BREAKINGVIEWS

Eldorado bets the farm on Caesars turnaround

24 June 2019

The serial acquirer of casinos is buying its big-name rival for $8.5 bln, more than twice its own market cap. Eldorado will now share Caesars’ heavy debt load. The smaller company is on a roll with a record of achieving promised synergies. It’ll need all that skill, and more.

Bristol-Myers drug sale tests $74 bln Celgene deal

24 June 2019

U.S. trustbusters have butted in once again, forcing the divestiture of a lucrative treatment. Bristol-Myers could have off-loaded its own nascent drug. Instead it may be hoping for a big price. That would support the idea that Celgene was undervalued, but it’s a riskier path.

Boris Johnson may spice up UK central bank race

24 June 2019

The frontrunner to succeed Prime Minister Theresa May tends to stray from the script. That increases the chances of an unconventional candidate replacing Mark Carney as the head of the Bank of England. If Johnson makes the pick, it could even be his most lasting legacy.

Metro raid is an opening salvo in longer battle

24 June 2019

Czech and Slovak investors have offered 5.8 bln euros for the German wholesale retailer. Though they speak for more than 30% of the shares, a 3% premium looks measly. To rebuff the assault, Metro CEO Olaf Koch needs to convince sceptical investors about his turnaround.

Natixis gives lesson in bond market fragility

24 June 2019

A fund unit owned by the French bank had to write down holdings of exotic bonds and penalise investors who pull money. It’s a prudent move that may stem outflows. But investors will be more nervous in future about funds that dabble in esoteric debt while promising easy liquidity.

Daimler profit crash gives new CEO cost-cut fuel

24 June 2019

Swede Ola Kaellenius has started his turn driving the $60 bln Mercedes-Benz owner with a profit warning. Shareholders will be exasperated by the group’s third such shock in a year. But bad news could make it easier for Kaellenius to make the case for much-needed savings.

Carrefour beats a dignified retreat from China

24 June 2019

The French retailer is selling its China operations to Suning after over two decades in the market. Valued at 1.4 bln euros including debt, the price looks decent given Carrefour’s slowing sales. For Suning and partner Alibaba, it opens a new front against Tencent and JD.

Delta is uncertain wingman for Korean Air Lines

24 June 2019

The $37 bln U.S. carrier bought a 4% stake in the parent of its Asian peer and plans to lift it to 10%. Delta is being regarded by investors as protection for the controlling family’s messy succession plan. Funds aligning against KAL, however, suggest the fight will persist.

Empire State forces U.S. climate progress

21 June 2019

New York is mandating net-zero emissions by 2050. That means laggard companies will have to move faster towards renewable energy. More intense investor activism should follow, especially if like-minded states generating more than half America’s $20 trillion GDP join the push.

Big Tech beware: antitrust cop can think small too

21 June 2019

The watchdog’s bid to stop a $1.4 bln merger of two book printers is old-school. Yet the Justice Department’s meticulous definition of the sector bodes ill for Facebook and its ilk. Narrow market definitions plus broad measures of customer harm would be the worst of both worlds.

A plutocrat president is up for re-election

21 June 2019

Donald Trump launched his 2020 campaign with a populist appeal to America’s forgotten men and women. His signature first-term legislation slashed taxes for companies, which now hand over the least in decades despite abundant profit. Such actions speak louder than Trump’s words.

Exchange-traded funds will keep gold glittering

21 June 2019

The yellow metal’s price has broken $1,400 an ounce and touched highs last seen in 2013, thanks to scope for lower U.S. interest rates and Gulf tensions. Yet holdings in the largest gold-backed ETFs are only just joining the rally. That should mean bullion keeps its shine.

Big Tech warrants Bank of England’s open eyes

21 June 2019

The central bank may let technology firms deposit funds alongside regular lenders as Governor Mark Carney seeks to keep up with rapid shifts in finance. Lower costs and more competition are broadly positive. Large groups like Facebook, however, deserve a more cautious embrace.