Exxon’s New Guinea sojourn stirs oil M&A waters 19 Jul 2016 The U.S. oil giant's $2.3 bln offer for Papua-focused gas explorer InterOil topped an earlier approach from rival energy group Oil Search. Though it's Exxon's biggest swoop since crude prices crashed, it looks more like opportunism than a catalyst for an impending deal wave.
Netflix shows its age with cringe-worthy wordplay 18 Jul 2016 The $42 bln digital-streaming service is throwing around the term "un-grandfather" to mean raising prices on customers. Tortuous rhetoric is bad enough when it emanates from Silicon Valley startups. From an established company like Reed Hastings' Netflix, it's embarrassing.
Yahoo’s goodwill flashes warning sign for bidders 18 Jul 2016 The once-mighty internet firm took a near $500 million impairment charge on its $1 bln acquisition of Tumblr. Boss Marissa Mayer's likely last earnings call serves as a red flag for potential buyers: a similarly dismal writedown awaits you, too.
SoftBank’s new ARM may tie Sprint’s behind back 18 Jul 2016 The Japanese tech and telecom titan spent $32 bln on the UK chipmaker because it's feeling good about its U.S. wireless carrier. SoftBank's confidence confounds. Sprint is fourth of four in a maturing market locked in a price war. It's a bad time to have a distracted parent.
Hawaiian deal wipes out on isolationist wave 18 Jul 2016 Aloha State regulators blocked NextEra's $4.3 bln acquisition of Hawaiian Electric. A sale to the Florida operator was a neat way to end the utility's odd ownership of a bank and spur investment in solar. Britain isn't the only isle whose protectionist tendencies will be painful.
Corporate GOP convention snub boosts Trump appeal 18 Jul 2016 The dearth of company sponsors at the Republican bash reflects unease with the White House hopeful's stance on issues like trade. Businesses usually provide support for the nomination party. Ironically, their absence may serve to enhance the real-estate mogul's outsider image.
Bank of America sets stage for a good run 18 Jul 2016 The laggard lender generated an annualized return on equity of just 6.5 pct, trailing rivals from Citi to JPMorgan. Boss Brian Moynihan nevertheless managed to grow book value most while keeping safe on credit. That's good news for shareholders, as long as returns can pick up.
Turkey’s failed coup leaves no victors 16 Jul 2016 President Tayyip Erdogan’s government survived an attempted military coup but has few reasons for triumphalism. Much-needed foreign capital is likely to flee, and all the faster if there are harsh reprisals. Economic damage risks making this key U.S. and EU ally less reliable.
Wells Fargo and U.S. Bancorp raise Citi bar higher 15 Jul 2016 Slowly recovering lenders often target a 10 pct return on equity, hoping to placate long-suffering investors. For Citi and others that only covers the cost of capital. Consistently cranking out more, as Wells Fargo and U.S. Bancorp just did again, is what turbo-charges valuations.
Trump VP pick Pence provides some needed balance 15 Jul 2016 The White House hopeful chose Indiana Governor Mike Pence as his running mate. He has the right kind of right-wing résumé, with views in support of free trade and against a Muslim visitor ban. The No. 2 could help by persuading his boss that nativist policies harm the economy.
Ackman and Herbalife both win a Pyrrhic victory 15 Jul 2016 Pershing Square's claim that the $6.4 bln supplements seller deceived customers was justified, but the activist hedge fund lost a four-year campaign to label it a pyramid scheme. Herbalife's victory, however, comes with painful settlement costs and forced business-model changes.
Yahoo’s failure clarifies future for U.S. spinoffs 15 Jul 2016 The Treasury modified regulations on when splits can qualify for tax-free treatment. The move comes after the IRS declined to bless Yahoo's carve-out of its Alibaba stake. Similar deals have been on hold since. This reasonable government approach provides much-needed clarity.
Assembling economic dream team is more than a game 14 Jul 2016 Hillary Clinton and Donald Trump soon will unveil detailed economic plans as party officials gather at upcoming conventions. To help them draft a team of advisers, Breakingviews blends the fun of fantasy sports with the real consequences of policy in a new interactive graphic.
Bayer’s modest bump puts target Monsanto on spot 14 Jul 2016 The German chemical giant raised its offer for the American seed purveyor to $64 bln, including debt. It's a token $2 bln increase from Bayer's initial bid. That should scotch hopes that Bayer will go a lot higher. For Monsanto boss Hugh Grant, decision time is fast approaching.
JPMorgan struggles to earn its keep 14 Jul 2016 The U.S. megabank run by Jamie Dimon cranked out a $6.2 bln second-quarter profit as lending and trading jumped. A utility-like 10 pct return on equity will probably beat most rivals but barely covers the firm's cost of equity. The banking industry needs to show it can do better.
Cravath’s female boss will be hard act to follow 14 Jul 2016 The white-shoe law firm chose Faiza Saeed as its next managing partner. Rivals often mirror Cravath on matters such as pay, but a dearth of women in senior positions will limit the number of copycats. Such scarcity puts the legal world embarrassingly behind its corporate clients.
Plains $7 bln swap simplifies only so much 13 Jul 2016 The U.S. pipeline operator is restructuring its MLP arrangement and cutting its dividend to conserve cash. Plains also is collapsing the governance of two separate listed entities under a single board. The group structure nevertheless remains complex and debt levels too high.
Venezuela crushed by Maduro’s survival calculus 13 Jul 2016 The Andean country's leader is squeezing imports to hoard dollars for debt payment. Ordinary folk are paying the price. A recall referendum he'd probably lose offers more hope than disorderly change. It'll take higher oil prices or electoral shenanigans to keep him in power.
Boosting bank earnings requires more creativity 13 Jul 2016 Trading, stock deals and mortgage refinancing picked up in the second quarter. That's a relief after a poor start to the year. But bank returns mostly remain too low and new business too scarce. It puts the emphasis on finding new ways to cut costs and harness technology.
Dimon helps steer value debate beyond shareholders 12 Jul 2016 JPMorgan's CEO is raising pay for 18,000 lower-level workers like bank tellers, after similar moves by Gap, Wal-Mart, Starbucks and others. Helping shrink the income inequality gap is a good step, especially by sharing spoils often reserved for Wall Street staff and investors.