Bollore and apathy triumph at Telecom Italia 15 Dec 2015 The chairman of Vivendi forced through a bid for board seats at Telecom Italia, despite opposition from other shareholders. The clincher was a low turnout at the vote, a poor sign for TI’s management. Investors apparently prefer uncertainty to unexcitement.
Greater China slowdown bedevils Prada 15 Dec 2015 Over nine months of 2015, U.S. and Middle Eastern sales slipped. But Greater China was the showstopper. Local currency retail sales tumbled 24 pct in the region. The $9 bln label’s chosen focus – it even listed in Hong Kong – is looking like the wrong economic and fashion choice.
Dow-DuPont tax acrobatics more clever than cagey 15 Dec 2015 The chemical giants’ $130 bln merger and split should avoid any tax on capital gains. One needed contortion is to show that the shareholder rosters overlap. Dodges like so-called inversions have caught flak lately, but this looks more like a convenient fit with byzantine rules.
Qualcomm separates activist wheat from chaff 15 Dec 2015 The $70 bln chip company dismissed Jana’s call to separate its manufacturing and licensing arms. The firm led by Paul Jacobs has been more amenable to sane suggestions to cut costs, shake up its board and return capital. That’s a good balance between short- and long-term greed.
Spin-meisters’ $841 mln deal takes cue from clients 15 Dec 2015 The purchase of press release service PR Newswire is the latest in a string of deals for Cision, owner of the Gorkana journalist database. Acquisition “platforms” have already colonized the pharma and consumer sectors. It was only a matter of time before flaks piled on.
Howard Stern talk helps buoy Sirius XM 15 Dec 2015 The popular American shock jock renewed his contract with John Malone’s $21 bln satellite radio service for the next 12 years. Music is a big draw for Sirius XM subscribers but having Stern, Baba Booey and others in his merry band helps with retention in a crowded field.
Sanofi and Boehringer scratch each others’ backs 15 Dec 2015 The French pharma group is swapping its animal health business for the consumer arm of the German company. The 23 billion euro deal helps both while avoiding the risk of expensive M&A. Boehringer may have a marginally better deal, but Sanofi’s need is probably greater.
Pininfarina deal shows money buys taste after all 15 Dec 2015 Indian conglomerate Mahindra is paying a modest price to control the storied Italian car designer, saving it from high debt, anemic earnings and a jaded business model. As peers Ferretti and Pirelli already found, even Italian engineering flair doesn’t go very far without cash.
Spanish vote risks Portuguese-style messy outcome 15 Dec 2015 Polls reckon the incumbent conservatives will win this week’s election, but fall short of a majority. Many expect centrist Ciudadanos to back the winner, but it could instead opt for a deal with the Socialists and Podemos – similar to the motley crew that now runs Portugal.
GE upset offers Asian buyers way into U.S. kitchen 15 Dec 2015 The group’s appliance unit is up for grabs after a $3 bln sale to Electrolux collapsed. Buying one of the top makers of U.S. cookers, dishwashers and fridges would be transformational for Haier or Midea of China. But Panasonic, Samsung, or Germany’s Bosch might have other ideas.
China’s chip landgrab sparks $8 bln of hasty M&A 15 Dec 2015 China wants to assemble a domestic semiconductor giant via foreign takeovers. So rattled rivals are rushing to secure assets, especially in Taiwan. Micron’s $4.1 bln buyout of a JV partner makes sense. ASE’s gatecrashing of an agreed tie-up with the Chinese looks riskier.
Cox: Capitalism can help solve the gun problem 14 Dec 2015 Squabbling U.S. Republican presidential contenders can’t seem to agree on much, but they all say they want to end crony capitalism. By repealing a law that uniquely shields gunsmiths from the disciplining force of liability lawsuits, they could let the free market save lives.
Oil price slump takes gloss off Paris climate deal 14 Dec 2015 Brent crude trading close to an 11-year low could be a big boost to global growth. But at least in the short-term, the cheaper oil price will stoke fossil fuel demand. Even if the Paris accord helps longer-term, both oil prices and consumption are set to tick up.
Newell Rubbermaid overworks M&A machine 14 Dec 2015 The serial-acquiring owner of Sharpie markers and Graco baby gear is buying Jarden’s motley collection of candles, camping gear and more for over $15 bln. The value of the proposed cost savings more than covers the $2.7 bln premium, but the scale and debt strain conglomerate logic.
Third Ave teaches finance – and management – 101 14 Dec 2015 The U.S. investment firm’s closure of a high-yield fund, blocking withdrawals, has rattled markets. The episode echoes past failures caused by promising liquidity in illiquid assets. The Third Avenue CEO’s abrupt exit suggests flawed oversight, too. But contagion remains a risk.
BAE deal beats Rolls-Royce nationalisation 14 Dec 2015 The British government has concerns about the aero-engine maker that also handles some nuclear submarine work for the UK. In extremis, nationalisation is a possibility. A better scenario is that defence contractor BAE steps in. It might dust off deal ideas in any event.
South Africa’s Zuma discount is entrenched 14 Dec 2015 Assets of Africa’s second-largest economy are up after President Jacob Zuma’s rethink on a new finance minister. But 10-year bonds and shares are yet to recover all their losses. As the U.S. prepares to hike rates, the government has lost credibility at just the wrong time.
Bollore’s offensive on Telecom Italia looks clumsy 14 Dec 2015 The Vivendi chairman pulled support for Telecom Italia’s plan to convert non-voting shares into the regular kind. The move comes as his bid for TI board seats is struggling. If it works, he avoids dilution, but creates a messy conflict with the board and other shareholders.
Dixon: UK’s EU bind not quite a blind alley 14 Dec 2015 Prime Minister David Cameron has boxed himself in by asking the EU to let him deny “in-work” benefits to European migrants. Though other countries almost certainly won’t agree to this, there may be ways out of the box. Hopefully one will work. Otherwise, the UK could quit the EU.
New Renault-Nissan pact is only roadside repair 14 Dec 2015 France’s growing power at Renault is curbed, as is the French carmaker’s sway in Japan. It ends months of distraction for the auto alliance led by Carlos Ghosn. But the fiddly legal fixes only go so far. It would be better to see the duo drive towards a full merger.
Paris deal gives green light to eco-investing 14 Dec 2015 The climate goals agreed by 195 countries are laudably ambitious. Scepticism over governments’ ability to hit them is warranted. But the accord should encourage venture funds, bond- and shareholders to stump up more capital. And making an impact is not as hard as it may sound.
Wu-Tang Clan’s sales method is mostly madness 11 Dec 2015 The hip-hop collective auctioned a one-copy album in what seemed like a cool experiment after Prince gave one away, Radiohead tried a name-your-price model and Adele bypassed streaming. The exclusivity attracted an unpopular buyer, however. Wu-Tang’s experiment may end up unique.
Review: A bitter guffaw as Wall Street falls apart 11 Dec 2015 The 2008 financial crisis was too complex for any one medium to tell it all. Journalists and protagonists have penned books. Hollywood has tried terse drama. There have been documentaries and radio shows. The film “The Big Short” goes for dark humor that barely masks disgust.
Alibaba’s HK newspaper deal adds to mission creep 11 Dec 2015 The e-commerce giant’s purchase of South China Morning Post is an old headline with a new twist. Jack Ma follows in the footsteps of countless tycoons wielding influence through the press. The difference is that he’s forcing Alibaba’s public shareholders to lend him a hand.
DowDuPont tests limits of ambitious M&A 11 Dec 2015 A $130 bln union of the U.S. chemical titans is really four deals in one, given a planned three-way breakup to follow. The $30 bln of estimated value creation from cost savings is aggressive. Mergers of equals often become strained. At least the strategic rationale makes sense.
Goldman and Morgan Stanley cement M&A oligopoly 11 Dec 2015 Both banks landed advisory roles on either side of the $130 bln DowDuPont merger, extending their league-table leads in a record year of dealmaking. They also held the one and two spots during the 2007 and 2000 peaks. Cracking the top tier can be done, but it’s exceedingly rare.
Heathrow offers useful dry run for Brexit debate 11 Dec 2015 David Cameron has deferred a decision on airport development around London. One business group called the move “gutless”. But expansionists haven’t yet convinced the populists. As with the UK’s looming poll on EU membership, it will take more than economics to win over voters.
Cash calls leave issuers with unfinished business 11 Dec 2015 Lonmin and Standard Chartered’s shares have both slipped further than theory might suggest since issuing a combined $5.5 billion of new stock. That’s logical at miner Lonmin, which now has a big stock overhang. For lender StanChart, it looks like a vote of diminished confidence.
Breakdown: Uneven CO2 prices are better than none 11 Dec 2015 Plenty of governments and executives support a uniform carbon emissions cost. Yet it’s unlikely one will emerge from the U.N. climate change confab. That’ll leave a hodge-podge of local schemes in place. As the need for energy innovation rises, it beats having nothing.
L&G swells ranks of quarterly report refuseniks 11 Dec 2015 The UK insurer and asset manager has ditched quarterly reporting and will update the market on a semi-annual basis. Reduced transparency is forgivable: Legal & General’s business is long term and lumpy. Rivals could follow, though saying less rather than more isn’t for everyone.