GE upset offers Asian buyers way into U.S. kitchen 15 Dec 2015 The group’s appliance unit is up for grabs after a $3 bln sale to Electrolux collapsed. Buying one of the top makers of U.S. cookers, dishwashers and fridges would be transformational for Haier or Midea of China. But Panasonic, Samsung, or Germany’s Bosch might have other ideas.
Cox: Capitalism can help solve the gun problem 14 Dec 2015 Squabbling U.S. Republican presidential contenders can’t seem to agree on much, but they all say they want to end crony capitalism. By repealing a law that uniquely shields gunsmiths from the disciplining force of liability lawsuits, they could let the free market save lives.
Newell Rubbermaid overworks M&A machine 14 Dec 2015 The serial-acquiring owner of Sharpie markers and Graco baby gear is buying Jarden’s motley collection of candles, camping gear and more for over $15 bln. The value of the proposed cost savings more than covers the $2.7 bln premium, but the scale and debt strain conglomerate logic.
Third Ave teaches finance – and management – 101 14 Dec 2015 The U.S. investment firm’s closure of a high-yield fund, blocking withdrawals, has rattled markets. The episode echoes past failures caused by promising liquidity in illiquid assets. The Third Avenue CEO’s abrupt exit suggests flawed oversight, too. But contagion remains a risk.
Paris deal gives green light to eco-investing 14 Dec 2015 The climate goals agreed by 195 countries are laudably ambitious. Scepticism over governments’ ability to hit them is warranted. But the accord should encourage venture funds, bond- and shareholders to stump up more capital. And making an impact is not as hard as it may sound.
Wu-Tang Clan’s sales method is mostly madness 11 Dec 2015 The hip-hop collective auctioned a one-copy album in what seemed like a cool experiment after Prince gave one away, Radiohead tried a name-your-price model and Adele bypassed streaming. The exclusivity attracted an unpopular buyer, however. Wu-Tang’s experiment may end up unique.
Review: A bitter guffaw as Wall Street falls apart 11 Dec 2015 The 2008 financial crisis was too complex for any one medium to tell it all. Journalists and protagonists have penned books. Hollywood has tried terse drama. There have been documentaries and radio shows. The film “The Big Short” goes for dark humor that barely masks disgust.
DowDuPont tests limits of ambitious M&A 11 Dec 2015 A $130 bln union of the U.S. chemical titans is really four deals in one, given a planned three-way breakup to follow. The $30 bln of estimated value creation from cost savings is aggressive. Mergers of equals often become strained. At least the strategic rationale makes sense.
Goldman and Morgan Stanley cement M&A oligopoly 11 Dec 2015 Both banks landed advisory roles on either side of the $130 bln DowDuPont merger, extending their league-table leads in a record year of dealmaking. They also held the one and two spots during the 2007 and 2000 peaks. Cracking the top tier can be done, but it’s exceedingly rare.
Breakdown: Uneven CO2 prices are better than none 11 Dec 2015 Plenty of governments and executives support a uniform carbon emissions cost. Yet it’s unlikely one will emerge from the U.N. climate change confab. That’ll leave a hodge-podge of local schemes in place. As the need for energy innovation rises, it beats having nothing.
LBO-style debt adds zing to Yum Brands break-up 11 Dec 2015 Kentucky Fried Chicken will stuff shareholders with $6.2 billion before spinning off its China arm. The remaining Yum will carry debt of 5 times EBITDA. That’s not too extreme for the fast food industry- but it does look a lot like a self-administered leveraged buyout.
From Caterpillar an activist butterfly may hatch 10 Dec 2015 The $39 bln earth-moving machinery conglomerate is in a pickle. Deals struck at the peak of the commodities and Chinese investment booms trashed the stock and hurt management’s credibility. An investor seeking changes, even a breakup, could play well in Peoria and on Wall Street.
Oil’s reckoning invites a U.S. mega-deal 10 Dec 2015 Conoco, Chevron, Kinder Morgan and the state of Alaska are modifying capital strategies amid another lurch down in crude prices. If these conditions persist, something like Shell’s $70 bln takeover of BG should look appealing. Occidental and Anadarko could make tempting targets.
John Thain’s tin ear survives to the bitter end 10 Dec 2015 CIT, the mid-market lender he runs, just changed how it defines retirement. The new rules neatly suit Thain’s age and length of service, allowing him to keep stock he’d otherwise lose. It’s a predictable bow for a man who once spent $1.2 mln gilding his office at Merrill Lynch.
Dow-DuPont reaction could produce $20 bln in value 9 Dec 2015 Combining the chemical giants, each worth nearly $60 bln on Tuesday, would be complicated. A three-way split thereafter might not unlock much value, but would bring focus. Asset rejiggering could allow cost cuts worth almost twice as much as Wednesday’s 10 pct share-price gains.
Savoy and Plaza sale means trophies for all 9 Dec 2015 Accor is buying the owner of the luxury London and New York hotels for $2.9 bln from its Saudi and Qatari investors. Adding higher-end lodging may help the French group make its online booking system more competitive. The price, however, looks too high to create much value.
Trump’s Muslim tirade fails basic capitalist test 9 Dec 2015 The GOP candidate’s call to ban Muslim visitors ignores the openness on which the system that made him rich relies. U.S. deficits, banks and property have all benefitted from Arab money. Closing doors to people could do the same to capital, which a president can ill afford.
Yahoo a good bet for Barry Diller’s menagerie 9 Dec 2015 The flailing internet firm scrapped plans to spin off its Alibaba stake and may split its search and advertising unit instead. The media mogul’s assorted online businesses could be a logical home, as might Verizon, owner of AOL. In truth, almost any deal would be a win for Yahoo.
Alternative lenders facing first major disruption 9 Dec 2015 Lending Club, OnDeck and others in the competitive market will probably experience rising interest rates for the first time next year. That’ll test their performance, funding and credibility. Prosper’s loan to one of the San Bernardino shooters may speed regulatory scrutiny, too.
Dow-DuPont an activist coup on Corporate America 9 Dec 2015 The $60 bln chemical giants are in merger talks, according to reports, a testament to the persistence of pushy investors Dan Loeb and Nelson Peltz. If the companies pull off a deal and a rumored three-way split, it could be this generation’s version of barbarians at the gate.