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.
Unicorn fantasy thrives at asset managers’ expense 17 Mar 2015 Venture capitalists have occasionally given birth to private firms worth more than $1 bln. Now the process is going mainstream, with the likes of Fidelity investing in Pinterest. The ballooning size and number of these companies may leave shareholders with unhealthy beasts.
Jefferies rubs salt into own wounds 17 Mar 2015 The Wall Street firm avoided a second straight quarterly loss, but just barely. It reported only $12.5 mln in profit after missing the rebound in most fixed-income trading and relying too much on slowing LBOs. Boss Richard Handler can’t afford another dismal quarter like this.
Clock ticks for Swatch in Apple Watch challenge 17 Mar 2015 Swatch CEO Nick Hayek is sanguine about the tech giant’s attempt to disrupt time. Yet he faces tricky options: lock horns with Tim Cook in a smartwatch war, or move upmarket where Apple will struggle to compete on craftsmanship. Swatch doesn’t look primed for either.
U.S. gym chain buyout demands a serious workout 16 Mar 2015 The $4 bln acquisition of Life Time Fitness by Leonard Green and TPG probably lards it with debt of about six times EBITDA. That may be why seven banks are limbering up to do the financial lifting. The new owners will have to run hard on the treadmill to make the numbers work.
Oil collapse turns U.S export ban into jobs killer 16 Mar 2015 Overseas sales restrictions sent American crude prices below Brent in the shale boom. That was manageable. Now, with WTI hitting a six-year low, the ban threatens both workers and energy independence. Ending it, and the disparity, is fast becoming a job-saving necessity.
Valeant’s $11 bln bid may have scored two knockouts 16 Mar 2015 By sweetening its offer for Salix, the acquisitive drugmaker now backed by hedgie Bill Ackman put rival suitor Endo on the mat. The extra cash and a balance sheet reeling from the Allergan deal leave the business model looking wobbly. Valeant may have just rung its own bell too.
Sotheby’s new CEO brings needed broad-brush talent 16 Mar 2015 Tad Smith has been selling Madison Square Garden hot dogs, not Jeff Koons Balloon Dogs. Time at McKinsey and beyond, though, suggests generalist skills. With activist investors, art collectors and online upheaval among varied challenges, the hire looks logical, at least on paper.