KKR left to recount beans in Australian deal 7 Mar 2019 The $1.4 bln buyout of accounting software developer MYOB was all but in the books. Now a hedge fund owning 10 pct is unexpectedly demanding a much higher price. With KKR sitting on a one-fifth stake and the broader stock market turning up, the numbers may be harder to reconcile.
Facebook’s new privacy plan: Stitch wings on a pig 6 Mar 2019 Boss Mark Zuckerberg is extolling the virtues of small, closed networks, the antithesis of the behemoth he created. His manifesto borrows from Snap, WeChat and Apple, creating service-like revenue but jeopardizing advertising. It raises the question of whether he’s serious.
U.S. import levies are knives at a gunfight 6 Mar 2019 Donald Trump wants to cut America’s trade deficit. But the U.S. posted a record goods shortfall in December. The president’s tax cuts are stoking the country’s appetite for imports more powerfully than his tariffs can restrain it – while rapidly running up a fiscal deficit, too.
Lyft IPO has fewer Wall Street seats than it seems 6 Mar 2019 The ride-hailing firm has booked a staggering 29 banks for its trip to the public market. But only three, led by JPMorgan, will earn a decent fare. That’s an unusually small group. If Uber sticks with recent practice, there will be more wannabe drivers clamoring for their share.
Barrick can learn from mining’s golden oldies 6 Mar 2019 The gold miner seems to be warming to the idea of a joint venture rather than a merger with $18 bln rival Newmont. There’s a precedent: a decade ago BHP ditched a hostile bid for Rio Tinto in favor of a friendly iron-ore tie-up. That failed, but this time can be different.
Aon shows humble pie is a dish best eaten swiftly 6 Mar 2019 The insurance broker’s shares rebounded after it ditched its pursuit of Willis Towers Watson a day after admitting interest. As miner Barrick is finding, it’s awkward sticking with a deal investors distrust. Moving on early helps avoid permanent dents to credibility.
Resurgence of carry trades is riddled with risk 6 Mar 2019 Borrowing low-rate currencies to invest in higher-yielding ones is back in vogue. That’s because major central banks are deferring policy tightening and volatility is low. One or the other of these reasons may all too easily vanish, leaving followers of the trend high and dry.
Kraft Heinz new recipe could start with the board 6 Mar 2019 The $40 bln ketchup maker’s board is stocked with representatives of its main shareholders and has plenty of consumer expertise. But Kraft Heinz has missed a trick. Its rivals have more flavor from other industries. Having disappointed investors, there’s room for fresh insights.
L&G gets an awareness of its own mortality 6 Mar 2019 The UK insurer’s shares fell despite a hiked 2018 dividend. L&G’s bulk annuity business is still delivering, but margins are under pressure. The bright spot is a windfall from customers dying quicker – but that’s because its actuaries got their forecasts wrong.
Just Eat’s final course looks unappetising 6 Mar 2019 The UK takeaway group’s sales are soaring and it has a lead in its home market. The problem is that Uber and Deliveroo are eating its lunch. Just Eat can sell assets like the Brazil unit, but investors would be left with a group with no head chef and better-funded competitors.
ECB stimulus flows show why Draghi works so hard 6 Mar 2019 President Mario Draghi bought 2 trln euros of government bonds to boost the economy. But some proceeds were used to buy debt issued by non-euro zone companies, or left in bank deposits, the BIS says, diluting the impact. Though mainstream, money-printing remains an imprecise tool.
Goudet exit shows AB InBev model’s last dregs 6 Mar 2019 Chair Olivier Goudet is leaving the brewer because of conflicts with his role at JAB. Both groups share a taste for buying assets, and cutting costs. Yet the tension with JAB’s Snapple or Dr Pepper brands shows the strategy’s limits, and AB InBev’s need to go beyond alcohol.
Cooler Chinese military spending is cold comfort 6 Mar 2019 Beijing will dedicate just 5.9 pct of its budget to defence in 2019, after a splurge last year. Yet investments in unconventional weapons, plus a fishing fleet that pushes territorial claims with the help of a maritime militia, will keep the regional arms race simmering.
Nio’s right place, right time may be short-lived 6 Mar 2019 Tesla’s Chinese rival is revving up, delivering 11,348 units in its first year. Nio bucked a slowdown in the world’s largest car market thanks in part to sparse competition for luxury electric vehicles. But its net loss nearly doubled, and new rivals are hitting the road in 2019.
SEC throws sand in ESG investors’ wheels 5 Mar 2019 It’s not just CEOs who are irked by investors’ call for more disclosure over environmental, social and governance risk. A top official from the U.S. securities regulator said that such proposals waste the agency’s time. Pension funds pushing for change have a long march ahead.
Aon’s big deal suggests size without benefits 5 Mar 2019 The insurance broker is mulling an all-share bid for $24 bln rival Willis Towers Watson. There’s a precedent: Willis Towers Watson itself resulted from a merger that delivered additional revenue, lower taxes and cost cuts. This time round, it’s hard to see the attraction.
Buffett airline bet no longer pie in the sky 5 Mar 2019 Has the Oracle of Omaha changed his view that airlines are an investment “death trap”? He now owns stakes in some, and wouldn’t rule out buying one outright. It might be the airlines that have changed, though. Consolidation and smarter pricing have made the industry more resilient.
Raiffeisen is stalked by spectre of Danske 5 Mar 2019 Shares in the Austrian lender and two Dutch banks fell after media reports of money-laundering allegations. The former is the hardest hit since investors think the latter have stronger defences. Fears of a Danske-style U.S. probe mean they are in no mood to defer judgment.
Mario Draghi is boxed into being generous to banks 5 Mar 2019 The European Central Bank boss is expected to announce more cheap loans in the coming months. New regulations may otherwise cause a credit crunch just as the euro zone economy is slowing. Monetary policymakers will have little choice but to paper over a two-tier banking system.
Lyft and Uber could leave other IPOs idling 5 Mar 2019 The two ride-hailing firms could between them raise twice as much as the $7.1 bln tech debutants managed on U.S. exchanges last year. With Airbnb, Pinterest and others hoping to take similar trips to the public markets, Wall Street needs to get a lot more demand on the roads.
Private equity gives Evonik auto shock absorber 5 Mar 2019 The German chemicals group has sold its Plexiglas division to Advent International for 3 billion euros. Given it’s a cyclical business exposed to the car sector, that’s a decent price. With its shares flat compared to five years ago, investors may now value Evonik more richly.
Zimbabwe offers a way to test blockchain’s worth 5 Mar 2019 Even after a 60 pct devaluation, Harare’s monetary credibility is irreparably broken. That should make it an ideal test case for distributed ledgers replacing ropey central banks. Yet citizens’ justifiable distrust of the state doesn’t mean ceding monetary control is an easy fix.
Beijing strikes the right balance on stimulus 5 Mar 2019 The government lowered its growth target at the annual opening of parliament, as expected, and rolled out a $300 bln tax cut, which was less so. Officials will keep a hawkish eye on debt. The policy package looks like an effective, if awkward, way to support the real economy.
China Tower sends message investors want to hear 5 Mar 2019 After a weak debut, shares of the $42 bln mobile infrastructure firm have rocketed more than 50 pct in three months. A faster domestic rollout of 5G and a higher dividend help. Unexpected reassurances on corporate governance also set the company apart from other state monopolists.
Disney’s CEO pay sequel outperforms the original 4 Mar 2019 It took a shareholder revolt last March, but the board has canned some $13 mln extra a year for Bob Iger after the Fox deal closes. Incentivizing executives for dealmaking is bad practice. Ditching it will mollify investors, even though Iger is still minting a fortune.
Gold miners bury a good deal under two shiny ones 4 Mar 2019 Newmont has rejected an $18 bln stock offer from Barrick, saying shareholders fare better in its agreed purchase of Goldcorp. But Barrick’s arguments – and bigger benefits for Newmont’s owners – hinge on the two joining forces in Nevada. Neither merger is required for that.
Battle for Oslo Bors shows bidders’ fatigue 4 Mar 2019 Nasdaq has hiked its offer for the Norwegian exchange to 158 Norwegian crowns a share, or $788 mln, on a par with an already raised bid by Euronext. Its scale in the region gives it a minor edge. But the face off shows both suitors are already at the limit of financial logic.
May offers tiny plaster for gaping Brexit wound 4 Mar 2019 The UK government promised 1.6 bln pounds to help poor English towns. It looks like a ploy by PM Theresa May to get her EU withdrawal deal through parliament. But it pales next to aid from Brussels and the investment lost since the country voted to leave Europe.
Seats are elusive in U.S. trade musical chairs 4 Mar 2019 Some kind of deal with China may be within reach. Yet Trump officials are considering cutting India from a duty-free program. Congress wants to change a pact with Canada and Mexico. And talks with the EU and Japan are tense. For businesses, trade clarity is in short supply.
LVMH-Pernod bid talk makes for watery cocktail 4 Mar 2019 Ever since activist Elliott showed up at Pernod, Paris has been awash in speculation that LVMH covets the $46 bln spirits group. Adding booze brands like Absolut to its portfolio would dilute LVMH’s luxury profile. Bernard Arnault’s public disavowal of a deal is believable.