Stocks and Funds
The tech giant’s executive chairman is taking 20 pct of the hedge fund firm off bankrupt Lehman Brothers’ hands. The billionaire was brought into Google to supervise its young founders. Not for him the frivolity of, say, a sports team investment like Steve Ballmer’s.
The pharma group managed to beat expectations in Q1 despite wrestling with patent expiries. One-off disposals of $309 million helped boost operating profit to $1.8 billion. Raising funds makes sense at a time when Astra is challenged, but investors shouldn’t rely on them.
The UK-based emerging markets bank says it is looking at where it should best be headquartered. The regulatory, economic and reputational costs of being in London have clearly risen. But HSBC’s realistic alternatives – Hong Kong and Shanghai – both carry major risks.
Spain’s biggest bank is merging its asset management arm with that of UniCredit, with private equity help. Both lenders gain from meshing cash-generative, capital-light businesses. But Santander does so without adding scale in the United States - where it still faces big regulatory hurdles.
Bids and Buyouts
When boss Rob Marcus lunged for Comcast’s $45 bln bid, he gave in to the buyer’s demand that it pay no fee if the deal got torpedoed. Now Marcus is empty-handed in a rapidly changing industry. Rival suitor Charter may return, but Time Warner Cable’s negotiating power is weaker.
TPG and others are buying Montreal-based Cirque du Soleil at a $1.5 bln valuation. That’s over $1 bln less than the price secured by founder Guy Laliberté in an ill-fated 2008 sale to Dubai. Recent shows have struggled, though, and hoped-for Chinese growth could easily stumble.
A collapse of the $45 bln Time Warner Cable deal would leave controlling shareholder Brian Roberts with a second ugly scar. Overconfidence also contributed to a failed tilt at Disney a decade ago. Comcast rebounded with NBCU, which suggests Roberts will be back before too long.
The Israeli drugmaker needs a deal to shore up falling sales. Smaller rival Mylan offers that and oodles of synergies. A tie-up, though, would face antitrust concerns, require high leverage and have to get around a powerful poison pill. No wonder the market is skeptical.
Money and Markets
Corporate finance has more in common with lager and ale than meets the eye. The bulge bracket in both industries had been losing market share to smaller craft practitioners. The Guinness makers of mergers – Goldman Sachs and Morgan Stanley – are staging a slow pour of a comeback.
Who will gain from “follow the money” voting?
Anthony Atkinson’s “Inequality” is a UK-centric manifesto to help the poor and restrain the rich. The Oxford academic’s specific proposals are mostly sensible, but they dodge serious questions about the role of the welfare state and the balance of national and global justice.
People vote with their wallets. The governing Conservative coalition may earn credit for presiding over five years of low interest rates and a strongish pound. But a Breakingviews calculator suggests a weaker record on growth, house prices and stocks could swing votes to Labour.