Can maker dons tin hat to reveal $6.6 bln approach 5 Feb 2015 Shares in London-listed Rexam jumped 20 pct on news it might sell itself to U.S. rival Ball. A deal isn’t even inked, and the antitrust concerns are substantial. The British company’s decision to publicise the price under discussion looks brave – or designed to force Ball’s hand.
Pfizer’s generics injection lifts mood for breakup 5 Feb 2015 The pharmaceutical giant’s $15 billion purchase of Hospira gives it a shot at reversing a history of value-destroying acquisitions. The injectable drug maker’s strength in non-branded medications should fortify Pfizer’s generics unit – and clear the way for spinning it off.
Lazard waits for shareholders to catch up 5 Feb 2015 CEO Ken Jacobs has successfully steered the bank to the target he set in 2012. And there’s room to go further. A decent jump in the stock price shows investors have started to cotton on. But Lazard still trades at an undeserved discount to its advisory and money management peers.
World’s swelling debt calls for radical surgery 5 Feb 2015 Despite promises to deleverage, global borrowing has increased by $57 trillion since 2007, according to McKinsey. It’s hard to see economies growing their way back to prudence. Shrinking the pile will require borrowers to seek relief – and some creditors to cancel their claims.
General Motors-Ally spat clears the air for both 4 Feb 2015 The automaker is competing harder with its former finance unit. And six-year Ally boss Michael Carpenter, who criticized GM’s rivalry, has now gone. Both shifts have been in the works for a while. Now, the recovering car manufacturer and Ally can finally go their separate ways.
Brazil must cast wider, global net for Petrobras 4 Feb 2015 The exit of CEO Maria das Graças Foster and other top bosses offers a chance to rebuild the $50 bln oil giant, and salvage Brazil’s reputation. Tapping internationally credible oil execs with a clear mandate would be the best way to start over – assuming anyone wants the job.
Prisoner’s dilemma costs Gilead investors $15 bln 4 Feb 2015 Its hep C drug helped the $145 bln biotech quadruple fourth-quarter earnings and plan for a big buyback. Gilead’s stock sank 10 pct, though, because it’s going to discount the treatment sharply this year. Cures fuel price wars because there’s no repeat business to worry about.
Staples-Office Depot can pass antitrust checkout 4 Feb 2015 Crunching together the two U.S. office supply chains is a financial winner: the value of the synergies alone pays for the $6.3 bln deal. Though trustbusters may squawk, even they acknowledge that with internet and big box stores thriving, the competitive landscape has changed.
Smucker deal may keep activists in Kibbles ‘n Bits 4 Feb 2015 The jam maker is gobbling Big Heart Pet Brands for $5.8 bln. Mixing coffee with dog food could create bargaining heft with stores but more likely will leave uppity investors hungry for a breakup. There’s a reason the one-time Nabisco division is caught in a cycle of spinoffs.
Watch the small print in Qualcomm’s China fight 4 Feb 2015 Antitrust regulators are putting together a case against the U.S. chipmaker. If it’s found guilty, a big fine would grab the headlines. But forcing Qualcomm to lower patent fees, or banning the company from linking royalties to chip sales, could do greater financial damage.
Shell oils gears for climate-activist investors 3 Feb 2015 The Anglo-Dutch major is backing a shareholder resolution for more disclosure about how climate change might affect its business. The demands are hardly taxing, so a refusal might look defensive. But the episode highlights the growing power of environmentally focused investors.
U.S. elections cash delivers mixed returns at best 3 Feb 2015 Donors stuffed candidate coffers with $1.6 bln in the 2014 midterm contests alone. Contenders backed by a right-leaning Koch brothers fund won at a 90 pct clip, but only 20 pct of a big Democratic group’s choices succeeded. It’s yet another reason to spend less on campaigns.
S&P’s $1.4 bln deal reawakens watchdogs’ dilemma 3 Feb 2015 The credit rater isn’t admitting to any illegality, but at more than half of 2013 revenue the settlement is painful. If Uncle Sam really thinks S&P defrauded bondholders, it’s crazy to regulate raters more tightly - investors are more likely to be taken in by any shenanigans.
Obama makes deficit control harder than necessary 2 Feb 2015 His new budget increases federal outlays by 6.4 pct a year. So to rein in borrowing, tax revenue has to grow at over 7 pct annually. Of course some proposals are pure politics. But a solid U.S. economy could handle less government spending, taking heat out of the revenue fight.
Small print debases $41 bln U.S. spectrum sale 2 Feb 2015 The biggest bandwidth auction in years raised about twice as much as expected for Uncle Sam. But a 25 pct “small business” discount claimed by Dish Network is helping the $33 bln pay-TV company add to its unused stockpile and outbid rival operators that badly need capacity.
Banker pay cut deceleration may have wider effects 2 Feb 2015 Investment banks have held steady the slice of revenue paid out to employees in recent years, an industry-sponsored study finds. Higher pay at buyout firms and hedge funds acts as a brake. But with returns tepid everywhere, finance sector-wide compensation may fall further.
Shareholders give Exxon the benefit of the doubt 2 Feb 2015 The oil major is keeping mum on spending plans even as rivals cut back. And it only beat Q4 estimates thanks to tax and legal breaks. Unlike Chevron, though, Exxon is still buying back stock, if less than before. Such relative resilience appeals to investors, but might not last.
Low-growth consumer stocks are pushing the limit 2 Feb 2015 Yield-starved investors are chasing reliable dividend payers. Beside near zero-yield sovereign bonds, 3 pct from stocks such as Procter & Gamble, Diageo and Unilever is easy to like. But there’s little growth in their emerging or developed markets. The stocks look expensive.
Stolid Q4 U.S. growth provides platform for 2015 30 Jan 2015 A 2.6 pct rate of expansion in the quarter and 2.4 pct growth for 2014 hardly represent a boom. But it’s still a stronger story than most developed economies. With pay rising, confidence strong and inflation, interest rates and gasoline prices low, the upside remains promising.
Costco treats shareholders like staff: equitably 30 Jan 2015 The U.S. mega-retailer known for paying workers above the minimum wage is similarly treating its owners with greater deference than rivals do. Rather than buying back stock, Costco is paying a $2.2 bln special dividend. It’s a fresh sign of how all stakeholders can be rewarded.