Americas

Amazon Pentagon ties may receive greater scrutiny

14 August 2018

Donald Trump is no fan of Jeff Bezos. But the U.S government could become an even bigger Amazon client as the Department of Defense seeks pitches for a $10 bln cloud deal. The juggernaut’s slick Pentagon networking could give rivals like Oracle some curious optics to exploit.

Tesla is risky vehicle for Saudi reform drive

14 August 2018

The Gulf state wants to diversify away from oil and might help take the auto group private, reckons CEO Elon Musk. That’d be a mistake. Tesla could flop even if electric cars take off, and Musk’s buyout price is too high. There are cheaper ways to play the energy transition.

Icahn got it half right with Cigna battle

14 August 2018

The activist investor has backed away from his fight against the U.S. health insurer's $52 bln deal to buy Express Scripts. On merit alone, his opposition was justified. But for activists, that is no longer enough to win. Shifting shareholder rosters have changed the game.

Antofagasta shows markets’ low bar to trade panic

14 August 2018

Shares in the London-listed Chilean copper miner slumped after it said U.S.-China trade tensions may hit demand for the metal. Antofagasta had a weak first half, but its guidance is unchanged. Macro jitters mean investors are unwilling to give companies the benefit of the doubt.

UK insurer buyout depends on avoiding potholes

14 August 2018

Bain Capital is offering 1.2 bln pounds in cash for esure. To justify a multiple of 12 times 2019 earnings, the private equity firm will need to ramp up the motor and property insurer’s digital credentials. An overhaul is necessary to counter the industry’s shaky prospects.

Hadas: Turkey shows damage of fading world order

14 August 2018

The country and its foreign creditors have had an irresponsible relationship for decades. The latest crisis is different because one-time supporters like the U.S., EU and IMF are less willing to help, and there are no credible replacements. Prepare for more currency crises.

Going local would take KKR Indian loans up a notch

14 August 2018

A listing of the U.S. firm's lending unit would help fund long-term growth in a market where companies have been starved of credit. Healthy valuations for non-bank financial services firms, plus signs a new bankruptcy code is working, make it a good time to bed down.

Musk missive reveals more than he might like

13 August 2018

Tesla’s CEO has given extra details about his mooted buyout of the $59 bln electric-car maker, including that the Saudis want to finance it. Yet how he’s handled the disclosures, and his too-free definition of “secured” financing, confirm how ill-suited he is for his public role.

Wrangler jeans breakup gets a dressing down

13 August 2018

Owner VF is separating its denim brands from the rest of its wares. The Wrangler and Lee jeans division will be more indebted and pay a higher dividend. But VF’s pieces add up to less than its $37 bln valuation, which takes the impact out of the company's big reveal.

Nielsen’s best option is to rip off the band-aid

13 August 2018

Paul Singer’s Elliott disclosed a 5 pct stake in the stumbling $8.5 bln TV-ratings firm and is pushing for a sale. It’s a surer remedy than auctioning one floundering business unit amidst a protracted CEO search. Buyout firms took Nielsen on once before. Maybe they will again.

It’s time to take away Trump’s tariff toys

13 August 2018

Using steel duties to punish Turkey over a detained U.S. pastor is an abuse of the president's powers. While national security is a legitimate reason to restrict trade, doing so on a whim hurts America. Congress can be more muscular even if it's not yet prepared to rein Trump in.

Bayer’s cancer scare makes a bad deal worse

13 August 2018

The German group's market value fell nearly $10 bln after a court awarded $289 mln to a user of weed killer made by U.S. division Monsanto. That may overstate the likely losses, but the verdict undermines a deal that already destroyed value, and left shareholders without a say.

South Korea offers cautionary Trump trade tale

13 August 2018

Seoul dodged U.S. steel tariffs by agreeing to a quota. The limit, however, was then applied retroactively and prevented exemptions. American manufacturers are now cut off from materials. EU President Jean-Claude Juncker and others will have to keep a close eye on the fine print.

Guest view: ESG ratings aren’t reliable enough

10 August 2018

Socially responsible investing has become a $20 trln-plus industry, but how do we know if firms are actually doing well by doing good? Shiva Rajgopal and Richard Foster pinpoint four big problems in measuring the environmental, social and governance impact of investments.

Tinder parent gives Facebook a dating lesson

10 August 2018

Owner Match Group said the swiping app will have more than $800 mln in revenue this year. Shares have tripled since its 2015 debut as it rakes in money from subscriptions. The successful model only highlights the shortcomings of the social network’s wannabe status.

Summer lulls offer false sense of security

10 August 2018

That, at least, is the lesson of August 2008. A complacent Citi exec claimed the lender had more than enough capital, Merrill handed one banker a $40 mln guarantee, GM’s CEO was talking up its prospects - and the Fed was worried about inflation. The hubris didn’t last long.

Saudi’s fund manager-in-chief veers off-piste

10 August 2018

Mohammed bin Salman wants to diversify the desert kingdom away from oil. Buying pricey Tesla stock while selling Canadian assets seems a strange way to do that, though. To stop further net outflows of capital, the crown prince could do with sticking more closely to his mandate.

Holding: U.S. fraud prosecutors miss more than hit

9 August 2018

A likely skewering of Trump campaign chief Paul Manafort won’t erase flubs against ex-Jefferies and Cantor traders or sharp drops in white-collar cases. Watchdogs were rightly scolded for pursuing too few financial-crisis miscreants. They haven’t yet learned their lesson.

Viewsroom: Tesla’s wild and crazy ride

9 August 2018

CEO Elon Musk’s tweet about wanting to take the company private is causing a stir. Unorthodoxy aside, its volatile boss and weak corporate governance means Tesla is better off the public roads. Plus, Pakistan’s likely new leader Imran Khan will have to go hat in hand to the IMF.

Tesla gets a lesson in buyout realities

9 August 2018

Elon Musk wanting to take the money-losing carmaker private has set Wall Street all atwitter. But Dun & Bradstreet’s $5.4 bln LBO is a reminder of what it usually takes: a mature, mediocre, profitable firm. That’s a better bet than capital-draining dreams of domination.