Unbundling Paramount is better for almost everyone 22 Mar 2024 Buyout shop Apollo is offering $11 bln for the media empire’s studios, home of “Mission: Impossible.” That’s a complication for Shari Redstone’s push to sell her controlling stake and salvage her family business. Other investors are better served by a breakup’s cash lifeline.
Capital Calls: Wegovy gets a booster 22 Mar 2024 Concise views on global finance: The US government’s decision to pay for weight-loss drugs for some older patients is a big step for makers Eli Lilly and Novo Nordisk. Not because it will boost their share prices, but because it makes current valuations less far-fetched.
European private equity IPO door is only half open 22 Mar 2024 Buyout firms tested the market with cautious pricing for two beauty companies’ listings. Although Galderma performed, Douglas’s debt pile spooked investors. For sellers sitting on $3 trln of unsold assets the message is clear: discounts work, but only for healthy businesses.
Middle East AI dream depends on luring brainpower 22 Mar 2024 An abundance of cheap energy to power data centres gives artificial intelligence startups reason to consider the Gulf. But to become a force in AI, Saudi Arabia and the UAE will have to design their own advanced chips. Attracting talent to the region will require more than money.
Hong Kong property tycoons send warning by waiting 22 Mar 2024 A home price slump has left blue-chip real estate firms like New World trading at their lowest valuation since 2003. Back then, it sparked a rash of shareholder buyouts. This time round, property magnates remain on the sidelines, suggesting the market has further to fall.
Samsonite books a test flight out of Hong Kong 22 Mar 2024 The $6 bln luggage maker is planning another listing in addition to the Asian financial hub where its shares have long suffered from low liquidity. A resulting valuation uplift might be enough to convince potential suitors including KKR and Carlyle that a buyout could make sense.
Apple antitrust case is surprisingly simple 21 Mar 2024 The US legal swipe at the $2.7 trln iPhone maker is all about choice. Users choose its devices, but not always the services on them. That shows up in small ways, like payments or how to install apps. In a new cloud-dominated world, returning choice to users will matter much more.
Reddit looks awkward in its new business suit 21 Mar 2024 Going public at a hefty $6.4 bln shows investors think the social media site can turn a profit. But Reddit still looks a poor fit for public markets given its reliance on moderators who manage its forums for free. Their interests are at odds with advertisers and shareholders.
Europe’s green giant is focusing on safer bets 21 Mar 2024 Iberdrola is upping investment on ageing power grids. The $79 bln Spanish utility is also buying out US unit Avangrid and allocating its biggest chunk of capex to the States. Both bets look likelier to pay off than renewable power and geographies with less generous subsidies.
Macron’s fiscal chickens come home to roost 21 Mar 2024 The French president is scrambling to deal with an official report likely to show dismal public finances and a deficit near 6% of GDP. He ignored warnings as debt topped 110% of economic output. Bond investors are relaxed but spending cuts will be the price of his insouciance.
Bank crises proved a mixed blessing for rivals 21 Mar 2024 It’s 12 months since Silicon Valley Bank failed and Credit Suisse collapsed into the arms of UBS. In this Viewsroom podcast, Breakingviews columnists explain how bigger banks gorged on these lenders’ carcasses – and how the system’s underlying weaknesses have not gone away.
‘Twin peaks’ can keep EU capital market push alive 21 Mar 2024 A two-pronged approach can aid Europe’s drive for a single financial market. By splitting oversight of the system’s safety from the policing of daily operations, Brussels can avoid a David Lynch-style mystery on who killed its plan to boost investments and savings across borders.
Tencent is running out of excuses for gaming woes 21 Mar 2024 Revenue at the $350 bln giant is shrinking in its core business in China and abroad. That implies Beijing's crackdowns are not to blame this time. It pledged to double share buybacks but Tencent admits it needs to get its "own house in order". That looks increasingly urgent.
Japanese investors becoming the life of the party 21 Mar 2024 ValueAct, Elliott and Berkshire Hathaway have deployed some $16 bln to uncover value in Tokyo-listed stocks. They’re receiving warmer welcomes than raider T. Boone Pickens did in 1989. Even better, the US trio’s success is helping inspire local funds to sustain the momentum.
AI hype will be hard to puncture 20 Mar 2024 Short-seller Hindenburg is attacking $80 bln Equinix, whose data-center investments have been pumped up by artificial-intelligence exuberance. US regulators are also starting to target some of the hot air. Even so, the valuation bubble is more likely to deflate slowly than pop.
US nudges EU banks toward clean break with Russia 20 Mar 2024 Austrian lender Raiffeisen dreamt up a $1.6 bln plan to salvage value from its Moscow-based unit. But Washington dislikes it, Reuters has reported. For European banks, upsetting the US could ultimately be more damaging than the write-offs from a speedy Russian exit.
Disney’s CEO still has time to be a hero 20 Mar 2024 Shareholders will soon vote on the $200 bln entertainment firm’s board line-up, the culmination of a bitter battle between long-serving chief Bob Iger and activist Nelson Peltz. Iger is likely to prevail. He should invite Peltz to join the Mouse House as a director anyway.
Deeper Gucci woes test new CEO’s luxury touch 20 Mar 2024 Sales at Kering’s top brand are falling fast. An unproven designer, China weakness and a volatile client base are behind the group’s discount valuation. With M&A limiting hopes of buybacks, Gucci boss Jean-François Palus has a harder task convincing investors to stay the course.
BoE gears up to unnecessarily prolong worker pain 20 Mar 2024 The Bank of England is set to keep rates steady because it wants to see slower wage growth before easing policy. But pay rises are already falling and won’t cause inflation. The central bank could help 30 mln employees, and 11 mln borrowers, by cutting borrowing costs sooner.
China’s automakers try turning Japanese 20 Mar 2024 Efforts to block Chinese auto exports are inspiring BYD and rivals to set up factories overseas. Their journey is reminiscent of Toyota and Nissan’s drive into the US and Europe. But Washington and Beijing’s fraught ties and new tech portend a different ending to this road trip.
Even bitcoin has room for VIPs 19 Mar 2024 Digital asset manager Grayscale has become a victim of its own crusade for US ETFs tracking the cryptocurrency. The exodus from its trailblazing trust now exceeds $10 bln because of low-fee rivals. It’s offering goodies to keep customers, but a premium fund also holds value.
US Steel tug-of-war threatens to pull it apart 19 Mar 2024 Cleveland-Cliffs has put its rival in a bind, rallying political and labor opposition to a $14 bln agreed sale to Japan’s Nippon while pushing its own questionable takeover bid. No deal at all would be bad news for the target’s union workers. A carve-up might be inevitable.
Crypto’s roaring comeback may be harder to undo 19 Mar 2024 Bitcoin’s price broke its record, nearly two years after crypto exchange FTX went bust. In this Exchange podcast, Andreessen Horowitz’s Arianna Simpson explains why digital assets and the ledgers underpinning them are inextricable, and what’s driving new excitement around both.
Mexican wave of nearshoring firms is all at sea 19 Mar 2024 The country’s proximity to the US could make it a preferred destination as multinationals move away from Asia. Companies like Merck and Tesla are building factories there but, so far, manufacturing is not growing. With relocations costs soaring, an economic boom looks elusive.
Unilever’s sweet exit comes with sour aftertaste 19 Mar 2024 The $126 bln consumer giant is splitting off its unit that makes Cornetto ice cream. Doing so cuts exposure to food, and may boost sales growth. But Unilever investors are bearing the costs of the split, and their company remains big in the edible version of stranded assets.
Japan’s first step to new normal is the easiest 19 Mar 2024 The central bank raised interest rates, ending 26 years of unconventional stimulus. Policymakers hinted they will keep borrowing costs steady for a while but the pressure to curb inflation, rather than unleash its virtues, may rise fast. The hard work for the country starts now.
China property’s Enron damp squib may yet surprise 19 Mar 2024 Markets shrugged as a watchdog accused Evergrande of inflating sales by $78 bln over a two-year period. The US firm’s 2001 demise, by contrast, had broad impacts. More fallout in China is likely, potentially ensnaring banks and auditors like PwC. Investors are too sanguine.
Alphabet and Apple have cause to circle AI wagons 18 Mar 2024 The $2.7 trln iPhone-maker is in talks to license Alphabet’s artificial intelligence models, according to Bloomberg. Apple has underinvested, but Google search’s pride of place on its devices is also at risk. A deal would help both defend their turf, if regulators don’t kill it.
Like Rome, oil demand won’t be destroyed in a day 18 Mar 2024 Oil producers attending the big industry confab in Houston this week recognize they are under pressure. US firms are merging; Saudi is reinventing itself. Like in any dwindling empire, many leaders will want to take over rivals. Rewarding investors with cash is a better strategy.
Reckitt slump offers a cue to slim down 18 Mar 2024 The $41 bln Lysol maker’s shares fell sharply after it lost a US court case. One option for Reckitt Benckiser is to separate the nutrition arm, focus of the legal woes. That would ease the hit to the rest of the group, but also leave a new arm that may yet be worth something.