Medical firms’ $18 bln merger lacks clear logic 3 May 2016 Healthcare data miner IMS is uniting with Quintiles, a manager of drug trials. Each will own about half the combined company, and other than some cost savings, the reasons for combining are a bit nebulous. The presence of buyout firm TPG on both sides may offer some clues.
UBS’s golden ratio shows cuts are vital 3 May 2016 The Swiss bank is rejigging its wealth unit after trading income as a percentage of invested funds dipped to historic lows. Group return on equity was just 5.1 pct in the first quarter. UBS depends on rich folks being active. When they aren’t, the only option is to trim expenses.
HSBC and ANZ take roundabout path to stability 3 May 2016 Choppy markets and higher bad debts knocked HSBC’s pre-tax profit by 14 pct in the first quarter. Erstwhile rival ANZ slashed its dividend after first-half earnings dropped almost a quarter. The process of making banks safer and less exciting is proving far from straightforward.
Marchionne’s job upgrade bodes ill for Fiat 3 May 2016 The storied boss of Fiat Chrysler has taken over as chief executive of spun-out Ferrari, too. Leading the iconic luxury carmaker is surely the more alluring of the two jobs. Yet challenged Fiat Chrysler arguably needs Sergio Marchionne’s full attention more than ever.
BNP keeps capital catch-up plan on track – just 3 May 2016 The French bank’s revenue shrank less than costs, reversing the dynamic from the previous quarter and helping returns to improve. BNP needs profits to bring solvency in line with peers. But it would help if earnings were driven by a higher top line, not just lower bad debts.
Leicester City upends "size is everything" mantra 3 May 2016 The lowly UK soccer club has, remarkably, won the Premier League. Victory in Britain’s top division had been the preserve of a five-club oligopoly since 1992, and Leicester was a 5000-1 outsider. Businesses facing seemingly unbreakable glass ceilings have a new role model.
Aberdeen’s big problem is emerging "meh" 3 May 2016 The UK asset manager’s stock has slumped, despite a recovery in its core emerging market investment business. The good news is that outflows have slowed, and Aberdeen is hacking costs and diversifying. The bad news is that the recovery is tepid, and clients come back only slowly.
Baidu shows health is a huge flashpoint in China 3 May 2016 A dying student accused the search giant of promoting false medical information. The ensuing probe has cut $5 bln from Baidu’s market value: a big move but not an overreaction. Health scandals are highly sensitive and authorities pay close attention to outbursts of online anger.
Hong Kong retail will miss mainland money 3 May 2016 Chinese tourists are spending less, and increasingly forsaking the city altogether for Tokyo or Seoul. That is bad news for global and local brands alike, from Apple to Chow Tai Fook. Landlords will suffer too. Hong Kong could sell itself harder and open its doors a little wider.
TV’s green shoots will wither from digital heat 2 May 2016 Advertisers may commit $19 bln to U.S. prime-time shows – the latest sign of big money flowing to broadcasters such as CBS. Short-term quirks account for much of it, though. Madison Avenue’s love affair with the likes of YouTube and Facebook looks more durable in the long run.
Apollo Education owners risk flunking buyout 101 2 May 2016 Bidders for the University of Phoenix parent bumped their offer 5 pct to $1.14 bln. That’s generous, considering the for-profit college faces regulatory crackdowns and dimming financial prospects. With a vote on the deal imminent, investors grubbing for more may look like dunces.
Who cares who invented bitcoin? 2 May 2016 The whole point of the cryptocurrency and related technology is that they now live a life of their own. That makes Australian Craig Wright’s claim to be bitcoin creator Satoshi Nakamoto a curiosity at best. There is, however, a caveat related to the originator’s personal stash.
Halliburton-Baker blowup reverberates beyond oil 2 May 2016 The $35 bln oil-services deal is the latest to buckle under regulatory pressure this year, after Pfizer’s bid for Allergan. Baker Hughes pockets a $3.5 bln break fee at Halliburton owners’ expense. Punishing the boss and board would yield a more enduring lesson in M&A hubris.
Shrinkage may be just what subpar hedge funds need 2 May 2016 Warren Buffett is well ahead with his bet that the S&P 500 will beat them over a decade. In the first quarter, the $3 trln industry suffered its largest outflow in years. It could be for the best. The high-fee model is better suited for the periphery than the mainstream.
Washington starts hitting fintech where it hurts 2 May 2016 The FTC is probing PayPal’s fast-growing payment app Venmo. Customers and big bank bosses including Jamie Dimon and Brian Moynihan have complained about lax data protection at financial upstarts. The watchdog’s move serves as a warning not to favor speed over security.
Tribune’s foot dragging on bid is bad stewardship 2 May 2016 Gannett is asking Tribune shareholders to withhold votes for directors after going public with an $813 mln offer for the L.A. Times publisher. Trib Chair Michael Ferro looks like he’s stalling. Small wonder: He and his management team will struggle to beat Gannett’s 63 pct premium.