Activists finagle deal in toppy real-estate market 31 Jul 2018 Brookfield is buying Forest City, owner of a hodge-podge of assets including the New York Times building, for $11.4 bln. The 27 pct premium allows Starboard to exit with a profit. Rising rates and other heady markers mean the deal may signal a peak in property values, too.
Trumponomics flirts with more debt and inequality 31 Jul 2018 Treasury Secretary Steven Mnuchin wants to cut capital-gains tax bills by accounting for inflation. It’s sensible to assess the true value of costs and profit. But it’d mostly benefit the wealthy and add to what may be a $1.1 trln deficit in 2019. It also smacks of self-interest.
Franco-Dutch utility deal muddies U.S. M&A waters 31 Jul 2018 Suez is selling a fifth of its stateside unit to pension manager PGGM for 30 times earnings. The $601 mln transaction looks even pricier than the takeover battles for two other U.S. water utilities. With asset scarcity making the market frothy, buyers risk ending up high and dry.
StanChart’s new glow dimmed by U.S. threats 31 Jul 2018 The emerging markets bank boosted first-half pre-tax profit by 34 pct and paid its first interim dividend for three years. Wealthy clients and a booming Chinese business are taking it closer to its targets. But a potential trade war and its U.S. probation overshadow the revival.
How Sergio Marchionne saved Fiat and Chrysler 30 Jul 2018 The automakers’ former boss, who has died at 66, rescued both from the wrecker’s yard. His push for breakups and consolidation also helped produce better shareholder returns than his main rivals. A new selection of Breakingviews columns offers a taste of his 14-year tenure.
Rite Aid’s itch should be easy to scratch 30 Jul 2018 Hedge fund Highfields objects to Cerberus-owned Albertsons’ merger with the $2 bln drugstore chain. Minor conflicts at board level don’t help. But plenty of value is being offered to Rite Aid investors. Albertsons doesn’t need to offer much more to make a deal look reasonable.
Carlyle mega-fund rolls with valuation tide 30 Jul 2018 The buyout firm’s largest single pool of capital, at $18.5 bln, coincides with fresh records across the industry. It may get harder for Carlyle and its ilk to deliver high returns. With shareholders prizing fees over investment profit, though, taking more money is a no-brainer.
#MeToo is only one of CBS’s Les Moonves problems 30 Jul 2018 The media group is investigating its CEO over sexual-harassment accusations. Even without that, he was a risk. CBS has an entrenched board, is fighting unhelpfully with controlling owner Shari Redstone and faces a tricky industry-wide transition. Moonves is no longer an asset.
Exxon long-term view is more than short-term worry 27 Jul 2018 With declining production, the $360 bln group is missing out on current buoyant oil prices. Chevron’s second quarter likewise fell short, but along with European competitors it is boosting share buybacks. Exxon’s owners can justifiably fret about the industry’s uncertain future.
Predicting U.S. GDP more exciting, more pointless 27 Jul 2018 The U.S. economy grew at a healthy 4.1 percent pace in the second quarter. A surge in exports ahead of retaliatory tariffs helped. Consumer spending, aided by tax cuts, was also a factor. The trade war and fiscal stimulus could result in zig-zagging GDP figures for some time.
Twitter purges users and shareholders alike 27 Jul 2018 The social network’s efforts to reduce spam, fake users and toxicity shrank active monthly users. Investors fled as well. That leaves both the platform and valuation more salubrious. Healthy returns will now depend on finding growth.
BP takes worthwhile gamble with shale deal 27 Jul 2018 The $10.5 bln that the oil major is paying for BHP’s U.S. shale assets is a full price and allows the miner to finally extricate itself from an expensive mistake. But BP is plugging a strategic gap and can easily cut costs. That makes the price appear more reasonable.
Pinduoduo polishes New York’s tech IPO crown 27 Jul 2018 The shopping app’s shares rose 40 pct in their U.S. debut, valuing it at $34 bln. New York has lost some marquee China tech floats to Hong Kong of late, but those it won have mostly outperformed Fragrant Harbour debutants. The Big Apple is still the host with the most.
Amazon’s growth is leaving the shop behind 26 Jul 2018 Jeff Bezos's outfit gets only about half its revenue from its online stores, down from two-thirds two years ago. E-commerce is growing, but the businesses Amazon has built around it are expanding faster and producing much more profit. That makes its valuation a little less crazy.
Viewsroom: Sergio Marchionne’s legacy 26 Jul 2018 The sudden death of Fiat Chrysler’s CEO has robbed the car industry of one of its most colorful – and successful – leaders. Antony Currie, Rob Cox and Lisa Jucca look back over his 14 years at the wheel and discuss what’s on the road ahead for his successor Mike Manley.
UNFI mixes organic food and financial steroids 26 Jul 2018 The natural-food distributor is paying $2.9 billion for grocery wholesaler Supervalu – a clear attempt to bulk up in response to Amazon’s foray into food retail. UNFI is getting a good deal thanks to generous cost cuts, but the amount of debt it is taking on makes this risky.
Conoco escapes squeeze on Big Oil’s golden goose 26 Jul 2018 Infrastructure bottlenecks are depressing oil prices in America’s resource-rich Permian Basin. New pipelines should be running by next year if labor and steel problems don’t cause delays. While the $84 bln Conoco’s U.S. business is holding up, others may not be so fortunate.
New Facebook pessimism overshoots reality 26 Jul 2018 Forecasts of reduced growth and margins wiped nearly 20 pct, or about $120 bln, off the social network’s valuation. That’s an astonishing hit. Investors now implicitly expect growth to be run-of-the-mill within a few years. That’s replacing excessive optimism with undue glumness.
Indian tycoon winner of Trump-China metals scrap 26 Jul 2018 Hindalco is snagging aluminium producer Aleris for $2.6 bln after CFIUS concerns torpedoed a previous bid from a Chinese buyer. Hindalco’s U.S. arm Novelis is paying more, but the numbers stack up. Mogul Kumar Mangalam Birla is smartly taking advantage of the trade war for now.
Tariff truce leaves EU carmakers stuck in low gear 26 Jul 2018 Volkswagen, BMW and Daimler’s collective value rose about $7 bln after U.S. President Donald Trump seemed to relent on auto tariffs. It’s a minor victory. Transatlantic peace may not last, while Trump’s trade battle with China will still prove disruptive for the German trio.