Halliburton boss loses trust if Baker deal busted 6 Apr 2016 The U.S. Justice Department is suing to block the oil-services giant’s planned takeover of rival Baker Hughes. That could put shareholders on the hook for a break fee worth over 10 pct of Halliburton’s market cap. CEO David Lesar’s pay and chairman’s role would deserve a rethink.
Abandoned Pfizer deal leaves all sides tainted 6 Apr 2016 The U.S. Treasury looks bad for changing the rules to kill the $160 bln merger with Allergan. Lawmakers’ inaction encouraged such tax-driven transactions. But Pfizer and CEO Ian Read bear the most responsibility for wasting time and resources pushing an overpriced, risky deal.
Uncle Sam puts $740 bln pension industry in a spin 6 Apr 2016 New rules to force brokers to put clients first look like good news for retirement savers. BlackRock, BofA and others with low-cost products should benefit, too. But others like Fidelity are likely to bear the brunt of the $17 bln in lost fees – and pass that onto clients.
Cops arrive just in time to break up the M&A party 6 Apr 2016 There’s no better sign that the current boom of corporate promiscuity has reached end days than the ferocious intervention by U.S. authorities citing antitrust, tax or national security concerns. The demise of Pfizer-Allergan should clearly signal the cycle is coming to a close.
ZTE purge is first step to sanctions solution 6 Apr 2016 The Chinese tech group has replaced its CEO and two other executives implicated in allegedly busting U.S. trade curbs. That should help to lift penalties that would cripple ZTE’s business. Other punishments may follow, but the existential threat facing the company is fading.
Allergan has chance at fresh start without Pfizer 5 Apr 2016 The $160 bln deal is on the rocks after Treasury killed the tax rationale, erasing 15 pct of Allergan’s market value. A timely sale of its generic-drug business to Teva for $41 bln will cushion the blow and contain comparisons to Valeant. The financial flexibility is much needed.
New Fed test metric both removes and adds risk 5 Apr 2016 Return on stressed assets shows which holdings get handicapped most in the annual exam of bank balance sheets. Selling them should reduce risk, increase capital returns and even help claims that cost of capital is falling. But it also leaves lenders with ever more similar assets.
David Tepper exposes tax-avoidance paradox 5 Apr 2016 The billionaire boss of hedge-fund firm Appaloosa is relocating to Florida. Though he’ll pay less tax, it’s rarely the motivation for such migration. Physically moving to save money seems easy enough, but doing so on paper with overseas M&A and offshore accounts is even easier.
Iceland first casualty of mostly pointless crusade 5 Apr 2016 Offshore assets exposed in the Panama Papers did for Iceland’s prime minister. It wouldn’t have happened if Icelanders didn’t expect better behaviour, and know how to ask for it. That’s the problem. Leaks thwack the mostly good, and leave the genuinely corrupt largely untroubled.
Inflation insurance is new U.S. fad 5 Apr 2016 Investors have a new-found appetite to buy American bonds offering protection against price rises. U.S. inflation is finally ticking up and could overshoot the Fed’s 2 pct target. With Europe showing no such signs, though, the fashion won’t cross the Atlantic any time soon.
Israel may give Silicon Valley run for its money 5 Apr 2016 Tech and cyber-security know-how, startup spirit, VC funds and even climate make the Middle East’s startup hub a bit like the Bay Area. Jerusalem is keeping Tel Aviv on its toes. Israel has other advantages, too – a global outlook and perhaps greater hunger than in the Valley.
Twitter may score big with football digital rights 5 Apr 2016 Jack Dorsey’s social-media firm won permission to stream 10 NFL games for a reported $10 mln. That’s the price of a one-minute Super Bowl ad, making the deal a cheap way to up the $12 bln service’s user base. Twitter may finally gain some ground against rivals like Facebook.
CalPERS learns social responsibility can be a drag 5 Apr 2016 The $290 bln California pension fund may reinvest in tobacco stocks after a report found that exiting the sector cost it $3 bln over 15 years. There’s more to the idea than higher returns, though. Engaging financially with controversial firms can be a better way to effect change.
Uncle Sam’s anti-inversion hunt may bag big trophy 5 Apr 2016 The United States is under fire for not doing more to prevent tax-reducing M&A deals. The $160 bln Pfizer-Allergan merger is a prime example. New rules seem to put it squarely in regulators’ sights. With the target’s shares down sharply, the Big Pharma tie-up looks under threat.
Blackstone bets Indian IT can weather US election 5 Apr 2016 The buyout firm’s $1.1 billion bid for Indian outsourcer Mphasis looks brave when U.S. presidential candidates are touting restrictions for skilled foreign workers. The low valuation and a long-term contract with seller Hewlett Packard Enterprise at least offers some protection.
Disney’s fairytale CEO plan gets twist in ending 5 Apr 2016 Bob Iger’s right-hand man Tom Staggs is stepping down, a year after he was anointed as heir apparent. That leaves no obvious succession plan at Disney after Iger twice extended his reign. An outsider would be surprising. At least the company has two years to find a replacement.
ValueAct takes hit to its most valuable asset 4 Apr 2016 Jeff Ubben’s hedge fund has been accused by U.S. prosecutors of being an activist where it said it was a passive investor. ValueAct’s reputation for agitating quietly is already suffering from the Valeant meltdown. A fight against the government invites more unwanted attention.
Wall St handed absentee role in TBTF Groundhog Day 4 Apr 2016 Minneapolis Fed boss Neel Kashkari had no big banks at his first forum on whether to break them up. New ideas on this much-debated conundrum were light on the ground, too. Banks are definitely safer, but only another crisis, not more jaw-jaw, can test whether they’re safe enough.
BATS’ second swing at an IPO may go awry 4 Apr 2016 The equities exchange plans to go public at an earnings multiple that its profit margin doesn’t justify. BATS may grow faster than rivals, yet it botched an offering in 2012 and comes to market at an inauspicious time for selling new stock. That’s reason enough for caution.
Panama Papers can only clean up so much 4 Apr 2016 A leak of some 11 mln documents from a law firm in the Central American nation has kicked off a global offshore tax hunt. Iceland’s prime minister is already under fire and other world leaders could be damaged. The impact may be limited, however, in the least democratic regimes.