Murdoch lets Bertelsmann pay up for publishing 25 Nov 2020 The German media group will buy Simon & Schuster for an eye-popping $2.2 billion in cash. It already owns the massive Penguin Random House and size gives it more power. But it also means U.S. regulators could thwart the deal, leaving Murdoch an opening.
Corona Capital: Record Dow, Basketball, GoCompare 25 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: Vaccine optimism shunts the blue-chip Dow Jones index through 30,000; U.S. college basketball gets back on the court; and UK publisher Future snaps up the bargain-hunting website.
Oil’s latest boost has longer-term thrust 25 Nov 2020 Multiple Covid-19 vaccines have lifted crude prices to March levels on hopes of an economic recovery. Producers may now pump like crazy, but renewed declines look less likely. Meanwhile, Big Oil’s virus-driven cuts to new supply should prop up prices further down the line.
Music royalty boom comes with dissonant undertones 25 Nov 2020 Hipgnosis, set up by bigwig Merck Mercuriadis, has spent $1.8 bln on hits by artists from Rihanna to 50 Cent. A fat yield and low returns elsewhere explain the fund’s pull. Investors must close their ears to poor disclosure, manic dealmaking and a rapidly changing industry.
India adds distress to distressed debt deals 25 Nov 2020 Tycoon Gautam Adani narrowly outbid U.S.-based Oaktree with a $4 bln bid for insolvent housing lender DHFL. The offer, however, was submitted late and cheekily expanded on its original plan. It’s the second time the industrialist has blindsided foreign buyers in a worrying trend.
Bond defaults air China’s dirty municipal laundry 25 Nov 2020 Missed payments and misconduct by state firms are putting provinces like Henan under fresh stress. It’s now having trouble issuing debt even as fiscal revenue shrinks. Henan and its peers are mandated to create millions of jobs, but tighter credit could slow recovery.
Musk passes Gates, but not yet in impact 24 Nov 2020 The Tesla mogul’s wealth edged past the Microsoft founder’s, at just under $128 bln. That’s because Gates has given vast sums to charity and supercharged vaccine development, especially for the poor. Helping out humanity beats amassing wealth. Musk may one day achieve that too.
Elliott’s Swiss cookie raid merits activist slap 24 Nov 2020 Paul Singer’s fund made a 733 mln euro bid for debt-laden baker Aryzta. It comes as the Otis Spunkmeyer maker’s soggy valuation may gain from a plan backed by other investors to break it up. The easing pandemic gives shareholders reason to hold out for more.
Affirm IPO earns half a credit for disruption 24 Nov 2020 The payment startup offers a clever alternative to credit cards, passing some of the cost of buy-now-pay-later to merchants. That suits peddlers of pricey items who want to juice up sales, or customers without access to plastic. The challenge is to make that more than a niche.
The Exchange: Post-Covid, post-Trump mega-trends 24 Nov 2020 Supply chains may become more diverse or shorter, tech companies with few hard assets will continue to thrive, and the transition away from fossil fuels will present opportunities. Taimur Hyat, COO of $1.4 trln asset manager PGIM, looks to the future with Richard Beales.
Corona Capital: Tiffany, Biden, Vaccines, Cash box 24 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: The cut-price jeweller issues less-than-sparkling results; the U.S. president-elect gets to start tackling the pandemic; Russia touts its discount vaccine; and UK firms gorge on shareholder-unfriendly equity issues.
Bigger DAX is still too small for Germany 24 Nov 2020 Exchange operator Deutsche Boerse is expanding the blue-chip benchmark by a third to 40 members. Including a larger slice of the country’s listed companies is a good thing. But given the ubiquity of family-owned mid-sized firms, investors are still missing much of the action.
Ethiopia piles war risk on shaky economy 24 Nov 2020 Civil conflict is sending the once fast-growing African nation into reverse. Lenders and donors may withdraw, deepening a dollar crunch from reduced investment and exports. High debt and reliance on foreign capital leave PM Abiy Ahmed ill-placed for a prolonged crisis.
China’s e-yuan solves one stimulus problem 24 Nov 2020 Digital currency transactions have topped $300 mln as the central bank steps up trials across the country. Virtual money that’s traceable is showing promise in getting consumers to spend rather than hoard. That might spur Beijing to use cash handouts to boost consumption.
Australian milk deal looks a little too local 24 Nov 2020 Vegemite-maker Bega could buy Lion Dairy for $400 mln after regulators blocked a Chinese buyer amidst diplomatic tensions. A home-grown champion could consolidate the domestic market, but as other Aussie industries are discovering, there are few substitutes for Chinese demand.
Yellen may be bolder Treasury pick than she looks 23 Nov 2020 If nominated by Joe Biden, the former Fed chair would be only the second U.S. central bank chief to take the top fiscal post. Her resume makes her a safe choice, but Yellen’s evolution on subjects like fiscal deficits and unemployment could make her more daring.
U.S. vaccine distribution faces funding black hole 23 Nov 2020 Covid-19 shots should start appearing within weeks, and the federal government has bought plenty of doses. But distribution will be expensive, and it falls in the hands of cash-strapped states. If federal funding is delayed, the U.S. could fall behind on inoculations.
How to limit future emerging market debt crises 23 Nov 2020 The IMF says countries could sweeten future debt restructurings with extras that will jump in value in good times. A better option may be to copy a junk bond instrument that offers respite during cash crunches. Persuading investors to accept either will be the biggest hurdle.
March’s market bailout demands regulatory payback 23 Nov 2020 Central banks were right to prop up financial markets when the pandemic caused panic. But their support exposed structural flaws and may lead to future recklessness. Preventing that requires regulators to extend their reach. Compared to 2008, the reforms are less obvious.
Corona Capital: Cash stockpiles, Empty real estate 23 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. companies hoard money; retailer rout causes real estate double whammy.
Vaccine euphoria may be headed for a reality check 23 Nov 2020 AstraZeneca is the latest drugmaker to say its Covid-19 vaccine is effective. It’s good news and offers hope of a return to normal. But tricky logistics, supply constraints and a reluctant public could stall a mass rollout. Investors eyeing a quick recovery may be disappointed.
Credit Agricole pays modest price for Italy Plan B 23 Nov 2020 The French bank’s 737 mln euro cash bid for Credito Valtellinese values the regional lender at less than half its tangible book value. The combination is smaller than a mooted deal with rival Banco BPM. At least CEO Philippe Brassac is not overpaying for Italian expansion.
Blackstone suited to be Crown buyer of last resort 23 Nov 2020 Regulators suspended the Aussie casino operator’s gaming licence for a new luxury Sydney complex. That darkens the clouds over James Packer’s embattled $5 bln empire. The buyout shop is already an investor and knows a thing or two about buying and breaking up real estate groups.
China’s SEC olive branch is sturdier than it looks 23 Nov 2020 Officials want to discuss plans to improve U.S. regulators’ access to audits of New York-listed Chinese firms. Scepticism is due but Beijing is tired of fraud scandals and Washington’s big threat to delist around $2 trln of market value is a stretch. There’s room to compromise.
Mnuchin and Powell create dangerous guessing game 20 Nov 2020 The U.S. Treasury secretary and Fed chief’s spat over unused bailout funds is a Rorschach test. Fiscal hawks may see an attempt to coax Congress into spending elsewhere. Others may see a petty gesture by an outgoing administration. The uncertainty is what poses the greatest risk.
Boutique SPAC merges Wall Street and Easy Street 20 Nov 2020 Perella Weinberg may hit up a blank-check company to go public after a year of IPO mutterings. The deal would be an endorsement of a less complex process to list shares. But boutiques aren’t consistently great investments and SPACs have their own reputations to clean up.
Review: A premature declaration of fintech victory 20 Nov 2020 In “Banking on It” Anne Boden, founder of digital lender Starling, sketches a plausible theory of why her business model will triumph. Score-settling with arch-rival Monzo disrupts the story. And until Starling turns a meaningful profit, Boden’s argument lacks evidence.
Corona Capital: U.S. airlines 20 Nov 2020 Concise views on the pandemic’s corporate and financial fallout: The CDC issued a warning to Americans not to travel over the upcoming Thanksgiving holiday as Covid-19 cases surge. Airlines, once again, are going hat-in-hand to Washington.
Cineworld debt horror show points to gory finale 20 Nov 2020 The world’s second-largest cinema chain wants to cut rents at its UK venues, the FT says. That would barely dent borrowings of $8 bln. Even if lockdowns end and viewers return, CEO Mooky Greidinger may need shareholders to inject as much as $2 bln, or risk lenders taking control.
Italian sovereign fund is a force to reckon with 20 Nov 2020 Fabrizio Palermo has turned 170-year-old CDP into a deal machine. Through his activism, Rome snagged stakes in Euronext and fintech star Nexi. If he gets another term as CEO, the urge to build champions won’t ebb. But the fund must prove it can keep politics at arm’s length.