Activism is lost in translation at Vivendi 23 Mar 2015 The French media group is the object of a transatlantic clash between U.S. investor Peter Schoenfeld and group chairman Vincent Bollore. Vivendi could indeed be more shareholder-friendly. But Schoenfeld may struggle to win large institutional support in Paris.
Biotech-insurer connection looks wildly premature 23 Mar 2015 Early results for Biogen’s Alzheimer’s drug added $10 bln to its value on Friday. Now an analyst comment that it might cut long-term care payouts for Genworth has sent the insurer’s stock up 5 pct. Past failed treatments make that a step too far – and even a sign of a bubble.
Holdout investors can survive beating on the bayou 20 Mar 2015 At the New Orleans M&A jamboree, dealmakers slammed merger appraisal cases that allow shareholders to sue for higher prices. Even the Delaware chief judge’s fiery rebuttal didn’t carry the day. In the real world, though, the suits are proving sturdy checks on dodgy transactions.
First stab at U.S. fracking rules strikes balance 20 Mar 2015 A long-awaited federal edict on hydraulic fracturing addresses big environmental worries while sparing oil and gas drillers heavy new costs. It applies only on government land and may evolve. But it’s a workable step toward replacing patchwork state rules with national standards.
Global trends through a Tiffany glass, darkly 20 Mar 2015 The luxury retailer’s tarnished outlook reflects a new economic normal. A slump in Japan reflects that nation’s fiscal constraints, while the rising dollar has hit sales elsewhere. On the bright side, growth in Europe is rebounding and Chinese consumers are playing their part.
China’s world bank has rickety foundations 20 Mar 2015 The country’s patchy record of funding big projects at home and abroad hasn’t deterred Western countries from rushing to join its new Asian infrastructure bank. To lure private capital, the body will have to be commercial and transparent. Early signs suggest it will be neither.
Wall Street’s über-lawyer hits bum regulatory note 19 Mar 2015 Rodgin Cohen thinks watchdogs have gone overboard to prove they’re not captured by banks. That resonates with many in Congress, but the 2008 crisis exposed the necessity of more robust oversight. Still, room remains to soften examiners’ ferocity even if banks overstate the pain.
Drugmaker IPO should ease any TPG anxiety 19 Mar 2015 The buyout firm may quadruple its investment – at least on paper – in Par Pharmaceutical, a generics maker it bought for $1.9 bln less than three years ago. The return delivers a useful lift as TPG raises a new $10 bln fund. It’s also good therapy for a dispiriting lawsuit.
Wall Street owners finally get breakup bona fides 19 Mar 2015 The SEC is allowing BofA shareholders to vote on whether to spin off Merrill Lynch. The watchdog previously muzzled similar requests at JPMorgan and elsewhere. Banks won’t like the scrutiny, but it’s a worthwhile debate to air publicly, as they’re running the numbers internally.
Oil companies stare into the mining abyss 19 Mar 2015 Embattled iron ore producer Fortescue risks being frozen out of debt markets after balking at paying a high rate on a deal. Rivals that dallied at raising capital after metal prices tanked suffered worse fates. Oil servicers and drillers still have a chance to save themselves.
China’s capital flight lands on New York doorsteps 19 Mar 2015 Chinese investors have pumped $10.4 billion into U.S. real estate in two years, most of it in Manhattan. And that doesn’t include the homes they actually live in. Americans should welcome their new neighbours. The question for China is how many of its elite it can stand to lose.
Fed’s lack of patience may be tested 18 Mar 2015 U.S. central bankers now anticipate domestic GDP will grow by less than 3 pct a year indefinitely. That has curbed their expectations – and the market’s – for higher interest rates accordingly. The steady and narrow consensus at the Fed, however, could easily prove misplaced.
Goldman’s shadow bank debuts somewhat deceptively 18 Mar 2015 In what could be seen as a bad ad for its own bankers and lead underwriter BofA, shares of the middle-market lender fell as much as 2.5 pct. Deal fees typically drag on business development company IPOs, however. And unlike some rivals, Goldman’s trades above its net asset value.
Guest view: Vocal investors add value and variety 18 Mar 2015 Giving shareholders more say in director nominations opens companies to fresh viewpoints and talent. So does putting women and minorities in management and on boards. Adopting those policies is good business, not just the right thing to do, says Roger Ferguson, CEO of TIAA-CREF.
Deflation needle buried in haystack of history 18 Mar 2015 A BIS study of falling consumer prices going back to 1870 shows only a weak link with lower GDP growth. The cheery finding may lead policymakers astray. The sharp end of today’s deflation threat lies in depressed wages. It has drawn blood before, and could do so again.
U.S. shows up Spain on money-laundering crackdown 18 Mar 2015 Tiny Banco de Madrid has filed for bankruptcy after the U.S. accused its Andorran parent of money laundering. Spain had actually investigated the issue, but hadn’t sent its report to prosecutors. As such, Madrid has missed a good chance to prove its bank oversight credentials.
Market expectations weigh heavily on Fed patience 17 Mar 2015 Traders expect overnight rates at or above 0.75 pct as 2016 nears. Without a crisis hangover they’d be above core inflation, running 1.4 pct. Hiking them – even from near-zero – carries risks. But with economic growth steady, the U.S. central bank needs to follow through.
U.S. mega-mall deal features bazaar tactics 17 Mar 2015 Macerich rejected an unsolicited $22 bln takeover bid from larger rival Simon Property. The suitor’s touted 30 pct premium may really be worth less. Even so, the target’s decision to shield itself by undoing good corporate governance is the more disingenuous haggling move.
M&A’s March Madness shindig puts refs center court 17 Mar 2015 Wall Street’s watchdog-in-chief and a revamped Delaware bench star in the industry’s annual New Orleans gig. Hot topics include how to make outvoted investors richer and lawsuit losers poorer. Activists and dealmakers will get their shots, but the focus is on rules of the game.
Rob Cox: If only GE had an activist who cared 17 Mar 2015 The problem with Jeff Immelt’s conglomerate isn’t inertia, bad managers or crummy assets. GE faces a harder nut to crack: Investors don’t seem to give a damn. As Microsoft’s experience before Satya Nadella suggests, the perception of a stock as dead money is hard to shake off.