Cancer scare leaves GSK castoff adrift 11 Aug 2022 Shares in Haleon have fallen by nearly a fifth on fears of litigation linked to a heartburn drug. It’s another worry for the $28 bln business which GSK spun off after loading it up with debt, amid recession fears. The uncertainty means investors can’t even hope for a takeover.
Capital Calls: Entain’s big M&A bet 11 Aug 2022 Concise views on global finance: The Ladbrokes owner is bulking up, making life harder for perennial U.S. suitor MGM Resorts International.
Reality will tame next Italy PM’s spending plans 11 Aug 2022 Giorgia Meloni is on track to lead Rome’s next government. Her rightist political alliance favours big tax cuts, fiddling with 200 bln euros of European recovery funds and state intervention in Italy Inc. High public debt and EU vigilance will puncture its wildest trial balloons.
Caymans gives Hong Kong tycoons a head start 11 Aug 2022 Thomas Lau’s $240 mln retail buyout is the Asian hub’s first deal since the Caribbean haven dropped an archaic rule tying approval to voter numbers as well as shareholdings. The law invited abuse, but also gave small investors some rare power. Nixing poor offers just got harder.
SoftBank’s Alibaba sale could end breakup taboo 10 Aug 2022 Masayoshi Son’s group will cut its stake in the Chinese e-commerce giant to 15% from 24%. It’s a sensible, albeit belated, move. The holding contributes to a 55% conglomerate discount, which would be narrowed further by spinning off Arm and selling more of its Japanese telco.
After streaming, Walmart just needs Instacart 10 Aug 2022 If the $350 bln retailer were to bundle streaming services from Paramount, Disney and Comcast, it could better compete with its nemesis, Amazon. The strategy is a low-cost path into the media business, albeit late. A boost to food delivery would give Walmart the whole package.
Capital Calls: Disney turns screws on Netflix 10 Aug 2022 Concise views on global finance: The Magic Kingdom now has as many subscribers to its streaming products as Netflix. It needs all the fairy dust it can get ahead of a looming price war.
Food delivery’s next gig is software-as-a-service 10 Aug 2022 As demand for takeaways slows, $28 bln DoorDash and rivals are searching for new sources of revenue. One option is to sell their tech to food retailers. But that assumes others can make a bigger success of a business model that has struggled for profitability.
Aussie banks’ “fortress” balance sheets win kudos 10 Aug 2022 Jamie Dimon coined the phrase to highlight JPMorgan’s strength during the 2008 financial crisis. But it applies best to Australian lenders like Commonwealth Bank, which now carry 50% more capital than U.S. peers. That does crimp returns, but has bolstered shareholder value.
ByteDance relapses to unhealthy tech deal habit 10 Aug 2022 TikTok's Chinese parent has taken over a hospital chain for $1.5 bln. Peers like Alibaba have made similar forays into healthcare, with underwhelming results. Amid falling valuations and Beijing crackdowns, such off-piste bets look even more ill-advised.
Video game deal battle could leave one victor 9 Aug 2022 The $14 bln app software firm, AppLovin, has launched an unsolicited $17.5 bln bid for rival Unity. The odds are probably stacked against the buyer because the offer looks opportunistic and has a small premium. Yet it may kill Unity’s even less attractive deal to buy IronSource.
Streaming video’s next episode: price wars 9 Aug 2022 Eight out of every 10 American households has three streaming services, 50% more than three years ago. Plus, the amount people are spending has spiked. It all points to saturation. Rivals now have to steal share by lowering prices. Disney boss Bob Chapek has the most to lose.
Capital Calls: Tech bros give Allbirds the boot 9 Aug 2022 Concise views on global finance: The maker of popular nondescript sneakers with a purpose is getting tripped up on demand. Its stock price pounding may make it vulnerable to a takeover.
Ray-Ban heirs inherit wasteful Mediobanca feud 9 Aug 2022 Eyewear tycoon Leonardo Del Vecchio, who died in June, bought nearly 20% of the Italian bank as part of a fight with CEO Alberto Nagel. Making a return on the $1.5 bln stake will test his successors. Backing Nagel in his hunt for a target may be the more prudent choice.
Gautam Adani takes new tycoon risk to next level 9 Aug 2022 The world’s fourth-richest man is using the $220 bln empire he founded to amass critical energy and infrastructure assets. Financial profligacy broke many of his Indian rivals. Politics, complexity and opacity are bigger concerns for a billionaire starting to get too big to fail.
Carlyle’s next gen needs to be more than its CEO 8 Aug 2022 Boss Kewsong Lee stepped down at the $14 bln asset manager and co-founder Bill Conway will be in charge as they look for a replacement. That’s a step back in Carlyle’s transition. Success hinges on finding a leader who, like the business, is a commodity not a star.
Drug law aims small dart at wrong part of monster 8 Aug 2022 America spends about twice as much on pharmaceuticals as peer nations. Government drug price negotiations might save $100 billion. A real headshot would be targeting hospital spending, which is about twice as big as drugs and faster growing.
Transportation M&A nightmare worth the trip 8 Aug 2022 Often when industries with monopolistic traits consolidate – airlines, trains - there’s a race to be an acquirer. Buyers end up paying top dollar, and regulatory concessions can be steep. Still other industries have shown the finish line is rewarding if investors stick it out.
Capital Calls: Nelson Peltz under pressure 8 Aug 2022 Concise views on global finance: A group of shareholders has replaced the chairman of a London fund managed by the legendary activist investor.
SoftBank chagrin is poor defence against bad bets 8 Aug 2022 The Japanese investor suffered a $23 bln net loss from falling markets and a weak yen. Boss Masayoshi Son says he has learned lessons. But exiting ride-hailer Uber with a 5% annual return supports the view of SoftBank as a firm that can only follow, not outperform, the crowd.
BHP’s metals deal could use some schmuck insurance 8 Aug 2022 CEO Mike Henry’s rebuffed $5.8 bln bid for OZ Minerals pits a mining giant trying to bulk up on nickel and copper, vital to electric cars, against a scrappier rival. Offering performance payouts on top of a premium would help address both sides’ risk and reward calculations.
China’s Hawaii washes away an economic sandcastle 8 Aug 2022 A Covid-19 outbreak has locked down cities in Hainan, stranding over 80,000 visitors. It sets back a decent recovery in tourism, a generator of more than 11% of pre-pandemic GDP. With other growth pillars shaky, it’s the worst time to give consumers another reason to check out.
U.S.-China relationship bleeds by a thousand cuts 8 Aug 2022 Beijing has suspended bilateral cooperation on drugs, climate, military and crime over Washington’s support for Taiwan. In the near term little changes; actual collaboration was minimal. The diplomatic freeze will nevertheless further poison a $600 bln trade relationship.
TSMC is China’s trump card against U.S. and Taiwan 5 Aug 2022 The chipmaker plays an outsized role in the global economy, supplying Apple, Qualcomm and others that make phones and cars. If tensions with Taiwan ramp up, China may threaten a blockade of the island. That could halt production of everything from Toyota Camrys to Maytag washers.
Barbarians’ tax win is another point for the 1% 5 Aug 2022 A bid to curb a U.S. loophole that allows buyout managers to pay less in taxes was dropped in a climate bill that looks set to pass. The industry has beaten back similar efforts before. Barons have gone from shaking up companies to barreling through Washington.
Biden’s economic successes shadowed by inflation 5 Aug 2022 A $433 bln climate and healthcare bill would bring the U.S. president $1.7 trln in non-crisis spending for key projects. That’s better than predecessors. But helping the environment or fixing roads won’t solve surging prices in the short term, so he won’t get credit for wins.
Capital Calls: Amazon deal, Beyond Meat 5 Aug 2022 Concise views on global finance: Amazon’s latest purchase to buy iRobot rolls over FTC Chair Lina Khan, a critic of the company’s expansion. Meanwhile, the founder of the plant protein company envies another meat substitute, SPAM.
Carmakers’ China decline is global warning 5 Aug 2022 Even as the People’s Republic loosens ownership restrictions on foreign manufacturers, Stellantis is closing its local Jeep factory. Domestic rivals took over 50% of the world’s largest car market in 2021. The worry for Western giants is that competition accelerates elsewhere.
Bubble stock spike harks back to Hong Kong habits 5 Aug 2022 Shares in AMTD Digital soared up to 21,000% in three weeks in New York, even as bosses acknowledge there’s no reason for it. The surge has meme stock traits. But a majority owner and small float give it more in common with puzzling penny-stock moves in its Asian home.
India M&A veto plans will shake world’s dealmakers 5 Aug 2022 New Delhi is set to give its antitrust enforcer a bigger say on overseas deals. It may have missed the boat in stymieing tie-ups among Big Tech, which have a huge user-base in the country. If India, like China, uses those powers for industrial aims, it will have a chilling effect.