M&A running out of road on Easy Street 30 Sep 2015 Since July, only four out of 10 U.S. buyers’ stocks have risen after a deal announcement. That’s a big drop from 80 pct in early 2014. Blaming volatility misses the point. Investors just aren’t convinced by increasingly bold and messy deals. The end of a merger boom may be nigh.
Ralph Lauren’s new CEO saddled with high hopes 30 Sep 2015 The fashion icon passed over his son to hire Gap’s Stefan Larsson to run the family-controlled clothier. Corporate America is increasingly open to outside bosses, despite notable failures. Expectations also can be excessive. After all, investors have valued Larsson at $1.6 bln.
VW’s dodgy diesel gains: a measly 4.3 bln euros 30 Sep 2015 That’s what the German carmaker appears to have saved by skimping on state-of-the-art emissions technology. Look only at the U.S. cars that got VW in trouble and it falls to 200 mln euros. Investors have so far lost 140 times that as the shares have plunged. Cheating doesn’t pay.
ValueAct in Fox henhouse may goose pace of change 29 Sep 2015 Rupert Murdoch’s pick of fund founder Jeffrey Ubben for the board may have both feeling comfortable. But the friendly activist’s lack of a public agenda doesn’t mean a shakeup is off the table. He’s already ruffling feathers with a call to arms against on-demand service Netflix.
Henry Blodget makes most of Wall Street ban 29 Sep 2015 Selling most of Business Insider to Axel Springer for $343 mln is another step in the disgraced former dot-com analyst’s rehab. Blodget’s media outlet has made money and created jobs – despite the distorted market for talent that Wall Street created and Silicon Valley is aping.
Yahoo’s Alibaba spinoff troubles may outlast boss 29 Sep 2015 Marissa Mayer plans to complete the internet firm’s separation from the Chinese e-commerce company. Resolving tax issues may take years, though, if authorities challenge the deal. With Yahoo’s business stagnant and competition rising, the CEO may be gone before wrangling ends.
Mexican thirst for oil revenue ups auction stakes 29 Sep 2015 The nation will again try to solicit investors for its ailing energy sector after a first round of bidding in July fell flat. Falling crude prices and output are already taking a toll on Latin America’s No. 2 economy. Sweetening terms enough to lure big money is a must.
Business Insider picks deep German pockets 29 Sep 2015 Axel Springer is buying the business and tech news website at a $442 mln valuation. Nine times sales implies a long run of fast growth. It evokes Dresdner’s acquisition of Wasserstein Perella, a deal from the days when Business Insider boss Henry Blodget worked on Wall Street.
Japan Tobacco gives Reynolds breath of fresh air 29 Sep 2015 The buyer is paying $5 bln for the overseas rights to the U.S. cigarette group’s American Spirit brand - a whopping 250 times earnings. It’ll allow Reynolds to exhale a cloud of debt as it focuses on U.S. sales. Its strategy is a handy guide for similarly challenged sectors.
Pure Storage unicorn shivers in cooling market 29 Sep 2015 The computer-storage maker was valued at over $3 bln last year, as backers latched onto its fast growth selling flash memory that’s cheaper and more efficient than rival offerings. But losses and competition are mounting, and the risks threaten a lower valuation at IPO.
Alcoa split is canny move – not least for its CEO 28 Sep 2015 The $12 bln aluminum producer is cleaving sluggish smelting from healthier aerospace. Based on rival valuations, Alcoa shareholders can expect a modest uplift. Boss Klaus Kleinfeld, however, gets a new gig atop a more promising business, one he has been building by acquisition.
Valeant’s back-foot problem flares up in Congress 28 Sep 2015 The pharmaceuticals company keeps fighting through chronic skepticism about its acquisitive ways and the related borrowing. Now, U.S. lawmakers’ questions about drug prices have cost Valeant $11 bln in market value. Always being on the defensive could eventually take its toll.
Donald Trump’s tax plan is true to form 28 Sep 2015 The boisterous billionaire says 75 mln Americans won’t pay taxes if he’s U.S. president and business rates will be halved. Missing is how to pay for these cuts and more. Fuzzy numbers are the hallmark of a man whose wealth can’t be verified and is linked to four bankruptcies.
VW’s emissions scandal needn’t break its own bank 28 Sep 2015 The carmaker’s financial services arm is being sucked into its current crisis. The group’s funding costs are rising and the ECB won’t buy its asset-backed debt. The $164 bln-by-assets lender is vulnerable to a brand implosion - but should cope with more realistic scenarios.
VW tests U.S. enforcers’ fairness to foreign firms 28 Sep 2015 The German carmaker skidded into a legal system that extracts bigger fines and more guilty pleas from overseas companies than American peers. Differences in the cases may explain the discrepancy. But any prosecutor bias may get as much scrutiny as Volkswagen’s emissions tricks.
Shell’s Arctic retreat better late than never 28 Sep 2015 The Anglo-Dutch major faces a write-off of up to $4.1 bln after ditching oil and gas exploration in Alaska. Environmentalists will be happy. But if the group wants to bed down BG and ride out low oil prices, investors should cheer the demise of costly and brand-dilutive forays.
Hostile bid makes best TV in U.S. broadcast fight 28 Sep 2015 Nexstar wants to buy Media General for $4.1 bln, breaking up the latter’s agreed merger with Meredith. The new offer makes financial sense for Media General owners and would create a local TV player minus the baggage of magazines. The mystery is why Nexstar wasn’t first choice.
Vodafone and Liberty may yet converge 28 Sep 2015 Talks between the two telcos over a potential swap of European assets have come to nothing. Regulatory headwinds may be an issue, but the sticking point seems to have been price rather than strategic rationale. That means a deal – eventually – can’t be ruled out.
Don’t panic: Fed’s rate hikes will be slowest ever 25 Sep 2015 The U.S. central bank has so far delayed raising interest rates from zero. Janet Yellen tried on Thursday to reduce uncertainty over when liftoff will come. But the Fed’s caution will continue even after that. Rates aren’t heading to historically normal levels anytime soon.
VW bungles restart with new CEO from old guard 25 Sep 2015 Volkswagen lifer Matthias Mueller will be the stricken carmaker’s next boss. He has what it takes to fix operational woes. But as an internal appointment he is an imperfect investigator of past wrongdoing. Herbert Diess, poached recently from BMW, would have been a better choice.