China’s next top corporate tourist is HNA 28 Apr 2016 The conglomerate has added Radisson owner Carlson Hotels to its portfolio of airlines, property and electronics. It has spent more than $15 bln outside the People’s Republic in a year. As with other Chinese buyers, outsiders can only guess at the logic of HNA’s grand tour.
Zuckerberg tightens grip as Facebook cash flows 27 Apr 2016 Amid a tripling of profit and 50 pct rise in sales, the social network is creating a third class of non-voting stock. It cements control for CEO Mark Zuckerberg in the event of big M&A or staff rewards. At least the weak corporate governance also may help philanthropic deeds.
Goldman may find some dark alleys down Main Street 27 Apr 2016 The Wall Street titan is going mass market with GSBank.com to fund itself with more deposits and fewer short-term loans. It also invites scrutiny from more regulators, including the CFPB, DFS and other state enforcers. It’s not yet obvious the tradeoff is worthwhile for Goldman.
Carly Fiorina signs up to another doomed merger 27 Apr 2016 Presidential candidate Ted Cruz tapped the former Hewlett-Packard boss to be his running mate if he can somehow win the Republican nomination. The math, after a five-state sweep by front-runner Donald Trump, is about as compelling as Fiorina’s calculus for HP’s purchase of Compaq.
Comcast’s DreamWorks bid turns up heat on Disney 27 Apr 2016 The media and cable firm may offer $3 bln for the maker of “Shrek” and other animated films. The small but significant addition could help CEO Brian Roberts’ company compete with the Mouse, which it tried to buy in 2004. It might also ease the pain of losing Time Warner Cable.
Euro zone cracks show in QE plaster 27 Apr 2016 The ECB’s money printing has squashed interest rates for countries and companies, even in the south. Yet the difference in borrowing costs between riskier sovereigns and Germany is rising. Bond-buying has not made investors insensitive to risk. It may not prevent default either.
Yahoo’s bow to Starboard signals inevitable sale 27 Apr 2016 The troubled internet firm has agreed to appoint four of the activist investor’s nominees to its board. Starboard founder Jeff Smith’s addition to the committee exploring a deal is the most notable development. A slow and desultory process just received a long-overdue kick.
Apollo Education buyout barely makes the grade 27 Apr 2016 The $1.1 bln offer is a big comedown for a company worth $14 bln in 2009. A White House crackdown on for-profit colleges has left Apollo wayward, however. Let investors backed by President Obama’s allies struggle to help the University of Phoenix owner rise from the ashes.
Barclays inches forward as rivals inch back 27 Apr 2016 The UK lender’s first-quarter investment banking performance was less calamitous than peers’, but group return on equity was a sparse 3.8 pct. It should tick up if boss Jes Staley can keep selling unloved assets. If speed sometimes takes precedence over price, that’s okay.
Santander coping with trifecta of pain 27 Apr 2016 The Spanish bank’s three main markets of Brazil, the UK and Spain all face headwinds. Yet earnings fell a better-than-expected 5 percent in the first quarter and capital improved. The rest of the year may be rocky, but Santander deserves some credit.
Sterling and UK economy tell different stories 27 Apr 2016 British growth slowed in the first quarter and negative economic surprises are surpassing positive ones by a fair margin. Yet Brexit-focused traders have pushed up the pound. The problem is that sterling’s bounce hinges on politics, which is even more fickle than economics.
Losing bidder is indirect winner in Darty bid 27 Apr 2016 Furniture retailer Conforama has pulled out of a frenzied bidding war for the European electrical store. Their prudent approach that doesn’t count synergies made the price too high. Rival Fnac’s final bid is 70 pct above its original offer - but still looks like a good deal.
What’s the difference between Adidas and Nike? 27 Apr 2016 Around 30 billion euros. That’s how much more the German sportswear maker might be worth if it could match its U.S. rival’s operating margins. First-quarter earnings were strong and Adidas is getting more profitable. But incoming CEO Kasper Rorsted is starting from a low base.
Jack Ma’s jewel is a $20 bln mystery for Alibaba 27 Apr 2016 The e-commerce group’s financial affiliate is now valued at $60 bln. Alibaba has an option to take a 33 pct stake, or extend a profit-sharing agreement between the two. Yet their future relationship is clouded by regulatory uncertainty. Alibaba’s shareholders are in the dark.
Abu Dhabi could shoulder most of 1MDB tab 27 Apr 2016 The emirate blinked in a standoff over $3.5 bln of debt it guaranteed for the disgraced Malaysian investor, and is now paying interest on 1MDB bonds. The fund’s default is a headache for Malaysia. But Abu Dhabi’s reluctance to let down outside investors means it might pay more.
Apple can juice peaking iPhone sales with services 26 Apr 2016 The tech giant peddled fewer smartphones last quarter, causing a 13 pct drop in revenue. One way of reversing the unprecedented development would be to persuade users they need pricier models sooner. That’s difficult, though. A simpler solution lies with features like Apple Pay.
Twitter squandering users’ value to advertisers 26 Apr 2016 The $12 bln micro-blogging network missed quarterly-revenue estimates as ad spending lagged expectations. Boss Jack Dorsey’s plans for streaming video and targeting celebrities might pique Madison Avenue interest. But the advantage of an influential audience is slipping away.
Citi shareholders slow bank breakup momentum 26 Apr 2016 A proposal simply to study a split of the mega-bank led by Mike Corbat won just 3.5 pct support. That’s a broad rejection of rhetoric from the U.S. presidential race and elsewhere. Bigger is better probably will prevail until Wall Street and Main Street can agree otherwise.
Exxon can afford to run on less than AAA power 26 Apr 2016 Standard & Poor’s stripped the world’s biggest private-sector oil producer of its gold-plated credit rating, leaving Microsoft and J&J as the last of a dying breed. It’s a blow to prestige, but markets already priced in a cut. Like the Energizer Bunny, Exxon has juice to spare.
Bangladeshi heist updates notorious robber’s maxim 26 Apr 2016 Willie Sutton held up banks “because that’s where the money is.” After its network was used to try and steal $1 bln of South Asian funds from the New York Fed, SWIFT is warning customers about attacks. Rich governments are as vulnerable as big lenders in the age of cyber hacks.
Confucius say: Don’t confuse Ant with unicorn 26 Apr 2016 The $60 bln implied value of Chinese fintech group Ant Financial suggests PayPal-style innovation on steroids. It’s not so simple, though. The Alibaba affiliate’s fortunes may be tied more closely to the vagaries of PRC state capitalism than to private-sector disruption.
Saudi reforms could be low oil price’s cure 26 Apr 2016 Cheap oil helped Saudi Arabia’s deputy crown prince get backing for a plan to end his country’s addiction to crude. With that strategy to diversify the economy now rubber-stamped, higher prices are no longer a barrier to reform. Saudi could, maybe, have the best of both worlds.
Perella Weinberg scratching M&A itch in oil patch 26 Apr 2016 Joining forces with Tudor Pickering, as is being discussed, would combine energy expertise with restructuring know-how and global reach in one shot. A Goldman Sachs imprimatur also could help unite the boutique cultures. The logic suggests there’s more to it than just doing a deal.
EU budget delinquents have the upper hand 26 Apr 2016 The European Commission is considering penalising Spain and Portugal for flouting budget rules designed to underpin the euro. Doing so would risk a political backlash. Letting them off sends a signal EU budget rules are toothless. It hardly helps that the rulebook is so complex.
BP’s dividend policy has unexpected payoff 26 Apr 2016 A 7.5 percent dividend yield implies investors are skeptical the UK oil major can maintain the payout. But in the name of staying generous, BP is finding impressive ways to slash costs and spending. That’s fine unless cuts damage future earnings, or oil stays below $50 a barrel.
StanChart gets some emerging market relief 26 Apr 2016 The jump in the lender’s shares reflects comfort that business didn’t deteriorate in the first quarter. Recovering commodity prices and receding fears about China help sentiment. This was the stuff CEO Bill Winters can’t really control. Now to address the bits he hopefully can.
E.ON’s corporate alchemy hinges on nuclear boost 26 Apr 2016 Spinning off fossil fuels and energy trading might unlock around 7.5 bln euros in hidden value at E.ON, if the remaining group can catch up to valuations of peers like National Grid. A favourable deal with Berlin over nuclear decommissioning costs is a key precondition.
Chernobyl is symbol of shaky EU-Ukraine ties 26 Apr 2016 Thirty years after the disaster at the nuclear power station, EU money has helped build a structure to contain further reactor fallout. But Ukraine will have to sort any future issues by itself. Efforts to bring Kiev and Brussels closer suffer from a similar risky dynamic.
Mitsubishi Motors’ VW-style crash is justified 26 Apr 2016 The Japanese carmaker’s value has dropped by $3.4 bln since it admitted fiddling test data. Though uncertainties abound, that reaction doesn’t look excessive. If its cash pile halves, EBITDA drops by a quarter and already-low valuation multiples shrink, the decline is deserved.
Steel woes may dent Tata’s credit aura 26 Apr 2016 Lenders long assumed the unlisted Indian group would ride to the rescue of subsidiaries. Troubles at its European steel unit, which owes $6 bln, are testing that faith. If Tata forces banks to share its pain, other group companies may have to pay more for their $11 bln of debt.