BREAKINGVIEWS

U.S. tax outlook opens M&A pricing divide

18 October 2017

Republicans want to cut the corporate rate to 20 pct, but the timing is as uncertain as the outcome. Theoretically, profit – and thereby valuations – could get a 23 pct boost from lower taxes. Sellers want that priced in, but buyers won’t. All-stock deals could be one answer.

Danone’s chair-CEO blend leaves sour taste

18 October 2017READY SOON

Boss Emmanuel Faber is taking on both roles three years after the yoghurt maker split them. Yet shareholders are increasingly unhappy with such poor corporate governance at French companies. And with an activist to contend with, the board’s decision looks complacent.

TPG’s car-insurance deal comes with a warranty

18 October 2017

The buyout group and Uber investor is selling car insurer Warranty to Assurant for $2.5 bln, taking a 23 pct stake and some cash. It looks to have doubled its money. Taking shares as payment isn’t a full exit for TPG, but it leaves both parties assured of respectable returns.

Global watchdogs may curb U.S. deregulatory push

18 October 2017

The U.S. Treasury will decide whether to recommend scrapping the post-crisis bank resolution regime, as some Republicans urge. But foreign regulators threaten to impose new limits on American firms if it's ditched. That reduces the chances of a major rollback of financial rules.

Spanish toll-road bid steamrollers Benettons

18 October 2017

ACS has made a 17 billion euro offer for infrastructure operator Abertis, using the balance sheet of its German unit Hochtief. The price is better than a rival bid from Atlantia, controlled by Italy’s Benetton family. It owes more to cheap debt than economic sense.

Revamped Reckitt has yet to clean up its act

18 October 2017

A restructuring is eclipsing the Dettol-to-Durex maker’s poor third quarter results. Parking brands that are more exposed to competition in a separate unit is smart but makes the company costlier to run. Nor does that address the sales problems caused by shifting consumer habits.

Private equity margarine bet needs activist backup

18 October 2017

Buyout firms may pay up to 7 billion euros for Unilever’s spreads unit. The new owners will need to stem falling sales as shoppers shun artificial produce. Acquiring other brands from food companies under pressure from uppity shareholders could be one way of boosting returns.

Mistimed writedowns lesser of mining M&A evils

18 October 2017

Rio Tinto has been accused by the SEC of hiding the plunging value of a coal mine it bought in 2011. The charges are serious, but at least accounting procedures are fairly clear. If only there were rules that could prevent mining bosses getting carried away during M&A upswings.

Qudian IPO feeds debt-hungry Chinese millennials

18 October 2017

The online lender backed by e-commerce giant Alibaba’s financial arm has priced its U.S. listing above expectations, says Reuters. It boasts fast growth, low defaults and - shockingly for tech - profitability. As young Chinese shoppers rack up debt, Qudian will keep earning.

Indonesia’s slowdown belies Jakarta’s reform spin

18 October 2017

Eight interest-rate cuts by Indonesia’s central bank since January 2016 are getting little traction with investors or consumers. As growth slows, the urgency is rising for President Joko Widodo to accelerate infrastructure projects, attack corruption and create well paid jobs.

Soros punches new $18 bln hole in societal ills

17 October 2017

The hedge funder who took on the Bank of England has given most of his fortune to his charity, making it the second-largest in the U.S. behind the Bill and Melinda Gates Foundation. Conservatives may moan, but his causes of human rights, democracy and fairness need support.

China’s iQiyi is like Netflix with extra challenges

17 October 2017

The Chinese video-streaming service is eyeing a debut on U.S. markets next year and already inviting comparisons to its American partner. Both are burning cash on new content to lure fans. Fickle consumers and limited appeal abroad stand in the way of a $10 bln-plus valuation.

Morgan Stanley staff have the most to cheer about

17 October 2017

Rival Goldman Sachs pays its people more on average, but James Gorman’s firm has boosted comp and benefits by 9 pct this year, almost double the raise of its rival. JPMorgan bankers face a pay cut. Asset-management employees, though, can afford to pop some champagne corks.