Fyffes and Chiquita deal ripe for scrutiny 10 Mar 2014 It’s not AOL/Time Warner, but when it comes to fresh fruit, the $1 bln merger of Fyffes and Chiquita is big bananas. Dublin tax rates will help the new company, as will logistical savings. The biggest potential banana skin is antitrust concern.
When denials can be as instructive as the truth 7 Mar 2014 Goldman’s elevator annotator failed for a denial of identity. Bitcoin’s fingered father rejects founding the crypto-currency. From this shadowy world, such confusion is expected. Not so among systemically important insurers, where Pimco’s “Bond King” Bill Gross reigns supreme.
S&P 500 shows optimism despite still subpar jobs 7 Mar 2014 Friday’s report leaves the U.S. with 666,000 fewer working citizens than in early 2008. Yet the stock market hit a record on Thursday, five years after its nadir. It’s a reminder that America’s recovery has so far benefited Main Street a lot less than it has helped Wall Street.
Beautiful friendships with activists ending fast 7 Mar 2014 An uppity investor challenging laggard miner Cliffs rejected an offer of two board seats. Instead, Casablanca Capital is forging ahead with efforts to install six directors and replace the CEO. Companies have been listening more to vocal shareholders, but those times may go by.
Wal-Mart puts collar on Cerberus price for Safeway 7 Mar 2014 Based on the 2007 A&P-Pathmark merger, synergies could be worth more than half the $9.4 bln Cerberus’s Albertsons is paying for its rival U.S. grocer. In theory that leaves room for a higher offer. But competition means cost savings may need to go to shoppers, not investors.
What Putin wants matters less than what he doesn’t 7 Mar 2014 The Russian president fears real democracy in Ukraine as much as at home. And he’s afraid of a disruption of trade and financial ties if Kiev turns towards the EU. If the U.S. and Europe want Putin to back down, they have to convince him that he’s wrong on both counts.
Review: Why all you know about money is wrong 7 Mar 2014 Felix Martin says that money isn’t a commodity, but a system of credits. This insight allows his book to rewrite monetary history in an eye-opening way. It also suggests that the way economists approach finance and recessions is hopelessly wrong.
Safeway shopping cart comes up short at checkout 7 Mar 2014 In the Cerberus-led takeover, new equity and debt, cash, a stock distribution, future sales and even a tax break in theory get to $40 a share, or $9.4 bln. But investors marked Safeway shares down. Goes to show getting to knockout prices is tough for private equity these days.
EBay could have it both ways with PayPal 6 Mar 2014 The online merchant thinks owning a payments unit is symbiotic. But activist Carl Icahn says the businesses would be worth more separated. EMC garnered some of the best of both worlds by partially spinning off VMware. The same approach at eBay could defuse the tension.
Legal eagles find yet another path to turbulence 6 Mar 2014 Guaranteed payouts and possible crimes helped kill U.S. law firm Dewey. Now forays into 9/11 suits and Chevron’s spat with Ecuador threaten Washington lobbying shop Patton Boggs. The recent recession caused pain for many firms. But bets on big cases can add to the risk.
Big Oil faces no-win on rampant cost inflation 6 Mar 2014 Energy bosses at an industry shindig in Houston this week agreed that a doubling of labor and equipment prices over the past decade is their biggest headwind. Meanwhile, on recent form, they’ve struggled to keep production flowing. Cutting costs is likely to dent future output.
Elon Musk’s Gigafactory puts utilities on notice 6 Mar 2014 The Tesla CEO reckons he can kick off a virtuous circle by doubling world lithium-ion battery production. Musk expects that to slash costs by more than 30 pct and add a turbo boost to Tesla’s sales. It may also leave electric pylons looking as outdated as telephone poles.
Search for China’s “Bear Stearns moment” is flawed 6 Mar 2014 The country’s possible first bond default has prompted comparisons with the Wall Street firm’s failure. It’s tempting for investors to seek parallels with 2008. If the analogy fits at all, it’s only because it reminds the Chinese authorities which mistakes to avoid.
Moelis IPO hands valuable sales pitch to rivals 5 Mar 2014 The boutique adviser wants to leave its founder in control. Evercore, Greenhill and Lazard public offerings raised governance issues as well. But none of those firms was as stingy as Moelis in protecting new shareholders. That could give them an edge when competing for clients.
Peltz, Pepsi breakup arguments both a bit flat 5 Mar 2014 The soda maker reckons losing shared costs would offset gains from the activist’s plan to split the company. That’s not quite true. A breakup would generate more value. But only a rapid uptick in profitability would justify drastic surgery. That’s a tougher argument to make.
Edward Hadas: The ongoing ethics struggle of banks 5 Mar 2014 The boss of Credit Suisse blamed a few private bankers for recent U.S. legal problems. The Employees Association wants management to take more responsibility. Such blame-casting misses the point. In too many businesses, the culture encourages ignoring the voice of conscience.
Energy titans tap yet another dry well: inequality 5 Mar 2014 The industry’s grandees are gathered for their annual confab in Houston, celebrating shale and lamenting higher costs. Amid the hoopla, Chevron CEO John Watson said renewable policies hurt the poor while BHP boss Andrew Mackenzie claimed oil can help them. That’s all a bit rich.
Carlyle’s $1.9 bln Korea deal bets paranoia pays 5 Mar 2014 The buyout firm is purchasing Tyco’s security business in South Korea for three times revenue and 11 times EBITDA. That looks punchy. Koreans are reluctant users of alarm systems - even safer Japan has more. If incomes continue to rise and inequality increases, that will change.
Ken Moelis engineers the deal of his lifetime 4 Mar 2014 The investment banker is taking his eponymous 7-year-old firm public. It may be worth some $2 bln. By stretching the limits of corporate governance, Moelis will wield exceptional control. For potential investors this is a chance to grab onto his coattails – and not much more.
Freeport-McMoRan shows pay votes have some bite 4 Mar 2014 The copper miner is slashing base salaries for top execs including Chairman James Moffett after shareholders opposed pay practices twice in three years. Freeport needs to do more to put governance on a sound footing. But the changes show say-on-pay isn’t a toothless tiger.