BREAKINGVIEWS

Italian grudge may steer Vivendi’s big M&A mandate

18 February 2019

Vincent Bolloré may be sore about JPMorgan’s work with activist Elliott in Italy. Yet the U.S. bank’s analysts lead the pack in valuing Universal, at a whopping $50 bln. As the media group chooses advisers to sell half of Taylor Swift’s music label, bygones may not be bygones.

UK’s centrist group is far from a Macron moment

18 February 2019READY SOON

The defection of seven left-wing Labour politicians invites comparisons with the political shakeup that propelled the French President to power. But Britain’s political system penalises small parties. The split strengthens PM Theresa May, and may help her Brexit deal.

Wirecard lands dubious credit from German watchdog

18 February 2019

The regulator slapped a short-selling ban on the payments group’s shares. The thesis that Wirecard’s volatility could cause “general market uncertainty” is odd since wild price swings had abated. And the prohibition does nothing to fix the company’s problem: lack of transparency.

SoftBank adds to contradictions with Mubadala punt

18 February 2019

Masayoshi Son’s group is bankrolling half the Abu Dhabi state investor’s $400 mln start-up vehicle. That’s peanuts next to the $100 bln Vision Fund, and gives SoftBank access to early-stage bets. But outsourcing those decisions is an odd look for a supposed tech visionary.

New Reckitt CEO will have breakup on the brain

18 February 2019

Separating cleaning goods like Vanish and Dettol from Nurofen and health products helped outgoing CEO Rakesh Kapoor lift sales last year. A full breakup could boost Reckitt’s market value by more than a tenth, Breakingviews calculates. It’ll be the new boss’s first big task.

Aussie watchdogs bark as economy starts to bite

18 February 2019

A spate of tough decisions on banks and other oligopolies augurs an era of stricter regulation. The broad inquiry into financial misdeeds helped spur an overdue crackdown. It's also a new risk for boards and investors as a long, stable growth streak Down Under looks vulnerable.

Hong Kong’s China extradition experiment unnerves

18 February 2019

The territory is mulling a way to exchange suspects across the border. With over 1,000 mainland firms listed there, putting CEOs within reach of local courts makes sense. But Beijing’s reaction to U.S. attempts to extradite a Huawei executive suggests the channel might be abused.

UK throws drowning Huawei a European lifeline

18 February 2019

British intelligence says it can manage risks from using the Chinese giant’s kit to build ultra-fast 5G networks, the FT reports. It's the first major power to challenge a U.S. campaign against the telecoms group. Berlin or Paris could follow, keeping Huawei's ambitions afloat.

Trouble in Paradise highlights U.S. coal’s dilemma

15 February 2019

The Kentucky power plant is one of two being closed because the fuel is no longer economical. Struggling supplier Murray Energy, run by a big Trump supporter, reckons overseas markets are its salvation. But they are unlikely to come to the rescue of the American industry.

Trump wall non-deal requires scraping for funds

15 February 2019

Congress rejected the U.S. president’s border barrier demands so he declared a national emergency. If he defeats legal challenges, he may find $6.7 bln for the structure. Yet he turned down a compromise providing $25 bln in 2018. As with trade, the result looks far from artful.

Vincent Bolloré shores up Vivendi activist defence

15 February 2019

The French billionaire treats the media group like a family hedge fund. The latest instance is a new share buyback that allows the tycoon to boost his control without personally coughing up a penny. Any activist that wants to improve governance will have to move quickly.

Shell might win new energy race by wanting it more

15 February 2019

The UK oil major is acquiring German energy-storage group Sonnen. Utilities, carmakers and big tech groups are all converging on the residential-power market. Shell’s need to move quickly to hedge against peak oil demand may give it an edge.

German $6 bln non-LBO is sign of lean buyout times

15 February 2019

Hellman & Friedman and Blackstone are buying classifieds group Scout24. They can’t pile much debt on it, and the return looks way off the level investors usually expect. With buckets of cash, private equity needs to do deals. Buying fast-growing targets offer a little security.