Failed bid would leave Astra under pressure 26 May 2014 Pfizer looks foolish for the way it handled a $119 bln offer for the UK drugmaker. But its shares have barely suffered. Astra remains independent and yet it is now under more scrutiny. Some of its shareholders welcomed a possible takeover - and could again.
Hacked eBay exposes itself to another attack 23 May 2014 Carl Icahn buried the hatchet with the online auctioneer’s board before it came out that records of 145 mln customers were breached. Similar cracks just cost the boss of retailer Target his job. That leaves an opening for another investor to pressure eBay’s CEO and directors.
Colombia will have to settle for Latam second best 23 May 2014 President Juan Manuel Santos is on his way to winning re-election after helping propel his country’s economic fortunes. Nevertheless, Colombia faces serious geographic, political and social constraints. That means Chile should retain its singular gold-plated status in the region.
Dull industrials could make shiny tax-arb targets 22 May 2014 Juiced up on drug deals that promise big tax savings, like Pfizer’s bid for Astra, bankers are pitching copycat transactions before Congress gets wise. Tyco, Ingersoll-Rand and Pentair went abroad during a previous exodus and may tempt acquirers seeking inversions of their own.
M&A targets can get stiffed when they "go shop" 22 May 2014 The tactic of seeking bids after signing up a buyer is meant to ensure top dollar. More often, it leads to low offers and sale prices, new research shows. Deals like Media General’s buyout of Lin Media suggest sellers are wising up, though, portending better value for investors.
Jumbo fine could help BNP out of U.S. morass 22 May 2014 The French bank’s penalty for alleged sanctions violations could reportedly entail short-term curbs on its U.S. business, with unpredictable consequences. If a bigger upfront fine offers the chance to avoid that outcome, BNP should go for it – even if dividends suffer.
Wal-Mart can win leading the way on minimum wage 22 May 2014 The mega-retailer’s labor costs would rise by $2 bln with a higher U.S. pay floor. But it also has more low-wage customers than employees, thus translating into a net gain in earnings, a Breakingviews analysis shows. Taking a stand on the issue could pay off for Wal-Mart.
Falling U.S. margin debt presages equity trouble 22 May 2014 A drop in loans which use shares as collateral has long spelled market trouble. A recent decline may be due to reduced investor optimism about growth and profits, or a somewhat less generous Fed. Either way, it looks like stock markets could flag, or fall, in coming months.
Hess $2.9 bln sale vindicates high-octane activism 22 May 2014 The oil industry laggard will shed its retail outlets to refiner Marathon and focus on lucrative exploration. Hedge fund Elliott can take credit for the transformation that has allowed Hess to catch up with rivals. It’s more evidence that uppity investors can drive useful change.
JD.com wins rich price despite poor governance 22 May 2014 The e-commerce group priced its $25 bln IPO above expectations. Investors seem unfazed by the revelation of a $591 mln gift of stock to boss Richard Liu. Investors are buying into his expertise, but a large, unexplained transfer of value days from going public raises red flags.
Heed New York Times governance risk headlines 21 May 2014 Investors surrendering their rights to founders at Facebook, Google, Alibaba and elsewhere may want to consider the management kerfuffle at the Grey Lady. It’s what can happen when, down the line, the competent leaders they entrusted are gone and their successors entrenched.
Big Oil can learn from $50 bln Kazakh fiasco 21 May 2014 The oil majors running the Kashagan field may have to wait until 2016 before any black gold flows again. That’ll be a decade late and five times over budget. The debacle shows the drawback of too many partners involved in the same project under tough climate conditions.
Fed bigwigs short of signs on path to higher rates 21 May 2014 New York’s Dudley thinks interest rates should rise slowly, Philly’s Plosser reckons they should go up faster, and Bullard of St. Louis has crunched numbers implying rates should already be at “normal” levels. Veering off the beaten track has left the Fed uncertain how to return.
Edward Hadas: Three Ms for economics re-education 21 May 2014 Students of the dismal science think their teachers are letting them down. The reproaches are just, but their reform agenda is insufficiently radical. The academic discipline of economics should reconsider the role of markets, pay less heed to money and allow for more morality.
Astra-Pfizer needs a fresh start later in the year 21 May 2014 Some shareholders want the UK pharma company to talk to its American suitor now. But there is no honest route to a higher bid until August. Talks in the dying days of the bid timetable could actually delay a full move. An amicable cooling off period is the best plan.
Oil’s eerie calm cannot continue 21 May 2014 Crude has been oddly stable since 2011. That’s tough for traders. For consumers, oil is expensive but at least predictable. Yet $110 a barrel promises alluring profits for too many potential producers. Brace for increased supply, lower prices and way more volatility.
Credit Suisse misses chance to show accountability 20 May 2014 Brady Dougan says he did not consider resigning over the bank’s guilty plea for tax evasion. He may not have been involved in the wrongdoing, but as CEO he stands for the firm. A top-level departure would demonstrate Credit Suisse’s ethical standards, and shame other bank bosses.
Retail bricks battle for clicks appreciation 20 May 2014 Williams-Sonoma is a prime example of a common oddity. The cookware-to-furniture merchant generates nearly half its sales over the web with Amazon-like growth and more profitability. Yet investors pay 10 times as much for the e-commerce king’s earnings. That logic has its limits.
Reborn Chesapeake starts to hit its stride 20 May 2014 A year to the day after replacing profligate CEO Aubrey McClendon, the U.S. oil and gas explorer secured a two-notch credit rating upgrade to nearly investment grade. By slashing debt and simplifying Chesapeake, new boss Doug Lawler is winning over stock and bond investors alike.
Long arm of U.S. law doesn’t extend to cyberspace 20 May 2014 Credit Suisse’s guilty plea and $2.5 billion fine for helping tax dodgers shows Uncle Sam’s hold over finance is strong even beyond its borders. Yet hacking accusations against Chinese military personnel have produced only defiance. It’s a sign of the limits to U.S. legal power.