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Tuesday, 02 September 2014

BREAKINGVIEWS

M&A

Dollar General heads to front of M&A checkout line

02 September 2014

The discounter’s sweetened $9.1 bln bid for Family Dollar includes a big break fee and extra assurances on antitrust. The offer bests its rival’s agreed $8.5 bln tie-up with Dollar Tree - and General still has some bucks to spare. Family’s directors should start negotiating.

An U.S. flag flies in front of a UBS building in New York.

U.S. bankers should add Ros Stephenson to contacts

02 September 2014

In her new role at UBS, the ex-Barclays investment banking chairman will need to replenish the depleted ranks of dealmakers. It’ll be one of the few shops on Wall Street hiring with any gusto. Stephenson probably won’t accept all calls, though, and her pitch may have limited appeal.

U.S. House Majority Leader Eric Cantor (R-VA) (L) and House Speaker John Boehner (R-OH) address reporters after a Republican caucus meeting at the U.S. Capitol in Washington May 7, 2014.

Washington's revolving door has new Wall St exit

02 September 2014

The old path led from Congress and regulatory agencies to bulge-bracket banks like Citi and Goldman. But Republican exile Eric Cantor’s new job with Moelis confirms boutiques and other investment firms are now a better choice for a fat paycheck with a less pejorative headline.

An aircraft is silhouetted by the sun.

London's island airport may yet fly

02 September 2014

Opponents of the plan to build a brand new airport in the Thames estuary have won support from a government-appointed arbiter. The four-runway project is hard to square financially. But Boris Island has a champion who may yet win the power needed to push the proposal through.   

A model displays new product "Glass by Google" at the Diane von Furstenberg Spring/Summer 2013 collection show during New York Fashion Week September 9, 2012.

Luxottica's new governance plan is short-sighted

02 September 2014

The Italian eyewear company has replaced its single chief executive with two co-heads. The model is complex and relies heavily on 79-year-old founder Chairman Leonardo Del Vecchio. Like the clunky Google Glass smart specs Luxottica is partnering on, it needs further work.

Commercial drivers with the app-based, ride-sharing company Uber protest against working conditions outside the company's office in Santa Monica, California June 24, 2014.

Uber can steer round German roadblock

02 September 2014

The U.S. taxi app says it will defy a ban issued by a Frankfurt court, risking fines of 250,000 euros per journey. This looks like Silicon Valley arrogance. But Germany’s taxi rules are outdated and flawed. Uber is sticking up for consumers and will probably prevail in the end.

A man puts money in his sporran at the Birnam Highland Games in Scotland, August 30, 2014. Scotland will hold a referendum on independence on September 18.

Markets start to wake up to Scots secession risk

02 September 2014

Sterling currency options have jumped after poll gains for the pro-independence lobby. If Scots vote Yes, wholly unresolved issues surrounding currency and the division of spoils will burst out into the open. They won’t be quickly resolved. Investors should brace themselves.  

A Ferrari "599 GTB" model during a visit to the Ferrari private track in Fiorano, northern Italy, November 15, 2010.

Banks risk provoking EU with bonus get-arounds

02 September 2014

Firms are paying top staff extra “allowances” in response to European bonus caps. That avoids raising base salaries and keeps costs flexible. The risk is that successful avoidance of the rules will prompt policymakers to shift the attack to pay quantum rather than pay structure.

A road sign is seen in front of a sign of Agricultural Bank of China at its branch in Beijing April 23, 2013.

Don't cry for China's pay-capped corporate chiefs

02 September 2014

Plans to cut cash salaries for state sector bosses by up to half may sting. But top executives in effect get another currency – political stock. If China’s ruling party had a share price, it would be rising. The trouble is, outsiders can’t easily see what that stock is worth.

BREAKINGVIEWS TV ON INSIDER

Columns

Rob Cox

Rob Cox: Why Citigroup would be better in bits

02 September 2014

Nine years ago, Breakingviews proposed slicing the giant New York bank into smaller pieces to benefit shareholders. Post-crisis, the advantages of the idea extend beyond the stock market to global regulators and even taxpayers. It’s time to revisit breaking up Citi.

Hugo Dixon

Hugo Dixon: EU's three big problems all linked

01 September 2014

The stagnant euro zone economy is one reason the EU is reluctant to take action against Russia. It also increases the risk that Britain will quit the EU - which, in turn, would diminish its power and ability to stand up to Moscow. The EU really needs to get its act together.

Features

Peter Thal Larsen

Six steps to Alibaba's twelve-figure valuation

02 September 2014

As the Chinese e-commerce giant launches its IPO, investors must decide what the shares are worth. Growth, profitability and stock market multiples are a factor. So are potential new businesses, though shaky governance merits a discount. Breakingviews spells out the key numbers.

Neil Unmack

ECB keeps hoping in ABS field of dreams

29 August 2014

Mario Draghi expects investors to come if he builds a market that he admits barely exists. Purchases of asset-backed securities might help growth and boost inflation. Yet the obstacles are substantial, and regulation is a thorn. Government aid would help.