Nestle’s big problem is its crunchy governance 26 Jun 2017 Hedge fund Third Point’s ideas for the Swiss maker of KitKat are sensible but obvious. Nestle is already weighing up asset sales. It has set and missed targets before. Shaking up the company’s slow-moving culture would achieve more – starting with a new chairman.
Nestle gives Dan Loeb an Alpine peak to climb 26 Jun 2017 The pushy billionaire has set his sights on the Swiss Alpo-to-Perrier producer. Consumer groups such as P&G and Pepsi have proven tough activist targets. Loeb clearly likes a challenge, having recently agitated in lethargic Japan. And $263 bln Nestle may be a movable mountain.
U.S. debt ceiling’s only value is as a warning light 23 Jun 2017 The Treasury wants lawmakers to raise the $20 trln cap on federal borrowing or risk a default. The 100-year-old idea of the limit is no longer practical, especially when Congress won't link it with budgeted outlays. Still, the ceiling is a symbol of America's growing debt burden.
Natural gas inflicts fresh wounds on old victim 22 Jun 2017 Southern risks a new writedown after regulators tired of waiting for a novel “clean-coal” plant. As with its troubled nuclear project, the $50 bln U.S. utility tried untested designs. Efforts to diversify fuel sources are admirable but cheap gas prices continue to crush them.
Review: We’re all behaviorists now – so what? 23 Jun 2017 A decade after the financial crisis started, the lessons are still being debated. Two new books by leading financial practitioners say human irrationality and unpredictability hold the key to understanding. Their reasoning is compelling, but the practical takeaways are slim.
Markets call Trump’s bluff with Indian IT rally 23 Jun 2017 The value of the top outsourcing firms has risen about 9 pct, or $12 bln, since the election of U.S. President Donald Trump. Investors have reason to doubt his hard talk on immigration, and to believe Premier Narendra Modi can help his counterpart see the mutual benefits.
Next test for big U.S. banks is self-restraint 22 Jun 2017 All 34 lenders and Wall Street firms cleared the Fed’s annual health hurdle. Next year’s checkup may be less strict on operational risk and other areas. If banks want to make aggressive payouts to investors, future stress tests may give the central bank less power to stop them.
Viewsroom: Helping Uber hail a new CEO 22 Jun 2017 Filling departed founder Travis Kalanick’s seat is no easy task, so we offer some suggestions. Elsewhere, Amazon CEO Jeff Bezos’ seemingly crazy $13.7 bln offer for struggling grocer Whole Foods has some logic. Anbang lands in hot water in China. And the lure of 100-year debt.
Argentina grinds toward economic credibility 22 Jun 2017 Within just a couple of days Latin America’s third-largest economy sold a rare 100-year bond and was then surprisingly snubbed for inclusion in a major stock index by MSCI. Amid all the noise, President Mauricio Macri is slowly asserting the dullness of competence.
IPO puts Altice USA’s best program behind it 22 Jun 2017 Bankers directed a flawless show for the public offering of the Dutch-based cable-TV company’s American business. Altice USA now trades at a higher multiple than Charter and Comcast yet has more onerous debt and no clear path to expand. Shareholders may want to change channels.
Qatar’s American Airlines ticket not just politics 22 Jun 2017 Buying a stake in the carrier has all the hallmarks of a politically motivated deal. Flexing its financial muscles in the United States sends a defiant message to its enemies circling in the Gulf. But American Airlines also offers commercial value on top of diplomatic leverage.
U.S. Senate’s “better” healthcare is still worse 22 Jun 2017 Upper-chamber Republicans unveiled their hitherto secret Obamacare alternative. Unlike the House bill it keeps income-based subsidies, but there are big cuts to Medicaid. Millions would probably lose insurance coverage. With costs ballooning, that's what Trump might call "mean."
Buffett reaffirms value of his seal of approval 22 Jun 2017 Berkshire Hathaway is buying up to 38 pct of Canada's Home Capital and extending it C$2 bln in credit. It’s a rescue out of Buffett's 2008 playbook that promises to steady the troubled mortgage lender. The favorable terms illustrate how his imprimatur is as coveted as his cash.
Blackstone may have to financially engineer itself 22 Jun 2017 The buyout shop's units are trading close to the $31 IPO price of exactly a decade ago. Even with dividends, Blackstone's owners have fared no better than if they'd bought the S&P 500. Getting anywhere near boss Steve Schwarzman's $100 price target probably requires big changes.
Saudi Aramco IPO is exercise in reverse valuation 22 Jun 2017 The oil producer is worth $2 trillion, say its owners. The question might not be whether that valuation is right, but what Aramco’s owners and bankers will have to do to get it. A Breakingviews calculator suggests this will be a stretch of reason.
Harley-Davidson’s Italian drive could prove pricey 22 Jun 2017 The U.S. motorcycle maker might pay up to 1.5 bln euros for rival Ducati, Reuters reported. The racy Italian brand would bring younger riders and more international customers. But unless Harley can rev up Ducati’s lacklustre earnings any deal would be financially corrosive.
Oracle’s cloud warrants a partly sunny forecast 21 Jun 2017 Larry Ellison's software titan increased web-based storage and services revenue quickly. Oracle's retreat from traditional databases also isn't hurting as much as expected. Remixing the way cloud results are reported is suspect, though, and rival Amazon keeps growing fast, too.
Diageo deal has pension chaser for George Clooney 21 Jun 2017 The drinks giant will pay up to $1 bln for a tequila brand founded by the actor and two buddies. Casamigos is a fast-growing firm ripe for international expansion. The worm in the bottle is that Clooney has to promote the tipple until he turns 66 to collect the full check.
New app: Uber, but for an Uber CEO 21 Jun 2017 Co-founder Travis Kalanick has quit under a cloud of business and cultural troubles that threaten the ride-hailing service's eye-popping $68 bln valuation. He leaves a dearth of senior managers and a void at the top. Breakingviews imagines an Uber-like widget that helps fill it.
Buyout firms’ $16 bln mainframe roll-up may compute 21 Jun 2017 BMC Software, owned by Bain and Golden Gate, is mulling an offer for CA Inc. Both have their roots in the giant computers that powered industry before the cloud. The numbers could work out, especially with hefty cost cuts, but wrinkles include how to exit an untrendy business.