Middling performance nets $500 mln for Aetna CEO 5 Dec 2017 Mark Bertolini’s payday from selling the insurer to drugstore chain CVS stems largely from steady success and not selling shares amassed over the years. Yet Aetna’s performance is nothing special compared to peers. Genius is easy to find when there’s a heavy wind behind a sector.
EU fight against tax havens has flaws 5 Dec 2017 The bloc has put 17 jurisdictions, including Panama and South Korea, on a blacklist for failing to fight tax abuses. European Union countries, however, are free to decide what steps to take against offenders. A laudable drive can be undermined if some choose a lenient approach.
Brexit deal hinges on enlightened obfuscation 5 Dec 2017 A plan for Northern Ireland to accept some EU rules has met with opposition in Belfast and demands for similar treatment elsewhere. Prime Minister Theresa May's best hope is to fudge tough decisions, and use the threat of a chaotic exit – or another election – to quash dissent.
Deutsche Bank fund IPO raises perverse paradox 5 Dec 2017 The German lender plans to list a stake in its 711 bln euro asset management unit. A rebrand and new legal structure should help reassure clients and shareholders nervous about Deutsche’s health. But selling a chunk of its most profitable unit will leave behind a weaker bank.
Provident Financial probe complicates salvage job 5 Dec 2017 Shares in the embattled lender fell 13 pct after UK regulators investigated its car unit. Its card business is also under scrutiny and its home credit division is reeling from a botched revamp. Financial clouds will make it harder to find a new CEO or bolster its balance sheet.
Cineworld’s $3.6 bln Regal bid runs debt gauntlet 5 Dec 2017 The British cinema operator is raising $4 billion to help finance an offer for its struggling U.S. peer. Combined debt of 4 times EBITDA looks scary given threats to the industry from digital streaming. CEO Mooky Greidinger needs a booming box office to ensure a happy ending.
Jack Ma enlarges his Chinese payments peloton 5 Dec 2017 Having invested in bike-sharing giant Ofo, Alibaba affiliate Ant is putting another $300 mln into rival Youon. That's 80 mln potential users to lock into Ma's Alipay system. The move reflects rising stakes in a cutthroat battle with Mobike, backed by payments rival Tencent.
ICO bust heralds U.S. crypto-currency rules chaos 4 Dec 2017 The SEC has taken its first action against a coin offering, alleging the perpetrators fraudulently raised $15 mln. The CFTC, though, just gave the green light to bitcoin futures. The growing regulatory discord on virtual currencies increases the risks to investors.
Icahn knows a playbook to avoid with SandRidge 4 Dec 2017 As the governance-challenged driller did last week, CVR Energy tried to fend off the activist with a poison pill back in 2012. Icahn ended up bidding for the refiner and still owns 82 pct of it. It’s an experience neither he nor other shareholders will relish repeating.
Facebook targets children with Snap rip-off 4 Dec 2017 Mark Zuckerberg’s outfit is launching a messaging app for kids under 12. It’s a bid to attract a new generation of users by a company struggling to lure youngsters from Snapchat. Yet it’s also a gamble for Facebook. Targeting tweens will invite even closer regulatory scrutiny.
Apple exerts gravitational pull on chipmaker rise 4 Dec 2017 UK-based Dialog lost a third of its value on fears the iPhone maker will build its own chips. Rising sales of smart gizmos have boosted demand for semiconductors, and their makers’ stocks. Rosy valuations downplay the risks for a fragmented sector in a rapidly changing industry.
Broadcom fires board broadside from shaky platform 4 Dec 2017 The chipmaker is nominating 11 directors at Qualcomm, which has rejected its roughly $105 bln unsolicited offer. Only a brave shareholder would replace a board solely to advance a not-yet-financed bid. But the move pressures Qualcomm to engage before its annual meeting in March.
Rushed U.S. tax bill rewards oil, real estate 4 Dec 2017 The Republican Senate plan snuck in tax breaks for oil and gas partnerships, real-estate investment trusts and other sectors. One hiccup puts the research tax credit favored by business at risk. But overall, corporate America and the wealthy may receive an early Christmas gift.
Prysmian’s U.S. cable tie-up is well thought out 4 Dec 2017 The Italian cable-maker is buying loss-making U.S. rival General Cable for $3 bln including debt. The hefty premium is deserved if the buyer can deliver chunky cost savings. In a sector where scale is all-important, the deal helps Prysmian see off European and Chinese opponents.
Consumer groups’ health drive comes at a cost 4 Dec 2017 Germany’s Merck has invited bids for its $4.8 billion Seven Seas vitamins unit. With Pfizer also selling its over-the-counter business, Nestlé and rival consumer giants see opportunities to use their sharper marketing skills. But the health craze comes with pumped-up valuations.
Chinese fintech Qudian dangerously reverses IPO 5 Dec 2017 The $4.1 bln micro-lender backed by Alibaba's Ant Financial intends to buy back a big slug of the stock it just debuted in October. The plan follows China's crackdown on the industry. With the full implications unclear and a share-lockup expiry looming, Qudian's move is risky.
CVS deal reveals high cost of Amazon defense 3 Dec 2017 At $77 bln, the U.S. drugstore chain is paying over the odds to buy insurer Aetna. Identified savings cover only a third of the premium. In time, sending more patients to CVS clinics could lift profit. The plan, however, is more apt to simply stop existing customers from leaving.
Rio Tinto plays it safe with compromise chairman 4 Dec 2017 After a nine-month search, the $90 bln miner picked director Simon Thompson over former Xstrata boss Mick Davis to lead the board. His mining, emerging-market and buyout knowhow should prove useful. A fresh push to squeeze out cash is another sign Rio is keeping risks calculated.
New Delhi bowls Rupert Murdoch a bouncer 4 Dec 2017 Star India may be forced to share its $2.5 bln cricket rights with a state broadcaster if the league is deemed of “national importance.” That might score the government some points. For Murdoch, who is fielding interest for parts of his Fox empire, it would be a sticky wicket.
GOP casts principle aside in scramble for tax win 2 Dec 2017 Senate Republicans passed a tax cut plan after last-minute changes papering over deficit concerns and the bill’s tilt to the wealthy. Differences with the House must be reconciled. But an escalating Russian influence probe makes the party even more frantic to claim a victory.
Wall St poised to stop worrying and love bitcoin 1 Dec 2017 Crypto-currencies are set to take center stage. Mike Novogratz is launching a hedge fund, exchanges are teeing up futures contracts, big banks are likely to enter the fray and even the Fed is taking notice. It may end in tears, but the industry won’t ignore a $300 bln market.
Spotify and Tencent make oddly logical supergroup 1 Dec 2017 The Swedish music-streaming service and the Chinese tech giant’s rival unit may swap 10 pct stakes. Tencent gains another trophy asset and access to expertise making users pay. Spotify gets cash and a peek into a huge market. The risk is it muddies already hard-to-price IPOs.
Holding: Bet on Supreme Court to lift gambling ban 1 Dec 2017 New Jersey’s suit to legalize sports wagers makes financial policy sense, but the constitutional argument is stronger. Limits on the feds’ power mean states do their own thing on everything from pot to guns. A court already inclined that way is likely to extend it to betting.
Review: Firm ideas for a world of soft assets 1 Dec 2017 Modern economies are increasingly built on intangible factors like research and development and software. "Capitalism Without Capital" shows how this trend contributes to problems like rising inequality. But it stops short of tackling the rising dominance of big tech groups.
Jeremy Corbyn pay row shows costs of bank excess 1 Dec 2017 The UK opposition leader attacked “speculators” and criticised banker pay, as UBS chief Sergio Ermotti defended it. A decade after the crisis, remuneration still fuels dissent. Shareholders' failure to rein it in has led to dismal returns. Volatile politics could be more damaging.
Europe’s bad-loan struggle risks backfiring 1 Dec 2017 Italy is leading the resistance to a European Central Bank plan to shrink banks’ bad debts. A victory will be empty, though. Ignoring defaulted loans hurts new lending. Failing to clean up legacy balance-sheet risks could also kill off the euro zone’s bank deposit scheme.
Alitalia needs help to regain cruising altitude 1 Dec 2017 The insolvent airline has attracted bidders including Lufthansa and easyJet. Its 12,000 staff make it look bulky compared to budget carriers. Though the Italian government opposes drastic layoffs, further cost-cutting is necessary to return the carrier to financial health.