BREAKINGVIEWS

AT&T and Comcast alike in debt, not in risk

18 June 2018

Big acquisitions will leave the telco and cable firm with more than $170 billion of debt each. At first, Comcast’s bid for bits of Fox would create the heavier relative leverage load. But it’s AT&T’s recently closed merger with Time Warner that looks more vulnerable.

Carrefour tin ear puts fat cats in Macron’s sights

18 June 2018

The supermarket’s ex-boss forwent part of a 13 mln euro payoff after pressure from the French government. It shows that the ex-banker President Emmanuel Macron is no slave to laissez-faire economics. His move to liberalise firing rules makes corporate excess a legitimate target.

Audi arrest puts brakes on VW’s reform drive

18 June 2018READY SOON

The head of Volkswagen’s luxury brand is being held over fears he may hinder an investigation into emissions cheating. The question is why the long-serving executive still had his job. The carmaker’s messy governance is still hindering new boss Herbert Diess’ cleanup operation.

South32 finds acceptable way to splash the cash

18 June 2018

The BHP spinoff is paying $1.3 bln for the rest of Canadian miner Arizona Mining. The 50 percent premium sounds reminiscent of past mining M&A excess. Yet the deal makes strategic sense, and isn’t too pricey. Besides, South32 needs to deploy its mountain of net cash.

Virgin Money is cheap bride in UK bank wedding

18 June 2018

The UK upstart lender is selling out to rival CYBG in an all-share deal worth 1.7 billion pounds. The premium on offer is little more than half the value of expected cost savings. Despite a UK slowdown and higher consumer credit risks, Virgin shareholders will feel short-changed.

Italian corporate finance suffers political shock

18 June 2018

The country’s election and its turbulent aftermath contributed to a sharp drop in capital markets activity. Despite still-buoyant M&A, total investment banking fees are down 30 pct year-on-year. This is bad news for banks, but worse still for local companies seeking funding.

French cable group suffers earnings power shortage

18 June 2018

Nexans lost almost a fifth of its value after saying EBITDA may fall 15 pct. The company’s racy growth plans rest on trends like offshore wind and soaring data use, but investors value it as a sector basket-case. Given the profit warning and a departing CEO, that looks fair.

Renault M&A race sidelines governance niceties

15 June 2018

Investors backed CEO Carlos Ghosn’s pay despite the French state’s opposition. His 7.4 million euro package was greased with soft targets. Yet the high proportion of shares at least gives Ghosn an extra incentive to push for a value-boosting merger with Japan’s Nissan.

Argentina’s road to normality hits more zigzags

15 June 2018

The replacement of the central bank chief should help stabilize the peso, along with IMF assistance, despite Thursday’s 6 percent drop. It’s all part of President Macri’s long haul to turn his country’s economic pathology into more mainstream travails. It won’t be smooth going.

Colombia’s likely leader less safe than he looks

15 June 2018

Conservative Ivan Duque leads polls ahead of Sunday’s presidential runoff. He is the more markets-friendly candidate, though his animosity to a peace deal with FARC rebels and Colombians’ distrust of business and political elites may spell discord if he wins, spooking investors.

Trump’s trade animus undermines valid China beef

15 June 2018

The White House on Friday imposed tariffs on Chinese goods in response to intellectual-property theft. It’s a legitimate issue that also plagued Obama. But Trump’s other anti-trade moves hurt his case – and U.S. importers. He also isn’t tackling China’s long-term economic threat.

Zell has financial reason to speak better of women

15 June 2018

The real estate mogul made tone deaf comments about women at a conference – not for the first time. Sam Zell has a history of speaking off the cuff, offset by a reputation as a skillful asset trader. His female-run REIT, an outperformer, shows why he ought to rein in his speech.

Rolls-Royce investors wisely keep the seat belt on

15 June 2018

The plane engine-maker aims to generate 1 pound of cash per share over the mid-term, quadruple this year’s estimate. Despite the bullish new target, shareholders don’t look to be pricing it in fully. A distant horizon and history of one-off costs explain why.