Kohl’s risks being left on a lonely retail shelf 30 Jun 2022 U.S. retail sales are falling, big store chains have overstocked, and inflation is spooking consumers. That raises pressure on the underperforming Kohl's, which is weighing a potential offer from Franchise Group. If a deal materializes, it will be hard to refuse.
Robinhood’s reversal, Russian oil cap 30 Jun 2022 The digital brokerage is worth less than a quarter of its $32 bln IPO value. In this Viewsroom podcast, Breakingviews columnists argue that its $7 bln cash pile and ample user base make it an attractive target. Also, Western leaders’ plan to restrict funds to Moscow may backfire.
It’s time to rediscover the importance of interest 30 Jun 2022 The cost of money is not only key to controlling prices. It also affects the value of financial assets, the allocation of capital, and the appetite for debt. Ultralow interest rates distorted these decisions, Edward Chancellor says. Little wonder financial anxiety is rising.
Uniper woes could force reality check on Berlin 30 Jun 2022 The German utility needs state support after Russia cut gas supplies, forcing it to buy more expensive fuel instead. A better alternative would be for the regulator to allow Uniper to pass the cost on to consumers, dampening demand. The risk of open-ended bailouts helps its case.
Bankers’ next pitch is corporate finance fiction 30 Jun 2022 Fees from mergers and IPOs dried up in the first half, while jumpy debt markets inhibited private equity buyers. Dealmakers need a new way to win business from companies blindsided by a pandemic and a war. There may be an opportunity in preparing CEOs for the next calamity.
Unilever ice cream mess is only partly cleaned up 30 Jun 2022 The $116 bln group has sold its Israeli Ben & Jerry’s business after the ice cream maker halted sales in the occupied Palestinian territories. Unilever gets to extricate itself from a no-win situation. Yet the hipster dessert’s ongoing autonomy means the two may clash elsewhere.
Capital Calls: Fed faces inflation divergence 30 Jun 2022 Concise views on global finance: The central bank’s preferred measure of rising prices, the U.S. personal consumption index, rose 6.3% in May. That’s more subdued than the surging consumer price index. But the latter offers a better read on household spending.
China’s property bottom leaves few standing tall 30 Jun 2022 Vanke, the second-largest developer by sales, reckons parts of the housing market are recovering. Rivals with weaker credit ratings are struggling with debt repayments and face a wall of maturities. A rebound requires access to borrowing markets where investors remain sceptical.
Money can’t buy Ken Griffin political happiness 29 Jun 2022 Citadel’s founder backed an Illinois candidate for governor with a $50 mln donation but lost. The winner, a farmer, also has deep-pocketed backers. He will go up against Hyatt heir J.B. Pritzker. As billionaires on both sides up political stakes, they will cancel each other out.
Texas becomes Tesla’s new China 29 Jun 2022 The U.S. state has been good to the carmaker, offering tax breaks while the top prosecutor backed Elon Musk’s Twitter bot claims. That’s similar to how his relationship has worked with China. Musk returned favors to Beijing. Soon, he could become a dutiful friend of Texas, too.
Chip shortages may soon turn to gluts 29 Jun 2022 Volkswagen says its chip shortages are fading. Other industries may be in even better shape as $185 bln of investment increases production and demand falters. Bloating inventories and the realization users ordered too many chips could turn shortfalls to excess with a crack.
E-commerce may be beauty behemoths’ next makeover 29 Jun 2022 L’Oréal and Estée Lauder like to plug small brands into their sprawling networks. That could plump up the sales and profitability of a trendy online makeup group like $1.5 bln e.l.f. Applying its skill in selling direct to consumers would add gloss to their own brands as well.
Saving energy now is an EU no-brainer 28 Jun 2022 The bloc has hiked LNG imports by 50% to replenish storages and cut its Russian gas dependency. But if Moscow turns off the taps, Germany could sink into recession. All the more reason to kick off energy-saving measures this summer and try to curb gas prices by cutting demand.
Mukesh Ambani lays groundwork to divide and rule 29 Jun 2022 The tycoon’s son Akash is taking over the telecom unit as a first step in transferring the $220 bln empire to his three children. Spinoffs will probably follow. Ensuring family interests align should help avoid a repeat of his own epic sibling feud and preserve the group’s power.
Japan’s activists chip away slowly but unsurely 29 Jun 2022 Toshiba adding representatives from two pushy investors to its board represents another landmark for the world’s third-biggest market. The number of campaigns is only inching up, however, and it’s mostly smaller companies being targeted. The slog involved makes progress tough.
JetBlue has its “Top Gun: Maverick” moment 28 Jun 2022 With two days before a key deal deadline, the budget airline has pulled out some creative aerobatics to win over target Spirit, and swat away a favored rival bid by Frontier. The offer of more cash up-front is daring – but takes JetBlue’s shareholders deep into the danger zone.
Happy-employee laws miss real problem: bad bosses 28 Jun 2022 Canada’s most populous province has passed a law on the so-called right to disconnect, joining a handful of European countries. But Ontario’s new policy is vague, difficult to enforce and doesn't tackle the real reason for employee burnout, namely toxic workplace culture.
G7’s Russia cap could send oil prices up, not down 28 Jun 2022 The developed nations club wants to cut Moscow’s revenue by curbing crude export prices. To work, a cap needs to be global in scope, air-tight to avoid sanctions evasion, and have Russian acceptance of the forced discount. Without these it may mean less supply, and higher prices.
Capital Calls: Chinese fishermen, UK’s Jupiter 28 Jun 2022 Concise views on global finance: Joe Biden goes after the People’s Republic’s commercial fishing fleet; the fund manager’s new chief executive has an even tougher task than his predecessor.
Enforcement is weak link in Russian sanctions push 28 Jun 2022 Western capitals have frozen assets and blacklisted oligarchs. The United States has many well-funded financial crimes regulators, but there’s little formal coordination with poorer European counterparts in policing breaches. Places like Dubai offer hiding places, too.
Green deals overcome markets flashing red 28 Jun 2022 Despite widespread investor risk aversion, China’s EV battery giant CATL just raised $6.7 bln in new equity. The decarbonisation theme is dominating big stock sales. Supply chains and higher costs are a concern, but the Ukraine war will help keep capital coming to clean energy.
Robinhood at $0 would start to look cheap 27 Jun 2022 At its recent stock price lows, Robinhood is a pile of cash with a digital brokerage thrown in virtually for free. Users might drift, and regulators may blunt Robinhood’s arrows, but assuming the most valuable customers stick around, it makes sense for acquirers to be circling.
CEOs will look past abortion bans, too 27 Jun 2022 Individual U.S. states will now decide how to regulate access to abortion; some have already outlawed it. That makes navigating the system’s impact on employees more complicated for companies. They’ve done this before – in emerging markets, from China to Saudi Arabia.
Airlines M&A plays regulator roulette 27 Jun 2022 Budget carrier Frontier raised its offer for peer Spirit to $2.6 bln. That’s just enough to compete with rival JetBlue’s bid. Now shareholders have to weigh merger-skeptical regulators. It’s not just a calculation of who can win, but what the buyer will give up for it to happen.
American shipping law doesn’t sail 27 Jun 2022 A U.S. act passed in 1920 requires ships traveling between U.S. ports to be American made and operated. But that has doubled the cost of transporting gas from Houston to New York, among other things. Eliminating the old rule would ease pressures on shortages – and rising prices.
Naspers “put” tackles one of its Tencent problems 27 Jun 2022 The South African firm and its Dutch offshoot will buy back stock by slowly trimming their $133 bln stake in the Chinese tech giant. Tax liabilities and clunky governance remain valuation drags. But investors can worry less about Naspers blowing its riches on other startups.
Ray-Ban tycoon leaves behind unfinished business 27 Jun 2022 EssilorLuxottica Chairman Leonardo Del Vecchio has died at 87 without publicly anointing an heir. That raises questions about the eyewear giant’s future and investments in Mediobanca and Generali. Though trusted lieutenants may reassure investors, they lack his track record.
India’s Zomato gorges on a deal in lean times 27 Jun 2022 As tech companies tighten their belts, half the country’s food-delivery duopoly is paying $570 mln for grocery outfit Blinkit. SoftBank and other sellers swap a down round for a safety net. Using richly valued stock should make it more palatable for the buyer’s shareholders.
Capital Calls: Russian default, Inflation and debt 27 Jun 2022 Concise views on global finance: Moscow defaulted on its foreign debt for the first time in over 100 years, leaving bondholders in limbo; the Bank for International Settlements wants rates raised “quickly and decisively”, but is also worried about higher borrowing costs.
Toshiba ballot tees up a fresh Japan litmus test 27 Jun 2022 The $18 bln conglomerate backed board candidates from pushy investors Elliott and Farallon to rebuild shareholder trust. Then it helped broadcast another director’s opposition to them, undermining the effort. How domestic funds vote will gauge corporate governance progress.