Chinese buyer can put spring back in Reebok’s step 26 May 2021 Owner Adidas thinks Anta Sport and Li Ning, as well as private equity firms, may bid for the ailing brand, worth maybe $1.8 bln. Buyout barons have scored big apparel wins. But a red-hot domestic market means Chinese groups are best-placed to succeed where the German firm failed.
Capital Calls: Uber union 26 May 2021 Concise views on global finance: UK union’s success in representing drivers may hit potholes in the United States.
Goldman puts “long-term greedy” to work in China 26 May 2021 The Wall Street firm won approval for an asset management venture with local megabank ICBC, despite selling its shares in the lender for a bumper profit nearly a decade ago. Its painstakingly diplomatic exit leaves the door open for Goldman to rehash its old money-making mantra.
Huawei gets pushed toward collision with Alibaba 26 May 2021 Founder Ren Zhengfei wants his embattled hardware company to shift focus to cloud computing and software. That will pit him against the $570 bln e-commerce giant, which is also moving into IT services. Huawei's scale and resources make it a formidable threat.
Amazon pays to take MGM chess piece off the board 25 May 2021 Jeff Bezos’s $9 bln potential movie studio deal puts a huge premium on MGM. And it could get caught in regulatory purgatory. But Amazon would take a coveted asset off the streaming market. Meanwhile, the $1.6 trln e-commerce giant has time to catch up to media rivals.
FirstGroup rebels may rue waiting for the next bus 25 May 2021 Two shareholders of the UK transport operator may vote against a $4.6 bln sale of its U.S. businesses to EQT. While no knockout, the price looks fair given the lack of other certain offers. A delay could destabilise the company when it needs to focus on opportunities at home.
Exxon’s necessary transition starts with the board 25 May 2021 Investors are being asked to vote on a welter of measures to fix the oil giant. Dissident shareholders and proxy advisory services disagree on what and how much needs to be done. Having more independent board voices with experience in energy firms undergoing big shifts is key.
U.S. tech will slip the new global tax net 25 May 2021 The G7 may soon agree a 15% minimum corporate levy. That’s too low to stop profit being shifted to havens, which may dream up new sweeteners. And until Amazon and others pay taxes where they make sales, countries like France, Britain, and India will lose out as tech profit grows.
German landlord tie-up risks political subsidence 25 May 2021 Property giant Vonovia is offering 18 bln euros for rival Deutsche Wohnen. CEO Rolf Buch gets 160,000 apartments at book value, but the financial rewards look modest. His company may now also become a bigger target for Berlin politicians opposed to rent hikes.
Belarus plays airspace poker with a weak hand 25 May 2021 Irate western powers have banned flights over the Russian ally’s territory after it forced a Ryanair jet to land. Engaging in “air piracy” is easier for countries that can afford to lose overflight fees or are too big to fly around. Neither is obviously the case for Belarus.
The Exchange: South Africa’s prospects 25 May 2021 Johannesburg Stock Exchange CEO Leila Fourie tells Swaha Pattanaik how South Africa’s economy has coped with Covid-19. In an interview recorded for the International Economic Forum of the Americas, she also flags sectors that will rebound fastest and discusses ESG investing.
Bain discount auto IPO is cheap for a reason 25 May 2021 The private equity firm is listing French car parts seller PHE to raise 450 mln euros to pay down debt and prep for M&A. Europe’s fragmented after-sales market is due an overhaul. The jalopy-like multiple reflects uncertain growth and the threat from cheap-to-run electric motors.
Capital Calls: BlackRock/Exxon, Media deals, SPACs 25 May 2021 Concise views on global finance: The giant asset manager will vote for three dissident nominees for Exxon Mobil’s board; boutique adviser LionTree has benefited from a rash of media deals; Lordstown Motors show why blank-check merger projections can’t be relied upon.
Lufax buyback boosts case for direct listings 25 May 2021 Just seven months after an IPO where raising capital was not the main goal, the $31 bln Chinese online lending service is repurchasing a slug of its stagnant shares. Such quick reversals hardly inspire confidence. It’s one more reason to consider new stock-issuance alternatives.
China’s commodities boom poses policy conundrum 25 May 2021 The government is trying to forcibly cap a fierce rally of key industrial ingredients like steel and coal. President Xi Jinping’s push to reduce overcapacity and cut emissions has companies slashing output, while property and exports keep driving demand. Something has to give.
D.C. summer heat set to inflame new debt fight 24 May 2021 Lawmakers have to set a ceiling on federal borrowing after July 31, following a period with the limit suspended. August also marks 10 years since S&P cut the U.S. credit rating. With debt now $28 trln, $6 trln more than the last explicit cap, standoff memories may flood back.
Ray-Ban maker may finally live up to merger vision 24 May 2021 EssilorLuxottica has ditched a power-sharing pact that ushered in the 2018 deal but led to infighting. Axing duplication should allow the 63 bln euro group to deliver long-promised cost savings. Erasing the governance discount to listed peers could unlock 10 bln euros of value.
SPAC double downer makes room for clever trade 24 May 2021 Wary co-investors are making blank-check companies pay less for targets. And sceptical punters are pushing down stock prices of the vehicles themselves. It's making it possible to buy SPAC shares below their $10 cash value, an almost risk-free bet with improving upside.
North Sea oil IPOs had best take the plunge soon 24 May 2021 Ex-Centrica boss Sam Laidlaw is mulling a float that may see his Neptune Energy group valued at $10 bln. Equity markets are skittish and rival driller Wintershall Dea also wants to list. But question marks over gas demand make it riskier for owners CVC, Carlyle and CIC to wait.
French investors are collateral damage in EY spat 24 May 2021 Paris-listed Solutions 30 published its 2020 annual report even though the audit firm didn’t sign off its accounts. Post Wirecard, it’s encouraging that auditors are taking a tougher stance. But with lenders potentially pulling credit, it leaves shareholders in a painful limbo.
Capital Calls: “Friends” reunion, SPACs in D.C. 24 May 2021 Concise views on global finance: AT&T's HBO Max is streaming a delayed 25-year reunion of the popular sitcom cast just as the company ditches its media assets; busybody U.S. Congress is taking a hands-off approach to blank-check firms.
Bike sharing shifts into a more manageable gear 24 May 2021 Sloppy investment and price wars wiped out stacks of startups. Now survivors are pedalling toward public markets. China’s Hello has teed up an IPO in New York while a SPAC deal values California’s Bird at $2.3 bln. Both lose money, but revenue and regulation issues look fixable.
State lender is India’s surprise steady bank 24 May 2021 The $50 bln State Bank of India is in stronger shape than it was pre-pandemic. Net interest income grew 13% in the fiscal year, helped by its lower ratio of bad loans and a focus on lending to public employees. That’s a big win but a smaller corporate loan book is a worry.
Difference between AT&T and Comcast: deal hubris 21 May 2021 Both the U.S. telecom firm and cable company used M&A to somersault into media and distribution. Now AT&T is U-turning by ditching Time Warner, yet Comcast is humming along with NBC Universal. For all AT&T’s labors, it’s hard to come back from an expensive, ill-timed acquisition.
Review: Lessons from Wall Street’s forgotten bank 21 May 2021 Brown Brothers Harriman played a central role in American business for over a century. Zachary Karabell’s “Inside Money” traces its rise from cotton trader to kingpin of the financial elite. Though its power has ebbed, the bank’s restrained, low-risk approach remains relevant.
Capital Calls: Bitcoin, Procore 20 May 2021 Concise views on global finance: Getting paid in cryptocurrencies loses allure in U.S. President Joe Biden's tax plan; the $11 bln building software firm is a bargain compared to peers.
Bursting gas bubble leaves hierarchy of pain 21 May 2021 Until recently, the hydrocarbon seemed a vital bridge from coal to wind and solar. Yet the International Energy Agency now says output must peak by 2025. Gas bulls from European oil majors to producer-states like Qatar all lose out. But some will suffer more than others.
Northern Ireland row threatens its Brexit dividend 21 May 2021 British leaders have cast doubt on border arrangements they agreed following the country’s split from the European Union. It’s a blow for the province’s plan to lure foreign firms by offering access to both Europe and Britain. Its post-Brexit boom may be over before it started.
Chinese snack-maker IPO is a little too spicy 21 May 2021 Weilong is aiming to go public in Hong Kong with its oily, salty strips. Sweet sales growth and a juicy profit margin pass the taste test. A March fundraising from Hillhouse and others, however, implied a fiery $9.4 bln valuation. Paying more than 70 times earnings will sting.
Video games give Tencent a break from reality 21 May 2021 Hits like "Honour of Kings" powered a 25% rise in quarterly sales, to $21 bln. New titles should give boss Pony Ma some cover from regulatory threats and fierce competition. The respite may be temporary, but changes in the messaging, music and video divisions hint at what's next.