WM Motor fundraise will test its anti-Tesla appeal 1 Jun 2022 Founder Freeman Shen missed a chance grabbed by rivals Xpeng and Li Auto to float when valuations were high, stalling his dream of mass-producing affordable electric cars. An IPO filing reveals deep losses; hoped-for economies of scale may be harder to achieve in tough times too.
Fourth time to be the charm for Richard Li’s IPO 1 Jun 2022 Poor markets have derailed insurer FWD’s $1 bln float. That’s the third delay after a costly Hong Kong to New York round trip, and a flirt with super voting stock. The pause gives the tycoon time to improve the Asian-focused company’s profit record and to freshen its pitch.
Gold Fields shells out to beat the ageing process 31 May 2022 The Johannesburg miner is buying Canada’s Yamana in a $6.7 bln all-share deal, creating the world’s fourth-biggest bullion producer. Scant cost savings don’t justify the premium. Given his middle-aged mines, CEO Chris Griffith has little option but a target with a longer future.
ESG raider needs to dig deeper 31 May 2022 Jeff Ubben’s Inclusive Capital has made a $1.9 bln offer for UK homebuilder Countryside. It’s both a bet on the need for more affordable housing, and an opportunistic raid on a target tainted by governance woes. But the ValueAct founder’s lowball bid needs a little sprucing up.
Pete Stavros and his equity-for-all quest 31 May 2022 The KKR partner started the non-profit Ownership Works to help companies grant stock to entire workforces. He discusses the resistance, the success stories, and an ambitious plan to create $100 bln of wealth for employees on this episode of The Exchange podcast.
Capital Calls: Peltz bolsters Unilever’s M&A cred 31 May 2022 Concise views on global finance: The U.S. investor’s seat on the board should help CEO Alan Jope sell deals to investors.
Oil embargo will hurt Putin more than EU 31 May 2022 Europe will halt 75% of Russian crude imports now and 90% by year end. Replacing the lost fuel will hike EU consumers’ red-hot energy bills. Moscow can sell oil elsewhere but may still lose more than a third of its most lucrative export revenue source, hurting its war machine.
Credit Suisse capital hike would speed turnaround 31 May 2022 The bank is considering raising $1 bln of equity, Reuters reported. That would be painful at such a low valuation, and the company denied it. But bigger balance-sheet buffers could fund faster shrinkage of the accident-prone investment bank, reducing its share-price drag sooner.
DSM stocks up on ingredients trend with Swiss deal 31 May 2022 The $29 bln Dutch producer of food supplements is swallowing family-owned Firmenich for shares and 3.5 bln euros in cash. That boosts its appeal with consumer groups seeking to manipulate taste, smell and texture. By making concessions on governance, DSM has got a decent price.
Big Four split would have few winners, many losers 31 May 2022 EY may separate its accounting arm from the unit that advises on strategy and IT. The consulting spinoff, worth some $60 bln, might win more business due to fewer conflicts and scandals. Yet the rump auditing business may struggle to attract staff, and push up prices for audits.
Nomura and Mitsui cultivate fertile climate ground 31 May 2022 The Japanese duo is buying trees-focused Australian fund manager New Forests. Mitsui also has backed Climate Friendly, which helps farmers sell carbon credits for sustainable agriculture. Done properly, it’s a lucrative and impactful sector deserving of greater investment.
Geely-backed auto SPAC deal revs up too fast 31 May 2022 Unprofitable maker of tech for car cockpits, Ecarx, is going public via a $3.5 bln sale to a blank-cheque firm, but a plan to boost its sales beyond Li Shufu’s marques looks ambitious. The record Chinese deal requires a leap of faith so soon after Didi’s wild listing ride.
Italian telecom network Plan B will be hurdle race 30 May 2022 Telecom Italia and a state-controlled rival want to merge their broadband networks. For KKR, which owns a stake in the $6 bln incumbent’s last-mile unit, it’s a consolation after a failed takeover. Yet any agreement will need to win over investors, bondholders, and regulators.
Angola bank IPO ends very long march to capitalism 30 May 2022 Eight years after its birth, the African oil producer’s stock market is finally getting its first listing. Given the delay, floating 10% of lender BAI is a coup for President Lourenço’s reform drive. At under $1 bln, the valuation is low enough to ensure it completes the trip.
Busted AGL breakup clears smoggy climate thinking 30 May 2022 The $4.3 bln power producer is ditching half its board, including the CEO and chair, after billionaire Mike Cannon-Brookes rounded up support to torch a demerger plan. With the obstructive old guard gone, it can more swiftly shed coal, be it under new leadership or a new owner.
Stability and security trump threat of sanctions 30 May 2022 India is buying more Russian oil and coal, and a state-led group of companies is now eyeing Shell’s stake in an LNG project. Price volatility and climate woes are dictating national priorities. It’ll be thorny for the West to punish poorer countries for putting themselves first.
Capital Calls: Twitter snubs investors 27 May 2022 Concise views on global finance: The social media platform refused to accept the resignation of director Egon Durban, one more check for bad corporate governance. But it’s not like investors have held the company to a high standard.
Consumers are the next transitory guessing game 27 May 2022 Central bankers and investors spent months debating whether inflation was here to stay. Now that mystery applies to the financial state of Americans, who are glum about the economy but still spending. It’s a problem for the Fed, but consumers might just have staying power.
Oil’s discards show the thrill of boring spinoffs 27 May 2022 A decade ago, oil firms jettisoned slow-growing refineries like Marathon Petroleum to focus on high-margin exploration. These businesses have returned far more than the exciting drilling business. The gap could widen, encouraging Big Oil to consider something similar.
Financiers may pave U.S. campaign trail with gold 27 May 2022 With ex-Bridgewater boss David McCormick questing for a Senate seat, more Wall Streeters could try their hand at politics. Wealth built in bull-market times can give even novices a lift. And from Ken Griffin to Jamie Dimon, there’s no shortage of finance bosses with strong views.
Fingers crossed Davos Man gets it wrong again 27 May 2022 Gloomy delegates at the Swiss conference worried about a prolonged conflict in Ukraine, Covid-19 lockdowns in China, and runaway food and energy prices. But in 2020 they failed to foresee the global pandemic. This time, an incorrect forecast might be good news for the planet.
EU’s Ukraine budget support lacks long-term focus 27 May 2022 Kyiv will need at least $30 billion this year to plug the holes in its ravaged finances. Western allies have pledged enough money to keep it running in the short term. But as the country’s situation deteriorates, they should brace for a lasting effort to keep Ukraine afloat.
AB InBev’s low-alcohol miss has sobering effect 27 May 2022 The world’s biggest brewer wants 20% of its beer volume in 2025 to contain little or no alcohol. Hitting the booze-free target requires unlikely growth of 30% a year. That puts a dampener on CEO Michel Doukeris’s do-gooder vibes, as well as his sales and margin potential.
Subdued Alibaba strikes fitting new tone 27 May 2022 New finance chief Toby Xu's focus on cost cuts and better-than-expected sales growth powered a 15% stock rally. The regulatory-thwacked e-commerce group is taking control where it can but exercising discipline on the bottom line in a slowing Chinese economy invites trouble too.
New Toshiba board’s work extends beyond Toshiba 27 May 2022 The embattled $19 bln conglomerate nominated a Houlihan Lokey banker to be chair and directors from pushy investors Elliott and Farallon. The main job now is to end a tortuous saga with a sale. Success would help show Japan’s supine shareholders how dogged engagement pays off.
Beijing’s stimulus ignores elephant in the room 27 May 2022 Premier Li Keqiang sounded the economic alarm and urged officials to step up tax cuts and spending. Yet pandemic controls are stressing struggling local governments. Without relaxing zero-Covid policies, all efforts to help China hit its 5.5% growth target look futile.
Broadcom gives only limp defense of VMware deal 26 May 2022 The chip giant is being vague about the benefits of a $61 bln tie-up with software maker VMware, giving only a lofty and distant profit target. Meeting it would require juiced-up revenue or massive cost cuts. The ambiguity may reflect that shareholders have no real say anyway.
UK windfall tax has reasonable hierarchy of pain 26 May 2022 Finance minister Rishi Sunak is funding a $19 bln fiscal support plan with a $6 bln raid on North Sea oil. The levy is gentle on companies who invest, and harsh on those with big tax assets from past losses. But high energy prices mean a further thwack to utilities may follow.
Venture royalty bets $4.5 bln on self-disruption 26 May 2022 Andreessen Horowitz’s new crypto fund comes less than a year after its last one. The former backer of Facebook and Airbnb reckons blockchain-based giants will conquer the web by rewarding users. If true, that should also mean less money for venture capitalists.
Shopify’s governance revamp is so 2021 26 May 2022 Shareholders are being asked to give Tobi Lütke the ability to keep his voting power even if his ownership stake falls. That might have been palatable at the end of last year, when Shopify’s shares were worth five times as much as they are now. Now it just adds insult to injury.