Australia hands U.S. timely infrastructure example 11 May 2017 An investor group is paying A$7.6 bln for 50.4 pct of Endeavour Energy, a New South Wales electricity distributor. It's an "asset recycling" model that raises private capital against established operations to fund new government investment. Trump's team should take note.
PPG might as well go hostile on Akzo 11 May 2017 It has little to lose by taking its $27 bln bid for the Dutch paint maker straight to shareholders. If Akzo invokes its poison pill, the deal falls away anyway. And if the U.S. suitor wins shareholder support, Akzo’s board will face enormous pressure to make the tie-up friendly.
Snap lays an egg worthy of Twitter nest 10 May 2017 The messaging app reported its first quarterly results showing a slowdown in user growth. That’s a worrisome trend since its lofty $27 bln value hinges on attracting more people. Meanwhile, rivals are co-opting features. The sheen of being the next new thing is fading fast.
Whole Foods board changes whet activists’ appetite 10 May 2017 The $12 bln organic-food purveyor is replacing more than half of its board, a step to appease Jana Partners. But the fund, with 8 percent of shares, wants a sale, and others are pounding the table. As long as Whole Foods same-store sales keep declining, they’ll stay hungry.
Time may join ranks of regretful M&A refuseniks 10 May 2017 Days after spurning takeover interest, the magazine publisher cut its dividend amid falling revenue. Some companies wisely go it alone, but many can't recoup deal-imputed value. With Time's shares trading 40 pct below one bid, it has a steep climb ahead to justify independence.
U.S. sheriff shoots own foot amid FBI skirmish 10 May 2017 The DOJ provided dubious cover for Director James Comey's dismissal, which risks undermining its moral authority overseas. U.S. prosecutors often step into cases, such as VW and FIFA, their counterparts won't. Foreign enforcers could now be more wary of providing necessary help.
Hadas: Solidarity is cure to Baumol’s cost disease 10 May 2017 William Baumol showed how differences in productivity put wage pressure on artists and other inefficient workers. The economist, who died last week, was right, but his analysis was too individualistic. The challenge is to find fair ways to share out the fruits of prosperity.
AXA takes out double hedge against U.S. and itself 10 May 2017 The French insurer is listing a minority stake in its American operations. Should the Trump administration revisit regulatory equivalence, the move will simplify a sale. In the meantime, investing a few extra billion euros might help AXA hit the upper end of its 2020 targets.
Trump’s game-show FBI antics challenge investors 9 May 2017 Director James Comey was fired like a common "Apprentice" contestant, despite the president's recent praise. The timing also is suspect given the agency's probe into the Trump campaign’s Russia ties. Tax cuts have to be revalued by the market if the rule of law is under threat.
U.S. telecom titans may be mispricing an option 9 May 2017 Verizon trumped AT&T with a $2.3 bln bid for Straight Path, an owner of spectrum touted for 5G wireless service. The original 200 pct premium is now 400 pct. Many investors clearly underappreciated the security's value. There's a decent chance suitors are now overestimating it.
Deep-learning chips getting artificially inflated 9 May 2017 Circuitry first produced for videogames now powers advances in the hot field of self-learning computers. That has helped double Nvidia's market value to over $60 bln in less than two years. The fate of graphics chips in bitcoin and new developments at Google may hint at slower growth.
Toshiba and Western Digital need to get along 9 May 2017 The ailing Japanese giant has warned its U.S. partner not to derail the auction of a key chip unit. Toshiba needs a full price to offset its nuclear losses while Western Digital wants to buy the business in a fire sale. There's not much common ground.
Pandora shuffles furiously to find profitable tune 9 May 2017 The streaming-music service is getting a $150 mln injection from private-equity firm KKR. It’s also shaking up the board and exploring a sale as it struggles to stem losses and get listeners to pay. With Spotify eating its lunch with subscriptions, Pandora is waving white flags.
Private equity ups the ante in Permian race 8 May 2017 The industry has raised over $2 bln this year via blank-check entities to buy up energy assets, with TPG the latest to join the party. Exxon and Shell are also prowling for west Texas acreage. As prices climb, the special-purpose funds will have to be nimble to avoid a shakeout.
Chinese investor visas deserve extreme vetting 8 May 2017 The family of Donald Trump's son-in-law and adviser, Jared Kushner, apologized for using his name in a real-estate pitch in Beijing. The deal offers visas in exchange for $500,000 of investment. In questioning immigration, Trump hasn’t raised the EB-5 program. He should.
Canada’s subprime trouble is drama, not crisis 8 May 2017 A run on the Home Capital mortgage lender has eerie echoes of 2008. But structural strengths and regulatory awareness mean the Canadian financial system is far sounder than its neighbor's before the crisis. Still, high housing prices and consumer-debt levels are economic risks.
Coach pays luxury price to catch up with LVMH 8 May 2017 The U.S. handbag maker is plunking down $2.4 bln for Kate Spade, a figure not justified strictly by the numbers. But Coach's owners like the move to a multibrand portfolio, which has worked for LVMH and Kering. Mature luxury marques can no longer expect to succeed on their own.
Sinclair $3.9 bln Tribune deal puts Fox in a hole 8 May 2017 The U.S. broadcaster is paying a 26 pct premium for its rival after Uncle Sam relaxed a wave of regulations. Tribune gives Sinclair more heft to mount a challenge to Rupert Murdoch’s Fox News. But it’s going to cost the buyer more than just the headline price tag.
Akzo board has painted itself into a corner 8 May 2017 The Dutch paint maker’s categorical rejection of rival PPG’s 24.6 bln euro bid creates two glaring problems for boss Ton Buechner. His self-imposed targets are fanciful, and many shareholders doubt his judgement on the deal. Should PPG go hostile, two battles will become three.
Markets call Trump’s war bluff on North Korea 8 May 2017 Investors are ignoring the U.S. president’s war rhetoric against Pyongyang, snapping up South Korean securities and modestly buying protection against default. Optimism over the global economy and a new leader in Seoul result in a mute reaction compared to past flashpoints.