Norway triumphs over tycoon in strange M&A saga 21 Jun 2013 Shipping mogul John Fredriksen wanted to combine his seafood group, Marine Harvest, with smaller rival Cermaq. But Norway thwarted the $1.7 bln hostile bid. Consolidating key national industries is always tricky. Doubly so if you’re up against one of the world’s richest states.
Bernanke should be international man of mystery 20 Jun 2013 The Fed chairman has embraced a far more communicative approach than his predecessors. The benefits, however, aren’t obvious. Based on the latest reaction in the markets, investors are parsing his comments as much as they did Alan Greenspan’s. Maybe fewer words would say more.
End of QE could create a healthy stimulus 20 Jun 2013 Ben Bernanke has upset investors with talk of lifting off the monetary gas. But the Fed chairman’s bond-buying accelerator has stoked markets for commodities and other assets more than GDP growth. Less acceleration could deflate energy prices and provide a broad economic boost.
U.S. Supreme Court not so classy on class actions 20 Jun 2013 The top court barred retailers from banding together to sue American Express on antitrust grounds. The jurists seem to pick cases that make it easy to quash class actions and promote private arbitration. The effect is to erode legal rights – and perhaps the court’s credibility.
Regulator creates fresh uncertainty for Barclays 20 Jun 2013 A review of UK bank capital has found that Barclays’ leverage ratio is too low. The lender needs to generate or find 6 bln stg of equity to get to the 3 pct minimum, yet regulators haven’t specified a deadline. If it’s 2015 then Barclays is fine. But investors just don’t know.
"Britain’s got cheap talent" shows a way forward 20 Jun 2013 British workers have changed - they take pay cuts. This makes for a painfully slow recovery now, but for higher employment and improved national competitiveness. The UK leads Europe in foreign direct investment and should stay on top - as long as it stays in the EU.
SandRidge flouts good governance to bitter end 20 Jun 2013 The embattled oil explorer succumbed to a shareholder uprising and replaced boss Tom Ward. But the board is giving him some $90 mln on the way out and installing the tainted CFO and lead director as CEO and chairman, respectively. It isn’t exactly a fresh start.
Fear of Fed: Where to hide in Asia? 20 Jun 2013 Though Ben Bernanke’s tough talk has led to outflows, not all of Asia’s equity markets are equally vulnerable. South Korea and Hong Kong aside, dividend yields offer a margin of safety, particularly in Taiwan, Singapore and Malaysia. But the exchange rate requires a close watch.
Investors move into "fear-on" mode 20 Jun 2013 Money and moods move markets. The Fed hasn’t yet slowed down the QE cashflow, but it has changed the emotional tone. The old risk-off, risk-on dichotomy is giving way to something more sinister: wild flight from assets which benefit from easy money - in other words, everything.
Lending squeeze tests faith in China’s authorities 20 Jun 2013 A spike in interbank rates has raised fears of a 2008-style meltdown. China’s closed and state-controlled financial system has a better chance of averting a crisis. But policymakers can make mistakes. The lack of transparency means even a small slip could undermine confidence.
Don’t bet on RBS good bank/bad bank split 20 Jun 2013 The UK chancellor will examine the idea of hiving off the state-held lender’s ropey assets. Doing so without more public money or further slowing RBS’s privatisation will be difficult. Fortunately it looks more a sop to bad bank advocates than a genuine statement of intent.
Belgian postal IPO lacks the promise of parcels 20 Jun 2013 Bpost is delivering a 2.9 bln euro Brussels flotation. The warm reception it is receiving augurs well for UK peer Royal Mail. Both face falling letter volumes but promise big dividends. Yet Royal Mail is stronger in parcels and could benefit more from e-commerce.
Spain has only one problem left, but it’s big 20 Jun 2013 Madrid deserves the IMF’s praise for cleaning up banks and tightening public finances. But those improvements came relatively easy. Now comes the hard part: substantial labour market reform. Without much lower unemployment, any recovery will be sickly, volatile and short-lived.
Bernanke’s legacy at Fed won’t be his to forge 19 Jun 2013 Obama says the chairman has done enough. If so, his successor will face the task of rolling back years of ultra-easy policies. Jittery markets make that tricky even for a known Fed boss. After Wednesday, Bernanke may have only five FOMC meetings left to help set a new direction.
Enlisting China underscores the Petrobras crunch 19 Jun 2013 Brazil’s state-controlled oil company is being forced to sell fuel at a loss to restrain inflation. The government also wants Petrobras to pump $65 bln into the economy by investing in refineries. Involving China’s Sinopec as a partner may help but such aid can’t be coming cheap.
Home Depot out-flips and strips private equity 19 Jun 2013 A Carlyle-led group bought the retailer’s wholesale arm for $8.5 bln just before the real estate bubble burst. The firms should recoup on paper their HD Supply investment in the IPO. Home Depot fared better. With the proceeds, it bought back shares – which have since doubled.
BT does its best to counteract government poaching 19 Jun 2013 After leading an impressive turnaround, Ian Livingston is leaving the UK telco. The timing is surprising: BT is embarking on a big push in TV. But it’s hard to make the boss say no to a government job. And BT has plumped for a strong internal candidate who signals continuity.
Eni could be better off holding on to Saipem 19 Jun 2013 The Italian oil major probably wishes it didn’t own 43 pct of Saipem, the struggling oilfield contractor. Ditching the unit was politically tricky before a string of profit warnings. Now, with investor faith in Saipem crumbling, Eni’s least-bad option may be to keep it.
Dish refines guerrilla campaign against SoftBank 19 Jun 2013 The satellite TV company won’t up its bid for Sprint, paving the way for SoftBank to buy the U.S. telecom provider. Instead it’s focusing on winning a chunk of Sprint’s subsidiary, Clearwire. Dish’s switch in tactics may yet be enough to force SoftBank to sign a peace agreement.
Brazil’s new-look resource nationalism still hurts 19 Jun 2013 A long-awaited mining bill reflects weakening commodities prices. Instead of a windfall tax, royalties may double. The market expected worse, but a levy on mine revenue rather than profit will still make future projects less viable. The new law could dent investment – and Vale.
Edward Hadas: Rate rigging costs more than money 19 Jun 2013 In cash terms, the manipulation of supposedly objective reference rates and prices is a petty crime: relatively small gains for a few and microscopic losses for many. Ethically, though, the tolerance of untrustworthy behaviour makes the industry look particularly bad.
More geopolitics than shipping in Nicaraguan canal 19 Jun 2013 A controversial $40 bln project to rival Panama’s passage doesn’t seem to make financial sense. But if its Chinese sponsor is any kind of proxy for Beijing, the idea of one day balancing U.S. influence in Central America isn’t far-fetched. And for that, the price could be right.
Cypriot pleadings to Troika are premature 19 Jun 2013 The struggling euro zone state wants its rescuers to ease its bailout terms, a leaked letter shows. Cyprus is right to feel aggrieved, and ongoing capital controls are a huge concern. But as Ireland learned, tweaks on euro zone bailouts have to be earned.
EQT compromises to get Springer Science sold 19 Jun 2013 The Swedish buyout firm is selling the publisher for a decent-looking 3.3 bln euros to rival BC Partners. But it’s been a slog. A fallback IPO was imminent and a compromise forged through an “earn-out” clause implies BC still doesn’t quite believe the sellers’ rosy forecasts.
Super-yachts: the new symbol of China’s excess 19 Jun 2013 The chairman of Dalian Wanda, a Chinese conglomerate, liked Sunseeker’s yachts so much he bought the company. Liquidity is ample and China’s super-rich are doing fine. But as the economy slows, showy displays of inequality and flashy deployment of capital are disconcerting.
China milk deal leaves small investors whey-faced 19 Jun 2013 Mengniu’s $1.6 billion bid for Yashili gives the target’s founding clan the chance to cozy up to a national champion, and buyout firm Carlyle a good return. Other investors are less fortunate - they will be selling for less than Yashili’s IPO price just three years ago.
UK banking report pulls more punches than it lands 18 Jun 2013 The long-awaited parliamentary report on UK banks is underwhelming. A “Fred Goodwin” law that could put the reckless in prison is a bold idea. A call for an inquiry into banking competition is right but hardly novel. Ultimately, the work is long on words and short on deeds.
Google shareholders get modest future-proofing 18 Jun 2013 A novel deal protects the search giant’s non-voting owners against a stock discount – and from the day when Larry Page and Sergey Brin no longer wield full control. The convoluted legal settlement, however, only goes to show it’s better to avoid a caste system in the first place.
Jefferies shows Wall St earnings still a crapshoot 18 Jun 2013 The bank blamed a tough March and April for a 27 pct drop in Q2 fixed-income trading. That’s at odds with both market data and larger rivals – JPMorgan, for one, was well up on last year as of May. It doesn’t help that newly private Jefferies’ opacity makes comparisons tricky.
Tribune tax hell perpetuates vicious circle 18 Jun 2013 Recent scrutiny has made clear everyone from Apple to Citigroup exploits the dense IRS guidebook to maximize profit. Now, Tribune may face a $500 mln tab for sales of Newsday and the Chicago Cubs years ago under Sam Zell. Avoiding the taxman isn’t always easy money.