Stocks and Funds
Thanks to stagnant sales the world’s top soda makers – with $300 bln of combined market cap – already attracted agitators in 2014. Now Pepsi is risking a proxy fight over billionaire Nelson Peltz’s break-up plan. Coke, too, may face a radical shake-up if it can’t reignite growth.
The German bank is set to review its direction in 2015. Its bet on capital markets remains unproven. Likely regulatory settlements in the coming months could raise further doubts. Recent executive moves suggest Deutsche is keeping options open for strategy and leadership change.
The pharma group has suffered two big drug failures. The setback over Alzheimer’s is no shock—the disease has been a money loser for big pharma. A second knock in Roche’s core cancer franchise hurts more. The failures will increase pressure on Roche to deploy excess cash.
The public offering of Juno Therapeutics presents an apt finale to the best year for biotech IPOs. It’s only a year old and revenue free, but its cancer fighting technology is hot. Juno’s $2 bln valuation shows capitalism’s ability to catalyze investors’ hopes and resources.
Bids and Buyouts
The Irish carrier has rebuffed an approach by the owner of British Airways. At the right price, Aer Lingus looks like a natural partner for IAG. But its unwieldy shareholder structure – including a large holding by Ryanair – and anti-trust concerns will be obstacles.
Even with a slowing economy the People’s Republic offers lots of growth for home-grown corporations. Hostile regulators, stronger rivals, and cultural differences discourage foreign expansion. Though some will take the plunge anyway, in most cases overseas growth can wait.
Anti-takeover protections adopted before threats arise are more apt to weather legal scrutiny. It’s one reason Allergan was able to resist Valeant’s $52 bln bid. When triggered reactively, they’re considered unfair surprises. Either way, shareholders often get unneeded cover.
The Spanish oil group is paying a big premium for the Canadian producer. The deal adds diversification after Argentina expropriated its YPF unit but also brings problematic North Sea assets. Repsol is hoping for a Talisman turnaround and an oil price recovery. Both are uncertain.
Money and Markets
Regulators are to unbundle charges for financial analysis and trading in Europe. Greater transparency is welcome. But buyside and sellside alike will be cheered that asset managers can still charge research to clients. Determining value for money may be tricky for end-investors.
Thor Bjorgolfsson embodies Iceland’s volcanic rise and fall. He made a fortune in post-Soviet Europe, lost a bank in 2008 and caused Deutsche Bank years of grief with Actavis. This deal junkie’s memoir is self-critical in parts - but unlikely to win many new friends in Reykjavik.
The central bank will buy sovereign debt – but each national government may have to set aside provisions in line with their own risks, Reuters says. It may secure German approval. But it would also weaken quantitative easing, and highlight a fragmenting euro zone.
A former official and a property mogul have been found guilty of charges relating to misconduct in public office. The transparency, unpredictability and lack of a neat ending make it very different from similar cases in mainland China. That’s just the way rule of law should be.