The Exchange: Journey of a vaccine 8 Dec 2020 Covid-19 vaccines developed by Pfizer, Moderna and AstraZeneca may soon be available for distribution. But how do you deliver billions of vials across the world? Rob Coyle, pharma head at freight giant Kuehne+Nagel joins Lisa Jucca to discuss how to meet the logistics challenge.
Wish’s cut-price approach fails to extend to IPO 8 Dec 2020 The owner of the cheap-and-cheerful e-commerce site reckons it’s worth up to $14 bln. Wish’s gamification of online shopping is a bit like China’s hugely successful Pinduoduo. The valuation suggests too much optimism that the model will translate for a U.S. audience.
Uber’s ambitions shrink faster than its losses 8 Dec 2020 The ride-hailing service is selling its self-driving unit and will take a stake in the autonomous vehicle start-up that is buying the division. Lower aspirations will mean reduced costs but CEO Dara Khosrowshahi’s company is only valued at $95 billion because of its dreams.
Funky debt bonanza is breeding complacency 8 Dec 2020 Companies from BP to Gazprom are issuing more bonds that count as equity than ever before. Low rates and investors’ thirst for yield explain why, yet the benefits of such hybrids are modest. To avoid future strife, companies should sell debt that is better at absorbing losses.
Buy-now-pay-later exposes regulation blind spot 8 Dec 2020 Sweden’s Klarna and Australia’s Afterpay both allow punters to buy goods and defer payment. Opinion is divided over how regulators should treat any loss on the enabling financing. Balancing innovation and stability is hard, but the rules right now aren’t clear enough.
Corona Capital: U.S. imports 8 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: U.S. consumers’ demand for products used at home help boost China’s shipments.
Judge Europe’s tech push in 2030, not 2020 8 Dec 2020 The bloc’s startups will raise $41 bln this year, venture firm Atomico reckons. It’s a fraction of America’s haul, and the region’s companies are still tiny by U.S. standards. Europe’s share of early-stage fundraising, however, is huge. That augurs very well for the future.
Hitachi unit buyout requires steely resolve 8 Dec 2020 KKR and Bain are among the suitors for the Japanese conglomerate’s $6 bln metals business. The company has fallen on especially hard times during the pandemic. It will take a big recovery and then some to generate a healthy return on the deal. A carve-up may even be in order.
Mining deal explores Sino-Australian common ground 8 Dec 2020 Perth-based IGO is in talks to buy a minority stake in a Tianqi Lithium mine for $1.5 bln. The Chinese company could use the money to cover $1.9 bln of debt from its investment in Chile’s SQM. It also would be welcome cooperation amid heated tensions between the two countries.
Blackstone’s SPAC foray puts price on convenience 7 Dec 2020 Payments company Paysafe is merging with a listed acquisition vehicle, while owners Blackstone and CVC halve their stake and extract $2.3 bln of cash. The cost to them is that they’ll leave roughly 15% on the table. Even so, it’s easy to see why SPACs tick private equity’s boxes.
Dylan sale suits him, but not changin’ times 7 Dec 2020 Universal Music is buying the 79-year-old songwriter’s entire catalog. With touring on hold and asset prices high, cashing out makes sense for older stars. Greener artists may need the dosh, but should think twice before selling too much work as the shape of the industry changes.
BC Partners finds awkward fix for low-tech buyouts 7 Dec 2020 After three failed IPOs, the private-equity firm may sell publisher Springer Nature to a new fund it controls for 6 bln euros, the FT says. It’s messy, but probably better than a botched listing. With public investors wary of sluggish assets, other deals may face a similar fate.
Activist minnow needs bigger fish to fry Exxon 7 Dec 2020 The $176 bln oil major has rarely listened to past investor pleas, so demands from a $40 mln stakeholder seems a non-starter. Yet its recent record of capital destruction may be enough for bigger funds to join in. Taking on the oil giant is a way to justify ESG lip service, too.
Corona Capital: Airbnb IPO, IKEA catalog 7 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: Vacation-rental app Airbnb ups its likely market valuation when it goes public later this week; and IKEA kills off its doormat-denting printed catalog after 70 years.
Green investing’s killer app faces growing pains 7 Dec 2020 Sustainable finance types long for a single metric showing how well companies are aligned with net zero emission targets. The Holy Grail exists, but there are many different versions. A harmonised methodology ahead of next year’s Glasgow climate summit looks ambitious.
Cellnex M&A machine scales top of valuation tower 7 Dec 2020 After two years of frenetic dealmaking, the telecom-mast firm’s market value has hit 25 bln euros. With cash flow from existing contracts accounting for maybe 90% of that worth, it’s getting little credit for future M&A. As rivals belatedly muscle in, that may be just as well.
Sinovac deal is placebo to governance woes 7 Dec 2020 A unit of the Chinese company making the Covid-19 jabs rolled out by Beijing has won fresh funds pointing to a $3 bln-plus valuation for the scandal-hit parent. It’s cold comfort for owners of the U.S. stock halted since 2019, and reminder that the vaccine lead may not pay off.
Davos set can easily make do in Singapore 7 Dec 2020 The city state makes for a decent approximation of the Swiss enclave to host the annual World Economic Forum gathering. It’s clean, safe, a private wealth hub and neutral enough. With the future billionaire class emerging from Asia, it might even suit as more than a stopgap site.
Eni’s UK wind farm tilt is cheap for a reason 4 Dec 2020 The Italian oil major is paying utility SSE and Norway’s Equinor just over 3 mln pounds per megawatt for a 20% stake in the first two phases of the Dogger Bank project. It’s cheaper than past offshore developments. That’s mainly because new farms don’t carry such big subsidies.
Glasenberg-less Glencore is surprise green champ 4 Dec 2020 Gary Nagle is the miner’s new CEO. The South African inherits a different firm to the one compatriot Ivan Glasenberg led. Running down coal mines to hit zero CO2 emissions by 2050 and boosting copper and cobalt pitches Glencore as an unlikely centrepiece of the green transition.
Fund firm merger-SPAC deal has hairy outline 4 Dec 2020 Dyal Capital, which buys stakes in asset managers, and Owl Rock, a direct lender, may merge and go public through a blank-check vehicle. It’s a complex triangular plan even without the parties' circular relationships. One question is whether there’s a sensible idea at the center.
Corona Capital: Movie releases, Ads, Running 4 Dec 2020 Concise views on the pandemic’s corporate and financial fallout: HBO Max uses its muscle on movie releases; advertising wins some and loses some; Brooks’ beast year.
Pet craze may pump up puppy-sized financial bubble 4 Dec 2020 Dog demand has soared under Covid-19, doubling the average UK pooch price to 1,875 pounds. Unlike tulip bulbs or South Sea Company shares, furry friends yield real non-financial returns. But a surge in supply arriving just as hard times bite is a recipe for a canine crash.
Hershey cocoa spat tests limits of investor ethics 4 Dec 2020 Ghana and Ivory Coast may stop selling sustainable beans to the Reese’s maker, accusing it of dodging payments for impoverished farmers. That could make it harder for the $31 bln group to flaunt its sustainability kudos. The snag is that so far shareholders don’t seem to care.
China’s Xi has precious opportunity to clean up 4 Dec 2020 From property to cars to chips, President Xi Jinping is pushing new rules to defuse risks and reallocate capital. It echoes his forceful effort to deleverage the economy in 2017. With world leaders distracted by the pandemic, Xi can endure more disruption this time around.
Japan Inc confronts limit of corporate carbon cuts 4 Dec 2020 Companies including Sony are lobbying for more renewable power in Japan. They need to satisfy clients like Apple, who have committed to carbon-neutral supply chains as soon as 2030. But even an edict from the $2 trln tech titan can’t force change where policymakers lag behind.
Stripe lobs chum into Wall Street’s turbid waters 3 Dec 2020 Goldman Sachs, Citi and Barclays are all partnering with the online payment upstart to garner deposits and fees from merchants who use it. For Goldman this is a land grab; for others it’s defensive. An added attraction may be the potential to bring Stripe to market – or buy it.
Burger King’s cooks could use a new recipe 3 Dec 2020 Restaurant Brands International prospered after buying the fast food chain. But its Tim Hortons outlet, which is planning a UK push, drags on the $27 bln group’s valuation. Investors 3G and Pershing Square are experts at cooking up deals. It may be time to change the menu.
Janet Yellen’s Treasury would be tough M&A arbiter 3 Dec 2020 The former Fed chair would oversee U.S. national security deal reviews if she becomes Treasury chief. She will likely rely on deputies with deep experience in cracking down in that area. Chinese-owned TikTok may be the first test and could show a more orderly but harder process.
Blackstone upends bond history with Ancestry.com 3 Dec 2020 The genealogy provider is disenfranchising large creditors in a $1.2 bln debt deal helping to fund the private equity shop’s buyout. Bondholders could push back in the future, but they can’t afford to sit out in a liquidity-drenched market. Issuers will keep their upper hand.