Qihoo buyout depends on China’s retail investors 3 Dec 2015 The Chinese web group is finalizing an $11.8 bln take-private bid. After contributing their own shares and tapping banks, bosses still need to find half that amount in fresh equity. Onshore wealth management firms who tap China’s mom-and-pop shareholders may help fill the gap.
Impeaching Rousseff as likely to falter as Brazil 3 Dec 2015 The attempt to remove the country’s hapless president probably lacks the votes to get far. Its proponent, the head of the lower house of Congress, has his own legal problems. But the process will further sap efforts to fix Latin America’s largest, and ailing, economy.
Pactual an arresting case against dual-class stock 2 Dec 2015 Incarcerated boss André Esteves has ceded voting control at the investment bank in a stock swap with his partners. It’s a neat fix, but reveals yet another risk of supervoting stock. Investors in companies with similar structures, like Google and Moelis, should take heed.
Unlikely activist rides against inbred energy deal 2 Dec 2015 David Tepper usually sticks to distressed debt. But the mass of potential conflicts behind SunEdison offshoot TerraForm’s bid for Vivint Solar assets has spurred the boss of hedge fund Appaloosa to change horses and take a 9 pct stake. It may augur greater scrutiny for the sector.
Zuckerberg’s supervoting shares prove double-edged 2 Dec 2015 Investors may one day regret the founder’s grip on Facebook. For now, though, it allows him to retain control while starting a long process of giving away 99 pct of his $45 bln of stock. The beneficiaries of Zuckerberg’s charity will see the silver lining to the governance flaw.
Yahoo CEO has run out of time for a turnaround 2 Dec 2015 After three years, it’s clear neither Marissa Mayer – nor maybe any top executive – can save the flailing internet company. The board’s job now should be to determine the best way to tidy up the firm’s affairs. Mayer’s best legacy may be that she got a good price for the core business.
Church of England could guide Vatican audit 2 Dec 2015 Pope Francis wants to appoint an external auditor of the Vatican’s wealth. About time too. Valuing assets such as the Sistine Chapel will prove an imperfect science. Yet the example given by the Church of England suggests that Good Book values may flow from good bookkeeping.
Bank rule zealots will be forced to back down 2 Dec 2015 Basel-based standard setters are finalising capital adequacy reforms that banks call “Basel IV”. But they clash with European policymakers’ growth plans and their Anglo-Saxon counterparts’ push for regulatory easing. The Bank of England’s newfound leniency will embolden others.
Cash is far from meeting its Waterloo 2 Dec 2015 Banknote printer De La Rue is cutting its output by a quarter amid a global glut. Denmark, Nigeria, Ireland and Swedish supergroup Abba are all chipping away at the status of cash. Yet growth in currency remains positive. The case for ditching it is compelling but impractical.
CVC gives wake-up call to old-style asset managers 2 Dec 2015 The private equity house is buying half of UK breakdown service RAC from Carlyle at a valuation of 2.2 billion euros. In some ways it’s a bog-standard secondary buyout. But it also sees private equity invading the turf of public market investment institutions.
Another reckoning looms for Sharp 2 Dec 2015 Lenders have bailed out the embattled Japanese electronics firm twice in the past three years. A more radical overhaul now looks likely – perhaps involving state-backed fund INCJ and affiliate Japan Display. If credit markets are right, there is little value for shareholders.
Essar buyout exposes Indian stock market weirdness 2 Dec 2015 Minority investors approved the delisting of Essar Oil last year. Now the controlling Ruia brothers are planning to sell half the $4.5 bln company to Russia’s Rosneft. The regulator has ordered Essar to compensate investors later. It’s a bizarre outcome in which no one looks good.
Mark Zuckerberg raises philanthropic bar to 99 pct 1 Dec 2015 It’s not disruption, but Facebook’s founder has built on The Giving Pledge championed by Warren Buffett and Bill Gates. Zuckerberg will give away nearly all his wealth, not half, in his lifetime. After moving fast and breaking things, he’s moving judiciously and learning things.
Cox: Two signs of M&A bacchanal’s last hurrah 1 Dec 2015 The boom just topped $4 trln, helped along by one telltale massive deal and another much smaller one. Pfizer’s takeover of Allergan is clearly predicated on exploiting tax loopholes while a U.S. retailer is getting into the pizza racket. Both indicate a cycle well past its peak.
Morgan Stanley tackling final profits puzzle piece 1 Dec 2015 CEO James Gorman may lay off a quarter of fixed-income traders. The unit’s wild quarterly swings usually decide whether the firm hits or misses financial-return targets. While cuts will help, what the bank does with the division’s product mix and capital would be more telling.
Puerto Rico debt payment marks end of fiscal rope 1 Dec 2015 The cash-strapped U.S. territory scraped together $355 mln for creditors, avoiding default on its government-guaranteed debt. A $945 mln payment due on Jan. 1 will be harder to deliver. Unless Congress offers relief soon, bondholders will still face a messy restructuring.
BlueCrest pinpoints major drag on returns: clients 1 Dec 2015 The $8 billion hedge fund will return capital to investors. High costs, increasingly risk-averse clients, and uninspiring performance didn’t mix well. From now on, BlueCrest will be free to chase higher returns, but finding them means taking on much more leverage.
Spinoff may recharge drained RWE 1 Dec 2015 The German power group may soon list renewable, grid and retail units separately, leaving behind a dirty old coal and nuclear business laden with debt. It looks like an attractive way to boost the 6.3 billion euro valuation. The downside is a potentially huge stock overhang.
Sumner Redstone’s health ails corporate governance 1 Dec 2015 The mental capacity of the Viacom and CBS chairman is being called into question again, this time in a lawsuit filed by a former girlfriend. At this point, shareholders in both media companies deserve a clearer idea of whether the ailing 92-year-old is fit to lead the boards.
Stress test implies end to UK bank capital hikes 1 Dec 2015 No institution failed the Bank of England’s 2015 exam, though RBS and StanChart missed on some metrics. The regulator also thinks capital ratios are only a little short of what’s needed in the longer term. That implies some lenders can pay higher dividends from their earnings.
Manchester City deal is good business for China 1 Dec 2015 Sport tends to consume capital rather than create it. Acquired kudos often bridges the gap. The $400 mln investment by two Chinese groups in one of the UK’s most successful teams could break the mould. Still, investors in English soccer still seem to value trophies above profit.
Gases suppliers caught by two deflating bubbles 1 Dec 2015 Linde cut its medium-term EBITDA forecasts by 5 percent, knocking its shares hard. The German industrial gas company is exposed to emerging markets and oil prices. Its dour outlook will blow cold air on the sector, including rival Air Liquide’s $13 bln bid for Airgas.
China’s new currency status points to weaker yuan 1 Dec 2015 Joining the IMF’s reserve basket is a symbolic feat. China is still a long way from letting free markets set the value of its currency. But a slowing economy, lower interest rates and capital outflows all suggest the yuan will continue to slip against the resurgent U.S. dollar.
South Korean web bank hopes ignore offline gloom 1 Dec 2015 The country has given the green light to two groups to set up internet-only banks. Foreign web giants including Alibaba and eBay have joined local companies to back the new ventures. The euphoria is oddly disconnected from the poor returns earned by country’s largest lenders.