Sky upside depends on Disney-Fox irrationality 25 Apr 2018 Brian Roberts’ Comcast formalised a $31 bln bid for the UK group. Rival suitors Bob Iger and Rupert Murdoch, of Disney and Fox, will struggle to match the U.S. cable giant’s synergies. Sky investors betting on a counteroffer must hope the media moguls ditch financial logic.
Xiaomi puts collective spin on tech IPO vows 25 Apr 2018 The Chinese firm says if net margins on its phones and gadgets ever top 5 pct, users will keep the spoils. Ahead of an IPO at a mooted value of up to $100 bln, this is a stunt worthy of Silicon Valley. It tells investors to focus on apps, and consumers that Xiaomi has their back.
Credit Suisse valuation gives no margin for error 25 Apr 2018 A 27 pct rise in underlying wealth management pre-tax profit allowed the Swiss bank to save face after a torpid performance from its investment bank. A 7.6 pct return reflects ongoing restructuring. But shares valued at a premium to book already price in rehabilitation.
Takeda’s stretch for Shire lets rivals limber up 25 Apr 2018 The Japanese drugmaker's fifth proposal for its Irish rival sweetens the bid to some $64 bln. The headline value, which uses a huge pile of stock for currency, is falling fast as Takeda shareholders recoil. That creates an opening for other suitors who can offer more hard cash.
Whitbread’s coffee spinoff is too slow 25 Apr 2018 The UK company is planning to hive off its Costa cafes less than two weeks after activist Elliott disclosed a 6 percent stake. That may lift the group’s undervalued shares and make the chain a bid target. But a 24-month timeline is too long for investors to wait for the takeaway.
Faith in Bolloré brain trust resists Africa probe 25 Apr 2018 Shares in Vincent Bolloré’s group fell 9 percent after French police questioned the tycoon about dealings in Guinea and Togo. Yet Vivendi, chaired by his son Yannick, barely moved. Investors are trusting that the family’s dealmaking dynamism will survive the test.
Indian telecom tower M&A leaves room for more 25 Apr 2018 A union of Bharti Infratel and Indus Towers creates a $15 bln company with more masts than heavyweight rival American Tower. This paves the way for indebted telecoms backers, including Vodafone, to take out a special dividend or sell part of the merged group to a buyout firm.
Viewsroom: America puts ZTE in the sin bin 25 Apr 2018 The Trump administration’s decision to ban U.S. companies from selling to the Chinese telecom giant is seriously hurting the company's business. And there’s no easy plan B for ZTE. Also: China has a new way to measure unemployment. Should investors take it seriously?
Hong Kong opens doors to far-from-super governance 25 Apr 2018 Tech companies with super-voting shares could be trading on the city’s stock market from June. The new rules offer more safeguards than New York, but without the legal redress U.S. investors enjoy. Expect some big listings – and shoddy treatment of minority shareholders.
Indonesia’s green ploy for copper raises red flag 25 Apr 2018 New environmental rules complicate and delay already tricky negotiations over control of Freeport-McMoRan's Grasberg mine. Cleaning up is a good thing, but the timing smacks of strong-arm tactics. It's a cautionary tale to foreign investors about an economy with so much appeal.
Water M&A fight puts governance center stage 24 Apr 2018 Eversource’s bid to upset SJW’s $750 mln deal with CWS is a close call on financial grounds. The interloper feels unfairly shut out, though, because SJW’s CEO ran the target until last year. And Eversource’s last big merger was messy. Watchdogs have to navigate choppy currents.
Wells Fargo shareholders give CEO welcome respite 24 Apr 2018 Owners overwhelmingly backed executive pay and directors at the bank’s at times ill-tempered annual meeting. It’s Tim Sloan’s first good news after a slew of regulatory hits. He owes Chair Betsy Duke some thanks. His task of transforming the firm’s culture may not be so easy.
United and Equifax boost GE chairman-CEO splitters 24 Apr 2018 The airline says having an independent chair lets CEO Oscar Munoz focus on running the company. Equifax is keeping the double act it adopted after last year’s massive hack. It’s recognition there are two jobs that need doing. Beleaguered GE is looking increasingly out of step.
U.S. sanctions rethink is only partly reassuring 24 Apr 2018 A Treasury decision to delay the effects of sanctions on Rusal and allow it to disentangle itself from Oleg Deripaska has boosted the shares of the Russian group. But it leaves U.S. policy harder to gauge. That doesn’t augur well for next month’s crunch decision on Iran.
Bookie investors misjudge odds in political casino 24 Apr 2018 William Hill, Paddy Power Betfair and GVC collectively lost 1 bln stg in value on reports Britain may cap betting-machine stakes and hike levies. That’s worse than feared, but not unimaginable given low UK gambling taxes. Smarter investors would have seen the writing on the wall.
Verizon better staid than reckless 24 Apr 2018 The $200 bln telecom firm's earnings met expectations, but rivals are otherwise engaged bidding for media companies. Verizon hasn't yet left its comfort zone, beside a half-hearted attempt for parts of Rupert Murdoch’s empire. When others are paying high prices, that's reassuring.
UK slide raises Santander’s modest bar to success 24 Apr 2018 Net profit in its British unit dropped 21 pct, blotting the Spanish bank’s solid first quarter. Strong growth in Brazil and Spain, however, more than made up for Brexit-related jitters. More of the same should allow Santander to hit its full-year earnings and dividend targets.
Peugeot investors jump the gun on Opel turnaround 24 Apr 2018 The French carmaker’s shares trade at a premium to European peers despite its below-average operating margin. Investors are already counting on a turnaround at Opel, the loss-making business bought from GM last year. A German labour dispute means there’s room for disappointment.
Didi floors its way to a public listing 24 Apr 2018 The Chinese ride-hailing outfit may be steering toward an $80 bln IPO this year as Uber finds its way. Didi also is moving into Mexico, adding food delivery and exploring custom cars with the likes of Renault. It could be a bid to race to opening Hong Kong and Shanghai markets.
ECB has big enough stick to repel bad-loan revolt 24 Apr 2018 A political backlash may force the European Central Bank to ditch plans for stricter provisioning of 760 bln euros of dud loans. The saga has weakened chief supervisor Daniele Nouy, and may delay reform of Europe’s banking union. But the ECB has other tools to cut the loan pile.
Vivo Energy offers pricey road to African growth 24 Apr 2018 The operator of 1,800 fuel stations across the continent is planning a stock market listing that values it at up to $3.3 billion. Earnings growth is healthy, and the company has scale. But a comparison with smaller regional rivals suggests the premium price tag is a stretch.
Hyundai agitator gets overly ambitious 24 Apr 2018 U.S. hedge fund Elliott wants better governance from the South Korean auto conglomerate, $11 bln returned to investors and higher dividends. Fair enough. As for structural changes, though, limitations on financial subsidiaries mean Hyundai is less likely to alter course.
Google’s owner starts to look like Alphabet soup 23 Apr 2018 The tech group’s $9.4 bln of earnings came with new noise. It adjusted the way it accounts for investments like Uber, moved some smart-home appliances into Google and now stresses “impressions” over clicks. Investors wanting concrete measurements are getting squishy ones instead.
Lampert gives Sears something to grin and bear 23 Apr 2018 The hedge fund manager, also CEO and largest owner of the flailing retailer, wants to buy its assets. Sure, there’s a chance he is getting an opportunistic deal. But Toys R Us shows that for retailers, bankruptcy risk is real. Lampert’s last ditch may be the least bad outcome.
USG bid upsets theory of the free-lunch Buffett 23 Apr 2018 Building-supplies maker Knauf is getting more hostile in its $5.9 bln bid for USG, whose biggest shareholder Berkshire Hathaway seems ready to sell. More recent buyers may not like the meager premium. Investing alongside Warren Buffett is no guarantee of aping his success.
Europe tests limits of net neutrality benefits 23 Apr 2018 Countries like Britain and the Netherlands are taking a strict approach to rules on treating internet traffic equally whereas the United States may roll them back. If opponents of net neutrality are right, Europeans will end up with less investment in networks and worse services.
Subsea 7 can still save McDermott from itself 23 Apr 2018 The Oslo-listed oil services group has lobbed in a $2 bln offer for its U.S. counterpart. Subsea 7’s bid looks low, and hinges on McDermott ditching an agreed deal with CB&I. But CB&I’s sale of Stone & Webster to Toshiba is a bad precedent, and Subsea 7 can afford to pay more.
Utility deal provides banquet for regulatory feast 23 Apr 2018 CenterPoint Energy’s $6 bln swoop for Vectren gives state watchdogs a chance to extract their pound of flesh for customers. As with many electric company M&A, there’s no number given on synergies. That leaves investors wondering if they’ll receive any juice at all.
U.S. bond yields may be throwing investors a curve 23 Apr 2018 The difference between short- and long-term Treasury rates is the smallest since before the financial crisis, raising fears of a coming recession. Yet the yield curve is a flawed warning, sometimes flashing years before a downturn hits. There are far better things to worry about.
UBS strength helped by two temporary leg-ups 23 Apr 2018 The Swiss lender’s investment bank made a 24 pct first-quarter return on equity. CEO Sergio Ermotti’s long-term downplay of fixed income looks great given recent equity volatility. But the weakness of key European peers also helps UBS look good.