Revamped Reckitt has yet to clean up its act 18 Oct 2017 A restructuring is eclipsing the Dettol-to-Durex maker’s poor third quarter results. Parking brands that are more exposed to competition in a separate unit is smart but makes the company costlier to run. Nor does that address the sales problems caused by shifting consumer habits.
Private equity margarine bet needs activist backup 18 Oct 2017 Buyout firms may pay up to 7 billion euros for Unilever’s spreads unit. The new owners will need to stem falling sales as shoppers shun artificial produce. Acquiring other brands from food companies under pressure from uppity shareholders could be one way of boosting returns.
Mistimed writedowns lesser of mining M&A evils 18 Oct 2017 Rio Tinto has been accused by the SEC of hiding the plunging value of a coal mine it bought in 2011. The charges are serious, but at least accounting procedures are fairly clear. If only there were rules that could prevent mining bosses getting carried away during M&A upswings.
Heads or tails, Mark Carney loses 17 Oct 2017 British inflation has hit 3 percent, the highest level since 2012. No wonder the Bank of England chief is hinting policy rates may soon rise. Carney’s problem is that he will be criticised for hurting a slow-growing economy if he hikes and accused of inconsistency if he delays.
Credit Suisse breakup faces trading conundrum 17 Oct 2017 An activist investor wants to split the Swiss bank into three parts. On paper, the private banking and asset management units alone justify its $41 bln market value. But the ailing investment bank – including an estimated $250 bln of derivatives – would struggle to stand alone.
Vivendi can live with Italy’s “golden power” move 17 Oct 2017 Premier Paolo Gentiloni wants Telecom Italia to install state-backed directors and a special appointee to handle security matters. It’s a headache for top shareholder Vivendi. But government sentinels are preferable to being forced to spin off assets or accept state investment.
Pearson’s improved report card could be erased 17 Oct 2017 The education publisher issued a slightly more optimistic forecast for operating profit and said its U.S. textbook business is unlikely to repeat its catastrophic 2016. But Pearson has misread its key market before. The shift to digital publishing still looks painful.
Danone has to work to milk turnaround tale 17 Oct 2017 Strong third-quarter sales lifted the French yogurt maker’s shares to record highs. Rebounding Chinese demand will help make the most of a strong portfolio of brands. But cost cuts and making a success of its WhiteWave acquisition are key ingredients for an even richer valuation.
Blame for Deutsche Bank woe extends beyond CEO 16 Oct 2017 Reports of boardroom tension at the German bank are adding to unease among investors already rattled by a sliding share price. While boss John Cryan may be in the firing line, Chairman Paul Achleitner helped set the strategy. He shares some responsibility for the bank’s malaise.
China is third-best option for Saudi Aramco 16 Oct 2017 With its $2 trln public offering in the balance, the Saudi oil giant may bring in a Chinese investor. That would provide cash the state doesn’t urgently need. The other perks of an international IPO, like regional influence and financial discipline, aren’t to be found in Beijing.
Europe poorly placed for Austria’s rightward drift 16 Oct 2017 The far-right Freedom Party scored well in the country’s election and may enter government. It has been in power before. However, its presence could make Europe’s immigration problem harder to manage, and further integration harder to agree. Centrifugal forces have not gone away.
FirstRand makes punt on post-Brexit housing market 16 Oct 2017 The South African bank has offered 1.1 billion pounds for Britain’s Aldermore. Shares in the mortgage lender had slipped amid concerns about the slowing property market. At 8 times expected 2018 earnings, FirstRand could be getting a bargain – provided bad loans don’t shoot up.
Aramco IPO logic is going up in smoke 13 Oct 2017 With oil prices under pressure and OPEC potentially extending cuts, the Saudi oil company’s IPO always seemed a stretch. Aramco had yet to pick an exchange, and would have had to get its books into shape. With private capital abundant, there's little purpose to all the hand wringing.
EU banks can tolerate a watered-down capital rule 13 Oct 2017 Global regulators could soon agree on restricting lenders’ leeway to assess their assets’ riskiness. The so-called output floor may be higher than European lenders wanted at 72.5 pct, but the formula involved may prove easier. Less aggressive U.S. watchdogs will help them, too.
ACS faces bumpy road to join Abertis battle 13 Oct 2017 The Spanish builder is planning a cash-and-share offer for the toll-road operator using its German Hochtief unit. Beating Atlantia’s $20 billion bid faces several hurdles. The Italian group has offered more cash. For ACS, taking on a lot more debt could also be problematic.
BASF plants fertile crop from Bayer’s blighted M&A 13 Oct 2017 The German chemicals group will pay 5.9 bln euros for a seeds business that Bayer must sell to clinch a takeover of Monsanto. A pledge to keep staff means few cost savings, but the deal should work in time. BASF shareholders will reap a better harvest by eschewing mega-mergers.
TPG follows Turkish raki feat with Myanmar whisky 13 Oct 2017 The buyout firm has sold out of Myanmar’s largest spirits company in a $1 bln deal. As it did in Turkey, TPG again bought small, scaled up and sold to a big corporate buyer. Making deals in places like Yangon is an acquired taste – but can yield potent returns.
UK energy cap is bad economics and poor politics 12 Oct 2017 Prime Minister Theresa May wants to limit the most commonly used gas and electricity tariffs until 2020. Other EU countries show government meddling does consumers more harm than good. As a response to the Labour Party’s threat of nationalisation, it’s too little, too late.
Sky investors choose between profit and principles 12 Oct 2017 Chairman James Murdoch faces a backlash over concerns about his independence as Twenty-First Century Fox, which he runs, tries to buy the UK pay-TV group. Shareholders have legitimate corporate-governance grievances. But financially they’d be better off with Murdoch’s money.
Italy’s new voting law gives illusion of stability 12 Oct 2017 Parliament is vetting new voting rules ahead of next year’s ballot. The system may encourage a coalition of left and right parties, and hurt the radical 5-Star Movement. Yet ideological strife is likely to weaken any future government, and the chance of meaningful reforms.