Market pours cold water on M&A animal spirits 25 Nov 2019 Schwab and copier maker Xerox are touting respective deals worth a combined $59 bln, but grand claims of value creation aren’t showing in share prices. For Schwab, customers may end up sharing the extra profit, while the Xerox deal on the table is unlikely to happen at all.
London sets Uber new, higher-risk test 25 Nov 2019 The British capital again refused to renew the $50 bln ride-hailing firm’s license. Uber can continue while it appeals, and in 2017 it eventually fixed enough problems to keep going. But now Uber has real rivals and public shareholders, weakening its power to fend off regulators.
Maybe eBay should rebrand as a VC fund 25 Nov 2019 The $29 bln firm is a shadow of Amazon in e-commerce, but selling StubHub for $4 bln shows prowess at incubating a business acquired for less than a tenth of that. Off-loading its classified operations could be similarly successful. And eBay’s biggest gains have come from PayPal.
Shell’s Eneco fail flags Big Oil’s tricky pivot 25 Nov 2019 The oil group lost out to Mitsubishi’s 4.1 bln euro bid for the Dutch utility. Paying up for small European players is easy for Japanese bidders with a low cost of capital. Less so for old crude producers trying to shift to low-carbon energy, while saddled with wary shareholders.
Maurice Levy and WeWork share unlikely synergies 25 Nov 2019 The 77-year-old adland grandee seems an odd pick for the office-sharing group’s C-suite. Yet the Publicis chairman earned his tech chops organising a huge Paris-based startup gathering. And his bulging blue-chip contact book may aid WeWork’s push for steadier corporate business.
LVMH can use Bulgari as model for Tiffany revamp 25 Nov 2019 The French luxury house has paid $16.2 bln to secure its U.S. jeweller rival. The final price tag is not too fanciful compared to past bling deals, but LVMH will still need to apply a lot of polish to make it stack up. Its past success at Bulgari gives much comfort.
Novartis sees too much good in bad cholesterol 25 Nov 2019 The Swiss drugs giant is buying The Medicines Co. and its artery-clearing drug inclisiran for $9.7 bln, or a fat 41% premium. But the sector is crowded and Novartis must wait years for a decent return. Governments and insurers may also tire of paying to treat lifestyle diseases.
UK election rivals ignore reality in own ways 25 Nov 2019 Prime Minister Boris Johnson’s manifesto for the Dec. 12 poll is short on policy and long on pledges to deliver Brexit soon. Labour’s Jeremy Corbyn is offering the opposite. The former dodges the difficulties of EU negotiations and the latter avoids difficult spending choices.
Japan’s sour Aussie milk goes down better in China 25 Nov 2019 Mengniu is gobbling up its second Australian acquisition in two months. Seller Kirin hasn’t had much luck with loss-making Lion Dairy. But the $15 bln buyer can easily afford the $407 mln snack. Unlike the previous owner, Down Under deals should appeal to its thirsty home market.
Hong Kong voters offer glimmer for recovery 25 Nov 2019 Record 71% turnout in local elections handed pro-democracy groups a big victory. It puts pressure on Chief Executive Carrie Lam to make some concessions. Even after six months of bumbling, she has a chance to take steps that could help keep the calm and reverse an economic slump.
AIA buys itself a little extra China cover 25 Nov 2019 The $120 bln insurer hired Lee Yuan Siong from Ping An to be CEO. Weathering strife in Hong Kong, its biggest market, is the most immediate challenge. His tech savvy and mainland political ties, nurtured during his time at the Chinese titan, will be valuable both now and later.
Facebook should keep the confessions coming 22 Nov 2019 The $570 bln social network has been unveiling a steady stream of data sins. The belated proactivity is welcome. Rising compliance costs may dent profitability but if Mark Zuckerberg can keep his ad machine going, an improved reputation will pay off financially.
Review: Math steals the show in quant legend’s bio 22 Nov 2019 Jim Simons of Renaissance Technologies is one of the most successful investors of all time, yet most people know little about the cagey mathematician. Gregory Zuckerman tries to change this in “The Man Who Solved the Market”. But algorithms are the real stars of this story.
Euronext’s Spanish journey looks tortuous 22 Nov 2019 Stephane Boujnah, the exchange’s acquisitive boss, may try to trump Swiss rival SIX’s 2.8 bln euro bid for Madrid-based peer BME. A higher offer may clinch the deal, but would test Euronext’s financial discipline. Appeasing local politicians would also come at a cost.
Coty’s $7 bln castoffs are a bad fit for Unilever 22 Nov 2019 The U.S. cosmetics maker will auction its salon brands and may raise up to 12 times the unit’s EBITDA. The price looks reasonable, but revenue is shrinking. Breaking into the professional market with stale lines such as Wella would undermine the European consumer group’s shakeup.
Chess “hybrid IPO” is less absurd than it sounds 22 Nov 2019 Ilya Merenzon, CEO of one of the game’s big broadcasters, may sell digital tokens that eventually convert to listed shares. Investors would get a discount but be stuck with a worthless asset if the planned IPO flops. Either way, World Chess’s profile gets a much-needed boost.
Anime hero toys with Japan’s robotic governance 22 Nov 2019 Bandai Namco, the $14 bln creator of Pac-Man, wants to buy the rest of Sotsu, the company behind the iconic Gundam empire. A Chicago-based investor has flown in to fight a flawed deal unfair to minority shareholders. It may, however, take regulators to save the day.
Meituan Dianping profit recipe lacks secret sauce 22 Nov 2019 China’s $68 bln food-delivery company had its second consecutive quarter in the black. Good weather and restaurant ad revenue helped. As global rivals have found, though, the ingredients for sustainable profit are elusive. It’s not clear yet Meituan has sourced them either.
Australia’s misbehaving banks run out of excuses 22 Nov 2019 Amid a $1.7 bln capital call, Westpac has been thwacked by a regulator for 23 mln money-laundering violations. Boss Brian Hartzer will find it hard to stay. The country’s lenders already have been shamed, fined and punished in other ways. It’s unclear how to set them straight.
Xerox prints double-sided hostility in HP bid 21 Nov 2019 The copier maker says it will take its $33.5 bln offer to the printer company’s shareholders if it won’t get serious about merger talks. That’s just silly. Reading between the lines, though, Xerox is threatening an activist battle, a prospect that ought to bring HP to the table.
Schwab-TD merger too appealing for its own good 21 Nov 2019 An $80 bln union of the two U.S. brokerages is an idea that has been tossed around for over a decade, and justifiably. Competitive pressures are intense, the industry fragmented, and the potential savings prodigious. That, though, gives TD Ameritrade room to set a high price.
Bacon exit offers veiled short on hedgie revival 21 Nov 2019 Louis Bacon is returning investors’ money in his firm Moore Capital. He’s the latest big hedge fund manager to step back, but the decision jars with a good year for traders who make bets on economic shifts. Bacon has his reasons, but it’s hardly a signal that recovery will last.
PayPal raids honey pot for $4 bln rewards deal 21 Nov 2019 The $120 bln payments firm’s purchase of online coupon and rewards firm Honey Science will lure customers who might otherwise go to rivals like Apple or Square. The target is even profitable. But at 40 times trailing revenue, there may be little sweet stuff left for PayPal.
UK $4 bln science LBO tests secondary-buyout craze 21 Nov 2019 Cinven, Astorg and Abu Dhabi’s wealth fund are taking a drug-testing group off KKR’s hands. The buyer knows the sector and has a clear M&A-driven plan, but the price is high. With tons of buyout cash and weak IPO markets, such eyebrow-raising “pass the parcel” deals will boom.
French lottery IPO may be as good as Macron gets 21 Nov 2019 Shares in La Française des Jeux popped 18% as the state-controlled group started trading. Winnings of $2 bln endorse President Emmanuel Macron’s privatisation push. But continuing protests and a national strike will hamper plans to sell more of the $20 bln Paris airport operator.
LVMH’s new Tiffany proposal is hard to turn down 21 Nov 2019 The luxury giant upped its bid for the U.S. jeweller to $130 a share, or $16 bln with debt. That’s more than 30% above Tiffany’s price before Bernard Arnault popped the question. The valuation is a stretch for the faster-growing French group. Tiffany may not get a better offer.
GM takes FCA to task over past and future slights 21 Nov 2019 Detroit’s top carmaker claims Fiat Chrysler bribed union officials to get a better deal than GM in contract talks. CEO Mary Barra’s crew even called out her almost-merger partner posthumously. The lawsuit smacks of payback, but its goal must be to gum up Fiat’s deal with Peugeot.
Sinking Thyssenkrupp needs more than a quick lift 21 Nov 2019 The German group’s shares fell after it cut its dividend. Selling its elevator unit will raise cash but leave a loss-making rump. With restructuring, the steel-to-ships maker could be worth much more than the current 7.5 bln euros, but boss Martina Merz faces an arduous climb.
China’s Pinduoduo digs in for a long Alibaba fight 21 Nov 2019 Investors wiped $11 bln off the e-commerce challenger’s market value after it posted a worse-than-expected quarterly loss. The rising cost of wooing consumers is to blame, as Pinduoduo battles its largest rival for big-city shoppers. Profitability just got a little more distant.
Alibaba’s bankers get more buck for their bang 21 Nov 2019 They are being paid the same $30 mln as the printers, but also sold $11 bln of shares that practically sold themselves. Uber’s advisers took a bigger 1.3% cut for a tougher $8 bln deal. For the amount of work involved, Saudi Aramco’s team is reaping the lowest return on effort.