Revamped U.S. deal reviews are skid risk for Tesla 16 Aug 2018 Saudi help in a buyout could spur national-security scrutiny under new powers. Tesla’s tech might be deemed critical, while D.C. also worries about China's ambitions. Rules and pilot programs are works in progress, but it's another uncertainty for CEO Elon Musk’s convoluted plans.
Walmart sharpens as Amazon efficiency edge dulls 16 Aug 2018 The $270 bln retailer increased quarterly sales 4 pct. That pales next to its Seattle rival’s latest 39 pct rise. But Walmart’s workers are as productive as ever while Amazon is employing many more, and getting less in return, as it expands stores, warehouses and distribution.
Britain’s Disney M&A ruling is a bit Mickey Mouse 16 Aug 2018 The Takeover Panel, generally a sound custodian of UK bid rules, is keeping the Magic Kingdom’s minimum buyout price for Sky at 14 pounds per share. Nudging it higher, in line with Disney’s Fox bid, would have set a better precedent for similar deals in the future.
Airbnb’s China business could learn from Uber 16 Aug 2018 The flat-sharing giant faces stiff competition and regulatory risk in the People’s Republic, but that doesn’t mean it should cut and run like Uber did. Partnering with a domestic incumbent could help both sides cash in on China’s travel boom.
How could a Tesla buyout pay off for investors? 15 Aug 2018 They might want to double their money in five years after taking the $60 bln electric-car maker private. Run the numbers with Breakingviews' new calculator to see what Elon Musk's company would have to achieve to make that happen.
Global dominance is key to Tesla buyout payoff 15 Aug 2018 Investors taking a company private often aim to double their money in five years. For that, Elon Musk would have to drive a sevenfold rise in vehicle sales, Breakingviews calculates, making Tesla as big as BMW and in command of almost half estimated all-electric car production.
Race is on to be the Netflix of weed 15 Aug 2018 Constellation Brands’ $4 bln investment in cannabis producer Canopy Growth could kick off a feeding frenzy, akin to that over media content. Beer isn’t the only industry with turf to defend or skills applicable to marijuana. Valuations could get even higher than the customers.
Cox: When commemorating crises, think 20 not 10 15 Aug 2018 As the decennial anniversary of Lehman’s systemic collapse approaches, it’s worth recalling the one that preceded it. Russia’s 1998 default led to LTCM’s demise. Shockingly, that fiasco’s lessons went mostly unheeded until 2008. The key takeaway: there are always blind spots.
Putin has strong defences against U.S. debt siege 15 Aug 2018 The rouble has slumped on fears that Russia’s sovereign bonds will be next in the crosshairs of U.S. sanctions. That would cause a stink, but the bill may not pass into legislation. If it does, oil prices and Moscow’s low debt mean President Vladimir Putin can weather a crisis.
Soybeans strain Beijing’s trade war messaging 15 Aug 2018 China is likely to buy more of the animal feed ingredient from the United States, even after tariffs. That's despite government assurances it can diversify away from more than $12 bln of annual U.S. purchases. Markets sense it coming; others might soon see through bluster too.
Amazon Pentagon ties may receive greater scrutiny 14 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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 Aug 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.