Staples-Office Depot flop leaves behind paper cuts 11 May 2016 The office supply chains have shredded a $6.3 bln merger after a judge called a halt amid worries about the impact on big customers. Squelched tie-ups like Sysco’s bid for US Foods portended the result. It’s a blow to the credibility of both sides.
Uber’s deal with U.S. drivers looks cheap 10 May 2016 Treated as employees rather than contractors, the ride-hailing service might have had to pay them as much as $730 mln more, according to court papers. That makes a $100 mln two-state settlement look like peanuts – another reason why the judge on the case might reject it.
Bud’s new name should be "Bahamas," not "America" 10 May 2016 AB InBev will call its iconic beer “America” through the end of U.S. elections in November. It’s a bold move from a brand facing heavy competitive pressure from popular craft brews. A tropical moniker would better reflect the Brazilian-run, Belgium-based conglomerate’s ownership.
Puerto Rico creditors making perfect enemy of good 10 May 2016 A bill to cut the U.S. territory’s $70 bln debt stalled amid fierce lobbying by bondholders that insist on full repayment. New but similar legislation offers a chance to get the island back on track. Though no one wants a haircut, a messy default could be far more costly.
U.S. watchdogs fiddle while fintech lenders burn 10 May 2016 The Treasury Department is the latest with ideas on regulating the likes of Prosper and SoFi. Studies are useful, but the alternative-lending industry is growing rapidly and, as Lending Club shows, starting to hit trouble. Effective supervision would help more than white papers.
Altice’s wily Cablevision math adds up to trouble 10 May 2016 Patrick Drahi’s telecom group told investors it can cut $900 mln in costs to justify the $18 bln U.S. cable acquisition. To appease New York officials worried about service, Altice is using a shorter timeframe to tout a $450 mln sum. Both constituencies will end up disappointed.
From Allergan to Zoetis: new drug M&A perspectives 10 May 2016 The acquisitive maker of Botox is devoting capital to buybacks and paying down debt. Meanwhile, Bill Ackman is selling a big stake in the animal-health company he has been pushing as a takeover target. With luck, the two moves together signal a more subdued approach to deals.
Cox: Why Brexit would be a boon for Donald Trump 10 May 2016 It’s June 24 and Britain has just voted to leave the EU. The Republican presidential candidate congratulates pro-leave UK politician Boris Johnson on a huge victory - and then calls for a U.S. referendum on TPP and NAFTA. Breakingviews obtained an early copy of Trump’s speech.
Nokia could spend a year on hold 10 May 2016 The Finnish telecoms group saw a 9 percent year-on-year drop in Q1 sales, in the first combined set of numbers since its 15.6 billion euro Alcatel-Lucent tie-up. Gross margin improved and synergies have been revised up. But slow mobile equipment sales remain a standout.
Silicon Valley loses if Oracle wins against Google 9 May 2016 Larry Ellison’s $160 bln software company says the web search titan illegally used Java for Android smartphone systems. Despite one favorable ruling, the copyright case looks weak. Worse, it may stifle coders and others. That’s anathema to a tech epicenter built on sharing ideas.
Sumner Redstone ruling takes drama back to Viacom 9 May 2016 A California judge threw out a lawsuit filed by his ex-girlfriend that captivated Hollywood and Wall Street alike. The media mogul’s bizarre deposition confirmed the very poor health many suspected. Even so, he keeps control of his empire – half of which is ailing badly, too.
Wall Street plays Patriot card on money laundering 9 May 2016 Banks want Washington to use provisions in the 2001 homeland security Act to set up a public-private database on suspect currency activity. It may be useful in preventing fraud and catching the bad guys. Lenders have another motive, too: cutting costs and even avoiding big fines.
Lending Club shows limits of fintech disruption 9 May 2016 CEO Renaud Laplanche is out after an internal probe into mis-selling at the biggest alternative lender. The board’s speedy action deserves credit. Financial-technology firms are learning what traditional rivals know: that some rules and habits are not meant to be broken.
Digesting Krispy Kreme may require more sweetener 9 May 2016 JAB has baked a 25 pct premium into its $1.4 bln offer to take the donut maker private. The billionaire-backed owner of coffee sellers Keurig and Peet’s should be able to boost sales and margins. But Krispy Kreme may prove too appetizing for others to pass up without a fight.
Trump’s Fed position befits a banana republic 6 May 2016 The reality-TV veteran turned White House contender says Janet Yellen is following the right monetary policy, but he’d replace her because she’s not a Republican. That’s not only a break with decorum. It’s a red flag that a President Trump would meddle in central-banking affairs.
Shaming VW could be pushy TCI’s best tactic 6 May 2016 Chris Hohn’s hedge fund has tackled the likes of Japan Tobacco and Coal India. That puts the 61 bln euro German carmaker in some bad company. Yet complaints of excessive pay, weak governance and inefficient operations are not new. Only VW’s controlling owners can force change.
Air Products and Evonik neutralize deal imbalance 6 May 2016 The U.S. industrial-gas producer is selling specialty chemicals to its German peer for $3.8 bln. A lofty valuation of 16 times last year’s EBITDA helps Air Products cover a tax hit triggered by the sale. To justify the price, Evonik is rustling up meaningful savings of its own.
Brexit advocates: heed the tale of Herb Kelleher 6 May 2016 The co-founder of U.S. budget airline Southwest took the glamour out of air travel. But the increased connectivity has had unexpected benefits - like more scientific breakthroughs, a new study shows. Those who seek a British exit from the EU may be giving up more than they know.
Farcical oil deal prompts George Costanza defense 5 May 2016 Like the character in sitcom “Seinfeld,” Energy Transfer hopes to shake up a sour relationship: the $21 bln takeover of pipeline rival Williams. ETE aims to pay less cash, seeming to force the issue by making itself as unattractive as possible. The stakes are no laughing matter.
U.S. watchdog gives bank customers back their bite 5 May 2016 The Consumer Financial Protection Bureau is reviving class-action lawsuits as a way to fight unfair fees and other scams. Existing rules often allow only solo cases in arbitration, where lenders get the edge. The masses deserve a better shot at bringing Wall Street to heel.