LinkedIn adds mission creep to its bulging résumé 9 Apr 2015 The job-seekers’ social network is buying online learning company lynda.com for $1.5 bln. LinkedIn claims both companies share the same ambition: “help professionals be better at what they do.” That fuzzy goal may encourage the firm to take on jobs for which it’s not suited.
Zynga’s multi-level StockVille proving hard to win 9 Apr 2015 When founder Mark Pincus stepped down as CEO in 2013, the FarmVille maker’s market value jumped. It tumbled again on the news that Pincus, who controls Zynga with three classes of stock, was coming back to officially run it. The super-voting share game is a treacherous one.
Guest view: What’s holding technology M&A back? 9 Apr 2015 Though deal-making is near boom-time highs, most of it’s not about making bold bets on the future, says Andreessen Horowitz’s managing partner. Activism plays a role. But as newly public tech firms that are more resistant to external pressure mature, the dynamic will shift.
Bollore gets better of activists in Vivendi tussle 9 Apr 2015 Vincent Bollore has made peace with U.S. activists circling the media group he chairs. A vow to return 6.75 bln euros to shareholders is handy: Vivendi had been too vague about plans for its huge cash pile. But the French tycoon’s antagonists seem to have compromised more.
Grenada offers debt restructuring model for Greece 9 Apr 2015 The Caribbean island is close to agreeing a deal with creditors after years of wrangling. The deal structure, including warrants and phased debt relief, is equitable, and provides incentives for reform. It looks like a decent model for Ukraine—or even Greece.
Hong Kong stock boomlet tests China’s capital dam 9 Apr 2015 A trickle of Chinese money pouring into Hong Kong stocks via a new trading link has turned into a flood. The arrival of mutual funds is a factor, but a bigger one is speculation on the wall of money bursting to get out of the mainland. The dam is sturdy, but pressure is building.
Dimon revives soapbox stance with dose of gravitas 9 Apr 2015 JPMorgan’s CEO caustically defended banking before his firm’s own woes silenced him. Dimon is more nuanced and thoughtful in his latest shareholder letter, on everything from industry complexity to divining the next crisis. It makes his arguments far more compelling.
Mylan’s $29 bln Perrigo play may keep suitor away 8 Apr 2015 The specialty drugmaker joined pharma’s deal frenzy with an unsolicited bid for its Irish-based rival. An over $3 bln rise in Mylan’s share price reflects more than possibly juicy synergies, though. It suggests the firm’s a target – and eager for a dose of takeover prevention.
Shell’s BG pounce puts major rivals on the spot 8 Apr 2015 The energy giant’s $70 bln swoop on its UK competitor may draw counterbids from Exxon or BP. The former hinted it’s open to a mega-deal, and the latter needs to get bigger and dilute exposure in Russia. BP could even be a target, though Conoco and Anadarko make easier prey.
BG board has reasons to cut CEO’s $48 mln payout 8 Apr 2015 Helge Lund faced a pay controversy before he even joined the British firm. After Shell’s $70 bln takeover, he could be tens of millions richer. Lund only just arrived, he won’t stay post-close, and he didn’t craft the deal. BG might at least trim his reward to match his tenure.
Market curbing Google faster than EU 8 Apr 2015 After five years’ back-and-forth, European competition authorities may charge the internet search giant with abusing a monopoly. Changing advertising patterns suggest technology is moving ahead of the law in muting Google’s power – an echo of Microsoft’s case last decade.
Asset managers are an unpredictable liability 8 Apr 2015 A new IMF report says these institutions pose risks to financial stability which are hard to pigeonhole. The biggest funds are not necessarily the biggest perils. And some simple investment products carry risks because of herd behaviour. Regulators should be uncomfortable.
Edward Hadas: Iceland may have cure to bad banking 8 Apr 2015 The tiny island state had a particularly extravagant financial boom and an especially painful bust. It’s a great place to try something new. A parliamentarian there proposes moving to “sovereign money,” which fully separates money and credit. The experiment is well worth making.
France becomes Renault activist – to stop activism 8 Apr 2015 The state is temporarily hiking its stake in the carmaker to prevent other investors opting out from a law to double government voting rights. The reform is meant to protect long-term investors. As it is, Paris is using activist-style techniques to safeguard its own interests.
Shell could win from bold $70 bln swoop on BG 8 Apr 2015 The oil major is offering a fat 50 pct premium for its UK rival. But the share price was depressed and the synergies are attractive. The deal could prove a smart and opportunistic way to boost growth via deepwater assets and liquid natural gas – provided Shell keeps costs down.
Shell-BG highlights rise of the micro-boutiques 8 Apr 2015 The $70 bln deal needed just three advisers: Merrill, Goldman, and minnow Robey Warshaw. Rivals like Zaoui & Co have also won major mandates. For big M&A shops, two worrying trends are intersecting: CEOs seem ready to hire fewer banks per deal and to use much smaller outfits.
Taking on UK non-doms is good politics –and policy 8 Apr 2015 A tax loophole for the footloose rich should be an easy target for a centre-left opposition. But Labour is only now saying it plans to clamp down on “non-domiciled” residents. If the time is finally right, then Chancellor George Osborne missed an easy win.
Why silencing short-sellers is futile 8 Apr 2015 Asian companies and regulators are coming down hard on authors of negative research reports. Though it’s possible to track down even anonymous assailants, it’s tougher to prove the attacks were wrong or reckless. Executives have little choice but to face up to their critics.
Japan index: BOJ plays a risky waiting game 8 Apr 2015 The Bank of Japan refused to heed growing calls to further ease its ultra-loose monetary policy. Inaction could be risky. Stock prices are the lone bright spot in a gloomy Breakingviews Abenomics Index reading for February. A return of deflation could hurt the BOJ’s credibility.
China bond market serves up sweet taste of failure 8 Apr 2015 Messing up is good, at least in small doses. A default by a restaurant chain that botched its transition to cloud computing could bring some discipline to a market that had little. The pity is that freedom to fail is a long way from being applied regardless of size and sector.
Royal Dutch Shell and BG open mega-deal pipeline 7 Apr 2015 The $200 bln energy giant is in advanced talks to buy its $46 bln gas rival. It could be an opportunistic move for Shell, whose vulnerable target has a new CEO. There could yet be other suitors for BG. Any deal is also bound to kick off other big transactions in the sector.
Bankers may slink past patrolmen with $5.3 bln LBO 7 Apr 2015 BofA, Goldman and five other lenders are financing the year’s biggest buyout. The valuation of Informatica, at 18 times EBITDA, by Permira and a Canadian fund implies leverage beyond regulatory caps. The tech company’s cash flow and deferred revenue should make the math work – just.
Costs of split help DuPont in activist fight 7 Apr 2015 The $65 bln chemical maker says Nelson Peltz’s proposed breakup would bring dis-synergies adding up to over $10 bln in present value. The numbers are plausible. Maybe slicing up DuPont would make value-adding cuts easier to deliver – but that’s a tough case for Peltz to make.
Rob Cox: Race to bottom of global subprime begins 7 Apr 2015 A new Chinese-led financial world order is emerging to challenge the IMF and World Bank. Republican U.S. presidential hopefuls Rand Paul and Ted Cruz are in a way enabling the fledgling framework. The possible competition in the market for national aid money could be worrisome.
Europe’s scars from Greece would run deep 7 Apr 2015 Warren Buffett is among those who reckon a Greek exit could make the euro zone stronger. Losses are manageable, other countries won’t follow immediately, and the shock may even prompt excess debt to be tackled. But political and economic tensions would be dangerously magnified.
Comcast CFO becomes $400 mln envy of the C-suite 7 Apr 2015 With $4 bln from his employer to invest in chunky deals, Michael Angelakis may sock away a huge retirement fund. If he can generate a 17.5 pct gross return, Breakingviews pegs his share at some $40 mln a year over a decade. Finance chiefs will be firing up their spreadsheets.
FedEx bets $5 bln on Europe’s potential with TNT 7 Apr 2015 The U.S. shipper’s cash bid for its Dutch rival comes two years after Brussels killed a takeover by rival UPS. The price is 20 times the weakened target’s 2016 earnings. That sounds high. But a strong dollar, cheap debt and sizeable synergies could help deliver decent returns.
Iran deal moves oil closer to long bear market 7 Apr 2015 A framework deal to curb Iran’s nuclear program is likely to bring the country’s oil exports way up. Like Saudi Arabia, Iran gains more from market share than it loses from low prices. Higher-cost producers will take time to adjust.
Hugo Dixon: Greece has two weeks to produce red meat 7 Apr 2015 The default scenario is off the table for the time being after Athens confirmed it would meet a payment to the IMF on April 9. But it will probably be back by late April if Greece doesn’t come up with some serious reforms on pensions, tax and banking.
Tencent’s discount to Facebook harder to justify 7 Apr 2015 The Chinese social media giant generated about the same revenue as its U.S. counterpart last year and was more profitable, despite having fewer users. Yet it trades at a lower multiple of earnings. As the two business models converge, the valuation gap needs a rethink.