BREAKINGVIEWS

HSBC succession farce may undercut strategic plan

21 February 2020

Chairman Mark Tucker is considering UniCredit’s Jean Pierre Mustier for the CEO job. Interim boss Noel Quinn has unveiled an overhaul but the ambitious Mustier likely has his own ideas of what’s needed. If the outsider is picked, the restructuring may eventually be restructured.

UBI will struggle to rebuff Intesa’s embrace

21 February 2020

The Italian bank is exploring alternatives to its larger rival’s $5.3 billion hostile takeover bid. A tie-up with state-owned lender Monte dei Paschi would be complex and costly. Other escape routes look equally unattractive. And Intesa has some room to woo reluctant investors.

India-born CEOs take one step back, two forward

21 February 2020

The governance mess at Gulf hospital operator NMC has put an Indian executive on the map for the wrong reason. But the country’s huge business diaspora is taking charge of giant firms like IBM. The international influence highlights a dearth of local opportunity.

SoftBank gives only an inch to clear Sprint static

20 February 2020

Masayoshi Son’s firm is taking a modest $5 bln hit to clinch Sprint's $120 bln merger with T-Mobile US. The latter could have pushed harder, but that might have put the long-awaited deal at risk. The dance with each other, and with regulators, seems to be over without a fall.

HP’s fire-with-fire defense does it no favors

20 February 2020

The printer maker adopted a poison pill to stop bidder Xerox from digging in further. Aggressive bids justify robust responses. But HP would gain more credibility by laying out its valuation argument clearly for shareholders before putting up prohibitively defensive measures.

Morgan Stanley-E*Trade deal puts D.C. on the spot

20 February 2020

It’s the first major acquisition by a big bank in over a decade, which virtually guarantees political scrutiny. Yet regulators like the Fed seem amenable to financial mergers. Political detractors can’t easily sabotage the $13 bln deal, but they could upset the delicate timing.

E*Trade embodies Wall Street’s stodgy middle age

20 February 2020

Serving armchair investors is as unracy as it gets for erstwhile masters of the universe. Yet Morgan Stanley’s $13 bln purchase of an online broker makes sense given the rise of passive funds and decline of securities trading. Wall Street’s future is boring, and profitably so.

Speedway could leave 7-Eleven with overfull tank

20 February 2020

The convenience store chain’s Japanese owner Seven & i may buy Marathon’s gas station business for $22 bln. If it does so with cash, then the acquisition would load it up with debt for what looks like a measly return. That might be why investors sent the shares down 9%.

Dutch grocer can afford $7 bln U.S. shopping spree

20 February 2020

Ahold Delhaize, the $28 bln owner of Stop & Shop supermarkets, churned out cash after another strong quarter. The success suggests it could hoover up smaller U.S. players. Several grocers might be an option, though Ahold might have to compromise on its preferences.

Morgan Stanley beats Goldman to E*Trade punch

20 February 2020

Buying the online broker for $13 bln gives James Gorman’s Wall Street firm stable income, higher returns and cheap retail deposits. David Solomon has promised that too at Goldman Sachs, albeit via other means. It leaves Solomon, still tackling regulatory issues, on the back foot.

Air France lays down worrying coronavirus marker

20 February 2020

The Franco-Dutch airline’s shares fell 7% as it warned of a 200 mln euro hit from the virus. Rivals BA-owner IAG and Lufthansa will also feel the travel drag. Yet Air France-KLM’s estimates count on a quick resolution. That suggests even more pain could be ahead for investors.

Julius Baer gets off lightly for dirty money sins

20 February 2020

The Swiss finance watchdog demanded better controls and barred the bank from embarking on major deals for now. That’s mild punishment given the systematic failings that were uncovered but reflects limits on what the supervisor can do. The regulator could really use sharper teeth.

GAM does just enough to become a takeover target

20 February 2020

The Swiss asset manager saw profits fall 92% as a compliance scandal caused clients to pull funds. New CEO Peter Sanderson is pledging to cut costs and boost margins, but his targets look optimistic. Still, if Sanderson can steady the ship, GAM could look appealing to a buyer.