Hugo Dixon: What sort of man is Tsipras? 8 Jun 2015 The next days will define Greece’s PM. He must choose between saving his country and sticking with a bankrupt ideology. If he is brave and smart, he can secure a few more concessions from creditors and a goodish deal for Greece. If not, he will drag Greece into the abyss.
Diageo bid genie may be out of the bottle 8 Jun 2015 Investors seem to think the $70 bln drinks giant is vulnerable to a takeover. Diageo shares jumped as much as 8 pct on sketchy reports of a possible approach from 3G Capital, of Heinz and Kraft fame. The UK-based company will need to respond, even if there’s no action this time.
Tesco’s South Korean unit stacks up for a buyout 8 Jun 2015 A disposal for around $6 bln would do much to fix the British grocer’s strained balance sheet. Tesco might not miss the Korean earnings that much either. It’s hard to see trade buyers bidding up the price. But it presents a rare opportunity for private equity in Asia.
Turkey enters era of enhanced uncertainty 8 Jun 2015 The AK Party’s loss of a parliamentary majority in Sunday’s election has a good side. It will restrain President Tayyip Erdogan’s dictatorial dreams. But neither the weakened AK nor the deeply divided opposition looks capable of attacking the country’s serious economic problems.
Japan’s GDP lift is bounty from currency war 8 Jun 2015 Output grew 3.9 percent in the first quarter, much faster than the 2.4 percent rate previously estimated. Investments made all the difference. Japanese exporters are ramping up capacity as they use the weak yen to fight for market share. Higher wages may be the next hopeful sign.
Elliott lands glancing blow on cosy HK market 8 Jun 2015 A local court has backed the activist’s gripe about Bank of East Asia selling stock to a friendly investor. Hong Kong firms routinely disregard lethargic shareholders to issue stock at will, abetted by docile directors. But Elliott’s challenge is too narrow to bring real change.
Deutsche CEO switch eases only two of its problems 7 Jun 2015 Joint bosses Anshu Jain and Juergen Fitschen are being replaced by ex-UBS CFO John Cryan. It’s oddly timed, but logical after poor results, scandals and rising investor ire. Cryan, though, needs to swiftly fill in the gaps of a questionable strategy that isn’t entirely his own.
U.S. jobs point to Fed’s sweet spot 5 Jun 2015 Some 280,000 positions were created in May, a healthy pickup to the 2015 pace. If this level of hiring keeps up and participation holds steady, unemployment would fall below 5 pct by year’s end. That’d beat the central bank’s projected range – and makes it harder to delay action.
Wal-Mart pits nepotism against experience 5 Jun 2015 The $240 bln retailer is replacing Chairman Rob Walton with his son-in-law. That’ll rile investors pushing for independent oversight. Greg Penner has a solid business background – and the family owns half the company. But Penner needs to prove he can get Wal-Mart back on track.
Mexico vote to damn ruling party with faint praise 5 Jun 2015 President Peña Nieto’s PRI will probably remain the strongest party after Sunday’s elections - despite a sluggish economy and voter disgust at corruption and violence. Opposition turmoil helped. But new voting rules may foster change, and economic reform is under way.
Vodafone talks raise more questions than answers 5 Jun 2015 The $100 bln telco is talking to cable group Liberty Global about an asset swap. Vodafone shares fell, suggesting disappointment among investors who’d thought a merger was on the cards. Smaller scale M&A is probably the right way forward, but any structure will be complex.
Thruppence: Should World Cup hosts foot FIFA woes? 5 Jun 2015 U.S. authorities are investigating how soccer’s governing body awarded the event to Russia and Qatar. As FIFA’s problems proliferate beyond graft indictments, Breakingviews columnists debate whether it is fair or practical to deprive host countries of the sport’s global fiesta.
TCI picks high-stakes fight in Spain 5 Jun 2015 Chris Hohn’s fund, the largest private investor in airport group Aena, is joining the company in challenging what it thinks is a misguided antitrust authority. Antagonising the supervisor is risky, but the accounting dispute puts more than 1 billion euros of value at stake.
Review: Growth pains for Asia’s eco-capitalists 5 Jun 2015 A new book by Mark Clifford hails green business as the antidote to Asia’s environmental crisis. But the eulogy inadvertently highlights companies’ unhealthy dependence on subsidies and debt. Clean-tech businesses must confront this flaw if they are to live up to the hype.
India GDP growth is one-third statistical illusion 5 Jun 2015 Official data have become utterly unreliable. A Breakingviews analysis of corporate and consumer behaviour suggests growth is now closer to 5 percent than the 7.5 percent claimed by the authorities. Investors are quite right to be upset by half-hearted monetary easing.
Rakuten cashes in on investors’ M&A optimism 5 Jun 2015 Its shares riding high, the Japanese group is raising $1.5 bln of equity to reduce acquisition-related debt. Investors have been supportive of Rakuten buying assets from messaging apps to airline stakes. This raises pressure to show the strategy can eventually generate returns.
Loans are no place for anti-takeover landmines 4 Jun 2015 The so-called “proxy put” gives lenders to a company the option of calling a default if enough board members are ousted. Investors say this impedes their right to vote for directors, and U.S. courts are tending to agree. Boards need to work with shareholders, not sabotage them.
Hugo Dixon: How Greece can cut a goodish deal 4 Jun 2015 Athens’ creditors haven’t quite delivered an ultimatum. Greece can probably get somewhat less austerity and an indication of some debt relief if it plays ball. The PM’s best option is to make one last push for concessions, then sign the deal, even if it splits his party.
European pair channel Brussels in internet bust-up 4 Jun 2015 Accor and Lufthansa are taking on web-based distribution and booking platforms. The hotelier and the airline want to save money and profit from their proprietary data. But customers may not be keen on these independent digital strategies. Fragmentation could breed resentment.
Beware a bluff from poker-playing Dish boss 4 Jun 2015 Charlie Ergen would be making a bold bet by merging his $35 bln U.S. satellite operator with similarly-sized wireless provider T-Mobile US. Given the spectrum Dish has accumulated, a deal could make sense. Ergen has proven wily, though, and plays his cards very carefully.
U.S banks may loosen M&A reins after Kentucky deal 4 Jun 2015 Smaller lenders have lots of reasons to merge: slow growth, rising costs and low interest rates. They’ve held back, though, in part because deals got stuck in regulatory quagmires. The Fed’s relatively swift assent to BB&T’s Bank of Kentucky swoop might put things back on track.
For bonds, crowds are more dangerous than Draghi 4 Jun 2015 The ECB chief’s relaxed attitude to volatility is fuelling gyrations in euro zone debt markets. But Mario Draghi is only stating the obvious. Supposedly risk-free assets have become some of the most perilous. The biggest hazard for investors is being part of too big a herd.
Apax’s new fund looks cheap for a reason 4 Jun 2015 The private equity firm is selling shares in a 611 mln euro fund at a 13 percent discount. That’s sensible for an asset class as chequered as listed private equity. Buyers will have to balance value against an untested strategy and little control. They shouldn’t count on a pop.
SoftBank’s $1 bln Korean deal needs to travel well 4 Jun 2015 The Japanese giant has added a stake in South Korea’s Coupang to its portfolio. It’s a big bet on a young company in a relatively small country. The online retailer is leading the shift to mobile shopping. SoftBank may need to export its expertise to justify the investment.
Alibaba fluffs first rule of being a movie villain 4 Jun 2015 The Chinese group’s film-making unit is raising $1.6 bln of equity, diluting shareholders and effectively leaving it a loss-making cash shell. On-screen bad guys who torture the hero usually give a lengthy account of their plans. Investors in Alibaba Pictures don’t even get that.
May Paulson’s Harvard gift spark plutocrat rivalry 3 Jun 2015 The hedgie’s $400 mln donation could soon be surpassed as the university’s largest, if recent history is any guide. Others like Bill Gates give more creatively, but engineering education is hardly a bad choice. Inflation – and competition – are welcome in the charitable context.
Overbanked tech IPO may rival Goldman’s deal 3 Jun 2015 Cybersecurity firm Sophos has six banks selling at least $125 mln of stock. That’s an average $21 mln per firm, a light workload. Facebook’s 33 underwriters shifted far more. Perhaps only the 128 banks on Goldman’s 1999 IPO did less. But the numbers hide a broader farce.
Beats gives Apple foretaste of car-making woes 3 Jun 2015 The iPhone maker is recalling 233,000 speakers made by the firm it bought last year. Apple has dealt with faulty goods before. But the scale of the recall and the reason, fire hazard, echo problems faced by the auto industry – a group CEO Tim Cook may want to join.
Lloyds legal fail takes gloss off 2009 Houdini act 3 Jun 2015 A UK court says the bank can’t redeem 4 bln pounds of CoCo bonds that helped it evade an even bigger crisis-era bailout. Without them, Lloyds would be much further off escaping its state shareholding. But it’s still left paying 200 mln pounds a year for near-useless capital.
Edward Hadas: FIFA and the root of all evil 3 Jun 2015 The soccer federation’s corruption shows how much harm abundant money can do to weak institutions. The problem goes well beyond sport. Modern affluence spreads lucre’s poison to everything from drug crime to the perfectly legal but socially destructive spiral of executive pay.