KKR red card is a Telecom Italia own goal 8 Apr 2022 After months of fumbling, the Italian operator hung up on the U.S. fund’s 10.8 bln euro takeover approach. Stiff opposition in Italy had dampened KKR’s interest. For CEO Pietro Labriola, revamping the hard-pressed group under intense market scrutiny will be twice as hard.
Putin’s finances can survive a European energy ban 8 Apr 2022 The Russian president may cut off gas to Europe, or even face a hydrocarbon export freeze himself. That could mean up to $50 bln less annual revenue, yet Moscow’s reserves and high oil prices will cushion the blow. An embargo would hurt Russia, but not bring Putin to his knees.
Capital Calls: Credit Agricole’s Italian job 8 Apr 2022 Concise views on global finance: The French lender buys a 9% stake in Italy’s Banco BPM, making it harder for local rivals to launch a bid.
Next Hong Kong chief gives China chance to reset 8 Apr 2022 Carrie Lam’s handling of protests and Covid-19 weakened the city’s stature and deepened economic imbalances. John Lee, the frontrunner to succeed her, looks thinly qualified to fix such issues. A more pragmatic approach from Beijing, though, might shore up investor confidence.
China’s Russian energy pause looks very temporary 8 Apr 2022 Companies are holding off new oil purchases to avoid stumbling into secondary sanctions. But the Chinese are top owners of Russia’s key gas export facilities in the strategic Arctic. Beijing has a strong incentive to resist disruption to its long-term energy security plans.
Fed’s 5-year balance sheet plan may be interrupted 7 Apr 2022 The U.S. central bank aims to reduce its $9 trln of assets by $95 bln a month. At that pace, even already fat pre-pandemic levels might not be reached until early 2027. That's a long time in economics, and in politics. Like the last attempt to slim down, it risks being thwarted.
Telegram’s Russia performance is a one-man show 7 Apr 2022 Pavel Durov’s messaging app has resisted President Vladimir Putin’s edicts and survived them. The app’s popularity has surged, setting it up to double its $30 bln valuation. Yet for skeptics of transparency at Twitter or WhatsApp, Telegram arguably presents even starker risks.
Chancellor: In praise of slack 7 Apr 2022 Executives spent decades optimising strategies to boost efficiency and returns on equity. That left them exposed to shocks like the global pandemic and invasion of Ukraine. In a world that values spare capacity, Japanese firms look better placed than their American counterparts.
Culture wars: Musk’s Twitter punt, French election 7 Apr 2022 Outspoken political and business leaders are making big moves. In this Viewsroom podcast, Breakingviews columnists discuss why Twitter may have reaped the benefits from Elon Musk’s investment and how French President Emmanuel Macron needs to work hard to win over voters.
Pérez vs. Benettons will be an uphill struggle 7 Apr 2022 ACS, run by Spanish magnate Florentino Pérez, has sided with Brookfield and GIP to buy road group Atlantia, 33%-owned by the Italian tycoons. A takeover could cost 20 bln euros net of debt, but a looming 8 bln euro asset sale would help. Winning over the Benettons will be harder.
Russia takes big step towards default 7 Apr 2022 Russia will pay foreign bondholders roubles instead of dollars. A default looks likely after a 30-day grace period. Many investors, stuck with a currency they can’t use and facing an uncertain legal battle for any recovery, may prefer to take losses today and sell.
Capital Calls: Buffett’s HP bet, Gambling M&A 7 Apr 2022 Concise views on global finance: Berkshire Hathaway takes a hefty stake in the computer and printer maker; Betting group 888 negotiates a better price for buying UK bookie William Hill.
Moped charger gets trapped in electric-car traffic 7 Apr 2022 Shares in Engine No. 1-backed Gogoro have jumped 16% since this week’s debut, adding zip to the Taiwanese battery-swapping scooter maker’s valuation. Yet it trails most car-charging outfits. There are risks, but Asia’s reliance on two-wheelers warrants a narrower gap.
Antitrust worries can ground JetBlue’s Spirit bid 6 Apr 2022 The U.S. airline’s shock $3.6 bln bid for its ultra-budget rival offers few cost savings and could lead to higher fares. That increases the risk that competition regulators – or Spirit’s board – stop it getting off the ground. For skeptical shareholders, that would be a relief.
Rouble’s strength is sign of Russia’s weakness 6 Apr 2022 The Russian currency has appreciated 70% against the dollar since early March. Capital controls, 20% interest rates, and forced conversion of export revenues have been enough to push it up in very thin trading volumes. The rebound is a sign of economic woes, not resilience.
Inflation regime shift looks scarily plausible 6 Apr 2022 Fed boss Jay Powell and other global rate-setters admit surging prices warrant policy action. Where they disagree is how forcefully they need to combat such pressures. The BIS, the umbrella body for central banks, says a new inflationary era may lie ahead. Its case is persuasive.
Ukraine should be rebuilt without Russian money 6 Apr 2022 Reconstruction may cost as much as $200 bln, more than Europe’s post-WW2 Marshall Plan in today’s money. Even if Kyiv wanted Russia’s roubles, Western finance will keep Ukraine in Europe’s orbit. Moscow’s main penance for the carnage will be in the form of long-term sanctions.
Money-manager deal gets asset allocation all wrong 6 Apr 2022 Perpetual’s $1.8 bln bid for J.O. Hambro owner Pendal would create an Australian giant with $180 bln under management. A 39% premium on a depressed valuation paid for using 75% in stock is hardly compelling, though. It’s a wise investment that can be structured better.
Musk fully cashes in on Twitter hype 5 Apr 2022 Tesla’s CEO has joined the $41 bln social media firm’s board after buying a 9% stake. He has a solid tech track record, and with 80 mln followers, it’s an insurance policy he won’t start his own platform. But Twitter’s value is up $10 bln. His presence doesn’t validate that jump.
Coinbase’s first anniversary will be sober affair 5 Apr 2022 A year after the cryptocurrency exchange went public, its shares have fallen 40%. Relying on fees from retail investors has made for volatile cash flows. A planned NFT marketplace and launching derivatives trading could help, but in those areas Coinbase is already behind the pack.
Capital Calls: Citi hands SEC a SPAC victory 5 Apr 2022 Concise views on global finance: The top underwriter for blank-check firms is pressing pause on its business. It shows that proposed SEC rules have real teeth.
Bank bidders solve tricky German M&A puzzle 5 Apr 2022 Advent and Centerbridge revived their $2 bln Aareal deal by offering a 12% bump and letting rebel shareholders stay invested. It should work, defying the trend of failed German takeovers. The lesson is that debt-free deals with a flexible buyer stand the best chance of success.
Gazprom sale fumble triggers canny German pounce 5 Apr 2022 Berlin took control of the Russian group’s key European unit after it tried to engineer a quick sale. The move stabilises critical assets like gas storage facilities and energy suppliers. It avoids the upfront cost of a nationalisation, and buys time for a longer-term fix.
The cost of corporate kowtowing to China 5 Apr 2022 In “America Second”, Isaac Stone Fish lays into executives who suck up to Beijing. He and Pete Sweeney discuss how politics and economics are forcing U.S. companies to reframe their approach, what legislations might be in the pipeline, and whether military conflict is inevitable.
Hypebeast finds SPAC shortcut to dual listing 4 Apr 2022 The Hong Kong-listed lifestyle, advertising and e-commerce firm is selling a stake to a blank-check vehicle, thereby collecting a U.S. listing as well. The implied valuation, despite being at a premium, is sober by SPAC standards. The novelty is involving two stock exchanges.
Musk turns SEC into super-Twitter 4 Apr 2022 The Tesla boss revealed that he is now the social media group's top shareholder. Some 80 mln people track his tweets, which have got him into trouble with the U.S. regulator. When it comes to opinions about Twitter itself, though, the SEC's disclosure platform may have an edge.
Time for Europe to break energy sanctions taboo 4 Apr 2022 Alleged Russian atrocities against Ukrainian civilians are set to trigger a harsher EU response. Dependency on Russian oil and gas makes Germany and others reluctant to back a full energy embargo. Taxing hydrocarbon imports is a halfway-house option that still hurts Moscow.
India’s $168 bln bank merger bets the house 4 Apr 2022 HDFC Bank’s plan to buy its mortgage-lender parent at a tiny discount sparked a 10% rally in shares of both. New capital rules enable the long-speculated union. Benefits range from lower funding costs to resolving CEO succession. Preparing for a home-loan boom is the main goal.
Macron’s smallest problem is winning second term 4 Apr 2022 The French president’s lead over contender Marine Le Pen is shrinking. But a decent economic record and a divided opposition mean he’s the favourite to win the upcoming election despite asking the French to work more. Tougher years lie ahead to implement his manifesto.
Capital Calls: U.S. truck drivers go missing 4 Apr 2022 Concise views on global finance: Bonuses and concessions from Washington aren't enough to fill the industry's empty cabs.