European airlines’ hot summer belies sector clouds 23 Apr 2024 Jet shortages mean that carriers may be able to charge higher fares this summer, ending years of overcapacity. For stronger players like $25 bln Ryanair, that could mean fatter margins. But it’s likely to be a short-term reprieve for a sector that’s grappling with other costs.
Private credit paints a new scream for banks 22 Apr 2024 Lending against wealthy patrons’ art has been dominated by financial institutions. Sotheby’s $700 mln sale of bonds backed by such loans offers non-bank rivals a template to upend the status quo. A rebounding securitization market can feed this machine, if it fits a careful mold.
Winner’s curse unfairly haunts $7 bln paper deal 19 Apr 2024 UK-based Mondi dropped its pursuit of DS Smith, handing victory to rival US bidder International Paper. The victor’s shares have lagged the sector, suggesting its investors see little value in the deal. If the promised cost savings appear, that view may be too pessimistic.
ESG is ghost at global retailers’ annual feast 19 Apr 2024 LVMH, Amazon and peers gathered in Paris for the industry’s yearly shindig. The growth areas in the $30 trln sector are Shein-style cheap garments and the Middle East. Both jar with retailers’ previous focus on environmental, social and governance factors.
Shell’s value gap is more strategy than geography 19 Apr 2024 CEO Wael Sawan may shift the $230 bln UK oil giant’s listing to New York if a discount to rivals like Exxon Mobil persists beyond 2025. But Shell’s shifting priorities, slower growth, and unreliable dividends weigh on its valuation. Those factors defy a superficial fix.
UK music fund may walk off stage without encore 18 Apr 2024 Hipgnosis Songs Fund accepted $1.4 bln in cash from US rival Concord Chorus. The 32% premium pitches songs by Neil Young and Shakira at the lower end of their shrunken fair value. With higher-for-longer rates, it’s far from clear that its Blackstone-owned manager will pay more.
Czech Sphinx may need to pay up for UK mail morsel 17 Apr 2024 Daniel Kretinsky has been rebuffed in a bid to buy the 72% of 3 bln pound International Distributions Services he doesn’t already own. The Czech billionaire has deep enough pockets to pay more for the owner of Royal Mail. But his target’s board has grounds to dig its heels in.
Luxury’s great divide will get more striking 17 Apr 2024 Sales at $420 bln LVMH rose a dull 3% in the first quarter. The Tiffany-to-Dior behemoth’s insipid performance points to a broader fragility within the sector. With revenue in the luxury industry flattening, the gap between winners and losers is set to grow wider.
Microsoft’s G42 deal puts UAE in America’s AI tent 16 Apr 2024 The $3 trln software giant is paying $1.5 bln for a minority stake in Abu Dhabi-based artificial intelligence group G42. Microsoft gets years of cloud storage business. But it also implies an end to the Gulf state’s effort to be a neutral AI counterparty to China and the US.
Gulf bank’s M&A hunt risks shareholder injury 15 Apr 2024 First Abu Dhabi, worth $40 bln, may be eyeing Turkish lenders following a short-lived pursuit of Standard Chartered. An overseas deal would help to diversify away from corporate and investment banking, but the cost savings look slim. Better to focus on growing at home.
Bernanke partly mends cracks in BoE’s crystal ball 12 Apr 2024 The former Fed chair’s review of the Bank of England’s economic forecasts contains some sensible ideas. He correctly urges the central bank to stop relying on market predictions of future interest rates. But he could have pushed harder for UK policymakers to climb off the fence.
BP takeover is both appealing and daunting 12 Apr 2024 Abu Dhabi National Oil Company recently considered buying its $110 bln British peer. It’s unlikely to be the only suitor. BP trades at a discount to other oil giants and recently installed a new CEO. But UK security concerns and EU antitrust rules present formidable hurdles.
Powell’s rate cuts may go from steady to steep 10 Apr 2024 Inflation hit 3.5% in March, making a June cut to borrowing costs unlikely. But Fed Chair Jay Powell is running out of time. A decrease in September would be seen to favor President Biden. The November decision is one day post-election. The only other option: take bigger whacks.
How new stock rules are boosting Europe’s startups 9 Apr 2024 Young companies in the European Union have traditionally lagged US rivals in both value and numbers. But in this Exchange podcast, Index Ventures Partner Hannah Seal explains how friendlier regulations on employee share ownership are helping EU-based entrepreneurs fill that gap.
Airbus obsessives have a shaky grasp of history 9 Apr 2024 The $140 bln pan-European group is flying high as rival Boeing stutters. Now carmakers and others are wondering if similar collaboration could help them face down overseas competitors. But Airbus’s idiosyncrasies and convoluted road to success make copycat plans pie-in-the-sky.
US bid has paper-thin lead in packaging M&A race 5 Apr 2024 Tennessee-based International Paper pegged the savings from a proposed all-share deal with DS Smith at $500 mln. If they’re viable, they help keep the US group’s investors on side. The onus is now on rival bidder Mondi to offer more, or show its own cost cuts would be higher.
Ben & Jerry’s rocky ESG road bucks vanilla trends 4 Apr 2024 The purpose-driven ice cream brand is being scooped out of Unilever as corporate activism increasingly invites controversy. And yet the maker of flavors like Empower Mint has grown faster than its parent. Social values, especially when authentic, can mix well with financial aims.
A Dr Martens sale may cause multiple blisters 4 Apr 2024 An investor thinks the struggling $1 bln UK bootmaker could sell itself. Low valuations may woo buyers, but a bid is unlikely to make up for a 75% share slide since the group’s IPO. A rushed exit may also dampen top investor Permira’s effort to list sneaker brand Golden Goose.
Thames Water fix requires everyone to take a bath 4 Apr 2024 One way to repair the ailing UK utility is to hike consumer bills. The government could also hose the holders of the group’s 17 bln pounds of net debt. That might make the politics of the sorry saga marginally less toxic – and even give Thames a shot at luring new investors.
Soho House’s private party may prove disappointing 2 Apr 2024 Executive Chair Ron Burkle could bless a de-listing of the loss-making $1.1 bln chain of members’ clubs, which he reckons will one day generate handsome earnings. He’s only right if the new sites, like São Paulo and Bangkok, prove as popular as the older ones. It’s a gamble.