Chipotle recipe is deep inside activist cookbook 7 Sep 2016 Pushy investor Bill Ackman bought a 10 pct stake in the struggling burrito chain, but hasn't revealed his plans. Previous stakes in Burger King, McDonald's and Wendy's have few obvious parallels. Creative finance can't fix Chipotle's real problem: reviving a damaged brand.
Apple’s new iPhone is about eyes more than ears 7 Sep 2016 Removal of the headphone jack has created most of the buzz. That and other new features in the latest iteration are enough to sell plenty of upgrades. A new camera, however, hints at Apple's ambitions in virtual and augmented reality, which could be the bigger temptation.
A $1 trln un-merger record that’s hard to beat 7 Sep 2016 Even with two more U.S. mega-deals on the rocks, 2015 is set to retain the global M&A crown. There soon will come a year, though, which surpasses its $4.4 trln of activity. It's the record volume of withdrawn acquisitions in 1999 that's more likely to stand the test of time.
Five Star scandal could boost Italian assets 7 Sep 2016 The radical political movement’s Rome mayor is on the ropes. That could reduce the risk of a 5-Star win at a national level, and encourage Prime Minster Matteo Renzi to consolidate power by calling elections. It could also reduce Italian debt’s penalty compared to Spain.
Anti-immigration policies amount to bad economics 7 Sep 2016 Donald Trump has ramped up his tough talk against foreigners. He wants to beef up U.S. deportation forces and even halt some new green cards. The plans are pricey and require thousands of additional staff. On top of that, hundreds of billions of dollars in output would be lost.
Minority investors should check the returns policy 7 Sep 2016 Sports Direct's shareholders are being trampled by a strong entrepreneur with a 55 pct stake. Italian luxury brand Prada has a similar issue: entrenched founders whose strategy isn’t working. Big shareholders can benefit companies, but other investors end up stuck if things sour.
Credit Suisse exit prolongs internal upheaval 7 Sep 2016 The Swiss bank has ditched trading head Tim O'Hara six months after boss Tidjane Thiam declared total confidence in him. His replacement oversaw big losses as head of Credit Suisse's securitised business. A plus may be that the struggling markets unit could now be pruned further.
Bond scarcity is least of Mario Draghi’s problems 7 Sep 2016 A shortage of eligible bonds may force the ECB boss to tweak self-imposed limits on asset purchases. The trick is to do so without upsetting sticklers for rules. It’s a minor test compared with how hard he’s finding it to push up inflation despite spending more than 1 trln euros.
Saudi faces choice of austerity over indulgence 7 Sep 2016 Falling oil prices may lead Riyadh to cut up to $20 bln of infrastructure projects. The risk is it might trigger a construction slump. Of course, Saudi could just increase borrowing and continue building in the desert. Restraint is perilous but would make more financial sense.
Anbang’s deal slowdown sounds unconvincing 7 Sep 2016 The Chinese insurer pledges fewer deals after a $16 bln-plus spree. That seems like a pitch for respectability before a Hong Kong IPO. But the bold, opportunistic group will probably keep finding new distractions to buy. That will be a turn-off for prospective investors.
Rakuten jig highlights Japan’s warped benchmark 7 Sep 2016 Shares of the shopping website leapt on news it would join the Nikkei 225. It shows the power of an arbitrary index weighted by share price instead of fundamentals like size or free float. The Bank of Japan's $60 bln-a-year push into index funds will only amplify the distortion.
Danaher returns to dealmaking with $4 bln dud 6 Sep 2016 Fresh from splitting off its industrial arm, the healthcare giant is buying molecular tester Cepheid. Cost cuts cover barely half the 54 pct premium and investors aren't buying promises of extra revenue. CEO Tom Joyce's claims of greater efficiency and growth are falling flat.
VW jolt not enough to end Icahn trucking nightmare 6 Sep 2016 The investor's 20 pct stake in Navistar got a boost from the troubled U.S. manufacturer's partnership with the German giant. Five years agitating for change has yielded nothing for Icahn or fellow activist owners. The stock needs to rise by half again just for him to break even.
Fox settlements another price for poor governance 6 Sep 2016 Rupert Murdoch's Twenty-First Century Fox settled a high-profile lawsuit against former TV boss Roger Ailes as accusations of his sexual peccadilloes snowball. Like the phone-hacking scandal in the UK, it's a result of lax oversight abetted by a dual-class share structure.
Germany sheds its M&A modesty 6 Sep 2016 Volkswagen, Bayer and Fresenius are among buyers who have more than doubled Germany’s share of global M&A this year. Some companies have ambitious new bosses; others are grasping cheap funding to address low growth at home. The surprise is this merger mania didn’t happen sooner.
Enbridge $28 bln deal balances oil, gas and future 6 Sep 2016 The Canada-based oil-pipeline group is buying Spectra Energy, a U.S. peer focused on natural gas. Expected cost cuts cover the 12 pct premium, while the all-stock structure limits debt and gives Spectra owners upside on projects to come. The question is whether that's enough.
Bayer’s tendrils close around Monsanto 6 Sep 2016 A raised $65 billion takeover offer puts more pressure on Monsanto to bend to its German peer. Bayer might stretch a tiny bit further to win over the U.S. seed-maker’s board, but a deal at these levels makes little financial sense. Monsanto is already pushing its luck.
Global leaders test limits of spreading wealth 6 Sep 2016 “Inclusion” was the buzzword at the G20 conflab. A fairer distribution of the fruits of growth is urgent when globalisation is under attack in the West. The challenge for politicians is to reduce inequality within rich countries without the rest of the world suffering.
Sports Direct gets image overhaul half right 6 Sep 2016 The retailer released a harsh report about working conditions before its AGM and announced a corporate governance review. The trouble is both will have been done by its own legal advisers. To really change investors' minds, owner Mike Ashley needs a more independent stock take.
VW’s empire building: the truck stops here 6 Sep 2016 For the German car maker to take 20 pct of U.S. truck maker Navistar sounds like a return to old expansionist habits. Boss Matthias Mueller pledged to simplify the business. The best hope is that it could still presage a split. A more global truck unit may be easier to spin off.
Spain’s sick make for healthy investment 6 Sep 2016 Germany’s Fresenius is paying 5.8 bln euros for Spanish hospital chain Quironsalud. It’s a reasonable price for a sector that has proved lucrative for its private equity owners. An ageing population and a fragmented market means it may still have potential.
DoCoMo spat adds odd twist to India scare stories 6 Sep 2016 The Japanese telco is struggling to enforce a London arbitration award ordering Tata Sons to pay it $1.2 bln. Tata says it wants to pay. India refuses to approve. Despite a slew of reforms, high-profile legacy disputes with foreign firms hurt the idea India is open for business.
Past returns don’t justify a wrong Birla merger 6 Sep 2016 Kumar Mangalam Birla's history of delivering strong returns is no reason to let pass a $9 bln merger of two holding companies. The deal gives the Indian tycoon more control of a hot finance arm at the expense of minority shareholders. On its own terms, the deal doesn't stack up.
Saudi-Russian oil truce more mirage than reality 5 Sep 2016 Riyadh and the Kremlin make awkward allies. Competing economic and political interests in the Middle East have been hard for both sides to overcome, even for the mutually beneficial goal of higher oil prices. Their latest attempts at a crude truce will probably be only illusory.
Barclays’ JPMorgan-isation has limits 5 Sep 2016 The UK lender has named the U.S. group’s equities head Tim Throsby as its new investment bank chief. With six of Barclays' 10 top execs JPMorgan alumni, CEO Jes Staley looks to be cloning his old bank. But Barclays' lesser scale - and various headaches - is a check on imitation.
Hong Kong vote shows deepening divide with China 5 Sep 2016 Protest leaders have won seats in the legislative election, and pro-democracy groups overall retained their veto. That will prolong political paralysis and may anger Beijing. The city's polarised politics cast an ever-larger shadow over its status as a global financial hub.
UK economy enjoys pre-Brexit sweet spot 5 Sep 2016 The services sector has rebounded from its post-EU vote slump, as did manufacturing. Recession may be dodged this year because Britain is getting the benefits of Brexit without the drawbacks. Faltering investment and rising price pressures are storing up problems for the future.
May’s migrant musings a cautious positive for City 5 Sep 2016 The UK prime minister has cast doubt on the efficacy of a so-called points-based immigration system post-Brexit. That sounds good for UK financial firms hit by restrictions on non-EU workers. The catch is Theresa May has little choice but to get net migration down somehow.
German protest vote could entrench Merkel 5 Sep 2016 In a regional election on the chancellor's home turf, the far-right Alternative for Germany won more votes than her own CDU. The populists' rise will increase political noise. Yet it also makes a continuation of Angela Merkel's current coalition after 2017 more likely.
Samsung Note 7 fires offer glimpse of new leader 5 Sep 2016 Faulty batteries have forced the $230 bln giant to recall its latest smartphone. The financial fallout may be manageable. But it gives outsiders a way to assess heir apparent Jay Y. Lee, who is trying to assert his authority on the conglomerate. Drastic action is encouraging.