesburg and Vincent Flasseur in London; Editing by Karin Strohecker, Joe Bavier and Alexander Smith)