Elliott comes out ahead in Alliance Trust truce 28 Apr 2015 Two of the three directors proposed by the U.S. activist will join the Scottish firm’s board. Meanwhile Alliance CEO Katherine Garrett-Cox avoids a humiliating defeat and gets a year to fix performance. Both sides compromised - but Elliott, and outside investors, do better.
Huge Apple payouts play catch-up with China growth 28 Apr 2015 The $760 bln iPhone behemoth is adding $50 bln more to its buyback plans. Quarterly numbers, though, show the Middle Kingdom overtaking Europe as Apple’s second-biggest market after 71 pct growth. CEO Tim Cook is in danger of taking more fire for returning cash too slowly.
DuPont investors: give Peltz a chance 27 Apr 2015 Proxy firm ISS is backing the activist and a second nominee. The case isn’t very strong. But Peltz on his own has a track record and a $1.8 bln stake. He’d get a year and then it would be up to the $65 bln chemical group whether to give him an age waiver to stand for re-election.
U.S. watchdog bites hacking victims too randomly 27 Apr 2015 The FTC has fined the likes of hotelier Wyndham over cyberattacks on the grounds that breached defenses were “unfair” to consumers. That encourages tighter security but doesn’t define what’s sufficient. Rules based on useful standards would be better than arbitrary penalties.
Pharma Arbageddon fears keep traders on sidelines 27 Apr 2015 Teva is after Mylan, which wants Perrigo. Such multibillion-dollar hostile deals are usually catnip for M&A punters. Recent failures have made them skittish, though. And these two battles come with cross-border complexity, antitrust and a poison pill. No wonder arbs are wary.
Tokyo Electron flop shows limits of M&A diplomacy 27 Apr 2015 Applied Materials’ $12.8 bln all-share takeover of the Japanese firm broke taboos in a country that is wary of foreign buyers. But after 19 months, U.S. regulators scuppered the tie-up. Investors will hope it doesn’t discourage other Japanese groups from considering bold deals.
Time Warner Cable’s greed comes home to roost 24 Apr 2015 When boss Rob Marcus lunged for Comcast’s $45 bln bid, he gave in to the buyer’s demand that it pay no fee if the deal got torpedoed. Now Marcus is empty-handed in a rapidly changing industry. Rival suitor Charter may return, but Time Warner Cable’s negotiating power is weaker.
M&A advice can be seen clearly with beer goggles 24 Apr 2015 Corporate finance has more in common with lager and ale than meets the eye. The bulge bracket in both industries had been losing market share to smaller craft practitioners. The Guinness makers of mergers – Goldman Sachs and Morgan Stanley – are staging a slow pour of a comeback.
Google’s Schmidt again plays adult in DE Shaw buy 24 Apr 2015 The tech giant’s executive chairman is taking 20 pct of the hedge fund firm off bankrupt Lehman Brothers’ hands. The billionaire was brought into Google to supervise its young founders. Not for him the frivolity of, say, a sports team investment like Steve Ballmer’s.
Review: The politics of anti-inequality 24 Apr 2015 Anthony Atkinson’s “Inequality” is a UK-centric manifesto to help the poor and restrain the rich. The Oxford academic’s specific proposals are mostly sensible, but they dodge serious questions about the role of the welfare state and the balance of national and global justice.
Santander finds Uncle Sam-friendly way to expand 24 Apr 2015 Spain’s biggest bank is merging its asset management arm with that of UniCredit, with private equity help. Both lenders gain from meshing cash-generative, capital-light businesses. But Santander does so without adding scale in the United States - where it still faces big regulatory hurdles.
Amazon Web Services delivers profitable twist 24 Apr 2015 Breakneck expansion at the web retailer’s cloud computing unit recalls Amazon’s glory years. Companies are seeing the benefits of letting someone else handle servers, storage and software. This time, the Jeff Bezos playbook contains a welcome wrinkle: growth and maybe profit.
China’s cyber crackdown: A guide for the perplexed 24 Apr 2015 The People’s Republic is squeezing technology companies. New banking rules and counter-terrorism legislation could make it harder for foreign groups to operate in the expanding market. Is security just an excuse to protect domestic players? Breakingviews cracks the code.
Comcast’s boss should live to buy another day 23 Apr 2015 A collapse of the $45 bln Time Warner Cable deal would leave controlling shareholder Brian Roberts with a second ugly scar. Overconfidence also contributed to a failed tilt at Disney a decade ago. Comcast rebounded with NBCU, which suggests Roberts will be back before too long.
Silicon Valley might as well embrace Uncle Sam 23 Apr 2015 The Pentagon is setting up shop in tech-land’s backyard, essentially taking their long-standing relationship public. With cybersecurity a rising concern, generals and geeks locking arms will do each some good, even if it further stokes consumer suspicions about Big Brother.
Inefficient markets lie behind flash crash arrest 23 Apr 2015 The U.S. says Navinder Sarao put out fake orders. But if human and electronic trend-followers didn’t dominate trading, such “spoofing” would be harmless. And if the tail of leveraged derivatives didn’t wag the cash market dog, Sarao would not be fighting extradition from the UK.
Greed isn’t good enough for ex-Lehman trader 23 Apr 2015 Jonathan Hoffman is in court demanding $84 mln in bonuses from the defunct U.S. firm – even though Barclays paid him the same hefty sum. The UK bank’s ex-boss Bob Diamond once touted a “no jerks” policy to fix the culture. Hoffman exemplifies why some banks have so far to go.
GM miss hints at broader struggle for U.S. autos 23 Apr 2015 Restructuring, higher taxes and weaker sales in Russia and Brazil hit the carmaker last quarter. The strong dollar’s effect is more worrying, though. It hurt in Latin America, and Japanese and European rivals are gaining an advantage over Detroit’s Big Three in the U.S. market.
Facebook growth rate depends on users liking R&D 23 Apr 2015 The social network spent 30 pct of Q1 sales developing new products. That’s proportionately about twice as much as Google and 10 times the outlay at Apple. At 42 pct, top line expansion fell short of expectations. To keep it up, all the investment needs to bear fruit.
Petrobras $17 bln charge lances festering boil 23 Apr 2015 The long-awaited writedown puts a concrete figure on years of corruption and mismanagement. The number looks big enough to satisfy investors, but shows the Brazilian oil giant’s problems go well beyond graft. It’s a start toward rebuilding financial and political confidence.