NAFTA’s three heads could haggle better than one 19 Feb 2014 The United States, Canada and Mexico are negotiating separate pacts with EU and Pacific Rim nations. A combined effort, however, would offer more leverage and lead to simplified commerce within North America. The trade accord’s 20th anniversary is a good time to show solidarity.
Edward Hadas: AOL, solidarity and health insurance 19 Feb 2014 The head of AOL managed to say something really stupid about employee benefits two weeks ago, and to sound callous while he was at it. It’s a shame Tim Armstrong came off so badly, because he was grappling with a serious topic without an easy solution: How to share costs fairly.
BTG Pactual suffers surprisingly few growing pains 19 Feb 2014 The investment bank run by André Esteves has bought rivals, added staff and is beefing up commodities – a business its Wall Street peers are trimming. And Brazil, its home market, is struggling. Yet last year’s net income only took a 14 pct hit. That shows remarkable resilience.
Diamond dealers show how to make M&A sparkle 19 Feb 2014 Jewelry retailer Signet’s stock shone 17 pct brighter after agreeing to buy rival Zale at a 41 pct premium. That’s what happens when cost savings effectively cover the purchase price. It makes the tarnish on shareholder-unfriendly Comcast and Jos. A. Bank more noticeable.
U.S. rules show limits of global bank resolution 19 Feb 2014 The Federal Reserve’s decision to make European lenders hold more capital against their American operations could push up funding costs and make banking less global. But it is an admission of reality. Cross-border resolution without national safety nets is still a non-starter.
Candy Crush destined to be a heartbreaker 18 Feb 2014 The addictive mobile app’s Europe-based maker is ready to capitalize on the hype with a U.S. IPO. Fast-growing King could be worth a tasty $6 bln given rival valuations. With top hit Candy Crush generating 80 pct of revenue, though, investor infatuation would be a dangerous game.
Oxy’s restructuring plan just California dreamin’ 18 Feb 2014 The oil and gas giant says it will spin off operations in the Golden State. That will raise cash and remove a lagging unit, but loading it with debt may deter buyers. Selling valuable chemical and pipeline assets instead could streamline the company and boost investor returns.
Actavis makes pharma deals look generic 18 Feb 2014 Its $25 bln acquisition of Forest Laboratories follows a familiar formula in the sector. Uppity investor? Check. Low-tax jurisdiction? Check. Buyer’s stock rises? Check. And over $8 bln of value created means financiers will keep busy with their own prescriptions for M&A success.
China copper IPO seeks gold in financial recycling 18 Feb 2014 Unloved Chinese companies with U.S. listings will be watching China Metal. Just 15 months after it quit the NYSE, the copper recycler is going public in Hong Kong at 10 times its last public market value. With earnings polished by tax refunds, any upside may be short-lived.
Currency wars pose disinflation risk for losers 17 Feb 2014 The dollar and the euro are rising against many currencies. It means that U.S. and euro zone exports are more expensive, and imports cheaper. They can absorb the trade hit. But with inflation already worryingly low, the downward pressure on prices might be harder to take.
Comcast deal may be headed for a Sprint moment 14 Feb 2014 A rival could help trustbusters squelch the $45 bln purchase of Time Warner Cable, just as the U.S. telco undercut AT&T’s bid for T-Mobile US. Showing harm to content sellers, not just customers, may be the key. There are no volunteers yet, but regulators seem open to persuasion.
America’s dumb elites risk fomenting a revolution 14 Feb 2014 The plutocrats at Davos seemed to agree that widespread social unrest is a big tail risk from the West’s rising financial inequality. So One Percenters like VC Tom Perkins, AOL boss Tim Armstrong and realty mogul Sam Zell should be wary of picking fights with the little guy.
Jos. A. Bank’s daft deal knits owners in a bind 14 Feb 2014 To avoid being acquired, or perhaps to fetch a higher price from rival Men’s Wearhouse, the suits retailer is issuing stock to buy Eddie Bauer at $56, only to buy it back at $65. If the $875 mln transaction isn’t unraveled, shareholders will find themselves painfully stitched up.
Argentina takes painful stab at economic reality 14 Feb 2014 The government has unveiled a new consumer price index more reliable than its predecessor. At 3.7 pct, it still has January inflation lower than private estimates. But it’s a good start that may please the IMF and international markets. It’ll make wage talks tougher, though.
Guest view: Europe risks wasting gene therapy advance 14 Feb 2014 Europe lags the U.S. in providing promising companies with the investment needed to get to market. Without better financing solutions, it won’t share in the industrial future of gene therapy, says the CEO of Syncona, the Wellcome Trust’s life-sciences investment company.
VW’s U.S. union critics are damaging own interests 13 Feb 2014 Tennessee Republicans like Senator Bob Corker are warning of pain if the automaker’s workers there vote to join the UAW. The anti-union gripes reflect old ideology, not the new reality. VW isn’t bothered by unions and has $7 bln to invest elsewhere if lawmakers make it unwelcome.
U.S. swaps watchdog can afford to take a breather 13 Feb 2014 The CFTC is delaying cross-border derivatives rules, a relief for the industry. But other rulemaking deadlines loom. With 90 pct of interest-rate swaps now centrally cleared, regulators have made great strides. They should finish the job, but allowing some leeway now makes sense.
Comcast deal machine spits out a value destroyer 13 Feb 2014 The return on investment from the $70 bln purchase of Time Warner Cable looks to be 1 percentage point lower than the buyer’s cost of capital. That’s crummy but not criminal. It’s also not too surprising. The Roberts family uses medieval governance to oversee the Comcast fiefdom.
Pepsi cash fountain won’t quench skeptics’ thirst 13 Feb 2014 The soft-drink giant’s promise to boost payouts by 35 pct could put fizz in investors’ step. But a decision to rule out big changes in struggling North American beverages leaves the company playing catch-up with Coke. Activists like Nelson Peltz will probably be looking for more.
Comcast gives deal junkies lots to watch on cable 13 Feb 2014 The biggest U.S. operator has agreed to buy rival Time Warner Cable for $45 bln in stock, interrupting a hostile takeover by smaller Charter. The target got the price it wanted but not the terms. Regulatory risks are high. And all eyes will still be on the crafty John Malone.