Breakingviews on Twitter
Search League Tables

Sunday, 29 May 2016

Stocks and Funds

Jeffrey Goldfarb

Review: Craft-beer memoir goes down easy

27 May 2016

Jim Koch’s tale of brewing Samuel Adams is refreshingly candid about battles with Budweiser, a controversial IPO and other troubles. Unlike many stale business books, “Quench Your Own Thirst” reads like a pub chat. Only Koch’s pride in bad governance leaves a bitter aftertaste.

A woman walks with her shopping bags in central Paris October 13, 2008.

Activist pushes on U.S. retailer's open door

26 May 2016

Hedge fund Barington wants two board seats and costs slashed at struggling Chico’s. It owns just a 1.4 pct stake at the $1.5 bln seller of women’s clothing. The company also is already shaking things up with its own new qualified directors. This investor aggression is overdone.

A sign is seen at an AstraZeneca site in Macclesfield, central England May 19, 2014.

AstraZeneca glitch cements M&A discount

27 May 2016

A blockbuster drug the UK group bought in a $2.7 bln deal has been delayed. The production glitch could mean just a few months holdup, but highlights why Astra trades at a lower valuation than peers. Buying and selling businesses is a risky way to manage a looming patent cliff.

Headphones in front of Spotify logo, February 18, 2014.

Spotify's next investors may face the music

26 May 2016

The streaming service increased revenue by 80 pct last year to $2.1 bln. More than 80 cents of each dollar pay for songs, however. Even assuming generous growth and operating leverage, Spotify will need to do still more to merit a higher valuation than its latest of $8.5 bln.

Bids and Buyouts

The corporate logo of Bayer.

Bayer's Monsanto bid yields poor financial harvest

27 May 2016

The German chemicals group’s rejected $62 bln offer for the seed maker already appeared to violate one of its key principles: stick to projects whose returns beat the cost of capital. Upping the price to win over Monsanto would take heroic sales-growth assumptions to stack up.

People shop inside an Apple store in central London March 29, 2006.

Apple may find it harder saying "no" to bad ideas

26 May 2016

An executive at the tech giant reportedly proposed a bid for Time Warner. That seems contrary to founder Steve Jobs’ recipe for success: reject “1,000 ideas” and focus only on the few good ones. But an aging iPhone, a tepid stock price and a cash pile risk making the mediocre tempting.

Graduate student Giulia Agliardi, from Milan, Italy, uses a fluorescence microscope to study cancer cells in the Nanomedicine Lab at UCL's School of Pharmacy in London May 2, 2013.

Thermo Fisher's FEI deal holds up under microscope

27 May 2016

But that’s only if the healthcare M&A machine can boost sales at its $4.2 bln quarry. Reducing taxes and cutting costs at the maker of electron microscopes only gets Thermo partway to justifying the price tag. Thermo’s track record gives investors some comfort it can do this.

A Red Cross worker during a training session with volunteers in Guatemala City April 29, 2009.

Health M&A's shots of state oversight may be toxic

25 May 2016

Missouri trustbusters plan to oppose Aetna’s $37 bln union with Humana absent changes. That probably won’t kill the deal, but the U.S. insurers must still satisfy regulators in five crucial states and Uncle Sam. No wonder investors’ prognosis for this and similar mergers is grim.

Money and Markets

Qatar's Emir Sheikh Tamim Bin Hamad Al-Thani

Qatar's debt bonanza stores up problems for future

27 May 2016

Too much of a good thing could be bad for the Gulf state. It has just raised a whopping $9 billion in the bond market thanks to investors’ hunger for yield. Loading up on debt will help Qatar cope with lower energy prices, but just dodges its biggest problem: lavish spending.

Lenovo CEO Yang Yuanqing attends a news conference in Sao Paulo September 5, 2012.

Time for Lenovo to get a grip in mobile

27 May 2016

The tech giant is a trailblazer for Chinese firms going global by doing deals overseas and adopting Western governance. The ill-judged takeover of Motorola’s old mobile business is testing that reputation. Absent a quick turnaround, Lenovo’s credibility will take a real dent.

Logos are pictured outside a Lidl retail shop in Geneva, Switzerland May 2, 2016.

German discounters open new front in trolley wars

27 May 2016

Lidl is investing 6.5 billion euros to soup up its stores, half of that outside Germany; peer Aldi is upgrading too. That will advance their attack on the middle market. If they can do it without raising prices, big rivals like UK grocers Tesco and Sainsbury will be in trouble.

RMB

A truly international yuan is a long way off

27 May 2016

New data shows use of the Chinese currency for global payments is declining and has fallen behind the Canadian dollar. China’s plans to internationalise the yuan are at odds with capital controls. Pressure on the yuan makes this a tricky time to liberalise the currency regime.