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Sunday, 23 November 2014

Stocks and Funds

Edvard Munch's painting "The Scream" is displayed in the Munch Museum.

Sotheby's CEO exit more scream than car crash

21 November 2014

Two artworks with those names are together worth about the $220 mln that Bill Ruprecht’s pending departure has added to the auctioneer’s value. The scream comes from board members like Dan Loeb, dissatisfied with the firm’s performance. By acting now, they may avoid a car crash.

Roulette chips are locked down at Caesars in Atlantic City, New Jersey July 5, 2006.

Apollo, TPG dabble in Caesars sleight-of-hand

20 November 2014

The casino’s private equity owners are haggling with creditors. One idea is to split a key unit into operating and property arms, as rivals have. Such financial engineering would fit well with Apollo and TPG’s earlier moves to turn this top-of-the-market LBO into a decent bet.

A security guard is silhouetted in front a Prudential office in London.

Pru’s lesson for investors: trust animal spirits

21 November 2014

The UK insurer’s stock hit a record this week, leaving rival Aviva trailing in its wake. It is a painful reminder of how Aviva lost out by failing in its attempt to buy Pru in 2006. The main reason there was no deal? The bidder lacked investor support to pay a fair premium.

A steel slap is seen at a hot-rolled production at ThyssenKrupp

ThyssenKrupp recovery is credible but priced in

20 November 2014

After three years of losses, the German engineer’s annual results showed 195 mln euros of earnings. Cost-cutting is ahead of plan, orders are up and debt is down. A surprise dividend shows new confidence. On a rough 30 pct premium, the shares optimistically expect more good news.

Bids and Buyouts

Aviva

Aviva's Friends tie-up is far from done

21 November 2014

The UK insurer wants to buy its peer for 5.6 bln stg in shares, bulking up in its challenged home market. For a 15 pct premium, Friends would get a surer future. Aviva gets some cash flow. Yet Friends’ entrepreneurial backers add complexity - and it may attract an interloper.

BBVA’s timing in Turkey looks odd

20 November 2014

The Spanish bank is raising 2 bln euros to buy an extra 14.9 percent stake in Garanti. BBVA gets a larger share of growing earnings and board control. But it could have achieved the latter by 2016 – at a much lower cost. And Turkey’s attractions come with obvious risks. 

Endesa’s 3 bln euro quasi-IPO bucks a tough market

21 November 2014

The second half of 2014 has been rocky for share sales, particularly in Spain. A secondary offering of 22 pct of Spanish utility Endesa succeeded because vendor Enel wasn’t greedy. It treated the deal like a new issue. That will help if Enel wants to sell more in future.

A forensic medical assistant sorts test tubes

Pharma market failure gets a charitable cure

19 November 2014

The Cystic Fibrosis Foundation helped fund a successful treatment for the deadly lung disease, stepping up when private investors wouldn’t. Its reward: $3.3 bln for rights to the new medication. So-called venture philanthropy could be the model for kick-starting drug development.

Money and Markets

A man hands out U.S. flags at a naturalization ceremony for 3,703 new U.S. citizens from 130 countries, in Los Angeles, California.

Certain gridlock offsets Obama's immigration move

21 November 2014

Coaxing 5 million undocumented immigrants out of the shadows could provide an economic boost, generating tax revenue and jobs. But the executive action virtually ensures Republicans won’t compromise on other priorities like tax reform, infrastructure and trade. It’s a wash.

Kate Duguid

Review: Congo's problems run deeper than oil

21 November 2014

Virunga Park sits on top of reserves and between hostile states inhabited by warring militias. A new documentary casts UK oil firm Soco as the park’s top threat. Unethical exploiters are just one symptom of a nation whose institutions are too weak to assure economic stability.

London Mayor Boris Johnson delivers his keynote speech to the Conservative Party annual conference in Manchester, northern England October 1, 2013.

Boris should pay up but not shut up over U.S. tax

21 November 2014

The London mayor, an American citizen, objects to paying a U.S. capital gains levy on his UK residence. Uncle Sam’s ex-pat tax laws are worthy of reform. But if Johnson really cares about that, the way to show it is to clear his debt and then campaign for change.

A Chinese bank employee counts yuan notes at a local bank in Nanjing, capital of east China’s Jiangsu.

China’s rate cut shows depth of growth concern

21 November 2014

The first cut to lending rates since 2012 shows the limits of Beijing’s tolerance of slowdown. It should save some riskier loans from going bad, and breathe some life into a zombified property market. But huge adjustments remain, and long-suffering savers will still be left worse off.