American socialist, 28, discovers secret of 99 pct 27 Jun 2018 “We've got people, they've got money.” With that slogan Alexandria Ocasio-Cortez triumphed over a well-funded opponent in a New York primary election. The phrase captures the idea that clobbered 19th-century free-market liberalism. It may just master today’s privileged 1 percent.
Conagra boss finally gets his Hungry-Man and more 27 Jun 2018 With an agreed $10.9 bln purchase of Pinnacle, Sean Connolly seals the deal on a takeover of the motley crew of slow-growth grocery goods he has pursued since 2014, when he ran Hillshire. But it’s a high price and ambitious cost cuts don’t cover the premium he’s paying.
Derivatives spat is bad omen for UK-EU regulation 27 Jun 2018 The Bank of England wants European authorities to provide assurance that contracts worth 100 trillion pounds will be valid after Brexit. The EU’s watchdog says banks must prepare for the worst. Playing politics with financial stability bodes ill for future regulatory cooperation.
Disney-Fox-Sky puts UK M&A regulators in a bind 27 Jun 2018 After the Mickey Mouse owner boosted its offer for Rupert Murdoch’s group, Sky investors reckon they’re due a bump. UK regulators’ keenness to protect minority investors implies it should agree. But doing so will also put it in the odd position of adding fuel to an already red hot bidding war.
Softer U.S. China plan is no comfort for investors 27 Jun 2018 President Donald Trump rationally chose to use national-security deal reviews to restrict Chinese investment. It’s a win for his Treasury secretary over trade hardliners. But the review body is opaque, mixed messages have confused markets, and Trump still wants auto tariffs.
Endemol’s $4 bln sale needs “Love Island” glitter 27 Jun 2018 Rampant media M&A makes it a good time for the production company’s owners, Fox and Apollo, to sell. Potential buyers may balk at loss-making Endemol Shine’s debt and reliance on tired reality TV formats. That’s unless ITV’s matchmaking hit shows the off-trend genre has legs.
IWG profit flub takes heat out of bidding war 27 Jun 2018 The serviced-office provider said profit this year would be lower than expected because it needs to invest more and revamp drab space. The miss suggests competition from rivals like WeWork is hotting up. That will also give private equity bidders the upper hand in takeover talks.
China’s homegrown shale is worth the bother 27 Jun 2018 The People’s Republic produced a fraction of U.S. shale gas output in 2017. Terrain issues, deep wells and limited data explain why, yet better domestic technology and state support are pushing production up. With trade tensions rising, Beijing's costly hedge looks sensible.
Chairman exit lays bare Carige’s governance knot 27 Jun 2018 Giuseppe Tesauro left the wobbly Italian lender after clashing with management. The departure highlights a squabble between top investor the Malacalza family, and financier Raffaele Mincione, who wants a merger. A boardroom feud risks delaying Carige’s much-needed turnaround.
Simplicity fixes only some bank woes Down Under 27 Jun 2018 A back-to-core banking push by Australia’s top lenders aims to address both public anger over poor advice and unimpressive wealth management returns. CBA is the latest to outline spinoff plans. Such splits may deflect regulatory heat. It is less clear how they help with growth.
China dims chances to shine in Asia’s cloud 27 Jun 2018 Demand is rising for remote data services across the region, including from proliferating startups. Chinese vendors such as Alibaba are best placed to challenge the likes of Amazon. Beijing's push for "internet sovereignty," though, may impede expansion, even by local champions.
Big Oil win over U.S. cities will be short lived 26 Jun 2018 A judge dismissed a long-shot lawsuit by Californian metropolises trying to hold Exxon and others liable for climate change. But many cities are slashing their CO2 emissions, which account for some 70 pct of the global total. Those attempts can pipe fossil fuels into obscurity.
Uber leaves London pit stop with minor dents 26 Jun 2018 The ride-hailing app won back its permit to operate in the UK capital. Its new license is shorter than hoped, and concessions like providing drivers’ insurance will lift costs. But CEO Dara Khosrowshahi keeps his service on the road in Europe’s top market and an IPO on track.
Crypto goes to Hollywood without a happy ending 26 Jun 2018 An Italian producer has raised $575 mln in a private coin sale to take on the likes of Netflix and Facebook. His proposed entertainment platform will reward producers and viewers of films, music and other content with tokens. The audacious plan has as many holes as a B-movie plot.
Facebook D.C. probe could open a can of worms 26 Jun 2018 Congress wants to hold the social-media platform accountable for Russian election meddling and other concerns. That could affect a key protection for internet firms, which have broad legal immunity for posted content. Reducing it would expose them to a rash of costly lawsuits.
Bond markets start to call Saudi bluff on Bahrain 26 Jun 2018 The tiny Gulf kingdom’s bond yields are spiking. Bahrain’s borrowing and dependence on a high oil price make its debt hard to sustain. But Saudi Arabia has no interest in its neighbour devaluing or falling apart. The more markets push, the more likely Riyadh is to step in.
Migrants may offer for-profit prisons a reprieve 26 Jun 2018 The prospect of detaining immigrant families for months or longer could mean big bucks for incarceration factories CoreCivic and GEO Group. It’s one way these listed U.S. companies can hope to offset an aging population and reduced drug sentences threatening their businesses.
GE breakup ushers in brave new era 26 Jun 2018 CEO John Flannery is spinning off the ailing $111 bln conglomerate’s healthcare unit and selling Baker Hughes, ending more than a century of growth. Focusing on aviation and power has risks, but the plan slashes debt and makes GE manageable. It was Flannery’s only logical choice.
Hadas: Turkish strongman overcomes mixed economics 26 Jun 2018 Tayyip Erdogan’s nationalist and religious appeal gave him victory in the presidential election. Economic factors played a lesser role. The mix is typical for “will of the people” rulers. They make financial promises, but their supporters care more about identity than money.
Carillion pitchforks are a blunt but merited tool 26 Jun 2018 The UK pension regulator could claw back 17 mln pounds from bosses of the collapsed outsourcer. That’s peanuts compared to Carillion’s pension deficit, and implies a tortuous legal saga. Still, the group’s chaotic failure and reckless management warrant a hefty deterrent.
HSBC capital surplus may be hiding in plain sight 26 Jun 2018 The Asia-focused bank’s shareholders are disappointed by new CEO John Flint’s pledge to merely maintain dividends. A Bank of England review of capital rules is one reason to be cautious. But even with tougher requirements, HSBC could still afford to substantially raise payouts.
European TV ends self-destructive soccer splurge 26 Jun 2018 The financial balance of power is shifting from clubs to groups like Sky, Telefonica and Canal Plus. The sport gets less money. But halting rights inflation gives telecom companies cash to invest in mobile networks while media groups can better compete with Netflix and Amazon.
China’s $2 bln electric car rescue is an odd turn 26 Jun 2018 A subsidiary of property giant Evergrande has agreed to bail out a troubled U.S.-based Tesla challenger. Faraday Future’s Chinese founder Jia Yueting gets breathing space, but why Chinese or U.S. regulators would clear this deal is a puzzle. Investors may be celebrating too soon.
Diageo could use a chaser as it runs up China tab 26 Jun 2018 The British booze giant wants to spend some $900 mln to own a majority of Sichuan Swellfun. A rally in baijiu stocks means Diageo is buying high again. Absolute control offers defensive value, but a broader strategy will be equally important against $150 bln Kweichow Moutai.
Chinese bank IPO seeks to emulate its tech clients 26 Jun 2018 China Renaissance is preparing to go public just as Meituan Dianping and other new-economy titans do the same. The advisory shop’s slow revenue growth and small bottom line make a mooted $5 bln valuation seem punchy. Boss Fan Bao will be counting on an investment halo effect.
College dorms play host to financial keg party 25 Jun 2018 Greystar is paying a reasonable-sounding $3.1 bln for Education Realty’s student-bunking business. The astronomical cost of college is prompting changes to the market, though, such as kids telecommuting to class. It could deprive university real estate of its youthful glow.
Local TV deals face national-sized nemesis 25 Jun 2018 Gray Television’s purchase of peer Raycom Media for $3.6 bln will create the third-largest broadcaster in the U.S. Gray has similar problems to AT&T, Disney and Comcast, all doing debt-funded deals to catch more nimble rivals. But the TV minnows are starting from way behind.
GE’s small ball merely delays tough decisions 25 Jun 2018 The conglomerate is selling its distributed-power unit to buyout shop Advent for $3.25 bln. It brings CEO John Flannery closer to his divestment target but doesn’t really cut debt or bolster earnings. That will require bigger sales or spinoffs, and probably another dividend cut.
Harley throws wrench in Trump’s tariff gears 25 Jun 2018 The fallout from the president’s misguided economic nationalism has prompted the $7 bln American icon to move U.S. production of its EU-bound bikes overseas. Harley’s rational response to stupid policy should allow it to cut more than enough costs to outweigh short-term pain.
Euro banks’ leverage games mock Basel playbook 25 Jun 2018 The Bank for International Settlements says European lenders flatter their leverage ratios by shrinking balance sheets just before reporting dates. It shows how global rules are weakened by uneven implementation. The danger is that banks’ profits are riskier than they look.