Mylan sets itself for M&A repeat prescription 14 Jul 2014 The U.S. pharma company will pay $5.3 bln for generic drug assets owned by Abbott. The transaction between the two American companies will see Mylan acquiring a tax home in Europe. The buyer is also likely to do further deals – and look for more tax arbitrage.
Unilever teaches a valuable lesson on gluttony 14 Jul 2014 The Anglo-Dutch consumer giant hedged its bets when it swallowed Slim-Fast and Ben & Jerry’s at once in 2000. The weight-loss brand cost seven times more, and Unilever just sold it for cheap. Ice cream still keeps it fat and happy. Fads, in both diet and investing, are dangerous.
Whiting bid for Kodiak leaves minorities in cold 14 Jul 2014 The Bakken oil driller is offering no premium in a $3.8 bln all-share bid for rival Kodiak. That’s OK for the 60 pct of shareholders who the companies say own both stocks – like hedgie John Paulson. And the deal’s logic is solid. But it short-changes the rest of Kodiak’s owners.
Shire shows power of tax inversion levers 14 Jul 2014 The UK pharma group says a $54 bln proposal from U.S. suitor AbbVie is potentially acceptable. The 50 pct premium reflects the value of tax synergies and the recommendation needed to achieve them. AbbVie will doubtless prevail if its share price holds, and there is no counterbid.
Life’s like a box of chocolates for Lindt owners 14 Jul 2014 Investors in the Swiss confectioner didn’t know they were going to get Russell Stover, the $1 bln-plus U.S. firm whose gift box starred in Forrest Gump. They still don’t know exactly what Lindt paid. Cost savings will be slim. This is about selling more chocs in middle America.
German soccer glory was predictable – with luck 13 Jul 2014 Brazil’s World Cup was first-rate entertainment, thanks to many surprising results. In finance, as in sport, forecasting is a dangerous game. But it is where the greatest value lies. The key is to draw conclusions from pertinent facts. Luck helps, too.
If only Argentine economy matched soccer success 13 Jul 2014 The nation’s strong World Cup showing reflects astute management of its big fan base and valuable on-field talent. That contrasts with a 100-year record of wasting its human and natural resources. Avoiding policy own-goals could one day make Argentina an economic champion, too.
Wells Fargo may be leaving $90 bln on table 11 Jul 2014 America’s largest bank reported solid second-quarter earnings. That helps explain why the stock’s 14 pct jump this year is the best of the banks. But Wells lags smaller rival U.S. Bancorp on several metrics, including efficiency. Closing the gap could boost its value by a third.
German $13.5 bln auto-parts bid may lack gas 11 Jul 2014 ZF Friedrichshafen is mulling an offer for U.S. peer TRW. It’d be the sector’s biggest tie-up since 2007. In the race to build connected, automated vehicles, the deal makes sense. But the privately owned German group may struggle to match counteroffers from larger, public rivals.
Pouring liquid on alternatives makes unsavory stew 11 Jul 2014 Mom-and-pop investors are being served big portions of hedge-fund style access in U.S. mutual fund form. At $140 bln and growing, the securities are a potent mix for managers and distributors seeking assets – and fees. For buyers, though, so-called liquid alts are far from solid.
Portugal makes world look a little shakier 10 Jul 2014 Problems at one smallish bank don’t justify the slump in European stocks. Yet even as the U.S. finally heals, recent data from the EU, China and Japan has mostly been discouraging. In another lukewarm year, investors probably should be jittery – and market over-reactions expected.
Allergan may give investors yet another option 10 Jul 2014 The drugmaker’s conservative fiscal ways left it vulnerable to Valeant’s hostile $51 bln bid. Additional cost-cutting and buybacks is a persuasive standalone response. Behind door number three could be a bold acquisition. Allergan shareholders are likely to be spoiled for choice.
Boeing can weather the loss of U.S. Ex-Im Bank 10 Jul 2014 The export lender financed 18 pct of the jet maker’s deliveries last year, or about $8 bln worth of planes. If Congress grounds the bank, Boeing might have to triple the credit it extends to sometimes risky customers. That could cloud the bottom line but won’t ruin the forecast.
U.S. may finally have a mortgage reform blueprint 10 Jul 2014 A new bill would wind down Fannie and Freddie and use market-based pricing for Washington’s home loan guarantees. It has been a long time coming, and it probably won’t go anywhere until at least next year. But it could be the kind of middle ground both parties eventually accept.
Rob Cox: Capital crisis making Italy SpA stronger 10 Jul 2014 Italian capitalism is undergoing Darwinian selection. Companies can no longer rely on the state, age-old shareholder pacts or even Mediobanca for capital. Firms are being forced to adapt to the rules of global finance to avoid extinction. The next generation looks fit to prosper.
Wall Street all dressed up with nowhere to go 10 Jul 2014 A mix of deal-making clients and yield-hungry investors should be cause for celebration from Goldman to Barclays. Yet only M&A and IPOs, not stock or bond trading, showed up to the second-quarter party. Bank shareholders should expect to toast another round of restructuring.
"Seller beware" when profiting from market calm 10 Jul 2014 Volatility, gauged by indicators like VIX, is ultra-low. While it could be the calm before a storm, investors including Pimco have been selling insurance against price swings. It’s one way to make money amidst shrinking yields, but it’s also a risky bet against the unexpected.
Carlos Slim shoved right where he wants to go 9 Jul 2014 The Mexican billionaire agreed to unload some of his $70 bln telecom empire to satisfy regulators. After years of fighting a breakup, the abrupt concession suggests Slim is ready to reallocate his capital. Local TV, energy and banking may beckon as could opportunities overseas.
World Bank takes on Wall St over Itaú’s stitch-up 9 Jul 2014 The Washington lender’s IFC is hiring an independent adviser to analyze the Brazilian bank’s bid to control Chile’s CorpBanca without paying a premium to minority shareholders. That could challenge the fairness opinions put forth by Goldman and BofA in support of the deal.
Renzi can show market bona fides with Eni shakeup 9 Jul 2014 Italy’s oil giant trades at a discount to peers partly due to project delays, geopolitical turmoil and downstream difficulties. Giving Eni more freedom to run itself for shareholders, and maybe sell its stake in oil-services firm Saipem, would best serve the state’s 30 pct interest.